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05-03-17 Board Packet
1 OTAY WATER DISTRICT BOARD OF DIRECTORS MEETING DISTRICT BOARDROOM 2554 SWEETWATER SPRINGS BOULEVARD SPRING VALLEY, CALIFORNIA May 3, 2017 3:30 P.M. AGENDA 1. ROLL CALL 2. PLEDGE OF ALLEGIANCE 3. APPROVAL OF AGENDA 4. APPROVAL OF THE MINUTES OF THE REGULAR MEETINGS OF JANUARY 4, 2017 AND FEBRUARY 1, 2017 5. 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 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) APPROVE AN AGREEMENT WITH PROSPECTRA CONTRACT FLOOR- ING FOR FLOOR COVERING REPLACEMENT FOR THE ADMINISTRA- TION BUILDING AT AN AMOUNT NOT-TO-EXCEED $183,415 b) AMEND THE DISTRICT’S PURCHASING MANUAL TO REFLECT THE RECOMMENDED UPDATES TO STREAMLINE THE PROCUREMENT OF GOODS AND SERVICES FOR THE DISTRICT c) ADOPT RESOLUTION NO. 4330 DESIGNATING SPECIFIC STAFF POSI- TIONS AS AUTHORIZED AGENTS TO DEAL WITH THE STATE OF CALI- FORNIA, OFFICE OF EMERGENCY SERVICES, ON THE DISTRICT’S BE- HALF IN ALL MATTERS PERTAINING TO DISASTER ASSISTANCE d) ADOPT RESOLUTION NO. 4331 AMENDING POLICY NO. 27, THE IN- VESTMENT POLICY, OF THE DISTRICT’S CODE OF ORDINANCES AND RE-DELEGATE AUTHORITY FOR ALL INVESTMENT RELATED ACTIVI- 2 TIES TO THE CHIEF FINANCIAL OFFICER, IN ACCORDANCE WITH GOVERNMENT CODE SECTION 53607 e) ADOPT RESOLUTION NO. 4332 TO EXTEND THE LETTER OF CREDIT WITH UNION BANK FOR THE OUTSTANDING VARIABLE RATE DEBT AND AUTHORIZE THE GENERAL MANAGER TO EXECUTE THE APPLI- CATION FOR AMENDMENT TO IRREVOCABLE STANDBY LETTER OF CREDIT f) AWARD A CONTRACT TO KIRK PAVING IN AN AMOUNT NOT-TO- EXCEED $200,000 FOR AS-NEEDED ASPHALT PAVING SERVICES FROM JULY 1, 2017 THROUGH JUNE 30, 2018, WITH AN OPTION TO EXTEND IT TO JUNE 30, 2019 g) AWARD TWO (2) PROFESSIONAL AS-NEEDED CONSTRUCTION MAN- AGEMENT AND INSPECTION SERVICES CONTRACTS TO ALYSON CONSULTING AND VALLEY CONSTRUCTION MANAGEMENT, EACH IN AN AMOUNT NOT-TO-EXCEED $500,000. THE TOTAL AMOUNT FOR THE TWO (2) CONTRACTS WILL NOT EXCEED $500,000 DURING FIS- CAL YEARS 2018 AND 2019 (ENDING JUNE 30, 2019) h) AWARD TWO (2) PROFESSIONAL AS-NEEDED WATER RECLAMATION ENGINEERING DESIGN SERVICES CONTRACTS TO ARCADIS U.S., INC. AND KEH & ASSOCIATES, EACH IN AN AMOUNT NOT-TO-EXCEED $175,000. THE TOTAL AMOUNT FOR THE TWO CONTRACTS WILL NOT EXCEED $175,000 DURING FISCAL YEARS 2018 AND 2019 (ENDING JUNE 30, 2019) i) APPROVE AN INCREASE TO THE CIP S2024 BUDGET IN THE AMOUNT OF $1,600,000 AND AWARD A CONSTRUCTION CONTRACT TO WIER CONSTRUCTION CORPORATION FOR THE CAMPO ROAD SEWER RE- PLACEMENT PROJECT IN AN AMOUNT NOT-TO-EXCEED $7,816,645.95 ACTION ITEMS 7. ENGINEERING AND WATER OPERATIONS a) APPROVE A PERMANENT MORATORIUM ON THE INSTALLATION OF NEW RECYCLED WATER FACILITIES ON OTAY MESA (MARTIN) 8. FINANCE AND ADMINISTRATION a) ADOPT ORDINANCE NO. 563 AMENDING SECTION 9, ANNEXATIONS AND DETACHMENTS; SECTION 28 CONNECTION FEES AND CHARGES FOR PORTABLE OR RECYCLED WATER SERVICE; SECTION 53, CON- DITIONS FOR SEWER SERVICE; AND APPENDIX A OF THE CODE OF ORDINANCES TO ADJUST THE DISTRICT’S WATER CAPACITY FEE, NEW WATER SUPPLY FEE, AND ANNEXATION FEE; CREATE A SEWER 3 CAPACITY FEE AND MODIFY THE SEWER ANNEXATION FEE, WITH ALL CHANGES TO BE EFFECTIVE MAY 3, 2017 (KOEPPEN) 9. BOARD a) DISCUSSION OF 2017 BOARD MEETING CALENDAR REPORTS 10. GENERAL MANAGER’S REPORT a) SAN DIEGO COUNTY WATER AUTHORITY UPDATE 11. DIRECTORS' REPORTS/REQUESTS 12. PRESIDENT’S REPORT 13. ADJOURNMENT All items appearing on this agenda, whether or not expressly listed for action, may be deliberated 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 through the District Secretary by contacting her at (619) 670-2280. If you have any disability which would require accommodation in order to enable you to participate in this meeting, please call the District Secretary at (619) 670-2280 at least 24 hours prior to the meeting. Certification of Posting I certify that on April 28, 2017, I posted a copy of the foregoing agenda near the regular meeting place of the Board of Directors of Otay Water District, said time being at least 72 hours in advance of the regular meeting of the Board of Directors (Government Code Section §54954.2). Executed at Spring Valley, California on April 28, 2017. /s/ Susan Cruz, District Secretary 1 MINUTES OF THE BOARD OF DIRECTORS MEETING OF THE OTAY WATER DISTRICT January 4, 2017 1. The meeting was called to order by President Robak at 3:30 p.m. 2. ROLL CALL Directors Present: Croucher, Gastelum, Robak, Smith and Thompson Staff Present: General Manager Mark Watton, General Counsel Daniel Shinoff, Attorney Jeanne Blumenfeld, Asst. General Manager German Alvarez, Chief of Engineering Rod Posada, Chief Financial Officer Joe Beachem, Chief of Administration Adolfo Segura, Chief of Operations Pedro Porras, Asst. Chief of Operations Jose Martinez, District Secretary Susan Cruz and others per attached list. 3. PLEDGE OF ALLEGIANCE 4. APPROVAL OF AGENDA A motion was made by Director Thompson to approve the agenda and to delete items 13a, ADOPT RESOLUTION NO. 4325 OF THE BOARD OF DIRECTORS OF OTAY WATER DISTRICT CONSENTING TO AND APPROVING THE APPOINTMENT OF MARK ROBAK AS A REPRESENTATIVE TO THE BOARD OF DIRECTORS OF THE SAN DIEGO COUNTY WATER AUTHORITY (FIRST SEAT), and 13b, ADOPT RESOLUTION NO. 4326 OF THE BOARD OF DIRECTORS OF OTAY WATER DISTRICT CONSENTING TO AND APPROVING THE APPOINTMENT OF TIM SMITH AS A REPRESENTATIVE TO THE BOARD OF DIRECTORS OF THE SAN DIEGO COUNTY WATER AUTHORITY (SECOND SEAT), from the agenda. The motion was seconded by Director Croucher. There was discussion on why Director Thompson wished to delete items 13a and 13b from the agenda. The motion failed with the following vote: Ayes: Directors Croucher and Thompson Noes: Directors Gastelum, Robak and Smith Abstain: None Absent: None A motion was made by Director Smith, and seconded by President Robak and carried with the following vote: Ayes: Directors Croucher, Gastelum, Robak and Smith Noes: Director Thompson 2 Abstain: None Absent: None to approve the agenda as is. 5. ADOPT RESOLUTION NO. 4319 COMMENDING MR. JOSE LOPEZ FOR HIS SIXTEEN YEARS OF DEDICATED SERVICE TO THE OTAY WATER DISTRICT AS DIRECTOR OF DIVISION FOUR President Robak read Resolution No. 4319 into the record. President Robak then presented the recognition award to former Director Lopez recognizing him for his sixteen (16) years of leadership and dedicated service to the District, the community and all of San Diego County. Former Director Lopez indicated that it was an honor to serve his constituents for sixteen (16) years. He stated that his whole life has been dedicated to serving the public in different capacities from high school, college, his profession as a firefighter and through serving on the Otay Water District (Otay WD) board. He stated that he has never regretted it. He commented that he has just returned from a 47-day trip around Asia and he learned a lot from that experience. In the cities he visited, he saw the pride that people took in their cities. Their cities were thriving and were exceptionally clean. He indicated that he is mentioning this because he has experienced that same pride at the District. He thanked staff for their work and all their efforts. He thank District Secretary Susan Cruz for the many years of service and for all the work she has done. He congratulated Director Robak on his election as President and indicated that from his experience as a Director at Otay WD, there will be little controversies every now and then, but the District will get through it. He indicated that if the members of the board really consider what they do and keep the interest of the public in mind, things will work out. A motion was made by Director Croucher, and seconded by President Robak and carried with the following vote: Ayes: Directors Croucher, Gastelum, Robak, Smith and Thompson Noes: None Abstain: None Absent: None to approve Resolution No. 4319 commending Mr. Jose Lopez for his sixteen (16) years of dedicated service to the Otay Water District as Director of Division Four. Director Smith indicated that the one thing he will take away from his two (2) years of working with Director Lopez is how much he cared about the employees and his understanding of employees and how much of an impact they have on the running of the organization. The supervisors seem to get the credit for the success of the organization, but it is really the line staff that is doing all the hard 3 work. He stated that this goes all the way down the line and he really hopes that this viewpoint continues. Director Thompson indicated that he has served with Director Lopez for five (5) years and he viewed that time as one of the great treats in his time as a public servant. He stated that Director Lopez’ integrity, care and dedication to the public good is very commendable. He indicated that he has a great respect for him as a public official and a man and thanked him for the time that he has served with him. Director Croucher indicated that Director Lopez will be missed. His stated his dedication to the water industry, employees and citizens through the years is commendable and his advice to stay focused on the customers and the public needs is key. He felt, in the past, when the District fell on hard times it was because they looked at individuals as opposed to the public good. He indicated that if we look at the public first, then we would be headed in a good direction. Director Gastelum thanked Director Lopez for his years of service to the District and the community. He stated that when he received the congratulatory call from Director Lopez following the elections, he realized what a true gentleman he was. President Robak indicated that in the twelve years that he served on the board with Director Lopez, his character has certainly been good. He stated he is definitely a thoughtful person and his objective and leadership was towards serving the customers of the District. He thanked Director Lopez for his sixteen (16) years of service to the District. General Manager Watton also thanked him for his sixteen (16) years of service and indicated that, on a personal note, getting to know him personally and being considered as friends beyond service to the District, is something he cherishes. He stated he looks forward to keeping in touch beyond Otay and to continue the friendship. He congratulated him on his sixteen (16) years of service. General Counsel Shinoff stated that Director Lopez is a gentleman, scholar and a unique human being who has the ability to connect with all persons. He indicated that it was an honor and privilege to know him and that Director Lopez has contributed greatly to his perspective of what it is to be a good person. 6. RECESS FOR RECEPTION The board recessed at 3:55 p.m. for a reception to recognize the retirement of Director Lopez. 7. RECONVENE OTAY WATER DISTRICT BOARD MEETING The reconvened at 4:18 p.m. 4 8. 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. 9. APPROVE THE MINUTES OF THE REGULAR BOARD MEETING OF NOVEMBER 2, 2016 A motion was made by Director Croucher, and seconded by Director Smith and carried with the following vote: Ayes: Directors Croucher, Robak, Smith and Thompson Noes: None Abstain: Director Gatelum Absent: None to approve the minutes of the regular board meeting of November 2, 2016. PUBLIC HEARING 10. PUBLIC HEARING TO CERTIFY THE FINAL PROGRAM ENVIRONMENTAL IMPACT REPORT (PEIR) FOR THE DISTRICT’S 2015 WATER FACILITIES MASTER PLAN (WFMP) THE BOARD WILL BE HOLDING A PUBLIC HEARING TO CONSIDER CERTIFYING THE FINAL PEIR FOR THE DISTRICT’S 2015 WFMP. THE BOARD INVITES THE PUBLIC TO PROVIDE COMMENTS ON THE REPORT. a) CERTIFY THAT THE FINAL PEIR FOR THE DISTRICT’S 2015 WATER FACILITIES MASTER PLAN (WFMP) UPDATE HAS BEEN COMPLETED IN COMPLIANCE WITH THE CALIFORNIA ENVIRONMENTAL QUALITY ACT, THE CURRENT STATE GUIDELINES AND THE DISTRICT’S LOCAL GUIDELINES, AND THAT IT REFLECTS THE INDEPENDENT JUDGMENT OF THE DISTRICT; FIND THAT THE POTENTIALLY SIGNIFICANT EFFECTS OF THE DISTRICT’S 2015 WFMP UPDATE WILL BE AVOIDED THROUGH THE ADOPTION OF MITIGATION MEASURES, AS SHOWN IN THE PEIR, AND THE MITIGATION, MONITORING AND REPORTING PROGRAM FOR THE PEIR; AND APPROVE THE 2015 WFMP AS THE FINAL DOCUMENT Environmental Compliance Specialist Lisa Coburn-Boyd asked that the Board certify the Final Program Environmental Impact Report (PEIR) for the District’s 2015 Water Facilities Master Plan (WFMP) Project has been completed in compliance with the California Environmental Quality Act, the current State Guidelines and the District’s local Guidelines and that it reflects the independent judgement of the District. Additionally, staff is requesting approval of the Mitigation Monitoring and Reporting Program and the findings for the project. 5 She stated, lastly, staff is requesting that the Board approve the 2015 WFMP as the final document. Please reference the committee Action notes attached to staff’s report (Attachment A) for the details of Ms. Coburn-Boyd’s report. Director Smith indicated that this is a substantial document which sets the tone for the types of Capital Improvement Projects (CIP) that will be coming up for the District. It prioritizes the projects by year and provides the required environmental documentation associated with the projects. Director Robak indicated that he noted that one of the comment letters was from the Metropolitan Water District (MWD) and inquired if they normally comment on the District’s PEIRs. Ms. Coburn-Boyd indicated that they usually comment on the District’s Water Facilities Master Plan (WFMP), but not usually on individual projects. She stated they were concerned about annexations and would like to see the District do a more robust environmental review, but the comment was not relevant to the WFMP. The public hearing was opened at 4:31 p.m. No one wished to be heard. The public hearing was closed at 4:31 p.m. A motion was made by Director Thompson, and seconded by Director Smith and carried with the following vote: Ayes: Directors Croucher, Gastelum, Robak, Smith and Thompson Noes: None Abstain: None Absent: None to approve staffs’ recommendation. CONSENT CALENDAR 11. 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 Croucher, seconded by Director Smith and carried with the following vote: Ayes: Directors Croucher, Gastelum, Robak, Smith and Thompson Noes: None Abstain: None Absent: None to approve the following consent calendar items: a) APPROVE CHANGE ORDER NO. 5 TO THE EXISTING CONTRACT WITH TRANSTAR PIPELINE, INC. IN THE AMOUNT OF $61,592.34 6 FOR THE RANCHO SAN DIEGO BASIN SEWER REHABILITATION - PHASE 1 PROJECT b) ADOPT RESOLUTION NO. 4318, FIXING TERMS AND CONDITIONS FOR THE ANNEXATION OF CERTAIN REAL PROPERTIES OWNED BY R-12 B, LLC Co. (APN 644-310-53-00), OTAY RANCH II SUN 12, LLC CO. (APN 644-310-54-00), AND R-12 A, LLC CO. (APN 644-310-55-00) INTO THE OTAY WATER DISTRICT IMPROVEMENT DISTRICTS 22 AND 27 c) AWARD A PROFESSIONAL AS-NEEDED COATING INSPECTION SERVICES CONTRACT TO CSI SERVICES, INC. IN AN AMOUNT NOT- TO-EXCEED $175,000 FOR A PERIOD OF THREE (3) FISCAL YEARS (FY 2017 THROUGH FY 2019), ENDING JUNE 30, 2019 d) ADOPT RESOLUTION NO. 4324 TO UPDATE BOARD POLICY #47, POLICY AGAINST DISCRIMINATION, HARASSMENT, RETALIATION AND COMPLAINT PROCEDURE, AND BOARD POLICY #48, ADA/FEHA DISABILITY POLICY ACTION ITEMS 12. FINANCE, ADMINISTRATION AND INFORMATION TECHNOLOGY a) APPROVE THE SUBMITTAL OF THE FINANCIAL SECURITY PACKAGE TO THE STATE WATER RESOURCES CONTROL BOARD (SWRCB), CALIFORNIA’S CLEAN WATER STATE REVOLVING FUND PROGRAM, FOR THE PURPOSE OF APPLYING FOR $7,750,000 IN DEBT FINANCING OF THE CAMPO ROAD SEWER REPLACEMENT PROJECT; AND ADOPT RESOLUTION NO. 4320 TO FINANCE THE COST OF CONSTRUCTING AND RECONSTRUCTING CERTAIN PUBLIC FACILITIES AND IMPROVEMENTS; RESOLUTION NO. 4321 TO FILE AN APPLICATION FOR A FINANCING AGREEMENT FROM THE SWRCB; AND RESOLUTION NO. 4322 TO PLEDGE SEWER OPERATING REVENUES AND/OR REPLACEMENT RESERVES FOR THE CAMPO ROAD SEWER MAIN REPLACEMENT PROJECT Finance Manager Rita Bell indicated that staff is requesting that the Board authorize the submittal of the financial security package to the State Water Resources Control Board’s (SWRCB) Clean Water State Revolving Fund Program (CWSRF). The application is requesting $7,750,000 in debt financing for the Campo Road Sewer Replacement Project. The State requires that the Board adopt the three resolutions attached to the Staff Report which will be filed with the application. Please reference the Committee Action notes attached to staff’s report (Attachment A) for the details of Ms. Bell’s report. Staff indicated, in response to an inquiry from Director Croucher, that the District is working with the community and is keeping them informed that the District has 7 reached out to SDG&E and other agencies to coordinate infrastructure work to reduce impact to the community. It was discussed that if the District receives preliminary acceptance of its application, then there is a very good chance that it will receive final acceptance of its application. It was noted that even if the District’s application is accepted, it may not receive the full amount that has been applied for. Staff hopes to receive notification by May, June or July and indicated that if the District was not successful in acquiring funding through the SWRCB program, then the District would have to look at alternative funding, such as issuing Certificates of Participation (COPs). This would be more costly and the interest rate would be higher. A motion was made by Director Smith, seconded by Director Thompson and carried with the following vote: Ayes: Directors Croucher, Gastelum, Robak, Smith and Thompson Noes: None Abstain: None Absent: None to approve staffs’ recommendation. b) APPROVE THE CREATION OF AN AUTOMATED METER READING CHANGE OUT CAPITAL IMPROVEMENT PROGRAM PROJECT IN THE AMOUNT OF $1,150,000 FOR THE CURRENT FISCAL YEAR Customer Service Manager Andrea Carey indicated that staff is requesting that the board authorize the creation of an Automated Meter Reading (AMR) change out Capital Improvement Program (CIP) project in the amount of $1,150,000 for the current fiscal year. Please reference the Committee Action notes attached to staff’s report (Attachment A) for the details of Ms. Carey’s report. Ms. Carey brought a sample of the automated meter to show to the board. She indicated in response to an inquiry from Director Smith that the labor cost was not included at this time as staff has not yet completed the bid for the labor cost portion and would be bringing that back for the board’s consideration at a future meeting. It was indicated that staff would like to get the appropriation for the CIP because of the lead time required for the purchase of the meters. The cost of the Allegro Meter transponder is approximately $140 (with tax) and there is an additional cost for the meter itself. Staff could not recall the cost of the at the moment but could provide the information following the meeting. Director Smith thanked staff for bringing this item to the board within a month of the board’s inquiry. He also noted that Helix WD did a pilot project to determine how many customers would actually go online and look at their water use. It was found that only 1% of the customers who had access to that data actually went 8 online to look. SDG&E found that 3% of their customers checked their electrical use online. Ms. Carey stated that the District did some polling of the District’s customers and also analyzed the “drive-by” read versus the “AMI signal” technology and found that the “drive-by” read was still more economical. A motion was made by Director Smith, seconded by President Robak and carried with the following vote: Ayes: Directors Croucher, Gastelum, Robak, Smith and Thompson Noes: None Abstain: None Absent: None to approve staffs’ recommendation. 13. BOARD a) ADOPT RESOLUTION NO. 4325 OF THE BOARD OF DIRECTORS OF OTAY WATER DISTRICT CONSENTING TO AND APPROVING THE APPOINTMENT OF MARK ROBAK AS A REPRESENTATIVE TO THE BOARD OF DIRECTORS OF THE SAN DIEGO COUNTY WATER AUTHORITY (FIRST SEAT) and ADOPT RESOLUTION NO. 4326 OF THE BOARD OF DIRECTORS OF OTAY WATER DISTRICT CONSENTING TO AND APPROVING THE APPOINTMENT OF TIM SMITH AS A REPRESENTATIVE TO THE BOARD OF DIRECTORS OF THE SAN DIEGO COUNTY WATER AUTHORITY (SECOND SEAT) A motion was made by Director Croucher that the District replace one Director on the San Diego County Water Authority’s (CWA) Board of Directors and that Director Croucher remain on the CWA board as a board officer. The motion was seconded by Director Thompson. There was discussion that by maintaining Director Croucher on CWA’s board the Otay WD would maintain the benefits of a board officer position on CWA’s board. It was felt that this would be in the best interest of the District and its ratepayers. It was indicated that CWA has a very large board and that there is a very complicated process on how the representatives on CWA’s board are moved into the officer roles (North Representative, South Representative, City of San Diego Representative and Non-City of San Diego Representative) which is described in their Administrative Code. It was indicated that Director Croucher has the time on CWA’s board, committee assignments, is a more tenured board member and the right circumstances came together for him to be appointed as an officer. It was noted that in four (4) years, the Otay WD will have a chair on CWA’s board and that in CWA’s history they have never had a chair from the same agency twice. 9 There was further discussion that it was not felt that replacing one or more board members on CWA’s board would necessarily hurt the District and that rotating representation on CWA’s board would provide all Directors an opportunity to serve on their board. Ms. Kathleen Hedberg, a resident of La Mesa, indicated she wished to express her support for agenda items 13a and 13b. She indicated that she has known President Robak for over 10 years and felt he would be a great asset to CWA’s board. Ms. Hedberg also stated that she has known Director Smith for nearly 20 years. He is knowledgeable in the water industry and she felt that the District had two (2) fine potential candidates to represent the Otay WD on CWA’s Board of Directors. The motion failed with the following vote: Ayes: Directors Croucher and Thompson Noes: Directors Gastelum, Robak and Smith Abstain: None Absent: None Director Smith made a motion to approve items 13a and 13b, President Robak seconded the motion. There was more discussion that board members from other member agencies were commenting that changing representatives was not in the best interest of the Otay WD and its customers. There was expressed interest by the members of the District’s board (Otay WD board) in working together in the best interest of its customers and the agency. The board recessed at 5:55 p.m. and reconvened at 6:04 p.m. President Robak made a motion to amend Director Smith’s motion and appoint Director Smith to replace General Manager Watton and maintain Director Croucher’s appointment to CWA’s board. Director Thompson seconded the motion. The motion passed unanimously with the following vote: Ayes: Directors Croucher, Gastelum, Robak, Smith and Thompson Noes: None Abstain: None Absent: None b) DISCUSSION OF THE 2017 BOARD MEETING CALENDAR Director Thompson noted that he may not be able to attend the May 3, 2017 board meeting. There were no changes to the board meeting calendar. REPORTS 10 14. GENERAL MANAGER’S REPORT General Manager’s Report General Manager Watton reviewed handouts that were provided on the dias for each member of the board (see attached). He also presented information from his report which included an update on the Certificate of Insurance Tracking and Verification Service, the vulnerability assessment, the water loss audit, the capacity fee study, the Rosarito Beach Desalination Project, lead testing at grade levels K-12 schools, and water sales and purchases. He also noted the articles on the Rosarito Beach Desalination Project which are also attached to his report. CWA Report Director Croucher indicated that the CWA board officers traveled to Los Angeles to attend the Metropolitan Water District (MWD) board meeting. He shared a couple of examples of how CWA representatives on MWD’s board are being treated due to the lawsuit between the agencies. He stated at the MWD board meeting they discussed the findings of an audit of the Artificial Turf Program and an article published by the Los Angeles Times that was critical of the program. CWA representative on MWD’s board, Ms. Elsa Saxod, requested if MWD staff could forward such articles to the board representatives and MWD refused to do so citing that it would be a copyright issue to do so. MWD is also planning to seek a $175 million variable loan where the interest rate could go as high as 12%. Mr. Keith Lewinger, also CWA’s representative on MWD’s board, inquired why the rate on the loan was so high when rates are currently very low and asked for the details of the loan. MWD staff responded that this is the way they have done such loans for 20 years and this was the way they were going to handle the loan. The MWD board voted to approve the $175 million loan, as recommended by MWD’s staff, without receiving copies of the loan documents. The loan documents are not available to the board members until after the board has voted. Director Croucher also presented a video shown at the 2016 Colorado River Water Users Conference title, “The Colorado River Story: Addressing Continuing Challenges with Collaboration.” It reviewed the history of the Colorado River as source of water and how the States are working together to maintain the river and its future. 15. DIRECTORS' REPORTS/REQUESTS Director Smith reported that he attended, along with his regular committee and board meetings, a meeting of the District’s Ad Hoc San Diego Matters Committee and the employee holiday dinner. Director Gastelum thanked General Manager Watton and staff for the tour of the District’s facilities. He stated that he takes pride in learning about the District and commended staff for the good work they are accomplishing at the District. 11 Director Thompson requested a tour of the District’s proposed alignment of the pipeline that will deliver desalinated water from the Rosarito Desalination Project. General Manager Watton noted that the alignment in Mexico is changing, but staff will provide a tour. 16. PRESIDENT’S REPORT President Robak noted he has a written report of the meetings he attended during the month of December 2016 (his report is attached) and also shared that he attended many swearing-in ceremonies following the elections, including his brother’s ceremony, who was elected to the Lakeside Water District board. He also reviewed some of the things he would like to see occur during his presidency including a board retreat, meetings of the Ad Hoc Optimization Committee, conclusion of Employee Negotiations, an annual meeting with other agencies, the District rejoining ACWA as a member, and to tighten spending. 17. CLOSED SESSION The board recessed to closed session at 6:42 p.m. to discuss the following matters: a) CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION Initiation of litigation pursuant to paragraph (4) of subdivision (d) of Section 54956.9: 1 CASE b) PUBLIC EMPLOYEE PERFORMANCE EVALUATION: PERIODIC AND CUSTOMARY REVIEW IN DUE COURSE [GOVERNMENT CODE §54957.6] TITLE: GENERAL COUNSEL c) CONFERENCE WITH LABOR NEGOTIATORS [GOVERNMENT CODE §54957.6] AGENCY DESIGNATED REPRESENTATIVES: BOARD AD HOC COMMITTEE MEMBERS EMPLOYEE ORGANIZATION: OTAY WATER DISTRICT EMPLOYEES’ ASSOCIATION AND ALL REPRESENTED AND UNREPRESENTED PERSONNEL INCLUDING MANAGEMENT AND CONFIDENTIAL EMPLOYEES 12 The board reconvened at 8:03 p.m. and General Counsel Shinoff reported that the board met in closed session and took no reportable actions. 18. ADJOURNMENT With no further business to come before the Board, President Robak adjourned the meeting at 8:03 p.m. ___________________________________ President ATTEST: District Secretary 13 President’s Report Mark Robak January 4, 2017 Board Meeting # Date Meeting Purpose 1 7-Dec OWD Regular Board Meeting Monthly board meeting 2 8-Dec San Diego County Water Authority Observe meeting process 3 9-Dec Committee Agenda Briefing Go over agendas for FA&CC and E&O committee meetings. 4 10-Dec District Employee Holiday Dinner Annual employee dinner 5 13-Dec District Finance, Administration and Communications Committee Met with General Manager Watton to review items that will be presented at the December committee meetings. 6 13-Dec El Cajon City Council Swearing in of Councilmembers 7 13-Dec La Mesa City Council Swearing in of Councilmembers 8 14-Dec Board Agenda Briefing Discuss agenda for January 4th Board meeting 9 14-Dec San Diego County Water Authority Community open house for Lake Murray to Sweetwater Reservoir Pipeline 3 Relining Project 10 14-Dec Santee City Council Swearing-In of new Mayor and Councilmember 1 MINUTES OF THE BOARD OF DIRECTORS MEETING OF THE OTAY WATER DISTRICT February 1, 2017 1. The meeting was called to order by President Robak at 3:36 p.m. 2. ROLL CALL Directors Present: Croucher, Gastelum, Robak, Smith and Thompson Staff Present: General Manager Mark Watton, General Counsel Daniel Shinoff, Attorney Jeanne Blumenfeld, Asst. General Manager German Alvarez, Chief of Engineering Rod Posada, Chief Financial Officer Joe Beachem, Chief of Administration Adolfo Segura, Chief of Operations Pedro Porras, Asst. Chief of Operations Jose Martinez, District Secretary Susan Cruz and others per attached list. 3. PLEDGE OF ALLEGIANCE 4. APPROVAL OF AGENDA A motion was made by Director Thompson, and seconded by Director Croucher and carried with the following vote: Ayes: Directors Croucher, Gastelum, Robak, Smith and Thompson Noes: None Abstain: None Absent: None to approve the agenda. 5. ASSOCIATION OF CALIFORNIA WATER AGENCIES PRESENTATION (TIMOTHY QUINN, EXECUTIVE DIRECTOR) Mr. Timothy Quinn, Executive Director of the Association of California Water Agencies (ACWA), provided a presentation on what his organization does, how they work, what their current priorities are and what they will be focused on in 2017. ACWA is a statewide organization with 36 board members from around the State of California and they work with the members to address water issues from a statewide perspective to improve water supply reliability. He stated the issues ACWA is focused on include developing a long-term conservation and drought policy, advancing water storage investments, advancing sound policy on water markets/water transfers, providing leadership on drinking water solutions for disadvantaged communities and ensuring Delta solutions are part of a comprehensive statewide plan. He lastly shared that ACWA is working on 2 Proposition 218 issues and working to give members more choice and flexibility for tiered pricing, lifeline rates and the ability to finance storm water. It was discussed that the Otay WD’s annual membership fee would be approximately $25,000 and it is based on the agency’s Operating and Maintenance budget with a 50% discount on the first year’s membership. The state of California is divided into 10 regions and all members receive one vote. The membership breakdown is 60% urban and 40% agricultural which is also reflected on ACWA’s board. It was noted that one of the advantages of being a member of ACWA is the agencies together, under ACWA, can have an influence on regulations. 6. APPROVAL OF THE MINUTES OF THE REGULAR MEETING OF DECEMBER 7, 2016 AND SPECIAL MEETING OF JANUARY 12, 2017 A motion was made by Director Smith, and seconded by President Robak and carried with the following vote: Ayes: Directors Croucher, Gastelum, Robak, Smith and Thompson Noes: None Abstain: None Absent: None to approve the minutes of the regular meeting of December 7, 2016 and Special Meeting of January 12, 2017. 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. CONSENT CALENDAR 8. 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 Thompson, seconded by Director Smith and carried with the following vote: Ayes: Directors Croucher, Gastelum, Robak, Smith and Thompson Noes: None Abstain: None Absent: None to approve the following consent calendar items: 3 a) AUTHORIZATION TO ACQUIRE PERMANENT UTILITY AND TEMPORARY CONSTRUCTION EASEMENTS AT THE RANCHO SAN DIEGO TOWNE CENTER FROM VESTAR FOR THE CAMPO ROAD SEWER REPLACEMENT PROJECT IN AN AMOUNT NOT-TO-EXCEED $190,000 b) ADOPT RESOLUTION NO. 4323 AMENDING POLICY NO. 45, THE DEBT POLICY, OF THE DISTRICT’S CODE OF ORDINANCES c) ADOPT ORDINANCE NO. 560 AMENDING SECTION 27, REQUIREMENTS AND LIMITATIONS FOR OBTAINING WATER SERVICE, OF THE DISTRICT’S CODE OF ORDINANCES d) ADOPT THE 2017 OTAY WATER DISTRICT LEGISLATIVE PROGRAM GUIDELINES e) ADOPT RESOLUTION NO. 4327 OF THE OTAY WATER DISTRICT CONFIRMING GARY CROUCHER AND TIM SMITH AS THE DISTRICT’S REPRESENTATIVES TO THE SAN DIEGO COUNTY WATER AUTHORITY, EACH TO VOTE IN THE ABSENCE OF THE OTHER ACTION ITEMS 9. FINANCE, ADMINISTRATION AND INFORMATION TECHNOLOGY a) APPROVE AN ENGAGEMENT LETTER WITH THE AUDITING FIRM OF TEAMAN, RAMIREZ AND SMITH, INC., TO PROVIDE AUDIT SERVICES TO THE DISTRICT FOR THE FISCAL YEAR ENDING JUNE 30, 2017 Finance Manager Rita Bell indicated that staff is requesting that the board approve the engagement letter with the firm of Teaman, Ramirez & Smith, Inc. for auditing services for the fiscal year ending June 30, 2017. Please reference the Committee Action notes attached to staff’s report (Attachment A) for the details of Ms. Bell’s report. A motion was made by Director Gastelum, and seconded by Director Smith and carried with the following vote: Ayes: Directors Croucher, Gastelum, Robak, Smith and Thompson Noes: None Abstain: None Absent: None to approve staffs’ recommendation. b) ADOPT RESOLUTION NO. 4325 TO APPROVE A ONE (1) YEAR EXTENSION TO THE CURRENT MEMORANDUM OF 4 UNDERSTANDING (MOU) BETWEEN THE OTAY WATER DISTRICT AND THE OTAY WATER DISTRICT EMPLOYEES’ ASSOCIATION, AND APPROVE THE SAME PROVISIONS FOR MANAGEMENT, CONFIDENTIAL AND EXECUTIVE EMPLOYEES (WILLIAMSON) General Manager Watton indicated that this item was discussed in closed session (at a Special Board Meeting held on January 12, 2017). The Otay Water District Employees’ Association ratified the offer from the board and Resolution No. 4325 is presented for the board’s ratification to extend the current MOU for one (1) year. It was discussed that the Ad Hoc Employee Negotiations Committee felt that this was a good resolution for both parties and would move the staff and board forward for another year. The staff will receive an increase of between 2% and 3% which is consistent with the inflation rate. It is felt that stability and protecting ratepayers’ interest was important, while also recognizing the value of the District’s staff. A motion was made by Director Gastelum, seconded by Director Thompson and carried with the following vote: Ayes: Directors Croucher, Gastelum, Robak, Smith and Thompson Noes: None Abstain: None Absent: None to approve Resolution No. 4235 approving a one (1) year extension to the current MOU between the Otay Water District and the Otay Water District Employees’ Association, and approve the same provisions for management, confidential and executive employees. 10. BOARD a) DISCUSSION OF 2017 BOARD MEETING CALENDAR Director Croucher noted that from February 28 to March 1, 2017 he may be in Sacramento and may be unable to attend the March 1 board meeting. There were no changes to the board meeting calendar. INFORMATIONAL ITEMS 11. THIS ITEM IS PROVIDED TO THE BOARD FOR INFORMATIONAL PURPOSES ONLY. NO ACTION IS REQUIRED ON THE FOLLOWING AGENDA ITEM. a) UPDATE ON THE PROGRESS OF THE CITY OF SAN DIEGO’S APPLICATION WITH THE CALIFORNIA DEPARTMENT OF WATER 5 RESOURCES FOR A SCIENTIFIC-BASED MODIFICATION TO THE BOUNDARIES OF THE SAN DIEGO FORMATION GROUNDWATER AQUIFER Engineering Manager Bob Kennedy indicated that in September of 2014, Governor Brown signed into law the Sustainable Groundwater Management Act (SGMA) in response to persistent and drought driven severe overdraft and related ground subsidence issues in portions of the state, primarily the Central Valley of California. The Act set forth a process and timeline for the formation of Groundwater Sustainability Agencies (GSAs) to establish and implement Groundwater sustainability Plans (GSPs) and restore groundwater sustainability in basins classified by the DWR as being of “medium” to “high” priority. Please reference the Committee Action notes attached to staff’s report (Attachment A) for the details of Mr. Kennedy’s report. Director Smith indicated that the Engineering, Operations and Water Resources Committee discussed this item at length and the committee wished to make sure that the City of San Diego is not taking water rights. He stated that it is clear that that is not what is happening. The discussion is on how to split the cost of the GSP between the involved agencies. It was noted that it is about a year before a decision needs to be made. This item will be brought back at a future board meeting. REPORTS 12. GENERAL MANAGER’S REPORT General Manager’s Report General Manager Watton presented information from his report which included an update on the Vulnerability Assessment performed by the DHS, the Hillsdale Road sewer replacement project, the Rosarito desalination project, a contractor taking water from a hydrant without a meter in the Otay Mesa area, and water purchases. Director Thompson commented regarding the water taken from the hydrant without a meter that because this was not the first time the contractor was caught stealing water, that he would like to see the District refer the theft to the District Attorney’s office. He also would like the District to make a complaint with the State Contractors License Board. He stated that he feels the District needs to take action against this contractor to change their actions. Director Thompson further suggested that the District explore technology that can sense when water is being stolen from a hydrant, similar to AMR technology, that is cost effective. Director Croucher asked that the District educate the public on how to report hydrant water theft to the District. 6 The board had further comments and questions concerning a few items in the General Manager’s report and staff responded to the questions and comments. CWA Report Director Smith indicated that CWA is preparing its budget and they discussed three items new to their budget which they will be focusing on: cyber security, energy management, and workforce development. He also shared that in their 15-month window view, sales and revenues are down 3% and 5% respectively. He lastly reported that CWA staff reviewed its biological mitigation bank at the board’s request and they found that they have purchased too much of tier 2 Coastal Sage Scrub. They will be reaching out to the agencies to sell their excess to those who need it. Director Croucher added that the largest issue discussed by CWA this past month was the drought. He indicated that most of the reservoirs in California, on average, are over 100% full and others are between 20% and 69% full. He noted that these percentages include snowpack as well. He stated that the County of San Diego is not in a state of emergency with regard to water supply, but County residents still need to use water wisely and conserve. However, drastic measures are not necessary as the County has invested in infrastructure (Desalination Plant, built/enlarged reservoirs for storage, etc.) to stabilize its supplies. He noted that CWA is not looking at the “California Water Fix” negatively. They feel that they need their questions answered before they can support the plan. He lastly announced that the Water Academy will be holding another session and asked if the District had anyone they wished to nominate, nominations are due on February 9. Director Gastelum indicated that Communications Officer Tenille Otero had nominated him to attend the academy. 13. DIRECTORS' REPORTS/REQUESTS Director Smith reported that he attended the following meetings in January: regular board meeting on January 4, special board meeting on January 12, the Engineering Operations and Water Resources Committee on January 17, the Desalination Project Committee on January 19, the Ad Hoc Employee Negotiations Committee on January 9, the Ad Hoc Optimization Committee on January 11, the City of San Diego Matters Committee on January 20, and the mediation in the City of San Diego matter on January 30. Director Croucher reported that he met with President Robak and they discussed several issues and agreed at their meeting that professionalism is key to relations with members of the board and constituents. He stated that he feels that they, as a board, are much stronger now following his meeting with President Robak and the January 2017 board meeting discussion. Director Smith indicated that he concurred with Director Croucher’s statement. 7 14. PRESIDENT’S REPORT President Robak noted he has a written report of the meetings he attended during the month of January 2017 (his report is attached). He noted that the meeting of the Ad Hoc Optimization Committee was productive and is a work in progress. He also commented with regard to his meeting with Director Croucher that the board is moving forward for the greater good of the District and its customers. 15. CLOSED SESSION The board recessed to closed session at 6:42 p.m. to discuss the following matters: a) CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION Initiation of litigation pursuant to paragraph (4) of subdivision (d) of Section 54956.9: 1 CASE b) CONFERENCE WITH REAL PROPERTY NEGOTIATORS [GOVERNMENT CODE §54956.8] PROPERTY: SALT CREEK GOLF COURSE 525 HUNTE PARKWAY CHULA VISTA, CA 91914 AGENCY NEGOTIATOR: MARK WATTON, GENERAL MANAGER NEGOTIATING PARTIES: BILL McWETHY, PACIFIC HOSPITALITY GROUP UNDER NEGOTIATIONS: INSTRUCT NEGOTIATOR CONCERNING PRICE, TERMS OF PAYMENT, OR BOTH, FOR THE PURCHASE, SALE AND/OR LEASE OF THE PROPERTY. c) CONFERENCE WITH LABOR NEGOTIATORS [GOVERNMENT CODE §54957.6] AGENCY DESIGNATED REPRESENTATIVES: MARK ROBAK AND TIM SMITH EMPLOYEE ORGANIZATION: OTAY WATER DISTRICT EMPLOYEES’ ASSOCIATION 8 AND ALL REPRESENTED AND UNREPRESENTED PERSONNEL INCLUDING MANAGEMENT AND CONFIDENTIAL EMPLOYEES The board reconvened at 6:21 p.m. and General Counsel Shinoff reported that the board met in closed session and took no reportable actions. 16. ADJOURNMENT With no further business to come before the Board, President Robak adjourned the meeting at 6:21 p.m. ___________________________________ President ATTEST: District Secretary 9 President’s Report Mark Robak February 1, 2017 Board Meeting # Date Meeting Purpose 1 4-Jan OWD Regular Board Meeting Monthly board meeting 2 5-Jan Met with Director Gary Croucher Discuss Board Dynamics 3 6-Jan Met with Director Mitch Thompson Discuss Board Dynamics 4 9-Jan Ad Hoc Employee Negotiations Committee Discussed Employee Negotiation matters. 5 11-Jan Ad Hoc Optimization Committee Reviewed District Business Operations 6 12-Jan OWD Special Board Meeting Discussed Closed Session Matters 7 13-Jan Committee Agenda Briefing Met with General Manager Watton to review items that will be presented at the January committee meetings. 8 17-Jan Council of Water Utilities Heard speaker on the Sustainable Groundwater Management Act (SGMA) 9 18-Jan Finance, Administration and Communications Committee Reviewed items that will be presented at the February board meeting. 10 19-Jan Desalination Project Committee Received an update on the Desalination Project and Otay Mesa Conveyance and Disinfection System Project. 11 24-Jan East County Chamber of Commerce Land Use & Infrastructure Committee Speaker from SDCWA on business regulation 10 12 25-Jan Ad Hoc Salt Creek Golf Course Committee Discussed terms for the purchase, sale and/or lease of the golf course property. 13 27-Jan Board Agenda Briefing Conference call with General Manager Watton and General Counsel Shinoff to review items that will be presented at the February Board meeting. STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: May 3, 2017 PROJECT: Various DIV. NO. ALL SUBMITTED BY: Kent Payne Purchasing and Facilities Manager APPROVED BY: Adolfo Segura, Chief, Administrative & IT Services German Alvarez, Assistant General Manager Mark Watton, General Manager SUBJECT: AUTHORIZE THE GENERAL MANAGER TO EXECUTE AN AGREEMENT WITH PROSPECTRA CONTRACT FLOORING FOR FLOOR COVERING REPLACEMENT FOR THE ADMINISTRATION BUILDING IN AN AMOUNT NOT-TO-EXCEED $183,415 GENERAL MANAGER’S RECOMMENDATION: That the Board authorize the General Manager to execute an agreement with ProSpectra Contract Flooring (ProSpectra) for floor covering replacement for the District’s Administration building in an amount not-to-exceed $183,415. COMMITTEE ACTION: See “Attachment A”. PURPOSE: To obtain authorization for the General Manager to enter into an agreement with ProSpectra for floor covering replacement for the Administration Building. ANALYSIS: With the exception of the Board Room, the floor covering throughout the Administration building is original to the remodel completed in 1998. Many areas are well worn and exhibit a deteriorated state including 2 fading, discoloration, indelible stains, delamination, seam separation, and unraveling at the edges, among other conditions. These conditions present a less than professional atmosphere for staff, visitors, and the public and in some cases, can present a general walking hazard. Staff enlisted Smart Design Commercial Interiors, LLC (Smart Design) to develop and specify carpet materials with an industry-standard fiber and backing lifetime commercial limited warranty, and color schemes suitable for an administrative work environment. Smart Design is a San Diego commercial interior design firm serving building owners, contractors and developers. Smart Design produced four (4) schemes from which an informal survey was conducted among District staff. In accordance with established purchasing procedures, the District issued a Request-for-Bids for the materials and labor based on the most popular scheme. Seven (7) firms attended a mandatory pre-bid meeting which was held on March 22, 2017. Four (4) firms indicated they would participate, however only the following two (2) bids were submitted: Firm Total ProSpectra Contract Flooring $183,415 Christian Brothers Flooring & Interiors $216,144 Staff polled the firms who did not submit a bid as to the reason(s) why they did not participate. One indicated that it was not the right time to take on this project but would be interested in bidding on future projects. The others indicated that it was not the right fit for their firm and that the furniture moving requirement was too complicated. ProSpectra, a Berkshire Hathaway company, maintains a local San Diego office and is the largest commercial flooring contractor in the U.S. Founded in 1996, they’ve completed more than 350,000 projects for more than 100,000 customers. Staff researched and referenced many of Prospectra’s projects and they have consistently met its commitments on each project. They have navigated complicated scheduling requirements and working conditions similar to the District’s. Prospectra completed a similar District project at the San Diego Housing Commission where old carpet was removed, floors prepared and new carpet installed while lifting cubicles in place. FISCAL IMPACT: Joe Beachem, Chief Financial Officer The total budget for CIP P2564 is $215,000. Total expenditures, plus as-needed underlayment repairs ($5,000) including this contract, are $188,415. 3 Based on a review of the financial budget, the Project Manager anticipates that the budget for CIP P2564 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. STRATEGIC GOAL: Supports the Districts Strategy: Ensure financial health through formalized policies, prudent investing, and efficient operations. LEGAL IMPACT: None. ATTACHMENTS: Attachment A – Committee Action Report ATTACHMENT A SUBJECT/PROJECT: AUTHORIZE THE GENERAL MANAGER TO EXECUTE AN AGREEMENT WITH PROSPECTRA CONTRACT FLOORING FOR FLOOR COVERING REPLACEMENT FOR THE ADMINISTRATION BUILDING IN AN AMOUNT NOT-TO-EXCEED $183,415 COMMITTEE ACTION: The Finance, Administration, and Communications Committee reviewed this item at a meeting held on April 19, 2017 and the following comments were made: Staff is requesting that the board approve an agreement with ProSpectra Contract Flooring (ProSpectra) for floor covering replacement for the District’s Administration building in an amount not-to exceed $183,415. Staff reviewed information in the staff report. The Committee inquired if possibly the District would have received more than two (2) bids if it did not require the mandatory pre-bid meeting and walk-through. Staff indicated that the District does make exceptions for those who cannot attend and noted that this is a public works contract. The District is, thus, somewhat limited in what it can do. The District contacted more than seven (7) companies and the seven firms that attended the prebid meeting were those who felt that they could handle the flooring project. The work would need to be done during the night and the contractor must tear down the cubicles and set them back up. In response to another inquiry from the Committee, staff indicated that the cost per square foot is approximately $8 ($183,415/23,000 square feet). Staff noted that ProSpectra had won all the floor covering replacement bids for the San Diego Convention Center. They were consistently the lowest bidder. Staff feels confident that their bid is competitive. Upon completion of the discussion, the committee supported staffs’ recommendation and presentation to the full board on the consent calendar. STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: May 3, 2017 SUBMITTED BY: Kevin Koeppen, Finance Manager Kent Payne, Purchasing Manager PROJECT: DIV. NO. All APPROVED BY: Joseph R. Beachem, Chief Financial Officer Adolfo Segura, Chief of Administrative Services German Alvarez, Assistant General Manager Mark Watton, General Manager SUBJECT: Amend the District’s Purchasing Manual to Reflect the Recommended Updates to Streamline the Procurement of Goods and Services for the District GENERAL MANAGER’S RECOMMENDATION: That the Board approve an amendment to the District’s Purchasing Manual to reflect the recommended updates in order to streamline the procurement of goods and services for the District. COMMITTEE ACTION: See Attachment A. PURPOSE: To request that the Board amend the District’s Purchasing Manual as presented in “Attachment B” in order to streamline the procurement of goods and services. ANALYSIS: The Board of Directors establishes the operational guidelines and procedures with respect to purchasing the goods and services 2 necessary to conduct the District’s business. This includes items that the General Manager (GM) or his/her Designee is authorized to purchase and which exceed the GM’s delegated purchasing authority. These procedures are defined and published in the District’s Purchasing Manual. As a normal course of business, staff periodically reviews and recommends changes that are intended to improve the operation of the District or updates in administrative items. During a review of the Purchasing Manual staff identified modifications to the manual, which should be made to prevent undue delays in operations and reflect the current administrative duties of the Assistant General Manager. The recommended changes are summarized below: Section 2 - Organization Section 2 identifies the reporting relationships within the Purchasing Division. The position of “Assistant General Manager over Finance and Administration” with its duties and responsibilities has been rolled into the current “Assistant General Manager” position. The recommended updates align the reporting relationships within the Division to recognize this change. 6.2.3 Cooperative/Joint Purchases Under the current purchasing policies, staff are not authorized to purchase solely from competitively bid contracts and multiple award schedules issued by the Federal Government’s General Services Administration, those issued by the State of California’s Department of General Services nor those of any other public agency. The recommended changes to this section modernize the cooperative and joint purchases language and authorizes staff to purchase directly from the above mentioned contracts and schedules as well as those issued by cooperatives and alliances such as US Communities, National IPA, WSCA-NASPO Cooperative Purchasing Organization and National Joint Powers Alliance among other groups that serve Government, Education and non-profit agencies. The advantages to the District and its ratepayers include the ability to leverage the buying power of large agencies and organizations while reallocating staff to more productive efforts through the elimination of the requirement to replicate and run multiple solicitations for standard goods and services. 3 Section 7 – Pricing/Bidding Requirements As part of an efficiency review of district-wide purchasing processes, the competitive bid limit was identified as an area where staff productivity gains can be derived by raising the three-bid threshold to $10,000 from the current limit of $5,000 which has been in place for over ten years. Staff conducted a survey of water districts that are members of the California Association of Public Procurement Officials (CAPPO). Nine respondents, most of which are smaller in size than the District, indicated that the three-bid threshold is at $5,000. An additional nine districts, most of which are similar or larger, indicated a threshold of $10,000 or higher with an average of $13,333. The average of all these districts is $9,167. Water Districts Limit Alameda County Water District $5,000 Central Basin Municipal $5,000 Coachella Valley Water District $5,000 Mammoth Community Water District $5,000 Marin Municipal Water District $5,000 Modesto Irrigation District $5,000 Placer County Water Agency $5,000 Santa Clara Valley Water District $5,000 Western Municipal Water District $5,000 East Bay Municipal Utility District $10,000 Eastern Municipal Water District $10,000 San Diego County Water Authority $10,000 Santa Cruz Water Department $10,000 South Coast Water District $10,000 Sweetwater Authority $10,000 El Dorado Irrigation District $15,000 Castaic Lake Water Agency $20,000 Metropolitan Water District of Southern California $25,000 Staff also conducted an analysis of fiscal year 2016 purchases that would have been affected by this change along with the estimated staff time required to source, request, analyze and process these orders. Fifty-five purchase orders were identified averaging $7,585 each. The total estimated staff time equals $26,813. A complete survey of quote differentials for the 55 orders revealed a range of 4 5.29% that totals a maximum saving of the bid process of only $22,486. In other words, the District spent $26,813 in labor hours to save $22,486 at best. In addition to the labor savings, $7,500 can be gained by shifting most of these orders on to the Cal-Card incentive program. The more significant advantage is the reallocation of staff to more productive work. Staff therefore recommends that the three-bid threshold be raised to $10,000. Section 7.2.8 Board Authorized Purchases Exceeding the General Manager’s Authority The current manual states that the General Manager or his/her Designee is authorized to exceed his/her delegated purchasing authority under Section 2 of the Code of Ordinances and purchase the following goods and services without Board approval so long as the overall Board approved budget is not exceeded: 1. Gas and electric utility for the operation of the District 2. Water 3. Temporary Labor Services 4. Chemicals and gasses for the treatment of potable and recycled water. 5. Fuel, gasoline and diesel 6. Sewage Transportation and Processing 7. Water Meters 8. Service and maintenance of the Board adopted sole source Enterprise Resource Planning (ERP) System, Tyler Eden 9. Service and maintenance of the Board adopted sole source Geographic Information System, Environmental Systems Research Institute (ESRI)/GIS 10. Medical service benefits provided by Special District Risk Management Authority (SDRMA) Fluctuations in water sales can significantly impact the following three items in this section: (1) gas and electric utility for the operation of the District, (2) water, and (4) chemicals and gasses for the treatment of potable and recycled water. In the event actual water sales significantly exceed budgeted water sales, the total expenditures related to these three items will result in exceeding the overall Board approved budget. The Purchasing Manual, as written, limits the General Manager’s authority to purchase these 5 three items under such circumstances, which is not the intent of the manual. Staff recommends that the manual be modified to authorize the General Manager or his/her Designee to purchase these three items so long as they are commensurate with water revenues for the same time period. In addition, the remaining seven items in the listing above should be limited, so long as the overall Board approved budget for Labor and Benefits, Materials and Maintenance, and Administrative Expenses is not exceeded. FISCAL IMPACT: Joe Beachem, Chief Financial Officer None. STRATEGIC GOAL: The District ensures its continued financial health through sound policies and procedures. LEGAL IMPACT: None. Attachments: A) Committee Action B) Purchasing Manual Strike-through C) Purchasing Manual Proposed ATTACHMENT A SUBJECT/PROJECT: Amend the District’s Purchasing Manual to Reflect the Recommended Updates to Streamline the Procurement of Goods and Services for the District COMMITTEE ACTION: The Finance, Administration, and Communications Committee reviewed this item at a meeting held on April 19, 2017 and the following comments were made: Staff is requesting that the board approve amendments to the District’s Purchasing Manual to streamline the procurement of goods and services for the District. Staff reviewed information in the staff report. The Committee commented that they felt that the General Manager’s spending authority described in Section 7.2.8, Board authorized Purchases Exceeding the General Manager’s Authority, for the purchase of gas & electricity for the operation of the District, water, and chemicals and gasses for the treatment of potable and recycled water, was too vague and needed to be more specific. The term “commensurate” was too general. Staff indicated that they would review and revise the verbiage as suggested by the committee. Staff reviewed and recommends the following language changes, “… so long as the amounts do not exceed the additional revenues collected from water revenues for the same time period…”. The attachments have been updated to reflect the new language. Upon completion of the discussion, the committee supported staffs’ recommendation and presentation to the full board on the consent calendar. OTAY WATER DISTRICT PURCHASING MANUAL Revised September 7, 2016May 3, 2017 Attachment B Page 2 of 33 Otay Water District Purchasing Manual Table of Contents Section Page Cover 1 Table of Contents 2 1 - Mission and Ethics Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 2 - Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Purpose .Statement Responsibilities 3 - Purchasing Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Purpose General Policies 4 - Purchasing Guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 Purpose General Guidelines and Protocols Vendor Involvement Guidelines and Protocols 5 - Legal Considerations Regarding Purchasing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1110 Purpose General 6 - Types of Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1211 Purpose General Procedures Construction Services (Public Works) Professional Consulting Cooperative/Joint Purchases Emergency Purchases 132 Materials, Goods, Services, and General Consulting Petty Cash Sole Source Purchases Blanket Purchase Orders: Guidelines for Issuing Blanket Purchase Orders 1413 Guidelines for the Use of Blanket Purchase Orders 7 - Pricing/Bidding Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154 Purpose General Requirements Formal Advertising Quotations Public Works – Construction Request for Proposals 1615 Two Step Bidding Formatted Page 3 of 33 Purchases Exempt from Competitive Pricing Emergency Purchases 175 Board Authorized Purchases Exceeding the General Manager’s Authority 8 - Change Orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1817 Purpose General 9 - Authorization to Purchase – Signatory Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Purpose General 10 - Documentation of Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Purpose General Procedure Purchases Exempt from Purchase Order Requirement 11 - Special Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Exceptions to Purchasing Procedures Bonding Encouraging Emerging Business Enterprise Insurance Invoicing Receiving, Inspection and Acceptance 23 Specifications Inventory 12 - Disposal of Surplus Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Purpose General Procedure Auction Sale Sale to Federal, State, and Local Municipalities and Government Agencies 25 Sale to Republic of Mexico Municipalities and U.S. Government Agencies 26 Donation of District Surplus Property to Municipalities, Government Agencies, and Charitable Organizations 27 Exchange or Trade-In 28 Disposal as Scrap 13 – Cal Card Credit Cards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Purpose Guidelines Definitions Procedure 30 Authorized Purchases Responsibilities Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Revisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Page 4 of 33 Section 1 – Mission and Ethics Statement 1.0 PURPOSE: To provide an understanding of the basic goal of the purchasing function within the Otay Water District. 1.1 MISSION STATEMENT: To provide for the procurement, storage and distribution of all supplies, equipment and services for the District using progressive purchasing techniques, methods and stringent controls while seeking the highest cost savings for the customers of the District. 1.2 ETHICS STATEMENT: The Otay Water District, its governing Board, employees, and agents who are involved at any point in the process to select suppliers, award and administer contracts and approve payments must adhere to high standards of ethical behavior. To this end, the policies and guidelines established in this Purchasing Manual are intended to ensure that purchasing and purchasing related decisions are in accordance with adherence to the high ethical standards of the purchasing community and of the Otay Water District. Formatted: Right: 0.03", Space After: 0 pt Formatted: Not Expanded by / Condensed by Formatted: Not Expanded by / Condensed by Formatted: Not Expanded by / Condensed by Page 5 of 33 Section 2 – Organization 2.0 PURPOSE: To provide an understanding of the Purchasing Division’s organization and its relationship within the Otay Water District. 2.1 STATEMENT: The Purchasing and Facilities Manager directs the Purchasing and Facilities Division. The Purchasing and Facilities Manager reports to the Chief of Administrative Services, who in turn reports to the Assistant General Manager over Finance and Administration, who in turn reports to the General Manager. The General Manager reports to the Board of Directors. Board of Directors | General Manager | Assistant General Manager Finance and Administrative Services | Chief of Administrative Services | Purchasing and Facilities Manager 2.2 RESPONSIBILITIES: 2.2.1 Board of Directors – Ultimate authority regarding the purchasing policies, practices and guidelines of the District rests with the Board of Directors. It is the Board’s responsibility to establish policy and direction regarding purchasing functions in accordance with the District’s Code of Ordinances. 2.2.2 General Manager – The General Manager is responsible, in accordance with the District’s Code of Ordinances, for ensuring that the District complies with Board direction regarding the purchasing function. 2.2.3 Assistant General Manager of Finance and Administrative Services – It is the Assistant General Manager’s responsibility to oversee and administer the Finance, Information Technology and Administrative Servicesall District Departments and to insure that the directions of the General Manager are carried out. 2.2.4 Chief of Administrative Services – It is the Chief’s responsibility to administer the District’s Purchasing and Facilities Division as directed by the Assistant General Manager of Finance and Administrative Services. 2.2.5 Purchasing and Facilities Manager – It is the Manager’s responsibility to manage the Purchasing and Facilities Division as directed by the Chief of Administrative Services and to: a. Develop objectives, policies, programs and procedures for the negotiation and the acquisition of materials, supplies, equipment and services for the District. Page 6 of 33 b. Coordinate purchasing policies throughout the District. c. Disseminate to other departments purchasing information designed to promote efficient operations. d. Negotiate and approve assigned purchase orders in the best interest of the District. e. Make purchases for the District in such a manner so as to maximize the value received for monies expended. f. Arrange for the sale or disposal of materials and supplies declared surplus by the Board of Directors. g. Maintain inventory levels at a satisfactory operating level. h. Work with District departments to promote vendor/seller relations. i. Work with District Departments and Committees establishing standardization of workmanship, materials and supplies used throughout the District. j. Protect the District’s interest in matters concerning charges related to the purchasing of materials, supplies and services. Page 7 of 33 Section 3 – Purchasing Policy 3.0 PURPOSE: To provide an understanding of the purchasing function and to establish and present the purchasing policies within the Otay Water District. 3.1 GENERAL: Purchasing is fundamental to the operation of the District. It means the acquisition of goods and services in exchange for an acceptable price or consideration. A purchase may be in the simplest form or it may involve the development of lengthy written agreements. Every purchase involving the transfer of goods or services is a contract. As a contract, there are considerations as to the nature of the purchase, its value, timing, method of payment, delivery, and other conditions that must be addressed. For this reason, it is the District’s policy to rest the responsibility and authority to purchase within the Purchasing and Facilities Division (Purchasing Department). 3.2 POLICIES: a. General Policy: All purchases and requests for pricing or repair services shall be made in accordance with applicable laws and the District’s Purchasing Manual, policies, and procedures. b. Open Door Policy: The Purchasing Department shall maintain an “Open Door” policy with all salespeople desiring to sell goods or services to the District. c. Interviews with Salespeople: If it is necessary for staff, other than Purchasing Department personnel, to interview salespeople regarding details of their products, requests for such visits should be made through the Purchasing Department. In interviews with salespeople, no one except the Purchasing Department may comment on the preference for any product, or give any information regarding performance or price. d. Correspondence with Suppliers: All correspondence with suppliers must be processed through the Purchasing Department unless it is technical in nature and makes no references towards purchasing. e. Negotiated Changes: Unless authorized by the General Manager, the Purchasing Department will negotiate all changes to purchases. f. Authority to Question: In order to serve the best interest of the District, the Purchasing Department shall have the authority to question all requests for purchases regarding quantity, quality, timing, and specifications. g. Approval of Gratis Materials and Samples: The Purchasing Department must approve all gratis materials, supplies or services submitted to the District as samples or tests prior to their acceptance. h. Conflict of Interest: Employees are required to disclose to the Purchasing Department any conflict of interest in the selection or recommendation for selection of District vendors, suppliers, or consultants. All contracts shall contain language, as approved by the District’s legal counsel, requiring Vendors, Suppliers, and Consultants to disclose any actual and potential conflicts of interest that exist between the Vendor, Supplier, or Consultant and the District, its representatives, agents, Board of Directors, and employees. Page 8 of 33 Section 4 – Purchasing Guidelines 4.0 PURPOSE: To provide guidelines and protocol for the standardized application of purchasing activities within the Otay Water District. 4.1 GENERAL: To a large extent, the Purchasing and Facilities Division’s (Purchasing Department) performance will be measured by how well it satisfies the needs of various departments within the District. It is essential that there be mutual cooperation between District departments to ensure that a condition of confidence exists. For this reason the following standardized guidelines and protocols have been established. 4.1.1 Guidelines and Protocol: a. Departments will keep the Purchasing Department informed of their current and anticipated activities. b. Overlapping duties regarding purchases will be clearly defined in the best interest of the District. c. If the material or equipment requested is not readily available or its price is such that significant savings can be realized through alternatives, the alternative that is in the best interest of the District shall be selected. d. Policies and procedures of the District’s Purchasing Manual will be followed. e. The Purchasing Department will notify interested departments on matters related to shortages, new products, discontinued products or anything else that directly affects the performance of the interested department, the Purchasing Department, or the District. 4.2 VENDOR INVOLVEMENT Through the Purchasing Department’s contact with vendors, it is in a position to develop or diminish the District’s reputation and/or vendor/District relationships. The District promotes a fair and aggressive purchasing manner that results in positive vendor relationships. To accomplish this, the District has established the following standardized guidelines and protocols. 4.2.1 Guidelines and Protocol: a. All competition between suppliers is to be kept open and fair. b. Advantages through vendor errors shall be declined. c. Revision of bids after submission shall not be accepted. d. Materials not strictly up to specification that may be usable without sacrifice shall be reviewed. Page 9 of 33 e. Bids shall only be solicited from those vendors with whom the District intends to do business. f. The District shall not be obligated to any particular vendor. g. Vendor locations may be visited to promote product and vendor knowledge. h. Transactions and communications with vendors shall be truthful yet shall not divulge sensitive or confidential information related to competition. i. Vendor questions, calls or correspondence shall be answered promptly and in a manner that maintains fair competition. Page 10 of 33 Section 5 – Legal Considerations Regarding Purchasing 5.0 PURPOSE: To provide understanding and direction related to legal considerations within the purchasing function of the Otay Water District. 5.1 GENERAL: The District has designated that the Purchasing and Facilities Manager has the authority to act fiducially as its agent with regard to the purchase of materials, supplies, and services. This designation is referred to as Law of Agency. As such, the Purchasing and Facilities Manager binds the District to whatever buying decision is made and makes the District responsible for any purchase order issued under his/her limits of authority. In addition to acting in the best interest of the District, the Purchasing and Facilities Manager must ensure that various Federal and State statutes governing purchasing and interstate commerce are complied with. For these reasons, consultation with the District’s legal counselor shall be made whenever there is a question concerning anti-trust implications, warranty, risk of loss and rights and remedies of the District. Page 11 of 33 Section 6 – Types of Purchases 6.0 PURPOSE: To provide standardized procedures for the purchase of consulting, construction, materials, goods, and services within the Otay Water District. 6.1 GENERAL: The District recognizes the varying levels of complexity within the purchasing function and the need to establish standardized procedures to administer the various types of purchases made within the District. 6.2 PROCEDURES: 6.2.1 Construction Services (Public Works): The General Manager, or his/her designee, may award purchase orders/contracts for construction services that are within the authorization limit of the General Manager as set by the Board of Directors. Competitive pricing of construction purchases must be in accordance with the bidding and pricing procedures of the District as outlined in Section 7.2.3 (Pricing/Bidding Requirements) of this manual. Award shall be made to the responsive and responsible bidder who has submitted the lowest bid meeting the requirements and criteria set forth in the invitation to bid. For construction contracts exceeding staff’s limit of authorization, a summary of bids together with staff’s recommendation for award or possible rejection of bids must be presented to the Board of Directors of the District at a board meeting. Should an award be made, the Board of Directors will authorize staff to execute a contract on behalf of the District. After approval as to form and legality by the District’s legal counsel, the successful bidder and the District’s representative will sign the contract. A copy of the executed contract shall be promptly provided to the Finance Department for proper accounting review. If after notification, the successful bidder fails to execute the contract within ten (10) days, the bid deposit, made in cash, cashier’s check, certified check, or bid bond will be forfeited. 6.2.2 Professional Consulting: The General Manager, or his/her designee, may award purchase orders/contracts for professional consulting services that are within the authorization limits as set by the Board of Directors. Professional Consulting Services are defined as architectural, Engineering, Environmental and any other service as identified within the California Government Code § 4525-4529. Competitive pricing of consulting services must be in accordance with the bidding and pricing procedures of the District as outlined in Section 7.2.4a (Pricing/Bidding Requirements) of this manual. Award shall be made to the consultant whose response to a request for proposal best meets the District’s needs. At the discretion of the Board of Directors or the General Manager, the review of submitted proposals may be made by the a Committee established by the Board or the General Manager. For professional consulting contracts exceeding the General Manager’s limit of authorization, a summary of bids together with staff’s recommendation for award must be presented to the Board of Directors of the District at a board meeting. Should an award be made, the Board of Directors will authorize staff to execute a contract on behalf of the District. After approval as to form and legality by the District’s legal counsel, the successful bidder and the District’s representative will sign the contract. A copy of the executed contract shall be promptly provided to the Finance Department for proper accounting review. 6.2.3 Cooperative/ Joint Purchases: The Purchasing and Facilities Manager may utilize cooperative/"piggyback" contracts, multiple award schedules and joint power agreements awarded by Federal agencies, any state, municipality or public Page 12 of 33 agency to purchase goods and services, up to the General Manager’s authorized approval limit or subject to Board of Directors’ approval when the General Manager’s authority is exceeded. These purchases are exempt from the District’s competitive solicitation requirements so long as the contracts, schedules and agreements are solicited in a manner substantially consistent with District purchasing policies. The Purchasing and Facilities Manager, subject to the approval of the District’s General Manager, may combine District purchases with the purchases of other agencies in order to best serve the District provided the value of the purchase is within the General Manager’s Board authorized approval limit. Should the value of the purchases exceed the authorization limit of the General Manager, approval to purchase must be made by the Board of Directors of the District. At a formal meeting of the Board of Directors of the District, staff will present a request for authorization to combine the District’s purchases with those of another agency. If approved, the Board will authorize staff to execute a purchase order/contract on behalf of the District. After approval as to form and legality by the District’s Legal Counsel, the purchase order/contract shall be executed. 6.2.4 Emergency Purchases: In the event of a catastrophic emergency, the guidelines and requirements as set forth in California state statute and in the District’s Code of Ordinance shall prevail over those stated herein. 6.2.5 Materials, Goods, Services, and General Consulting: Purchases of materials, goods and services, the value of which are within the limits authorized by the Board of Directors, may be made by the District’s General Manager or his/her designee. Competitive pricing for materials, goods and services must be in accordance with the bidding and pricing procedures of the District as outlined in Section 7.2.2, 7.2.4, 7.2.5, and 7.2.6 (Pricing/Bidding Requirements) of this manual as applicable. Purchases shall be made from the bidder whose bid best meets the District’s requirements and needs as set forth in the invitation to bid or request for quotation. The Board of Directors of the District must authorize purchases exceeding the General Manager’s authorized approval limit. At a meeting of the Board of Directors, a summary of bids together with staff’s recommendation for the award of a contract/purchase order or the rejection of bids shall be presented. Should an award be made, the Board of Directors of the District will authorize staff to execute a purchase order/contract on behalf of the District. 6.2.6 Petty Cash: The primary purpose of petty cash funds is to reduce costs associated with purchases and expenses in accordance with the District’s financial policies. 6.2.7 Sole Source Purchases: Other than contracts for construction, alteration or repair of District facilities, a contract may be awarded for materials, goods, services, or general consulting without competition when the District’s General Manager or the Board of Directors determines that either the product is designated to match others in use on a particular public improvement, is a unique or novel product application required to be used in the public interest, or where only one brand or trade name is known. Sole source purchases may be made by the District’s General Manager provided the value of the purchase is within the limits authorized for the General Manager by the Board of Directors of the District and the reason for the sole source authorization is documented by the General Manager and retained in accordance with District’s record’s retention policy. The Board of Directors of the District must authorize sole source purchases exceeding the General Manager’s authorized limit. At a meeting of the Board of Directors, staff will present the bid submitted together with a recommendation requesting an award of purchase order/contract to the vendor identified as the sole source. Should an award be made, the Board will authorize staff to Page 13 of 33 execute a purchase order/contract on behalf of the District. 6.2.8 Blanket Purchase Orders: Blanket purchase orders are issued to reduce administrative and operational costs, inventories and paperwork and may be issued for regularly purchased materials, supplies and services. Should a blanket purchase order be issued, the order shall include a description of each material, supply and/or service requested, a unit price for each, the period of time the order shall be in effect, and a statement obligating the vendor to deliver all or a specified part of the District’s usage requirement upon receipt of an authorized release from the District. Not included on the blanket purchase order are specific quantities. Instead of specific quantities, the blanket purchase order shall list an estimate of the quantity of each item that will be used for the period to which the blanket purchase order refers. Blanket purchase orders may not be issued for a period of time exceeding one year unless authorized by the General Manager. 6.2.8.1 Guidelines for Issuing Blanket Purchase Orders: a. Blanket purchase orders may only be issued, changed, or revoked by the Purchasing and Facilities Manager or the General Manager. b. Competitive pricing and vendor selection for blanket purchase orders shall be in accordance with the policies and guidelines as set forth in this manual. c. The Board of Directors must authorize blanket purchase orders exceeding the General Manager’s authorization limit. At a formal meeting of the Board of Directors, a summary of the requested blanket purchase order(s) shall be presented. The summary shall include a description of the materials, supplies, and services required, and total order pricing. Should the Board approve the blanket order(s), they will authorize staff to issue a blanket purchase order on behalf of the District. 6.2.8.2 Guidelines for the Use of Blanket Purchase Orders: a. The supervisor of the employee receiving materials, services, and/or goods released against a blanket purchase order will write the account code/work order information, sign (attesting that the release is authorized and that all goods/materials/services were received and accepted) and forward the receiving (packing slips) document to the Finance Department. Processed shipping documents (coded and signed) must be submitted to the Finance Department no later than the end of next workday from the date items were received. b. In the event that invoiced unit pricing exceeds the unit price indicated on the blanket purchase order, Purchasing will contact the vendor requesting that a corrected invoice be sent to the District and notify them that payment will be withheld pending the receipt of the corrected invoice. c. Should the ordering individual wish the warehouse to take delivery of items released under a blanket purchase order, notification must be given to warehouse staff. Said notification should be made by written memorandum or through e-mail or other electronic form and must include information on the purchase order number assigned to the purchase, what and when goods are to be delivered, and who will ultimately receive the goods. Page 14 of 33 Section 7 – Pricing/Bidding Requirements 7.0 PURPOSE: To provide requirements, policies, and guidelines for the pricing/bidding of purchases within the Otay Water District. 7.1 GENERAL: It is the District’s policy to request competitive pricing from responsible vendors for all purchases exceeding $5,00010,000. Pricing, although important, is not the only factor in determining the overall cost and value of a product. Quality, service and delivery are factors that must also be considered when comparing quotations. It is by weighing these factors that an intelligent decision can be made to purchase the product with the greatest value for the least overall price. 7.2 REQUIREMENTS: 7.2.1 Formal Advertising: Public works purchases, as defined in the State of California’s government and contract code, shall follow the procedure outlined under the California Uniform Public Construction Cost Accounting Act (CUPCCAA) (Sect 22000 et seq. of the California Contract Code and as set by the California Uniform Construction Cost Accounting Commission (CUCCAC). Solicitations must contain a brief description of the goods or services required, state where prospective bidders may obtain plans and specifications and make any required deposits, state the time and place of the bid opening, and state that the District reserves the right to reject one or all bids. (Rev 2017-09-07) 7.2.2 Quotations: For purchases greater than $5,00010,000, excluding public works subject to CUPCCAA or formal bidding, a minimum of three competitive quotations must be obtained. Quotations received may be in written or oral form. Should oral quotations be received, written documentation must be made identifying the bidder’s name, contact name, telephone number, the date of the quotation and the pride bid. Should three quotations not be obtainable, documentation in the form of a notation of memorandum must be provided and attached to the purchase requisition. Where only one price is obtainable, the actions taken to obtain competitive pricing shall be documented and attached to the purchase requisition and the purchase may be made and the requirements of this section shall be satisfied. (Rev 2017-09-07) 7.2.3 Public Works - Construction: Public work purchases equal to or exceeding what is authorized under the California Uniform Public Construction Cost Accounting Act (CUPCCAA) (Sect 22000 et seq. of the California Code and as set by the California Uniform Construction Cost Accounting Commission (CUCCAC) must be formally advertised and sealed bids received. (Rev 2017-09-07) The Purchasing and Facilities Manager or the General Manager’s designee, in conjunction with the project manager, and where appropriate, the District’s legal counsel, shall publicly open all sealed bids and tabulate the results. The bid tabulation, along with a recommendation for award contract or possible rejection of bids, shall be forwarded to the District’s General Manager. In the event that the value of the purchase exceeds the General Manager’s signatory authority, a summary of bids shall be presented together with staff’s recommendation for an award of contract or possible rejection of bids to the Board of Directors of the District during a formal board meeting. The Board of Directors will then authorize the execution of the contract on behalf of the District. Page 15 of 33 Award shall be made to the responsive and responsible bidder who has submitted the lowest bid meeting the requirements and criteria set forth in the invitation to bid. After approval as to form and legality of the contract documents by legal counsel, the successful bidder and the appropriate District representative(s) shall execute the contract. A copy of the executed contract shall be promptly provided to the Finance Department for proper accounting review. 7.2.4 Request for Proposals: a. For the Solicitation of Professional Consulting (Engineering): (Rev 2017-09-07) The General Manager, or his/her designee, will establish a review panel to evaluate and rank submittals (proposals) using criteria published in the Request for Proposals package. Documents, invitations, and evaluation of submittals for professional consulting services shall be made in compliance with Government Code Section 4526-4529 and District Policy #21 – Policy for Selection of Professional Consultants. b. For the Solicitation of General Consulting and Services: The General Manager, or his/her designee, shall determine the method for soliciting and evaluating proposals for general consulting and services. The request for proposal must be in written form and must provide sufficient information to clearly identify the work required and provide respondents with a clear understanding of the District’s needs, work specifications, expectations and the criteria that will be used to evaluate submittals. 7.2.5 Two Step Bidding: Where it is considered impractical to initially prepare a purchase description to support an award on price, a request for proposals may be issued requesting the submission of not priced technical proposals. This will be followed by an invitation for bids limited to those bidders whose technical proposals meet the requirements set forth in the first invitation. 7.2.6 Purchases Exempt from Competitive Pricing: The following contract/purchases are exempt from competitive pricing: 1. With Federal, State or Local Agencies, 2. Temporary labor services to fill time-limited employment needs, 3. For the sole purpose of obtaining expert witness for litigation, and 4. That are for legal defense, legal advice, or legal services. 7.2.7 Emergency Purchases: During times when the General Manager has declared an emergency, where the immediate acquisition of materials, goods, and services is required, the purchase of needed materials, goods, and services shall be made in accordance with California state statutes and per the District’s Code of Ordinances. Page 16 of 33 7.2.8 Board Authorized Purchases Exceeding the General Manager’s Authority: a. The General Manager or his/her Designee is authorized to exceed his/her delegated purchasing authority under Section 2 of the Code of Ordinance and purchase the following goods and services without Board approval so long as the overall Board Approved District Budget for Labor and Benefits, Materials and Maintenance and Administrative expenses is not exceeded: 1. Gas and electric utility for the operation of the District 2.1.Water 3.1.Temporary labor services 4. Chemicals and gasses for the treatment of potable and recycled water. 5.2.Fuel, gasoline and diesel 6.3.Sewage Transportation and Processing 7.4.Water Meters 8.5.Service and maintenance of the District’s Board adopted sole source Enterprise Resource Planning (ERP) System, Tyler Eden 9.6.Service and maintenance of the District’s Board adopted sole source Geographic Information System, Environmental Systems Research Institute (ESRI)/GIS 7. Medical Service Benefits provided by Special District Risk Management Authority (SDRMA) b. The General Manager or his/her Designee is authorized to exceed his/her delegated purchasing authority under Section 2 of the Code of Ordinances and purchase the following goods and services without Board approval so long as the amounts are commensurate with the District’s water revenues for the same time period: Gas and electric utility for the operation of the District 1. Water 2. Gas and electric utility for the operation of the District 3. Chemicals and gasses for the treatment of potable and recycled water. Formatted: Normal, No bullets or numbering Formatted: Normal, No bullets or numbering Page 17 of 33 Section 8 – Change Orders 8.0 PURPOSE: To provide guidelines for the initiation and approval of contract change orders within the Otay Water District. 8.1 GENERAL: Change orders may be initiated by the contractor/vendor or by the District. The District’s General Manager or his/her designee must approve change orders as defined in the District’s Code of Ordinances, Section 2.01e. The Board must approve change orders exceeding the General Manager’s authorized limit. Only written change orders are allowed. Page 18 of 33 Section 9 – Authorization to Purchase – Signatory Authority 9.0 PURPOSE: To provide guidelines and protocol for establishing signatory authority for the approval of purchases within the Otay Water District. 9.1 GENERAL: The Board of Directors of the District has sole signatory (ability to sign contracts and approve purchases) authority within the Otay Water District. The Board may, at a regularly scheduled board meeting, establish signatory authorization limit(s) for the General Manager as defined in the District’s Code of Ordinances, Section 2.01c-e. The General Manager at his/her discretion may delegate his/her signatory authority, as he/she deems necessary. Other than as identified in Section 7.2.8 of this Manual, “Board Authorized Purchases Exceeding the General Managers Authority”, delegated authorization limits may not exceed those established by the Board for the General Manager. Delegated authorization must be documented in the form of a memorandum, signed by the General Manager. Included in the memorandum must be a listing of individuals and/or job classification to whom signatory and purchase approval authority has been delegated and the maximum dollar value(s) of said authority. Copies of the memorandum shall be provided to the District’s senior management team and to the Purchasing and Facilities Manager. The General Manager at his/her discretion may allow the Assistant General Managers to delegate their signatory authority, as they deem necessary within their departments. Page 19 of 33 Section 10 – Documentation of Purchases 10.0 PURPOSE: To provide standardized guidelines and procedures for documenting the authorization, pricing and award of contracts within the Otay Water District. All purchases exceeding petty cash limit, excluding purchases identified as exempt from this requirement under “Purchases Exempt from Purchase Order Requirement”, shall be required to be documented as prescribed herein. 10.1 GENERAL: As a public agency, the fundamental practice of documenting purchases must be followed. The documentation must provide a record of vendor name, address, contact and telephone number, pricing, authorized purchase approval(s), terms and conditions, consideration, placement of order, receipt of order and authorization of payment. Documentation will be made on a “purchase requisition” form (printed or electronic) together with a purchase order/contract (printed or electronic). 10.2 PROCEDURE: a. A “Purchase Requisition” (requisition) form is an internal control document. It shall be used to record vendor name, address, contact and telephone number, authorized purchase approval(s), pricing, quantities and special terms and conditions. Documentation of competitive pricing may be in the form of a memorandum or note attached to the requisition. For purchases requiring the use of formal bidding/advertising, the bids received will be retained in accordance with the District’s record retention policy. The requisition may be in written or electronic form provided that it is standardized, and immutable. b. When complete, the requisition will be used to produce a purchase order/contract. A copy of the completed purchase requisition will be retained in accordance with the District’s record retention policy. c. The purchase order/contract represents a written agreement between the District and the Vendor. In addition to identifying the District and Vendor, it is used to document terms and conditions. d. The purchase order/contract will be in a form as approved by the District’s legal counsel. e. The purchase order form shall be the used as the District’s primary contract document for material, service, and supply purchases. Typically, purchases of professional engineering services, consulting and major construction require contracts in a form other than a purchase order. In the event a contract in a form other than a purchase order is used, the District’s counsel shall approve it as to form. A purchase order may be issued for control purposes to supplement a contract. In this event, the purchase order will reference the contract document as representing the agreement between the District and vendor. 10.2.1 Purchases Exempt from Purchase Order Requirement: a. The Board has identified the following purchases as exempt from the requirement of a written purchase order/contract: 1. Travel and meeting advances and reimbursements 2. Purchases less than the petty cash limit 3. Prepaid travel expenses, i.e., airfare and hotel 4. Utilities 5. Television and satellite service Page 20 of 33 6. Meal reimbursements 7. Telephone usage charges, including wireless telephones and pagers 8. Postage 9. Classified, legal, and display advertising 10. Petty Cash purchases 11. Mileage reimbursement 12. Memberships and dues 13. Subscriptions and books 14. Permits and fees 15. Customer refunds 16. District credit card reimbursements 17. Employee awards, incentives 18. Employee educational reimbursements 19. Seminars and training 20. Purchases made utilizing Cal Card 21. Contracts or letters of agreement as approved by the General Manager or the Board of Directors b.c. Completed purchase requisitions may be required, as determined by the General Manager or his/her designee. Page 21 of 33 Section 11 – Special Considerations 11.0 Exceptions to Purchasing Procedures: In specific instances, such as Federal Grants and Assessment Districts, there may be specific requirements in the contract or ordinance relating to the expenditure of such funds. The conditions of such agreements and ordinances shall take precedence over the procedures established in this manual. 11.1 Bonding: a. In addition to any required bid deposit or bond, all construction contracts in excess of $35,000 shall require: 1) A PERFORMANCE BOND in the amount of 100% of the contract price, and 2) A LABOR AND MATERIALS BOND in the amount of not less than 50% of the contract price. b. For construction contracts under $35,000, bonding shall be in accordance with District Policy No. 31, Encouraging Disadvantaged Business Enterprise Firms. 11.2 Encouraging Emerging Business Enterprise: The District’s purchasing practices shall reflect the requirements set forth in District Policy No. 31, Encouraging Disadvantaged Business Enterprise Firms. 11.3 Insurance: a. General, Automobile, and Errors and Omissions: All contracts shall have a requirement for general, automobile, and errors and omissions insurance as applicable to the type of service or work contemplated. The amount and type of insurance required for each type of contract shall be at the discretion of the General Manager in an amount so as to indemnify the District from loss. b. Workers’ Compensation: All public works contracts shall have a requirement for workers’ compensation insurance in an amount as required by law. Additionally, all non-public works contracts shall require workers’ compensation insurance coverage in an amount sufficient to indemnify the District from loss. 11.4 Invoicing: Financial obligations of the District are normally settled on a Net 30 day payment basis. All invoices submitted to the District must include: 1) The vendor’s name, business address and date, 2) The District’s purchase order/contract number and the vendor’s invoice number, 3) The shipment date and/or the date of service, 4) The terms of sale and applicable payment discounts, 5) An itemized description of materials purchased or services performed, including quantities, unit prices, discounts, extensions, and other charges as specified in the purchase order/contract, Page 22 of 33 6) Sales and other taxes and freight charges, itemized separately or as specified by the District. 11.5 Receiving, Inspection and Acceptance: a. All materials, supplies or services furnished shall be exactly as specified, free from all defects and shall be subject to inspection and testing by the District. The method of inspection to be used in any particular procurement shall be commensurate with the specific quality and specification requirements. The Purchasing and Facilities Manager shall be notified immediately if any materials, supplies or services do not conform to specification. In such cases, the Purchasing and Facilities Manager shall take appropriate action to protect the interests of the District. b. Receiving shall be documented on the receiving copy of the purchase order or other electronic form. When all materials, supplies and/or services have been received, the receiving staff will forward the vendor’s shipping document(s) to the Finance Department and indicate (in writing or electronically) that the materials, supplies and/or services have been accepted and that the purchase order is authorized for payment. 11.6 Specifications: a. All purchases of materials, supplies and services shall meet the requirements as published by the District in “Standard Specifications for Water and Sewer Construction”. b. The requesting person shall define specifications for materials, supplies and services not addressed by the above referenced publication. The specification shall include information such as brand or trade names, description of material or method of manufacture, description of performance, purpose and use, physical and chemical properties, and any other information needed so as to give the purchasing department enough information to purchase correctly. For purchases requiring a written specification, it shall be the requisitioning staff’s responsibility to provide a complete specification document. c. All specifications shall be drafted so as to assure the maximum practicable competition for the District’s needs. 11.7 Inventory: General Manager or his/her designee shall identify District property to be inventoried and shall insure that periodic inventory reconciliation is performed. Page 23 of 33 Section 12 – Disposal of Surplus Property 12.0 PURPOSE: To provide a standardized method for disposing of materials, supplies and other property, excluding real property, that is surplus to the needs of the District. 12.1 GENERAL: a. It is staff’s responsibility to keep the District’s inventories as low as possible and to standardize materials, supplies and equipment in order to minimize the number of articles carried in stock while b. Surplus Items - The General Manager shall develop, on an as need basis, an inventory of properties that are surplus to the District’s needs. The General Manager or his/her designee may declare items with a residual value less than $10,000.00 as surplus to the needs of the District and authorize their disposal. Where the residual value of an item exceeds $10,000.00, only the Board of Directors may declare the property surplus and authorize its disposal. c. Items of Little or No Value – Items that have no value to the District and little or no value in the market place except as scrap or for a purpose other than its originally intended use, the General Manager or his/her designee shall have authority to declare said properties trash or scrap and 12.2 PROCEDURE: Once property has been declared surplus it shall be the responsibility of the Purchasing and Facilities Manager, in a manner provided herein and approved by the General Manager, to dispose of the surplus property. All property shall be disposed of “as is-where is”, with no warranty or guarantee as to serviceability or usability and where applicable, paid in full in U.S. currency prior to delivery. District property tags shall be removed from the surplus property prior to its disposal. District employees, as private individuals, may purchase District surplus property by participating in auction sales as prescribed in Section 12.2.1 Auction Sale. 12.2.1 Auction Sale: a. Disposal of surplus property may be accomplished through auction sale. 1) Through consignment of items to a vendor, a private auctioneer, licensed and bonded to do business in San Diego County, to sell on behalf of the District. Where authorized by the General Manager, the Purchasing and Facilities Manager shall enter into an agreement with the vendor that has the potential of generating the most market interest and, therefore, the highest net proceeds for the District. The consignment vendor shall, at its expense, advertise the item for sale and shall accept offers for the District, with the District having final acceptance authority. 2) By advertising for sale in a newspaper of general circulation or in any other manner approved by the General Manager. Newspaper ads shall be placed at least two (2) weeks prior to the sale date and shall identify the property for sale. Sealed bids will be solicited unless otherwise directed by the Purchasing and Facilities Manager and the property will be sold to the highest bidder. Bid security shall be provided by requiring that a ten percent (10%) guarantee accompany each bid or aggregated bid. Such bid security shall be in the form of a certified check, cashier’s check, or money order payable to the order of the District. Payment of the balance of the total Page 24 of 33 bid must be made by the successful bidder within twenty-four (24) hours after the award. In the event the successful bidder fails to pay the balance of his bid, the bid security will be forfeited and the award will be made to the next highest responsible bidder. The successful bidder shall be responsible for all required permits, fees and licenses. The property shall be removed from District premises in a time frame established by the Purchasing and Facilities Manager. 3) By participation in a joint municipal/public agency public auction. Where authorized by the General Manager, the District may dispose of surplus property through participation in a joint municipal/public agency auction. 12.2.2 Sale to Federal, State, and Local Municipalities and Governmental Agencies: a. Where it is in the best interest of the public, surplus property may be sold by the Purchasing and Facilities Manager to municipalities and government agencies in accordance with the follow guidelines. The Purchasing and Facilities Manager shall give preference to local governmental agencies located within the District’s boundary. Page 25 of 33 1) If the estimated fair market value, as determined by the Purchasing and Facilities Manager, does not exceed $10,000, a negotiated sale may be conducted with the governmental agency and sale of the item concluded at the price determined to be a fair and reasonable market price for the item. 2) If the estimated fair market value, as determined by the Purchasing and Facilities Manager, is greater than $10,000 but does not exceed $50,000, the General Manager’s approval shall be obtained prior to any sale. Information provided to the General Manager shall, at a minimum, identify the government entity, the rationale behind the sale at the value, and the manner in which the fair market value was determined. 3) If the estimated fair market value, as determined by the Purchasing and Facilities Manager, is greater than $50,000, Board approval shall be obtained prior to any sale. Information provided to the Board shall, at a minimum, identify the government entity, the rationale behind the sale at that value, and the manner in which the fair market value was determined. 12.2.3 Sale to Republic of Mexico, U.S. Municipalities and Government Agencies: a. When the District has declared items surplus to its needs and the Purchasing and Facilities Manager has determined that the item(s) should be sold in accordance with the guidelines contained herein, such item(s) may be sold to Republic of Mexico, U.S. municipalities and/or government agencies under the following guidelines: 1) Prior to consummating any sale to a Republic of Mexico, U.S. municipality and/or governmental agency, the Purchasing and Facilities Manager shall ensure that right of first refusal for known requirements is offered to local governmental agencies. 2) The Republic of Mexico, U.S. municipality and/or governmental agency shall forward to the Purchasing and Facilities Manager, a written official request which provides the following information: a. Name and address of municipality or governmental agency. Page 26 of 33 b. Name and telephone number of responsible official who can consummate a resulting sale agreement and sign appropriate sale documents. c. Description and quantity of surplus property items desired. d. Statement as to how the items requested will be used by the requesting municipality or governmental agency. 3) If the estimated fair market value, as determined by the Purchasing and Facilities Manager, does not exceed $50,000, the General Manager’s approval shall be obtained. Information provided to the General Manager shall, at a minimum, identify the government entity, the rationale behind the sale at that value, and the manner in which the fair market value was determined. 4) If the estimated fair market value, as determined by the Purchasing and Facilities Manager, is greater than $50,000, Board approval shall be obtained. Information provided to the Board shall, at a minimum, identify the government entity, the rationale behind the sale at that value, and the manner in which the fair market value was determined. Page 27 of 33 12.2.4 Donation of District Surplus Property to Municipalities, Governmental Agencies, and Charitable Organizations: a. Where it is in the best interest of the public, surplus District property of no or De Minimus value, where proceeds of the sale of the property will be less than the cost of the sale of the property, may be donated under the following guidelines to municipalities, governmental agencies, and charitable organizations in lieu of discarding such property: b. The District’s Purchasing and Facilities Manager shall first assess the value of the item and the cost of disposal and make a determination that the item has no value or De Minimus value. c. The requesting municipality, public agency, or charitable organization shall forward to the Purchasing and Facilities Manager a written donation request, approved by its governing board or chief operating officer, which includes the following minimum information: 1. Name and address of municipality, agency, or charitable organization. 2. Name and telephone number of responsible official who will accept the donation, if approved, and sign appropriate donation documents. 3. Description and quantity of surplus property items desired. 4. Statement as to how the items requested will be used by the requesting public agency. 5. Proof of charitable status (501 (C)) organizations as applicable. d. Donation of surplus items requested shall be made to requesting entities giving priority to entities as follows: 1. Public agencies within the District’s boundary 2. Public agencies outside of the District’s boundary 3. Charitable organizations within the District’s boundary 4. Charitable organizations outside of the District’s boundary e. Donation of District owned surplus property of no or De Minimus value may be approved by the Purchasing and Facilities Manager when the estimated total fair market value of the donation, as determined by the Purchasing and Facilities Manager, does not exceed either $25 per item or $500 per lot. f. Donation of District owned surplus property of no or De Minimus value may be approved by the General Manager when the estimated total fair market value, as determined by the Purchasing and Facilities Manager, does not exceed $10,000. g. Donation of District owned surplus property of no or De Minimus value, where the total estimated fair market value of the donation, as determined by the Purchasing and Facilities Manager, exceeds $10,000 shall be made by the Board. h. For the purpose of this policy, charitable organizations shall mean a non-profit organization exempt from taxation under the provisions of the Internal Revenue Code, 26 U.S.C. 501 (C), whose primary purpose is public service or a Republic of Mexico registered public organization promoting economic and social well-being in the border region. i. In consideration for the donation and as a condition of transfer, the recipient of the donated surplus shall execute a release and indemnification agreement satisfactory to the District’s General Counsel. Formatted: Left, Right: 0", Line spacing: Multiple 1.15li Page 28 of 33 12.2.5 Exchange or Trade-In: Where deemed by the Purchasing and Facilities Manager to be in the best interest of the District, the surplus property may be exchanged or traded in on new supplies and equipment. Trade-in values must be documented and retained in accordance with the District’s records retention policy. 12.2.6 Disposal as Scrap: In the case of surplus property that has been determined by the General Manager or their designee to be trash or scrap with no or De Minimus value, and where no governmental or non-profit organization expresses interest in the item, the Purchasing and Facilities Manager may dispose of the property in any manner deemed appropriate. Where property is disposed of as scrap, full records of such disposal shall be kept. Page 29 of 33 Section 13 –Credit Cards 13.0 PURPOSE: To provide procedures and guidelines for the issuing and use of credit cards and for the administration of the Cal-Card Program within the District. 13.1 GUIDELINES: a. The General Manager is authorized to be issued and to issue credit cards and to establish revolving credit accounts with vendors where it is in the best interest of the District, in accordance with applicable statutes and laws. b. Where feasible, the issuing of credit cards shall be through the State of California Cal Card Program. c. Use of credit cards shall be limited to appropriate purchases as defined herein. d. Purchases utilizing credit cards shall be made in accordance with this policy and established purchasing procedures and guidelines as defined in the District’s Purchasing Manual. This includes, but is not limited to complying with the District’s requirements related to authorization and pricing/ bidding. e. The intent of utilizing credit cards, and in particular Cal-Card credit cards, is to: 1. Reduce costs associated with the accounts payable function, 2. Reduce payment time to District suppliers, 3. Provide a means to take advantage of time sensitive price discounts, 4. Enhance District operations and reduce cost, 5. Reduce dependency on petty cash disbursements, 6. Provide for expedient purchases during emergencies. 13.2 DEFINITIONS: a. Cal-Card Program: A system developed by the State of California (under Governor Wilson’s Executive Order W-73-94) designed to facilitate public credit card purchases up to $50,000. b. I.M.P.A.C. Government Services (IMPAC): Credit Card provider contracted with the State of California, through a Master Service Agreement, to provide Visa Credit Card service; maintain master file and account for each card holder; send monthly statements to each cardholder, approving official, and agency or district accounting office. c. District Representative: The District’s contact person for program and accounting office functions; determines which District personnel receives cards; establishes card limits including purchase restrictions; establishes District’s procedures and guidelines for participation in the Cal-Card Program. d. Cardholder: Person(s) designated by the District’s Representative as being authorized to make purchases using credit cards and/or the Cal-Card Program within District procedures and guidelines. e. Approving Official: Person(s) designated by the District’s Representative to review, approve, and/or certify monthly cardholder billing statements and adherence to District purchasing and budgetary procedures; forwards monthly statements to the District’s Page 30 of 33 accounting office. f. Accounting Office Representative: Person designated within the District to receive and process credit card statements and documentation. g. Credit Card Limit: The transaction and spending limit established by the District Representative for a Cardholder. 13.3 PROCEDURE: Purchases made utilizing credit cards and/or Cal-Cards shall comply with the District’s requirements, guidelines and procedures as defined within the District’s Purchasing Manual. 13.4 APPROPRIATE PURCHASES: a. The General Manager or his/her designee shall determine which goods and services are appropriate for purchase using credit cards and may, in the best interest of the District, restrict where, when and how credit cards are utilized. The value of a purchase made using credit cards is limited to the signatory authority of the General Manager and must be categorized as one of the following: 1. Exempt from the requirement of a purchase order/contract, 2. Made under the auspices of a blanket purchase order, 3. Documented and approved in a form approved by the General Manager, 4. Made under an emergency declared by authority of the General Manager. 13.5 RESPONSIBILITIES UNDER THE CAL_CARD PROGRAM: 13.5.1 District’s Representative: a. The General Manager or his/her designee is the District’s Representative relative to the Cal- Card program. b. The District’s Representative shall be responsible, for: 1. Completion and processing of State required documentation for participation in the Cal- Card program, 2. Establishment of credit card limits (Credit card limits shall not exceed the purchasing authority of the General Manager as granted by the Board of Directors and those limits established by the General Manager under his/her Signatory Authority Delegation Schedule), 3. Identification of Cardholders, Approving Officials, and Accounting Office Representative, 4. Overseeing of the Cal-Card Program within the District, 5. Insuring adherence to the District’s purchasing policies, procedures and practice. 13.5.2 Cardholder: a. The Cardholder shall be responsible for: 1. Adhering to the procedures and guidelines set herein, 2. Reviewing his/her monthly statements for accuracy, 3. Retaining, reconciling, and attaching sales slips and, when applicable, approved requisitions to his/her monthly statement, Page 31 of 33 4. Providing and documenting account code information on monthly statements by transaction, 5. Submitting his/her reconciled statement, with attachments, to his/her Approving Official in a timely manner. 13.5.3 Approving Official: a. The Approving Official shall be responsible for: 1. Adhering to the procedures and guidelines set herein, 2. Reviewing and approving for payment the monthly statements for those cardholders under his/her supervision, 3. Insuring that all information required for payment, including account coding, of monthly statements is provided to the Finance Department, 4. Requesting additional documentation if necessary, 5. Forwarding all statements to the Finance Department in a timely manner. 13.5.4 Finance Department Representative: 1. The Finance Department Representative shall be responsible for: 1. Adhering to the procedures and guidelines set herein, 2. Receiving consolidated monthly statements, 3. Receiving reconciled statements from Approving Officials, 4. Reconciling statements in accordance with District procedures and policies governing the accounts payable function. Page 32 of 33 Appendix 1. Otay Water District Board of Directors Policy No. 21 2. Otay Water District Board of Directors Policy No. 31 3. Otay Water District Memorandum -Signatory Authority Delegation (Revised as necessary by the General Manager) Page 33 of 33 Revisions 1. Codified October 2009 2. October 2014 –Amend Section 12 - Disposal of Surplus Property by Board action, 3. April 2016 – Amend Section 7.2.8 Board Authorized Purchases Exceeding the General Manager’s Authority by Board action. 4. August 2016 – Correction of minor spelling errors. Board action not required. 5. September 2016 – CUPCCAA adoption. Section 7 – Pricing/Bidding Requirements by Board action. OTAY WATER DISTRICT PURCHASING MANUAL Revised May 3, 2017 Attachment C Page 2 of 31 Table of Contents Section Page 1 - Mission and Ethics Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 2 - Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Purpose .Statement Responsibilities 3 - Purchasing Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Purpose General Policies 4 - Purchasing Guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Purpose General Guidelines and Protocols Vendor Involvement Guidelines and Protocols 5 - Legal Considerations Regarding Purchasing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Purpose General 6 - Types of Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Purpose General Procedures Construction Services (Public Works) Professional Consulting Cooperative/Joint Purchases Emergency Purchases 12 Materials, Goods, Services, and General Consulting Petty Cash Sole Source Purchases Blanket Purchase Orders: Guidelines for Issuing Blanket Purchase Orders 13 Guidelines for the Use of Blanket Purchase Orders 7 - Pricing/Bidding Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Purpose General Requirements Formal Advertising Quotations Public Works – Construction Request for Proposals 15 Two Step Bidding Purchases Exempt from Competitive Pricing Emergency Purchases 15 Board Authorized Purchases Exceeding the General Manager’s Authority Page 3 of 31 8 - Change Orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Purpose General 9 - Authorization to Purchase – Signatory Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Purpose General 10 - Documentation of Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Purpose General Procedure Purchases Exempt from Purchase Order Requirement 11 - Special Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Exceptions to Purchasing Procedures Bonding Encouraging Emerging Business Enterprise Insurance Invoicing Receiving, Inspection and Acceptance 23 Specifications Inventory 12 - Disposal of Surplus Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Purpose General Procedure Auction Sale Sale to Federal, State, and Local Municipalities and Government Agencies 25 Sale to Republic of Mexico Municipalities and U.S. Government Agencies 26 Donation of District Surplus Property to Municipalities, Government Agencies, and Charitable Organizations 27 Exchange or Trade-In 28 Disposal as Scrap 13 – Cal Card Credit Cards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Purpose Guidelines Definitions Procedure 30 Authorized Purchases Responsibilities Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Revisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Page 4 of 31 Section 1 – Mission and Ethics Statement 1.0 PURPOSE: To provide an understanding of the basic goal of the purchasing function within the Otay Water District. 1.1 MISSION STATEMENT: To provide for the procurement, storage and distribution of all supplies, equipment and services for the District using progressive purchasing techniques, methods and stringent controls while seeking the highest cost savings for the customers of the District. 1.2 ETHICS STATEMENT: The Otay Water District, its governing Board, employees, and agents who are involved at any point in the process to select suppliers, award and administer contracts and approve payments must adhere to high standards of ethical behavior. To this end, the policies and guidelines established in this Purchasing Manual are intended to ensure that purchasing and purchasing related decisions are in accordance with adherence to the high ethical standards of the purchasing community and of the Otay Water District. Page 5 of 31 Section 2 – Organization 2.0 PURPOSE: To provide an understanding of the Purchasing Division’s organization and its relationship within the Otay Water District. 2.1 STATEMENT: The Purchasing and Facilities Manager directs the Purchasing and Facilities Division. The Purchasing and Facilities Manager reports to the Chief of Administrative Services, who in turn reports to the Assistant General Manager, who in turn reports to the General Manager. The General Manager reports to the Board of Directors. Board of Directors | General Manager | Assistant General Manager | Chief of Administrative Services | Purchasing and Facilities Manager 2.2 RESPONSIBILITIES: 2.2.1 Board of Directors – Ultimate authority regarding the purchasing policies, practices and guidelines of the District rests with the Board of Directors. It is the Board’s responsibility to establish policy and direction regarding purchasing functions in accordance with the District’s Code of Ordinances. 2.2.2 General Manager – The General Manager is responsible, in accordance with the District’s Code of Ordinances, for ensuring that the District complies with Board direction regarding the purchasing function. 2.2.3 Assistant General Manager – It is the Assistant General Manager’s responsibility to oversee and administer all District Departments and to insure that the directions of the General Manager are carried out. 2.2.4 Chief of Administrative Services – It is the Chief’s responsibility to administer the District’s Purchasing and Facilities Division as directed by the Assistant General Manager. 2.2.5 Purchasing and Facilities Manager – It is the Manager’s responsibility to manage the Purchasing and Facilities Division as directed by the Chief of Administrative Services and to: a. Develop objectives, policies, programs and procedures for the negotiation and the acquisition of materials, supplies, equipment and services for the District. Page 6 of 31 b. Coordinate purchasing policies throughout the District. c. Disseminate to other departments purchasing information designed to promote efficient operations. d. Negotiate and approve assigned purchase orders in the best interest of the District. e. Make purchases for the District in such a manner so as to maximize the value received for monies expended. f. Arrange for the sale or disposal of materials and supplies declared surplus by the Board of Directors. g. Maintain inventory levels at a satisfactory operating level. h. Work with District departments to promote vendor/seller relations. i. Work with District Departments and Committees establishing standardization of workmanship, materials and supplies used throughout the District. j. Protect the District’s interest in matters concerning charges related to the purchasing of materials, supplies and services. Page 7 of 31 Section 3 – Purchasing Policy 3.0 PURPOSE: To provide an understanding of the purchasing function and to establish and present the purchasing policies within the Otay Water District. 3.1 GENERAL: Purchasing is fundamental to the operation of the District. It means the acquisition of goods and services in exchange for an acceptable price or consideration. A purchase may be in the simplest form or it may involve the development of lengthy written agreements. Every purchase involving the transfer of goods or services is a contract. As a contract, there are considerations as to the nature of the purchase, its value, timing, method of payment, delivery, and other conditions that must be addressed. For this reason, it is the District’s policy to rest the responsibility and authority to purchase within the Purchasing and Facilities Division (Purchasing Department). 3.2 POLICIES: a. General Policy: All purchases and requests for pricing or repair services shall be made in accordance with applicable laws and the District’s Purchasing Manual, policies, and procedures. b. Open Door Policy: The Purchasing Department shall maintain an “Open Door” policy with all salespeople desiring to sell goods or services to the District. c. Interviews with Salespeople: If it is necessary for staff, other than Purchasing Department personnel, to interview salespeople regarding details of their products, requests for such visits should be made through the Purchasing Department. In interviews with salespeople, no one except the Purchasing Department may comment on the preference for any product, or give any information regarding performance or price. d. Correspondence with Suppliers: All correspondence with suppliers must be processed through the Purchasing Department unless it is technical in nature and makes no references towards purchasing. e. Negotiated Changes: Unless authorized by the General Manager, the Purchasing Department will negotiate all changes to purchases. f. Authority to Question: In order to serve the best interest of the District, the Purchasing Department shall have the authority to question all requests for purchases regarding quantity, quality, timing, and specifications. g. Approval of Gratis Materials and Samples: The Purchasing Department must approve all gratis materials, supplies or services submitted to the District as samples or tests prior to their acceptance. h. Conflict of Interest: Employees are required to disclose to the Purchasing Department any conflict of interest in the selection or recommendation for selection of District vendors, suppliers, or consultants. All contracts shall contain language, as approved by the District’s legal counsel, requiring Vendors, Suppliers, and Consultants to disclose any actual and potential conflicts of interest that exist between the Vendor, Supplier, or Consultant and the District, its representatives, agents, Board of Directors, and employees. Page 8 of 31 Section 4 – Purchasing Guidelines 4.0 PURPOSE: To provide guidelines and protocol for the standardized application of purchasing activities within the Otay Water District. 4.1 GENERAL: To a large extent, the Purchasing and Facilities Division’s (Purchasing Department) performance will be measured by how well it satisfies the needs of various departments within the District. It is essential that there be mutual cooperation between District departments to ensure that a condition of confidence exists. For this reason the following standardized guidelines and protocols have been established. 4.1.1 Guidelines and Protocol: a. Departments will keep the Purchasing Department informed of their current and anticipated activities. b. Overlapping duties regarding purchases will be clearly defined in the best interest of the District. c. If the material or equipment requested is not readily available or its price is such that significant savings can be realized through alternatives, the alternative that is in the best interest of the District shall be selected. d. Policies and procedures of the District’s Purchasing Manual will be followed. e. The Purchasing Department will notify interested departments on matters related to shortages, new products, discontinued products or anything else that directly affects the performance of the interested department, the Purchasing Department, or the District. 4.2 VENDOR INVOLVEMENT Through the Purchasing Department’s contact with vendors, it is in a position to develop or diminish the District’s reputation and/or vendor/District relationships. The District promotes a fair and aggressive purchasing manner that results in positive vendor relationships. To accomplish this, the District has established the following standardized guidelines and protocols. 4.2.1 Guidelines and Protocol: a. All competition between suppliers is to be kept open and fair. b. Advantages through vendor errors shall be declined. c. Revision of bids after submission shall not be accepted. d. Materials not strictly up to specification that may be usable without sacrifice shall be reviewed. e. Bids shall only be solicited from those vendors with whom the District intends to do business. Page 9 of 31 f. The District shall not be obligated to any particular vendor. g. Vendor locations may be visited to promote product and vendor knowledge. h. Transactions and communications with vendors shall be truthful yet shall not divulge sensitive or confidential information related to competition. i. Vendor questions, calls or correspondence shall be answered promptly and in a manner that maintains fair competition. Page 10 of 31 Section 5 – Legal Considerations Regarding Purchasing 5.0 PURPOSE: To provide understanding and direction related to legal considerations within the purchasing function of the Otay Water District. 5.1 GENERAL: The District has designated that the Purchasing and Facilities Manager has the authority to act fiducially as its agent with regard to the purchase of materials, supplies, and services. This designation is referred to as Law of Agency. As such, the Purchasing and Facilities Manager binds the District to whatever buying decision is made and makes the District responsible for any purchase order issued under his/her limits of authority. In addition to acting in the best interest of the District, the Purchasing and Facilities Manager must ensure that various Federal and State statutes governing purchasing and interstate commerce are complied with. For these reasons, consultation with the District’s legal counselor shall be made whenever there is a question concerning anti-trust implications, warranty, risk of loss and rights and remedies of the District. Page 11 of 31 Section 6 – Types of Purchases 6.0 PURPOSE: To provide standardized procedures for the purchase of consulting, construction, materials, goods, and services within the Otay Water District. 6.1 GENERAL: The District recognizes the varying levels of complexity within the purchasing function and the need to establish standardized procedures to administer the various types of purchases made within the District. 6.2 PROCEDURES: 6.2.1 Construction Services (Public Works): The General Manager, or his/her designee, may award purchase orders/contracts for construction services that are within the authorization limit of the General Manager as set by the Board of Directors. Competitive pricing of construction purchases must be in accordance with the bidding and pricing procedures of the District as outlined in Section 7.2.3 (Pricing/Bidding Requirements) of this manual. Award shall be made to the responsive and responsible bidder who has submitted the lowest bid meeting the requirements and criteria set forth in the invitation to bid. For construction contracts exceeding staff’s limit of authorization, a summary of bids together with staff’s recommendation for award or possible rejection of bids must be presented to the Board of Directors of the District at a board meeting. Should an award be made, the Board of Directors will authorize staff to execute a contract on behalf of the District. After approval as to form and legality by the District’s legal counsel, the successful bidder and the District’s representative will sign the contract. A copy of the executed contract shall be promptly provided to the Finance Department for proper accounting review. If after notification, the successful bidder fails to execute the contract within ten (10) days, the bid deposit, made in cash, cashier’s check, certified check, or bid bond will be forfeited. 6.2.2 Professional Consulting: The General Manager, or his/her designee, may award purchase orders/contracts for professional consulting services that are within the authorization limits as set by the Board of Directors. Professional Consulting Services are defined as architectural, Engineering, Environmental and any other service as identified within the California Government Code § 4525-4529. Competitive pricing of consulting services must be in accordance with the bidding and pricing procedures of the District as outlined in Section 7.2.4a (Pricing/Bidding Requirements) of this manual. Award shall be made to the consultant whose response to a request for proposal best meets the District’s needs. At the discretion of the Board of Directors or the General Manager, the review of submitted proposals may be made by the a Committee established by the Board or the General Manager. For professional consulting contracts exceeding the General Manager’s limit of authorization, a summary of bids together with staff’s recommendation for award must be presented to the Board of Directors of the District at a board meeting. Should an award be made, the Board of Directors will authorize staff to execute a contract on behalf of the District. After approval as to form and legality by the District’s legal counsel, the successful bidder and the District’s representative will sign the contract. A copy of the executed contract shall be promptly provided to the Finance Department for proper accounting review. 6.2.3 Cooperative/ Joint Purchases: The Purchasing and Facilities Manager may utilize cooperative/"piggyback" contracts, multiple award schedules and joint power agreements awarded by Federal agencies, any state municipality or public Page 12 of 31 agency to purchase goods and services, up to the General Manager’s authorized approval limit or subject to Board of Directors’ approval when the General Manager’s authority is exceeded. These purchases are exempt from the District’s competitive solicitation requirements so long as the contracts, schedules and agreements are solicited in a manner substantially consistent with District purchasing policies. 6.2.4 Emergency Purchases: In the event of a catastrophic emergency, the guidelines and requirements as set forth in California state statute and in the District’s Code of Ordinance shall prevail over those stated herein. 6.2.5 Materials, Goods, Services, and General Consulting: Purchases of materials, goods and services, the value of which are within the limits authorized by the Board of Directors, may be made by the District’s General Manager or his/her designee. Competitive pricing for materials, goods and services must be in accordance with the bidding and pricing procedures of the District as outlined in Section 7.2.2, 7.2.4, 7.2.5, and 7.2.6 (Pricing/Bidding Requirements) of this manual as applicable. Purchases shall be made from the bidder whose bid best meets the District’s requirements and needs as set forth in the invitation to bid or request for quotation. The Board of Directors of the District must authorize purchases exceeding the General Manager’s authorized approval limit. At a meeting of the Board of Directors, a summary of bids together with staff’s recommendation for the award of a contract/purchase order or the rejection of bids shall be presented. Should an award be made, the Board of Directors of the District will authorize staff to execute a purchase order/contract on behalf of the District. 6.2.6 Petty Cash: The primary purpose of petty cash funds is to reduce costs associated with purchases and expenses in accordance with the District’s financial policies. 6.2.7 Sole Source Purchases: Other than contracts for construction, alteration or repair of District facilities, a contract may be awarded for materials, goods, services, or general consulting without competition when the District’s General Manager or the Board of Directors determines that either the product is designated to match others in use on a particular public improvement, is a unique or novel product application required to be used in the public interest, or where only one brand or trade name is known. Sole source purchases may be made by the District’s General Manager provided the value of the purchase is within the limits authorized for the General Manager by the Board of Directors of the District and the reason for the sole source authorization is documented by the General Manager and retained in accordance with District’s record’s retention policy. The Board of Directors of the District must authorize sole source purchases exceeding the General Manager’s authorized limit. At a meeting of the Board of Directors, staff will present the bid submitted together with a recommendation requesting an award of purchase order/contract to the vendor identified as the sole source. Should an award be made, the Board will authorize staff to execute a purchase order/contract on behalf of the District. 6.2.8 Blanket Purchase Orders: Blanket purchase orders are issued to reduce administrative and operational costs, inventories and paperwork and may be issued for regularly purchased materials, supplies and services. Should a blanket purchase order be issued, the order shall include a description of each material, supply and/or service requested, a unit price for each, the period of time the order shall be in effect, and a statement obligating the vendor to deliver all or a specified part of the District’s usage requirement upon receipt of an authorized release from the District. Not included on the blanket purchase order are specific Page 13 of 31 quantities. Instead of specific quantities, the blanket purchase order shall list an estimate of the quantity of each item that will be used for the period to which the blanket purchase order refers. Blanket purchase orders may not be issued for a period of time exceeding one year unless authorized by the General Manager. 6.2.8.1 Guidelines for Issuing Blanket Purchase Orders: a. Blanket purchase orders may only be issued, changed, or revoked by the Purchasing and Facilities Manager or the General Manager. b. Competitive pricing and vendor selection for blanket purchase orders shall be in accordance with the policies and guidelines as set forth in this manual. c. The Board of Directors must authorize blanket purchase orders exceeding the General Manager’s authorization limit. At a formal meeting of the Board of Directors, a summary of the requested blanket purchase order(s) shall be presented. The summary shall include a description of the materials, supplies, and services required, and total order pricing. Should the Board approve the blanket order(s), they will authorize staff to issue a blanket purchase order on behalf of the District. 6.2.8.2 Guidelines for the Use of Blanket Purchase Orders: a. The supervisor of the employee receiving materials, services, and/or goods released against a blanket purchase order will write the account code/work order information, sign (attesting that the release is authorized and that all goods/materials/services were received and accepted) and forward the receiving (packing slips) document to the Finance Department. Processed shipping documents (coded and signed) must be submitted to the Finance Department no later than the end of next workday from the date items were received. b. In the event that invoiced unit pricing exceeds the unit price indicated on the blanket purchase order, Purchasing will contact the vendor requesting that a corrected invoice be sent to the District and notify them that payment will be withheld pending the receipt of the corrected invoice. c. Should the ordering individual wish the warehouse to take delivery of items released under a blanket purchase order, notification must be given to warehouse staff. Said notification should be made by written memorandum or through e-mail or other electronic form and must include information on the purchase order number assigned to the purchase, what and when goods are to be delivered, and who will ultimately receive the goods. Page 14 of 31 Section 7 – Pricing/Bidding Requirements 7.0 PURPOSE: To provide requirements, policies, and guidelines for the pricing/bidding of purchases within the Otay Water District. 7.1 GENERAL: It is the District’s policy to request competitive pricing from responsible vendors for all purchases exceeding $10,000. Pricing, although important, is not the only factor in determining the overall cost and value of a product. Quality, service and delivery are factors that must also be considered when comparing quotations. It is by weighing these factors that an intelligent decision can be made to purchase the product with the greatest value for the least overall price. 7.2 REQUIREMENTS: 7.2.1 Formal Advertising: Public works purchases, as defined in the State of California’s government and contract code, shall follow the procedure outlined under the California Uniform Public Construction Cost Accounting Act (CUPCCAA) (Sect 22000 et seq. of the California Contract Code and as set by the California Uniform Construction Cost Accounting Commission (CUCCAC). Solicitations must contain a brief description of the goods or services required, state where prospective bidders may obtain plans and specifications and make any required deposits, state the time and place of the bid opening, and state that the District reserves the right to reject one or all bids. (Rev 2017-09-07) 7.2.2 Quotations: For purchases greater than $10,000, excluding public works subject to CUPCCAA or formal bidding, a minimum of three competitive quotations must be obtained. Quotations received may be in written or oral form. Should oral quotations be received, written documentation must be made identifying the bidder’s name, contact name, telephone number, the date of the quotation and the pride bid. Should three quotations not be obtainable, documentation in the form of a notation of memorandum must be provided and attached to the purchase requisition. Where only one price is obtainable, the actions taken to obtain competitive pricing shall be documented and attached to the purchase requisition and the purchase may be made and the requirements of this section shall be satisfied. (Rev 2017-09-07) 7.2.3 Public Works - Construction: Public work purchases equal to or exceeding what is authorized under the California Uniform Public Construction Cost Accounting Act (CUPCCAA) (Sect 22000 et seq. of the California Code and as set by the California Uniform Construction Cost Accounting Commission (CUCCAC) must be formally advertised and sealed bids received. (Rev 2017-09-07) The Purchasing and Facilities Manager or the General Manager’s designee, in conjunction with the project manager, and where appropriate, the District’s legal counsel, shall publicly open all sealed bids and tabulate the results. The bid tabulation, along with a recommendation for award contract or possible rejection of bids, shall be forwarded to the District’s General Manager. In the event that the value of the purchase exceeds the General Manager’s signatory authority, a summary of bids shall be presented together with staff’s recommendation for an award of contract or possible rejection of bids to the Board of Directors of the District during a formal board meeting. The Board of Directors will then authorize the execution of the contract on behalf of the District. Page 15 of 31 Award shall be made to the responsive and responsible bidder who has submitted the lowest bid meeting the requirements and criteria set forth in the invitation to bid. After approval as to form and legality of the contract documents by legal counsel, the successful bidder and the appropriate District representative(s) shall execute the contract. A copy of the executed contract shall be promptly provided to the Finance Department for proper accounting review. 7.2.4 Request for Proposals: a. For the Solicitation of Professional Consulting (Engineering): (Rev 2017-09-07) The General Manager, or his/her designee, will establish a review panel to evaluate and rank submittals (proposals) using criteria published in the Request for Proposals package. Documents, invitations, and evaluation of submittals for professional consulting services shall be made in compliance with Government Code Section 4526-4529 and District Policy #21 – Policy for Selection of Professional Consultants. b. For the Solicitation of General Consulting and Services: The General Manager, or his/her designee, shall determine the method for soliciting and evaluating proposals for general consulting and services. The request for proposal must be in written form and must provide sufficient information to clearly identify the work required and provide respondents with a clear understanding of the District’s needs, work specifications, expectations and the criteria that will be used to evaluate submittals. 7.2.5 Two Step Bidding: Where it is considered impractical to initially prepare a purchase description to support an award on price, a request for proposals may be issued requesting the submission of not priced technical proposals. This will be followed by an invitation for bids limited to those bidders whose technical proposals meet the requirements set forth in the first invitation. 7.2.6 Purchases Exempt from Competitive Pricing: The following contract/purchases are exempt from competitive pricing: 1. With Federal, State or Local Agencies, 2. Temporary labor services to fill time-limited employment needs, 3. For the sole purpose of obtaining expert witness for litigation, and 4. That are for legal defense, legal advice, or legal services. 7.2.7 Emergency Purchases: During times when the General Manager has declared an emergency, where the immediate acquisition of materials, goods, and services is required, the purchase of needed materials, goods, and services shall be made in accordance with California state statutes and per the District’s Code of Ordinances. Page 16 of 31 7.2.8 Board Authorized Purchases Exceeding the General Manager’s Authority: a. The General Manager or his/her Designee is authorized to exceed his/her delegated purchasing authority under Section 2 of the Code of Ordinance and purchase the following goods and services without Board approval so long as the overall Board Approved District Budget for Labor and Benefits, Materials and Maintenance and Administrative expenses is not exceeded: 1. Temporary labor services 2. Fuel, gasoline and diesel 3. Sewage Transportation and Processing 4. Water Meters 5. Service and maintenance of the District’s Board adopted sole source Enterprise Resource Planning (ERP) System, Tyler Eden 6. Service and maintenance of the District’s Board adopted sole source Geographic Information System, Environmental Systems Research Institute (ESRI)/GIS 7. Medical Service Benefits provided by Special District Risk Management Authority (SDRMA) b. The General Manager or his/her Designee is authorized to exceed his/her delegated purchasing authority under Section 2 of the Code of Ordinances and purchase the following goods and services without Board approval so long as the amounts are commensurate with the District’s water revenues for the same time period: 1. Water 2. Gas and electric utility for the operation of the District 3. Chemicals and gasses for the treatment of potable and recycled water. Page 17 of 31 Section 8 – Change Orders 8.0 PURPOSE: To provide guidelines for the initiation and approval of contract change orders within the Otay Water District. 8.1 GENERAL: Change orders may be initiated by the contractor/vendor or by the District. The District’s General Manager or his/her designee must approve change orders as defined in the District’s Code of Ordinances, Section 2.01e. The Board must approve change orders exceeding the General Manager’s authorized limit. Only written change orders are allowed. Page 18 of 31 Section 9 – Authorization to Purchase – Signatory Authority 9.0 PURPOSE: To provide guidelines and protocol for establishing signatory authority for the approval of purchases within the Otay Water District. 9.1 GENERAL: The Board of Directors of the District has sole signatory (ability to sign contracts and approve purchases) authority within the Otay Water District. The Board may, at a regularly scheduled board meeting, establish signatory authorization limit(s) for the General Manager as defined in the District’s Code of Ordinances, Section 2.01c-e. The General Manager at his/her discretion may delegate his/her signatory authority, as he/she deems necessary. Other than as identified in Section 7.2.8 of this Manual, “Board Authorized Purchases Exceeding the General Managers Authority”, delegated authorization limits may not exceed those established by the Board for the General Manager. Delegated authorization must be documented in the form of a memorandum, signed by the General Manager. Included in the memorandum must be a listing of individuals and/or job classification to whom signatory and purchase approval authority has been delegated and the maximum dollar value(s) of said authority. Copies of the memorandum shall be provided to the District’s senior management team and to the Purchasing and Facilities Manager. The General Manager at his/her discretion may allow the Assistant General Manager to delegate their signatory authority, as they deem necessary within their departments. Page 19 of 31 Section 10 – Documentation of Purchases 10.0 PURPOSE: To provide standardized guidelines and procedures for documenting the authorization, pricing and award of contracts within the Otay Water District. All purchases exceeding petty cash limit, excluding purchases identified as exempt from this requirement under “Purchases Exempt from Purchase Order Requirement”, shall be required to be documented as prescribed herein. 10.1 GENERAL: As a public agency, the fundamental practice of documenting purchases must be followed. The documentation must provide a record of vendor name, address, contact and telephone number, pricing, authorized purchase approval(s), terms and conditions, consideration, placement of order, receipt of order and authorization of payment. Documentation will be made on a “purchase requisition” form (printed or electronic) together with a purchase order/contract (printed or electronic). 10.2 PROCEDURE: a. A “Purchase Requisition” (requisition) form is an internal control document. It shall be used to record vendor name, address, contact and telephone number, authorized purchase approval(s), pricing, quantities and special terms and conditions. Documentation of competitive pricing may be in the form of a memorandum or note attached to the requisition. For purchases requiring the use of formal bidding/advertising, the bids received will be retained in accordance with the District’s record retention policy. The requisition may be in written or electronic form provided that it is standardized, and immutable. b. When complete, the requisition will be used to produce a purchase order/contract. A copy of the completed purchase requisition will be retained in accordance with the District’s record retention policy. c. The purchase order/contract represents a written agreement between the District and the Vendor. In addition to identifying the District and Vendor, it is used to document terms and conditions. d. The purchase order/contract will be in a form as approved by the District’s legal counsel. e. The purchase order form shall be the used as the District’s primary contract document for material, service, and supply purchases. Typically, purchases of professional engineering services, consulting and major construction require contracts in a form other than a purchase order. In the event a contract in a form other than a purchase order is used, the District’s counsel shall approve it as to form. A purchase order may be issued for control purposes to supplement a contract. In this event, the purchase order will reference the contract document as representing the agreement between the District and vendor. 10.2.1 Purchases Exempt from Purchase Order Requirement: a. The Board has identified the following purchases as exempt from the requirement of a written purchase order/contract: 1. Travel and meeting advances and reimbursements 2. Purchases less than the petty cash limit 3. Prepaid travel expenses, i.e., airfare and hotel 4. Utilities 5. Television and satellite service Page 20 of 31 6. Meal reimbursements 7. Telephone usage charges, including wireless telephones and pagers 8. Postage 9. Classified, legal, and display advertising 10. Petty Cash purchases 11. Mileage reimbursement 12. Memberships and dues 13. Subscriptions and books 14. Permits and fees 15. Customer refunds 16. District credit card reimbursements 17. Employee awards, incentives 18. Employee educational reimbursements 19. Seminars and training 20. Purchases made utilizing Cal Card 21. Contracts or letters of agreement as approved by the General Manager or the Board of Directors c. Completed purchase requisitions may be required, as determined by the General Manager or his/her designee. Page 21 of 31 Section 11 – Special Considerations 11.0 Exceptions to Purchasing Procedures: In specific instances, such as Federal Grants and Assessment Districts, there may be specific requirements in the contract or ordinance relating to the expenditure of such funds. The conditions of such agreements and ordinances shall take precedence over the procedures established in this manual. 11.1 Bonding: a. In addition to any required bid deposit or bond, all construction contracts in excess of $35,000 shall require: 1) A PERFORMANCE BOND in the amount of 100% of the contract price, and 2) A LABOR AND MATERIALS BOND in the amount of not less than 50% of the contract price. b. For construction contracts under $35,000, bonding shall be in accordance with District Policy No. 31, Encouraging Disadvantaged Business Enterprise Firms. 11.2 Encouraging Emerging Business Enterprise: The District’s purchasing practices shall reflect the requirements set forth in District Policy No. 31, Encouraging Disadvantaged Business Enterprise Firms. 11.3 Insurance: a. General, Automobile, and Errors and Omissions: All contracts shall have a requirement for general, automobile, and errors and omissions insurance as applicable to the type of service or work contemplated. The amount and type of insurance required for each type of contract shall be at the discretion of the General Manager in an amount so as to indemnify the District from loss. b. Workers’ Compensation: All public works contracts shall have a requirement for workers’ compensation insurance in an amount as required by law. Additionally, all non-public works contracts shall require workers’ compensation insurance coverage in an amount sufficient to indemnify the District from loss. 11.4 Invoicing: Financial obligations of the District are normally settled on a Net 30 day payment basis. All invoices submitted to the District must include: 1) The vendor’s name, business address and date, 2) The District’s purchase order/contract number and the vendor’s invoice number, 3) The shipment date and/or the date of service, 4) The terms of sale and applicable payment discounts, 5) An itemized description of materials purchased or services performed, including quantities, unit prices, discounts, extensions, and other charges as specified in the purchase order/contract, Page 22 of 31 6) Sales and other taxes and freight charges, itemized separately or as specified by the District. 11.5 Receiving, Inspection and Acceptance: a. All materials, supplies or services furnished shall be exactly as specified, free from all defects and shall be subject to inspection and testing by the District. The method of inspection to be used in any particular procurement shall be commensurate with the specific quality and specification requirements. The Purchasing and Facilities Manager shall be notified immediately if any materials, supplies or services do not conform to specification. In such cases, the Purchasing and Facilities Manager shall take appropriate action to protect the interests of the District. b. Receiving shall be documented on the receiving copy of the purchase order or other electronic form. When all materials, supplies and/or services have been received, the receiving staff will forward the vendor’s shipping document(s) to the Finance Department and indicate (in writing or electronically) that the materials, supplies and/or services have been accepted and that the purchase order is authorized for payment. 11.6 Specifications: a. All purchases of materials, supplies and services shall meet the requirements as published by the District in “Standard Specifications for Water and Sewer Construction”. b. The requesting person shall define specifications for materials, supplies and services not addressed by the above referenced publication. The specification shall include information such as brand or trade names, description of material or method of manufacture, description of performance, purpose and use, physical and chemical properties, and any other information needed so as to give the purchasing department enough information to purchase correctly. For purchases requiring a written specification, it shall be the requisitioning staff’s responsibility to provide a complete specification document. c. All specifications shall be drafted so as to assure the maximum practicable competition for the District’s needs. 11.7 Inventory: General Manager or his/her designee shall identify District property to be inventoried and shall insure that periodic inventory reconciliation is performed. Page 23 of 31 Section 12 – Disposal of Surplus Property 12.0 PURPOSE: To provide a standardized method for disposing of materials, supplies and other property, excluding real property, that is surplus to the needs of the District. 12.1 GENERAL: a. It is staff’s responsibility to keep the District’s inventories as low as possible and to standardize materials, supplies and equipment in order to minimize the number of articles carried in stock while b. Surplus Items - The General Manager shall develop, on an as need basis, an inventory of properties that are surplus to the District’s needs. The General Manager or his/her designee may declare items with a residual value less than $10,000.00 as surplus to the needs of the District and authorize their disposal. Where the residual value of an item exceeds $10,000.00, only the Board of Directors may declare the property surplus and authorize its disposal. c. Items of Little or No Value – Items that have no value to the District and little or no value in the market place except as scrap or for a purpose other than its originally intended use, the General Manager or his/her designee shall have authority to declare said properties trash or scrap and 12.2 PROCEDURE: Once property has been declared surplus it shall be the responsibility of the Purchasing and Facilities Manager, in a manner provided herein and approved by the General Manager, to dispose of the surplus property. All property shall be disposed of “as is-where is”, with no warranty or guarantee as to serviceability or usability and where applicable, paid in full in U.S. currency prior to delivery. District property tags shall be removed from the surplus property prior to its disposal. District employees, as private individuals, may purchase District surplus property by participating in auction sales as prescribed in Section 12.2.1 Auction Sale. 12.2.1 Auction Sale: a. Disposal of surplus property may be accomplished through auction sale. 1) Through consignment of items to a vendor, a private auctioneer, licensed and bonded to do business in San Diego County, to sell on behalf of the District. Where authorized by the General Manager, the Purchasing and Facilities Manager shall enter into an agreement with the vendor that has the potential of generating the most market interest and, therefore, the highest net proceeds for the District. The consignment vendor shall, at its expense, advertise the item for sale and shall accept offers for the District, with the District having final acceptance authority. 2) By advertising for sale in a newspaper of general circulation or in any other manner approved by the General Manager. Newspaper ads shall be placed at least two (2) weeks prior to the sale date and shall identify the property for sale. Sealed bids will be solicited unless otherwise directed by the Purchasing and Facilities Manager and the property will be sold to the highest bidder. Bid security shall be provided by requiring that a ten percent (10%) guarantee accompany each bid or aggregated bid. Such bid security shall be in the form of a certified check, cashier’s check, or money order payable to the order of the District. Payment of the balance of the total Page 24 of 31 bid must be made by the successful bidder within twenty-four (24) hours after the award. In the event the successful bidder fails to pay the balance of his bid, the bid security will be forfeited and the award will be made to the next highest responsible bidder. The successful bidder shall be responsible for all required permits, fees and licenses. The property shall be removed from District premises in a time frame established by the Purchasing and Facilities Manager. 3) By participation in a joint municipal/public agency public auction. Where authorized by the General Manager, the District may dispose of surplus property through participation in a joint municipal/public agency auction. 12.2.2 Sale to Federal, State, and Local Municipalities and Governmental Agencies: a. Where it is in the best interest of the public, surplus property may be sold by the Purchasing and Facilities Manager to municipalities and government agencies in accordance with the follow guidelines. The Purchasing and Facilities Manager shall give preference to local governmental agencies located within the District’s boundary. 1) If the estimated fair market value, as determined by the Purchasing and Facilities Manager, does not exceed $10,000, a negotiated sale may be conducted with the governmental agency and sale of the item concluded at the price determined to be a fair and reasonable market price for the item. 2) If the estimated fair market value, as determined by the Purchasing and Facilities Manager, is greater than $10,000 but does not exceed $50,000, the General Manager’s approval shall be obtained prior to any sale. Information provided to the General Manager shall, at a minimum, identify the government entity, the rationale behind the sale at the value, and the manner in which the fair market value was determined. 3) If the estimated fair market value, as determined by the Purchasing and Facilities Manager, is greater than $50,000, Board approval shall be obtained prior to any sale. Information provided to the Board shall, at a minimum, identify the government entity, the rationale behind the sale at that value, and the manner in which the fair market value was determined. 12.2.3 Sale to Republic of Mexico, U.S. Municipalities and Government Agencies: a. When the District has declared items surplus to its needs and the Purchasing and Facilities Manager has determined that the item(s) should be sold in accordance with the guidelines contained herein, such item(s) may be sold to Republic of Mexico, U.S. municipalities and/or government agencies under the following guidelines: 1) Prior to consummating any sale to a Republic of Mexico, U.S. municipality and/or governmental agency, the Purchasing and Facilities Manager shall ensure that right of first refusal for known requirements is offered to local governmental agencies. 2) The Republic of Mexico, U.S. municipality and/or governmental agency shall forward to the Purchasing and Facilities Manager, a written official request which provides the following information: a. Name and address of municipality or governmental agency. Page 25 of 31 b. Name and telephone number of responsible official who can consummate a resulting sale agreement and sign appropriate sale documents. c. Description and quantity of surplus property items desired. d. Statement as to how the items requested will be used by the requesting municipality or governmental agency. 3) If the estimated fair market value, as determined by the Purchasing and Facilities Manager, does not exceed $50,000, the General Manager’s approval shall be obtained. Information provided to the General Manager shall, at a minimum, identify the government entity, the rationale behind the sale at that value, and the manner in which the fair market value was determined. 4) If the estimated fair market value, as determined by the Purchasing and Facilities Manager, is greater than $50,000, Board approval shall be obtained. Information provided to the Board shall, at a minimum, identify the government entity, the rationale behind the sale at that value, and the manner in which the fair market value was determined. 12.2.4 Donation of District Surplus Property to Municipalities, Governmental Agencies, and Charitable Organizations: a. Where it is in the best interest of the public, surplus District property of no or De Minimus value, where proceeds of the sale of the property will be less than the cost of the sale of the property, may be donated under the following guidelines to municipalities, governmental agencies, and charitable organizations in lieu of discarding such property: b. The District’s Purchasing and Facilities Manager shall first assess the value of the item and the cost of disposal and make a determination that the item has no value or De Minimus value. c. The requesting municipality, public agency, or charitable organization shall forward to the Purchasing and Facilities Manager a written donation request, approved by its governing board or chief operating officer, which includes the following minimum information: 1. Name and address of municipality, agency, or charitable organization. 2. Name and telephone number of responsible official who will accept the donation, if approved, and sign appropriate donation documents. 3. Description and quantity of surplus property items desired. 4. Statement as to how the items requested will be used by the requesting public agency. 5. Proof of charitable status (501 (C)) organizations as applicable. d. Donation of surplus items requested shall be made to requesting entities giving priority to entities as follows: 1. Public agencies within the District’s boundary 2. Public agencies outside of the District’s boundary 3. Charitable organizations within the District’s boundary 4. Charitable organizations outside of the District’s boundary e. Donation of District owned surplus property of no or De Minimus value may be approved by the Purchasing and Facilities Manager when the estimated total fair market value of the donation, as determined by the Purchasing and Facilities Manager, does not exceed either $25 Page 26 of 31 per item or $500 per lot. f. Donation of District owned surplus property of no or De Minimus value may be approved by the General Manager when the estimated total fair market value, as determined by the Purchasing and Facilities Manager, does not exceed $10,000. g. Donation of District owned surplus property of no or De Minimus value, where the total estimated fair market value of the donation, as determined by the Purchasing and Facilities Manager, exceeds $10,000 shall be made by the Board. h. For the purpose of this policy, charitable organizations shall mean a non-profit organization exempt from taxation under the provisions of the Internal Revenue Code, 26 U.S.C. 501 (C), whose primary purpose is public service or a Republic of Mexico registered public organization promoting economic and social well-being in the border region. i. In consideration for the donation and as a condition of transfer, the recipient of the donated surplus shall execute a release and indemnification agreement satisfactory to the District’s General Counsel. 12.2.5 Exchange or Trade-In: Where deemed by the Purchasing and Facilities Manager to be in the best interest of the District, the surplus property may be exchanged or traded in on new supplies and equipment. Trade-in values must be documented and retained in accordance with the District’s records retention policy. 12.2.6 Disposal as Scrap: In the case of surplus property that has been determined by the General Manager or their designee to be trash or scrap with no or De Minimus value, and where no governmental or non-profit organization expresses interest in the item, the Purchasing and Facilities Manager may dispose of the property in any manner deemed appropriate. Where property is disposed of as scrap, full records of such disposal shall be kept. Page 27 of 31 Section 13 –Credit Cards 13.0 PURPOSE: To provide procedures and guidelines for the issuing and use of credit cards and for the administration of the Cal-Card Program within the District. 13.1 GUIDELINES: a. The General Manager is authorized to be issued and to issue credit cards and to establish revolving credit accounts with vendors where it is in the best interest of the District, in accordance with applicable statutes and laws. b. Where feasible, the issuing of credit cards shall be through the State of California Cal Card Program. c. Use of credit cards shall be limited to appropriate purchases as defined herein. d. Purchases utilizing credit cards shall be made in accordance with this policy and established purchasing procedures and guidelines as defined in the District’s Purchasing Manual. This includes, but is not limited to complying with the District’s requirements related to authorization and pricing/ bidding. e. The intent of utilizing credit cards, and in particular Cal-Card credit cards, is to: 1. Reduce costs associated with the accounts payable function, 2. Reduce payment time to District suppliers, 3. Provide a means to take advantage of time sensitive price discounts, 4. Enhance District operations and reduce cost, 5. Reduce dependency on petty cash disbursements, 6. Provide for expedient purchases during emergencies. 13.2 DEFINITIONS: a. Cal-Card Program: A system developed by the State of California (under Governor Wilson’s Executive Order W-73-94) designed to facilitate public credit card purchases up to $50,000. b. I.M.P.A.C. Government Services (IMPAC): Credit Card provider contracted with the State of California, through a Master Service Agreement, to provide Visa Credit Card service; maintain master file and account for each card holder; send monthly statements to each cardholder, approving official, and agency or district accounting office. c. District Representative: The District’s contact person for program and accounting office functions; determines which District personnel receives cards; establishes card limits including purchase restrictions; establishes District’s procedures and guidelines for participation in the Cal-Card Program. d. Cardholder: Person(s) designated by the District’s Representative as being authorized to make purchases using credit cards and/or the Cal-Card Program within District procedures and guidelines. e. Approving Official: Person(s) designated by the District’s Representative to review, approve, and/or certify monthly cardholder billing statements and adherence to District purchasing and budgetary procedures; forwards monthly statements to the District’s Page 28 of 31 accounting office. f. Accounting Office Representative: Person designated within the District to receive and process credit card statements and documentation. g. Credit Card Limit: The transaction and spending limit established by the District Representative for a Cardholder. 13.3 PROCEDURE: Purchases made utilizing credit cards and/or Cal-Cards shall comply with the District’s requirements, guidelines and procedures as defined within the District’s Purchasing Manual. 13.4 APPROPRIATE PURCHASES: a. The General Manager or his/her designee shall determine which goods and services are appropriate for purchase using credit cards and may, in the best interest of the District, restrict where, when and how credit cards are utilized. The value of a purchase made using credit cards is limited to the signatory authority of the General Manager and must be categorized as one of the following: 1. Exempt from the requirement of a purchase order/contract, 2. Made under the auspices of a blanket purchase order, 3. Documented and approved in a form approved by the General Manager, 4. Made under an emergency declared by authority of the General Manager. 13.5 RESPONSIBILITIES UNDER THE CAL_CARD PROGRAM: 13.5.1 District’s Representative: a. The General Manager or his/her designee is the District’s Representative relative to the Cal- Card program. b. The District’s Representative shall be responsible, for: 1. Completion and processing of State required documentation for participation in the Cal- Card program, 2. Establishment of credit card limits (Credit card limits shall not exceed the purchasing authority of the General Manager as granted by the Board of Directors and those limits established by the General Manager under his/her Signatory Authority Delegation Schedule), 3. Identification of Cardholders, Approving Officials, and Accounting Office Representative, 4. Overseeing of the Cal-Card Program within the District, 5. Insuring adherence to the District’s purchasing policies, procedures and practice. 13.5.2 Cardholder: a. The Cardholder shall be responsible for: 1. Adhering to the procedures and guidelines set herein, 2. Reviewing his/her monthly statements for accuracy, 3. Retaining, reconciling, and attaching sales slips and, when applicable, approved requisitions to his/her monthly statement, Page 29 of 31 4. Providing and documenting account code information on monthly statements by transaction, 5. Submitting his/her reconciled statement, with attachments, to his/her Approving Official in a timely manner. 13.5.3 Approving Official: a. The Approving Official shall be responsible for: 1. Adhering to the procedures and guidelines set herein, 2. Reviewing and approving for payment the monthly statements for those cardholders under his/her supervision, 3. Insuring that all information required for payment, including account coding, of monthly statements is provided to the Finance Department, 4. Requesting additional documentation if necessary, 5. Forwarding all statements to the Finance Department in a timely manner. 13.5.4 Finance Department Representative: 1. The Finance Department Representative shall be responsible for: 1. Adhering to the procedures and guidelines set herein, 2. Receiving consolidated monthly statements, 3. Receiving reconciled statements from Approving Officials, 4. Reconciling statements in accordance with District procedures and policies governing the accounts payable function. Page 30 of 31 Appendix 1. Otay Water District Board of Directors Policy No. 21 2. Otay Water District Board of Directors Policy No. 31 3. Otay Water District Memorandum -Signatory Authority Delegation (Revised as necessary by the General Manager) Page 31 of 31 Revisions 1. Codified October 2009 2. October 2014 –Amend Section 12 - Disposal of Surplus Property by Board action, 3. April 2016 – Amend Section 7.2.8 Board Authorized Purchases Exceeding the General Manager’s Authority by Board action. 4. August 2016 – Correction of minor spelling errors. Board action not required. 5. September 2016 – CUPCCAA adoption. Section 7 – Pricing/Bidding Requirements by Board action. STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: May 3, 2017 SUBMITTED BY: Rita Bell, Finance Manager PROJECT: DIV. NO. All APPROVED BY: Joseph R. Beachem, Chief Financial Officer German Alvarez, Assistant General Manager Mark Watton, General Manager SUBJECT: Adopt Resolution No. 4330 Designating Specific Staff Positions to be Authorized as Agents to Deal with the State of California, Office of Emergency Services (OES), on the District’s Behalf in All Matters Pertaining to Disaster Assistance GENERAL MANAGER’S RECOMMENDATION: That the Board adopt Resolution No. 4330 designating specific staff positions to be authorized as Agents to deal with the State of California, Office of Emergency Services (OES), on the District’s behalf in all matters pertaining to disaster assistance. COMMITTEE ACTION: See Attachment A. PURPOSE: To authorize District staff in the positions of Safety and Security Specialist, Finance Manager, and Environmental Compliance Specialist, to be the authorized contacts on behalf of the District for all matters pertaining to disaster assistance. 2 ANALYSIS: It is important that, in the event of an emergency, the District is able to efficiently coordinate and execute claims with Cal EMA and/or FEMA. In December 2007, as a part of working with OES to obtain funds for repairs to District property from the October 2007 Harris Fire, the Board passed Resolution No. 4115 to Designate District Agents for Disaster Assistance. In April 2011, as a part of working with the OES to obtain funds for repairs to District property from the December 2010 rainstorms, the Board passed Resolution No. 4170 to Designate District Agents for Disaster Assistance. In both instances above, the District applied to the Federal Emergency Management Agency (FEMA) and the State of California, Office of Emergency Services (OES) for disaster assistance to help pay for these repairs. FEMA requires all claims to be processed through OES. OES requires the governing body of each agency to formally designate specific agents by position title, to represent the agency in all matters pertaining to their application for disaster assistance. OES will not release any grant money to an agency that has not provided them with a fully executed Agent Resolution and OES Form 130 (Attachment C). In April of 2014, the Board passed Resolution No. 4231 to designate specific staff positions to be authorized as agents to deal with the OES in all matters pertaining to disaster assistance. OES policy mandates that this resolution is only valid for a maximum of 3 years. The District’s previous resolution, approved in April 2014, will expire in April 2017. The District has identified the following three positions as being both knowledgeable and appropriate for working directly with OES and FEMA: 1) Safety and Security Specialist, 2) Finance Manager, and 3) Environmental Compliance Specialist. These are the same positions that were identified for the previous resolution. This is a universal resolution and is effective for all open and future disasters up to three (3) years following the date of approval below. The three (3) year limit is established by Cal EMA and the universal resolution would allow the list of authorized individuals to approve requests for financial assistance in the event of any disaster over the duration of the resolution. 3 FISCAL IMPACT: Joe Beachem, Chief Financial Officer This specific action does not authorize any spending or the receipt of funds, it only facilitates future interactions to obtain financial assistance. STRATEGIC GOAL: The District ensures its continued financial health through the establishment of proper relief in the case of a natural disaster. LEGAL IMPACT: None. Attachments: Attachment A – Committee Action Attachment B – Resolution No. 4330 Attachment C – Cal OES Form 130 ATTACHMENT A SUBJECT/PROJECT: Adopt Resolution No. 4330 Designating Specific Staff Positions to be Authorized as Agents to Deal with the State of California, Office of Emergency Services (OES), on the District’s Behalf in All Matters Pertaining to Disaster Assistance COMMITTEE ACTION: The Finance, Administration, and Communications Committee reviewed this item at a meeting held on April 19, 2017 and the following comments were made: Staff is requesting that the board adopt Resolution No. 4330 designating specific staff positions to be authorized as Agents to deal with the State of California, Office of Emergency Services (OES), on the District’s behalf in all matters pertaining to disaster assistance. Staff reviewed information in the staff report. The Committee inquired what the rational was for the positions selected as the authorized agents for the District. The three positions work with the OES staff one-on-one in submitting the application for grant money for the District’s property disaster repairs. The District’s staff identifies the damage, OES staff determine how the damage will be repaired through discussions with staff and then determines how much will be provided for the repairs. The District’s Finance Manager, as authorized under the 3-year OES Form 130 expiring on April 30, 2017, signs applications submitted to OES by the District. The General Manager and Assistant General Manager are briefed on the process and status of the application. Upon completion of the discussion, the committee supported staffs’ recommendation and presentation to the full board on the consent calendar. RESOLUTION NO. 4330 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE OTAY WATER DISTRICT FOR DESIGNATION OF AGENTS TO THE STATE OF CALIFORNIA, OFFICE OF EMERGENCY SERVICES WHEREAS, the Otay Water District Board of Directors have been presented with a ‘‘Designation of Applicant’s Agent Resolution’’ for the Otay Water District, authorizing it’s agent(s) to execute for and on behalf of the District for the purpose of obtaining certain federal financial assistance under P.L. 93-288 as amended by the Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, and/or state financial assistance under the Natural Disaster Assistance Act; and WHEREAS, the Board needs to authorize its agent(s) to provide to the State Office of Emergency Services for all matters pertaining to such state disaster assistance the assurances and agreements required; and WHEREAS, it is in the interest of the District to so designate agents; NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED by the Board of Directors of the Otay Water District that the following three positions are so designated as Authorized Agents: 1) Safety and Security Specialist; 2) Finance Manager; and 3) Environmental Compliance Specialist. PASSED, APPROVED AND ADOPTED by the Board of Directors of Otay Water District at a board meeting held this 3rd day of May 2017, by the following vote: Attachment B Ayes: Noes: Abstain: Absent: ________________________ President ATTEST: ____________________________ District Secretary STATE OF CALIFORNIA GOVERNOR’S OFFICE OF EMERGENCY SERVICES Cal OES ID No: ______________________ Cal OES 130 DESIGNATION OF APPLICANT'S AGENT RESOLUTION FOR NON-STATE AGENCIES BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE OTAY WATER DISTRICT (Governing Body) (Name of Applicant) THAT Safety and Security Specialist , OR (Title of Authorized Agent) Finance Manager , OR (Title of Authorized Agent) Environmental Compliance Specialist (Title of Authorized Agent) is hereby authorized to execute for and on behalf of the Otay Water District , a public entity (Name of Applicant) established under the laws of the State of California, this application and to file it with the California Governor’s Office of Emergency Services for the purpose of obtaining certain federal financial assistance under Public Law 93-288 as amended by the Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, and/or state financial assistance under the California Disaster Assistance Act. THAT the ____Otay Water District________________________, a public entity established under the laws of the State of California, (Name of Applicant) hereby authorizes its agent(s) to provide to the Governor’s Office of Emergency Services for all matters pertaining to such state disaster assistance the assurances and agreements required. Please check the appropriate box below: This is a universal resolution and is effective for all open and future disasters up to three (3) years following the date of approval below. This is a disaster specific resolution and is effective for only disaster number(s) ________________________ Passed and approved this 3rd day of May , 2017 Mark Robak, President (Name and Title of Governing Body Representative) (Name and Title of Governing Body Representative) (Name and Title of Governing Body Representative) CERTIFICATION I, Susan Cruz , duly appointed and District Secretary of (Name) (Title) Otay Water District , do hereby certify that the above is a true and correct copy of a (Name of Applicant) Resolution passed and approved by the Board of Directors of the Otay Water District (Governing Body) (Name of Applicant) on the 3rd day of May , 2017 . (Signature) (Title) Cal OES 130 (Rev.9/13) Page 1 STATE OF CALIFORNIA GOVERNOR’S OFFICE OF EMERGENCY SERVICES Cal OES 130 - Instructions Cal OES Form 130 Instructions A Designation of Applicant’s Agent Resolution for Non-State Agencies is required of all Applicants to be eligible to receive funding. A new resolution must be submitted if a previously submitted Resolution is older than three (3) years from the last date of approval, is invalid or has not been submitted. When completing the Cal OES Form 130, Applicants should fill in the blanks on page 1. The blanks are to be filled in as follows: Resolution Section: Governing Body: This is the group responsible for appointing and approving the Authorized Agents. Examples include: Board of Directors, City Council, Board of Supervisors, Board of Education, etc. Name of Applicant: The public entity established under the laws of the State of California. Examples include: School District, Office of Education, City, County or Non-profit agency that has applied for the grant, such as: City of San Diego, Sacramento County, Burbank Unified School District, Napa County Office of Education, University Southern California. Authorized Agent: These are the individuals that are authorized by the Governing Body to engage with the Federal Emergency Management Agency and the Governor’s Office of Emergency Services regarding grants applied for by the Applicant. There are two ways of completing this section: 1. Titles Only: If the Governing Body so chooses, the titles of the Authorized Agents would be entered here, not their names. This allows the document to remain valid (for 3 years) if an Authorized Agent leaves the position and is replaced by another individual in the same title. If “Titles Only” is the chosen method, this document must be accompanied by a cover letter naming the Authorized Agents by name and title. This cover letter can be completed by any authorized person within the agency and does not require the Governing Body’s signature. 2. Names and Titles: If the Governing Body so chooses, the names and titles of the Authorized Agents would be listed. A new Cal OES Form 130 will be required if any of the Authorized Agents are replaced, leave the position listed on the document or their title changes. Governing Body Representative: These are the names and titles of the approving Board Members. Examples include: Chairman of the Board, Director, Superintendent, etc. The names and titles cannot be one of the designated Authorized Agents, and a minimum of two or more approving board members need to be listed. Certification Section: Name and Title: This is the individual that was in attendance and recorded the Resolution creation and approval. Examples include: City Clerk, Secretary to the Board of Directors, County Clerk, etc. This person cannot be one of the designated Authorized Agents or Approving Board Member (if a person holds two positions such as City Manager and Secretary to the Board and the City Manager is to be listed as an Authorized Agent, then the same person holding the Secretary position would sign the document as Secretary to the Board (not City Manager) to eliminate “Self Certification.” Cal OES 130 (Rev.9/13) Page 2 STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: May 3, 2017 SUBMITTED BY: Rita Bell, Finance Manager PROJECT: DIV. NO. All APPROVED BY: Joseph R. Beachem, Chief Financial Officer German Alvarez, Assistant General Manager Mark Watton, General Manager SUBJECT: Adopt Resolution No. 4331 Amending Policy No. 27, the Investment Policy, of the District’s Code of Ordinances and Re-Delegating Authority for All Investment Related Activities to the Chief Financial Officer GENERAL MANAGER’S RECOMMENDATION: That the Board adopt Resolution No. 4331 amending Policy No. 27, the Investment Policy, of the District’s Code of Ordinances and re- delegating authority for all investment related activities to the Chief Financial Officer, in accordance with Government Code Section 53607. COMMITTEE ACTION: See Attachment A. PURPOSE: Government Code Section 53646 recommends that the District’s Investment Policy be tendered to the Board on an annual basis for review. In addition, Government Code Section 53607 requires that for the Chief Financial Officer’s delegation of authority to remain effective, the governing board must re-delegate authority over investment activities on an annual basis. ANALYSIS: The primary goals of the Investment Policy are to assure compliance with the California Government Code, Sections 53600 et seq. The primary objectives, in priority order, of investment activities are: 1. Protect the principal of the funds. 2. Remain sufficiently liquid to enable the District to meet all operating requirements which might be reasonably anticipated. 3. The District’s return is a market rate of return that is commensurate with the conservative investments approach to meet the first two objectives of safety and liquidity. The code provides a broad range of investment options for local agencies, including Federal Treasuries, Federal Agencies, Callable Federal Agencies, the State Pool, the County Pool, high-grade corporate debt, and others. Over recent years, the size of the District’s portfolio has declined from $110 million in 2010 to $87 million as of February 28, 2017. The reduction is primarily due to planned outlays for construction projects. Because of the District’s adherence to a conservative range of authorized investments, we have been able to maintain a healthy and diversified portfolio with no investment losses despite an extended period of turmoil and instability in the national financial markets. The policy is consistent with the current law and the overall objectives of the policy are being met. FISCAL IMPACT: Joe Beachem, Chief Financial Officer None. STRATEGIC GOAL: Demonstrate financial health through formalized policies, prudent investing, and efficient operations. LEGAL IMPACT: None. Attachments: A) Committee Action Form B) Resolution No. 4331 Exhibit 1 - Policy No. 27 Strike-through C) Policy No. 27 Proposed D) Presentation ATTACHMENT A SUBJECT/PROJECT: Adopt Resolution No. 4331 Amending Policy No. 27, the Investment Policy, of the District’s Code of Ordinances and Re-Delegating Authority for All Investment Related Activities to the Chief Financial Officer COMMITTEE ACTION: The Finance, Administration, and Communications Committee reviewed this item at a meeting held on April 19, 2017 and the following comments were made: Staff is requesting that the board adopt Resolution No. 4331 amending Policy No. 27, the Investment Policy, of the District’s Code of Ordinances and redelegating authority for all investment related activities to the Chief Financial Officer, in accordance with Government Code Section 53607. Staff reviewed information in the staff report. It was indicated that there are two changes recommended to the Investment Policy: - Simplify the language concerning authorized and approved brokers. - Clarify that the five-year maximum is from the settlement date of the purchase (investment). There was discussion regarding a list of institutions authorized to do business with the District. Staff indicated that the District maintains a list of the brokers/dealers whom the CFO has selected to work with. Staff does not currently maintain a list of various banks, but would if banks were used to purchase CDs. The following is the proposed policy verbiage which has been revised to reflect this practice: The Chief Financial Officer shall maintain a list of District selected financial institutions and security brokers/dealers authorized and approved to provide investment services in the State of California. Investment services included the buying and selling of permissible investments such as treasuries, government agencies, etc. for delivery to the custodian bank. In addition, a list will also be maintained of approved security broker/dealers who are authorized to provide investment services in the State of California. Staff noted that Code of Ordinance Section 3.01 requires Board approval to establish a new banking relationship while Policy 27 defines the investment relationships. The committee inquired what the returns were on the District’s investments. It was indicated that at the end of January 2017 the Federal Agency Issues for Callable Issues returned 1.118% and Coupon Issues returned 0.67%, and GSE’s returned 1.4%. Staff explained that when rates are low, the District purchases three (3) year GSE’s to lock into a rate as rates were continuing to drop. Now that rates are going up, staff is purchasing callable issues. Staff noted that they also reference the CIP to assure that the District can fund the upcoming two (2) to three (3) years of planned projects. It was discussed that LAIF is very short term investments and funds can be available the same day. The County Pool is longer term than LAIF and can be liquidated in one day. The Committee suggested that an Investment Workshop be scheduled sometime in the future. Upon completion of the discussion, the committee supported staffs’ recommendation and presentation to the full board on the consent calendar. Page 1 of 2 RESOLUTION NO.4331 WHEREAS, the Otay Water District Board of Directors has been presented with an amended Investment Policy No. 27 of the District’s Code of Ordinances for the financial management of the Otay Water District; and WHEREAS, the amended Investment Policy has been reviewed and considered by the Board, and it is in the interest of the District to adopt the amended Investment Policy; and WHEREAS, the strike-through copy of the proposed policy is attached as Exhibit 1 to this resolution; and NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED by the Board of Directors of the Otay Water District that the amended Investment Policy, incorporated herein as Attachment C, is hereby adopted. PASSED, APPROVED AND ADOPTED by the Board of Directors of Otay Water District at a board meeting held this 3rd day of May 2017, by the following vote: Ayes: Noes: Abstain: Absent: A RESOLUTION OF THE BOARD OF DIRECTORS OF THE OTAY WATER DISTRICT AMENDING INVESTMENT POLICY NO.27 OF THE DISTRICT’S CODE OF ORDINANCES Attachment B Page 2 of 2 _______________________ President ATTEST: ____________________________ District Secretary OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/4/165/ 3/17 Page 1 of 18 1.0: POLICY It is the policy of the Otay Water District to invest public funds in a manner which will provide maximum security with the best interest return, while meeting the daily cash flow demands of the entity and conforming to all state statues governing the investment of public funds. 2.0: SCOPE This investment policy applies to all financial assets of the Otay Water District. The District pools all cash for investment purposes. These funds are accounted for in the District’s audited Comprehensive Annual Financial Report (CAFR) and include: 2.1) General Fund 2.2) Capital Project Funds 2.2.1) Designated Expansion Fund 2.2.2) Restricted Expansion Fund 2.2.3) Designated Betterment Fund 2.2.4) Restricted Betterment Fund 2.2.5) Designated Replacement Fund 2.2.6) Restricted New Water Supply Fund 2.3) Other Post Employment Fund (OPEB) 2.4) Debt Reserve Fund Exceptions to the pooling of funds do exist for tax-exempt debt proceeds, debt reserves and deferred compensation funds. Funds received from the sale of general obligation bonds, certificates of participation or other tax-exempt financing vehicles are segregated from pooled investments and the investment of such funds are guided by the legal documents that govern the terms of such debt issuances. 3.0: PRUDENCE Investments should be made with judgment and care, under current prevailing circumstances, which persons of prudence, discretion and intelligence, exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived. Exhibit 1 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/4/165/ 3/17 Page 2 of 18 The standard of prudence to be used by investment officials shall be the “Prudent Person” and/or "Prudent Investor" standard (California Government Code 53600.3) and shall be applied in the context of managing an overall portfolio. Investment officers acting in accordance with written procedures and the investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments. 4.0: OBJECTIVE As specified in the California Government Code 53600.5, when investing, reinvesting, purchasing, acquiring, exchanging, selling and managing public funds, the primary objectives, in priority order, of the investment activities shall be: 4.1) Safety: Safety of principal is the foremost objective of the investment program. Investments of the Otay Water District shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, the District will diversify its investments by investing funds among a variety of securities offering independent returns and financial institutions. 4.2) Liquidity: The Otay Water District’s investment portfolio will remain sufficiently liquid to enable the District to meet all operating requirements which might be reasonably anticipated. 4.3) Return on Investment: The Otay Water District’s investment portfolio shall be designed with the objective of attaining a benchmark rate of return throughout budgetary and economic cycles, commensurate with the District’s investment risk constraints and the cash flow characteristics of the portfolio. 5.0 DELEGATION OF AUTHORITY Authority to manage the Otay Water District’s investment program is derived from the California Government Code, Sections 53600 through OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/4/165/ 3/17 Page 3 of 18 53692. Management responsibility for the investment program is hereby delegated to the Chief Financial Officer (CFO), who shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials and their procedures in the absence of the CFO. The CFO shall establish written investment policy procedures for the operation of the investment program consistent with this policy. Such procedures shall include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the CFO. 6.0: ETHICS AND CONFLICTS OF INTEREST Officers and employees involved in the investment process shall refrain from personal business activity that could conflict with the proper execution and management of the investment program, or that could impair their ability to make impartial investment decisions. Employees and investment officials shall disclose to the General Manager any material financial interests in financial institutions with which they conduct business. They shall further disclose any personal financial/investment positions that could be related to the performance of the investment portfolio. Employees and officers shall refrain from undertaking personal investment transactions with the same individual with whom business is conducted on behalf of the District. 7.0: AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS The Chief Financial Officer shall maintain a list of District selected financial institutions and security brokers/dealers authorized and approved to provide investment services in the State of California. In addition, a list will also be maintained of approved security broker/dealers who are authorized to provide investment services in the State of California. Investment services include the buying or selling of permissible investments such as treasuries, government agencies, etc. for delivery to the custodian bank. These may include “primary” dealers or regional dealers that qualify under Securities & Exchange Commission Rule 15C3-1 (Uniform Net Capital Rule). No public OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/4/165/ 3/17 Page 4 of 18 deposit shall be made except in a qualified public depository as established by state laws. All financial institutions and broker/dealers who desire to become qualified bidders for investment transactions must supply the District with the following, as appropriate: Audited Financial Statements. Proof of Financial Industry Regulatory Authority (FINRA) certification. Proof of state registration. Completed broker/dealer questionnaire. Certification of having read the District’s Investment Policy. Evidence of adequate insurance coverage. An annual review of the financial condition and registrations of qualified bidders will be conducted by the CFO. A current audited financial statement is required to be on file for each financial institution and broker/dealer in through which the District invests. 8.0: AUTHORIZED AND SUITABLE INVESTMENTS From the governing body perspective, special care must be taken to ensure that the list of instruments includes only those allowed by law and those that local investment managers are trained and competent to handle. The District is governed by the California Government Code, Sections 53600 through 53692, to invest in the following types of securities, as further limited herein: 8.01) United States Treasury Bills, Bonds, Notes or those instruments for which the full faith and credit of the United States are pledged for payment of principal and interest. There is no percentage limitation of the portfolio which can be invested in this category, although a five-year maturity limitation is applicable. 8.02) Local Agency Investment Fund (LAIF), which is a State of California managed investment pool, may be used up to the maximum permitted by State Law (currently $65 million). The OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/4/165/ 3/17 Page 5 of 18 District may also invest bond proceeds in LAIF with the same but independent maximum limitation. 8.03) Bonds, debentures, notes and other evidence of indebtedness issued by any of the following government agency issuers: Federal Home Loan Bank (FHLB) Federal Home Loan Mortgage Corporation (FHLMC or "Freddie Mac") Federal National Mortgage Association (FNMA or "Fannie Mae") Government National Mortgage Association (GNMA or “Ginnie Mae”) Federal Farm Credit Bank (FFCB) Federal Agricultural Mortgage Corporation ( FAMCA or “Farmer Mac”) There is no percentage limitation of the portfolio which can be invested in this category, although a five-year maturity from the settlement date limitation is applicable. Government agencies whose implied guarantee has been reduced or eliminated shall require an “A” rating or higher by a nationally recognized statistical rating organization. 8.04) Interest-bearing demand deposit accounts and Certificates of Deposit (CD) will be made only in Federal Deposit Insurance Corporation (FDIC) insured accounts. For deposits in excess of the insured maximum of $250,000, approved collateral shall be required in accordance with California Government Code, Section 53652. Investments in CD’s are limited to 15 percent of the District’s portfolio. 8.05) Commercial paper, which is short-term, unsecured promissory notes of corporate and public entities. Purchases of eligible commercial paper may not exceed 10 percent of the outstanding paper of an issuing corporation, and maximum investment maturity will be restricted to 270 days. Investment is further limited as described in California Government Code, Section 53601(h). Purchases of commercial paper may not exceed 10 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/4/165/ 3/17 Page 6 of 18 percent of the District’s portfolio and no more than 10 percent of the outstanding commercial paper of any single issuer. 8.06) Medium-term notes defined as all corporate debt securities with a maximum remaining maturity of five years from the settlement date or less, and that meet the further requirements of California Government Code, Section 53601(k). Investments in medium-term notes are limited to 10 percent of the District’s portfolio. 8.07) Money market mutual funds that invest only in Treasury securities and repurchase agreements collateralized with Treasury securities, and that meet the further requirements of California Government Code, Section 53601(l). Investments in money market mutual funds are limited to 10 percent of the District's portfolio. 8.08) The San Diego County Treasurer’s Pooled Money Fund, which is a County managed investment pool, may be used by the Otay Water District to invest excess funds. There is no percentage limitation of the portfolio which can be invested in this category. 8.09) Under the provisions of California Government Code 53601.6, the Otay Water District shall not invest any funds covered by this Investment Policy in inverse floaters, range notes, interest-only strips derived from mortgage pools, or any investment that may result in a zero interest accrual if held to maturity. Also, the borrowing of funds for investment purposes, known as leveraging, is prohibited. 9.0: INVESTMENT POOLS/MUTUAL FUNDS A thorough investigation of the pool/fund is required prior to investing, and on a continual basis. There shall be a questionnaire developed which will answer the following general questions: A description of eligible investment securities, and a written statement of investment policy and objectives. A description of interest calculations and how it is distributed, and how gains and losses are treated. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/4/165/ 3/17 Page 7 of 18 A description of how the securities are safeguarded (including the settlement processes), and how often the securities are priced and the program audited. A description of who may invest in the program, how often, and what size deposits and withdrawals are allowed. A schedule for receiving statements and portfolio listings. Are reserves, retained earnings, etc., utilized by the pool/fund? A fee schedule, and when and how is it assessed. Is the pool/fund eligible for bond proceeds and/or will it accept such proceeds? 10.0 COLLATERALIZATION Collateralization will be required on certificates of deposit exceeding the $250,000 FDIC insured maximum. In order to anticipate market changes and provide a level of security for all funds, the collateralization level will be 102% of market value of principal and accrued interest. Collateral will always be held by an independent third party with whom the entity has a current custodial agreement. A clearly marked evidence of ownership (safekeeping receipt) must be supplied to the entity and retained. The right of collateral substitution is granted. 11.0: SAFEKEEPING AND CUSTODY All security transactions entered into by the Otay Water District shall be conducted on a delivery-versus-payment (DVP) basis. Securities will be held by a third party custodian designated by the District and evidenced by safekeeping receipts. 12.0: DIVERSIFICATION The Otay Water District will diversify its investments by security type and institution, with limitations on the total amounts invested in each security type as detailed in Paragraph 8.0, above, so as to reduce overall portfolio risks while attaining benchmark average rate of return. With the exception of U.S. Treasury securities, government agencies, and authorized pools, no more than 50% of the District’s OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/4/165/ 3/17 Page 8 of 18 total investment portfolio will be invested with a single financial institution. 13.0: MAXIMUM MATURITIES To the extent possible, the Otay Water District will attempt to match its investments with anticipated cash flow requirements. Unless matched to a specific cash flow, the District will not directly invest in securities maturing more than five years from the settlement date of the purchase. However, for time deposits with banks or savings and loan associations, investment maturities will not exceed two years. Investments in commercial paper will be restricted to 270 days. 14.0: INTERNAL CONTROL The Chief Financial Officer shall establish an annual process of independent review by an external auditor. This review will provide internal control by assuring compliance with policies and procedures. 15.0: PERFORMANCE STANDARDS The investment portfolio shall be designed with the objective of obtaining a rate of return throughout budgetary and economic cycles, commensurate with the investment risk constraints and the cash flow needs. The Otay Water District’s investment strategy is passive. Given this strategy, the basis used by the CFO to determine whether market yields are being achieved shall be the State of California Local Agency Investment Fund (LAIF) as a comparable benchmark. 16.0: REPORTING The Chief Financial Officer shall provide the Board of Directors monthly investment reports which provide a clear picture of the status of the current investment portfolio. The management report should include comments on the fixed income markets and economic conditions, discussions regarding restrictions on percentage of investment by categories, possible changes in the portfolio structure going forward and thoughts on investment strategies. Schedules in the quarterly report should include the following: OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/4/165/ 3/17 Page 9 of 18 A listing of individual securities held at the end of the reporting period by authorized investment category. Average life and final maturity of all investments listed. Coupon, discount or earnings rate. Par value, amortized book value, and market value. Percentage of the portfolio represented by each investment category. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/4/165/ 3/17 Page 10 of 18 17.0: INVESTMENT POLICY ADOPTION The Otay Water District’s investment policy shall be adopted by resolution of the District’s Board of Directors. The policy shall be reviewed annually by the Board and any modifications made thereto must be approved by the Board. 18.0: GLOSSARY See Appendix A. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/4/165/ 3/17 Page 11 of 18 APPENDIX A: GLOSSARY ACTIVE INVESTING: Active investors will purchase investments and continuously monitor their activity, often looking at the price movements of their stocks many times a day, in order to exploit profitable conditions. Typically, active investors are seeking short term profits. AGENCIES: Federal agency securities and/or Government-sponsored enterprises. BANKERS’ ACCEPTANCE (BA): A draft or bill or exchange accepted by a bank or trust company. The accepting institution guarantees payment of the bill, as well as the issuer. BENCHMARK: A comparative base for measuring the performance or risk tolerance of the investment portfolio. A benchmark should represent a close correlation to the level of risk and the average duration of the portfolio’s investments. BROKER/DEALER: Any individual or firm in the business of buying and selling securities for itself and others. Broker/dealers must register with the SEC. When acting as a broker, a broker/dealer executes orders on behalf of his/her client. When acting as a dealer, a broker/dealer executes trades for his/her firm's own account. Securities bought for the firm's own account may be sold to clients or other firms, or become a part of the firm's holdings. CERTIFICATE OF DEPOSIT (CD): A short or medium term, interest bearing, FDIC insured debt instrument offered by banks and savings and loans. Money removed before maturity is subject to a penalty. CDs are a low risk, low return investment, and are also known as “time deposits”, because the account holder has agreed to keep the money in the account for a specified amount of time, anywhere from a few months to several years. COLLATERAL: Securities, evidence of deposit or other property, which a borrower pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposits of public monies. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/4/165/ 3/17 Page 12 of 18 COMMERCIAL PAPER: An unsecured short-term promissory note, issued by corporations, with maturities ranging from 2 to 270 days. COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR): The official annual report for the Otay Water District. It includes detailed financial information prepared in conformity with generally accepted accounting principles (GAAP). It also includes supporting schedules necessary to demonstrate compliance with finance-related legal and contractual provisions, extensive introductory material, and a detailed statistical section. COUPON: (a) The annual rate of interest that a bond’s issuer promises to pay the bondholder on the bond’s face value. (b) A certificate attached to a bond evidencing interest due on a set date. DEALER: A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his own account. DEBENTURE: A bond secured only by the general credit of the issuer. DELIVERY VERSUS PAYMENT: There are two methods of delivery of securities: delivery versus payment and delivery versus receipt. Delivery versus payment is delivery of securities with an exchange of money for the securities. Delivery versus receipt is delivery of securities with an exchange of a signed receipt for the securities. DERIVATIVES: (1) Financial instruments whose return profile is linked to, or derived from, the movement of one or more underlying index or security, and may include a leveraging factor, or (2) financial contracts based upon notional amounts whose value is derived from an underlying index or security (interest rates, foreign exchange rates, equities or commodities). DISCOUNT: The difference between the cost price of a security and its maturity when quoted at lower than face value. A security selling below original offering price shortly after sale also is considered to be at a discount. DISCOUNT SECURITIES: Non-interest bearing money market instruments that are issued at a discount and redeemed at maturity for full face value, e.g., U.S. Treasury Bills. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/4/165/ 3/17 Page 13 of 18 DIVERSIFICATION: Dividing investment funds among a variety of securities offering independent returns. FEDERAL CREDIT AGENCIES: Agencies of the Federal government set up to supply credit to various classes of institutions and individuals, e.g., S&L’s, small business firms, students, farmers, farm cooperatives, and exporters. FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC): A federal agency that insures deposits in member banks and thrifts, currently up to $100,000 per deposit. FEDERAL FARM CREDIT BANK (FFCB): The Federal Farm Credit Bank system supports agricultural loans and issues securities and bonds in financial markets backed by these loans. It has consolidated the financing programs of several related farm credit agencies and corporations. FEDERAL FUNDS RATE: The rate of interest at which Fed funds are traded. This rate is currently pegged by the Federal Reserve through open-market operations. FEDERAL AGRICULTURAL MORTGAGE CORPORATION (FAMC or Farmer Mac): A stockholder owned, publicly-traded corporation that was established under the Agricultural Credit Act of 1987, which added a new Title VIII to the Farm Credit Act of 1971. Farmer Mac is a government sponsored enterprise, whose mission is to provide a secondary market for agricultural real estate mortgage loans, rural housing mortgage loans, and rural utility cooperative loans. The corporation is authorized to purchase and guarantee securities. Farmer Mac guarantees that all security holders will receive timely payments of principal and interest. FEDERAL HOME LOAN BANK (FHLB): Government sponsored wholesale banks (currently 12 regional banks), which lend funds and provide correspondent banking services to member commercial banks, thrift institutions, credit unions and insurance companies. FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC or Freddie Mac): A stockholder owned, publicly traded company chartered by the United States federal government in 1970 to purchase mortgages and related securities, and then issue securities and bonds in financial markets OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/4/165/ 3/17 Page 14 of 18 backed by those mortgages in secondary markets. Freddie Mac, like its competitor Fannie Mae, is regulated by the United States Department of Housing and Urban Development (HUD). FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA or Fannie Mae): FNMA, like GNMA was chartered under the Federal National Mortgage Association Act in 1938. FNMA is a federal corporation working under the auspices of the Department of Housing and Urban Development (HUD). It is the largest single provider of residential mortgage funds in the United States. Fannie Mae is a private stockholder-owned corporation. The corporation’s purchases include a variety of adjustable mortgages and second loans, in addition to fixed-rate mortgages. FNMA’s securities are also highly liquid and are widely accepted. FNMA assumes and guarantees that all security holders will receive timely payment of principal and interest. FEDERAL RESERVE SYSTEM: The central bank of the United States created by Congress and consisting of a seven member Board of Governors in Washington, D.C., 12 regional banks and about 5,700 commercial banks that are members of the system. FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC. (FINRA): An independent, not-for-profit organization authorized by Congress to protect America’s investors by making sure the securities industry operates fairly and honestly. It is dedicated to investor protection and market integrity through effective and efficient regulation of the securities industry. FINRA is the successor to the National Association of Securities Dealers, Inc. (NASD). GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA or Ginnie Mae): A government owned agency which buys mortgages from lending institutions, securitizes them, and then sells them to investors. Because the payments to investors are guaranteed by the full faith and credit of the U.S. Government, they return slightly less interest than other mortgage-backed securities. INTEREST-ONLY STRIPS: A mortgage backed instrument where the investor receives only the interest, no principal, from a pool of mortgages. Issues are highly interest rate sensitive, and cash flows vary between interest periods. Also, the maturity date may occur earlier than that stated if all loans within the pool are pre-paid. High prepayments on OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/4/165/ 3/17 Page 15 of 18 underlying mortgages can return less to the holder than the dollar amount invested. INVERSE FLOATER: A bond or note that does not earn a fixed rate of interest. Rather, the interest rate is tied to a specific interest rate index identified in the bond/note structure. The interest rate earned by the bond/note will move in the opposite direction of the index. An inverse floater increases the market rate risk and modified duration of the investment. LEVERAGE: Investing with borrowed money with the expectation that the interest earned on the investment will exceed the interest paid on the borrowed money. LIQUIDITY: A liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value. In the money market, a security is said to be liquid if the spread between bid and asked prices is narrow and reasonable size can be done at those quotes. LOCAL AGENCY INVESTMENT FUND (LAIF): The aggregate of all funds from political subdivisions that are placed in the custody of the State Treasurer for investment and reinvestment. MARKET VALUE: The price at which a security is trading and could presumably be purchased or sold. MASTER REPURCHASE AGREEMENT: A written contract covering all future transactions between the parties to repurchase/reverse repurchase agreements that establish each party’s rights in the transactions. A master agreement will often specify, among other things, the right of the buyer-lender to liquidate the underlying securities in the event of default by the seller borrower. MATURITY: The date upon which the principal or stated value of an investment becomes due and payable. MONEY MARKET: The market in which short-term debt instruments (bills, commercial paper, bankers’ acceptances, etc.) are issued and traded. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/4/165/ 3/17 Page 16 of 18 MUTUAL FUNDS: An open-ended fund operated by an investment company which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. Mutual funds raise money by selling shares of the fund to the public. Mutual funds then take the money they receive from the sale of their shares (along with any money made from previous investments) and use it to purchase various investment vehicles, such as stocks, bonds, and money market instruments. MONEY MARKET MUTUAL FUNDS: An open-end mutual fund which invests only in money markets. These funds invest in short term (one day to one year) debt obligations such as Treasury bills, certificates of deposit, and commercial paper. PASSIVE INVESTING: An investment strategy involving limited ongoing buying and selling actions. Passive investors will purchase investments with the intention of long term appreciation and limited maintenance, and typically don’t actively attempt to profit from short term price fluctuations. Also known as a buy-and-hold strategy. PRIMARY DEALER: A designation given by the Federal Reserve System to commercial banks or broker/dealers who meet specific criteria, including capital requirements and participation in Treasury auctions. These dealers submit daily reports of market activity and positions and monthly financial statements to the Federal Reserve Bank of New York and are subject to its informal oversight. Primary dealers include Securities and Exchange Commission registered securities broker/dealers, banks, and a few unregulated firms. PRUDENT PERSON RULE: An investment standard. In some states the law requires that a fiduciary, such as a trustee, may invest money only in a list of securities selected by the custody state—the so-called legal list. In other states the trustee may invest in a security if it is one which would be bought by a prudent person of discretion and intelligence who is seeking a reasonable income and preservation of capital. PUBLIC SECURITIES ASSOCIATION (PSA): A trade organization of dealers, brokers, and bankers who underwrite and trade securities offerings. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/4/165/ 3/17 Page 17 of 18 QUALIFIED PUBLIC DEPOSITORIES: A financial institution which does not claim exemption from the payment of any sales or compensating use or ad valorem taxes under the laws of this state, which has segregated for the benefit of the commission eligible collateral having a value of not less than its maximum liability and which has been approved by the Public Deposit Protection Commission to hold public deposits. RANGE NOTE: An investment whose coupon payment varies and is dependent on whether the current benchmark falls within a pre-determined range. RATE OF RETURN: The yield obtainable on a security based on its purchase price or its current market price. This may be the amortized yield to maturity on a bond the current income return. REGIONAL DEALER: A securities broker/dealer, registered with the Securities & Exchange Commission (SEC), who meets all of the licensing requirements for buying and selling securities. REPURCHASE AGREEMENT (RP OR REPO): A holder of securities sells these securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. The security “buyer” in effect lends the “seller” money for the period of the agreement, and the terms of the agreement are structured to compensate him for this. Dealers use RP extensively to finance their positions. Exception: When the Fed is said to be doing RP, it is lending money that is increasing bank reserves. SAFEKEEPING: A service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank’s vaults for protection. SECONDARY MARKET: A market made for the purchase and sale of outstanding securities issues following their initial distribution. SECURITIES & EXCHANGE COMMISSION: Agency created by Congress to protect investors in securities transactions by administering securities legislation. SEC RULE 15C3-1: See Uniform Net Capital Rule. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/4/165/ 3/17 Page 18 of 18 STRUCTURED NOTES: Notes issued by Government Sponsored Enterprises (FHLB, FNMA, FAMCA, etc.), and Corporations, which have imbedded options (e.g., call features, step-up coupons, floating rate coupons, derivative-based returns) into their debt structure. Their market performance is impacted by the fluctuation of interest rates, the volatility of the imbedded options and shifts in the shape of the yield curve. TREASURY BILLS: A non-interest bearing discount security issued by the U.S. Treasury to finance the national debt. Most bills are issued to mature in three months, six months, or one year. TREASURY BONDS: Long-term coupon-bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities of more than 10 years. TREASURY NOTES: Medium-term coupon-bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities from two to 10 years. UNIFORM NET CAPITAL RULE: Securities and Exchange Commission requirement that member firms as well as nonmember broker-dealers in securities maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio. Indebtedness covers all money owed to a firm, including margin loans and commitments to purchase securities, one reason new public issues are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash. YIELD: The rate of annual income return on an investment, expressed as a percentage. (a) INCOME YIELD is obtained by dividing the current dollar income by the current market price for the security. (b) NET YIELD or YIELD TO MATURITY is the current income yield minus any premium above par or plus any discount from par in purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/3/17 Page 1 of 17 1.0: POLICY It is the policy of the Otay Water District to invest public funds in a manner which will provide maximum security with the best interest return, while meeting the daily cash flow demands of the entity and conforming to all state statues governing the investment of public funds. 2.0: SCOPE This investment policy applies to all financial assets of the Otay Water District. The District pools all cash for investment purposes. These funds are accounted for in the District’s audited Comprehensive Annual Financial Report (CAFR) and include: 2.1) General Fund 2.2) Capital Project Funds 2.2.1) Designated Expansion Fund 2.2.2) Restricted Expansion Fund 2.2.3) Designated Betterment Fund 2.2.4) Restricted Betterment Fund 2.2.5) Designated Replacement Fund 2.2.6) Restricted New Water Supply Fund 2.3) Other Post Employment Fund (OPEB) 2.4) Debt Reserve Fund Exceptions to the pooling of funds do exist for tax-exempt debt proceeds, debt reserves and deferred compensation funds. Funds received from the sale of general obligation bonds, certificates of participation or other tax-exempt financing vehicles are segregated from pooled investments and the investment of such funds are guided by the legal documents that govern the terms of such debt issuances. 3.0: PRUDENCE Investments should be made with judgment and care, under current prevailing circumstances, which persons of prudence, discretion and intelligence, exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived. Exhibit 1 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/3/17 Page 2 of 17 The standard of prudence to be used by investment officials shall be the “Prudent Person” and/or "Prudent Investor" standard (California Government Code 53600.3) and shall be applied in the context of managing an overall portfolio. Investment officers acting in accordance with written procedures and the investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments. 4.0: OBJECTIVE As specified in the California Government Code 53600.5, when investing, reinvesting, purchasing, acquiring, exchanging, selling and managing public funds, the primary objectives, in priority order, of the investment activities shall be: 4.1) Safety: Safety of principal is the foremost objective of the investment program. Investments of the Otay Water District shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, the District will diversify its investments by investing funds among a variety of securities offering independent returns and financial institutions. 4.2) Liquidity: The Otay Water District’s investment portfolio will remain sufficiently liquid to enable the District to meet all operating requirements which might be reasonably anticipated. 4.3) Return on Investment: The Otay Water District’s investment portfolio shall be designed with the objective of attaining a benchmark rate of return throughout budgetary and economic cycles, commensurate with the District’s investment risk constraints and the cash flow characteristics of the portfolio. 5.0 DELEGATION OF AUTHORITY Authority to manage the Otay Water District’s investment program is derived from the California Government Code, Sections 53600 through 53692. Management responsibility for the investment program is hereby OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/3/17 Page 3 of 17 delegated to the Chief Financial Officer (CFO), who shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials and their procedures in the absence of the CFO. The CFO shall establish written investment policy procedures for the operation of the investment program consistent with this policy. Such procedures shall include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the CFO. 6.0: ETHICS AND CONFLICTS OF INTEREST Officers and employees involved in the investment process shall refrain from personal business activity that could conflict with the proper execution and management of the investment program, or that could impair their ability to make impartial investment decisions. Employees and investment officials shall disclose to the General Manager any material financial interests in financial institutions with which they conduct business. They shall further disclose any personal financial/investment positions that could be related to the performance of the investment portfolio. Employees and officers shall refrain from undertaking personal investment transactions with the same individual with whom business is conducted on behalf of the District. 7.0: AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS The Chief Financial Officer shall maintain a list of District selected financial institutions and security broker/dealers authorized and approved to provide investment services in the State of California. Investment services include the buying or selling of permissible investments such as treasuries, government agencies, etc. for delivery to the custodian bank. These may include “primary” dealers or regional dealers that qualify under Securities & Exchange Commission Rule 15C3- 1 (Uniform Net Capital Rule). No public deposit shall be made except in a qualified public depository as established by state laws.All financial institutions and broker/dealers who desire to become qualified bidders for investment transactions must supply the District with the following, as appropriate: OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/3/17 Page 4 of 17 Audited Financial Statements. Proof of Financial Industry Regulatory Authority (FINRA) certification. Proof of state registration. Completed broker/dealer questionnaire. Certification of having read the District’s Investment Policy. Evidence of adequate insurance coverage. An annual review of the financial condition and registrations of qualified bidders will be conducted by the CFO. A current audited financial statement is required to be on file for each financial institution and broker/dealer through which the District invests. 8.0: AUTHORIZED AND SUITABLE INVESTMENTS From the governing body perspective, special care must be taken to ensure that the list of instruments includes only those allowed by law and those that local investment managers are trained and competent to handle. The District is governed by the California Government Code, Sections 53600 through 53692, to invest in the following types of securities, as further limited herein: 8.01) United States Treasury Bills, Bonds, Notes or those instruments for which the full faith and credit of the United States are pledged for payment of principal and interest. There is no percentage limitation of the portfolio which can be invested in this category, although a five-year maturity limitation is applicable. 8.02) Local Agency Investment Fund (LAIF), which is a State of California managed investment pool, may be used up to the maximum permitted by State Law (currently $65 million). The District may also invest bond proceeds in LAIF with the same but independent maximum limitation. 8.03) Bonds, debentures, notes and other evidence of indebtedness issued by any of the following government agency issuers: Federal Home Loan Bank (FHLB) OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/3/17 Page 5 of 17 Federal Home Loan Mortgage Corporation (FHLMC or "Freddie Mac") Federal National Mortgage Association (FNMA or "Fannie Mae") Government National Mortgage Association (GNMA or “Ginnie Mae”) Federal Farm Credit Bank (FFCB) Federal Agricultural Mortgage Corporation ( FAMCA or “Farmer Mac”) There is no percentage limitation of the portfolio which can be invested in this category, although a five-year maturity from the settlement date limitation is applicable. Government agencies whose implied guarantee has been reduced or eliminated shall require an “A” rating or higher by a nationally recognized statistical rating organization. 8.04) Interest-bearing demand deposit accounts and Certificates of Deposit (CD) will be made only in Federal Deposit Insurance Corporation (FDIC) insured accounts. For deposits in excess of the insured maximum of $250,000, approved collateral shall be required in accordance with California Government Code, Section 53652. Investments in CD’s are limited to 15 percent of the District’s portfolio. 8.05) Commercial paper, which is short-term, unsecured promissory notes of corporate and public entities. Purchases of eligible commercial paper may not exceed 10 percent of the outstanding paper of an issuing corporation, and maximum investment maturity will be restricted to 270 days. Investment is further limited as described in California Government Code, Section 53601(h). Purchases of commercial paper may not exceed 10 percent of the District’s portfolio and no more than 10 percent of the outstanding commercial paper of any single issuer. 8.06) Medium-term notes defined as all corporate debt securities with a maximum remaining maturity of five years from the settlement date or less, and that meet the further requirements of California Government Code, Section 53601(k). Investments in medium-term notes are limited to 10 percent of the District’s portfolio. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/3/17 Page 6 of 17 8.07) Money market mutual funds that invest only in Treasury securities and repurchase agreements collateralized with Treasury securities, and that meet the further requirements of California Government Code, Section 53601(l). Investments in money market mutual funds are limited to 10 percent of the District's portfolio. 8.08) The San Diego County Treasurer’s Pooled Money Fund, which is a County managed investment pool, may be used by the Otay Water District to invest excess funds. There is no percentage limitation of the portfolio which can be invested in this category. 8.09) Under the provisions of California Government Code 53601.6, the Otay Water District shall not invest any funds covered by this Investment Policy in inverse floaters, range notes, interest-only strips derived from mortgage pools, or any investment that may result in a zero interest accrual if held to maturity. Also, the borrowing of funds for investment purposes, known as leveraging, is prohibited. 9.0: INVESTMENT POOLS/MUTUAL FUNDS A thorough investigation of the pool/fund is required prior to investing, and on a continual basis. There shall be a questionnaire developed which will answer the following general questions: A description of eligible investment securities, and a written statement of investment policy and objectives. A description of interest calculations and how it is distributed, and how gains and losses are treated. A description of how the securities are safeguarded (including the settlement processes), and how often the securities are priced and the program audited. A description of who may invest in the program, how often, and what size deposits and withdrawals are allowed. A schedule for receiving statements and portfolio listings. Are reserves, retained earnings, etc., utilized by the pool/fund? A fee schedule, and when and how is it assessed. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/3/17 Page 7 of 17 Is the pool/fund eligible for bond proceeds and/or will it accept such proceeds? 10.0 COLLATERALIZATION Collateralization will be required on certificates of deposit exceeding the $250,000 FDIC insured maximum. In order to anticipate market changes and provide a level of security for all funds, the collateralization level will be 102% of market value of principal and accrued interest. Collateral will always be held by an independent third party with whom the entity has a current custodial agreement. A clearly marked evidence of ownership (safekeeping receipt) must be supplied to the entity and retained. The right of collateral substitution is granted. 11.0: SAFEKEEPING AND CUSTODY All security transactions entered into by the Otay Water District shall be conducted on a delivery-versus-payment (DVP) basis. Securities will be held by a third party custodian designated by the District and evidenced by safekeeping receipts. 12.0: DIVERSIFICATION The Otay Water District will diversify its investments by security type and institution, with limitations on the total amounts invested in each security type as detailed in Paragraph 8.0, above, so as to reduce overall portfolio risks while attaining benchmark average rate of return. With the exception of U.S. Treasury securities, government agencies, and authorized pools, no more than 50% of the District’s total investment portfolio will be invested with a single financial institution. 13.0: MAXIMUM MATURITIES To the extent possible, the Otay Water District will attempt to match its investments with anticipated cash flow requirements. Unless matched to a specific cash flow, the District will not directly invest in securities maturing more than five years from the settlement date of the purchase. However, for time deposits with banks or savings and loan associations, investment maturities will not exceed two years. Investments in commercial paper will be restricted to 270 days. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/3/17 Page 8 of 17 14.0: INTERNAL CONTROL The Chief Financial Officer shall establish an annual process of independent review by an external auditor. This review will provide internal control by assuring compliance with policies and procedures. 15.0: PERFORMANCE STANDARDS The investment portfolio shall be designed with the objective of obtaining a rate of return throughout budgetary and economic cycles, commensurate with the investment risk constraints and the cash flow needs. The Otay Water District’s investment strategy is passive. Given this strategy, the basis used by the CFO to determine whether market yields are being achieved shall be the State of California Local Agency Investment Fund (LAIF) as a comparable benchmark. 16.0: REPORTING The Chief Financial Officer shall provide the Board of Directors monthly investment reports which provide a clear picture of the status of the current investment portfolio. The management report should include comments on the fixed income markets and economic conditions, discussions regarding restrictions on percentage of investment by categories, possible changes in the portfolio structure going forward and thoughts on investment strategies. Schedules in the quarterly report should include the following: A listing of individual securities held at the end of the reporting period by authorized investment category. Average life and final maturity of all investments listed. Coupon, discount or earnings rate. Par value, amortized book value, and market value. Percentage of the portfolio represented by each investment category. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/3/17 Page 9 of 17 17.0: INVESTMENT POLICY ADOPTION The Otay Water District’s investment policy shall be adopted by resolution of the District’s Board of Directors. The policy shall be reviewed annually by the Board and any modifications made thereto must be approved by the Board. 18.0: GLOSSARY See Appendix A. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/3/17 Page 10 of 17 APPENDIX A: GLOSSARY ACTIVE INVESTING: Active investors will purchase investments and continuously monitor their activity, often looking at the price movements of their stocks many times a day, in order to exploit profitable conditions. Typically, active investors are seeking short term profits. AGENCIES: Federal agency securities and/or Government-sponsored enterprises. BANKERS’ ACCEPTANCE (BA): A draft or bill or exchange accepted by a bank or trust company. The accepting institution guarantees payment of the bill, as well as the issuer. BENCHMARK: A comparative base for measuring the performance or risk tolerance of the investment portfolio. A benchmark should represent a close correlation to the level of risk and the average duration of the portfolio’s investments. BROKER/DEALER: Any individual or firm in the business of buying and selling securities for itself and others. Broker/dealers must register with the SEC. When acting as a broker, a broker/dealer executes orders on behalf of his/her client. When acting as a dealer, a broker/dealer executes trades for his/her firm's own account. Securities bought for the firm's own account may be sold to clients or other firms, or become a part of the firm's holdings. CERTIFICATE OF DEPOSIT (CD): A short or medium term, interest bearing, FDIC insured debt instrument offered by banks and savings and loans. Money removed before maturity is subject to a penalty. CDs are a low risk, low return investment, and are also known as “time deposits”, because the account holder has agreed to keep the money in the account for a specified amount of time, anywhere from a few months to several years. COLLATERAL: Securities, evidence of deposit or other property, which a borrower pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposits of public monies. COMMERCIAL PAPER: An unsecured short-term promissory note, issued by corporations, with maturities ranging from 2 to 270 days. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/3/17 Page 11 of 17 COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR): The official annual report for the Otay Water District. It includes detailed financial information prepared in conformity with generally accepted accounting principles (GAAP). It also includes supporting schedules necessary to demonstrate compliance with finance-related legal and contractual provisions, extensive introductory material, and a detailed statistical section. COUPON: (a) The annual rate of interest that a bond’s issuer promises to pay the bondholder on the bond’s face value. (b) A certificate attached to a bond evidencing interest due on a set date. DEALER: A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his own account. DEBENTURE: A bond secured only by the general credit of the issuer. DELIVERY VERSUS PAYMENT: There are two methods of delivery of securities: delivery versus payment and delivery versus receipt. Delivery versus payment is delivery of securities with an exchange of money for the securities. Delivery versus receipt is delivery of securities with an exchange of a signed receipt for the securities. DERIVATIVES: (1) Financial instruments whose return profile is linked to, or derived from, the movement of one or more underlying index or security, and may include a leveraging factor, or (2) financial contracts based upon notional amounts whose value is derived from an underlying index or security (interest rates, foreign exchange rates, equities or commodities). DISCOUNT: The difference between the cost price of a security and its maturity when quoted at lower than face value. A security selling below original offering price shortly after sale also is considered to be at a discount. DISCOUNT SECURITIES: Non-interest bearing money market instruments that are issued at a discount and redeemed at maturity for full face value, e.g., U.S. Treasury Bills. DIVERSIFICATION: Dividing investment funds among a variety of securities offering independent returns. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/3/17 Page 12 of 17 FEDERAL CREDIT AGENCIES: Agencies of the Federal government set up to supply credit to various classes of institutions and individuals, e.g., S&L’s, small business firms, students, farmers, farm cooperatives, and exporters. FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC): A federal agency that insures deposits in member banks and thrifts, currently up to $100,000 per deposit. FEDERAL FARM CREDIT BANK (FFCB): The Federal Farm Credit Bank system supports agricultural loans and issues securities and bonds in financial markets backed by these loans. It has consolidated the financing programs of several related farm credit agencies and corporations. FEDERAL FUNDS RATE: The rate of interest at which Fed funds are traded. This rate is currently pegged by the Federal Reserve through open-market operations. FEDERAL AGRICULTURAL MORTGAGE CORPORATION (FAMC or Farmer Mac): A stockholder owned, publicly-traded corporation that was established under the Agricultural Credit Act of 1987, which added a new Title VIII to the Farm Credit Act of 1971. Farmer Mac is a government sponsored enterprise, whose mission is to provide a secondary market for agricultural real estate mortgage loans, rural housing mortgage loans, and rural utility cooperative loans. The corporation is authorized to purchase and guarantee securities. Farmer Mac guarantees that all security holders will receive timely payments of principal and interest. FEDERAL HOME LOAN BANK (FHLB): Government sponsored wholesale banks (currently 12 regional banks), which lend funds and provide correspondent banking services to member commercial banks, thrift institutions, credit unions and insurance companies. FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC or Freddie Mac): A stockholder owned, publicly traded company chartered by the United States federal government in 1970 to purchase mortgages and related securities, and then issue securities and bonds in financial markets backed by those mortgages in secondary markets. Freddie Mac, like its competitor Fannie Mae, is regulated by the United States Department of Housing and Urban Development (HUD). OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/3/17 Page 13 of 17 FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA or Fannie Mae): FNMA, like GNMA was chartered under the Federal National Mortgage Association Act in 1938. FNMA is a federal corporation working under the auspices of the Department of Housing and Urban Development (HUD). It is the largest single provider of residential mortgage funds in the United States. Fannie Mae is a private stockholder-owned corporation. The corporation’s purchases include a variety of adjustable mortgages and second loans, in addition to fixed-rate mortgages. FNMA’s securities are also highly liquid and are widely accepted. FNMA assumes and guarantees that all security holders will receive timely payment of principal and interest. FEDERAL RESERVE SYSTEM: The central bank of the United States created by Congress and consisting of a seven member Board of Governors in Washington, D.C., 12 regional banks and about 5,700 commercial banks that are members of the system. FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC. (FINRA): An independent, not-for-profit organization authorized by Congress to protect America’s investors by making sure the securities industry operates fairly and honestly. It is dedicated to investor protection and market integrity through effective and efficient regulation of the securities industry. FINRA is the successor to the National Association of Securities Dealers, Inc. (NASD). GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA or Ginnie Mae): A government owned agency which buys mortgages from lending institutions, securitizes them, and then sells them to investors. Because the payments to investors are guaranteed by the full faith and credit of the U.S. Government, they return slightly less interest than other mortgage-backed securities. INTEREST-ONLY STRIPS: A mortgage backed instrument where the investor receives only the interest, no principal, from a pool of mortgages. Issues are highly interest rate sensitive, and cash flows vary between interest periods. Also, the maturity date may occur earlier than that stated if all loans within the pool are pre-paid. High prepayments on underlying mortgages can return less to the holder than the dollar amount invested. INVERSE FLOATER: A bond or note that does not earn a fixed rate of interest. Rather, the interest rate is tied to a specific interest OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/3/17 Page 14 of 17 rate index identified in the bond/note structure. The interest rate earned by the bond/note will move in the opposite direction of the index. An inverse floater increases the market rate risk and modified duration of the investment. LEVERAGE: Investing with borrowed money with the expectation that the interest earned on the investment will exceed the interest paid on the borrowed money. LIQUIDITY: A liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value. In the money market, a security is said to be liquid if the spread between bid and asked prices is narrow and reasonable size can be done at those quotes. LOCAL AGENCY INVESTMENT FUND (LAIF): The aggregate of all funds from political subdivisions that are placed in the custody of the State Treasurer for investment and reinvestment. MARKET VALUE: The price at which a security is trading and could presumably be purchased or sold. MASTER REPURCHASE AGREEMENT: A written contract covering all future transactions between the parties to repurchase/reverse repurchase agreements that establish each party’s rights in the transactions. A master agreement will often specify, among other things, the right of the buyer-lender to liquidate the underlying securities in the event of default by the seller borrower. MATURITY: The date upon which the principal or stated value of an investment becomes due and payable. MONEY MARKET: The market in which short-term debt instruments (bills, commercial paper, bankers’ acceptances, etc.) are issued and traded. MUTUAL FUNDS: An open-ended fund operated by an investment company which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. Mutual funds raise money by selling shares of the fund to the public. Mutual funds then take the money they receive from the sale of their shares (along with any money made from previous investments) and use it to purchase OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/3/17 Page 15 of 17 various investment vehicles, such as stocks, bonds, and money market instruments. MONEY MARKET MUTUAL FUNDS: An open-end mutual fund which invests only in money markets. These funds invest in short term (one day to one year) debt obligations such as Treasury bills, certificates of deposit, and commercial paper. PASSIVE INVESTING: An investment strategy involving limited ongoing buying and selling actions. Passive investors will purchase investments with the intention of long term appreciation and limited maintenance, and typically don’t actively attempt to profit from short term price fluctuations. Also known as a buy-and-hold strategy. PRIMARY DEALER: A designation given by the Federal Reserve System to commercial banks or broker/dealers who meet specific criteria, including capital requirements and participation in Treasury auctions. These dealers submit daily reports of market activity and positions and monthly financial statements to the Federal Reserve Bank of New York and are subject to its informal oversight. Primary dealers include Securities and Exchange Commission registered securities broker/dealers, banks, and a few unregulated firms. PRUDENT PERSON RULE: An investment standard. In some states the law requires that a fiduciary, such as a trustee, may invest money only in a list of securities selected by the custody state—the so-called legal list. In other states the trustee may invest in a security if it is one which would be bought by a prudent person of discretion and intelligence who is seeking a reasonable income and preservation of capital. PUBLIC SECURITIES ASSOCIATION (PSA): A trade organization of dealers, brokers, and bankers who underwrite and trade securities offerings. QUALIFIED PUBLIC DEPOSITORIES: A financial institution which does not claim exemption from the payment of any sales or compensating use or ad valorem taxes under the laws of this state, which has segregated for the benefit of the commission eligible collateral having a value of not less than its maximum liability and which has been approved by the Public Deposit Protection Commission to hold public deposits. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/3/17 Page 16 of 17 RANGE NOTE: An investment whose coupon payment varies and is dependent on whether the current benchmark falls within a pre-determined range. RATE OF RETURN: The yield obtainable on a security based on its purchase price or its current market price. This may be the amortized yield to maturity on a bond the current income return. REGIONAL DEALER: A securities broker/dealer, registered with the Securities & Exchange Commission (SEC), who meets all of the licensing requirements for buying and selling securities. REPURCHASE AGREEMENT (RP OR REPO): A holder of securities sells these securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. The security “buyer” in effect lends the “seller” money for the period of the agreement, and the terms of the agreement are structured to compensate him for this. Dealers use RP extensively to finance their positions. Exception: When the Fed is said to be doing RP, it is lending money that is increasing bank reserves. SAFEKEEPING: A service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank’s vaults for protection. SECONDARY MARKET: A market made for the purchase and sale of outstanding securities issues following their initial distribution. SECURITIES & EXCHANGE COMMISSION: Agency created by Congress to protect investors in securities transactions by administering securities legislation. SEC RULE 15C3-1: See Uniform Net Capital Rule. STRUCTURED NOTES: Notes issued by Government Sponsored Enterprises (FHLB, FNMA, FAMCA, etc.), and Corporations, which have imbedded options (e.g., call features, step-up coupons, floating rate coupons, derivative-based returns) into their debt structure. Their market performance is impacted by the fluctuation of interest rates, the volatility of the imbedded options and shifts in the shape of the yield curve. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 9/15/93 5/3/17 Page 17 of 17 TREASURY BILLS: A non-interest bearing discount security issued by the U.S. Treasury to finance the national debt. Most bills are issued to mature in three months, six months, or one year. TREASURY BONDS: Long-term coupon-bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities of more than 10 years. TREASURY NOTES: Medium-term coupon-bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities from two to 10 years. UNIFORM NET CAPITAL RULE: Securities and Exchange Commission requirement that member firms as well as nonmember broker-dealers in securities maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio. Indebtedness covers all money owed to a firm, including margin loans and commitments to purchase securities, one reason new public issues are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash. YIELD: The rate of annual income return on an investment, expressed as a percentage. (a) INCOME YIELD is obtained by dividing the current dollar income by the current market price for the security. (b) NET YIELD or YIELD TO MATURITY is the current income yield minus any premium above par or plus any discount from par in purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond. INVESTMENT POLICY No. 27 & PERFORMANCE REVIEW May 3, 2017 Attachment D POLICY REVIEW Purpose: Annual Policy Review Delegation of Investment Authority INVESTMENT POLICY GUIDELINES A. California Government Code: Sections 53600 through 53692 B. Investment Policy Certification: Association of Public Treasurers of the United States & Canada (APT US&C) Benefits of Certification: •Trust and confidence that the District’s investment policy is a professionally accepted policy. •Assurance that the District is abiding by professional standards to ensure prudent management of public funds. POLICY CHANGES Changes have been made in the past, when needed. There are two recommended changes to the Investment Policy dated May 3, 2017. •Simplify the language concerning authorized and approved brokers. •Clarify the that five-year maximum is from the settlement date of the purchase. INVESTMENT OBJECTIVE To safeguard principal, maintain liquidity and to achieve a market investment return. Fund Objectives (in order of priority) Safety Liquidity Yield SAFETY Category Safety Bank Deposits Amounts in excess of $250,000 FDIC limit are required by California Government Code to be 110% collateralized by the bank. LAIF Mandated by applicable state statutes* and state law, invested in a conservative manner and limits the investments to fixed- income securities. County Pool Mandated by state law, invested in a conservative manner and limits the investments to fixed-income securities. S&P Rating of AAAf/S1, which indicates extremely strong protection against losses and low sensitivity to changing market conditions. GSE’s Guaranteed by Federal Government. *Applicable state statutes •No. California Government Code 16429.3 states that monies placed with the Treasurer for deposit in the LAIF by cities, counties, special districts, nonprofit corporations, or qualified quasi-governmental agencies shall not be subject to either of the following:(a) Transfer or loan pursuant to Sections 16310, 16312, or 16313. (b) Impoundment or seizure by any state official or state agency. •California Government Code 16429.4 states that the right of a city, county, city and county, special district, nonprofit corporation, or qualified quasi-governmental agency, to withdraw its deposited money from the LAIF upon demand may not be altered, impaired, or denied in any way by any state official or state agency based upon the States failure to adopt a State Budget by July 1 of each new fiscal year. LIQUIDITY Category Availability Bank Deposits Immediately LAIF Same day County Pool 2-3 days GSE’s Can be converted to cash in 2-3 days Maintain highly liquid investments with a hold strategy. Annual Yield Performance YTD as of February 28th FY16 FY17 Otay 0.78% 1.13% LAIF 0.47% 0.78% County Pool 0.67% 1.19% Cash Management The District reconciles cash and performs a rolling 7-day forecast on a daily basis. Levels by Investment Type Category Target Levels Bank Deposits Outstanding checks and current day’s electronic payments. LAIF Short-term (30-60 days) obligations. County Pool Amounts in excess of bank deposit and LAIF targets that are to be invested using the laddering approach or to fund short-term obligations such as current year debt payments. GSE’s Target 2-3 year issuances with a laddering approach. INVESTMENT PORTFOLIO YTD as of February 28th Authorized $(‘000s) $ / % Actual % LAIF (Operating) $6,772 $65 million 7.87% Govt. Agency Bonds $67,732 100% 78.71% Bank Deposits & CDs $82 15% 0.10% San Diego County Pool $11,469 50% 13.33% TOTAL: $86,055 REQUESTED BOARD ACTION Re-delegate authority for all investment related activities to the Chief Financial Officer in accordance with Government Code Section 53607. QUESTIONS? STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: May 3, 2017 SUBMITTED BY: Rita Bell, Finance Manager PROJECT: DIV. NO. All APPROVED BY: Joseph R. Beachem, Chief Financial Officer German Alvarez, Assistant General Manager Mark Watton, General Manager SUBJECT: Adopt Resolution No. 4332 to Extend the Letter of Credit for the 1996 Variable Rate Certificates of Participation GENERAL MANAGER’S RECOMMENDATION: That the Board adopt Resolution No. 4332 to extend the Letter of Credit (LOC) with Union Bank for the outstanding variable rate debt and authorize the General Manager to execute the Application for Amendment to Irrevocable Standby Letter of Credit. COMMITTEE ACTION: See Attachment A. PURPOSE: To obtain approval by the Board to amend the LOC extending the termination date to June 29, 2020 and to execute the Application for Amendment to Irrevocable Standby Letter of Credit in connection with the existing LOC securing the 1996 Variable Rate Demand Certificates of Participation (1996 COPs). ANALYSIS: The District has five outstanding debt issuances that total approximately $95 million. Debt is used to fund the District’s Capital Improvement Program (CIP). One of the debt issuances is a variable rate debt, which is at a very low cost and thus, the District would like to maintain it. The outstanding variable rate debt is currently $8.2 million, which represents 9% of the District’s overall debt portfolio. In 1996, the District issued $15,400,000 1996 Variable Rate Demand Certificates of Participation (COPs) with an outstanding principal of $9,900,000. They are scheduled to mature on September 1, 2026 and currently bear an interest rate before fees of .88%, which is reset weekly. The proceeds of the 1996 COPs were used for the construction of a series of public improvements including water storage, pump stations, reservoirs, pipelines and the District headquarters. In order for the variable rate debt to remain on the market, a bank must provide a LOC to guarantee the debt payments to the certificate holders. Staff has discussed the possibility of converting the debt to a fixed rate debt. Under the amendment to the LOC agreement the effective variable rate is approximately 1.78%. The current rate to refinance a debt of similar size and duration is 2.8%. Based on this evaluation and the cost of refinancing, staff determined that it is still less expensive to maintain this debt as a variable rate issuance. In addition, the District may also consider paying the debt down or off, should it become cost beneficial. At this time, paying the debt down or off is not cost beneficial as it would reduce reserve levels below targeted amounts resulting in a need to issue debt. The variable rate debt is a small portion of the District’s debt portfolio, so any volatility in interest rates would not have a dramatic effect on the net portfolio interest expense. Currently, 1996 COPs are secured by a LOC provided by Union Bank. The LOC with Union Bank was executed on June 29, 2011 and was extended twice, with a current expiration date of June 29, 2017. Obtaining a new LOC is normally cost prohibitive as it is similar to the cost of issuing new debt. The cost of obtaining a new LOC provider in 2011 was approximately $150,000. Staff has obtained an Application for Amendment to Irrevocable Standby Letter of Credit to the existing Union Bank LOC agreement extending the terms until June 29, 2020. The District’s continued CIP requires the ongoing financial funding provided by this debt while the variable rate accomplishes this at a very low cost. The Application for Amendment to Irrevocable Standby Letter of Credit to extend the LOC agreement will enable the 1996 COP’s to remain a variable rate debt. FISCAL IMPACT: Joe Beachem, Chief Financial Officer Under the terms of the proposed extension, Union Bank has kept the LOC rate at 95 basis points. There are no changes to the LOC other than extending it to June 29, 2020. STRATEGIC GOAL: To provide sound financing of District facilities. LEGAL IMPACT: None. Attachments: A) Committee Action B) Resolution No. 4332 C) Application for Amendment to Irrevocable Standby LOC ATTACHMENT A SUBJECT/PROJECT: Adopt Resolution No. 4332 to Extend the Letter of Credit for the 1996 Variable Rate Certificates of Participation COMMITTEE ACTION: The Finance, Administration, and Communications Committee reviewed this item at a meeting held on April 19, 2017 and the following comments were made: Staff is requesting that the board adopt Resolution No. 4332 to extend the Letter of Credit (LOC) with Union Bank for the outstanding variable rate debt and authorize the General Manager to execute the Application for Amendment to Irrevocable Standby LOC. Staff reviewed information in the staff report. It was discussed that Union Bank meets the minimum credit rating for the debenture, though their credit rating is lower that the Otay WD’s. The Committee inquired why the District is required to have a LOC. Staff indicated that the LOC is not meant to enhance the credit of the debt. It provides the purchaser of the debt issuance another entity, other than Otay WD, where they could claim their monies back. This is a requirement of variable rate debt issuance. The Committee inquired what the current LOC rate is on the market for Union Bank and other banks. Staff had inquired with the District’s Financial Advisor, Harrell and Associates, and the Financial Advisor indicated that a similar size issuance ($10 to $12 million) with a three (3) year LOC would be 95 basis points which is what Union Bank is offering the District, plus approximately $150,000 in initial fees. The Committee asked staff to inquire with Union Bank if they would reduce the LOC fee based on the District being a long term customer, the District’s financial strength and credit rating. Staff inquired with Union Bank and while we are a valued customer they are unwilling to reduce the fee. 5 Upon completion of the discussion, the committee supported staffs’ recommendation and presentation to the full board on the consent calendar. Attachment B RESOLUTION NO. 4332 RESOLUTION OF THE BOARD OF DIRECTORS OF THE OTAY WATER DISTRICT APPROVING THE EXECUTION AND DELIVERY OF DOCUMENTS FOR A LETTER OF CREDIT EXTENSION FOR THE OTAY WATER DISTRICT VARIABLE RATE DEMAND CERTIFICATES OF PARTICIPATION (1996 CAPITAL PROJECTS) WHEREAS, the Otay Water District (the “District”) and the Otay Service Corporation (the “Corporation”) have previously entered into an Installment Sale Agreement dated as of June 1, 1996 as amended by the First Amendment to Installment Sale Agreement dated as of August 1, 2004 and the Second Amendment to Installment Sale Agreement dated as of June 30, 2011 (collectively, the “Installment Sale Agreement”) and that certain Trust Agreement dated as of June 1, 1996 as amended by the First Supplemental Trust Agreement dated as of May 25, 2011 and by the Second Supplemental Trust Agreement dated as of June 30, 2011 (collectively, the “Trust Agreement”) by and among the District, the Corporation and the Bank of New York Mellon Trust Company, N.A. (as successor trustee to Chemical Trust Company of California) (the “Trustee”) pursuant to which the Otay Water District Variable Rate Demand Certificates of Participation (1996 Capital Projects) (the “Certificates”) are outstanding; and WHEREAS, the Certificates evidence undivided fractional interests in the Installment Payments to be made by the District under the Installment Agreement; and WHEREAS, the Letter of Credit from Union Bank, N.A. (the “Bank”) securing the repayment of the Certificates under the Trust Agreement expires on June 29, 2017 and the District and the Bank desire to extend the maturity date to June 29, 2020; and WHEREAS, in order to effectuate the extension of the Letter of Credit, there has been presented to the District the following document for approval which is on file with the Secretary of the Board of Directors: (1) An Application for Amendment to Irrevocable Standby Letter of Credit by and between the District and the Bank; and WHEREAS, the execution and delivery of the foregoing document is necessary to effectuate the extension of the Letter of Credit which the Board of Directors has determined to be in the best interests of the District; NOW, THEREFORE, the Board of Directors of the Otay Water District does hereby RESOLVE, DETERMINE and ORDER as follows: Section 1. The above recital is true and correct and is adopted by the legislative body of the District. Section 2. The Application for Amendment to Irrevocable Standby Letter of Credit is hereby approved and each of the President of the Board of Directors, the Vice President of the Board of Directors, the Treasurer, the General Manager, the Chief Financial Officer, and their written 2 designees (each an “Authorized Officer” and collectively the “Authorized Officers”), acting alone, is hereby authorized and directed to execute and deliver the Application for Amendment to Irrevocable Standby Letter of Credit in the name of and on behalf of the District, in substantially the form and content now before this meeting, but with such changes, modifications, additions and deletions therein as shall be deemed necessary, desirable or appropriate by the Authorized Officer or Authorized Officers executing the same, such approval to be conclusively evidenced by the execution and delivery thereof by one or more of the Authorized Officers. Section 3. The Authorized Officers are hereby authorized and directed, to do any and all things and to execute and deliver the Application for Amendment to Irrevocable Standby Letter of Credit in order to consummate the extension of the Letter of Credit and otherwise to effectuate the purposes of this resolution. Section 4. This resolution shall take effect upon its adoption. ADOPTED, SIGNED and APPROVED at a regular meeting of the District this 3rd day of May, 2017. President of the Board of Directors of the Otay Water District ATTEST: Secretary of the Board of Directors of the Otay Water District 3 STATE OF CALIFORNIA ) ) ss COUNTY OF SAN DIEGO ) I, Susan Cruz, Secretary of the Board of Directors of the Otay Water District, do hereby certify that the foregoing Resolution No. 4332 was duly adopted by the Board of Directors of said District at a regular meeting thereof held on the 3rd day of May, 2017, and that it was so adopted by the following vote: AYES: DIRECTORS: NOES: DIRECTORS: ABSENT: DIRECTORS: ABSTAIN: DIRECTORS: Secretary of the Board of Directors of the Otay Water District (SEAL) STATE OF CALIFORNIA ) ) ss COUNTY OF SAN DIEGO ) I, Susan Cruz, Secretary of the Board of Directors of the Otay Water District, do hereby certify that the above and foregoing is a full, true and correct copy of Resolution No. 4332 of said Board, and that the same has not been amended or repealed. DATED: _________________, 2017. Secretary of the Board of Directors of the Otay Water District (SEAL) STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: May 3, 2017 SUBMITTED BY: Jose Martinez, Assistant Chief of Water Operations PROJECT: DIV. NO. All APPROVED BY: Pedro Porras, Chief of Water Operations German Alvarez, Assistant General Manager Mark Watton, General Manager SUBJECT: ANNUAL AS-NEEDED PAVING SERVICES GENERAL MANAGER’S RECOMMENDATION: That the Board authorize entering into an agreement with Kirk Paving in an amount not to exceed $200,000 for as-needed asphalt paving services from July 1, 2017 through June 30, 2018, and with an option to extend it to June 30, 2019. COMMITTEE ACTION: Please see Attachment A. PURPOSE: To present bid results and request that the Board authorize entering into an agreement with Kirk Paving, Lakeside, CA for as- needed asphalt paving services from July 1, 2017 through June 30, 2018 in an amount not to exceed $200,000, and with an option to extend it to June 30, 2019. ANALYSIS: As a regular course of business, the District is required to maintain and repair its water delivery infrastructure. Routinely this work requires the removal and re-installation of asphalt paving in public roadways. It has been shown more effective and efficient for the District to use outside contractors for its asphalt paving work. Therefore, the District has used outside asphalt paving contract services for more than twelve (12) years. As-needed paving services have been included in the FY 2018 Operating Budget under Contracted Services. The FY 2018 budget for annual as-needed paving under Contracted Services is $200,000. In accordance with the District’s purchasing requirements, a notice was published and bids were solicited for this work on a “unit price” basis. On March 21, 2017, contractors attended a mandatory pre-bid meeting and on April 4, 2017, bids were received and publicly opened with the following results from three (3) bidders: Bidder Weighted Score Kirk Paving, Lakeside 468.00 RGC General Engineering 481.58 EngineeringABC Construction, San Diego 510.54 The responsive bidder with the lowest weighted score is determined to be the lowest responsible bidder, in this case it is Kirk Paving, of Lakeside, CA. Kirk Paving served as the FY 2017 as-needed paving service contractor for the District and has performed all required work with no issues noted. Staff is confident that they will be able to perform the required work. Bids have been submitted on a unit-cost basis for the different types of work typically required during paving. The types of work are assigned a weight factor based on the District’s experience of the frequency they will be employed during the term of the agreement and these weights are multiplied by the unit cost to determine a unit score. Unit scores are totaled to provide the overall score of the bid and the contractor with the lowest overall score is the low bidder. Please refer to Attachment B. Under Contracted Services for Utility Maintenance staff budgeted $200,000 per year for this paving service, therefore, near the completion of FY18, staff will assess the cost of paving, which we believe may go up due to increases in construction activities. At that time staff will ask the contractor to let us know if its unit price will remain the same or if any adjusted increase is reasonable for an additional year contract. At that point, staff will either propose to renew its contract or will go over the process again requesting additional proposals from other contactors. Consequently, staff would like to negotiate an optional second-year contract that remains competitive. FISCAL IMPACT: Joe Beachem, Chief Financial Officer The FY 2018 budget request includes $200,000 for as-needed paving services. The project manager has projected that this requested amount is sufficient to cover the anticipated expenses for the paving needs in the 2018 fiscal year. STRATEGIC GOAL: Strategy: Stewards of Public Infrastructure. Goal: Conduct the best practice preventative maintenance activities. LEGAL IMPACT: None. Attachment A: Committee Action Form Attachment B: FY 2018 As-Needed Paving Services Score Sheet ATTACHMENT A SUBJECT/PROJECT: ANNUAL AS-NEEDED PAVING SERVICES COMMITTEE ACTION: The Engineering, Operations, and Water Resources Committee reviewed this item at a meeting held on April 18, 2017, and the following comments were made: Staff recommended that the Board authorize entering into an agreement with Kirk Paving in an amount not-to-exceed $200,000 for as-needed asphalt paving services from July 1, 2017 through June 30, 2018, and with an option to extend it to June 30, 2019. In response to a question from the Committee, staff stated that in addition to the three (3) companies who submitted bids for this project, the District reached out to other companies who previously submitted bids for other paving projects including as-needed asphalt paving services. It was indicated that those companies declined to submit bids due to other commitments and opportunities to larger contracted projects attributable to an increase in construction activities. The Committee commented that it was nice to work with Kirk Paving for the past several years without any major issues. Following the discussion, the Committee supported staffs’ recommendation and presentation to the full board as a consent item. ATTACHMENT B Item Wght Type of Service Unit Bid Price Total Score Unit Bid Price Total Score Unit Bid Price Total Score 1 10 Asphalt 0"-6"15.00$ 150 16.70$ 167.00 14.07$ 140.70 2 3 Asphalt 7"-12"15.00$ 45 15.80$ 47.40 14.07$ 42.21 3 1 Cap/Sheet 0"-1"0.10$ 0.1 0.20$ 0.20 0.20$ 0.20 4 1 Satin Seal 0.50$ 0.5 0.02$ 0.02 0.02$ 0.02 5 1 Traffic Stripping 0.20$ 0.2 0.20$ 0.20 0.25$ 0.25 6 3 Grinding 1.50$ 4.5 2.00$ 6.00 0.68$ 2.04 7 1 Traffic Loops 0.10$ 0.1 1.00$ 1.00 0.50$ 0.50 8 3 Sand/Seal 1.00$ 3 1.00$ 3.00 1.25$ 3.75 9 1 Base Rem/Rep 0.10$ 0.1 0.75$ 0.75 0.68$ 0.68 10 3 Saw Cut 0"-6"0.20$ 0.6 0.50$ 1.50 0.68$ 2.04 11 1 Saw Cut 6"-12"0.20$ 0.2 0.15$ 0.15 0.10$ 0.10 12 1 Saw Cut 12"+0.20$ 0.2 0.10$ 0.10 0.10$ 0.10 13 1 Chip Seal*1.50$ 1.5 0.75$ 0.75 1.00$ 1.00 14 8 1.5" Grind & Pav 3.50$ 28 3.40$ 27.20 5.90$ 47.20 234 255.27 240.79 Item Score Type of Service Unit Bid Price Total Score Unit Bid Price Total Score Unit Bid Price Total Score 1 10 Asphalt 0"-6"15.00$ 150 16.70$ 167.00 14.07$ 140.70 2 3 Asphalt 7"-12"15.00$ 45 15.80$ 47.40 14.07$ 42.21 3 1 Cap/Sheet 0"-1"0.10$ 0.1 0.20$ 0.20 0.20$ 0.20 4 1 Satin Seal 0.50$ 0.5 0.02$ 0.02 0.02$ 0.02 5 1 Traffic Stripping 0.20$ 0.2 0.20$ 0.20 0.25$ 0.25 6 3 Grinding 1.50$ 4.5 2.00$ 6.00 0.68$ 2.04 7 1 Traffic Loops 0.10$ 0.1 1.00$ 1.00 0.50$ 0.50 8 3 Sand/Seal 1.00$ 3 1.00$ 3.00 1.25$ 3.75 9 1 Base Rem/Rep 0.10$ 0.1 0.75$ 0.75 0.68$ 0.68 10 3 Saw Cut 0"-6"0.20$ 0.6 0.50$ 1.50 0.68$ 2.04 11 1 Saw Cut 6"-12"0.20$ 0.2 0.15$ 0.15 0.10$ 0.10 12 1 Saw Cut 12"+0.20$ 0.2 0.10$ 0.10 0.10$ 0.10 13 1 Chip Seal*1.50$ 1.5 0.75$ 0.75 1.00$ 1.00 14 8 1.5" Grind & Pav 3.50$ 28 3.40$ 27.20 5.90$ 47.20 234 255.27 240.79 468 510.54 481.58 Score Month 1-6 Months 7-12 Score Month 7-12 Total Score FY 2018 As-Needed Paving Services Bid Score Sheet Months 1-6 Kirk Paving ABC Construction RGC General Engineering STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: May 3, 2017 SUBMITTED BY: Dan Martin Engineering Manager PROJECT: Various DIV. NO. ALL APPROVED BY: Rod Posada, Chief, Engineering German Alvarez, Assistant General Manager Mark Watton, General Manager SUBJECT: Award of Two (2) As-Needed Construction Management and Inspection Services Contracts for Fiscal Years 2018 and 2019 GENERAL MANAGER’S RECOMMENDATION: That the Otay Water District (District) Board of Directors (Board) award two (2) professional As-Needed Construction Management and Inspection Services (CMIS) contracts and to authorize the General Manager to execute the agreements with Alyson Consulting (Alyson) and Valley Construction Management (Valley CM), each in an amount not-to-exceed $500,000. The total amount for the two (2) agreements will not exceed $500,000 during Fiscal Years 2018 and 2019 (ending June 30, 2019). COMMITTEE ACTION: Please see Attachment A. PURPOSE: To obtain Board authorization for the General Manager to enter into two (2) professional As-Needed CMIS agreements with Alyson and Valley CM, with each agreement in an amount not-to-exceed $500,000 for Fiscal Years 2018 and 2019. The total amount for the two (2) agreements will not exceed $500,000 during Fiscal Years 2018 and 2019. 2 ANALYSIS: The District will require the services of two (2) professional CMIS consultants in support of the District’s Capital Improvement Program (CIP) projects for two (2) fiscal years, FY 2018 and FY 2019 (ending June 30, 2019). The District has used an as-needed contract for construction management and inspection services over the last two fiscal years. The average fiscal year effort of the as-needed construction manager used to support the District’s CIP for Fiscal Years 2016 and 2017 equates to less than a full-time employee (FTE) at a rate of 0.43 per year. Use of the As-Needed CMIS has provided the District with the ability to obtain consulting services in a timely and efficient manner. Active construction work for the District is anticipated to peak in Fiscal Years 2018 and 2019. An analysis of the CIP workload for Fiscal Years 2018 and 2019 estimates that a greater level of effort will be required for as-needed construction management services. During this two year peak, the annual effort for construction management services is projected at an annual rate of 0.89 of an FTE per year (below the threshold needed to consider a full-time employee with this specialized skill set). The District staff will identify tasks for specific projects 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 anticipated CIP projects that are estimated to require construction management and partial inspection for Fiscal Years 2018 and 2019, at this time, are listed below: CIP Capital Facilities Project ESTIMATED Construction Management COST S2024 Campo Road Sewer Main Replacement $285,000 S2049 Calavo Basin Sewer Rehabilitation - Phase 2 $30,000 S2048 Hillsdale Road Sewer Repairs $20,000 P2533 1200-1 Reservoir Interior/Exterior Coating $20,000 3 P2546 980-2 Reservoir Interior/Exterior Coating $35,000 P2543 850-1 Reservoir Interior/Exterior Coating $25,000 P2573 PL- 12-Inch Pipeline Replacement, 803 Zone, Hillsdale Road $40,000 P2574 PL - 12-Inch and 14-Inch Pipeline Replacement, 803 and 978 Zone, Vista Grande, Pence Drive $30,000 R2116 RecPL - 14-Inch, 927 Zone, Force Main Improvements $15,000 TOTAL: $500,000 The scopes of work for the above projects are estimated from preliminary information and past projects. Therefore, staff believes that a $500,000 cap on the As-Needed CMIS contracts is adequate. The As-Needed CMIS contracts do not commit the District to any expenditure until a task order is approved to perform work on a CIP project. The District does not guarantee work to the consultants, nor does the District guarantee that it will expend all of the funds authorized by the contract on professional services. The District solicited for Construction Management and Inspection Services by placing an advertisement on the Otay Water District’s website and using BidSync, the District’s online bid solicitation website on January 31, 2017. The advertisement was also placed in the Daily Transcript. Eleven (11) firms submitted a Letter of Interest and a Statement of Qualifications. The Request for Proposal (RFP) for As-Needed CMIS was sent to the ten (10) firms resulting in eight (8) proposals received by March 3, 2017. Alyson Consulting, San Diego, CA Arcadis U.S., Inc., San Diego, CA Infrastructure Engineers, Brea, CA Kleinfelder/Simon Wong Engineering, San Diego, CA KOA Corporation, San Diego, CA NV5, San Diego, CA Valley Construction Management, San Diego, CA Wallace & Associates Consulting, Inc., Oceanside, CA The three (3) firms that chose not to propose are Callu Engineering, Inc. of San Diego, KMEA of National City, and SCST, Inc. of San Diego. 4 In accordance with the District’s Policy 21, staff evaluated and scored all written proposals and interviewed the top six (6) firms on March 23, 2017. Valley CM and Alyson received the highest scores for their services based on their experience, understanding of the scopes of work, proposed method to accomplish the work, and their composite hourly rate. Valley CM and Alyson were the most qualified consultants with the best overall total score. A summary of the complete evaluation is shown in Attachment B. Valley CM and Alyson 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. Alyson is providing these services to the District under the District’s current CMIS agreement. Staff found that Alyson’s performance under the current agreement has been excellent. FISCAL IMPACT: Joe Beachem, Chief Financial Officer The funds for these contracts will be expended for 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 project. Based on a review of the financial budgets, the Project Manager anticipates that the budgets will be sufficient to support the professional as-needed consulting services required for the CIP 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 high value water and wastewater services to the customers of the Otay Water District in a professional, effective, and efficient manner” and the District’s Vision, “A District that is at the forefront in innovations to provide water services at affordable rates, with a reputation for outstanding customer service.” LEGAL IMPACT: None. 5 DM:mlc P:\WORKING\As Needed Services\Construction Management\As Needed CM & Inspection Svcs FY18, FY19\Staff Report\BD 05-03-17_As-Needed CMIS FY18 - FY19_Staff Report\BD 05-03-17_Staff Report As-Needed Engineering Construction Management and Inspection Services.docx Attachments: Attachment A – Committee Action Attachment B – Summary of Proposal Rankings ATTACHMENT A SUBJECT/PROJECT: Various Award of Two (2) As-Needed Construction Management and Inspection Services Contracts for Fiscal Years 2018 and 2019 COMMITTEE ACTION: The Engineering, Operations, and Water Resources Committee (Committee) reviewed this item at a meeting held on April 18, 2017, and the following comments were made: Staff recommended that the Board award two (2) professional As-Needed Construction Management and Inspection Services (CMIS) contracts and to authorize the General Manager to execute the agreements with Alyson Consulting (Alyson) and Valley Construction Management (Valley CM), each in an amount not-to-exceed $500,000. The total amount for the two (2) agreements will not exceed $500,000 during Fiscal Years 2018 and 2019 (ending June 30, 2019). Staff reviewed the staff report to the Committee and indicated that page 2 of the staff report provides a list of projects that will be supported by construction management. Staff shared that fees were evaluated by comparing billing rates for the following positions: o Principal Engineer (2%) o Registered Professional Engineer (2%) o Project Construction Manager (60%) o Field Inspector (30%) o Specialty Inspector (2%) o Administration/Clerical (4%) Each position was given a weight and the sum of these weighted rates are indicated in the scoring table on Attachment B of the staff report. It was noted that the rating of the weights was presented within the Request for Proposal package. Staff indicated that each weight was based on the District’s historical use of classification over the last several years. It was noted that both Valley CM and Alyson are registered with the Department of Industrial Relations, as required by Senate Bill 854. Staff indicated that Alyson is currently performing Construction Management and Inspection Services (CMIS) under the current As-Needed contract and stated that their performance has been excellent. Staff noted that the As-Needed CMIS contracts do not commit the District to any expenditure until a task order is approved to perform work on a CIP project. In addition, the District does not guarantee work to the consultants, nor does the District guarantee that it will expend all of the funds authorized by the contract. There was a discussion of hiring District retirees to perform CMIS. Staff stated that they would consider this option if it would benefit both the District and retirees. At the request of the Committee, staff stated that they would explore the pros and cons of hiring a District retiree for CMIS. The Committee commended staff for being transparent with the weighting of the salary categories, which is a very valuable information to have prior to submitting proposals to the District. In response to inquiries and comments from the Committee, staff stated that there are many variables to consider if the District were to hire a full-time Construction Manager employee. It is estimated that the base salary for a Construction Manager would be approximately $150,000. However, there are other costs to take into consideration such as fees for recruitment, certification, training, liabilities, as well as benefits and a retirement pension for a full-time District employee. Staff noted that on a case-by-case basis, they will consider hiring full-time employees versus consultants if it were to be more beneficial to the District. Following the discussion, the Committee supported staffs’ recommendation and presentation to the full board as a consent item. Qualifications of Staff Understanding of Scope, Schedule and Resources Soundness and Viability of Proposed Project Plan INDIVIDUAL SUBTOTAL - WRITTEN AVERAGE SUBTOTAL - WRITTEN Proposed Rates* Consultant's Commitment to DBE 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 Kevin Koeppen 28 20 26 74 12 11 8 9 40 Jonathan Chambers 25 21 24 70 12 12 8 8 40 Steve Beppler 27 23 26 76 12 13 8 8 41 Stephanie Chen 26 22 26 74 13 14 8 8 43 Doug Rahders 24 21 25 70 11 11 9 8 39 Kevin Koeppen 27 20 23 70 10 9 7 8 34 Jonathan Chambers 25 21 25 71 11 10 7 7 35 Steve Beppler 26 20 23 69 10 10 6 5 31 Stephanie Chen 26 19 19 64 10 9 7 7 33 Doug Rahders 21 21 22 64 10 8 9 8 35 Kevin Koeppen 26 20 26 72 987731 Jonathan Chambers 24 23 24 71 996630 Steve Beppler 25 20 24 69 796527 Stephanie Chen 21 19 25 65 887629 Doug Rahders 21 21 23 65 887831 Kevin Koeppen 28 23 28 79 12 10 9 8 39 Jonathan Chambers 29 24 27 80 12 12 9 9 42 Steve Beppler 28 24 27 79 13 12 8 7 40 Stephanie Chen 25 23 27 75 11 11 8 7 37 Doug Rahders 25 22 27 74 10 11 9 8 38 Kevin Koeppen 25 19 23 67 Jonathan Chambers 24 20 22 66 Steve Beppler 23 20 23 66 Stephanie Chen 22 19 23 64 Doug Rahders 24 18 22 64 Kevin Koeppen 24 19 23 66 Jonathan Chambers 23 20 22 65 Steve Beppler 24 20 22 66 Stephanie Chen 23 17 20 60 Doug Rahders 22 18 20 60 Kevin Koeppen 28 22 27 77 13 11 8 9 41 Jonathan Chambers 27 24 27 78 11 13 7 8 39 Steve Beppler 27 24 27 78 13 13 7 8 41 Stephanie Chen 25 21 26 72 12 14 7 7 40 Doug Rahders 24 23 25 72 11 10 7 9 37 Kevin Koeppen 26 20 25 71 11 9 8 8 36 Jonathan Chambers 25 21 25 71 10 11 7 8 36 Steve Beppler 25 19 25 69 10 12 6 6 34 Stephanie Chen 24 20 22 66 11 9 7 7 34 Doug Rahders 22 22 21 65 11 11 8 9 39 *The fees were evaluated by comparing weighted rates for six positions. The sum of these six weighted rates are noted on the table to the left. Consultant Rate Position Score Note: The Review Panel does not see or consider rates when scoring other categories. Rates are scored by the PM, who is not on the Review Panel. Alyson Consulting $142.10 8 Arcadis $147.10 5 Infrastructure Engineers $137.80 11 Kleinfelder $154.38 highest 1 KOA Corporation $146.40 6 NV5 $151.60 3 Valley Construction Mgmt.$131.26 lowest 15 Wallace & Associates $143.04 8 SUMMARY OF PROPOSAL RANKINGS As-Needed Construction Management and Inspection Services - Fiscal Years 2018 and 2019 112 40 130 Excellent TOTAL SCORE REFERENCES 41 122 Excellent ORAL 34 36 73 63 WRITTEN 90 81 68 5 N 73 ATTACHMENT B MAXIMUM POINTS Valley Construction Management 68 8 Y15 8 75 66 RATES SCORING CHART NV5 Alyson Consulting Y Y 76 3 Y Wallace & Associates Arcadis Infrastructure Engineers 68 11 N 79 10930 107 71 117 NOT INTERVIEWED Kleinfelder 77 KOA Corporation 65 6 N 1 Y 78 39 NOT INTERVIEWED P:\WORKING\As Needed Services\Construction Management\As Needed CM & Inspection Svcs FY18, FY19\Staff Report\BD X-X-17_As-Needed CMIS FY18 - FY19_Staff Report\Exhibits\Exhibit B STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: May 3, 2017 SUBMITTED BY: Stephen Beppler Senior Civil Engineer Bob Kennedy Engineering Manager PROJECT: Various DIV. NO. ALL APPROVED BY: Rod Posada, Chief, Engineering German Alvarez, Assistant General Manager Mark Watton, General Manager SUBJECT: Award of Two (2) As-Needed Water Reclamation Engineering Design Services Contracts for Fiscal Years 2018 and 2019 GENERAL MANAGER’S RECOMMENDATION: That the Otay Water District (District) Board of Directors (Board) award two (2) professional As-Needed Water Reclamation Engineering Design Services contracts and to authorize the General Manager to execute two agreements with Arcadis U.S., Inc. (Arcadis) and KEH & Associates (KEH), each in an amount not-to-exceed $175,000. The total amount spent through the two contracts will not exceed $175,000 during Fiscal Years 2018 and 2019 (ending June 30, 2019). COMMITTEE ACTION: Please see Attachment A. PURPOSE: To obtain Board authorization for the General Manager to enter into two (2) professional As-Needed Water Reclamation Engineering Design Services contracts with Arcadis and KEH, with each contract in an amount not-to-exceed $175,000 for Fiscal Years 2018 and 2019. The total amount spent through the two contracts will not exceed $175,000 during Fiscal Years 2018 and 2019. 2 ANALYSIS: The District will require the services of two (2) professional water reclamation engineering design consultants on an as-needed basis in support of the District’s Capital Improvement Program (CIP) projects for Fiscal Years 2018 and 2019 (ending June 30, 2019). It is more efficient and cost effective to issue as-needed contracts for water reclamation engineering design 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 construction management, geotechnical, traffic, and environmental services. The District staff will identify tasks for specific projects 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 CIP projects that are estimated to require water reclamation engineering design services for Fiscal Years 2018 and 2019, at this time, are listed below: Staff believes that a $175,000 cap on each of the As-Needed Water Reclamation Engineering Design Services contract is adequate. Fees for professional services will be charged to the CIP projects or to the Fiscal Year Operations budget. CIP DESCRIPTION ESTIMATED COST S2043 RWCWRF – Sludge Handling System $25,000 S2046 RWCWRF – Aeration Panels Replacement $60,000 S2051 RWCWRF – Headworks Improvements $60,000 S2061 RWCWRF – Aeration Controls Consolidation & Optimization Upgrades $30,000 TOTAL: $175,000 3 The As-Needed Engineering Design 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 of the funds authorized by the contract on professional services. The District solicited for Engineering Design Services by placing an advertisement on Bidsync, the Otay Water District’s website, and with various other publications including the Daily Transcript. Seven (7) firms submitted a Letter of Interest and a Statement of Qualifications. The Request for Proposal (RFP) for Engineering Design Services was sent to all seven (7) firms resulting in three (3) proposals received by March 9, 2017. They are as follows: Arcadis U.S., Inc., San Diego and Carlsbad, CA ES Engineering Services, Orange, CA KEH & Associates, San Marcos, CA Firms that submitted Letters of Interest, but did not propose, were AECOM of San Diego, Carollo Engineers, Inc. of San Diego, HDR Engineering, Inc. of San Diego, and Kleinfelder of San Diego. In accordance with the District’s Policy 21, staff evaluated and scored all written proposals. Arcadis and KEH 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. Arcadis and KEH were the most qualified consultants with the best overall proposals. Arcadis currently holds a professional engineering agreement with the District for as-needed engineering design services (Fiscal Years 2015 and 2016) that is scheduled to end on June 30, 2017. Both consultants provide similar services to other local agencies and are readily available to provide the services required. A summary of the complete evaluation is shown in Attachment B. Arcadis and KEH 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 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 4 approved by the District for the consultant's services on a specific CIP project. Based on a review of the financial budgets, the Project Manager anticipates that the budgets will be sufficient to support the professional as-needed consulting services required for the CIP 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 high value water and wastewater services to the customers of the Otay Water District in a professional, effective, and efficient manner” and the General Manager’s Vision, “A District that is at the forefront in innovations to provide water services at affordable rates, with a reputation for outstanding customer service.” LEGAL IMPACT: None. SB/BK:mlc P:\WORKING\As Needed Services\Water Reclamation Engineering Design\FY 2018-2019\Staff Report\BD_05-03-17_Staff Report_Award of As-Needed Water Reclamation Engineering Design Services (SB-BK).docx Attachments: Attachment A – Committee Action Attachment B – Summary of Proposal Rankings ATTACHMENT A SUBJECT/PROJECT: Various Award of Two (2) As-Needed Water Reclamation Engineering Design Services Contracts for Fiscal Years 2018 and 2019 COMMITTEE ACTION: The Engineering, Operations, and Water Resources Committee (Committee) reviewed this item at a meeting held on April 18, 2017, and the following comments were made: Staff recommended that the Board award two (2) professional As- Needed Water Reclamation Engineering Design Services contracts and to authorize the General Manager to execute two agreements with Arcadis U.S., Inc. (Arcadis) and KEH & Associates (KEH), each in an amount not-to-exceed $175,000. The total amount spent through the two contracts will not exceed $175,000 during Fiscal Years 2018 and 2019 (ending June 30, 2019). It was noted that staffs’ recommendation would allow the District to obtain consulting services in a timely and efficient manner and would be more cost effective by issuing contracts on an as-needed basis. Staff stated that the District will identify tasks and request cost proposals from the two consultants during the contract period. The District will evaluate the proposals based upon qualifications and cost and then 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 describe in the scope of work. Staff indicated that fees were evaluated by comparing billing rates for the following positions: o Principal Engineer (5%) o Associate Principal Engineer (5%) o Project Manager (30%) o Project Engineer II (15%) o Project Engineer I (30%) o Technician Drafter (10%) o Office Support (5%) Each position was given a weight and the sum of these weighted rates are indicated in the scoring table on Attachment B of the staff report. Staff stated that the District has not previously worked directly with KEH on any projects, but they were a sub- consultant for the preparation of the District’s 2013 Wastewater Management Plan. They are a highly rated company that has provided similar services to other local agencies including the City of Carlsbad. Arcadis has provided services for the District in the past, including preparation of the Wastewater Management Plan and also As-Needed Engineer Design Services in FY 2015-16. Staff noted that both firms are readily available to provide the services required. In response to a question from the Committee, staff stated that in the past the District selected a single firm to provide as- needed consulting services. However, staff looked at other alternatives to increase production and value for the District while maintaining responsiveness. Staff stated that selecting multiple engineering firms has allowed the District to solicit task proposals from two firms and evaluate the value to the District based on the design team strength, schedule to complete the task, and ultimately the cost for the design effort. In response to a question from the Committee, staff stated that fees will be charged by hourly rates. The Committee commended staff for establishing this procedure of soliciting proposals from two consultants on an as-needed basis as it provides flexibility to the District. If one firm is not available or suitable for a project, the District has the option to assign it to the other firm. 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 Fee* Consultant's Commitment to DBE TOTAL - WRITTEN 30 25 30 85 85 15 Y/N 100 Poor/Good/ Excellent Lisa Coburn-Boyd 27 23 26 76 Gene Palop 29 23 30 82 Dan Martin 27 22 27 76 Adolfo Segura 29 23 27 79 Bob Kennedy 28 23 28 79 Lisa Coburn-Boyd 25 15 18 58 Gene Palop 22 15 21 58 Dan Martin 20 18 20 58 Adolfo Segura 25 19 20 64 Bob Kennedy 24 18 21 63 Lisa Coburn-Boyd 28 23 27 78 Gene Palop 28 24 28 80 Dan Martin 28 22 27 77 Adolfo Segura 28 22 29 79 Bob Kennedy 28 23 28 79 Firm Arcadis ES Engineering KEH *Note: Review Panel does not see or consider proposed Weighted Fee $144 $115 $158 fee when scoring other categories. The proposed fee Score 6 15 1 is scored by the PM, who is not on Review Panel. RATES SCORING CHART MAXIMUM POINTS 6Arcadis 84 Y Y 60 Attachment B SUMMARY OF PROPOSAL RANKINGS As-Needed Water Reclamation Engineering Design Services - Fiscal Years 2018 and 2019 WRITTEN Excellent REFERENCES ES Engineering Y KEH 79 1 80 75 78 15 Excellent P:\WORKING\As Needed Services\Water Reclamation Engineering Design\FY 2018-2019\Staff Report\Attachment B - Summary of Proposal Rankings.xls STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: May 3, 2017 SUBMITTED BY: Dan Martin Engineering Manager PROJECT: S2024-001103 DIV. NO. 5 APPROVED BY: Rod Posada, Chief, Engineering German Alvarez, Assistant General Manager Mark Watton, General Manager SUBJECT: Approval to Increase the CIP S2024 Budget in an Amount of $1,600,000 and Award of a Construction Contract to Wier Construction Corporation for the Campo Road Sewer Replacement Project GENERAL MANAGER’S RECOMMENDATION: That the Otay Water District (District) Board of Directors (Board) increase the CIP S2024 budget in the amount of $1,600,000. Additionally, that the Board award a construction contract to Wier Constrution Corporation (Wier Construction) and authorize the General Manager to enter into a construction contract with Wier Construction for the Campo Road Sewer Replacement Project in an amount not-to- exceed $7,816,645.95 (see Exhibit A for Project location). COMMITTEE ACTION: Please see Attachment A. PURPOSE: To obtain Board authorization to increase the CIP S2024 budget in the amount of $1,600,000 from $8,500,000 to $10,100,000 and to obtain Board authorization for the General Manager to enter into a construction contract with Wier Construction for the Campo Road Sewer Replacement Project in an amount not-to-exceed $7,816,645.95. 2 ANALYSIS: The District is proposing the replacement of an existing 10-inch sewer pipeline, located within and south of Campo Road between Avocado Boulevard and Singer Lane, which is undersized to handle current sewer flows. To accommodate current and future flows, an approximately 7,420-foot-long, 15-inch gravity sewer main will be installed to replace the existing 9,225 feet long, 10-inch sewer main. The eastern terminus of the proposed pipeline will be located at the intersection of Avocado Boulevard/Rancho San Diego Village Shopping Center driveway and terminate in the Rancho San Diego Towne Center, where it will connect to the existing 27-inch sewer main within the shopping center’s parking lot. Sewer laterals stemming from the existing pipe will be reconnected to the proposed pipeline. The majority of the pipeline will be installed with open trench construction except in two locations, a crossing of Campo Road and at the intersection of Campo Road/Jamacha Boulevard, where horizontal auger boring will be used. The existing sewer will be abandoned in place with the exception of a 210 feet long section of aboveground pipeline and seven supporting pillars that will be removed. The design was provided by the District’s As-needed Design Engineer, Rick Engineering Company. The Project was advertised on January 25, 2017 using BidSync, the District’s online bid solicitation website. The Project was also advertised in the Daily Transcript and the District’s website. BidSync provided electronic distribution of the Bid Documents, including specifications, plans, and addendum. A non- mandatory Pre-Bid Meeting was held on February 16, 2017, which was attended by sixteen (16) contractors, subcontractors, and suppliers. 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 on March 9, 2017, with the following results: BID RANK CONTRACTOR TOTAL BID AMOUNT 1 Wier Construction Corporation Escondido, CA $7,816,780.95 2 LH Woods & Sons, Inc. Vista, CA $7,844,000.00 3 Palm Engineering Construction Company, Inc. San Diego, CA $8,265,493.50 4 S.C. Valley Engineering, Inc. El Cajon, CA $9,733,000.00 5 TC Construction Company, Inc. Santee, CA $9,790,940.00 6 Burtech Pipeline, Inc. Encinitas, CA $10,300,064.50 7 Pulice Construction, Inc. San Diego, CA $10,537,127.00 3 The Engineer’s Estimate is $7.2 Million. A review of the bids was performed by District staff for conformance with the contract requirements. During the review of the bids, staff noted discrepancies between the unit prices and extended total amounts associated with the unit pricing on the bids submitted by Wier Construction, LH Woods & Sons, Inc., and Palm Engineering Construction Company. Staff corrected the bid amounts in accordance with the requirements included in Section 00400, “Bid List Requirements and Understanding” of the contract documents. The corrected bid amounts are shown in the table below: BID RANK CONTRACTOR TOTAL BID AMOUNT 1 Wier Construction Corporation Escondido, CA $7,816,645.95* 2 LH Woods & Sons, Inc. Vista, CA $7,844,240.00** 3 Palm Engineering Construction Company, Inc. San Diego, CA $8,265,421.50*** 4 S.C. Valley Engineering, Inc. El Cajon, CA $9,733,000.00 5 TC Construction Company, Inc. Santee, CA $9,790,940.00 6 Burtech Pipeline, Inc. Encinitas, CA $10,300,064.50 7 Pulice Construction, Inc. San Diego, CA $10,537,127.00 * Bid Item 30: Total price corrected to reflect unit price per Section 00400 “Bid List Requirements and Understanding” of the contract documents. ** Bid Item 31: Total price corrected to reflect unit price per Section 00400 “Bid List Requirements and Understanding” of the contract documents. *** Bid Item 5: Total price corrected to reflect unit price per Section 00400 “Bid List Requirements and Understanding” of the contract documents. Staff determined that Wier Construction was the lowest responsive and responsible bidder. Wier Construction holds a Class A Contractor’s License in the State of California, which meets the contract document’s requirements. Wier Construction’s license is valid through October 31, 2017. The reference checks indicated a very good to excellent performance record. An internet background search of the company was performed and revealed no outstanding issues with this company. 4 Staff verified that the bid bond provided by Wier Construction is valid. Staff will also verify that Wier Construction’s Performance Bond and Labor and Materials Bond are valid prior to execution of the contract. The District has applied to the State Revolving Fund for funding to support the Project. As a result, the State Revolving Fund’s requirements, which include Disadvantaged Business Enterprise (DBE) utilization and reporting, have been incorporated into the bidding and contract documents. District staff and staff from the State Revolving Fund have reviewed the DBE documents provided by Wier Construction as part of their bid package and have determined that they are compliant. Subsequent to the bid opening, staff posted the bid opening results and the corrected bid results to BidSync. A request for the listed subcontractors associated with each of the bids was made by ABC Liovin Drilling, Inc. Staff provided the requested information and followed up with ABC Liovin Drilling, Inc. who confirmed receipt of the requested information and also confirmed that they had no concerns with respect to the award of the Project. Along with the request to award the construction contract, staff is requesting a $1,600,000 budget increase to support the completion of the Project. The basis for the budget increase request is as follows: The FY 2017 budget for the Campo Road Sewer Project was based on the Project’s 60% design cost opinion provided by the design engineer. That estimate totaled approximately $6,833,000. As the Project developed to the level of final plans and specifications during FY 2017, the Engineer’s Estimate was updated to a new amount of $7,200,000. This represents an increase of $367,000. Acquisition of easements for the Project which total $315,000 were in excess of the estimated amount of $67,000 as included in the Project’s 60% design cost option which was used for the FY 2017 budget. This represents an increase of $248,000. When bids were opened, the bid from the lowest responsive and responsible bidder totaled approximately $7,800,000. This represents an increase of approximately $600,000 above the Engineer’s Estimate. Staff is requesting an additional $185,000 to support inspection of the work since most of the work will be performed at night due to permitting requirements. Staff is requesting construction contingency in the amount of $200,000 to address unforeseen work on this complex underground 5 project (approximately 2.5% of the construction contract amount). FISCAL IMPACT: Joe Beachem, Chief Financial Officer The Fiscal Year 2017 budget for CIP S2024 is $8,500,000. Total expenditures, plus outstanding commitments and forecast, including this contract, are $10,100,000. See Attachment B for budget detail. Based on a review of the financial budget, the Project Manager anticipates that with a budget increase of $1,600,000, the Project will be completed within the new budget amount of $10,100,000. The Finance Department has determined that should the State Revolving Fund Loan be approved, the District would borrow $6 million at an estimated rate of 1.7% for a term of 30 years. For the remainder of the project 50% of the funding will be available from the Replacement Fund and 50% of the funding will be available from the Betterment ID 18 fund for CIP S2024. Should the State decline the District’s application for financial assistance, a lesser amount would be required to be borrowed from a more traditional source such as a Certificate of Participation at a higher interest rate. The Project budget increase request included in this staff report is reflected in the Draft Fiscal Capital Improvement Program for Fiscal Years 2018-2023. STRATEGIC GOAL: This Project supports the District’s Mission statement, “To provide high value water and wastewater services to the customers of the Otay Water District in a professional, effective, and efficient manner” and the District’s Vision, “A District that is at the forefront in innovations to provide water services at affordable rates, with a reputation for outstanding customer service.” LEGAL IMPACT: None. DM:mlc P:\WORKING\CIP S2024 Campo Road Sewer Replacement\Staff Reports\BD 05-03-17\BD 05-03-17, Staff Report Campo Road Sewer Replacement - Award Construction Contract_rev1.docx Attachments: Attachment A – Committee Action Attachment B – S2024 Budget Detail Exhibit A – Project Location ATTACHMENT A SUBJECT/PROJECT: S2024-001103 Approval to Increase the CIP 2024 Budget in an Amount of $1,600,000 and Award of a Construction Contract to Wier Construction Corporation for the Campo Road Sewer Replacement Project COMMITTEE ACTION: The Engineering, Operations, and Water Resources Committee (Committee) reviewed this item at a meeting held on April 18, 2017, and the following comments were made: Staff recommended that the Board increase the CIP S2024 budget in the amount of $1,600,000. Additionally, that the Board award a construction contract to Wier Construction Corporation (Wier Construction) and to authorize the General Manager to execute a construction contract with Wier Construction for the Campo Road Sewer Replacement Project in an amount not-to-exceed $7,784,245.95. Staff reviewed the staff report with the Committee and noted that during the review of bids, staff noticed discrepancies between the unit prices on the bids submitted by Wier Construction, LH Woods & Sons, Inc., and Palm Engineering Construction Company. Bid amounts were corrected by staff in accordance with the requirements included in Section 00400, “Bid List Requirements and Understanding” of the contract documents. Page 3 of the staff report provides additional details of this matter. Staff indicated that Wier Construction was the lowest responsive and responsible bidder and recommended that the Corporation be awarded a construction contract for the Project. It was discussed that along with the request to award the construction contract to Wier Construction, staff also requested a $1,600,000 budget increase for completion of the Project. The basis for the increase includes updated Engineer’s Estimates, acquisition of easements for the Project, and a contingency. Staff noted that the easements are now in place, and details of the requested increase are provided on pages 4 and 5 of the staff report. The Committee and staff discussed procedures for Engineer’s Estimates and how to improve it. One suggestion from the Committee was that staff update estimates on an annual basis, especially for million dollar projects that are delayed and take longer than anticipated to complete. Staff indicated that they are currently re-calculating Engineer Estimates for active projects that are over a year old. In response to a question from the Committee, staff stated that they believe the contingency for the Project is sufficient as it is approximately 2.5% of the construction contract amount. In response to another question from the Committee, staff stated that they use the ENR Construction Index and historical data to prepare Engineering Estimates at the mid-point of construction. The Committee shared information about the American Society of Cost Engineers which provides guidelines to estimate construction costs at various stages of projects during design. The Committee also shared that staff can add 3%-5% for bidding climate, which is a valid number to add to bidding costs. Following the discussion, the Committee supported staffs’ recommendation and presentation to the full board as a consent item. Note: Subsequent to the April 18, 2017 Committee Meeting, staff discovered an error in the bid analysis for the Campo Road Sewer project. Staff, in error, misplaced a decimal point on Wier Construction’s submitted Bid Item No. 6, “Demolition of Existing 8- Inch Sewer Abandonment” reflecting $3,600.00 in lieu of Wier Construction’s bid amount of $36,000.00. Staff re-analyzed all of the submitted bids and confirmed that no other errors had occurred. Wier Construction’s corrected bid amount is $7,816,645.95. It was confirmed that the corrected bid by Wier Construction remains the lowest responsive and responsible bid. The staff report to the Board of Directors has been updated to reflect the correct contract award amount. As a Lesson Learned, staff has implemented a three party review process in an effort to eliminate future bid analysis errors. ATTACHMENT B – S2024 Budget Detail SUBJECT/PROJECT: S2024-001103 Approval to Increase the CIP 2024 Budget in an Amount of $1,600,000 and Award of a Construction Contract to Wier Construction Corporation for the Campo Road Sewer Replacement Project 20-Apr-17 Budget 10,100,000 Planning Consultant Contracts 20,020 20,020 - 20,020 AEGIS ENGINEERING MGMT INC Regulatory Agency Fees 2,260 2,260 - 2,260 COUNTY OF SAN DIEGO 132 132 - 132 US BANK Service Contracts 43 43 - 43 EAST COUNTY GAZETTE 162 162 - 162 SAN DIEGO DAILY TRANSCRIPT Standard Salaries 139,696 139,696 - 139,696 Total Planning 162,312 162,312 - 162,312 Design 001102 Consultant Contracts 9,315 9,315 - 9,315 WATER SYSTEMS CONSULTING INC 765,074 691,074 74,000 765,074 RICK ENGINEERING COMPANY 4,025 4,025 - 4,025 MICHAEL D KEAGY REAL ESTATE 3,508 3,508 - 3,508 NINYO & MOORE GEOTECHNICAL AND 735 735 - 735 AIRX UTILITY SURVEYORS INC Professional Legal Fees 1,910 1,910 - 1,910 ARTIANO SHINOFF 182 182 - 182 STUTZ ARTIANO SHINOFF Regulatory Agency Fees 956 956 - 956 COUNTY OF SAN DIEGO Service Contracts 158 158 - 158 SAN DIEGO DAILY TRANSCRIPT 62 62 - 62 DAILY JOURNAL CORPORATION Settlements 125,000 125,000 - 125,000 GRI-REGENCY LLC 190,000 190,000 - 190,000 VESTAR Standard Salaries 295,772 295,772 - 295,772 Total Design 1,396,698 1,322,698 74,000 1,396,698 Construction Construction Contract 7,816,646 - 7,816,646 7,816,646 WIER CONSTRUCTION CORP. Consultant Contracts 17,400 17,400 - 17,400 ALYSON CONSULTING 12,258 12,258 - 12,258 NINYO & MOORE GEOTECHNICAL AND 42,461 2,211 40,250 42,461 RICK ENGINEERING COMPANY 380,000 - 380,000 380,000 Construction Management/Inspection Regulatory Agency Fees 274 274 - 274 COUNTY OF SAN DIEGO Standard Salaries 100,000 16,850 83,150 100,000 Project Contingency 170,000 - 170,000 170,000 2.2% of Construction Contract Total Construction 8,539,038 48,993 8,490,046 8,539,038 Grand Total 10,098,048 1,534,003 8,564,046 10,098,048 Vendor/Comments Otay Water District S2024 - Campo Road Sewer Main Replacement Committed Expenditures Outstanding Commitment & Forecast Projected Final Cost SKYLINEWESLEYANCHURCH ?Ë AV O C A D O B L V D FURY LANE JAMA C H A B L V D JAMAC H A R D CUYAMACACOLLEGE C A M P O R D C A M P O R D ?Ë PROJECTALIGNMENT OWDREGULATORYSITE Ralph W. ChapmanWater ReclamationFacility SINGER L N RANCHOSAN DIEGOVILLAGE RANCHOSAN DIEGOTOWNECENTER Existing 10-inchGravity Sewer tobe Replaced VICINITY MAP PROJECT SITE NTS DIV 5 DIV 1 DIV 2 DIV 4 DIV 3 ?ò Aä;&s ?p ?Ë !\ OTAY WATER DISTRICTCAMPO ROAD SEWER MAIN REPLACEMENTLOCATION MAP EXHIBIT A CIP S2024 0 1,000500 Feet F F P: \ W O R K I N G \ C I P S 2 0 2 4 C a m p o R o a d S e w e r R e p l a c e m e n t \ 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 , L o c a t i o n M a p , O c t 2 0 1 5 . m x d Legend Proposed 15-Inch Sewer Main Alignment Existing 10-inch Gravity Sewer to be Replaced Existing Sewer Mains STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: May 3, 2017 SUBMITTED BY: Dan Martin Engineering Manager PROJECT: Various DIV. NO. 2 APPROVED BY: Rod Posada, Chief, Engineering German Alvarez, Assistant General Manager Mark Watton, General Manager SUBJECT: Permanent Moratorium on the Installation of New Recycled Water Facilities on Otay Mesa effective July 1, 2017 GENERAL MANAGER’S RECOMMENDATION: That the Otay Water District (District) Board of Directors (Board) place a permanent moratorium on the installation of new recycled water facilities on Otay Mesa effective July 1, 2017 (see Exhibit A for Project location). COMMITTEE ACTION: Please see Attachment A. PURPOSE: To place a permanent moratorium on the installation of new recycled water facilities on Otay Mesa effective July 1, 2017. ANALYSIS: Currently, recycled water is not available on Otay Mesa. The existing recycled water infrastructure on Otay Mesa is being supplied with potable water. As the District has pursued expansion of the District’s recycled water supply system to the Otay Mesa area, the District has encountered a number of issues and risks, when considered in total, challenge both the technical and financial feasibility of delivering recycled water to Otay Mesa. On July 2, 2 2014, staff presented information to the Board on the uncertainty of recycled water availability for Otay Mesa, the financial feasibility considerations associated with anticipated recycled water rates from the City of San Diego (City), the uncertainty of securing easements to support the Otay Mesa Recycled Water Supply Link Project, and the delivery horizon of Indirect Potable Reuse (IPR) and/or Direct Potable Reuse (DPR). As a result of the information presented to the Board, the Board voted to place a temporary moratorium on the installation of new recycled water facilities on Otay Mesa. At the September 7, 2016 Board meeting, staff presented an update on a number of efforts related to the temporary moratorium on the installation of new recycled water facilities on Otay Mesa. These efforts included meeting with representatives of the East Otay Mesa Property Owners Association and the Otay Mesa Property Owners Association (EOMPOA/OMPOA) in August of 2016 and a request by EOMPOA/OMPOA to approve a second extension to the temporary moratorium on the installation of new recycled water facilities on Otay Mesa for a period of one additional year to July 1, 2017. The EOMPOA/OMPOA explained that they believed the outlook for development had improved over the last year and that the added one (1) year extension would provide additional time for the EOMPOA/OMPOA to continue efforts to attract businesses to Otay Mesa that may have a high demand for recycled water use. Additionally, the EOMPOA/OMPOA representatives explained that funding opportunities that could offset the capital costs of implementing recycled water infrastructure on Otay Mesa may materialize within the requested extension. With the approved temporary moratorium extension date approaching, to date, no additional businesses that have a high demand for recycled water use on Otay Mesa have been identified or are expected. In addition, no additional funding opportunities have been identified or are expected. At the July 6, 2016 Board meeting, staff provided a summary update of factors included in the Otay Mesa Recycled Water Financial Analysis. Staff also presented a sensitivity analysis to determine the sensitivity of the Otay Mesa Recycled Water Financial Analysis. It was noted that staff evaluated the financial feasibility under multiple pricing and demand scenarios including the financial feasibility of recycled water on Otay Mesa based on the City of San Diego’s Unitary Rate of $753/AF. As part of each analysis, staff determined the level of demand that would be required for the expansion of the recycled system on Otay Mesa to be financially feasible. To be financially feasible under Unitary Rate pricing, the ultimate demand on Otay Mesa would need to be at least 3,200 acre-feet per year by 2035. Based on a projected annual demand of 1,200 acre-feet, expansion of recycled water on Otay Mesa is not financially feasible. 3 The following summarizes the current status of the factors included in the Otay Mesa Recycled Water Financial Analysis: Cost of Supply - On November 17, 2015, the City voted to raise the rate for recycled water from the then current rate of $0.80/HCF ($348/AF) to a new Unitary Rate of $1.73/HCF ($753/AF). This new Unitary Rate was effective on January 1, 2016. Using this cost of supply, it was determined through the financial analysis that the payback period for infrastructure was more than 70 years, which is beyond the useful life of the recycled water infrastructure Infrastructure Cost – The estimated total cost for the Otay Mesa Recycled Water Expansion Projects as included in the “Otay Water District Water Capacity Fee, New Water Supply, Sewer Capacity Fee, and Annexation Fees for Water and Sewer” study dated March 2017 is $22.6 million. It is anticipated that these costs may increase. Recycled Water Demand – The projected Year 2035 demand for recycled water on Otay Mesa remains unchanged at 1,200 Acre- Feet per year since July 2014. Since this demand has not increased, the increased cost of supply and cost of infrastructure would be distributed across the same number of projected users. During the temporary moratorium, no additional new users that would increase the projected demand have been identified or are expected. Expiration of Recycled Water Incentives – Metropolitan Water District (MWD) recycled water incentives are set to expire in 2025. San Diego County Water Authority (SDCWA) recycled water incentives are set to expire in 2026. No additional incentives have been identified or are expected. Easements Needed from the City of San Diego (City) - During recent discussions with the City regarding the easements needed to support the Otay Mesa recycled water transmission infrastructure, the City offered to resolve the easement matter. Although this represents a step forward with respect to the Project, the acquisition of the easements do not materially change the overall financial feasibility of expansion of recycled water on Otay Mesa given the other factors noted in this staff report. As included in the July 6, 2016 Board Report, the District has not collected San Diego County Water Authority (SDCWA) capacity fees on 4 meters set and designated as future recycled water meters in anticipation that recycled water would be available on Otay Mesa. The value of the avoided SDCWA fees, based on an analysis of SDCWA capacity and treatment fees that would have been due at the time of meter purchase, totals $1,340,684. Over the last three (3) years of the Temporary Moratorium, greater certainty has been realized with respect to the factors included as part of the Otay Mesa Recycled Water Financial Analysis. The current status of factors that contribute to the financial analysis results in less feasibility and supports a staff recommendation to place a permanent moratorium on the installation of new recycled water facilities on Otay Mesa. Sufficient opportunities have been provided through the approval of two (2) separate one-year extensions to identify new customers. Approval of a permanent moratorium at this time would mean that the Otay Mesa Recycled Water Expansion Projects, which total $22.6 million, would be excluded from the “Otay Water District Water Capacity Fee, New Water Supply, Sewer Capacity Fee, and Annexation Fees for Water and Sewer” study dated March 2017. The exclusion of these costs will lower the capacity fee charged as part of a water meter purchase. As noted in the study, exclusion of the Otay Mesa Recycled Water Expansion Projects costs will lower the base ¾-inch meter equivalent water capacity fee by $211.52. The approved Fiscal Year 2017 budget includes a Capital Improvement Program project “Repurpose Otay Mesa Recycled Water Lines” (R2123) (Project) to evaluate alternative uses for the recycled waterlines installed on Otay Mesa. Initial work on this Project will consist of hydraulic modeling to access the potential for alternative use of the existing recycled water infrastructure when a permanent moratorium is approved. FISCAL IMPACT: Joe Beachem, Chief Financial Officer Overall, it has been determined that the financial benefits of a permanent moratorium outweigh the identified financial costs. There are financial costs associated with a permanent moratorium. Those costs include potential reimbursement of $950,000 in grant funds that were received from the United States Bureau of Reclamation (USBR). The identified financial costs also include avoided SDCWA capacity fees, as described in this report. The value of the SDCWA fees, based on an analysis of SDCWA capacity and treatment fees that would have been due at the time of meter purchase, totals $1,340,684. 5 If a permanent moratorium is placed on the Otay Mesa recycled system, the Otay Mesa Recycled Water Expansion Projects which total $22.6 million would be excluded from the “Otay Water District Water Capacity Fee, New Water Supply, Sewer Capacity Fee, and Annexation Fees for Water and Sewer” study dated March 2017. The exclusion of these costs will lower the base ¾-inch meter equivalent water capacity fee by $211.52. STRATEGIC GOAL: This Project supports the District’s Mission statement, “To provide high value water and wastewater services to the customers of the Otay Water District in a professional, effective, and efficient manner” and the District’s Vision, “A District that is at the forefront in innovations to provide water services at affordable rates, with a reputation for outstanding customer service.” LEGAL IMPACT: None. DM/RP:jf P:\WORKING\CIP R2087\Staff Reports\BD 05-03-17\BD 05-03-17 Staff Report Otay Mesa Recycled Water Permanent Moratorium_rev1.docx Attachments: Attachment A – Committee Action Exhibit A – Project Location Map ATTACHMENT A SUBJECT/PROJECT: Various Permanent Moratorium on the Installation of New Recycled Water Facilities on Otay Mesa effective July 1, 2017 COMMITTEE ACTION: The Finance, Administration, and Communications Committee reviewed this item at a meeting held on April 19, 2017 and the following comments were made: Staff is requesting that the board place a permanent moratorium on the installation of new recycled water facilities on Otay Mesa effective July 1, 2017. Staff reviewed information in the staff report. The committee inquired if the East Otay Mesa Property Owners Association is aware that the District is proposing to make the moratorium on recycled water permanent and if they have made any comments. Staff indicated that they are aware and no comments have been received from the association. Upon completion of the discussion, the committee supported staffs’ recommendation and presentation to the full board as an action item. 1 STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: May 3, 2017 SUBMITTED BY: Kevin Koeppen, Finance Manager PROJECT: DIV. NO. All APPROVED BY: Joseph R. Beachem, Chief Financial Officer German Alvarez, Assistant General Manager Mark Watton, General Manager SUBJECT: Adopt Ordinance No. 563 Amending Section 9, Annexations and Detachments; Section 28 Connection Fees and Charges for Potable or Recycled Water Service; Section 53, Conditions for Sewer Service; and Appendix A of the Code of Ordinances to Adjust the District’s Water Capacity Fee, New Water Supply Fee, and Annexation Fee; Create a Sewer Capacity Fee and Modify the Sewer Annexation Fee, with all Changes to be Effective May 3, 2017 GENERAL MANAGER’S RECOMMENDATION: That the Board adopt Ordinance No. 563 amending Section 9 Annexations and Detachments 9.04 B. & C.4; Section 28 Connection Fees and Charges for Potable or Recycled Water Service 28.01 A & B; Section 53 Conditions for Sewer Service 53.03 A.1; and Appendix A of the Code of Ordinances which will incorporate the following changes effective May 3, 2017. 1) Update the current water capacity fee (including the Triad fee) and new water supply fee to reflect the value of the District’s current and future assets. 2 a. If the Otay Mesa Recycled Water Permanent Moratorium is approved by the Board, staff is requesting the Board approve Appendix A as proposed in Attachment G. b. If the Otay Mesa Recycled Water Permanent Moratorium is NOT approved by the Board, staff is requesting the Board approve Appendix A as proposed in Attachment F. 2) Update the water annexation fee to reflect the updated “buy-in” for new customers annexing into the Otay Water District boundaries. 3) Update the sewer capacity fee to reflect the updated value of the District’s current and future assets. 4) Update the sewer annexation fee to reflect the updated “buy-in” for new customers annexing into a sewer improvement district (ID). COMMITTEE ACTION: See Attachment A. PURPOSE: To obtain approval of Ordinance No. 563 that would modify the water and sewer capacity and annexation fees as well as the new water supply fees the District charges. SUMMARY: At the time of connection to a public agency’s utility system, customers are typically charged a capacity fee to “buy in” to the water and wastewater systems. The capacity fee requires new users to pay for their share of the costs to construct the facilities required for providing their water and sewer service. Revenues generated through the proposed capacity fees can be used to directly offset system expansion costs, repay debt issued for the water system expansion, or for renewal and replacement of capital projects. Use of capacity fee revenues to offset these capital and debt service costs reduces the amount of revenue required from rates assessed to existing users. In this way capacity fee revenues, in effect, reimburse the existing users (through lower rates) for the costs they have incurred to provide capacity for new users. In addition, the new water supply fee pays for the expansion cost of capital for new water supply projects. This fee is 3 separate from the general capacity fee and highlights that the District is charging new users for the new supply. An annexation fee is based on all availability fees and property taxes paid by existing users. For water customers it is charged to all properties annexing into the Otay Water District boundaries. For sewer customers it is proposed to be charged to all properties annexing into a sewer ID. This fee compensates the existing users for their past investment in the District’s water and sewer systems. Water customers who are within the District boundaries benefit from the proximity of the water facilities and pay both availability and property taxes even though they may not have a water connection. Neighboring properties just outside the District boundaries likewise have benefited; however, as they have not previously annexed into the District they have not paid the property tax and availability fees. The proposed fees, effective May 3, 2017, are applied per Equivalent Dwelling Unit (EDU) and are as follows: Current Fee Proposed Fee Change Water Capacity Fee*$8,590 $8,004 ($586) New Water Supply Fee $1,064 $801 ($263) Annexation Fee $1,912 $2,021 $109 Total $11,566 $10,826 ($740) Triad Capacity Fee*$6,445 $6,143 ($302) Sewer (in ID) Capacity Fee (buy-in)$4,403 $3,246 ($1,157) Sewer (outside ID) Capacity Fee (buy-in)$6,886 $5,554 ($1,332) Annexation Fee $1,095 $1,106 $11 Total (outside ID)$7,981 $6,660 ($1,321) *The Capacity figures presented above are based on an Otay Mesa recycled temporary moratorium. If the moratorium were permanent, the Capacity Fee and Triad Capacity Fee proposed above would be reduced by $211.52 and $158.64, respectively. BACKGROUND: A District objective is that growth pays for growth. This is achieved by charging capacity and annexation fees to new customers. Periodically, these fees are reviewed and updated to 4 ensure equity and accuracy of the fees. The methodologies used in this water capacity and annexation fee study are consistent with those used in the studies performed in 2010 and 2014. The methodologies used in the sewer capacity and annexation fee study are consistent with those used in the 2014 study. The current study was prepared by HDR Engineering, Inc. Water Capacity, New Water and Annexation Fees In 2010, a Capacity and Annexation Fee study was performed and the Board changed the capacity fee structure for water from an incremental to a combined fee methodology. The combined fee methodology is typically used where some capacity is available in parts of the existing system, but new or incremental capacity will need to be built in other parts. This results in a capacity fee that reflects the value of existing and planned capacity. This method was chosen because it aligned with the District’s current size and future growth expectations. A new water supply fee was also established in 2010 to separately identify the cost of new water supply projects and is essentially a subcomponent of the capacity fee that we choose to show separately. The water annexation fee methodology was also modified in 2010 to reflect both the changes in the capacity fee study and to use an industry accepted method for calculating the fee. This fee is charged to new customers annexing into the Otay Water District boundaries. The purpose of the annexation fee is to collect from new water customers their fair share of taxes (1% property tax and availability fees) already paid by the existing customers in the District. Sewer Capacity and Annexation Fees Prior to 2014, the sewer capacity and annexation fees were last updated in 1998 as part of a fee study. In 2014, the District had no sewer capacity fee (based on the 1998 study), but did have an annexation fee. The annexation fee from 1998 until 2014 was really a “buy-in” capacity fee, meant to reimburse the sewer customers who built the sewer infrastructure. However, an annexation fee is only charged when a customer is annexed into a sewer ID. The thinking prior to 2014 was that new sewer customers would need to be annexed into the system. Between 2009 and 2014, only 5 of 27 new sewer connections paid an annexation fee because only these 5 customers were outside a sewer ID. As part of the 2014 study, a capacity fee was 5 implemented so that all new sewer customers would have to “buy- in” to the sewer system, which ensures all customers pay their fair share. Additionally, because customers who were already in a sewer ID paid debt (used for the construction of sewer facilities) that was collected through the tax role, it is necessary for the District to have two separate capacity fees. The first capacity fee applies to parcels within an ID that paid prior tax debt. The second capacity fee applies to parcels outside an ID that have not paid tax debt. Having two separate sewer capacity fees ensures that each new customer pays their fair share of the facilities. In the current study, the methodologies used, to calculate the sewer capacity and annexation fees are consistent with those used in the 2014 study. STUDY RESULTS: Capacity Fee Methodology: There are several industry accepted methodologies to use when calculating capacity and annexation fees which are viable under California law. The first capacity fee method is the Combined Capacity Fee, which is what the District currently uses for the water capacity fee. Under this methodology, the cost of the current system plus the cost of all future expansion projects is divided by all customers existing and future. This method is typically used where some capacity is available in parts of the existing system, but new or incremental capacity will need to be built in other parts. This methodology is used in this situation because it results in a capacity fee that reflects the value of existing and planned capacity. The following illustrates the combined fee methodology. Existing and Future Asset Values Existing and Future Equivalent Meters The second is the Incremental Capacity Fee method, where the cost of all future expansion projects is divided by all future customers, which is what the District currently uses for the New Water Supply fee. This method is typically used when the system has limited or no capacity to serve new development, or in this case where this subset of capacity is limited, and new or incremental facilities are needed to serve new development now 6 and into the future. The following illustrates the components of this calculation. Value of Future Facilities Future Equivalent Meters The third capacity fee method is called the Buy-in Fee, where the cost of the current system, including the excess capacity, is divided by the existing customers. This method is typically used when the existing system has sufficient capacity to serve new development now and into the future. This fee is charged to all new customers and reflects how much existing customers have paid for the current system. The current sewer annexation fee uses this method and therefore, is essentially a sewer Buy-in Capacity Fee. The calculation is illustrated below. Existing Asset Value Existing Equivalent Meters Asset Valuation: There are two ways to value the cost of existing facilities and assets. The first valuation methodology is reproduction cost. This method uses the original cost of existing facilities adjusted for inflation. The second valuation methodology is replacement cost or what it would cost today to build the same functional infrastructure which means it may not be identical in construction methods or materials, but it performs the same function. Staff and the consultant’s recommendation is to use replacement cost using depreciated value as the basis for valuation of water and sewer pipelines. Reproduction cost using depreciated value is recommended for all other assets such as reservoirs and pump stations. Annexation Fee Methodology Annexation fees are commonly used by cities and districts and ensure that existing users are compensated for their past investment in the water system. Under this methodology, all property taxes paid by the existing District property owners (1% property tax and availability fees) is divided by the total number of existing EDUs within the District. The calculation is illustrated below. 7 Water Capacity and Annexation Fees: This study’s recommendation is to continue to use the Combined Capacity Fee methodology for the calculation of the water capacity fee. The current water capacity fee is $8,590.34 after being adjusted for the ENR Index through March, 2017. Based on the most up-to-date capital improvement plan and the 2015 Water Resources Master Plan, the newly calculated water capacity fee is $8,003.87. A discounted capacity fee of $6,004.91 was calculated for the Triad developers by excluding future potable storage, thereby recognizing their prepayment of storage. The overall decrease in the capacity fee is due to a decrease of approximately $40 million in developer reimbursement projects. These developer reimbursement projects were removed from the future CIP listing as they have been deemed to be the responsibility of the developer. Included in the listing of future projects are six projects, totaling $22.6 million, related to the expansion of the recycled water system to Otay Mesa, which there is currently a temporary moratorium on. If the moratorium on the expansion of recycled water to Otay Mesa were permanent, the capacity fee would have been further reduced by approximately $212. The current study recommends the same methodology be used as the basis for the New Water Supply fee, which separately identifies the cost of new water supply projects. Based on this recommendation, the current fee of $1,064.11, inflated by ENR through March 2017, will be adjusted to the recommended fee of $800.70 which reflects the current capital plan and future estimated EDU’s. The reduction in the New Water Supply Fee is due to a reduction in the total estimated project costs being funded by new water supply fees. New water supply projects are funded by both the betterment fund and new water supply fund. Betterment funds the portion of the project that benefits existing customers and the new water supply funds the portion of the project benefiting future customers. The allocation between these two funds is based on the ratio of existing EDU’s to future EDU’s, which is obtained from the District’s Water Resources Master Plan (WRMP). Based on the current approved WRMP, the percentage of new water supply project costs being Total Taxes Collected Existing EDUs 8 funded by the new water supply fee has decreased from 40% to 31%. This study also recommends the continuation of the current industry accepted water annexation fee methodology. This fee is charged to new customers who want to annex into the Otay Water District boundaries, because they have not historically paid their share of these fees or taxes. The purpose of this fee is to compensate existing users for their past investment in the District’s water system paid through fees and taxes. The current water annexation fee is $1,911.95, after being adjusted for the ENR Index through March 2017, and the new recommended fee is $2,021.40 reflecting the updated cumulative tax collections. Sewer Capacity and Annexation Fees: This study’s recommendation is to continue to use the Combined Capacity Fee methodology for the calculation of the sewer capacity fee. The sewer annexation fee currently charged is meant to reimburse the sewer customers who built the sewer infrastructure as the existing system is capable of meeting future demand within the current district boundaries. The current sewer capacity fee is $6,886.04 after being adjusted for the ENR index through March, 2017. Based upon the most up-to- date capital improvement plan, the newly calculated sewer capacity fee is $5,554.39. The overall reduction in the capacity fee is due to the existing system’s depreciation outpacing the cost of capital improvements. Additionally, a second sewer capacity fee must be calculated because customers who are located within a sewer ID paid debt (used for the construction of sewer facilities) that was collected through the tax role. By establishing two separate sewer capacity fees it ensures that each new customer pays their fair share of facilities and that no customer is overcharged. The second capacity fee applies to parcels within an ID that have paid tax debt and is recommended to be set at $3,246.39. These customers receive a credit of $2,308 to reflect their past payments towards sewer debt. The current sewer annexation fee is only charged when a customer is annexed into a sewer ID. The current sewer annexation fee is $1,095.31 after being adjusted for the ENR index through March, 2017. Based upon the availability fees paid via the tax role by existing customers, the newly calculated sewer annexation fee is $1,105.79. The new annexation fee would only be paid by new 9 customers who are not currently in a sewer ID and therefore, are required to annex into a sewer ID prior to any sewer connection. Capacity, New Water Supply & Annexation Conclusion: The fee study was prepared using industry standard methodologies and equitably charges new customers for water and sewer service. Staff is recommending the capacity, annexation and new water supply fees be amended based on the results of this study. Staff has provided two options for Appendix A (See Attachments F & G). If the Otay Mesa recycled temporary moratorium remains in effect, then Attachment F represents the new fees. If a permanent moratorium is approved, then Attachment G represents the new fees. Temporary Service Fee Code Modification During the review of Appendix A, staff noted a clean-up item related to Section 31.02 D.1. At the April 6, 2016 Board meeting, the Board adopted changes to Section 31 of the District’s Code of Ordinances. The adopted changes included removing Section 31.02 D of the Code for temporary service to community service organizations. Since this change was not made at that time, staff is requesting to make this update to Appendix A. FISCAL IMPACT: Joe Beachem, Chief Financial Officer If the Otay Mesa recycled moratorium remains temporary, the fiscal impact will be a decrease in capacity fees and new water supply fees of approximately $589.47 and $263.41 per EDU, respectively. If the Otay Mesa recycled moratorium is made permanent, the capacity fees would decrease by an additional $211.52. The fiscal impact for the water annexation fee is an increase of $109.45 per meter equivalent. The estimated long- term reduction in water capacity fees and new water supply fee revenues is offset by reductions in estimated future CIP costs related to developer reimbursements. The fiscal impact for sewer capacity will be a decrease of $1,331.65 per EDU and sewer annexation fees will increase $10.48 per meter equivalent. These changes will be incorporated into the upcoming Fiscal Year 2018 budget. All long-term fiscal impacts of these fee changes will be assessed and considered in the future rate modeling. 10 STRATEGIC GOAL: To ensure that the costs of service are born by responsible parties. This revenue source will help the District meet its fiscal responsibility to its ratepayers. LEGAL IMPACT: None. General Manager Attachments: A) Committee Action Form B) Ordinance No. 563 Exhibit 1 Section 9 Strike-through Exhibit 2 Section 28 Strike-through Exhibit 3 Section 53 Strike-through Exhibit 4 Appendix A Strike-through C) Section 9 Proposed D) Section 28 Proposed E) Section 53 Proposed F) Appendix A Proposed – Temporary Otay Mesa Moratorium G) Appendix A Proposed – Permanent Otay Mesa Moratorium H) HDR Capacity and Annexation Fee Report I) Presentation by HDR 11 ATTACHMENT A SUBJECT/PROJECT: Adopt Ordinance No. 563 Amending Section 9, Annexations and Detachments; Section 28 Connection Fees and Charges for Potable or Recycled Water Service; Section 53, Conditions for Sewer Service; and Appendix A of the Code of Ordinances to Adjust the District’s Water Capacity Fee, New Water Supply Fee, and Annexation Fee; Create a Sewer Capacity Fee and Modify the Sewer Annexation Fee, with all Changes to be Effective May 3, 2017 COMMITTEE ACTION: The Finance, Administration, and Communications Committee reviewed this item at a meeting held on April 19, 2017 and the following comments were made: Staff is requesting that the board adopt Ordinance No. 563 amending Section 9 Annexations and Detachments 9.04.B and C.4; Section 28 Connection fees and Charges for Potable or Recycled Water Services 28.01.A and 28.01.B; Section 53 Conditions for Sewer Service 53.03.A.1; and Appendix A of the Code of Ordinances which will incorporate the following changes effective May 3, 2017: Update the current water capacity fee (including the Triad fee) and new water supply fee to reflect the value of the District’s current and future assets. - If the moratorium on recycled water facilities in the Otay Mesa area is made permanent or not made permanent approve Appendix A as proposed in Attachment G (made permanent) or approve Appendix A as proposed in Attachment F (if it is not made permanent). Update the water annexation fee to reflect the updated “buy-in” for new customers annexing into the Otay Water District boundaries. Update the sewer capacity fee to reflect the update value of the District’s current and future assets. 12 Update the sewer annexation fee to reflect the updated “buy-in” for new customers annexing into a sewer improvement district (ID). Staff and Mr. Tom Gould, HDR Engineering, Inc., reviewed information in the staff report. It was indicated that staff met with Developer representatives on April 18, 2017 and based on comments received during that meeting, staff identified changes to the proposed Capacity Fees (please reference Exhibit A attached to the committee notes). In response to an inquiry from the Committee, it was indicated that the District has updated its planning documents, its capital plans and has made some changes to land use which impacted fees. The committee inquired what was the timeframe that staff is referring to with regard to the total value of “future facilities that the District requires”. Staff indicated that they are referring to “ultimate buildout”. It was noted that the water capacity fee for the Triad Area is lower because the customers within that area prepaid storage facilities and are receiving credit for that prepayment. Upon completion of the discussion, the committee supported staffs’ recommendation and presentation to the full board as an action item. Exhibit A Otay Water District Amendments to the Capacity Fee Staff Report Staff met with Developer representatives on April 18. Based on comments received during that meeting staff identified changes to the proposed Capacity Fees. The Capacity Fee of $8,004 was reduced to $7,892 and the Triad Capacity Fee of $6,143 was reduced to $5,921. The highlighted items below reflect these modifications to the submitted staff report pertaining to Finance Committee Item #9 regarding the updated Capacity, New Water Supply and Annexation Fees. The Staff Report and related attachments have been amended to reflect the change. Page 3 Table Current Fee Proposed Fee Change Water Capacity Fee* $8,590 $7,892 ($698) New Water Supply Fee $1,064 $801 ($263) Annexation Fee $1,912 $2,021 $109 Total $11,566 $10,714 ($852) Triad Capacity Fee* $6,445 $5,921 ($524) Sewer (in ID) Capacity Fee (buy-in) $4,403 $3,246 ($1,157) Sewer (outside ID) Capacity Fee (buy-in) $6,886 $5,554 ($1,332) Annexation Fee $1,095 $1,106 $10 Total (outside ID) $7,981 $6,660 ($1,322) Page 7 Paragraph 1 Water Capacity and Annexation Fees: This study’s recommendation is to continue to use the Combined Capacity Fee methodology for the calculation of the water capacity fee. The current water capacity fee is $8,590.34 after being adjusted for the ENR Index through March, 2017. Based on the most up-to-date capital improvement plan and the 2015 Water Resources Master Plan, the newly calculated water capacity fee is $7,892.32. A discounted capacity fee of $5,921.21 was calculated for the Triad developers by excluding future potable storage, thereby recognizing their prepayment of storage. Page 9 Fiscal Impact If the Otay Mesa recycled moratorium remains temporary, the fiscal impact will be a decrease in capacity fees and new water supply fees of approximately $698 and $263 per EDU, respectively. If the Otay Mesa recycled moratorium is made permanent, the capacity fees would decrease by an additional $212 per EDU. The fiscal impact for the water annexation fee is an increase of $109 per meter equivalent. The estimated long- term reduction in water capacity fees and new water supply fee revenues is offset by reductions in estimated future CIP costs related to developer reimbursements. 1 ORDINANCE NO. 563 AN ORDINANCE OF THE BOARD OF DIRECTORS OF THE OTAY WATER DISTRICT AMENDING SECTION 9 ANNEXATIONS AND DETACHMENTS; SECTION 28 CONNECTION FEES AND CHARGES FOR POTABLE OR RECYCLED WATER SERVICE; SECTION 53 CONDITIONS FOR SEWER SERVICE; and APPENDIX A OF THE DISTRICT’S CODE OF ORDINANCES BE IT ORDAINED by the Board of Directors of Otay Water District that the District’s Code of Ordinances Section 9 Annexations and Detachments; Section 28 Connection Fees and Charges for Potable or Recycled Water Service; Section 53 Conditions for Sewer Service; and Appendix A be amended as per Exhibits 1, 2, 3 & 4 to this resolution. NOW, THEREFORE, BE IT RESOLVED that the new proposed Section 9 Annexations and Detachments (Attachment C); Section 28 Connection Fees and Charges for Potable or Recycled Water Service (Attachment D); Section 53 Conditions for Sewer Service (Attachment E); and Appendix A (Attachment __), of the Code of Ordinances shall become effective May 3, 2017. PASSED, APPROVED AND ADOPTED by the Board of Directors of the Otay Water District at a regular meeting duly held this 3rd day of May 2017, by the following roll call vote: AYES: NOES: ABSENT: ABSTAIN: Attachment B 2 ________________________________ President ATTEST: __________________________ District Secretary 9-1 CHAPTER 6 MISCELLANEOUS ADMINISTRATION PROCEDURES SECTION 9 ANNEXATIONS AND DETACHMENTS 9.01 REQUIREMENT OF ANNEXATION FOR SERVICE Except as provided elsewhere in this Code, whenever utility service is requested for land outside the boundaries of an improvement district, the land to be serviced must first be annexed to an improvement district(s). If the land is located outside the boundaries of the District, the land must also be annexed to the District. 9.02 ANNEXATIONS TO OR DETACHMENTS FROM IMPROVEMENTS DISTRICTS An owner or owners of land within the District desiring to annex to or detach land from an improvement district within the District must file a petition for such proceeding with the District. Annexation proceedings shall be con- ducted pursuant to Chapter I (commencing with Section 72670) of Part 11, Division 20 of the California Water Code. Detachment or exclusion proceedings shall be conducted pur- suant to Part 8.5 (commencing with Section 72080) of Divi- sion 20 of the California Water Code. If the land proposed to be annexed is outside the boundaries of the territory served by the Metropolitan Water District of Southern California and the territory served by the San Diego County Water Authority, and no local sources of water are available to serve such land, the District will require that the land be annexed to those entities as well. 9.03 ANNEXATIONS TO OR DETACHMENTS FROM THE DISTRICT THROUGH LAFCO An owner or owners desiring to annex land to or to detach land from the District may either (i) file a petition directly with the Local Agency Formation Commission (LAFCO) for the annexation or detachment or (ii) request the District to file the petition with LAFCO for such annexation or detachment. Any such proceeding for annexation or detachment, which is deemed a change of organization or reorganization pursuant to the Cortese-Knox Local Government Reorganization Act of 1985, shall be initiated, conducted and completed pursuant to Title 6, Division 1 (commencing with Section 56000) of the California Government Code. By annexing to the District the owners and representatives of the annexing land agree, on behalf of themselves and all future owners and occupants of the annexed lands, to comply with all laws, statutes, policies, plans, conditions and requirements applicable to the services provided by the District to such lands, including Exhibit 1 9-2 without limitation any conservation or local supply use requirements. 9.04 FEES AND CHARGES FOR ANNEXATIONS OR DETACHMENTS A petitioner requesting an annexation to or detachment from the District or within the District shall pay the following applicable fees and charges: A. Administrative Processing Fees 1. District Processing Fee. A District processing fee (see Appendix A, Section 9 for fee) shall be paid to the District for each annexation or detachment proceeding, regardless of the number of parcels involved, provided all parcels are included in one proceeding. This fee shall constitute the "base rate" on March 3, 1997. The base rate shall be adjusted annually for fluctuations in the Consumer Price Index (Urban Wage Earners and Clerical Workers - Los Angeles) and subsequent cost-of-living adjustment (COLA). 2. Additional Processing Fees or Charges. The peti- tioner shall pay all processing fees and charges due LAFCO, the State Board of Equalization and any other applicable government agency. 3. Concurrent Annexations to or Detachments from the District and an Existing Improvement District. No additional processing costs or fees will be charged to a petitioner for an annexation to or detachment from an existing improvement district when the proceeding is part of an annexation to or detachment from the District. 4. Payment of Fees and Charges. The District processing fees and charges shall be paid to the District at the time the petition for such proceeding is filed. Where a petition is filed with LAFCO, the District shall notify LAFCO that payment of all required fees and charges to the District shall be a condition for District approval of the annexation or detachment. B. Water Annexation Fees. The annexation fee (see Appendix A, Section 9) shall constitute the "base rate" on October 1, 2014 May 3, 2017). The base rate shall be adjusted quarterly on the first day of each calendar quarter for fluctuations in construction costs, as measured by the Engineering News Record Construction Cost Index for the Los Angeles Region. The ENR Construction Cost Index of 10,739.4311,555.03 on June 1, 2014 April 1, 2017 9-3 shall be deemed the "base index." The adjustment shall be in an amount equal to the percentage change in the ENR Construction Cost Index from the base index for the period from June 1, 2014 April 1, 2017 to the date of payment. 1. No water annexation fee shall be required for existing and future agricultural water service furnished by the District under the COMMERCIAL AGRICULTURAL category of Section 25 of the Code. 2. Non-permanent irrigation water service furnished by the District under Section 30 of the Code shall be available without payment of a water annexation fee. 3. Open Space to be Annexed. Open space lands shall not be excluded from annexations of land to a water improvement district. 4. Water Meter Type Exclusions. Annexation fees shall be collected on all water meters sold except for temporary water meters, water tank truck meters, nonpermanent irrigation water meters and outside user meters, all as defined elsewhere in this Code. 5. Effective Date. Annexation fees shall be col- lected on all lands annexing into the Otay Water District boundaries on or after March 5, 1997. 6. Basis for Determination. For annexations of land into the Otay Water District boundaries, the petitioner shall pay an annexation fee. The fee shall be paid at the time of petition to be annexed. There shall be no water annexation fee charged for parcels already within District boundaries that are applying to be annexed into a water ID. For permanent water meters, except for commercial agricultural meters, the annexation fee shall be determined on the basis of the demand to be placed on the District-wide water system. The fee will be determined on the basis of the size of the water meter required, as set forth in Section 27 of the Code. The fee shall be determined by multiplying the demand factor for the meter size, as set forth in Section 28 of the Code, by the annexation fee per EDU. See Appendix A, Section 9for fees. 9-4 C. Sewer Annexation Fees 1. Improvement District Annexation. All annexation for sewer service shall be into Improvement District No. 18 on or after December 16, 1998. 2. Open Space to be Annexed. Open space lands shall not be excluded from annexations of land to a sewer improvement district. 3. Effective Date. Annexation fees shall be collected on all lands annexing to a sewer improvement district on or after December 16, 1998. 4. Basis for Determination. For annexations of land to a sewer improvement district within the Dis- trict, the petitioner shall pay an annexation fee. The fee shall be determined on the basis of the demand to be placed on the District sewer system. The fee shall be paid at the time of sewer service connection request or General Manager's approval of plans, whichever occurs earlier. The extent of the demand will be determined on the basis of each equivalent dwelling unit (EDU) of service which is to be connected to the District sewer system. The number of EDUs prescribed in Section 53 of the Code shall be the basis for computation of the amount of the annexation fee. The fee will be determined by multiplying the number of EDUs by the annexation fee per EDU. See Appendix A, Section 9 for fees. This annexation fee shall constitute the "base rate" on October 1, 2014May 3, 2017. The base rate shall be adjusted on the first day of each calendar quarterly for fluctuations in construction costs as measured by the Engineering News Record Construction Cost Index for the Los Angeles Region. The ENR Construction Cost Index of 10,739.4311,555.03 (as of June 1, 2014April 1, 2017) shall be deemed the "base index." The adjustment shall be in an amount equal to the percentage change in the ENR Construction Cost Index from the base index for the period from June 1, 2014 April 1, 2017 to the date of payment. D. Detachment Fees For each detachment of land from an improvement district, the petitioner shall pay such fees as the General Manager determines are appropriate for the detachment. Determinations shall be made by the General Manager on a case-by-case basis. 9-5 9.05 TAXATION OF PROPERTY AFTER ANNEXATION TO IMPROVEMENT DISTRICT Where property is annexed by a petitioner, other than a tax-exempt agency, the property in the annexed area shall be subject to taxation after the annexation thereof for the purposes of the improvement district, including the payment of principal and interest on bonds and other obligations of the improvement district authorized and outstanding at the time of the annexation. The Board of Directors shall provide as a condition of the annexation that the annexed area shall be subject to taxation as if the property had always been a part of the improvement district. 9.06 OTHER CONDITIONS OF ANNEXATION By annexing to the District the owners and representatives of the annexing land agree, on behalf of themselves and all future owners and occupants of the annexed lands, to comply with all laws, statutes, policies, plans, conditions and requirements applicable to the services provided by the District to such lands, including without limitation any conservation or local supply use requirements. 28-1 SECTION 28 CONNECTION FEES AND CHARGES FOR POTABLE OR RECYCLED WATER SERVICE 28.01 COLLECTION OF FEES AND CHARGES A. Fees and Charges to be paid by the Customer. The following fees and charges shall be paid by the customer to connect to a District water system for potable water or recycled water service; these are in addition to the fees and charges in Section 9 and 25. Fees and charges shall include, but not be limited to, District fees, San Diego County Water Authority fees, and charges for work performed by District personnel on behalf of the customer. These charges may include the installation by District personnel of a water service lateral, and inspections required due to the requirement of a back flow device. These charges may also include a meter fee, installation fee (where laterals exist), lateral fee, meter box fee, and excavation permit fee. B. Basis for Determination of Connection Fees and Charges. The fees and charges shall be determined as follows: For permanent water meters, including potable or recycled irrigation service, the total water connection fee shall be determined on the basis of the demand to be placed on the District water system. The extent of demand will be determined on the basis of the size of the water meter, as set forth in Section 27 of the Code. For individually metered residential fire service, as outlined in Section 38.03 of the Code, the size and fee would be set based on water use requirements without additional fire capacity. The water connection fee will be determined by multiplying the demand factor for the meter size, as set forth below, by the total of the District-wide capacity fee. Meter Size Demand Factor 3/4" 1 1 2-1/2 1-1/2" 5 2" 8 3" 16 4" 25 6" 50 8" 80 10" 115 Exhibit 2 28-2 1. The District-wide capacity fee shall constitute the "base rate." For fees or charges after October 1, 2014 May 3, 2017, the base rate shall be adjusted on the first day of each calendar quarterly for fluctuations in construction costs, as measured by the Engineering News Record Construction Cost Index for the Los Angeles Region. The ENR Construction Cost Index of 10,739.4311,555.03(as of June 1, 2014 April 1, 2017) shall be deemed the "base index." The adjustment shall be in an amount equal to the percent- age change in the ENR Construction Cost Index from the base index for the period from June 1, 2014 April 1, 2017 to the date of payment. (See Appendix A, Section 28 for fees.) 2. The District-wide new water supply fee shall constitute the “base rate.” For fees or charges after October 1, 2014, the base rate shall be adjusted quarterly for fluctuations in construction costs, as measured by the Engineering News Record Construction Cost Index for the Los Angeles Region. The ENR Construction Cost Index of 1011,555.03 ,739.43 (as of June 1, 2014April 1, 2017) shall be deemed the “base index.” The adjustment shall be in an amount equal to the percentage change in the ENR Construction Cost Index from the base index for the period from June 1, 2014 April 1, 2017 to the date of payment. (See Appendix A, Section 28 for fees.) 28.02 INSTALLATION CHARGES FOR WATER METER AND WATER SERVICE LATERALS The determination of the water meter or service lateral size shall be based upon the information provided by the customer as detailed in Section 27 of the Code. The meter fees and installation charges are set forth in Appendix A, Section 28. Where a new water lateral is required, a customized, written estimate of the District's costs will be prepared. The customer shall deposit the estimated costs with the District prior to commencement of the work. If actual costs incurred by the District are less than the amount deposited, the District shall refund the excess to the customer. If the actual costs incurred exceed the amount deposited, the customer shall reimburse the District for the additional costs. 28-3 A. The meter fees and installation charges shall be set effective September 1, 2012, and then adjusted in the same manner as capacity fees as described in Section 28.01 B.1 above (See Appendix A, Section 28 for fees). 28.03 METER FEE REFUND A. If a water meter/service has been paid for but not installed, a customer may receive a refund of the District’s capacity fee and charges. If San Diego County Water Authority capacity fees have been paid to San Diego County Water Authority, the customer shall request a refund from San Diego County Water Authority. B. If the customer wants to change the meter/service size, they will be credited with the number of equivalent dwelling units they have previously purchased and will be refunded any balance per Section 28.03 A, above. If additional equivalent dwelling units are required, the customer will be charged based on 28.01 and 28.02. C. If a water meter/service has been previously paid and installed, and the customer requests a different meter size, the customer shall pay for the new meter and installation fees, plus any differential in capacity and new water supply fees as described in Section 28.03 B above. 53-1 SECTION 53 CONDITIONS FOR SEWER SERVICE 53.01 CONDITIONS FOR ACQUISITION OF SEWER SERVICE CAPACITY Sewer service capacity may be acquired only for service to a specific address, parcel of land, or a land development project covered by an approved map. An approved map shall mean a recorded final map, a recorded parcel map or a tentative sub- division map that has been approved by the County or by a City, as applicable. A. District Acceptance of Sewer Facilities for Russell Square Area - Under an Agreement with Cal Dorado Development, Inc., dated June 28, 1981, the District accepted title to a sewer pump station, force main and appurtenances for a sewage system to provide sewer service to the residential dwelling units to be constructed within the parcels of land in San Diego County Tentative Parcel Map 17150. Under an Agreement with Cal Dorado Development, Inc., dated June 18, 1981, the District agreed to provide service to such parcels on the terms and conditions contained therein. On October 1, 1984, pursuant to Resolution No. 2139, the District Board of Directors accepted title to the facilities. 53.02 SERVICE AREAS Sewer service shall be furnished by the District only to property located in Improvement District No. 18 (ID 18) and the Russell Square Sewer Service Area. Sewer service to property located outside such areas may be furnished only upon annexation to ID 18 and payment of all applicable annexation fees. (Appendix A, Section 9) A. Designation of Russell Square Sewer Area - The geographical area described on the District Map entitled "Russell Square Sewer Service Area," dated October 11, 1988, on file with the District Secretary, constitutes the Russell Square Sewer Service Area. 53.03 ACQUISITION OF SEWER CONNECTIONS FOR SERVICE Effective October 1, 2014 two separate sewer capacity fees have been established to ensure sewer customers do not pay for facilities twice. The first capacity fee applies to parcels within an ID that paid prior tax debt. The second capacity fee applies parcels outside an ID that have not paid the tax debt. The sewer capacity fees shall constitute the "base rate." For fees or charges after October 1, 2014May 3, 2017, the base rate shall be adjusted on the first day of each calendar quarterly for fluctuations in construction costs, as measured by the Engineering News Exhibit 3 53-2 Record Construction Cost Index for the Los Angeles Region. The ENR Construction Cost Index of 10,739.4311,555.03 (as of June 1, 2014April 1, 2017) shall be deemed the "base index." The adjustment shall be in an amount equal to the percentage change in the ENR Construction Cost Index from the base index for the period from June 1, 2014 April 1, 2017 to the date of payment. 1. Sewer Capacity Fee within an ID All new sewer connections for parcels within a sewer ID shall pay a capacity fee for each Equivalent Dwelling Unit (EDU) of sewer service provided. The capacity fee is due at the time an application for sewer service is requested. The number of EDUs for the connection shall be as set forth in Section 53.08 of the Code. (See Appendix A, Section 53 for fees) 2. Sewer Capacity Fee outside an ID All new sewer connections for parcels not within a sewer ID (requiring to be annexed into a sewer ID18 per code Section 9.04 C.) shall pay a capacity fee for each Equivalent Dwelling Unit (EDU) of sewer service provided. The capacity fee is due at the time an application for sewer service is requested. The number of EDUs for the connection shall be as set forth in Section 53.08 of the Code. (See Appendix A, Section 53 for fees) B. Russell Square Pump Station 1. Sewer Connection Fee A connection fee (see Appendix A, section 53 for fee) for each Equivalent Dwelling Unit (EDU) of sewer service provided through Russell Square Pump Station shall be collected. The connection fee is due at the time an application for sewer service is submitted. The number of EDUs for the connection shall be as set forth in Section 53.08 of the Code. (a) Exempt Parcels - The connection fee shall not apply to connections for sewer service to the parcels within the Tentative Parcel Map 17150. Such exempt parcels are currently identified as Assessor Parcel Nos. 497-011-41, 497-011-42, 497- 011-44, 497-011-46 and 497-011-47. 2. Monthly Sewer Service Charge A monthly sewer service charge (see Appendix A, Section 53 for charge) to cover normal operational 53-3 costs of the Russell Square Pump Station and force mains shall be collected. This charge shall be reviewed by the Board of Directors from time to time to assure that such charges cover the costs for operation of the sewer facilities. The proceeds of the fees and charges received by the District under 53.03 B.1 and 53.03 B.2 shall be used by the District solely for maintenance, replacement or repair under 53.03 B.1 and for the operation of the facilities under 53.03 B.2. In addition, the customer for such service shall pay the monthly service charge for sewer service set forth in Section 53.10 A and B. 53.04 CHARGES FOR INSTALLATION OF SEWER LATERALS Upon application for construction of one or more sewer laterals, the customer shall deposit with the District the estimated costs to be incurred by the District in connection with the instal- lation of the facilities required, as determined by the District. Upon completion of the work, the District shall calculate the actual costs incurred by the District in performing the work. If actual costs are less than the amount deposited, the District shall refund the balance of the deposit to the customer. If actual costs exceed the amount deposited, the customer shall reimburse the District for the additional costs. 53.05 PAYMENT OF FEES All fees prescribed in the Code shall become owing, due and payable at the time application is made to connect a premise to the sewer system of the District. The fees shall be paid to the District prior to the issuance of any permit authorizing the connection of such premise to the District sewer system. If the proposed connection cannot be made, the fee may be refunded when approved by the General Manager. 53.06 SEWER SERVICE USE CHANGES RESULTING IN INCREASED SYSTEM UTILIZATION The use of a sewer connection shall be limited to the type and number of EDUs authorized by the original wastewater discharge permit. Before adding any additional equivalent dwelling units, buildings, modifying existing buildings, or change of occupancy type, the property owner shall make a supplementary wastewater permit application to the District for such change in use and pay additional sewer annexation fees per EDU, if necessary, as may be applicable. Periodic inspection of the premises may be made by the District and if actual use is greater than estimated use, an assessment for additional annexation fees shall be 53-4 assessed in accordance with the fee schedule in the then current Code of Ordinances. 53.07 WASTEWATER DISCHARGE PERMIT ISSUANCE AND LIMITATION A. A wastewater discharge permit shall be required for any property for which a request is made to discharge into the District sewage system. B. Every wastewater discharge permit shall expire by limitations and shall become null and void, if the construction or work authorized by such permit is not commenced within 120 days from date of issuance of such wastewater discharge permit or if the construction or work authorized by such wastewater discharge permit is suspended or abandoned for a period of 120 days at any time after the work is commenced. C. Before such work can be recommenced, a new wastewater discharge permit application must be filed with the District. The District may reactivate the previous wastewater discharge permit provided that wastewater quantity and type is the same as the wastewater discharge allowed under the original permit, and provided further that such suspension and abandonment has not exceeded one year. Fees paid for the previous wastewater discharge permit may be credited toward the total permit fees required on the new permit application. Reactivation of the previous wastewater discharge permit shall be subject to District sewer capacity being available at the time of new application and subject to any additional costs or charges imposed during the period of such suspension or abandonment. 53.08 BASIS FOR DETERMINATION OF EQUIVALENT DWELLING UNITS (EDUs) The number of EDUs for sewer service shall be determined on the following basis: A. Residential Facilities EDUs Description 1 Single-family residence (Includes manufactured homes and mobile homes which are on private lots.) A secondary structure with a kitchen is considered an additional EDU Each individual living unit in apartments, multiple family housing and residential condominiums Each individual space in mobile homes and trailer parks 53-5 B. Commercial/Industrial Facilities 1. Food Service Establishments EDUs Description 3 Take-out restaurants with disposable utensils, no dishwasher and no public restrooms Take-out restaurants with disposable utensils, no dishwasher and no public restrooms Miscellaneous food establishments – ice cream shops, yogurt shops, bakeries (sales on premise only) Take-out/eat-in restaurants with disposable utensils, but with seating and public restrooms Restaurants with reusable utensils, seating and public restrooms (0-18 seats) o Add 1.0 EDU for each additional 6 seat unit, or portion thereof 2. Hotels and Motels EDUs Description .38 Per living unit without kitchen .60 Per living unit with kitchen 3. Commercial, Professional, Industrial Buildings and Establishments not specifically listed herein EDUs Description 1.2 +0.7 For first 1,000 square feet AND For each additional 1,000 square feet or portion thereof Applies to any office, store or industrial condominium or establishments 1.2 +0.7 For first 1,000 square feet AND For each additional 1,000 square feet of gross building floor area. Portions less than 1,000 sq. ft. will be prorated. Applies to situations where the occupancy type or usage is unknown at the time of application for service. This shall include, but not be limited to, shopping centers, industrial parks and professional office buildings. 1.0 Self-service laundry per washer 53-6 4. Convalescent Homes EDUs Description 0.7/bed Skilled nursing care facilities, psychological hospitals, convalescent hospitals; licensed by the applicable Governmental Agency. 0.5/bed Community Care Facilities with 16 or more beds licensed by the applicable Governmental Agency. 1.0 Community Care Homes with six or fewer total residents, including resident staff and housekeepers (to be the same EDU as a single family residence). C. Other commercial, industrial and other types of business establishments not included in 53.08 B.1 through 53.08 B.4 If the establishment is not included in 53.08 B.1 through 53.08 B.4 or if the EDUs specified in 53.08 B.1 through 53.08 B.4 are not representative of actual flow due to the number of employees or type of operation, the number of EDUs shall be determined in each case by the list of commercial strengths as defined by the State Water Resources Control Board (SWRCB) or by the General Manager and shall be based upon the estimated volume and type of wastewater discharge into the sewer. Examples of commercial, industrial and other business establishments include, but are not limited to, bottling works, supermarkets, markets, deli/markets, convenience stores, hospitals, laundries (other than self-service laundries), automobile service stations, mortuaries, day- care centers, bars and pool halls. 53.09 TRANSFER, ASSIGNMENT, OR RESALE OF SEWER CONNECTION RIGHTS EDU sewer connection rights obtained by a customer may not be sold, transferred, or assigned separately from ownership of the real property for which they were obtained, unless otherwise stated in an agreement with the District. 53.10 DEFINITIONS OF RESIDENTIAL AND MULTI-RESIDENTIAL SEWER SERVICE RATES, CHARGES AND FEES All District sewer rates, charges, and fees are subject to Board approval of rate increases to residential and multi-residential sewer services billed on or after January 1, 2014 and may apply to sewer services as early as the beginning of December 2013 and periodically thereafter through December 31, 2018. The increases shall be the amount sufficient to cover cost increases 53-7 related to operation and maintenance, but not to exceed 10% per year. Five-year Periodic Pass-through Rate Increases or Decreases from District Wholesalers - All District sewer rates, charges, and fees are subject to periodic rate changes from the District’s public agency wholesalers for a five-year period beginning January 1, 2014 through December 31, 2018. Set-up Fees for Accounts - A set-up fee (see Appendix A, Section 53 for fee) shall be charged for each account transferred to another customer. Winter Average Determination - Sewer service usage fee shall be based on the “Winter Average” water consumption, measured in units of hundred cubic feet (HCF). The winter average period is January through April. The winter average is calculated by adding the four months of water consumption for the preceding winter and dividing the resulting amount by four. This average is then reduced by a 15% usage discount, recognizing that not all water used flows into the sewer system, to determine the “Winter Average” for billing purposes see Appendix A, Section 53. Usage Fee - The usage fee rate (see Appendix A, Section 53) is multiplied by the “Winter Average” calculation for each customer (after the above noted 15% discount) and the resulting amount is added to the System Fee applicable to the size of meter. The resulting fixed fee shall be charged on a monthly basis for an entire calendar year, until a new “Winter Average” is determined for the following year. Residential Sewer System Fee - The monthly system fee is set forth in Appendix A, Section 53. A. Residential Rate Charges 1. Defined as: Sewer service for individually metered residential households. 2. The monthly sewer bill is calculated by adding the system fee plus the usage fee as described in 53.10 above. 3. The maximum “Winter Average” for individually metered residential customers is 30 units (after the 15% discount). 4. Monthly Residential Sewer Rate without Consumption History: The average residential sewer rate shall be determined by calculating the total usage fee for all 53-8 residential customers and dividing by the number of residential customers. Then the monthly average usage fee is added to the system fee and this shall be used to determine the total monthly fee to be used for residential customers with no prior winter consumption, customers using well water or other unmetered water. See Appendix A, Section 53. B. Multi-Residential Rate Charges 1. Defined as: Sewer service for master metered water service for multiple-residential households including for example; duplex, townhomes, apartments, and mobile homes. 2. The monthly sewer bill for the complex is calculated by adding a system fee based on meter size (as set forth in Appendix A, Section 53) plus the usage fee (as set forth in Appendix A, Section 53) multiplied by the winter average, for the entire complex. Note: There is no cap on consumption for the multi-residential customers. 3. Monthly Multi-Residential Sewer Rate without Consumption History: The multi-residential sewer rate shall be determined by calculating the total usage fee for all multi-residential customers and dividing by the number of multi-residential dwelling units. The usage fee per dwelling unit is multiplied by the new customer’s number of dwelling units and this shall be added to the monthly system fee, based on meter size, to determine the monthly rate. This is applicable to new complexes that do not have a prior winter consumption history. See Appendix A, Section 53. 53.11 DEFINITIONS OF COMMERCIAL AND INDUSTRIAL SEWER SERVICE RATES, CHARGES AND FEES All District sewer rates, charges, and fees are subject to Board approval of rate increases to commercial and industrial sewer services billed on or after January 1, 2014 and may apply to sewer services as early as the beginning of December 2013 and periodically thereafter through December 31, 2018. The increases shall be the amount sufficient to cover cost increases related to operation and maintenance, but not to exceed 10% per year. Five-year Periodic Pass-through Rate Increases or Decreases from District Wholesalers - All District sewer rates, charges, and fees are subject to periodic rate changes from the District’s public agency wholesalers for a five-year period beginning January 1, 2014 through December 31, 2018. 53-9 Set-up Fees for Accounts - A set-up fee (see Appendix A, Section 53 for fee) shall be charged for each account transferred to another customer. Average Annual Consumption - The Average Annual Consumption, measured in units of hundred cubic feet (HCF). The annual consumption period is January through December of the preceding year divided by the number of months of consumption. This average is reduced by a 15% usage discount which recognizes that not all water used flows into the sewer system. Usage Fee - The usage fee rate (see Appendix A, Section 53 for rate) is determined by the commercial customer’s sewer strength category in which they are assigned (low strength, medium strength or high strength). System Fee - The monthly system fee is determined by the commercial customer’s water meter size (as set forth in Appendix A, Section 53). Strength Factor - The State Water Resources Control Board (SWRCB) has grouped commercial customers into various categories and has identified Strength Factors for each of these business categories. The standard of measure for Strength Factors is the typical sewer strength of a single‐family residence (SFR). A SFR has strength factor of 1. (As set forth in Appendix A, Section 53) A. Commercial Rate Charges 1. The monthly sewer bill for commercial sewer customers is calculated by multiplying the average annual consumption, reduced by 15%, by the usage fee based on strength (as set forth in Appendix A, Section 53) plus the monthly system fee based on the customer’s water meter size. 2. For new commercial sewer customers without consumption history, staff shall make a determination of the average annual consumption to be used until a year’s consumption data can be collected. The determination shall be based on the prior owner or tenant of the sewer connection, or based on the most similar type of current business operation. If the customer does not agree with staff’s recommendation, the customer may request an adjustment, in writing, and direct it to the General Manager. B. Industrial and Other Users 1. Charges determined by the Board of Directors on a case-by-case basis. 53-10 Monthly sewer service charges shall commence upon installation of the water meter to serve the premises receiving the sewer service, upon connection to the District sewer system, upon start of occupancy of the premises to be served, or one year after the date the application for sewer service is filed. If a sewer service connection has been obtained and if sewer service will not be used until sometime after installation of the water meter, commencement of the sewer service charge may be deferred until the later date only upon prior approval of the General Manager. C. Commercial User Classifications Commercial sewer service customers are subject to periodic inspection of the premises by the District for verification of proper sewer strength classification. In addition to such periodic inspections, strength classifications will be reviewed periodically, at the discretion of the District. If warranted following a periodic inspection, periodic classification review, or a change in the nature of a customer’s business and/or use of the property, customers may be reclassified to reflect their current business operations and proper sewer strength, at the discretion of the District and consistent with the standards set forth herein and in the State Water Resources Control Board (SWRCB) listing for sewer strength. 1. Low-Strength Commercial = 1.0 Strength Factor Car wash General office and buildings Barber and beauty shops Department, retail stores and general commercial Hospitals and convalescent homes Public Laundromats and dry cleaners Professional office or office building Warehouse Bars without dining facilities Churches Schools (Elementary, junior & High Schools, Colleges) Other uses having a similar strength as determined by the District 2. Medium-Strength Commercial = 2.0 Strength Factor Hotels without dining facilities or cooking facilities Auto repair/sales shop and service station Shopping centers Other uses having a similar strength as determined by the District 53-11 3. High-Strength Commercial = 4.0 Strength Factor Bakery or bakery with deli Hotel with dining facilities Restaurants and bars with food Grocery stores with onsite butcher and/or bakery Other uses having a similar strength as determined by the District 53.12 ISSUANCE AND PAYMENT OF SEWER BILLS A. Issuance of Statements: Statements for sewer service or other charges will be mailed monthly or as soon as practical, after the applicable charges have been determined. B. Due Date: Each statement issued by the District for such charges shall be due and payable on the date of mailing or other presentation to the customer. C. Final Payment Date: All charges in each statement must be paid on or before the final payment date shown on the statement, which shall be at least 20 calendar days following the date of mailing or presentation of the statement. D. Place of Payment: Payments shall not be credited to a customer’s account until cash, check, credit card, draft, electronic funds transfer, money order or any other acceptable form of payment that will be honored by the bank has been received by the District at the District business office during regular office hours. Deposit of payment in the mail or at a location other than the District business office shall not be credited to a customer’s account until received at the business office. E. Returned Check Charges: A returned payment charge (see Appendix A, Section 34 for charge) shall be added to a customer’s account in each instance where payment has been made to the District with a check, draft, credit card or any other acceptable form of payment that has not been honored upon presentment to the bank upon which it is drawn. 53.13 DELINQUENT ACCOUNTS A. Requirement of Deposit Due to Repeated Delinquencies: If payments on a customer account have become delinquent five or more times, the General Manager, Chief Financial Officer, or any person delegated by the General Manager, shall be authorized to require the customer to make a deposit with the District, in cash or any other form satisfactory to the General Manager. The deposit amount shall be established at 53-12 the discretion of the General Manager and the Chief Financial Officer, but shall not exceed two times the highest bill during the twelve (12) months preceding the date of demand for a deposit. B. Handling of Deposit: A deposit shall not earn interest and shall only be applied to reduce or satisfy amounts due the District in the event of termination of service. A deposit does not constitute payment for service bills and the customer shall be required to comply with bill payment requirements to continue receiving service. C. Refund of Deposit: A deposit required under this Section shall be refunded to the customer as provided in Section 25.04 B. Section #Code #Fee Description Meter Size 9 9.04 A.1. District Annexation Processing Fee $776.20 9.04 B. Annexation Fees for Water Annexations into Otay Water District Boundaries Districtwide Annexation Fee 3/4" $1,907.32 1"$4,768.30 1-1/2" $9,536.60 2" $15,258.56 3" $30,517.12 4 $47,683.00 6" $95,366.00 8" $152,585.60 10" $219,341.80 9.04 C.4. Annexation Fees for Annexations to Sewer Improvement Districts per EDU $1,095.31 10 10.01 Waiver Request $50.00 23 23.04 Backflow Certification - Second Notification $10.00 - Third Notification $25.00 - Third Notification (hand delivered) $45.00 - Reconnection $50.00 - Reconnection (if test performed with technician present) $150.00 - Initial Filing Fee (New applicants for addition to the list of approved backflow prevention device testers)$25.00 - Renewal Filing Fee (to remain on list of approved backflow prevention device testers) Annually $10.00 25 25.03 A. Set-up Fees for Accounts $10.00 25 25.03 C. Monthly Fixed System Charges, MWD & CWA Charges (1)Meter Size System Charge MWD & CWA Fixed Charge Total Fixed Charge 3/4" $15.91 $15.00 $30.91 1" $22.47 $27.84 $50.31 Otay Water District Appendix A Charges (1) All Water used in December and billed in January 2017. Exhibit 4 Section #Code #Fee Description Meter Size Charges 25 25.03 C. Monthly Fixed System Charges, MWD & CWA Charges (continued)(1)1-1/2" $38.88 $62.96 $101.84 2" $58.55 $107.08 $165.63 3" $111.04 $227.75 $338.79 4" $170.10 $364.72 $534.82 6" $334.18 $746.59 $1,080.77 8" $531.05 $1,205.65 $1,736.70 10" $760.72 $1,735.39 $2,496.11 25 25.03 E.1.(b) Domestic Residential Water Rates (1)Unit Charge (The Conservation Tier discount applies Conservation Tier 0 - 5 $2.53 toward the first five units of water when 6-10 $3.95 overall consumption is ten units or less.) 11-22 $5.13 23 or more $7.90 25 25.03 E.2.(b) Multiple Residential Water Rates - Per Dwelling Unit (1) 0-4 $3.90 5-9 $5.05 10 or more $7.80 25 25.03 E.3.(b) Business and Publicly-Owned Water Rates (1)under 10" 0-185 $4.17 186-1,400 $4.23 1,401 or more $4.30 10" & larger 0-7,426 $4.17 7,427-14,616 $4.23 14,617 or more $4.30 25 25.03 E.4.(c) Irrigation and Commercial Agricultural Using Potable Water Rates (1)1" & smaller 0-54 $5.68 55-199 $5.74 200 or more $5.81 1.5" & 2" 0-144 $5.68 145-355 $5.74 356 or more $5.81 3" & larger 0-550 $5.68 551-1,200 $5.74 1,201 or more $5.81 (1) All Water used in December and billed in January 2017. Section #Code #Fee Description Meter Size Charges 25 25.03 E.5.(c)Recycled Water (1)3/4" - 1" 0-32 $4.85 (Landscape Irrigation and Certain 33-75 $4.92 Non-Irrigation Purposes Rates) 76 or more $4.99 1.5" & 2" 0-130 $4.85 131-325 $4.92 326 or more $4.99 3" & 4" 0-440 $4.85 441-1,050 $4.92 1,051 or more $4.99 6" & larger 0-4,000 $4.85 4,001-10,000 $4.92 10,001 or more $4.99 25 25.03 E.6.(c)Recycled Commercial (1)under 10" 0-173 $3.53 174-831 $3.60 832 or more $3.65 10" & larger 0-7,426 $3.53 7,427-14,616 $3.60 14,617 or more $3.65 25 25.03 E.7.(b) Potable Temporary and Construction Water Service Rates (1)1" & smaller 0-54 $11.36 55-199 $11.48 200 or more $11.62 1.5" & 2" 0-144 $11.36 145-355 $11.48 356 or more $11.62 3" & larger 0-550 $11.36 551-1,200 $11.48 1,201 or more $11.62 25 25.03 E.8.(b) Recycled Temporary and Construction Water Service Rates (1)3/4" - 1" 0-32 $9.70 33-75 $9.84 76 or more $9.98 (1) All Water used in December and billed in January 2017. Section #Code #Fee Description Meter Size Charges 25 25.03 E.8.(b) Recycled Temporary and Construction Water Service Rates (continued) (1)1.5" & 2" 0-130 $9.70 131-325 $9.84 326 or more $9.98 3" & 4" 0-440 $9.70 441-1,050 $9.84 1,051 or more $9.98 6" & larger 0-4,000 $9.70 4,001-10,000 $9.84 10,001 or more $9.98 25 25.03 E.10.(b) Tank Trucks Water Rates (1)1" & smaller 0-54 $11.36 55-199 $11.48 200 or more $11.62 1.5" & 2" 0-144 $11.36 145-355 $11.48 356 or more $11.62 3" & larger 0-550 $11.36 551-1,200 $11.48 1,201 or more $11.62 25 25.03 E.11.(c) Application Fee for Water Service Outside District Boundaries $500.00 25 25.03 E.11.(d) Water Rate for Service Outside District Boundaries (1)1" & smaller 0-54 $11.36 55-199 $11.48 200 or more $11.62 1.5" & 2" 0-144 $11.36 145-355 $11.48 356 or more $11.62 3" & larger 0-550 $11.36 551-1,200 $11.48 1,201 or more $11.62 25 25.03 E.12.(b) Application Fee for Water Service Outside an Improvement District $275.00 (1) All Water used in December and billed in January 2017. Section #Code #Fee Description Meter Size Charges 25 25.03 E.12.(c) Water Rate for Service Outside Improvement District (1)1" & smaller 0-54 $11.36 55-199 $11.48 200 or more $11.62 1.5" & 2" 0-144 $11.36 145-355 $11.48 356 or more $11.62 3" & larger 0-550 $11.36 551-1,200 $11.48 1,201 or more $11.62 25 25.03 E.13.(c) Fire Service Monthly Charge 3" or less $20.77 more than 4" $27.98 25 25.03 E.14.(b) Additional Water Service for Property Not Subject to District Taxes per unit $0.41 25 25.03 E.15.(b) Interim Service Water Rate in Improvement District 7 (1)1" & smaller 0-54 $11.36 55-199 $11.48 200 or more $11.62 1.5" & 2" 0-144 $11.36 145-355 $11.48 356 or more $11.62 3" & larger 0-550 $11.36 551-1,200 $11.48 1,201 or more $11.62 25 25.03 F.Energy Charges for Pumping Water (1) Per 100 ft of lift over 450 ft per unit $0.044 25 25.04 A. Deposits for Non-Property Owners 3/4" $75.00 1" $150.00 1-1/2" $200.00 (1) All Water used in December and billed in January 2017. Section #Code #Fee Description Meter Size Charges 25 25.04 A. Deposits for Non-Property Owner (continued)2" $360.00 3" $800.00 4" $1,350.00 6" $3,300.00 8" $4,400.00 10" $5,500.00 28 28.01 B.1. Capacity Fees and Zone Charge Districtwide Capacity Fee - All IDs excluding Triad 3/4"$8,590.34 1"$21,475.85 1-1/2" $42,951.70 2" $68,722.72 3" $137,445.44 4 $214,758.50 6" $429,517.00 8" $687,227.20 10" $987,889.10 - TRIAD 3/4" $6,444.91 1" $16,112.28 1 -1/2" $32,224.55 2" $51,559.28 3" $103,118.56 4 $161,122.75 6" $322,245.50 8" $515,592.80 10" $741,164.65 28 28.01 B.2. New Water Supply Fee - All IDs including Triad 3/4" $1,064.11 1" $2,660.28 1-1/2" $5,320.55 2" $8,512.88 3" $17,025.76 4" $26,602.75 6" $53,205.50 8" $85,128.80 10" $122,372.65 Section #Code #Fee Description Meter Size Charges 28 28.02 Installation and Water Meter Charges Meter Size Meter Cost Installation Total Meter Box/Vault (if Needed) - Potable (Non-Irrigation) 3/4" x 7.5" $226.96 $107.70 $334.66 $91.43 3/4" x 9" $241.65 $107.70 $349.35 $91.43 1" $292.87 $107.70 $400.57 $91.43 1.5" $476.03 $107.70 $583.73 $207.28 2" $682.10 $107.70 $789.80 $207.28 3" $2,125.70 $648.46 $2,774.16 $3,697.56 4" $3,692.00 $648.46 $4,340.46 $3,697.56 6" $6,377.10 $1,024.29 $7,401.39 $3,697.56 8" $7,967.71 $1,570.66 $9,538.37 $5,304.41 10" $11,459.05 $1,570.66 $13,029.71 $5,304.41 - Potable/Recycled Irrigation 3/4" x 7.5" $226.96 $107.70 $334.66 $233.02 3/4" x 9" $241.65 $107.70 $349.35 $233.02 1" $292.87 $107.70 $400.57 $233.02 1.5" $476.03 $107.70 $583.73 $233.02 2" $682.10 $107.70 $789.80 $233.02 3" $1,471.20 $648.46 $2,119.66 $3,697.56 4" $2,864.20 $648.46 $3,512.66 $3,697.56 6" $5,156.49 $1,024.29 $6,180.78 $3,697.56 8" $6,869.37 $1,570.66 $8,440.03 $5,304.41 10" $9,748.16 $1,570.66 $11,318.82 $5,304.41 - Combined Fire and Domestic 4" $8,783.61 $648.46 $9,432.07 $3,697.56 6" $11,690.22 $1,024.29 $12,714.51 $3,697.56 8" $16,996.73 $1,570.66 $18,567.39 $5,304.41 10" $23,194.92 $1,570.66 $24,765.58 $5,304.41 31 31.02 D.1. Requirement of Temporary Meter for Service minimum/per day $25.00 31 31.03 A.1. Requirement of Deposit for Temporary Meters 3/4" $156.85 1" $184.78 1-1/2" $379.62 2" $2,046.00 4" $1,986.00 6" $2,465.00 Section #Code #Fee Description Meter Size Charges 31 31.03 A.1. Requirement of Deposit for Temporary Meters (continued) - Construction Trailer Temporary Meter 2" $2,046.00 - Tank Truck Temporary Meter (Ordinance No. 372)2" $850.00 31 31.03 A.4. Temporary Meter Install & Removal 3/4" - 4" (on hydrant) $150.00 4" - 6" $806.00 8" - 10" Actual Cost 31 31.03 A.5. Temporary Meter Move Fee (includes backflow certification)3/4" - 4" (on hydrant) $150.00 4" - 6" $806.00 8" - 10" Actual Cost 33 33.07 A. Customer Request for Meter Test (Deposit)5/8", 3/4" & 1" $25.00 1-1/2" & 2 " $50.00 3" & Larger $125.00 34 34.01 D.2. Returned Check Charges $25.00 34 34.02 B. Late Payment Charge 5% of Delinquent Balance 34 34.02 G.1.(d) Delinquency Tag $15.00 34 34.02 G.3. Meter "Turn-On" Charge $50.00 53 53.03 A.1. Sewer Capacity Fee per EDU for parcels within a Sewer ID $4,402.76 53 53.03 A.2. Sewer Capacity Fee per EDU for parcels not within a Sewer ID $6,886.04 53 53.03 B.1. Sewer Connection Fee - Russell Square $7,500.00 53 53.03 B.2. Monthly Sewer Service Charge - Russell Square $200.00 53 53.10 & 11 Set-up Fees for Accounts $10.00 (2) Sewer billed beginning January 1, 2017. Section #Code #Fee Description Meter Size Charges 53 53.10 Residential Sewer Usage Fee (2) Rate multiplied by winter average units $2.58 53 53.10 Residential Sewer System Fee (2)5/8", 3/4" & larger $15.89 53 53.10 A. Residential Sewer Without Consumption History (2)5/8", 3/4" & larger $40.01 53 53.10 B. Multi-Residential Usage Fee - Sewer Without Consumption History (2) $24.12 53 53.10 B.2.Multi-Residential Usage Fee - Sewer (2) Rate multiplied by winter average units $2.58 53 53.10 B. 2.Multi-Residential System Fee - Sewer (2).75" $28.37 1" $41.80 1.5" $75.27 2" $115.46 3" $209.24 4" $343.23 6" $678.18 8" $1,080.14 10" $1,549.07 53 53.11 Commercial and Institutional Sewer Strength Factors Low Strength 1 Medium Strength 2 High Strength 4 53 53.11 Monthly Usage Fee for Commercial and Institutional Sewer (2)Rate multiplied by Low Strength $2.58 annual avg.Medium Strength $3.70 units High Strength $5.90 53 53.11 Monthly System Fee for Commercial and Institutional Sewer (2).75" $28.37 1" $41.80 1.5" $75.27 2" $115.46 3" $209.24 (2) Sewer billed beginning January 1, 2017. Section #Code #Fee Description Meter Size Charges 53 53.11 Monthly System Fee for Commercial and Institutional Sewer (2) (continued)4" $343.23 6" $678.18 8" $1,080.14 10" $1,549.07 60 60.03 Issuance of Availability Letters for Water and/or Sewer Service $75.00 72 72.04 A.1. Locking or Removing Damaged or Tampered Meters - To Pull and Reset Meter 3/4" - 2" $200.00 - Broken Curbstop or Tabs 3/4" - 1" Actual Cost - If Customer uses Jumper 3/4" - 1" Actual Cost - Broken Lock/Locking Device 3/4" - 1" $68.00 - Broken Curbstop or Tabs 1.5" - 2" Actual Cost - To Pull and Reset Meter 3" Actual Cost - To Pull and Reset Meter 4" Actual Cost - To Pull and Reset Meter 6" Actual Cost - To Pull and Reset Meter 8" Actual Cost - To Pull and Reset Meter 10" Actual Cost 72 72.05 D. A.Type I Fine - First Violation $100.00 - Second Violations $200.00 - Third or each additional violation of that same ordinance or requirement within a twelve-month period $500.00 Type II Fine $5,000.00 Type III Fine $500.00 Type IV Fine $500.00 Fine up to amount specified per each day the violation is identified or continues. Fine up to amount specified per each day the violation is identified or continues. Will not exceed per each day the violation is identified or continues. Section #Code #Fee Description Meter Size Charges State Water Code #71630 & Annual Board Resolution #4142 Water Availability/Standby Annual Special Assessment Charge $10.00 $10.00 $30.00 $3.00 $3.00 State Water Code #71630 & Annual Board Resolution #4142 Sewer Availability/Standby Annual Special Assessment Charge $10.00 $30.00 Annual Board Resolution General Obligation Bond Annual Tax Assessment $0.005 Policies 5 Copies of Identifiable Public Records $0.10/page Cassette Tape Duplication $2.00/tape Yearly Subscription Service for Agendas and Ratified Minutes Yearly Subscription Service for Board Packet and Ratified Minutes Per acre for outside I.D. & greater than one mile from District facilities. Less than one acre I.D. 4, 14, & 18 Per acre I.D. 4, 14, & 18 Per $1000 of assessed value for I.D. 27 $20.00/year or $0.50/meeting $100.00/year for first copy and $200.00/year for each copy thereafter Less than one-acre all I.D.s & Outside an I.D. Per acre in I.D. 1, 5, & Outside an I.D. Per acre in I.D. 2,3,7,9,10,19,20,22,25, & 27 Less than one-acre Outside I.D. and greater than one mile from District facilities. 9-1 CHAPTER 6 MISCELLANEOUS ADMINISTRATION PROCEDURES SECTION 9 ANNEXATIONS AND DETACHMENTS 9.01 REQUIREMENT OF ANNEXATION FOR SERVICE Except as provided elsewhere in this Code, whenever utility service is requested for land outside the boundaries of an improvement district, the land to be serviced must first be annexed to an improvement district(s). If the land is located outside the boundaries of the District, the land must also be annexed to the District. 9.02 ANNEXATIONS TO OR DETACHMENTS FROM IMPROVEMENTS DISTRICTS An owner or owners of land within the District desiring to annex to or detach land from an improvement district within the District must file a petition for such proceeding with the District. Annexation proceedings shall be con- ducted pursuant to Chapter I (commencing with Section 72670) of Part 11, Division 20 of the California Water Code. Detachment or exclusion proceedings shall be conducted pur- suant to Part 8.5 (commencing with Section 72080) of Divi- sion 20 of the California Water Code. If the land proposed to be annexed is outside the boundaries of the territory served by the Metropolitan Water District of Southern California and the territory served by the San Diego County Water Authority, and no local sources of water are available to serve such land, the District will require that the land be annexed to those entities as well. 9.03 ANNEXATIONS TO OR DETACHMENTS FROM THE DISTRICT THROUGH LAFCO An owner or owners desiring to annex land to or to detach land from the District may either (i) file a petition directly with the Local Agency Formation Commission (LAFCO) for the annexation or detachment or (ii) request the District to file the petition with LAFCO for such annexation or detachment. Any such proceeding for annexation or detachment, which is deemed a change of organization or reorganization pursuant to the Cortese-Knox Local Government Reorganization Act of 1985, shall be initiated, conducted and completed pursuant to Title 6, Division 1 (commencing with Section 56000) of the California Government Code. By annexing to the District the owners and representatives of the annexing land agree, on behalf of themselves and all future owners and occupants of the annexed lands, to comply with all laws, statutes, policies, plans, conditions and requirements applicable to the services provided by the District to such lands, including Attachment C 9-2 without limitation any conservation or local supply use requirements. 9.04 FEES AND CHARGES FOR ANNEXATIONS OR DETACHMENTS A petitioner requesting an annexation to or detachment from the District or within the District shall pay the following applicable fees and charges: A. Administrative Processing Fees 1. District Processing Fee. A District processing fee (see Appendix A, Section 9 for fee) shall be paid to the District for each annexation or detachment proceeding, regardless of the number of parcels involved, provided all parcels are included in one proceeding. This fee shall constitute the "base rate" on March 3, 1997. The base rate shall be adjusted annually for fluctuations in the Consumer Price Index (Urban Wage Earners and Clerical Workers - Los Angeles) and subsequent cost-of-living adjustment (COLA). 2. Additional Processing Fees or Charges. The peti- tioner shall pay all processing fees and charges due LAFCO, the State Board of Equalization and any other applicable government agency. 3. Concurrent Annexations to or Detachments from the District and an Existing Improvement District. No additional processing costs or fees will be charged to a petitioner for an annexation to or detachment from an existing improvement district when the proceeding is part of an annexation to or detachment from the District. 4. Payment of Fees and Charges. The District processing fees and charges shall be paid to the District at the time the petition for such proceeding is filed. Where a petition is filed with LAFCO, the District shall notify LAFCO that payment of all required fees and charges to the District shall be a condition for District approval of the annexation or detachment. B. Water Annexation Fees. The annexation fee (see Appendix A, Section 9) shall constitute the "base rate" on May 3, 2017). The base rate shall be adjusted on the first day of each calendar quarter for fluctuations in construction costs, as measured by the Engineering News Record Construction Cost Index for the Los Angeles Region. The ENR Construction Cost Index of 11,555.03 on April 1, 2017 shall be deemed the "base index." The 9-3 adjustment shall be in an amount equal to the percentage change in the ENR Construction Cost Index from the base index for the period from April 1, 2017 to the date of payment. 1. No water annexation fee shall be required for existing and future agricultural water service furnished by the District under the COMMERCIAL AGRICULTURAL category of Section 25 of the Code. 2. Non-permanent irrigation water service furnished by the District under Section 30 of the Code shall be available without payment of a water annexation fee. 3. Open Space to be Annexed. Open space lands shall not be excluded from annexations of land to a water improvement district. 4. Water Meter Type Exclusions. Annexation fees shall be collected on all water meters sold except for temporary water meters, water tank truck meters, nonpermanent irrigation water meters and outside user meters, all as defined elsewhere in this Code. 5. Effective Date. Annexation fees shall be col- lected on all lands annexing into the Otay Water District boundaries on or after March 5, 1997. 6. Basis for Determination. For annexations of land into the Otay Water District boundaries, the petitioner shall pay an annexation fee. The fee shall be paid at the time of petition to be annexed. There shall be no water annexation fee charged for parcels already within District boundaries that are applying to be annexed into a water ID. For permanent water meters, except for commercial agricultural meters, the annexation fee shall be determined on the basis of the demand to be placed on the District-wide water system. The fee will be determined on the basis of the size of the water meter required, as set forth in Section 27 of the Code. The fee shall be determined by multiplying the demand factor for the meter size, as set forth in Section 28 of the Code, by the annexation fee per EDU. See Appendix A, Section 9for fees. 9-4 C. Sewer Annexation Fees 1. Improvement District Annexation. All annexation for sewer service shall be into Improvement District No. 18 on or after December 16, 1998. 2. Open Space to be Annexed. Open space lands shall not be excluded from annexations of land to a sewer improvement district. 3. Effective Date. Annexation fees shall be collected on all lands annexing to a sewer improvement district on or after December 16, 1998. 4. Basis for Determination. For annexations of land to a sewer improvement district within the Dis- trict, the petitioner shall pay an annexation fee. The fee shall be determined on the basis of the demand to be placed on the District sewer system. The fee shall be paid at the time of sewer service connection request or General Manager's approval of plans, whichever occurs earlier. The extent of the demand will be determined on the basis of each equivalent dwelling unit (EDU) of service which is to be connected to the District sewer system. The number of EDUs prescribed in Section 53 of the Code shall be the basis for computation of the amount of the annexation fee. The fee will be determined by multiplying the number of EDUs by the annexation fee per EDU. See Appendix A, Section 9 for fees. This annexation fee shall constitute the "base rate" on May 3, 2017. The base rate shall be adjusted on the first day of each calendar quarter for fluctuations in construction costs as measured by the Engineering News Record Construction Cost Index for the Los Angeles Region. The ENR Construction Cost Index of 11,555.03 (as of April 1, 2017) shall be deemed the "base index." The adjustment shall be in an amount equal to the percentage change in the ENR Construction Cost Index from the base index for the period from April 1, 2017 to the date of payment. D. Detachment Fees For each detachment of land from an improvement district, the petitioner shall pay such fees as the General Manager determines are appropriate for the detachment. Determinations shall be made by the General Manager on a case-by-case basis. 9-5 9.05 TAXATION OF PROPERTY AFTER ANNEXATION TO IMPROVEMENT DISTRICT Where property is annexed by a petitioner, other than a tax-exempt agency, the property in the annexed area shall be subject to taxation after the annexation thereof for the purposes of the improvement district, including the payment of principal and interest on bonds and other obligations of the improvement district authorized and outstanding at the time of the annexation. The Board of Directors shall provide as a condition of the annexation that the annexed area shall be subject to taxation as if the property had always been a part of the improvement district. 9.06 OTHER CONDITIONS OF ANNEXATION By annexing to the District the owners and representatives of the annexing land agree, on behalf of themselves and all future owners and occupants of the annexed lands, to comply with all laws, statutes, policies, plans, conditions and requirements applicable to the services provided by the District to such lands, including without limitation any conservation or local supply use requirements. 28-1 SECTION 28 CONNECTION FEES AND CHARGES FOR POTABLE OR RECYCLED WATER SERVICE 28.01 COLLECTION OF FEES AND CHARGES A. Fees and Charges to be paid by the Customer. The following fees and charges shall be paid by the customer to connect to a District water system for potable water or recycled water service; these are in addition to the fees and charges in Section 9 and 25. Fees and charges shall include, but not be limited to, District fees, San Diego County Water Authority fees, and charges for work performed by District personnel on behalf of the customer. These charges may include the installation by District personnel of a water service lateral, and inspections required due to the requirement of a back flow device. These charges may also include a meter fee, installation fee (where laterals exist), lateral fee, meter box fee, and excavation permit fee. B. Basis for Determination of Connection Fees and Charges. The fees and charges shall be determined as follows: For permanent water meters, including potable or recycled irrigation service, the total water connection fee shall be determined on the basis of the demand to be placed on the District water system. The extent of demand will be determined on the basis of the size of the water meter, as set forth in Section 27 of the Code. For individually metered residential fire service, as outlined in Section 38.03 of the Code, the size and fee would be set based on water use requirements without additional fire capacity. The water connection fee will be determined by multiplying the demand factor for the meter size, as set forth below, by the total of the District-wide capacity fee. Meter Size Demand Factor 3/4" 1 1 2-1/2 1-1/2" 5 2" 8 3" 16 4" 25 6" 50 8" 80 10" 115 Attachment D 28-2 1. The District-wide capacity fee shall constitute the "base rate." For fees or charges after May 3, 2017, the base rate shall be adjusted on the first day of each calendar quarter for fluctuations in construction costs, as measured by the Engineering News Record Construction Cost Index for the Los Angeles Region. The ENR Construction Cost Index of 11,555.03(as of April 1, 2017) shall be deemed the "base index." The adjustment shall be in an amount equal to the percent- age change in the ENR Construction Cost Index from the base index for the period from April 1, 2017 to the date of payment. (See Appendix A, Section 28 for fees.) 2. The District-wide new water supply fee shall constitute the “base rate.” For fees or charges after October 1, 2014, the base rate shall be adjusted quarterly for fluctuations in construction costs, as measured by the Engineering News Record Construction Cost Index for the Los Angeles11,555.03 (as of April 1, 2017) shall be deemed the “base index.” The adjustment shall be in an amount equal to the percentage change in the ENR Construction Cost Index from the base index for the period from April 1, 2017 to the date of payment. (See Appendix A, Section 28 for fees.) 28.02 INSTALLATION CHARGES FOR WATER METER AND WATER SERVICE LATERALS The determination of the water meter or service lateral size shall be based upon the information provided by the customer as detailed in Section 27 of the Code. The meter fees and installation charges are set forth in Appendix A, Section 28. Where a new water lateral is required, a customized, written estimate of the District's costs will be prepared. The customer shall deposit the estimated costs with the District prior to commencement of the work. If actual costs incurred by the District are less than the amount deposited, the District shall refund the excess to the customer. If the actual costs incurred exceed the amount deposited, the customer shall reimburse the District for the additional costs. 28-3 A. The meter fees and installation charges shall be set effective September 1, 2012, and then adjusted in the same manner as capacity fees as described in Section 28.01 B.1 above (See Appendix A, Section 28 for fees). 28.03 METER FEE REFUND A. If a water meter/service has been paid for but not installed, a customer may receive a refund of the District’s capacity fee and charges. If San Diego County Water Authority capacity fees have been paid to San Diego County Water Authority, the customer shall request a refund from San Diego County Water Authority. B. If the customer wants to change the meter/service size, they will be credited with the number of equivalent dwelling units they have previously purchased and will be refunded any balance per Section 28.03 A, above. If additional equivalent dwelling units are required, the customer will be charged based on 28.01 and 28.02. C. If a water meter/service has been previously paid and installed, and the customer requests a different meter size, the customer shall pay for the new meter and installation fees, plus any differential in capacity and new water supply fees as described in Section 28.03 B above. 53-1 SECTION 53 CONDITIONS FOR SEWER SERVICE 53.01 CONDITIONS FOR ACQUISITION OF SEWER SERVICE CAPACITY Sewer service capacity may be acquired only for service to a specific address, parcel of land, or a land development project covered by an approved map. An approved map shall mean a recorded final map, a recorded parcel map or a tentative sub- division map that has been approved by the County or by a City, as applicable. A. District Acceptance of Sewer Facilities for Russell Square Area - Under an Agreement with Cal Dorado Development, Inc., dated June 28, 1981, the District accepted title to a sewer pump station, force main and appurtenances for a sewage system to provide sewer service to the residential dwelling units to be constructed within the parcels of land in San Diego County Tentative Parcel Map 17150. Under an Agreement with Cal Dorado Development, Inc., dated June 18, 1981, the District agreed to provide service to such parcels on the terms and conditions contained therein. On October 1, 1984, pursuant to Resolution No. 2139, the District Board of Directors accepted title to the facilities. 53.02 SERVICE AREAS Sewer service shall be furnished by the District only to property located in Improvement District No. 18 (ID 18) and the Russell Square Sewer Service Area. Sewer service to property located outside such areas may be furnished only upon annexation to ID 18 and payment of all applicable annexation fees. (Appendix A, Section 9) A. Designation of Russell Square Sewer Area - The geographical area described on the District Map entitled "Russell Square Sewer Service Area," dated October 11, 1988, on file with the District Secretary, constitutes the Russell Square Sewer Service Area. 53.03 ACQUISITION OF SEWER CONNECTIONS FOR SERVICE Effective October 1, 2014 two separate sewer capacity fees have been established to ensure sewer customers do not pay for facilities twice. The first capacity fee applies to parcels within an ID that paid prior tax debt. The second capacity fee applies parcels outside an ID that have not paid the tax debt. The sewer capacity fees shall constitute the "base rate." For fees or charges afterMay 3, 2017, the base rate shall be adjusted on the first day of each calendar quarter for fluctuations in construction costs, as measured by the Engineering News Record Construction Cost Attachment E 53-2 Index for the Los Angeles Region. The ENR Construction Cost Index of 11,555.03 (as of April 1, 2017) shall be deemed the "base index." The adjustment shall be in an amount equal to the percentage change in the ENR Construction Cost Index from the base index for the period from April 1, 2017 to the date of payment. 1. Sewer Capacity Fee within an ID All new sewer connections for parcels within a sewer ID shall pay a capacity fee for each Equivalent Dwelling Unit (EDU) of sewer service provided. The capacity fee is due at the time an application for sewer service is requested. The number of EDUs for the connection shall be as set forth in Section 53.08 of the Code. (See Appendix A, Section 53 for fees) 2. Sewer Capacity Fee outside an ID All new sewer connections for parcels not within a sewer ID (requiring to be annexed into a sewer ID18 per code Section 9.04 C.) shall pay a capacity fee for each Equivalent Dwelling Unit (EDU) of sewer service provided. The capacity fee is due at the time an application for sewer service is requested. The number of EDUs for the connection shall be as set forth in Section 53.08 of the Code. (See Appendix A, Section 53 for fees) B. Russell Square Pump Station 1. Sewer Connection Fee A connection fee (see Appendix A, Section 53 for fee) for each Equivalent Dwelling Unit (EDU) of sewer service provided through Russell Square Pump Station shall be collected. The connection fee is due at the time an application for sewer service is submitted. The number of EDUs for the connection shall be as set forth in Section 53.08 of the Code. (a) Exempt Parcels - The connection fee shall not apply to connections for sewer service to the parcels within the Tentative Parcel Map 17150. Such exempt parcels are currently identified as Assessor Parcel Nos. 497-011-41, 497-011-42, 497- 011-44, 497-011-46 and 497-011-47. 2. Monthly Sewer Service Charge A monthly sewer service charge (see Appendix A, Section 53 for charge) to cover normal operational costs of the Russell Square Pump Station and force mains shall be collected. This charge shall be reviewed by the Board of Directors from time to time 53-3 to assure that such charges cover the costs for operation of the sewer facilities. The proceeds of the fees and charges received by the District under 53.03 B.1 and 53.03 B.2 shall be used by the District solely for maintenance, replacement or repair under 53.03 B.1 and for the operation of the facilities under 53.03 B.2. In addition, the customer for such service shall pay the monthly service charge for sewer service set forth in Section 53.10 A and B. 53.04 CHARGES FOR INSTALLATION OF SEWER LATERALS Upon application for construction of one or more sewer laterals, the customer shall deposit with the District the estimated costs to be incurred by the District in connection with the instal- lation of the facilities required, as determined by the District. Upon completion of the work, the District shall calculate the actual costs incurred by the District in performing the work. If actual costs are less than the amount deposited, the District shall refund the balance of the deposit to the customer. If actual costs exceed the amount deposited, the customer shall reimburse the District for the additional costs. 53.05 PAYMENT OF FEES All fees prescribed in the Code shall become owing, due and payable at the time application is made to connect a premise to the sewer system of the District. The fees shall be paid to the District prior to the issuance of any permit authorizing the connection of such premise to the District sewer system. If the proposed connection cannot be made, the fee may be refunded when approved by the General Manager. 53.06 SEWER SERVICE USE CHANGES RESULTING IN INCREASED SYSTEM UTILIZATION The use of a sewer connection shall be limited to the type and number of EDUs authorized by the original wastewater discharge permit. Before adding any additional equivalent dwelling units, buildings, modifying existing buildings, or change of occupancy type, the property owner shall make a supplementary wastewater permit application to the District for such change in use and pay additional sewer annexation fees per EDU, if necessary, as may be applicable. Periodic inspection of the premises may be made by the District and if actual use is greater than estimated use, an assessment for additional annexation fees shall be assessed in accordance with the fee schedule in the then current Code of Ordinances. 53-4 53.07 WASTEWATER DISCHARGE PERMIT ISSUANCE AND LIMITATION A. A wastewater discharge permit shall be required for any property for which a request is made to discharge into the District sewage system. B. Every wastewater discharge permit shall expire by limitations and shall become null and void, if the construction or work authorized by such permit is not commenced within 120 days from date of issuance of such wastewater discharge permit or if the construction or work authorized by such wastewater discharge permit is suspended or abandoned for a period of 120 days at any time after the work is commenced. C. Before such work can be recommenced, a new wastewater discharge permit application must be filed with the District. The District may reactivate the previous wastewater discharge permit provided that wastewater quantity and type is the same as the wastewater discharge allowed under the original permit, and provided further that such suspension and abandonment has not exceeded one year. Fees paid for the previous wastewater discharge permit may be credited toward the total permit fees required on the new permit application. Reactivation of the previous wastewater discharge permit shall be subject to District sewer capacity being available at the time of new application and subject to any additional costs or charges imposed during the period of such suspension or abandonment. 53.08 BASIS FOR DETERMINATION OF EQUIVALENT DWELLING UNITS (EDUs) The number of EDUs for sewer service shall be determined on the following basis: A. Residential Facilities EDUs Description 1 Single-family residence (Includes manufactured homes and mobile homes which are on private lots.) A secondary structure with a kitchen is considered an additional EDU Each individual living unit in apartments, multiple family housing and residential condominiums Each individual space in mobile homes and trailer parks 53-5 B. Commercial/Industrial Facilities 1. Food Service Establishments EDUs Description 3 Take-out restaurants with disposable utensils, no dishwasher and no public restrooms Take-out restaurants with disposable utensils, no dishwasher and no public restrooms Miscellaneous food establishments – ice cream shops, yogurt shops, bakeries (sales on premise only) Take-out/eat-in restaurants with disposable utensils, but with seating and public restrooms Restaurants with reusable utensils, seating and public restrooms (0-18 seats) o Add 1.0 EDU for each additional 6 seat unit, or portion thereof 2. Hotels and Motels EDUs Description .38 Per living unit without kitchen .60 Per living unit with kitchen 3. Commercial, Professional, Industrial Buildings and Establishments not specifically listed herein EDUs Description 1.2 +0.7 For first 1,000 square feet AND For each additional 1,000 square feet or portion thereof Applies to any office, store or industrial condominium or establishments 1.2 +0.7 For first 1,000 square feet AND For each additional 1,000 square feet of gross building floor area. Portions less than 1,000 sq. ft. will be prorated. Applies to situations where the occupancy type or usage is unknown at the time of application for service. This shall include, but not be limited to, shopping centers, industrial parks and professional office buildings. 1.0 Self-service laundry per washer 53-6 4. Convalescent Homes EDUs Description 0.7/bed Skilled nursing care facilities, psychological hospitals, convalescent hospitals; licensed by the applicable Governmental Agency. 0.5/bed Community Care Facilities with 16 or more beds licensed by the applicable Governmental Agency. 1.0 Community Care Homes with six or fewer total residents, including resident staff and housekeepers (to be the same EDU as a single family residence). C. Other commercial, industrial and other types of business establishments not included in 53.08 B.1 through 53.08 B.4 If the establishment is not included in 53.08 B.1 through 53.08 B.4 or if the EDUs specified in 53.08 B.1 through 53.08 B.4 are not representative of actual flow due to the number of employees or type of operation, the number of EDUs shall be determined in each case by the list of commercial strengths as defined by the State Water Resources Control Board (SWRCB) or by the General Manager and shall be based upon the estimated volume and type of wastewater discharge into the sewer. Examples of commercial, industrial and other business establishments include, but are not limited to, bottling works, supermarkets, markets, deli/markets, convenience stores, hospitals, laundries (other than self-service laundries), automobile service stations, mortuaries, day- care centers, bars and pool halls. 53.09 TRANSFER, ASSIGNMENT, OR RESALE OF SEWER CONNECTION RIGHTS EDU sewer connection rights obtained by a customer may not be sold, transferred, or assigned separately from ownership of the real property for which they were obtained, unless otherwise stated in an agreement with the District. 53.10 DEFINITIONS OF RESIDENTIAL AND MULTI-RESIDENTIAL SEWER SERVICE RATES, CHARGES AND FEES All District sewer rates, charges, and fees are subject to Board approval of rate increases to residential and multi-residential sewer services billed on or after January 1, 2014 and may apply to sewer services as early as the beginning of December 2013 and periodically thereafter through December 31, 2018. The increases shall be the amount sufficient to cover cost increases 53-7 related to operation and maintenance, but not to exceed 10% per year. Five-year Periodic Pass-through Rate Increases or Decreases from District Wholesalers - All District sewer rates, charges, and fees are subject to periodic rate changes from the District’s public agency wholesalers for a five-year period beginning January 1, 2014 through December 31, 2018. Set-up Fees for Accounts - A set-up fee (see Appendix A, Section 53 for fee) shall be charged for each account transferred to another customer. Winter Average Determination - Sewer service usage fee shall be based on the “Winter Average” water consumption, measured in units of hundred cubic feet (HCF). The winter average period is January through April. The winter average is calculated by adding the four months of water consumption for the preceding winter and dividing the resulting amount by four. This average is then reduced by a 15% usage discount, recognizing that not all water used flows into the sewer system, to determine the “Winter Average” for billing purposes see Appendix A, Section 53. Usage Fee - The usage fee rate (see Appendix A, Section 53) is multiplied by the “Winter Average” calculation for each customer (after the above noted 15% discount) and the resulting amount is added to the System Fee applicable to the size of meter. The resulting fixed fee shall be charged on a monthly basis for an entire calendar year, until a new “Winter Average” is determined for the following year. Residential Sewer System Fee - The monthly system fee is set forth in Appendix A, Section 53. A. Residential Rate Charges 1. Defined as: Sewer service for individually metered residential households. 2. The monthly sewer bill is calculated by adding the system fee plus the usage fee as described in 53.10 above. 3. The maximum “Winter Average” for individually metered residential customers is 30 units (after the 15% discount). 4. Monthly Residential Sewer Rate without Consumption History: The average residential sewer rate shall be determined by calculating the total usage fee for all 53-8 residential customers and dividing by the number of residential customers. Then the monthly average usage fee is added to the system fee and this shall be used to determine the total monthly fee to be used for residential customers with no prior winter consumption, customers using well water or other unmetered water. See Appendix A, Section 53. B. Multi-Residential Rate Charges 1. Defined as: Sewer service for master metered water service for multiple-residential households including for example; duplex, townhomes, apartments, and mobile homes. 2. The monthly sewer bill for the complex is calculated by adding a system fee based on meter size (as set forth in Appendix A, Section 53) plus the usage fee (as set forth in Appendix A, Section 53) multiplied by the winter average, for the entire complex. Note: There is no cap on consumption for the multi-residential customers. 3. Monthly Multi-Residential Sewer Rate without Consumption History: The multi-residential sewer rate shall be determined by calculating the total usage fee for all multi-residential customers and dividing by the number of multi-residential dwelling units. The usage fee per dwelling unit is multiplied by the new customer’s number of dwelling units and this shall be added to the monthly system fee, based on meter size, to determine the monthly rate. This is applicable to new complexes that do not have a prior winter consumption history. See Appendix A, Section 53. 53.11 DEFINITIONS OF COMMERCIAL AND INDUSTRIAL SEWER SERVICE RATES, CHARGES AND FEES All District sewer rates, charges, and fees are subject to Board approval of rate increases to commercial and industrial sewer services billed on or after January 1, 2014 and may apply to sewer services as early as the beginning of December 2013 and periodically thereafter through December 31, 2018. The increases shall be the amount sufficient to cover cost increases related to operation and maintenance, but not to exceed 10% per year. Five-year Periodic Pass-through Rate Increases or Decreases from District Wholesalers - All District sewer rates, charges, and fees are subject to periodic rate changes from the District’s public agency wholesalers for a five-year period beginning January 1, 2014 through December 31, 2018. 53-9 Set-up Fees for Accounts - A set-up fee (see Appendix A, Section 53 for fee) shall be charged for each account transferred to another customer. Average Annual Consumption - The Average Annual Consumption, measured in units of hundred cubic feet (HCF). The annual consumption period is January through December of the preceding year divided by the number of months of consumption. This average is reduced by a 15% usage discount which recognizes that not all water used flows into the sewer system. Usage Fee - The usage fee rate (see Appendix A, Section 53 for rate) is determined by the commercial customer’s sewer strength category in which they are assigned (low strength, medium strength or high strength). System Fee - The monthly system fee is determined by the commercial customer’s water meter size (as set forth in Appendix A, Section 53). Strength Factor - The State Water Resources Control Board (SWRCB) has grouped commercial customers into various categories and has identified Strength Factors for each of these business categories. The standard of measure for Strength Factors is the typical sewer strength of a single‐family residence (SFR). A SFR has strength factor of 1. (As set forth in Appendix A, Section 53) A. Commercial Rate Charges 1. The monthly sewer bill for commercial sewer customers is calculated by multiplying the average annual consumption, reduced by 15%, by the usage fee based on strength (as set forth in Appendix A, Section 53) plus the monthly system fee based on the customer’s water meter size. 2. For new commercial sewer customers without consumption history, staff shall make a determination of the average annual consumption to be used until a year’s consumption data can be collected. The determination shall be based on the prior owner or tenant of the sewer connection, or based on the most similar type of current business operation. If the customer does not agree with staff’s recommendation, the customer may request an adjustment, in writing, and direct it to the General Manager. B. Industrial and Other Users 1. Charges determined by the Board of Directors on a case-by-case basis. 53-10 Monthly sewer service charges shall commence upon installation of the water meter to serve the premises receiving the sewer service, upon connection to the District sewer system, upon start of occupancy of the premises to be served, or one year after the date the application for sewer service is filed. If a sewer service connection has been obtained and if sewer service will not be used until sometime after installation of the water meter, commencement of the sewer service charge may be deferred until the later date only upon prior approval of the General Manager. C. Commercial User Classifications Commercial sewer service customers are subject to periodic inspection of the premises by the District for verification of proper sewer strength classification. In addition to such periodic inspections, strength classifications will be reviewed periodically, at the discretion of the District. If warranted following a periodic inspection, periodic classification review, or a change in the nature of a customer’s business and/or use of the property, customers may be reclassified to reflect their current business operations and proper sewer strength, at the discretion of the District and consistent with the standards set forth herein and in the State Water Resources Control Board (SWRCB) listing for sewer strength. 1. Low-Strength Commercial = 1.0 Strength Factor Car wash General office and buildings Barber and beauty shops Department, retail stores and general commercial Hospitals and convalescent homes Public Laundromats and dry cleaners Professional office or office building Warehouse Bars without dining facilities Churches Schools (Elementary, junior & High Schools, Colleges) Other uses having a similar strength as determined by the District 2. Medium-Strength Commercial = 2.0 Strength Factor Hotels without dining facilities or cooking facilities Auto repair/sales shop and service station Shopping centers Other uses having a similar strength as determined by the District 53-11 3. High-Strength Commercial = 4.0 Strength Factor Bakery or bakery with deli Hotel with dining facilities Restaurants and bars with food Grocery stores with onsite butcher and/or bakery Other uses having a similar strength as determined by the District 53.12 ISSUANCE AND PAYMENT OF SEWER BILLS A. Issuance of Statements: Statements for sewer service or other charges will be mailed monthly or as soon as practical, after the applicable charges have been determined. B. Due Date: Each statement issued by the District for such charges shall be due and payable on the date of mailing or other presentation to the customer. C. Final Payment Date: All charges in each statement must be paid on or before the final payment date shown on the statement, which shall be at least 20 calendar days following the date of mailing or presentation of the statement. D. Place of Payment: Payments shall not be credited to a customer’s account until cash, check, credit card, draft, electronic funds transfer, money order or any other acceptable form of payment that will be honored by the bank has been received by the District at the District business office during regular office hours. Deposit of payment in the mail or at a location other than the District business office shall not be credited to a customer’s account until received at the business office. E. Returned Check Charges: A returned payment charge (see Appendix A, Section 34 for charge) shall be added to a customer’s account in each instance where payment has been made to the District with a check, draft, credit card or any other acceptable form of payment that has not been honored upon presentment to the bank upon which it is drawn. 53.13 DELINQUENT ACCOUNTS A. Requirement of Deposit Due to Repeated Delinquencies: If payments on a customer account have become delinquent five or more times, the General Manager, Chief Financial Officer, or any person delegated by the General Manager, shall be authorized to require the customer to make a deposit with the District, in cash or any other form satisfactory to the General Manager. The deposit amount shall be established at 53-12 the discretion of the General Manager and the Chief Financial Officer, but shall not exceed two times the highest bill during the twelve (12) months preceding the date of demand for a deposit. B. Handling of Deposit: A deposit shall not earn interest and shall only be applied to reduce or satisfy amounts due the District in the event of termination of service. A deposit does not constitute payment for service bills and the customer shall be required to comply with bill payment requirements to continue receiving service. C. Refund of Deposit: A deposit required under this Section shall be refunded to the customer as provided in Section 25.04 B. Section #Code #Fee Description Meter Size 9 9.04 A.1. District Annexation Processing Fee $776.20 9.04 B. Annexation Fees for Water Annexations into Otay Water District Boundaries Districtwide Annexation Fee 3/4" $2,021.40 1" $5,053.50 1-1/2" $10,106.99 2" $16,171.19 3" $32,342.38 4 $50,534.96 6" $101,069.93 8" $161,711.88 10" $232,460.83 9.04 C.4. Annexation Fees for Annexations to Sewer Improvement Districts per EDU $1,105.79 10 10.01 Waiver Request $50.00 23 23.04 Backflow Certification - Second Notification $10.00 - Third Notification $25.00 - Third Notification (hand delivered) $45.00 - Reconnection $50.00 - Reconnection (if test performed with technician present) $150.00 - Initial Filing Fee (New applicants for addition to the list of approved backflow prevention device testers)$25.00 - Renewal Filing Fee (to remain on list of approved backflow prevention device testers) Annually $10.00 25 25.03 A. Set-up Fees for Accounts $10.00 25 25.03 C. Monthly Fixed System Charges, MWD & CWA Charges (1)Meter Size System Charge MWD & CWA Fixed Charge Total Fixed Charge 3/4" $15.91 $15.00 $30.91 1" $22.47 $27.84 $50.31 Otay Water District Appendix A Charges (1) All Water used in December and billed in January 2017. Attachment F Section #Code #Fee Description Meter Size Charges 25 25.03 C. Monthly Fixed System Charges, MWD & CWA Charges (continued)(1)1-1/2" $38.88 $62.96 $101.84 2" $58.55 $107.08 $165.63 3" $111.04 $227.75 $338.79 4" $170.10 $364.72 $534.82 6" $334.18 $746.59 $1,080.77 8" $531.05 $1,205.65 $1,736.70 10" $760.72 $1,735.39 $2,496.11 25 25.03 E.1.(b) Domestic Residential Water Rates (1)Unit Charge (The Conservation Tier discount applies Conservation Tier 0 - 5 $2.53 toward the first five units of water when 6-10 $3.95 overall consumption is ten units or less.) 11-22 $5.13 23 or more $7.90 25 25.03 E.2.(b) Multiple Residential Water Rates - Per Dwelling Unit (1) 0-4 $3.90 5-9 $5.05 10 or more $7.80 25 25.03 E.3.(b) Business and Publicly-Owned Water Rates (1)under 10" 0-185 $4.17 186-1,400 $4.23 1,401 or more $4.30 10" & larger 0-7,426 $4.17 7,427-14,616 $4.23 14,617 or more $4.30 25 25.03 E.4.(c) Irrigation and Commercial Agricultural Using Potable Water Rates (1)1" & smaller 0-54 $5.68 55-199 $5.74 200 or more $5.81 1.5" & 2" 0-144 $5.68 145-355 $5.74 356 or more $5.81 3" & larger 0-550 $5.68 551-1,200 $5.74 1,201 or more $5.81 (1) All Water used in December and billed in January 2017. Section #Code #Fee Description Meter Size Charges 25 25.03 E.5.(c)Recycled Water (1)3/4" - 1" 0-32 $4.85 (Landscape Irrigation and Certain 33-75 $4.92 Non-Irrigation Purposes Rates) 76 or more $4.99 1.5" & 2" 0-130 $4.85 131-325 $4.92 326 or more $4.99 3" & 4" 0-440 $4.85 441-1,050 $4.92 1,051 or more $4.99 6" & larger 0-4,000 $4.85 4,001-10,000 $4.92 10,001 or more $4.99 25 25.03 E.6.(c)Recycled Commercial (1)under 10" 0-173 $3.53 174-831 $3.60 832 or more $3.65 10" & larger 0-7,426 $3.53 7,427-14,616 $3.60 14,617 or more $3.65 25 25.03 E.7.(b) Potable Temporary and Construction Water Service Rates (1)1" & smaller 0-54 $11.36 55-199 $11.48 200 or more $11.62 1.5" & 2" 0-144 $11.36 145-355 $11.48 356 or more $11.62 3" & larger 0-550 $11.36 551-1,200 $11.48 1,201 or more $11.62 25 25.03 E.8.(b) Recycled Temporary and Construction Water Service Rates (1)3/4" - 1" 0-32 $9.70 33-75 $9.84 76 or more $9.98 (1) All Water used in December and billed in January 2017. Section #Code #Fee Description Meter Size Charges 25 25.03 E.8.(b) Recycled Temporary and Construction Water Service Rates (continued) (1)1.5" & 2" 0-130 $9.70 131-325 $9.84 326 or more $9.98 3" & 4" 0-440 $9.70 441-1,050 $9.84 1,051 or more $9.98 6" & larger 0-4,000 $9.70 4,001-10,000 $9.84 10,001 or more $9.98 25 25.03 E.10.(b) Tank Trucks Water Rates (1)1" & smaller 0-54 $11.36 55-199 $11.48 200 or more $11.62 1.5" & 2" 0-144 $11.36 145-355 $11.48 356 or more $11.62 3" & larger 0-550 $11.36 551-1,200 $11.48 1,201 or more $11.62 25 25.03 E.11.(c) Application Fee for Water Service Outside District Boundaries $500.00 25 25.03 E.11.(d) Water Rate for Service Outside District Boundaries (1)1" & smaller 0-54 $11.36 55-199 $11.48 200 or more $11.62 1.5" & 2" 0-144 $11.36 145-355 $11.48 356 or more $11.62 3" & larger 0-550 $11.36 551-1,200 $11.48 1,201 or more $11.62 25 25.03 E.12.(b) Application Fee for Water Service Outside an Improvement District $275.00 (1) All Water used in December and billed in January 2017. Section #Code #Fee Description Meter Size Charges 25 25.03 E.12.(c) Water Rate for Service Outside Improvement District (1)1" & smaller 0-54 $11.36 55-199 $11.48 200 or more $11.62 1.5" & 2" 0-144 $11.36 145-355 $11.48 356 or more $11.62 3" & larger 0-550 $11.36 551-1,200 $11.48 1,201 or more $11.62 25 25.03 E.13.(c) Fire Service Monthly Charge 3" or less $20.77 more than 4" $27.98 25 25.03 E.14.(b) Additional Water Service for Property Not Subject to District Taxes per unit $0.41 25 25.03 E.15.(b) Interim Service Water Rate in Improvement District 7 (1)1" & smaller 0-54 $11.36 55-199 $11.48 200 or more $11.62 1.5" & 2" 0-144 $11.36 145-355 $11.48 356 or more $11.62 3" & larger 0-550 $11.36 551-1,200 $11.48 1,201 or more $11.62 25 25.03 F.Energy Charges for Pumping Water (1) Per 100 ft of lift over 450 ft per unit $0.044 25 25.04 A. Deposits for Non-Property Owners 3/4" $75.00 1" $150.00 1-1/2" $200.00 (1) All Water used in December and billed in January 2017. Section #Code #Fee Description Meter Size Charges 25 25.04 A. Deposits for Non-Property Owner (continued)2" $360.00 3" $800.00 4" $1,350.00 6" $3,300.00 8" $4,400.00 10" $5,500.00 28 28.01 B.1. Capacity Fees and Zone Charge Districtwide Capacity Fee - All IDs excluding Triad 3/4"$7,892.32 1"$19,730.81 1-1/2" $39,461.62 2" $63,138.59 3" $126,277.18 4 $197,308.10 6" $394,616.20 8" $631,385.91 10" $907,617.25 - TRIAD 3/4" $5,921.21 1" $14,803.03 1 -1/2" $29,606.07 2" $47,369.71 3" $94,739.42 4 $148,030.35 6" $296,060.69 8" $473,697.11 10" $680,939.59 28 28.01 B.2. New Water Supply Fee - All IDs including Triad 3/4" $800.70 1" $2,001.75 1-1/2" $4,003.50 2" $6,405.61 3" $12,811.22 4" $20,017.52 6" $40,035.05 8" $64,056.08 10" $92,080.61 Section #Code #Fee Description Meter Size Charges 28 28.02 Installation and Water Meter Charges Meter Size Meter Cost Installation Total Meter Box/Vault (if Needed) - Potable (Non-Irrigation) 3/4" x 7.5" $226.96 $107.70 $334.66 $91.43 3/4" x 9" $241.65 $107.70 $349.35 $91.43 1" $292.87 $107.70 $400.57 $91.43 1.5" $476.03 $107.70 $583.73 $207.28 2" $682.10 $107.70 $789.80 $207.28 3" $2,125.70 $648.46 $2,774.16 $3,697.56 4" $3,692.00 $648.46 $4,340.46 $3,697.56 6" $6,377.10 $1,024.29 $7,401.39 $3,697.56 8" $7,967.71 $1,570.66 $9,538.37 $5,304.41 10" $11,459.05 $1,570.66 $13,029.71 $5,304.41 - Potable/Recycled Irrigation 3/4" x 7.5" $226.96 $107.70 $334.66 $233.02 3/4" x 9" $241.65 $107.70 $349.35 $233.02 1" $292.87 $107.70 $400.57 $233.02 1.5" $476.03 $107.70 $583.73 $233.02 2" $682.10 $107.70 $789.80 $233.02 3" $1,471.20 $648.46 $2,119.66 $3,697.56 4" $2,864.20 $648.46 $3,512.66 $3,697.56 6" $5,156.49 $1,024.29 $6,180.78 $3,697.56 8" $6,869.37 $1,570.66 $8,440.03 $5,304.41 10" $9,748.16 $1,570.66 $11,318.82 $5,304.41 - Combined Fire and Domestic 4" $8,783.61 $648.46 $9,432.07 $3,697.56 6" $11,690.22 $1,024.29 $12,714.51 $3,697.56 8" $16,996.73 $1,570.66 $18,567.39 $5,304.41 10" $23,194.92 $1,570.66 $24,765.58 $5,304.41 31 31.03 A.1. Requirement of Deposit for Temporary Meters 3/4" $156.85 1" $184.78 1-1/2" $379.62 2" $2,046.00 4" $1,986.00 6" $2,465.00 Section #Code #Fee Description Meter Size Charges 31 31.03 A.1. Requirement of Deposit for Temporary Meters (continued) - Construction Trailer Temporary Meter 2" $2,046.00 - Tank Truck Temporary Meter (Ordinance No. 372)2" $850.00 31 31.03 A.4. Temporary Meter Install & Removal 3/4" - 4" (on hydrant) $150.00 4" - 6" $806.00 8" - 10" Actual Cost 31 31.03 A.5. Temporary Meter Move Fee (includes backflow certification)3/4" - 4" (on hydrant) $150.00 4" - 6" $806.00 8" - 10" Actual Cost 33 33.07 A. Customer Request for Meter Test (Deposit)5/8", 3/4" & 1" $25.00 1-1/2" & 2 " $50.00 3" & Larger $125.00 34 34.01 D.2. Returned Check Charges $25.00 34 34.02 B. Late Payment Charge 5% of Delinquent Balance 34 34.02 G.1.(d) Delinquency Tag $15.00 34 34.02 G.3. Meter "Turn-On" Charge $50.00 53 53.03 A.1. Sewer Capacity Fee per EDU for parcels within a Sewer ID $3,246.39 53 53.03 A.2. Sewer Capacity Fee per EDU for parcels not within a Sewer ID $5,554.39 53 53.03 B.1. Sewer Connection Fee - Russell Square $7,500.00 53 53.03 B.2. Monthly Sewer Service Charge - Russell Square $200.00 53 53.10 & 11 Set-up Fees for Accounts $10.00 53 53.10 Residential Sewer Usage Fee (2) Rate multiplied by winter average units $2.58 (2) Sewer billed beginning January 1, 2017. Section #Code #Fee Description Meter Size Charges 53 53.10 Residential Sewer System Fee (2)5/8", 3/4" & larger $15.89 53 53.10 A. Residential Sewer Without Consumption History (2)5/8", 3/4" & larger $40.01 53 53.10 B. Multi-Residential Usage Fee - Sewer Without Consumption History (2) $24.12 53 53.10 B.2.Multi-Residential Usage Fee - Sewer (2) Rate multiplied by winter average units $2.58 53 53.10 B. 2.Multi-Residential System Fee - Sewer (2).75" $28.37 1" $41.80 1.5" $75.27 2" $115.46 3" $209.24 4" $343.23 6" $678.18 8" $1,080.14 10" $1,549.07 53 53.11 Commercial and Institutional Sewer Strength Factors Low Strength 1 Medium Strength 2 High Strength 4 53 53.11 Monthly Usage Fee for Commercial and Institutional Sewer (2)Rate multiplied by Low Strength $2.58 annual avg.Medium Strength $3.70 units High Strength $5.90 53 53.11 Monthly System Fee for Commercial and Institutional Sewer (2).75" $28.37 1" $41.80 1.5" $75.27 2" $115.46 3" $209.24 (2) Sewer billed beginning January 1, 2017. Section #Code #Fee Description Meter Size Charges 53 53.11 Monthly System Fee for Commercial and Institutional Sewer (2) (continued)4" $343.23 6" $678.18 8" $1,080.14 10" $1,549.07 60 60.03 Issuance of Availability Letters for Water and/or Sewer Service $75.00 72 72.04 A.1. Locking or Removing Damaged or Tampered Meters - To Pull and Reset Meter 3/4" - 2" $200.00 - Broken Curbstop or Tabs 3/4" - 1" Actual Cost - If Customer uses Jumper 3/4" - 1" Actual Cost - Broken Lock/Locking Device 3/4" - 1" $68.00 - Broken Curbstop or Tabs 1.5" - 2" Actual Cost - To Pull and Reset Meter 3" Actual Cost - To Pull and Reset Meter 4" Actual Cost - To Pull and Reset Meter 6" Actual Cost - To Pull and Reset Meter 8" Actual Cost - To Pull and Reset Meter 10" Actual Cost 72 72.05 D. A.Type I Fine - First Violation $100.00 - Second Violations $200.00 - Third or each additional violation of that same ordinance or requirement within a twelve-month period $500.00 Type II Fine $5,000.00 Type III Fine $500.00 Type IV Fine $500.00 Fine up to amount specified per each day the violation is identified or continues. Fine up to amount specified per each day the violation is identified or continues. Will not exceed per each day the violation is identified or continues. Section #Code #Fee Description Meter Size Charges State Water Code #71630 & Annual Board Resolution #4142 Water Availability/Standby Annual Special Assessment Charge $10.00 $10.00 $30.00 $3.00 $3.00 State Water Code #71630 & Annual Board Resolution #4142 Sewer Availability/Standby Annual Special Assessment Charge $10.00 $30.00 Annual Board Resolution General Obligation Bond Annual Tax Assessment $0.005 Policies 5 Copies of Identifiable Public Records $0.10/page Cassette Tape Duplication $2.00/tape Yearly Subscription Service for Agendas and Ratified Minutes Yearly Subscription Service for Board Packet and Ratified Minutes Per acre for outside I.D. & greater than one mile from District facilities. Less than one acre I.D. 4, 14, & 18 Per acre I.D. 4, 14, & 18 Per $1000 of assessed value for I.D. 27 $20.00/year or $0.50/meeting $100.00/year for first copy and $200.00/year for each copy thereafter Less than one-acre all I.D.s & Outside an I.D. Per acre in I.D. 1, 5, & Outside an I.D. Per acre in I.D. 2,3,7,9,10,19,20,22,25, & 27 Less than one-acre Outside I.D. and greater than one mile from District facilities. Section #Code #Fee Description Meter Size 9 9.04 A.1. District Annexation Processing Fee $776.20 9.04 B. Annexation Fees for Water Annexations into Otay Water District Boundaries Districtwide Annexation Fee 3/4" $2,021.40 1" $5,053.50 1-1/2" $10,106.99 2" $16,171.19 3" $32,342.38 4 $50,534.96 6" $101,069.93 8" $161,711.88 10" $232,460.83 9.04 C.4. Annexation Fees for Annexations to Sewer Improvement Districts per EDU $1,105.79 10 10.01 Waiver Request $50.00 23 23.04 Backflow Certification - Second Notification $10.00 - Third Notification $25.00 - Third Notification (hand delivered) $45.00 - Reconnection $50.00 - Reconnection (if test performed with technician present) $150.00 - Initial Filing Fee (New applicants for addition to the list of approved backflow prevention device testers)$25.00 - Renewal Filing Fee (to remain on list of approved backflow prevention device testers) Annually $10.00 25 25.03 A. Set-up Fees for Accounts $10.00 25 25.03 C. Monthly Fixed System Charges, MWD & CWA Charges (1)Meter Size System Charge MWD & CWA Fixed Charge Total Fixed Charge 3/4" $15.91 $15.00 $30.91 1" $22.47 $27.84 $50.31 Otay Water District Appendix A Charges (1) All Water used in December and billed in January 2017. Attachment G Section #Code #Fee Description Meter Size Charges 25 25.03 C. Monthly Fixed System Charges, MWD & CWA Charges (continued)(1)1-1/2" $38.88 $62.96 $101.84 2" $58.55 $107.08 $165.63 3" $111.04 $227.75 $338.79 4" $170.10 $364.72 $534.82 6" $334.18 $746.59 $1,080.77 8" $531.05 $1,205.65 $1,736.70 10" $760.72 $1,735.39 $2,496.11 25 25.03 E.1.(b) Domestic Residential Water Rates (1)Unit Charge (The Conservation Tier discount applies Conservation Tier 0 - 5 $2.53 toward the first five units of water when 6-10 $3.95 overall consumption is ten units or less.) 11-22 $5.13 23 or more $7.90 25 25.03 E.2.(b) Multiple Residential Water Rates - Per Dwelling Unit (1) 0-4 $3.90 5-9 $5.05 10 or more $7.80 25 25.03 E.3.(b) Business and Publicly-Owned Water Rates (1)under 10" 0-185 $4.17 186-1,400 $4.23 1,401 or more $4.30 10" & larger 0-7,426 $4.17 7,427-14,616 $4.23 14,617 or more $4.30 25 25.03 E.4.(c) Irrigation and Commercial Agricultural Using Potable Water Rates (1)1" & smaller 0-54 $5.68 55-199 $5.74 200 or more $5.81 1.5" & 2" 0-144 $5.68 145-355 $5.74 356 or more $5.81 3" & larger 0-550 $5.68 551-1,200 $5.74 1,201 or more $5.81 (1) All Water used in December and billed in January 2017. Section #Code #Fee Description Meter Size Charges 25 25.03 E.5.(c)Recycled Water (1)3/4" - 1" 0-32 $4.85 (Landscape Irrigation and Certain 33-75 $4.92 Non-Irrigation Purposes Rates) 76 or more $4.99 1.5" & 2" 0-130 $4.85 131-325 $4.92 326 or more $4.99 3" & 4" 0-440 $4.85 441-1,050 $4.92 1,051 or more $4.99 6" & larger 0-4,000 $4.85 4,001-10,000 $4.92 10,001 or more $4.99 25 25.03 E.6.(c)Recycled Commercial (1)under 10" 0-173 $3.53 174-831 $3.60 832 or more $3.65 10" & larger 0-7,426 $3.53 7,427-14,616 $3.60 14,617 or more $3.65 25 25.03 E.7.(b) Potable Temporary and Construction Water Service Rates (1)1" & smaller 0-54 $11.36 55-199 $11.48 200 or more $11.62 1.5" & 2" 0-144 $11.36 145-355 $11.48 356 or more $11.62 3" & larger 0-550 $11.36 551-1,200 $11.48 1,201 or more $11.62 25 25.03 E.8.(b) Recycled Temporary and Construction Water Service Rates (1)3/4" - 1" 0-32 $9.70 33-75 $9.84 76 or more $9.98 (1) All Water used in December and billed in January 2017. Section #Code #Fee Description Meter Size Charges 25 25.03 E.8.(b) Recycled Temporary and Construction Water Service Rates (continued) (1)1.5" & 2" 0-130 $9.70 131-325 $9.84 326 or more $9.98 3" & 4" 0-440 $9.70 441-1,050 $9.84 1,051 or more $9.98 6" & larger 0-4,000 $9.70 4,001-10,000 $9.84 10,001 or more $9.98 25 25.03 E.10.(b) Tank Trucks Water Rates (1)1" & smaller 0-54 $11.36 55-199 $11.48 200 or more $11.62 1.5" & 2" 0-144 $11.36 145-355 $11.48 356 or more $11.62 3" & larger 0-550 $11.36 551-1,200 $11.48 1,201 or more $11.62 25 25.03 E.11.(c) Application Fee for Water Service Outside District Boundaries $500.00 25 25.03 E.11.(d) Water Rate for Service Outside District Boundaries (1)1" & smaller 0-54 $11.36 55-199 $11.48 200 or more $11.62 1.5" & 2" 0-144 $11.36 145-355 $11.48 356 or more $11.62 3" & larger 0-550 $11.36 551-1,200 $11.48 1,201 or more $11.62 25 25.03 E.12.(b) Application Fee for Water Service Outside an Improvement District $275.00 (1) All Water used in December and billed in January 2017. Section #Code #Fee Description Meter Size Charges 25 25.03 E.12.(c) Water Rate for Service Outside Improvement District (1)1" & smaller 0-54 $11.36 55-199 $11.48 200 or more $11.62 1.5" & 2" 0-144 $11.36 145-355 $11.48 356 or more $11.62 3" & larger 0-550 $11.36 551-1,200 $11.48 1,201 or more $11.62 25 25.03 E.13.(c) Fire Service Monthly Charge 3" or less $20.77 more than 4" $27.98 25 25.03 E.14.(b) Additional Water Service for Property Not Subject to District Taxes per unit $0.41 25 25.03 E.15.(b) Interim Service Water Rate in Improvement District 7 (1)1" & smaller 0-54 $11.36 55-199 $11.48 200 or more $11.62 1.5" & 2" 0-144 $11.36 145-355 $11.48 356 or more $11.62 3" & larger 0-550 $11.36 551-1,200 $11.48 1,201 or more $11.62 25 25.03 F.Energy Charges for Pumping Water (1) Per 100 ft of lift over 450 ft per unit $0.044 25 25.04 A. Deposits for Non-Property Owners 3/4" $75.00 1" $150.00 1-1/2" $200.00 (1) All Water used in December and billed in January 2017. Section #Code #Fee Description Meter Size Charges 25 25.04 A. Deposits for Non-Property Owner (continued)2" $360.00 3" $800.00 4" $1,350.00 6" $3,300.00 8" $4,400.00 10" $5,500.00 28 28.01 B.1. Capacity Fees and Zone Charge Districtwide Capacity Fee - All IDs excluding Triad 3/4"$7,680.80 1"$19,202.01 1-1/2" $38,404.02 2" $61,446.43 3" $122,892.86 4 $192,020.10 6" $384,040.20 8" $614,464.31 10" $883,292.45 - TRIAD 3/4" $5,762.14 1" $14,405.35 1 -1/2" $28,810.70 2" $46,097.11 3" $92,194.22 4 $144,053.48 6" $288,106.96 8" $460,971.16 10" $662,646.00 28 28.01 B.2. New Water Supply Fee - All IDs including Triad 3/4" $800.70 1" $2,001.75 1-1/2" $4,003.50 2" $6,405.61 3" $12,811.22 4" $20,017.52 6" $40,035.05 8" $64,056.08 10" $92,080.61 Section #Code #Fee Description Meter Size Charges 28 28.02 Installation and Water Meter Charges Meter Size Meter Cost Installation Total Meter Box/Vault (if Needed) - Potable (Non-Irrigation) 3/4" x 7.5" $226.96 $107.70 $334.66 $91.43 3/4" x 9" $241.65 $107.70 $349.35 $91.43 1" $292.87 $107.70 $400.57 $91.43 1.5" $476.03 $107.70 $583.73 $207.28 2" $682.10 $107.70 $789.80 $207.28 3" $2,125.70 $648.46 $2,774.16 $3,697.56 4" $3,692.00 $648.46 $4,340.46 $3,697.56 6" $6,377.10 $1,024.29 $7,401.39 $3,697.56 8" $7,967.71 $1,570.66 $9,538.37 $5,304.41 10" $11,459.05 $1,570.66 $13,029.71 $5,304.41 - Potable/Recycled Irrigation 3/4" x 7.5" $226.96 $107.70 $334.66 $233.02 3/4" x 9" $241.65 $107.70 $349.35 $233.02 1" $292.87 $107.70 $400.57 $233.02 1.5" $476.03 $107.70 $583.73 $233.02 2" $682.10 $107.70 $789.80 $233.02 3" $1,471.20 $648.46 $2,119.66 $3,697.56 4" $2,864.20 $648.46 $3,512.66 $3,697.56 6" $5,156.49 $1,024.29 $6,180.78 $3,697.56 8" $6,869.37 $1,570.66 $8,440.03 $5,304.41 10" $9,748.16 $1,570.66 $11,318.82 $5,304.41 - Combined Fire and Domestic 4" $8,783.61 $648.46 $9,432.07 $3,697.56 6" $11,690.22 $1,024.29 $12,714.51 $3,697.56 8" $16,996.73 $1,570.66 $18,567.39 $5,304.41 10" $23,194.92 $1,570.66 $24,765.58 $5,304.41 31 31.03 A.1. Requirement of Deposit for Temporary Meters 3/4" $156.85 1" $184.78 1-1/2" $379.62 2" $2,046.00 4" $1,986.00 6" $2,465.00 Section #Code #Fee Description Meter Size Charges 31 31.03 A.1. Requirement of Deposit for Temporary Meters (continued) - Construction Trailer Temporary Meter 2" $2,046.00 - Tank Truck Temporary Meter (Ordinance No. 372)2" $850.00 31 31.03 A.4. Temporary Meter Install & Removal 3/4" - 4" (on hydrant) $150.00 4" - 6" $806.00 8" - 10" Actual Cost 31 31.03 A.5. Temporary Meter Move Fee (includes backflow certification)3/4" - 4" (on hydrant) $150.00 4" - 6" $806.00 8" - 10" Actual Cost 33 33.07 A. Customer Request for Meter Test (Deposit)5/8", 3/4" & 1" $25.00 1-1/2" & 2 " $50.00 3" & Larger $125.00 34 34.01 D.2. Returned Check Charges $25.00 34 34.02 B. Late Payment Charge 5% of Delinquent Balance 34 34.02 G.1.(d) Delinquency Tag $15.00 34 34.02 G.3. Meter "Turn-On" Charge $50.00 53 53.03 A.1. Sewer Capacity Fee per EDU for parcels within a Sewer ID $3,246.39 53 53.03 A.2. Sewer Capacity Fee per EDU for parcels not within a Sewer ID $5,554.39 53 53.03 B.1. Sewer Connection Fee - Russell Square $7,500.00 53 53.03 B.2. Monthly Sewer Service Charge - Russell Square $200.00 53 53.10 & 11 Set-up Fees for Accounts $10.00 53 53.10 Residential Sewer Usage Fee (2) Rate multiplied by winter average units $2.58 (2) Sewer billed beginning January 1, 2017. Section #Code #Fee Description Meter Size Charges 53 53.10 Residential Sewer System Fee (2)5/8", 3/4" & larger $15.89 53 53.10 A. Residential Sewer Without Consumption History (2)5/8", 3/4" & larger $40.01 53 53.10 B. Multi-Residential Usage Fee - Sewer Without Consumption History (2) $24.12 53 53.10 B.2.Multi-Residential Usage Fee - Sewer (2) Rate multiplied by winter average units $2.58 53 53.10 B. 2.Multi-Residential System Fee - Sewer (2).75" $28.37 1" $41.80 1.5" $75.27 2" $115.46 3" $209.24 4" $343.23 6" $678.18 8" $1,080.14 10" $1,549.07 53 53.11 Commercial and Institutional Sewer Strength Factors Low Strength 1 Medium Strength 2 High Strength 4 53 53.11 Monthly Usage Fee for Commercial and Institutional Sewer (2)Rate multiplied by Low Strength $2.58 annual avg.Medium Strength $3.70 units High Strength $5.90 53 53.11 Monthly System Fee for Commercial and Institutional Sewer (2).75" $28.37 1" $41.80 1.5" $75.27 2" $115.46 3" $209.24 (2) Sewer billed beginning January 1, 2017. Section #Code #Fee Description Meter Size Charges 53 53.11 Monthly System Fee for Commercial and Institutional Sewer (2) (continued)4" $343.23 6" $678.18 8" $1,080.14 10" $1,549.07 60 60.03 Issuance of Availability Letters for Water and/or Sewer Service $75.00 72 72.04 A.1. Locking or Removing Damaged or Tampered Meters - To Pull and Reset Meter 3/4" - 2" $200.00 - Broken Curbstop or Tabs 3/4" - 1" Actual Cost - If Customer uses Jumper 3/4" - 1" Actual Cost - Broken Lock/Locking Device 3/4" - 1" $68.00 - Broken Curbstop or Tabs 1.5" - 2" Actual Cost - To Pull and Reset Meter 3" Actual Cost - To Pull and Reset Meter 4" Actual Cost - To Pull and Reset Meter 6" Actual Cost - To Pull and Reset Meter 8" Actual Cost - To Pull and Reset Meter 10" Actual Cost 72 72.05 D. A.Type I Fine - First Violation $100.00 - Second Violations $200.00 - Third or each additional violation of that same ordinance or requirement within a twelve-month period $500.00 Type II Fine $5,000.00 Type III Fine $500.00 Type IV Fine $500.00 Fine up to amount specified per each day the violation is identified or continues. Fine up to amount specified per each day the violation is identified or continues. Will not exceed per each day the violation is identified or continues. Section #Code #Fee Description Meter Size Charges State Water Code #71630 & Annual Board Resolution #4142 Water Availability/Standby Annual Special Assessment Charge $10.00 $10.00 $30.00 $3.00 $3.00 State Water Code #71630 & Annual Board Resolution #4142 Sewer Availability/Standby Annual Special Assessment Charge $10.00 $30.00 Annual Board Resolution General Obligation Bond Annual Tax Assessment $0.005 Policies 5 Copies of Identifiable Public Records $0.10/page Cassette Tape Duplication $2.00/tape Yearly Subscription Service for Agendas and Ratified Minutes Yearly Subscription Service for Board Packet and Ratified Minutes Per acre for outside I.D. & greater than one mile from District facilities. Less than one acre I.D. 4, 14, & 18 Per acre I.D. 4, 14, & 18 Per $1000 of assessed value for I.D. 27 $20.00/year or $0.50/meeting $100.00/year for first copy and $200.00/year for each copy thereafter Less than one-acre all I.D.s & Outside an I.D. Per acre in I.D. 1, 5, & Outside an I.D. Per acre in I.D. 2,3,7,9,10,19,20,22,25, & 27 Less than one-acre Outside I.D. and greater than one mile from District facilities. FINAL REPORT Otay Water District Capacity, New Water Supply, and Annexation Fees for Water and Sewer April 2017 hdrinc.com 500 108th Ave NE, Suite 1200, Bellevue, WA 98004 T 425-450-6200 April 22, 2017 Mr. Kevin Koeppen Controller and Budgetary Services Finance Manager Otay Water District 2554 Sweetwater Springs Blvd. Spring Valley, California 91978-2004 Subject: Final Report Updated Capacity Fees, New Water Supply, and Annexation Fees for Water and Sewer Dear Mr. Koeppen: HDR was retained by the Otay Water District (District) to develop cost-based capacity, new supply and annexation fees for the water and sewer utilities. Enclosed please find HDR’s final report for this analysis. The conclusions and recommendations contained within this report should enable the District to implement cost-based water and sewer, capacity and annexation fees that meet the District’s financial goals and objectives. The District has historically established cost-based fees and this report is a continuation of those past practices. This report has been prepared using “generally accepted” financial, rate setting, and engineering principles. The District’s financial, budgeting and engineering data were the primary sources for much of the data contained in this report. This report was developed with significant participation and input by District management and staff. HDR appreciates the assistance provided by the District’s management team and staff in the development of this report. We also appreciate the opportunity to assist the District in this matter. Very truly yours, HDR Engineering, Inc. Tom Gould Vice President HDR’s Business Leader for Finance and Rates Table of Contents i Otay Water District – Capacity and Annexation Fee Updates Executive Summary Introduction ............................................................................................................... 1 Summary and Conclusions ......................................................................................... 1 Summary .................................................................................................................. 3 1 Introduction 1.1 Introduction ............................................................................................................... 4 1.2 Organization of Report............................................................................................... 4 1.3 Disclaimer ................................................................................................................. 4 2 Overview of Capacity, New Supply and Annexation Fees 2.1 Introduction ............................................................................................................... 5 2.2 Defining Capacity and Annexation Fees ..................................................................... 5 2.3 Economic Theory and Capacity, New Water Supply and Annexation Fees .................. 6 2.4 Capacity, New Water Supply and Annexation Fee Criteria ......................................... 6 2.5 Overview of the Capacity and New Water Supply Fee Methodology .......................... 8 2.6 Summary ................................................................................................................ 11 3 Legal Considerations in Establishing Capacity and New Supply Fees for the District 3.1 Introduction ............................................................................................................. 12 3.2 Requirements under California Law ......................................................................... 12 3.3 Proposition 218 and 26 and Capacity, New Water Supply, and Annexation Fees...... 14 3.4 Summary ................................................................................................................ 15 4 Determination of the District’s Capacity and New Water Supply Fees 4.1 Introduction ............................................................................................................. 16 4.2 Overview of the District’s Water and Sewer System................................................. 16 4.3 Current Water and Sewer Capacity Fees .................................................................. 17 4.4 Calculation of the District’s Capacity and New Water Supply Fees .......................... 18 4.4.1 System Planning Criteria ............................................................................... 18 4.4.2 Equivalent Meter Units ................................................................................ 19 4.4.3 Calculation of the Capacity Fee for the Major System Components .............. 20 4.5 Allowable Capacity and New Water Supply Fees ...................................................... 22 4.6 Key Information ....................................................................................................... 26 4.7 Implementation of the Capacity, New Water Supply and Annexation Fees .............. 26 4.8 Consultant Recommendations ................................................................................. 27 4.9 Summary ................................................................................................................. 27 Table of Contents Table of Contents ii Otay Water District – Capacity and Annexation Fee Updates 5 Determination of the District’s Water and Sewer Annexation Fees 5.1 Introduction ............................................................................................................. 28 5.3 Current Water and Sewer Annexation Fees ............................................................. 28 5.3 Calculation of the District’s Water and Sewer Annexation Fees ............................... 29 5.4 Key Information ....................................................................................................... 30 5.5 Implementation of the Annexation Fees .................................................................. 31 5.6 Consultant Recommendations ................................................................................. 31 5.7 Summary ................................................................................................................. 31 Technical Appendices Water Exhibits Exhibit W-1 Development of Capacity Fee – Buy In Exhibit W-2 Development of Pipe Replacement Cost Exhibit W-3A Development of Construction Work in Progress Exhibit W-3B Development of Water Debt Exhibit W-3C Development of Past Interest Payments Exhibit W-4 Summary of Reserve Funds Exhibit W-5 Development of Equivalent Dwelling Units Exhibit W-6 Development of Capacity Fee - Future Exhibit W-7 Current and Proposed Capacity Fee Sewer Exhibits Exhibit S-1 Development of Capacity Fee – Buy In Exhibit S-2 Development of Pipe Replacement Cost Exhibit S-3A Development of Construction Work in Progress Exhibit S-3B Development of Sewer Debt Exhibit S-3C Development of Past Interest Payments Exhibit S-4 Summary of Reserve Funds Exhibit S-5 Development of Equivalent Dwelling Units Exhibit S-6 Development of Capacity Fee - Future Exhibit S-7 Current and Proposed Capacity Fee Exhibit S-7A Discounted Sewer Capacity Fee for Inside ID Area Customers Annexation Exhibits Exhibit A-1 Summary of Annexation Fee Calculation Exhibit A-2 Summary of Water and Sewer EDUs Exhibit A-3 Summary of Tax Collections and Availability Charges Executive Summary 1 Otay Water District – Capacity and Annexation Fees Updates Introduction HDR was retained by Otay Water District (District) to review and update the capacity and annexation fees for the water and sewer utilities. The purpose of capacity fees is to recover the costs of public facilities in existence at the time the fee is imposed and for new public facilities to be acquired or constructed in the future that are of proportional benefit to the person or property being charged. These fees are charged to new customers connecting to the system, or the incremental increase for existing customers increasing their demands compared to value of their existing (pre-expansion) capacity. The District’s current capacity fees were last formally updated in 2014. By establishing cost- based capacity fees, the District is being proactive and taking an important step in providing adequate infrastructure to meet growth-related needs, and more importantly, providing this required infrastructure to new customers in a cost-based, fair and equitable manner. The District currently has capacity, new water supply, and annexation fees for water and capacity, and annexation fees for sewer. As noted above, the fees were analyzed and formally updated in 2014. Since 2014, the annexation fees, new water supply and capacity fees have been updated quarterly based on the Engineering News Record Construction Cost Index (ENR- CCI) for Los Angeles. The capacity fees were recently updated as of March 2017 ENR-CCI and the fees are effective April 1, 2017. Summary and Conclusions The capacity fees are based on the existing infrastructure and future capital improvements needed to serve growth divided by the number of equivalent dwelling units (EDUs) that will be served by the new capacity. For the capacity fees, the District has previously used the “combined methodology” for calculating the fees. This methodology is in conformance with generally accepted rate making practices and is based on the District’s water and sewer system planning and design criteria. The calculations also take into account the financing mechanisms of capital improvements. Based on the sum of the existing and future component costs, the net allowable utility capacity fee is determined. “Net” refers to the “gross” new development capacity fee, net of any debt service credits. “Allowable” refers to the concept that the calculated capacity fees are the District’s maximum cost-based charge. The District, as a matter of policy, may charge any amount up to the cost-based capacity fee, but not over that amount. Charging an amount greater than the allowable capacity fee would not meet the nexus test of the capacity fee being reasonably related to the impact placed upon the system by the new connecting customer. Capacity fees must be assessed or administered according to the capacity requirement or impact each new development places upon the utility system. This way, the capacity fee is Executive Summary Executive Summary 2 Otay Water District – Capacity and Annexation Fees Updates related to the impact the customer places on the system, and to the benefit the customer derives from the service provided. The existing and maximum allowable capacity and new water supply fee for the water utility system, as calculated within this report, for a new single-family residential 3/4” meter connection is presented in Table ES-1. The maximum allowable fee has been adjusted to reflect the recent ENR adjustment made in March 2017. Further detail of the derivation of this fee can be found in Section 4 of this report. Table ES – 1 Existing and Maximum Allowable Water Capacity and New Water Supply Fee (3/4” Meter) Fee Description Existing Fee Maximum Allowable Water Capacity Fee $8,590.34 $7,892.32 New Water Supply Fee 1,064.11 800.70 Total Fee $9,654.45 $8,693.02 It should be noted that larger sized meters (i.e., requiring greater capacity) pay a greater dollar amount, based on industry established (American Water Works Association – AWWA) meter equivalency factors. The capacity fees for all meter sizes for the District’s capacity fee schedule are presented in Section 4 of this report. The existing and proposed sewer capacity fee, as calculated within this study, is based on an Equivalent Dwelling Unit (EDU) basis. For the sewer utility, an EDU is calculated to reflect the capacity of a single-family home to provide sewer service, rather than meter size which may not reflect the sewer demands placed on the system. In this way, the number of EDU’s better reflects the capacity impacts the customer has placed upon the sewer system. Provided below in Table ES-2 is a summary of the current and proposed sewer capacity fee per EDU. Table ES – 2 Existing and Maximum Allowable Sewer Capacity Fee ($/EDU) Fee Description Existing Fee Maximum Allowable Sewer Capacity Fee $6,886.04 $5,554.39 The sewer capacity fee, charged based on various numbers of EDUs, is presented in Section 4 of this report. The annexation fee is charged to new customers annexing into the District boundaries. The annexation fee reimburses existing customers for past contributions so that all customers have Executive Summary 3 Otay Water District – Capacity and Annexation Fees Updates contributed equally to the District’s water and sewer system. The calculation of the District’s annexation fees is based on the original value of 1% General Tax and availability charges received to date, escalated to present day values based on the Consumer Price Index, from San Diego, from 1959 to present (through 2016). The existing and proposed annexation fees are shown below in Table ES-3. Table ES – 3 Existing and Maximum Allowable Annexation Fee Fee Description Existing Fee Maximum Allowable Water Annexation Fee (3/4” Meter) $1,911.95 $2,021.40 Sewer Annexation Fee $1,095.31 $1,105.79 Summary The capacity and annexation fees developed and presented in this report are based on the planning and engineering design criteria of the District’s water and sewer systems, the value of the existing assets, past financing of the system and “generally accepted” ratemaking principles. Adoption of the proposed water capacity, new water supply, and annexation fees and the sewer capacity, and annexation fees will provide multiple benefits to the District and will continue the District’s practice of establishing equitable and cost-based fees for new customers connecting to or requiring additional/expanded capacity in the District’s utility systems. Introduction 4 Otay Water District – Capacity and Annexation Fees Update “By establishing cost-based capacity fees the District maintains an approach of having “growth pay for growth” and existing utility customers should, for the most part, be sheltered from the financial impacts of growth.” 1.1 Introduction HDR Engineering, Inc. (HDR) was retained by the Otay Water District (District) to review and update the District’s capacity, new water supply fee, and annexation fee for the water utility and the capacity, and annexation fee for the sewer utility. The objective of this study is to calculate cost-based capacity fees for new customers connecting to water or sewer system, or for those existing customers requiring additional capacity in the District’s water and sewer systems. These fees provide the means of balancing the cost requirements for utility infrastructure between existing customers and new customers. The portion of existing infrastructure and future capital improvements that will provide service (i.e., capacity) to new customers is included in the calculation of the capacity fees. In contrast to this, the District has future capital improvement projects that are related to renewal and replacement of existing infrastructure in service. These infrastructure costs are included within the rates of the water and sewer service fees charged to the District’s customers, and are not included within the calculation of the proposed capacity fees. By establishing cost-based capacity fees the District maintains an approach of having “growth pay for growth” and existing utility customers should, for the most part, be sheltered from the financial impacts of growth. 1.2 Organization of Report This report documents the methodology, approach and technical analysis undertaken by HDR and the District to develop the District’s capacity, new water supply, and annexation fees for water and sewer. The report is divided into five sections. Section 1 provides a brief introduction and overview of the study. Given this brief introduction, Section 2 provides an overview of the development of capacity fees and the criteria and general methodology that should be used to calculate and establish cost-based fees. Next, Section 3 provides a general overview of the requirements under California law for determining capacity fees. Section 4 reviews the District specific calculations of the cost-based water and sewer capacity fees and the new water supply fee. Finally, Section 5 provides a summary of the water and sewer annexation fees. 1.3 Disclaimer HDR, in its calculation of the capacity, new water supply, and annexation fees for water and sewer presented in this report, has used “generally accepted” engineering and ratemaking principles. This should not be construed as a legal opinion with respect to California law. HDR recommends that the District have its legal counsel review the new water supply, capacity and annexation fees for water and sewer as set forth in this report to ensure compliance with California law. Introduction Overview of the Capacity Fees 5 Otay Water District – Capacity and Annexation Fee Updates 2.1 Introduction An important starting point in establishing capacity, new water supply, and annexation fees is to have a basic understanding of the purpose of these fees, along with the criteria and general methodology that is used to establish cost-based fees. Presented in this section of the report is an overview of these fees and the general criteria and methodologies that are used to develop cost-based capacity, new water supply, and annexation fees. 2.2 Defining Capacity, New Water Supply, and Annexation Fees The first step in establishing cost-based capacity, new water supply and annexation fees is to gain a better understanding of the definition of a system development charge (SDC) (i.e., a capacity fee). For the purposes of this report, an SDC (capacity fee) is defined as follows: “System development charges (capacity fees) are one-time charges paid by new development to finance construction of public facilities needed to serve them.”1 Simply stated, capacity fees are a contribution of capital to either reimburse existing customers for the available capacity in the existing system, or help finance planned future growth-related capacity improvements. At some utilities, capacity fees may be referred to as system development charges, impact fees, connection charges, plant/infrastructure investment fees, etc. Regardless of the label used to identify them, their objective is the same. That is, these charges are intended to provide funds to the utility to finance all or a part of the existing or new capital improvements needed to serve and accommodate new customer growth. Absent those fees, many utilities would likely be unwilling to build growth-related facilities (i.e., burden existing rate payers with the entire cost of growth-related capacity expansion). In the specific case of the District, annexation fees are a separate fee applied to new outside- District connections to account for the contributions existing District customers have made to the system through payment of general taxes and availability fees over the years. New outside District customers pay a one-time fee based on past general taxes, availability fees and past debt payments (for sewer) that bring the new outside-District customer connecting to the District’s system to an equal financial footing with existing customers of sharing the cost of developing the utility systems to provide services. 1 Arthur C. Nelson, System Development Charges for Water, Wastewater, and Stormwater Facilities, Lewis Publishers, New York, 1995, p. 1, Overview of Capacity, New Water Supply and Annexation Fees Overview of the Capacity Fees 6 Otay Water District – Capacity and Annexation Fee Updates “System planning criteria provides the “rational nexus” between the amount of infrastructure necessary to provide service and the charge to the customer.” 2.3 Economic Theory and Capacity, New Water Supply and Annexation Fees Capacity, new water supply, and annexation fees are generally imposed as a condition of service. The objective of a capacity fee is not merely to generate money for a utility, but to ensure that all customers seeking to connect to or requiring additional capacity in the utility’s system bear an equitable share of the cost of capacity that is invested in both the existing system and any future growth-related expansions. Through the implementation of fair and equitable capacity fees, existing customers should not be unduly burdened with the cost of new development. By establishing cost-based fees, the District will be taking an important step in providing adequate infrastructure to meet growth-related needs, and more importantly, providing this required infrastructure to new customers in a cost-based, fair and equitable manner. 2.4 Capacity, New Water Supply and Annexation Fee Criteria In the determination and establishment of the capacity fees, a number of different criteria are often utilized. The criteria often used by utilities to determine these fees are as follows: x Customer understanding x System planning criteria x Financing criteria, and x State/local laws Annexation fees differ from capacity and new water supply fees in that annexation fees are based solely on fees and taxes previously paid by other customers. In that sense, system planning criteria does not apply to annexation fees. Capacity and new water supply fees are based on capacity needs of new customers, capacity available in the system, and the cost to provide a unit of capacity. With these differences in mind, a majority of the discussion below relates primarily to capacity and new water supply fees. The criteria “customer understanding” implies that the fee should be easy to understand. This criterion has implications on the ways in which the fees are implemented and assessed to the customer. For water systems, the fee is generally based on meter size or specific customer usage (demands). The other implication of this criterion is that the methodology is clear and concise in its calculation of the amount of infrastructure necessary to provide service. The use of system planning criteria is one of the more important aspects in the determination of the new water supply and capacity fees. System planning criteria provides the “rational nexus” between the amount of infrastructure necessary to provide service and the assessment of the fees (charge) to the customer. The rational nexus test requires that there be a connection (nexus) established between the burden of new development on the existing or new or expanded facilities required to accommodate new or expanded development, and Overview of the Capacity Fees 7 Otay Water District – Capacity and Annexation Fee Updates the appropriate apportionment of the cost to the new or expanded development in relation to benefits reasonably received. To comply with the rational nexus test the calculated fees require the following: 1. “A connection be established between new development and the new or expanded facilities required to accommodate such development. This establishes the rational basis of public policy. 2. Identification of the cost of these new or expanded facilities needed to accommodate new development. This establishes the burden to the public of providing new facilities to new development and the rational basis on which to hold new development accountable for such costs. This may be determined using the so-called Banberry factors. [Banberry Development Company v. South Jordan City (631 P.2d 899, Utah 1981)]. 3. Appropriate apportionment of that cost to new development in relation to benefits it reasonably receives. This establishes the nexus between the fees being paid to finance new facilities that accommodate new development and benefit new development receives from such new facilities.”2 The first bullet of the rational nexus test requires the establishment of a rational basis of public policy. This implies the planning and capital improvement studies that are used to establish the need for new facilities to accommodate growth. Adopted master plans or facility plans should firmly meet this first test since these plans assess existing facilities and capacity, project future capacity requirements, and determine the future capital infrastructure and new facilities needed to accommodate growth. The second portion of the rational nexus test discusses the Banberry Factors. In summary, “consideration must be given to seven factors to determine the proportionate share of costs to be borne by new development: 1. The cost of existing facilities 2. The means by which existing facilities have been financed 3. The extent to which new development has already contributed to the cost of providing existing excess capacity 4. The extent to which existing development will, in the future, contribute to the cost of providing existing facilities used community wide or non-occupants of new development 5. The extent to which new development should receive credit for providing at its cost facilities the community has provided in the past without charge to other development in the service area. 6. Extraordinary costs incurred in serving new development 7. The time-price differential inherent in fair comparisons of amount of money paid at different times.”3 2Ibid, p. 16 and 17. 3Ibid, P. 18 and 19. Overview of the Capacity Fees 8 Otay Water District – Capacity and Annexation Fee Updates “One of the driving forces behind establishing cost- based capacity fees is that “growth pays for growth.” The final portion of the rational nexus test is the reasonable apportionment of the cost to new development in relation to benefits it reasonably receives. This is accomplished in the methodology to establish the capacity and new water supply fees, which is discussed in more detail within this section. One of the driving forces behind establishing cost-based capacity fees is that “growth pays for growth.” Therefore, these fees are typically established as a means of having new customers and those requiring additional capacity in the utility system pay an equitable share of the cost of their required infrastructure. The financing criteria for establishing the fees relates to the method used to finance infrastructure on the system and assures that customers are not paying twice for infrastructure – once through the development fees and again through water or sewer service fees. The double payment can come in through the imposition of growth- related infrastructure debt service within a customer’s rates. The financing criteria also reviews the basis under which main line extensions were provided and assures that the customer is not charged for infrastructure that was provided (contributed) by developers. Many states and local communities have enacted laws which govern the calculation and imposition of these types of development fees. These laws must be followed in the development of these types of fees. Most statutes require a “reasonable relationship” between the fee charged and the cost associated with providing service capacity to the customer. (California legal requirements are described in Section 3 of this report.) The fees do not need to be mathematically exact, but must bear a reasonable relationship to the cost burden imposed and benefits received. As discussed above, the utilization of the planning and financing criteria and the actual costs of construction and the planned costs of construction provide the nexus for the reasonable relationship requirement. 2.5 Overview of the Capacity and New Water Supply Fee Methodology There are “generally-accepted” methodologies that are used to establish capacity and new water supply fees. Nelson describes eight different methodologies that may be used to establish capacity and new water supply fees. “They include: 1. Market capacity method 2. Prototypical system method 3. Growth-related cost allocation method 4. Recoupment value method, also known as the buy-in method 5. Replacement cost method 6. Marginal cost method 7. Average cost method 8. System-wide and growth-related cost-attribution method”4 4Ibid., P. 71. Overview of the Capacity Fees 9 Otay Water District – Capacity and Annexation Fee Updates As Nelson notes, each of these methods may have certain advantages and disadvantages and should be applied in a manner that reflects the specific circumstances and conditions of the utility. As an example, a utility which has significant capacity in its existing system and can accommodate future growth would likely use the recoupment (buy-in) method. In contrast to this, a utility with no existing capacity which requires expansion of capacity to accommodate growth could potentially use the growth-related cost allocation method or the marginal cost method. For utilities that have some existing capacity available to serve a portion of new development, but must build additional capacity to serve all future development, the system- wide and growth-related attribution method may be appropriate. In the case of the District, this is essentially the circumstance for water and sewer, in which there is available capacity, but also the need for future expansion to accommodate new customers. Regardless of the overall methodology selected, a common denominator of the technical analyses is the various steps undertaken. These steps are as follows: x Determination of system planning criteria x Determination of equivalent dwelling unit equivalents (EDUs) x Calculation of existing system costs x Determination of any credits The first step in establishing capacity fees is the determination of the system planning criteria. This implies calculating the amount of water or sewer capacity required by a single-family residential customer. For water systems, water demand per equivalent meter is most often used, since this represents the basis for system design, and subsequent customer demands that are placed on the system. The number of existing customers is expressed in equivalent meter units. The American Water Works Association (AWWA) has a standardized method for determining meter equivalency for larger meter sizes5. These equivalency factors are based on the maximum safe operating capacity of the meters. The gallons per minute (GPM) rate at 80% of maximum flow was updated by the District on 9/21/12, Ordinance No. 534, Section 27. Provided below in Table 2-1 is a summary of the meter equivalency factors used to establish the District’s proposed water capacity fees. 5 AWWA M-1 Manual, 6th Edition, p. 326 Overview of the Capacity Fees 10 Otay Water District – Capacity and Annexation Fee Updates [1] GPM rate at 80% of maximum flow updated 9/21/12 Ordinance No. 534, Section 27. [2] Demand factor Ordinance No. 534, Section 28. For example, a 3/4-inch meter has a demand factor of one (1) and a 2-inch meter has a demand factor of 8, therefore a 2-inch meter has 8 times the demand capacity of a 3/4-inch meter. . These demand factors, for each meter size, are then used to develop the proposed water capacity fee for customers based on the meter size which reflects the demands they place on the system when compared to a typical single family customer. The District’s current capacity fees are based on these same demand or meter equivalency factors. For the sewer system, the amount of flow for one dwelling unit is determined and used to assess the number of equivalent dwelling units, or EDUs. The number of dwelling unit equivalents or equivalent meters can be determined based on the assumed or estimated single family requirements. Once again, this approach provides the needed linkage between the amounts of infrastructure necessary to provide service to a set number of customers. Once the number of equivalent meters, or capacity components for the system are determined, a component by component analysis is undertaken to determine the portion of the capacity fee attributable to each component in dollars per equivalent meter. In this process, the existing assets must be valued. Existing assets may be valued in a number of different ways. These methods may include the following: 9 Original Cost (OC) 9 Original Cost Less Depreciation (OCLD) 9 Replacement Cost New (RCN) 9 Replacement Cost New Less Depreciation (RCNLD) Table 2 – 1 Meter Equivalency Factors Meter Size Maximum Rate in U.S. Gallons per Minute (gpm) [1] Demand Factor/Meter Equivalency [2] 5/8” 24 1.0 3/4” 24 1.0 1” 40 2.5 1- 1/2” 80 5.0 2” 128 8.0 3” 400 16.0 4” 800 25.0 6“ 1,600 50.0 8” 2,720 80.0 10” 4,000 115.0 Overview of the Capacity Fees 11 Otay Water District – Capacity and Annexation Fee Updates Given these four different methods for valuing the assets, the selection of the valuation method certainly arises. The American Water Works Association M-1 manual notes the following concerning these various generally accepted valuation methods: “Using the OC and OCLD valuations, the [capacity fee] reflects the original investment in the existing capacity. The new customer “buys in” to the capacity at the OC or the net book value cost (OCLD) for the facilities and as a result pays an amount similar to what the existing customers paid for the capacity (OC) or the remaining value of the original investment (OCLD). Using the RCN and the RCNLD valuations, the [capacity fee] reasonably reflects the cost of providing new expansion capacity to customers as if the capacity was added at the time the new customers connected to the water system. It may be also thought of as a valuation method to fairly compensate the existing customers for the carrying costs of the excess capacity built into the system in advance of when the new customers connect to the system. This is because, up to the point of the new customer connecting to the system, the existing customers have been financially responsible for the carrying costs of that excess capacity that is available to development.”6 As a point of reference for this study, the District’s capacity fee analysis will use a RCNLD methodology for all assets and the District references this as “reproduction” not “replacement” cost in the study. The District’s existing assets are escalated to current dollars using a cost index (e.g. the Engineering New Record, Construction Cost Index; ENR-CCI) and then depreciated using a simple straight-line method based on the useful life of each historical asset, respectively. The pipes are valued at “replacement” cost based on current inventory of the system at the current time and a current dollar per lineal foot. This value is also depreciated and is referred to as “replacement” cost. After the existing infrastructure is analyzed then the future expansion projects are added to the total cost component. This total existing and future cost is divided by the total existing and future equivalent meters to determine the “gross capacity fee”. The last step in the calculation of the capacity fee is the determination of any credits. This is generally a calculation to assure that customers are not paying twice о once through capacity fees and again within the local water and sewer rates. 2.6 Summary This section of the report has provided an overview of capacity, new water supply, and annexation fees; the basis for establishing cost-based fees, considerations in establishing the fees, the burden development places on the system and the steps typically taken in the development of the technical analyses. In the development of the District’s capacity, new water supply, and annexation fee study, the issues identified in this section of the report have been addressed and will be discussed in more detail in later sections of the report. The next section of the report provides a brief overview of the legal considerations in establishing capacity, new water supply, and annexation fees as they relate to California law. 6 Ibid., p. 268 Legal Considerations in Establishing Fees for the District 12 Otay Water District – Capacity and Annexation Fee updates “The laws for the enactment of new development capacity fees in California are found in California Government Code sections 66013, 66016, and 66022 within the ‘Mitigation Fee Act.’ 3.1 Introduction An important consideration in developing capacity, new water supply, and annexation fees is any legal requirements at the state or local level. The legal requirements often establish the methodology around which the capacity, new water supply, and annexation fees must be calculated or how the funds must be used. Given that, it is important for the District to understand these legal requirements and develop and adopt fees which comply with those legal requirements. This section of the report provides an overview of the legal requirements for establishing capacity, new water supply, and annexation fees under California law. A discussion of the applicability of Proposition 218 and Proposition 26, as it relates to these fees, is also provided. The discussion within this section of the report is intended to be a summary of our understanding of the relevant California law as it relates to establishing capacity, new water supply, and annexation fees. It in no way constitutes a legal interpretation of California law by HDR. 3.2 Requirements under California Law Many states have established specific laws regarding the establishment, calculation and implementation of capacity, new water supply, and annexation fees. The main objective of most state laws is to have these types of fees established in such a manner that they are fair, equitable and cost-based. In other cases, state legislation may have been needed to provide the legislative powers to the utility to establish the charges. The laws for the enactment of capacity fees in California are codified in California Government Code sections 66013, 66016, and 66022, which are interspersed within the ‘Mitigation Fee Act.’ The Mitigation Fee Act is comprehensive legislation dealing mainly with development impact fees, although the above sections set forth the various requirements for imposition of capacity charges in California: calculation of the fees, noticing, accounting and reporting requirements, and processes for judicial review. Although contained within the Mitigation Fee Act, capacity fees are not development fees. Legal Considerations in Establishing Fees for the District Legal Considerations in Establishing Fees for the District 13 Otay Water District – Capacity and Annexation Fee updates A summary of the relevant statutes required in the calculation of capacity fees is as follows: “66013 (a) Notwithstanding any other provision of law, when a local agency imposes fees for water connections or sewer connections, or imposes capacity charges, those fees or charges shall not exceed the estimated reasonable cost of providing the service for which the fee or charge is imposed, unless a question regarding the amount of the fee or charge imposed in excess of the estimated reasonable cost of providing the services or materials is submitted to, and approved by, a popular vote of two-thirds of those electors voting on the issue.” “66013 (b) (3) ‘Capacity charge’ means a charge for facilities in existence at the time a charge is imposed or charges for new facilities to be constructed in the future that are of benefit to the person or property being charged. . . .” In addition to the determination of “the estimated reasonable cost of providing the service for which the fee is imposed,” California law also requires the following: x That notice (of the time and place of the meeting, including a general explanation of the matter to be considered) and a statement that certain data is available be mailed to those who filed a written request for such notice; x That certain data (the estimated cost to provide the service and anticipated revenue sources) be made available to the public; x That the public agency provide an opportunity for public input at an open and public meeting to adopt or modify the fee; and x That revenue in excess of actual cost be used to reduce the fee creating the excess. The basic principle that needs to be followed under California law is that the charge be based on a proportionate share of the costs of the system required to provide service and that the requirements for adoptions and accounting be followed in compliance with California law. For annexation fees, California has provided the authority to charge an availability charge for water and sewer utilities. Within the California water code Section 71631.6 there is a provision for availability charges, as follows: “71631.6. Notwithstanding the provisions of Section 71631, in any improvement district situated within the Otay Municipal Water District in San Diego County, the standby assessment or availability charge shall not exceed thirty dollars ($30) per acre per year for land on which the charge is levied or ten dollars ($10) per year for a parcel less than one acre. In any such improvement district the proceeds from any standby assessment or availability charge in excess of ten dollars ($10) per acre per year shall only be used for the purposes of such improvement district. This section, applicable only to the Otay Municipal Water District of San Diego County, is necessary because of the unique and special water management problems of the area included within such district.” Legal Considerations in Establishing Fees for the District 14 Otay Water District – Capacity and Annexation Fee updates Additionally, the California Public Utilities Code Section 164751, while not applicable to the District, provides further authority and clarification of this fee. “16475.(a) A public utility district which acquires, constructs, owns, operates, controls or uses works for supplying its inhabitants with water, may, pursuant to the notice, protest, and hearing procedures in Section 53753 of the Government Code, fix and collect a water standby or immediate availability charge on all land within its boundaries to which water is made available for any purpose by the district, whether the water is actually used or not, except that such charge shall not supply to lands permanently dedicated exclusively to transportation of persons or property. If the procedures set forth in this section as it read at the time a standby charge was established were followed, the district's board of directors may, by resolution, continue the charge pursuant to this section in successive years at the same rate. If new, increased, or extended assessments are proposed, the district shall comply with the notice, protest, and hearing procedures in Section 53753 of the Government Code. (c) If a person for more than one year obtains substantially all of his or her water requirements for the contiguous parcels of land which he or she occupies from rainfall, springs, streams, lakes, rivers, or wells, and if the person's primary economic activity on such land is the commercial extraction or processing of minerals, such land shall be exempt from any water standby or availability charges. d) Any funds derived from the charges levied pursuant to this section may be used by the district for all purposes which a public utility district is authorized to expend funds insofar as said purposes relate to the acquisition, construction, operation, control, or use of works for supplying its inhabitants with water.” These Sections of California law indicate the authority to levy the availability fee, which is the key financial input to the annexation fees, properties exempt from such fees, and directives and authority of how such fee revenue should be used. 3.3 Propositions 218 and 26 and Capacity, New Water Supply, and Annexation Fees In 1996, the voters of California approved Proposition 218, which required that the imposition of certain fees and assessments by municipal governments require a vote of the people to change or increase the fee or assessment. Of interest in this particular study is the applicability of Proposition 218 to the establishment of capacity and new water supply fees for the District. In Richmond v. Shasta Community Services Dist., 32 Cal.4th 409 (2004), the California Supreme Court held that water capacity fees are not “assessments” under Proposition 218 because they are imposed only on those who are voluntarily seeking water service, rather than being charged to particular identified parcels, and therefore such fees are not subject to the procedural or substantive requirements of Proposition 218. Additionally, the court held that a capacity fee is 1 Generally the Public Utilities Code does not apply to the District. Legal Considerations in Establishing Fees for the District 15 Otay Water District – Capacity and Annexation Fee updates not a development fee. The court also held that such fees can properly be enacted by either ordinance or resolution. In November 2010 the voters of California passed Proposition 26, an initiative based state constitutional amendment that provided a new definition of the term “tax” in the California Constitution. Under Proposition 26, a fee or charge imposed by a public agency is a tax unless it meets one of seven exceptions. Capacity fees fall within exception 2 – i.e., it is a charge imposed for a specific government service. Provided that a capacity fee does not charge one fee payor more in order to charge another fee payor less (i.e., a cross-subsidy), and it does not exceed the reasonable costs to the local government of providing the service, the fee is not a tax within the meaning of Proposition 26. Under Proposition 26, the local government bears the burden of proving by a preponderance of the evidence that a levy, charge, or other exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the payor’s burdens on, or benefits received from, the governmental activity. 3.4 Summary This section of the report has provided an overview of the legal requirements under California law for the establishment of capacity, new water supply, and annexation fees. As was noted above, an important legal requirement is that the fees or charges shall not exceed the estimated reasonable cost of providing the service for which the fee or charge is imposed. The next two sections of the report review and discuss the District’s calculation of the fees, and provides the basis for the establishment of a reasonable cost for the capacity fee. Determination of the District’s Capacity Fee and New Water Supply Fees 16 Otay Water District – Capacity and Annexation Fee Updates 4.1 Introduction This section of the report presents the details and key assumptions in the calculation of the District’s capacity fees for water and sewer and the new water supply fee for water. The calculation of the District’s capacity and new water supply fees is based upon District specific accounting and planning information. Specifically, the fees are based upon the District’s fixed asset records; the District’s current capital improvement plans; existing equivalent dwelling units (EDUs) and projection of future EDUs. For the water utility, the Water Facilities Master Plan (Master Plan) Update, as of 2015 was used. As was noted in Section 2 of this report, planning documents and projections of future EDUs provide the required support for a “rationally based public policy” to support the imposition of cost-based capacity and new water supply fees. To the extent that the cost and timing of future capital improvements change, then the capacity and new water supply fees presented in this section of the report should be updated to reflect the changes. 4.2 Overview of the District’s Water and Sewer System The Otay Water District is a water, recycled water and sewer service provider. The District was established in 1956. The District is located in the southern portion of San Diego County and the service area includes both urban and rural development. The District provides water within 125.5 square miles of the southeastern San Diego County. The water service planning area comprises three distinct land use planning agencies. They are the City of San Diego, the City of Chula Vista, and the County of San Diego. It serves the communities of Spring Valley, La Presa, Rancho San Diego, Jamul, eastern Chula Vista, and eastern Otay Mesa along the international border of Mexico. Potable water delivered by Otay Water District is purchased from the San Diego County Water Authority. The San Diego County Water Authority purchased most of its water from the region’s primary importer, the Metropolitan Water District of Southern California (CWA). There are approximately 724 miles of potable water lines, 40 potable reservoirs, and 21 potable pump stations. The District provides wastewater service to a portion of the land area within the Jamacha Basin, which is located within its North District and covers approximately 8,797 acres, which is about 11 percent of the District’s total service area. Approximately 15,200 customers are served through 6,071 connections. The sewage collection system serves Rancho San Diego, Calavo Gardens, Singing Hills and portions of Mount Helix within the Upper Sweetwater River Basin, also known as the Jamacha Basin. The County of San Diego also provides wastewater service in a portion of the Jamacha Basin. Wastewater flows from each agency’s customers are conveyed in joint collection and pumping systems. The District is responsible for approximately 88 miles of sewer line. The District owns and operates the Ralph W. Chapman Water Reclamation Determination of the District’s Capacity and New Water Supply Fees Determination of the District’s Capacity Fee and New Water Supply Fees 17 Otay Water District – Capacity and Annexation Fee Updates Facility (RWCWRF) within the Jamacha Basin. Wastewater flows generated within the Jamacha Basin are pumped to the RWCWRF and treated to produce recycled water, which is used to meet a portion of the District’s existing recycled water demand. All remaining flows are discharged into the Metro System. Wastewater collection, pumping, and treatment costs are shared between the District and the County as provided in the 1998 agreement between the Spring Valley Sanitation District (San Diego County) and Otay Water District. There are two sources of recycled water to the District. The RWCWRF has up to 1.3 MGD (million gallons per day capacity). The District also has an agreement with the City of San Diego which allows the District to purchase up to 6.0 MGD of recycled water generated by the City’s South Bay Water Reclamation Plant (SBWRP). There are approximately 99 miles of recycled water lines, 4 recycled water reservoirs, and 3 recycled water pump stations. The District delivers recycled water to customers through a dedicated distribution system where it is used to irrigate golf courses, playing fields, public parks, roadside landscapes and open space in eastern Chula Vista. 4.3 Current Water and Sewer Capacity Fees The District’s current water capacity and new water supply fees are shown below in Table 4-1. Table 4-1 Current Water Capacity and New Water Supply Fees by Meter Size Meter Size Demand Factor Water Capacity Fee New Water Supply Fee Total Capacity Fee 3/4” 1.0 $8,590.34 $1,064.11 $9,654.45 1” 2.5 21,475.85 2,660.28 24,136.13 1- 1/2” 5.0 42,951.70 5,320.55 48,272.25 2” 8.0 68,722.72 8,512.88 77,235.60 3” 16.0 137,445.44 17,025.76 154,471.20 4” 25.0 214,758.50 26,602.75 241,361.25 6” 50.0 429,517.00 53,205.50 482,722.50 8” 80.0 687,227.20 85,128.80 772,356.00 10” 115.0 987,889.10 122,372.65 1,110,261.75 [1] – District Capacity Fees effective April 1, 2017, ENR on 3/13/2017. As can be seen in Table 4-1, larger sized meters pay a greater fee which is based upon industry established (American Water Works Association [AWWA]) demand factors and District maximum safe operating capacities of the meters. Determination of the District’s Capacity Fee and New Water Supply Fees 18 Otay Water District – Capacity and Annexation Fee Updates The existing sewer capacity fee is presented in Table 4-2, on a per EDU basis. The District’s Code Section 53.09 indicates the number of EDUs for various types of land uses. Table 4-2 Current Sewer Capacity Fees by Number of EDUs Number of EDUs Sewer Capacity Fee 0.38 $2,616.70 0.60 4,131.62 1.00 6,886.04 1.20 8,263.25 0.70 4,820.23 [1] – District Capacity Fees effective April 1 2017, ENR on 3/13/2017. Section 53.09 of the District’s Code provides guidelines for determining the number of EDUs. For example, single-family, multi-family, condos and mobile homes are charged 1.0 EDU per unit. Hotels/motels with rooms with no kitchen are charged 0.38 EDUs per unit, while rooms with kitchens are charged 0.60 EDUs. Commercial uses are charged 1.20 EDUs for the first 1,000 square feet, and 0.70 EDU per 1,000 square feet of additional space. 4.4 Calculation of the District’s Capacity and New Water Supply Fees As was discussed in Section 2, the process of calculating new water supply fee and capacity fees is based upon a four-step process. These steps were as follows: 1. Determination of system planning criteria 2. Determination of equivalent dwelling units (EDUs) 3. Calculation of the capacity fees for system costs 4. Determination of any capacity fee credits Each of these areas is discussed in more detail below. 4.4.1 System Planning Criteria System planning criteria typically involves calculating the amount of water required by a single- family residential customer. Water demand represents the basis for system design. The American Water Works Association (AWWA) has a standardized method for determining demand factors for larger meter sizes. The number of equivalent meters can be determined based on AWWA demand factors. The number of customers by meter size was based on data from the District’s utility billing system as of December 2016. Table 4-3 shows a summary of the District’s 2016 water service customers by meter size. Determination of the District’s Capacity Fee and New Water Supply Fees 19 Otay Water District – Capacity and Annexation Fee Updates Table 4-3 2016 Water Existing Number of Meters Meter Size Residential Master Metered Commercial & Public AG, LDs, Const. Recycled Total 3/4” 43,202 41 335 106 3 43,687 1” 1,814 185 356 268 99 2,722 1–1/2” 18 244 299 382 394 1,337 2” 4 232 388 463 194 1,281 3” -- 42 34 2 4 82 4” -- 64 28 8 10 110 6” -- 6 10 2 3 21 8” -- 3 0 -- -- 3 10” -- -- 5 -- 1 6 Total 45,038 817 1,455 1,231 708 49,249 The total number of water service customers by meter size as of December 2016 is 49,249 units. 4.4.2 Equivalent Meter Units For system planning the number of existing customers, by meter size, is converted to the total number of equivalent dwelling units (EDUs). This provides the total number of EDUs on the current system and reflects the total demands placed on the system regardless of the size of the meter. This is an important point as the District does not specifically know what type (class) of customer, or size of meter, will connect to the system in the future. Rather, the District is able to develop a projection of demands and resulting capacity needs based on the projection of the EDU’s. To determine the number of EDUs on the current system, the AWWA meter demand factor (See Table 2-1) and the current number of meters by size (Table 4-3) are used. The number of dwelling unit equivalents or equivalent meters can be determined based on a single-family demand factor by meter size. Table 4-4 shows the 2016 water service customers by meter size converted to a single-family meter equivalency. Determination of the District’s Capacity Fee and New Water Supply Fees 20 Otay Water District – Capacity and Annexation Fee Updates Table 4-4 2016 Water Equivalent Meters Meter Size AWWA Meter Equivalency Total Customers by Meter Size Total Equivalent Meters 3/4” 1.00 43,687 43,687 1” 2.50 2,722 6,805 1–1/2” 5.00 1,337 6,685 2” 8.00 1,281 10,248 3” 16.00 82 1,312 4” 25.00 110 2,750 6” 50.00 21 1,050 8” 80.00 3 240 10” 115.00 6 690 Total 49,249 73,467 The total number of equivalent 3/4” meters for the District is 73,467 units. This total will be used in determination of the capacity and annexation fees. For the sewer system, the number of EDUs was determined by using the EDUs in the 2010 study of 6,714, and adding the 43 new connections since 2009, for a total of 6,757 existing EDUs on the sewer system. Compared to the District’s water system, the sewer system is relatively small and limited in growth. 4.4.3 Calculation of the Capacity Fee for the Major System Components The next step of the analysis is to review the major functional system infrastructure to determine the capacity fee for the system. In calculating the capacity fees for the District, existing components, debt service for existing facilities, future capital improvements relating to expansion and capital fund reserves were included. The methodology used to calculate each of these components is described below. EXISTING OR BUY-IN COMPONENT – To calculate the value of the existing assets for the buy-in component, the District’s methodology considered the original cost of each asset. The original cost of the asset was then adjusted to the value for reproduction cost. The reproduction cost of each asset was then depreciated to the remaining useful life (i.e. reproduction cost less depreciation). A reproduction cost method “is appropriate when the system has been completely built out, or possesses substantial excess capacity to accommodate new Determination of the District’s Capacity Fee and New Water Supply Fees 21 Otay Water District – Capacity and Annexation Fee Updates development on a fill-in basis, is in no need of major system upgrades and public officials wish to recoup financing cost previously incurred.”1 The District provided an asset listing for the various existing components and their installation dates. As was noted in Section 2, there are different methods for valuing existing assets. In this case, a reproduction cost new less depreciation method was used. To accomplish this, the original cost of each asset was escalated to current, March, 2017 dollars, based on the Construction Cost Index (CCI) for the Los Angeles area published in the City Engineering News & Record (ENR). Then, based on the installation date and an estimated useful life provided by the District for each asset, the reproduction cost for each asset was depreciated. Pipelines were valued at replacement cost new less depreciation. The length and size of pipe was multiplied by an average replacement cost per inch diameter of $25. Including the recycled water components, the total water capacity related eligible plant is approximately $642.5 million. The total wastewater capacity related eligible plant is approximately $31.5 million. The valuation of the existing assets can be seen on Exhibit W-1 for water and Exhibit S-1 for sewer of the Technical Appendix. Given the value of the assets, the next step was to determine the portion of the project costs that were deemed eligible to be included in the calculation of the capacity fee. The term “capacity fee eligible” simply describes the amount of the asset to be included within the calculation of the fee. Within this study, meters, older computers, and miscellaneous other operational cost items that appeared to be nearly depreciated were not included in the capacity fee calculation. The final value of the assets was reduced by the amount of future principal on the debt associated with the assets as the principal will be recovered via the debt service component within the District’s rates. DEBT SERVICE COMPONENT - In addition to the buy-in component, a debt service component was also developed. This component accounts for the principal on existing assets. The remaining principal portion of the debt associated with the assets was deducted from the total eligible asset value prior to calculating the capacity fee. This inclusion of a “debt service credit” avoids double charging the customer for the asset value in the existing or buy-in component of the capacity charge, and also in the debt service component of the rates. The principal portion of the debt service balance on existing assets is removed from the value prior to calculating the buy-in portion of the fee. By segregating the debt service out, the cost can be clearly identified and calculated appropriately The District has six outstanding issues for the water system. They are the 1996, and 2010A Certificates of Participation, 2009 General Obligation Bond, 2010 Build America Bonds, 2013 Water Revenue Refunding Bonds, and the 2016 Water Revenue Refunding Bonds. The District’s total outstanding principal is $98.7 million, which is all related to water. Details of the debt service are shown on Exhibit W-1 and W-3A. The sewer system has a $3 million anticipated debt in 2018, which is shown on Exhibit S-3B. 1 Arthur C. Nelson, System Development Charges for Water, Wastewater, and Stormwater Facilities, Lewis Publishers, New York, 1995, P. 77 Determination of the District’s Capacity Fee and New Water Supply Fees 22 Otay Water District – Capacity and Annexation Fee Updates OTHER COMPONENTS - In addition to the existing or buy-in component and debt service component, capital fund reserves, past interest payments from 1959 to 2008 which were not previously capitalized (net of depreciation at 50 year average life) were determined to be capacity fee related. These components are considered to be asset valuation adjustments to the overall water and sewer systems since they are capacity infrastructure costs that relate to the water and sewer systems as a whole. The total capacity eligible fund reserve is $22 million for water. Past interest payments, net of depreciation, is $36 million for water and $8.8 million for sewer. Further detail can be seen on Exhibit W-1, W-3B and W-4 for water and S-1, S-3B and S-4 for sewer of the Technical Appendix. FUTURE COMPONENTS – An important requirement for a capacity fee study is the connection between the anticipated future growth on the system and the needed facilities required to accommodate that growth. For purposes of this study, the District’s most current Capital Improvement Plan (CIP) was provided. District staff reviewed the existing capital improvement plan and updated it with the best available information. The projects necessary to meet demand for the water system were included in the CIP, along with a projection of the number of future EDUs. For the sewer system, it was determined that no expansion projects are needed at this time to meet the needs of projected growth within the current sewer boundaries. The updated water and recycled CIP detailed projects as expansion, betterment, new supply or replacement projects. Capital improvements that were expansion related were included in the capacity fee calculation. The CIP included Otay Mesa recycled expansion projects which would expand the recycled system to the Otay Mesa region of the District. Currently, the Board has placed a temporary moratorium on expanding the recycled water system to Otay Mesa. The total capacity eligible future projects for water include the Otay Mesa recycled expansion projects, totaling $22.6 million. If a permanent moratorium were placed on the Otay Mesa recycled system, these projects costs would have been excluded from the study and the base 3/4” meter equivalent water capacity fee would have been lower by $211.52, plus any subsequent ENR adjustments. The capacity fee for other meter sizes shall also be reduced by the meter equivalent. Exhibit W-6 of the Water Technical Appendix contains the details of this portion of the fee. 4.5 Allowable Capacity and New Water Supply Fees Based on the sum of the component costs calculated above, the allowable water and sewer capacity fee were determined. “Allowable” refers to the concept that the calculated capacity fees shown on Table 4-5 are the District’s cost-based water capacity fees. The District, as a matter of policy, may charge any amount up to the allowable capacity fee, but not over that amount. Charging an amount greater than the allowable capacity fee would not meet the nexus test of a cost-based capacity fee. Details are provided in Exhibit W-7 for water and S-7 for sewer of the Technical Appendix. Determination of the District’s Capacity Fee and New Water Supply Fees 23 Otay Water District – Capacity and Annexation Fee Updates Table 4-5 Summary of Allowable Water Capacity Fee Based on a 3/4” Meter Equivalency Total “Allowable” Capacity Fee Total Existing Capacity Plant (Repro & Replace. Less Depreciation) $612,327,458 Total Future Capacity Plant 230,951,570 Total Capacity Plant $843,279,028 Existing EDUs 73,467 Future EDUs 33,381 Total EDUs 106,848 Total Allowable Capacity Fee per 3/4” Equivalent Meter $7,892.32 As can be seen in Table 4-5, the calculated water capacity fee was determined to be $7,892.32 for a 3/4” meter equivalency. This calculated fee can then be placed in the context of the size of meter. The water capacity fee varies based upon the safe maximum operating capacity of the customer’s meter, which is summarized later in Table 4-7. Table 4-6 shows the new water supply fee calculation. This fee used the same methodology as described above, but is based only on future CIP projects that were identified as necessary for new water supply. The cost of these future projects were divided by the projected growth they are estimated to serve, to determine a total allowable new water supply fee per EDU for an equivalent meter. Table 4-6 Summary of Allowable New Water Supply Fee Components Total “Allowable” Water Supply Fee Total Future Capacity Plant (Expansion) $26,728,000 Future EDUs 33,381 Total Allowable New Water Supply Fee per 3/4” Equivalent Meter $800.70 Given the calculated capacity fee and the new water supply fee on an equivalent 3/4” meter basis, a summary table can be developed for the fees by the different meter sizes (capacities). Table 4-7 provides a summary of the calculated and allowable new water supply and water capacity fees by meter size. Determination of the District’s Capacity Fee and New Water Supply Fees 24 Otay Water District – Capacity and Annexation Fee Updates Table 4-7 Calculated Water Capacity and New Water Supply Fee by Meter Size Meter Size Meter Equivalency Water Capacity Fee New Water Supply Fee 3/4” 1.0 $7,892.32 $800.70 1” 2.5 19,730.81 2,001.75 1- 1/2” 5.0 39,461.62 4,003.50 2” 8.0 63,138.59 6,405.61 3” 16.0 126,277.18 12,811.22 4” 25.0 197,308.10 20,017.52 6” 50.0 394,616.20 40,035.05 8” 80.0 631,385.91 64,056.08 10” 115.0 907,617.25 92,080.61 As can be seen in Table 4-7, the Water Capacity Fee is $7,892.32 for a 3/4” meter and the New Water Supply Fee is $800.70. The capacity and new water supply fee varies based upon the safe maximum operating capacity of the customer’s meter. The capacity charges for the larger meter sizes are determined by multiplying the capacity charge for a 3/4” meter by the meter equivalency factors (i.e., relative capacities). The District’s current fee schedule has a separate fee for the Triad Development area. For this study, District staff researched the purpose of the fee reduction back to its inception and determined that when the Triad Development initially was developed the developers paid for the storage the area would need. Therefore, the capacity fees for the Triad area are credited against the portion of the fee that relates to potable water storage. HDR reviewed the discount provided to the Triad area and concluded that the discount of approximately 25% of the fee fairly reflects the time value of the $17 million paid for storage facilities. This is also consistent with the District’s current approach to providing a Triad credit on the fees. Table 4-8 presents the calculated water capacity fees along with the reduced Triad Development fees. New connections within the Triad area still pay the annexation fee (as appropriate) and the new water supply fee, as presented within this report. Determination of the District’s Capacity Fee and New Water Supply Fees 25 Otay Water District – Capacity and Annexation Fee Updates Table 4-8 Calculated Water Capacity and Triad Capacity Fees by Meter Size Meter Size Meter Equivalency Water Capacity Fee Triad Water Capacity Fee 3/4” 1.0 $7,892.32 $5,921.21 1” 2.5 19,730.81 14,803.03 1- 1/2” 5.0 39,461.62 29,606.07 2” 8.0 63,138.59 47,369.71 3” 16.0 126,277.18 94,739.42 4” 25.0 197,308.10 148,030.35 6” 50.0 394,616.20 296,060.69 8” 80.0 631,385.91 473,697.11 10” 115.0 907,617.25 680,939.59 SEWER CAPACITY FEES – The allowable sewer capacity fee is shown below in Table 4-9. There were no future sewer capacity related projects. There is available capacity within the existing sewer system to serve the anticipated growth on the system. Details of this calculation are provided in Exhibit S-7 of the Technical Appendix. Table 4-9 Summary of Allowable Sewer Capacity Fee Based on One EDU Total “Allowable” Capacity Fee Total Existing Capacity Plant (Repro & Replace. Less Depreciation) $37,531,000 Total Future Capacity Plant 0 Total Capacity Plant $37,531,000 Existing EDUs 6,757 Future EDUs 0 Total EDUs 6,757 Total Allowable Capacity Fee per EDU $5,554.39 Table 4-10 provides a summary of the calculated and allowable sewer capacity fees by the number of EDUs, based on Section 53.09 of the District’s Code. The District’s current resolution also specifies that customers within an ID area would not pay the “annexation fee”. Since the current sewer annexation fee is actually the buy-in capacity fee, it was determined by District staff who researched the historical aspects of the Resolution, that customers within an ID area should pay an equitable portion of the costs of available capacity, but should not pay an actual annexation fee, and should receive a credit for debt payments they have paid through debt Determination of the District’s Capacity Fee and New Water Supply Fees 26 Otay Water District – Capacity and Annexation Fee Updates assessments applied to parcels within the ID areas. Therefore, the sewer capacity fee is listed for those customers outside an ID area, who would pay the full capacity fee and an annexation fee for sewer, and those inside an ID area who would pay only a reduced capacity fee, which is reduced by the principal paid on the 1990 State loan for treatment plant, and all past interest payments. Table 4-10 Calculated Sewer Capacity Fee by Number of EDUs Number of EDUs Sewer Capacity Fee Outside ID Area Sewer Capacity Fee Inside Sewer ID Area 0.38 $2,110.67 $1,233.63 0.60 3,332.63 1,947.83 1.00 5,554.39 3,246.39 1.20 6,665.27 3,895.67 0.70 3,888.07 2,272.47 4.6 Key Information In the development of the water capacity and new water supply fees, and the sewer capacity fee for the District’s water and sewer utilities, key information was utilized: x The District’s capacity fees were developed on the basis of planning documents, anticipated future connections and the needed capital improvements to serve those future connections. x The District developed the projections of future EDUs based upon an analysis of available land area and type of development, and population growth projections. x The District’s asset records were used to determine the existing infrastructure assets. x The District provided financial records related to capital reserves available, past interest payments, billing system reports for number of meters by size, and pipeline inventories. x The District provided the current estimated cost per lineal foot for pipelines for each utility. x The District provided the most recent CIP for future expansion improvements. x The District determined the portion of future improvements that were growth-related. x The year 2016 was used as the basis for the CIP. x The calculation of the debt credit component included current outstanding principal on existing assets. 4.7 Implementation of the Capacity, New Water Supply, and Annexation Fees The District currently escalates capacity, new water supply, and annexation fees based on the Engineering News Record Construction Cost Index (ENR-CCI) on a quarterly basis. The ENR-CCI tracks changes in municipal construction costs. The methodology used to calculate these fees takes into account the cost of money or interest charges and inflation. Therefore, HDR would Determination of the District’s Capacity Fee and New Water Supply Fees 27 Otay Water District – Capacity and Annexation Fee Updates recommend that the District continue to adjust the fees at least annually, or quarterly, using the local ENR-CCI to reflect the cost of interest and inflation. This method of escalating the District’s fees should be used for no more than a five-year period. After five years, HDR recommends that the District update the fees based on the actual cost of infrastructure and any new planned facilities that would be contained in an updated master plan or capital improvement plan. 4.8 Consultant Recommendations Based on our review and analysis of the District’s fees, HDR makes the following recommendations: The District should revise and update their capacity fees and new supply fees such that they are no greater than the fees as set forth in this report. The District should continue within their resolution or ordinance the provision for periodic (annual or quarterly) adjustments to the fees based on changes in the Engineering News Record Construction Cost Index. The District should update the actual calculations for the capacity and new supply fees based on the methodology as approved by the resolution or ordinance setting forth the methodology for capacity fees at such time when a new capital improvement plan, facilities plan, master plan or a comparable plan is approved or updated by the District. 4.9 Summary The capacity and new supply fees developed and presented in this section of the report are based on the engineering design criteria of the District’s water and sewer system, the value of the existing assets, future capital improvements, current debt service on existing assets and “generally accepted” ratemaking principles. Adoption of the proposed fees will provide multiple benefits to the District and create equitable and cost-based charges for new customers connecting to the District’s water and sewer system. Determination of the District’s Sewer Capacity Fees 28 Otay Water District– Capacity and Annexation Fee Updates 5.1 Introduction This section of the report presents the details and key assumptions in the calculation of the District’s water and sewer annexation fee. The annexation fee is charged only to new customers annexing into the District’s service area boundaries (i.e., customers currently outside the District’s boundaries). The annexation fee reimburses existing customers for past contributions so that all customers have contributed equally to the District’s water and sewer systems. The calculation of the District’s water annexation fee is based upon District specific tax and availability charge collections. The sewer annexation fee is based on availability charge collections. 5.2 Current Water and Sewer Annexation Fees The current water annexation fee is based on the original value of the 1% General Tax and availability charges to date. These values are then escalated using the Consumer Price Index, from San Diego, from 1959 to present (2017). The total present value of the 1% general tax and the availability charges are divided by current water and recycled EDUs. The District’s current water annexation fees are shown below in Table 5-1. Table 5-1 Water and Sewer Annexation Fees by Meter Size and Classification Meter Size Meter Equiv. Water Annexation Fee [1] Sewer Customer Classification Number of EDUs [2] Sewer Annexation Fee [1] 3/4” 1.0 $1,911.95 Hotel/Motel w/o kitchen; /unit 0.38 $416.22 1” 2.5 4,779.88 Hotel/Motel with kitchen; per unit 0.60 657.19 1- 1/2” 5.0 9,559.75 Residential units (1) 1.00 1,095.31 2” 8.0 15,295.60 Commercial - first 1,000 sq.ft. 1.20 1,314.37 3” 16.0 30,591.20 Commercial addt’l 1,000 sq.ft. 0.70 766.72 [1] – District Annexation Fees linked to ENR-CCI for Los Angeles and adjusted quarterly. Last updated March 2017. [2] – EDU's are determined by the District's code, Section 53.09. As shown, the District’s current water annexation fee is similar in structure to the previously discussed water capacity fees and is based on a 3/4” meter equivalency. These are the same meter equivalencies as were used in the water capacity fees and they are based on the AWWA safe maximum operating capacity (GPM) of the different meter sizes.. The fees shown are effective April 1 1, 2017 and were adjusted by the consumer price index March 2017. Determination of the District’s Water and Sewer Annexation Fees Determination of the District’s Sewer Capacity Fees 29 Otay Water District– Capacity and Annexation Fee Updates 5.3 Calculation of the District’s Water and Sewer Annexation Fee The current water annexation fee calculation is based on the current methodology for water of the original value of the 1% General Tax and availability charges to date escalated to present day values based on the Consumer Price Index, from San Diego, from 1959 to present (2017). The 1% general tax is only for the water utility and is not included in the sewer calculation because no customers in the service area have paid the 1% general tax for the sewer system. The calculated water annexation fees are shown below in Table 5-2 and Table 5-3. Table 5-2 Calculation of Water Annexation Fee Item Original Value Present Value 1% General Tax $49,809,288 $74,927,986 Availability Charges 38,964,204 73,578,099 Total Gen. Tax & Availability $88,773,492 $148,506,085 Current EDUs 73,467 73,467 Potable Water Annexation Fee $1,208.35 $2,021.40 [1] – District Annexation Fees inked to ENR-CCI for Los Angeles and adjusted quarterly. Last updated March 2017. The resulting proposed annexation fee would be $2,021.40 for a 3/4” meter size. Table 5-3 shows the water annexation fees for various meter sizes. Table 5-3 Water Annexation Fee by Meter Type and Size Meter Size Meter Equivalent Water Annexation Fee 3/4” 1.0 $2,021.40 1” 2.5 5,053.50 1- 1/2” 5.0 10,106.99 2” 8.0 16,171.19 3” 16.0 32,342.38 4” 25.0 50,534.96 6” 50.0 101,069.93 8” 80.0 161,711.88 10” 115.0 232,460.83 Similar to the capacity fees and new water supply fees, the annexation fees for larger size meters are assessed based on the size of the meter, using the AWWA safe maximum operating capacities from the AWWA M1 manual. Determination of the District’s Sewer Capacity Fees 30 Otay Water District– Capacity and Annexation Fee Updates Table 5-4 shows the calculation for the sewer annexation fee. The same methodology is applied to sewer except the 1% general tax is not included for sewer. Table 5-4 Calculation of Sewer Annexation Fee Item Original Value Present Value Availability Charges $3,231,28 $7,471,792 Current EDUs 6,757 6,757 Sewer Annexation Fee $478.25 $1,105.79 [1] – District Annexation Fees linked to ENR-CCI for Los Angeles and adjusted quarterly. The resulting proposed sewer annexation fee would be $1,105.79 per one EDU. EDU's are determined by the District's code, Section 53.09. For example, single-family, multi-family, condos and mobile homes are charged 1.0 EDU per unit. Table 5-5 shows the sewer annexation fees for various EDUs. Table 5-5 Sewer Annexation Fee by Number of EDUs Customer Classification Number of EDUs Sewer Annexation Fees Hotel/Motel w/o kitchen; /unit 0.38 $420.20 Hotel/Motel with kitchen; per unit 0.60 663.47 Residential units (1) 1.00 1,105.79 Commercial - first 1,000 sq.ft. 1.20 1,326.95 Commercial – addt’l 1,000 sq.ft. 0.70 774.05 The sewer annexation fee, per District Resolution, applies only to customers who are not currently within an ID area that annex into the District’s service area. Customers within an ID area are assumed to have been paying the availability charges and therefore are considered to be equal to other existing customers in having paid their share of system improvements prior to connecting to the system. 5.4 Key Information In the development of the annexation fees for the District, key information was utilized as follows: x The annexation fees were developed to utilize the same and consistent methodology to both utilities. Determination of the District’s Sewer Capacity Fees 31 Otay Water District– Capacity and Annexation Fee Updates x The District’s annexation fees were developed on the basis of 1% General Tax and Availability Charges escalated by the San Diego Consumer Price Index. x The District water EDUs were based on current number of accounts by meter size calculated into equivalent meters by the AWWA meter equivalency for a single family meter. x The District sewer EDUs were provided by the District, based on the 2010 EDUs and additional 43 new EDUs since 2009. x The sewer annexation fees do not include any 1% general tax within the calculation. x The sewer capacity fees assume no additional capacity is needed to serve potential future customers. These fees would need to be recalculated if a significant change in future EDU’s or capacity requirements were made. 5.5 Implementation of the Annexation Fees The methodology used to calculate the annexation fees takes into account the cost of money or inflation. Therefore, HDR would recommend that the District continue the practice of adjusting the annexation fees, each year, by the Consumer Price Index for San Diego. 5.6 Consultant Recommendations Based on our review and analysis of the District’s annexation fees, HDR makes the following recommendations: The District should revise and update their water and sewer annexation fees which are no greater than the water annexation fees calculated and as set forth in this report. The District should continue with their resolution provision for periodic (annual or quarterly) adjustments to the annexation fees based on changes in the San Diego consumer price index (CPI). The District should update the actual calculations for the annexation fees based on the methodology as approved by the resolution, for annexation fees at least every five years. 5.7 Summary The water and sewer annexation fees developed and presented in this section of the report are based on the District’s customer data and 1% General Tax and availability charges. Adoption of the proposed annexation fees will continue to create equitable and cost-based charges for new customers connecting to the District’s water and sewer systems. Technical Appendices Water Capacity Fee Otay Water District - Water Exhibit W-1 Development of Capacity Fee - Buy-In Plant Description Original Cost (1) Accumulated Depreciation Original Cost Less Depr. Reproduction Cost (2) Reproduction Cost Less Depr. Pipe Replacement Cost Pipe Replacement Cost Less Depr. OC OCLD RC RCLND RC-Pipe (3) RCLND-Pipe Water Land $12,942,489 $0 $12,942,489 $45,399,884 $45,399,884 $45,399,884 Water/Recycled Assets Buildings 15,934,537 6,746,842 9,187,695 26,547,009 14,300,416 14,300,416 Water/Recycled Assets Field Equipment 7,467,300 4,328,927 3,138,373 8,633,648 3,472,533 3,472,533 Water/Recycled Assets Chlorination 1,723,138 508,538 1,214,600 2,061,555 1,327,129 1,327,129 Water/Recycled Assets Contributed 161,117,557 58,555,283 102,562,274 269,525,543 156,294,596 156,294,596 Water/Recycled Assets Less: Contributed Capital (161,117,557) (58,555,283) (102,562,274) (269,525,543) (156,294,596)(156,294,596)Water/Recycled Assets Finance (Capitalized Interest)10,593,028 3,712,873 6,880,156 19,909,604 10,333,873 10,333,873 Water/Recycled Assets Maps And Plans 2,382,339 1,383,912 998,428 3,585,801 1,149,671 1,149,671 Water/Recycled Assets Main Water System 118,094,418 37,473,487 80,620,931 237,089,542 108,913,904 451,364,568 263,596,908 263,596,908 Water/Recycled Assets Pump Stations 24,694,513 7,574,295 17,120,218 35,266,901 23,591,579 23,591,579 See Exhibit W2 Pumps 5,610,472 3,121,064 2,489,408 12,419,232 4,432,535 4,432,535 Water/Recycled Assets Power 491,520 369,113 122,407 722,572 133,584 133,584 Water/Recycled Assets Repairs 18,196,877 7,658,024 10,538,853 23,443,246 12,459,794 12,459,794 Water/Recycled Assets Reservoirs 115,510,485 40,202,244 75,308,241 171,053,866 102,514,715 102,514,715 Water/Recycled Assets Security 2,451,027 2,029,089 421,937 3,065,505 459,622 459,622 Water/Recycled Assets Water System Yearly 20,396,738 10,658,551 9,738,186 46,972,316 14,794,192 14,794,192 Water/Recycled Assets Total Water $356,488,881 $125,766,959 $230,721,923 $636,170,682 $343,283,433 $451,364,568 $263,596,908 $497,966,436 Recycled Water Land $883,418 $0 $883,418 $1,075,287 $1,075,287 $1,075,287 Water/Recycled Assets Buildings 1,077,749 190,544 887,205 1,170,388 959,195 959,195 Water/Recycled Assets Field Equipment 145,154 63,850 81,304 165,496 89,893 89,893 Water/Recycled Assets Chlorination 754,411 183,573 570,838 841,148 636,469 636,469 Water/Recycled Assets Contributed 22,032,696 5,300,115 16,732,581 30,387,572 22,744,001 22,744,001 Water/Recycled Assets Less: Contributed Capital (22,032,696) (5,300,115) (16,732,581) (30,387,572) (22,744,001)(22,744,001) Jamacha Basin Sewer 6,234,824 1,331,237 4,903,587 7,347,515 5,419,237 5,419,237 Water/Recycled Assets Maps & Plans 12,601 5,549 7,052 21,516 12,041 12,041 Water/Recycled Assets Main 50,750,757 10,463,795 40,286,962 65,991,004 51,845,729 131,022,500 115,823,890 115,823,890 Water/Recycled Assets Pump Stations 10,246,716 1,608,540 8,638,175 12,082,413 10,166,479 0 See Exhibit W2 Pumps 1,512,731 694,804 817,927 1,709,824 918,879 918,879 Water/Recycled Assets Power 34,098 33,223 875 54,558 1,381 1,381 Water/Recycled Assets Repair 420,935 53,540 367,395 456,747 398,642 398,642 Water/Recycled Assets Reservoir 19,769,252 4,352,642 15,416,610 25,122,722 19,252,103 19,252,103 Water/Recycled Assets Study 71,821 71,821 0 81,555 0 0 Water/Recycled Assets Total Recycled $91,914,467 $19,053,118 $72,861,349 $116,120,174 $90,775,335 $131,022,500 $115,823,890 $144,587,017 Total $448,403,348 $144,820,077 $303,583,272 $752,290,856 $434,058,768 $582,387,068 $379,420,798 $642,553,453 Capacity Fee= RCLND + RCLND-Pipe Reference Water Capacity Fee and New Water Supply Fee - Page 1 of 19 Otay Water District - Water Exhibit W-1 Development of Capacity Fee - Buy-In Plant Description Original Cost (1) Accumulated Depreciation Original Cost Less Depr. Reproduction Cost (2) Reproduction Cost Less Depr. Pipe Replacement Cost Pipe Replacement Cost Less Depr. OC OCLD RC RCLND RC-Pipe (3) RCLND-Pipe Capacity Fee= RCLND + RCLND-Pipe Reference Plus: Construction Work in Progress (4)10,172,665 See Exhibit W-3A Less: Outstanding Debt Principal (5)(98,695,000)See Exhibit W-3B Plus: Past Interest Payments (6)36,168,591 See Exhibit W-3C Plus: Capital Fund Reserves (7)22,127,749 See Exhibit W-4 Total Net Plant $612,327,458 (1) Asset listing as of June, 2016. (2) Based on specific in service date of asset and June 2016 Engineering News Record, for LA construction cost index. (3) Based on pipe inventory and $25 per inch diameter. Net of contributed capital. See Exhibit W-2 (4) Construction work in progress as of June 2016. See Exhibit W-3A. (5) Remaining principal as of June 2016. See Exhibit W-3B. (6) Past interest payments from 1959 to 2008 which were not previously capitalized; net of depreciation at 50 year average life. See Exhibit W-3C. (7) Cash reserves as of June 2016 which are CF eligible. See Exhibit W-4. (8) Based on data from the utility billing system as of June 2016. See Exhibit W-5. (9) Based on "buy-in" methodology established in AWWA M1, Sixth Edition, Table VI.2-1, page 269. Water Capacity Fee and New Water Supply Fee - Page 2 of 19 Otay Water District - Water Page 1 of 3 Exhibit W-2 Development of Pipe Replacement Cost Pipe cost based on dollars per inch diameter 2016 = $25 TOTAL DIAMETER MATERIAL LENGTH REPLACEMENT DIAMETER MATERIAL LENGTH REPLACEMENT INCH TYPE FEET COST INCH TYPE FEET COST 1 CPR 12 $300 2 CML&C 20 $1,000 1 PVC 85 2,125 2 PVC 5 250 2 ACP 150 7,500 3 PVC 2,651 198,825 2 CPR 1,309 65,450 2 PVC 154 7,700 4 ACP 54 5,400 4 CML&C 28 2,800 4 ACP 22,851 2,285,100 4 STL 117 11,700 4 CML&C 10 1,000 4 PVC 2,018 201,800 4 DIP 121 12,100 4 DIP 43 4,300 4 PVC 931 93,100 4 CCP 18 1,800 4 RCP 0 0 6 ACP 100 15,000 6 CML&C 81 12,150 6 ACP 225,881 33,882,150 6 PVC 92,225 13,833,750 6 STL 177 26,550 6 PVC 3,169 475,350 6 CCP 186 27,900 8 ACP 10,363 2,072,600 6 CPR 43 6,450 8 CML&C 958 191,600 8 ACP 805,360 161,072,000 8 CML&C 4,632 926,400 8 PVC 128,861 25,772,200 8 CPR 2,155 431,000 8 DIP 29 5,800 8 STL 1,982 396,400 8 DIP 31 6,216 10 ACP 12,170 3,042,500 8 PVC 727,153 145,430,600 10 PVC 11,144 2,786,000 10 ACP 382,358 95,589,500 10 CML&C 2,412 603,000 10 PRM (FRP)5,179 1,294,750 10 CPR 6 1,500 10 STL 22 5,500 10 STL 2,068 517,000 10 DIP 540 135,000 12 ACP 11,165 3,349,500 10 PVC 83,901 20,975,250 12 CML&C 9,721 2,916,300 10 CIP 1,999 499,750 12 STL 12 3,600 10 T-80 16 4,000 12 PVC 49,972 14,991,600 12 CPR 69 20,700 12 ACP 396,345 118,903,500 12 CML&C 9,892 2,967,600 12 DIP 223 66,900 12 CPR 1,984 595,200 12 PRM (FRP)2,501 750,300 12 STL 20,229 6,068,700 12 DIP 6,147 1,844,100 14 STL 16,325 5,713,750 12 PVC 301,448 90,434,400 12 CCP 10,762 3,228,600 16 ACP 15,307 6,122,800 12 CIP 6,136 1,840,800 16 CCP 5,427 2,170,800 12 RCP 740 222,000 16 CML&C 12,493 4,997,200 12 PRM 13 3,900 13 STL 50 16,250 16 PVC 68,185 27,274,000 14 ACP 35,046 12,266,100 20 ACP 21,542 10,771,000 14 STL 7,294 2,552,900 20 CML&C 4,751 2,375,500 14 CCP 63 22,050 14 CML&C 157 54,950 20 STL 167 83,500 14 PVC 29 10,150 20 PVC 29,120 14,560,000 16 ACP 143,498 57,399,200 24 CML&C 4,755 2,853,000 16 STL 19,655 7,862,000 24 PVC 932 559,200 RECYCLED WATER PIPELINESPOTABLE WATER PIPELINES Water Capacity Fee and New Water Supply Fee - Page 3 of 19 Otay Water District - Water Page 2 of 3 Exhibit W-2 Development of Pipe Replacement Cost Pipe cost based on dollars per inch diameter 2016 = $25 TOTAL DIAMETER MATERIAL LENGTH REPLACEMENT DIAMETER MATERIAL LENGTH REPLACEMENT INCH TYPE FEET COST INCH TYPE FEET COST RECYCLED WATER PIPELINESPOTABLE WATER PIPELINES 16 DIP 2,820 1,128,168 16 PVC 133,830 53,532,000 30 CML&C 31,754 23,815,500 16 CCP 10,900 4,360,000 16 CIP 14 5,600 30 PVC 360 270,000 16 CML&C 16,228 6,491,200 16 RCP 1,712 684,800 36 PVC 254 228,600 18 ACP 14,426 6,491,700 18 STL 262 117,900 18 DIP 487 219,150 18 PVC 206 92,700 18 CCP 7,891 3,550,950 18 CML&C 1,740 783,000 18 RCP 5,043 2,269,350 20 ACP 57,967 28,983,500 20 STL 6,376 3,188,000 20 PVC 32,255 16,127,500 20 CCP 364 182,000 20 RCP 1,236 618,000 20 CIP 4 2,000 20 CML&C 13,086 6,543,000 20 DIP 2 1,000 21 CCP 3,267 1,715,175 24 ACP 64,102 38,461,200 24 STL 5,327 3,196,200 24 PVC 30,715 18,429,000 24 CCP 10,004 6,002,400 24 RCP 185 111,000 24 CML&C 7,223 4,333,800 27 CCP 1,183 798,525 30 ACP 2,150 1,612,500 30 STL 77,184 57,888,000 30 PVC 2,180 1,635,000 30 CCP 13,336 10,002,000 30 CIP 1,975 1,481,250 30 RCP 84 63,000 30 CML&C 15,424 11,568,000 36 ACP 1,971 1,773,900 36 STL 27,418 24,676,200 36 PVC 995 895,500 36 CCP 29,299 26,369,100 36 CML&C 8,177 7,359,300 42 STL 8,624 9,055,200 42 PVC 636 667,800 42 CCP 342 359,100 42 CML&C 6,812 7,152,600 48 STL 55 66,000 48 CML&C 11 13,200 Water Capacity Fee and New Water Supply Fee - Page 4 of 19 Otay Water District - Water Page 3 of 3 Exhibit W-2 Development of Pipe Replacement Cost Pipe cost based on dollars per inch diameter 2016 = $25 TOTAL DIAMETER MATERIAL LENGTH REPLACEMENT DIAMETER MATERIAL LENGTH REPLACEMENT INCH TYPE FEET COST INCH TYPE FEET COST RECYCLED WATER PIPELINESPOTABLE WATER PIPELINES 60 STL 83 124,500 Total $1,140,967,259 Total $173,339,975 Useful Life Rep. Cost Useful Life Rep. Cost Rep. Cost Contributed Pipelines $689,602,691 Contributed Pipelines $42,317,475 Otay Owned 50 451,364,568 Otay Owned 50 131,022,500 Total $1,140,967,259 Total $173,339,975 $1,314,307,234 Assume for potable 12" inches and smaller was contributed Assume for recycled 8" and smaller was contributed Yearly Depreciation Average Age (1) Accumulated Depreciation Replacement Cost Less Depreciation Yearly Depreciation Average Age (1) Accumulated Depreciation Replacement Cost Less Depreciation Replacement Cost Less Depreciation 9,027,291$ 20.8 187,767,660$ $263,596,908 2,620,450$ 5.8 15,198,610$ $115,823,890 $379,420,798 (1) Average age based on 2010 study information plus 6 years to 2016. Water Capacity Fee and New Water Supply Fee - Page 5 of 19 Otay Water District - Water Page 1 of 2Exhibit W-3A 6/30/2016Development of Construction Work in Progress For the Year Ended June 30, 2016 Project Fund Description Beg Balance Addition/Accrual Capitalized/ Expensed/Reversed Ending Balance Expansion Betterment Replacement New Supply % CF % New Supply Total CF Total New Supply P2037 12 Res - 980-3 Reservoir 10.0 MG 242,686.21$ -$ -$ 242,686.21$ 100.0%0.0%0.0%0.0%100.0%0.0%$242,686 $0 P2040 12 Res - 1655-1 Reservoir 0.5 MG - 6,113.82 - 6,113.82 100.0%0.0%0.0%0.0%100.0%0.0%6,114 0 P2083 12 PS - 870-2 Pump Station (28,000 GPM)1,302,904.24 344,886.89 360,733.76 1,287,057.37 0.0%0.0%100.0%0.0%100.0%0.0%1,287,057 0 P2267 12 36-Inch Main Pumpouts & Air/Vacuum Vent 175,639.62 49,276.63 1,280.00 223,636.25 0.0%100.0%0.0%0.0%100.0%0.0%223,636 0 P2282 12 Vehicle Capital Purchases - 530,347.47 530,347.47 - 0.0%0.0%100.0%0.0%100.0%0.0%0 0 P2285 12 Office Eqpmnt & Furniture Capital Purch - 15,305.88 15,305.88 - 0.0%0.0%100.0%0.0%100.0%0.0%0 0 P2286 12 Field Equipment Capital Purchases - 54,696.79 54,696.79 - 0.0%0.0%100.0%0.0%100.0%0.0%0 0 P2325 12 PL - 10" to 12" Oversize, 1296 Zone, PB - 18,866.22 18,866.22 - 100.0%0.0%0.0%0.0%100.0%0.0%0 0 P2366 12 APCD Engine Replacements and Retrofits - 16,306.93 16,306.93 - 0.0%0.0%100.0%0.0%100.0%0.0%0 0 P2382 12 Safety and Security Improvements - 314,990.25 314,990.25 - 0.0%0.0%100.0%0.0%100.0%0.0%0 0 P2451 12 Otay Mesa Desalination Conveyance and Di - 310,067.59 310,067.59 - 0.0%60.0%0.0%40.0%60.0% 40.0%0 0 P2453 12 SR-11 Utility Relocations 1,265,553.82 179,844.79 1,440,525.30 4,873.31 0.0%0.0%100.0%0.0%100.0%0.0%4,873 0 P2466 12 Regional Training Facility - 815.99 815.99 - 40.0%60.0%0.0%0.0%100.0%0.0%0 0 P2469 12 Information Tech Network and Hardware - 174,156.18 174,156.18 - 100.0%0.0%0 0 P2470 12 Application Systems Dev & Integration - 40,385.80 - 40,385.80 0.0%40.0%60.0%0.0%100.0%0.0%40,386 0 P2477 12 Res - 624-1 Reservoir Cover Replacement - (12,520.00) (12,520.00) - 100.0%0.0%0 0 P2484 12 Large Water Meter Replacement Program - 68,234.40 68,234.40 - 0.0%0.0%100.0%0.0%100.0%0.0%0 0 P2485 12 SCADA Communication Syst & Software Repl - 256,897.63 256,897.63 0.00 0.0%0.0%100.0%0.0%100.0%0.0%0 0 P2486 12 Asset Mgmnt Plan Condition Assess & Data 759,928.34 20,000.00 759,928.34 20,000.00 40.0%60.0%0.0%0.0%100.0%0.0%20,000 0 P2493 12 624-2 Reservoir Interior Coating & Upgra - 6,199.98 6,199.98 - 0.0%0.0%100.0%0.0%100.0%0.0%0 0 P2494 12 Multiple Species Conservation Plan - 7,368.40 7,368.40 - 100.0%0.0%0.0%0.0%100.0%0.0%0 0 P2495 12 San Miguel Habitat Mgmt/Mitigation Area - 102,154.34 102,154.34 - 0.0%0.0%0.0%0.0%100.0%0.0%0 0 P2496 12 Otay Lakes Road Utility Relocations - 1,046.11 1,046.11 - 0.0%0.0%100.0%0.0%100.0%0.0%0 0 P2504 12 Regulatory Site Access Rd & PL Relocatn 260,743.10 260.94 - 261,004.04 0.0%50.0%50.0%0.0%100.0%0.0%261,004 0 P2507 12 East Palomar Street Utility Relocation 694,142.84 23,107.20 - 717,250.04 0.0%0.0%100.0%0.0%100.0%0.0%717,250 0 P2508 12 Pipeline Cathodic Protection Repl Prog 177,516.44 65,005.26 6,795.99 235,725.71 0.0%0.0%100.0%0.0%100.0%0.0%235,726 0 P2511 12 North District - South District Intercon 2,071,865.21 449,873.68 370,417.50 2,151,321.39 40.0%60.0%0.0%0.0%100.0%0.0%2,151,321 0 P2515 12 870-1 Reservoir Paving 485,322.01 4,325.51 489,647.52 - 100.0%0.0%0 0 P2518 12 803-3 Reservoir Interior/Exterior Coatin - 6,829.24 6,829.24 - 0.0%0.0%100.0%0.0%100.0%0.0%0 0 P2519 12 832-2 Reservoir Interior/Exterior Coatin - 7,801.22 7,801.22 - 0.0%0.0%100.0%0.0%100.0%0.0%0 0 P2520 12 Motorola Mobile Radio Upgrade - 1,987.36 - 1,987.36 0.0%0.0%100.0%0.0%100.0%0.0%1,987 0 P2529 12 711-2 Reservoir Interior & Exterior Coat 15,669.06 344,408.52 - 360,077.58 0.0%0.0%100.0%0.0%100.0%0.0%360,078 0 P2530 12 711-1 Reservoir Interior & Exterior Coat 15,783.71 889,241.09 905,024.80 - 0.0%0.0%100.0%0.0%100.0%0.0%0 0 P2531 12 944-1 Reservoir Interior & Exterior Coat 10,719.21 299,815.57 310,534.78 - 0.0%0.0%100.0%0.0%100.0%0.0%0 0 P2532 12 944-2 Reservoir Interior & Exterior Coat 887,033.72 49,688.35 936,722.07 - 0.0%0.0%100.0%0.0%100.0%0.0%0 0 P2535 12 458-2 Reservoir Interior Coating 373,947.06 399,575.85 773,522.91 - 0.0%0.0%100.0%0.0%100.0%0.0%0 0 P2537 12 Operations Yard Property Acquisition Imp 166,482.50 561,571.70 728,054.20 - 0.0%100.0%0.0%0.0%100.0%0.0%0 0 P2538 12 Administration and Operations Building F - 25,020.72 25,020.72 - 0.0%0.0%100.0%0.0%100.0%0.0%0 0 P2539 12 South Bay Bus Rapid Transit (BRT) Utilit 829,789.59 48,795.29 - 878,584.88 0.0%0.0%100.0%0.0%100.0%0.0%878,585 0 P2540 12 Work Order Management System Replacement - 168,540.82 168,540.82 - 0.0%40.0%60.0%0.0%100.0%0.0%0 0 P2541 12 624 Pressure Zone PRSs 224,411.28 517,861.61 742,272.89 - 0.0%100.0%0.0%0.0%100.0%0.0%0 0 P2542 12 850-3 Reservoir Interior Coating 144,545.64 382,314.31 526,859.95 - 0.0%0.0%100.0%0.0%100.0%0.0%0 0 P2545 12 980-1 Reservoir Interior Exterior Coatin - 997,240.96 - 997,240.96 0.0%0.0%100.0%0.0%100.0%0.0%997,241 0 P2547 12 District Administration Vehicle Charging 10,571.42 9,023.25 - 19,594.67 40.0%60.0%0.0%0.0%100.0%0.0%19,595 0 P2548 12 Sump Pump Installation at the 980-1 & 2 26,030.90 (0.00) 26,030.90 - 100.0%0.0%0 0 P2549 12 Fuel System Upgrade - 28,968.16 28,968.16 - 0.0%0.0%100.0%0.0%100.0%0.0%0 0 P2551 12 Blossom Lane Helix WD and Otay WD Interc 7,692.90 160,619.36 168,312.26 - 0.0%100.0%0.0%0.0%100.0%0.0%0 0 P2552 12 South Barcelona Helix WD and Otay WD Int 7,520.66 157,039.16 164,559.82 - 0.0%100.0%0.0%0.0%100.0%0.0%0 0 P2553 12 Heritage Road Bridge Replacement and Uti 210.24 5,024.95 - 5,235.19 0.0%0.0%100.0%0.0%100.0%0.0%5,235 0 P2554 12 640/340 PRS at Energy Way and Nirvana Av - 954.20 954.20 - 0.0%100.0%0.0%0.0%100.0%0.0%0 0 P2555 12 Administration & Operations Parking Lot - 48,309.89 - 48,309.89 0.0%0.0%100.0%0.0%100.0%0.0%48,310 0 Water Capacity Fee and New Water Supply Fee - Page 6 of 19 Otay Water District - Water Page 2 of 2Exhibit W-3A 6/30/2016Development of Construction Work in Progress For the Year Ended June 30, 2016 Project Fund Description Beg Balance Addition/Accrual Capitalized/ Expensed/Reversed Ending Balance Expansion Betterment Replacement New Supply % CF % New Supply Total CF Total New Supply P2557 12 520 Res Recirculation Pipeline Chemical - 9,403.09 - 9,403.09 0.0%0.0%100.0%0.0%100.0%0.0%9,403 0 P2558 12 Additional pump station fuel storage - 5,115.07 - 5,115.07 0.0%100.0%0.0%0.0%100.0%0.0%5,115 0 P2559 12 Pressure Vessel Repair and Replacement P - 46,790.11 - 46,790.11 0.0%0.0%100.0%0.0%100.0%0.0%46,790 0 P2561 12 Res - 711-3 Reservoir Cover/Liner Replac - 1,329.04 - 1,329.04 0.0%0.0%100.0%0.0%100.0%0.0%1,329 0 P2568 12 Technology Business Processes Improvemen - 24,966.00 24,966.00 - 0.0%0.0%100.0%0.0%100.0%0.0%0 0 P2569 12 Metro Ethernet Implementation/ District - 106,003.71 - 106,003.71 0.0%0.0%100.0%0.0%100.0%0.0%106,004 0 12 accruals 12 Accrual - 2,295.00 2,295.00 - 12 reimb 12 Reimbursement Agreement Accrual 20,300.00 - 20,300.00 - Total Water $10,177,010 $8,354,548 $10,861,833 $7,669,725 $7,669,725 $0 R2048 32 RecPL - Otay Mesa Dist Pipelines & Conve 379,734.09 - - 379,734.09 100.0%0.0%0.0%0.0%100.0%0.0%379,734 0 R2058 32 RecPL-16-Inch, 860 Zone, Airway Rd- Otay 675,954.72 - - 675,954.72 100.0%0.0%675,955 0 R2077 32 RecPL-24-Inch, 860 Zone, Alta Rd - Alta 5,441.99 1,639.63 7,081.62 - 100.0%0.0%0.0%0.0%100.0%0.0%0 0 R2087 32 RecPL-24-inch,927 Zone,Wueste Rd-Olympic 953,314.13 - 248,546.69 704,767.44 100.0%0.0%0.0%0.0%100.0%0.0%704,767 0 R2107 32 RWCWRF Screening Compactor and Chlorine - 3,472.58 3,472.58 - 0.0%0.0%100.0%0.0%100.0%0.0%0 0 R2108 32 Res - 927-1 Reservoir Cover Replacement 18,538.56 4,173.30 22,711.86 - 0.0%0.0%100.0%0.0%100.0%0.0%0 0 R2109 32 Sweetwater River Wooden Trestle Improvem 119,855.84 233,322.97 353,178.81 - 0.0%0.0%100.0%0.0%100.0%0.0%0 0 R2110 32 RecPS - 927-1 Optimization and Pressure 83,486.93 46,305.64 129,792.57 - 0.0%100.0%0.0%0.0%100.0%0.0%0 0 R2111 32 RWCWRF - RAS Pump Replacement 149,592.46 405,859.77 555,452.23 - 0.0%0.0%100.0%0.0%100.0%0.0%0 0 R2112 32 450-1 Disinfection Facility Rehabilitati 151,353.77 62,104.64 213,458.41 - 0.0%0.0%100.0%0.0%100.0%0.0%0 0 R2116 32 RecPL - 14-Inch, 927 Zone, Forcemain Ass 332,741.50 289,931.17 48,658.43 574,014.24 0.0%100.0%0.0%0.0%100.0%0.0%574,014 0 R2117 32 RWCWRF Contact Basin Expansion Project 103,927.64 7,377.64 - 111,305.28 0.0%100.0%0.0%0.0%100.0%0.0%111,305 0 R2118 32 Steele Canyon Sewer PS Chopper Pump - 4,940.48 - 4,940.48 0.0%100.0%0.0%0.0%100.0%0.0%4,940 0 R2119 32 Treatment Plant Automation & Security Up - 33,449.06 - 33,449.06 0.0%100.0%0.0%0.0%100.0%0.0%33,449 0 R2121 32 Res - 944-1 Reservoir Cover/Liner Replac - 18,773.98 - 18,773.98 0.0%0.0%100.0%0.0%100.0%0.0%18,774 0 R2122 32 Emergency Recycled Water Fire Hydrant In - 32,416.96 32,416.96 - 0.0%100.0%0.0%0.0%100.0%0.0%0 0 Accrual - - - - Reimbursement Agreement Accrual 201,019.50 - - 201,019.50 Total Recycled $3,174,961 $1,143,768 $1,614,770 $2,703,959 $2,502,939 $0 TOTAL $13,351,971 $9,498,316 $12,476,603 $10,373,684 $10,172,665 $0 Less: Accruals at year-end (221,319.50) (2,295.00) (22,595.00) (201,019.50) $13,130,651 $9,496,021 $12,454,008 $10,172,665 - - Water Capacity Fee and New Water Supply Fee - Page 7 of 19 Otay Water District - Water Exhibit W-3B Development of Water Debt For the Year Ended June 30, 2016 Debt Name 1996 2007 Ref. in 2016 2009 2010 A 2010 B July 5, 2013 TOTAL Principal Interest COP Principal Interest COP Principal Interest G.O.Principal Interest COP Principal Interest BABs Principal Interest Refunding PRINCIPAL I. Debt Status: Original Debt $15,400,000 $42,000,000 $7,780,000 $13,840,000 $36,355,000 $7,735,000 $123,110,000 # of Years/Rate 0.00%0.00%0.00%0.00%0.00%0.00% II. Principal and Interest Payments: 2017 $600,000 $16,600 $616,600 $1,200,000 $994,708 $2,194,708 $585,000 $162,969 $747,969 $900,000 $431,088 $1,331,088 $0 $2,371,868 $2,371,868 $635,000 $213,033 $848,033 3,920,000 2018 600,000 15,400 615,400 1,015,000 1,214,806 2,229,806 605,000 139,633 744,633 940,000 393,754 1,333,754 0 2,371,868 2,371,868 660,000 186,800 846,800 3,820,000 2019 700,000 14,033 714,033 1,045,000 1,173,456 2,218,456 635,000 114,433 749,433 975,000 354,988 1,329,988 0 2,371,868 2,371,868 685,000 159,567 844,567 4,040,000 2020 700,000 12,633 712,633 1,100,000 1,119,831 2,219,831 650,000 88,533 738,533 1,015,000 306,196 1,321,196 0 2,371,868 2,371,868 715,000 131,167 846,167 4,180,000 2021 700,000 11,233 711,233 1,155,000 1,063,456 2,218,456 680,000 61,533 741,533 1,065,000 253,363 1,318,363 0 2,371,868 2,371,868 745,000 101,567 846,567 4,345,000 2022 800,000 9,667 809,667 1,215,000 1,004,206 2,219,206 705,000 33,500 738,500 1,120,000 197,821 1,317,821 0 2,371,868 2,371,868 775,000 70,767 845,767 4,615,000 2023 800,000 8,067 808,067 1,285,000 941,706 2,226,706 720,000 4,800 724,800 1,175,000 139,529 1,314,529 0 2,371,868 2,371,868 805,000 38,767 843,767 4,785,0002024900,000 6,300 906,300 1,350,000 875,831 2,225,831 0 0 0 1,235,000 78,279 1,313,279 0 2,371,868 2,371,868 835,000 5,567 840,567 4,320,000 2025 900,000 4,500 904,500 1,420,000 806,581 2,226,581 0 0 0 1,295,000 11,331 1,306,331 0 2,371,868 2,371,868 0 0 0 3,615,000 2026 1,000,000 2,533 1,002,533 1,495,000 733,706 2,228,706 0 0 0 0 0 0 1,365,000 2,299,330 3,664,330 0 0 0 3,860,000 2027 1,100,000 367 1,100,367 1,570,000 657,081 2,227,081 0 0 0 0 0 0 1,450,000 2,207,767 3,657,767 0 0 0 4,120,000 2028 0 0 0 1,645,000 584,931 2,229,931 0 0 0 0 0 0 1,545,000 2,110,252 3,655,252 0 0 0 3,190,000 2029 0 0 0 1,715,000 517,731 2,232,731 0 0 0 0 0 0 1,640,000 2,006,679 3,646,679 0 0 0 3,355,000 2030 0 0 0 1,785,000 447,731 2,232,731 0 0 0 0 0 0 1,745,000 1,896,516 3,641,516 0 0 0 3,530,000 2031 0 0 0 1,855,000 374,931 2,229,931 0 0 0 0 0 0 1,855,000 1,779,392 3,634,392 0 0 0 3,710,000 2032 0 0 0 1,955,000 313,394 2,268,394 0 0 0 0 0 0 1,975,000 1,651,430 3,626,430 0 0 0 3,930,000 2033 0 0 0 2,005,000 263,894 2,268,894 0 0 0 0 0 0 2,105,000 1,514,409 3,619,409 0 0 0 4,110,000 2034 0 0 0 2,055,000 211,859 2,266,859 0 0 0 0 0 0 2,245,000 1,368,290 3,613,290 0 0 0 4,300,000 2035 0 0 0 2,115,000 155,806 2,270,806 0 0 0 0 0 0 2,390,000 1,212,689 3,602,689 0 0 0 4,505,000 2036 0 0 0 2,170,000 96,888 2,266,888 0 0 0 0 0 0 2,550,000 1,046,730 3,596,730 0 0 0 4,720,000 2037 0 0 0 2,235,000 33,525 2,268,525 0 0 0 0 0 0 2,715,000 869,973 3,584,973 0 0 0 4,950,000 2038 0 0 0 0 0 0 0 0 0 0 0 0 2,895,000 681,541 3,576,541 0 0 0 2,895,000 2039 0 0 0 0 0 0 0 0 0 0 0 0 3,085,000 480,724 3,565,724 0 0 0 3,085,00020400 0 0 0 0 0 0 0 0 0 0 0 3,290,000 266,587 3,556,587 0 0 0 3,290,000 2041 0 0 0 0 0 0 0 0 0 0 0 0 3,505,000 38,421 3,543,421 0 0 0 3,505,000 TOTAL $8,800,000 $101,333 $8,901,333 $33,385,000 $13,586,062 $46,971,062 $4,580,000 $605,402 $5,185,402 $9,720,000 $2,166,348 $11,886,348 $36,355,000 $42,777,544 $79,132,544 $5,855,000 $907,233 $6,762,233 $98,695,000 Water Capacity Fee and New Water Supply Fee - Page 8 of 19 Otay Water District - Water Exhibit W-3C Development of Past Interest Payments Year Total Sewer Water CPI Escalation Factor 2008 Present Day Dollars Sewer Present Day Dollars Water CPI Escalation Factor 2016 Present Day Dollars Sewer Present Day Dollars Water Average Age YTD Remaining Depreciated Sewer Depreciated Water Present Dollars Less Depr. Sewer Present Dollars Less Depr. Water 2008 2,601,252 47,277 2,553,975 1.09 51,683 2,791,997 1.13 $53,192 $2,873,495 50 9 41 $9,575 $517,229 $43,617 $2,356,266 2007 950,479 58,066 892,413 1.03 59,948 921,344 1.17 67,848 1,042,756 50 10 40 13,570 208,551 54,279 834,204 2006 959,225 68,491 890,734 1.06 72,330 940,660 1.20 81,861 1,064,617 50 11 39 18,009 234,216 63,852 830,401 2005 1,327,844 78,562 1,249,282 1.09 85,786 1,364,158 1.24 97,091 1,543,922 50 12 38 23,302 370,541 73,789 1,173,381 2004 1,252,307 88,293 1,164,014 1.13 99,946 1,317,638 1.28 113,117 1,491,272 50 13 37 29,410 387,731 83,706 1,103,541 2003 947,099 97,695 849,404 1.17 114,629 996,632 1.33 129,734 1,127,965 50 14 36 36,326 315,830 93,409 812,135 2002 1,503,063 106,779 1,396,284 1.22 129,973 1,699,564 1.38 147,100 1,923,527 50 15 35 44,130 577,058 102,970 1,346,469 2001 1,543,336 115,556 1,427,780 1.26 145,585 1,798,801 1.43 164,769 2,035,841 50 16 34 52,726 651,469 112,043 1,384,372 2000 1,540,592 124,036 1,416,556 1.32 163,449 1,866,668 1.49 184,988 2,112,652 50 17 33 62,896 718,302 122,092 1,394,350 1999 1,809,747 176,967 1,632,780 1.39 246,694 2,276,112 1.58 279,202 2,576,051 50 18 32 100,513 927,378 178,689 1,648,672 1998 1,952,742 227,266 1,725,476 1.44 328,010 2,490,361 1.63 371,235 2,818,533 50 19 31 141,069 1,071,042 230,165 1,747,490 1997 2,080,744 274,606 1,806,138 1.47 404,084 2,657,737 1.67 457,332 3,007,964 50 20 30 182,933 1,203,186 274,399 1,804,779 1996 1,421,139 319,333 1,101,806 1.50 478,077 1,649,525 1.69 541,076 1,866,893 50 21 29 227,252 784,095 313,824 1,082,798 1995 936,716 362,687 574,029 1.54 557,180 881,856 1.74 630,603 998,064 50 22 28 277,466 439,148 353,138 558,916 1994 1,329,706 394,491 935,215 1.56 615,062 1,458,118 1.76 696,112 1,650,264 50 23 27 320,212 759,121 375,901 891,142 1993 749,618 419,512 330,106 1.60 671,011 528,005 1.81 759,434 597,583 50 24 26 364,528 286,840 394,906 310,743 1992 689,412 296,895 392,517 1.63 485,193 641,462 1.85 549,130 725,992 50 25 25 274,565 362,996 274,565 362,996 1991 1,172,353 336,012 836,341 1.68 564,437 1,404,895 1.90 638,816 1,590,028 50 26 24 332,185 826,814 306,632 763,213 1990 1,454,800 372,559 1,082,241 1.74 648,438 1,883,639 1.97 733,887 2,131,859 50 27 23 396,299 1,151,204 337,588 980,655 1989 1,314,494 408,975 905,519 1.84 754,333 1,670,183 2.09 853,737 1,890,274 50 28 22 478,093 1,058,554 375,644 831,721 1988 1,841,881 444,586 1,397,295 1.95 867,861 2,727,613 2.21 982,225 3,087,049 50 29 21 569,690 1,790,488 412,534 1,296,560 1987 1,339,462 477,707 861,755 2.05 979,340 1,766,671 2.32 1,108,395 1,999,477 50 30 20 665,037 1,199,686 443,358 799,791 1986 1,428,383 509,385 918,998 2.12 1,081,084 1,950,422 2.40 1,223,546 2,207,442 50 31 19 758,599 1,368,614 464,948 838,828 1985 1,508,454 538,914 969,540 2.18 1,175,872 2,115,468 2.47 1,330,824 2,394,237 50 32 18 851,728 1,532,312 479,097 861,925 1984 1,585,069 566,769 1,018,300 2.30 1,302,731 2,340,584 2.60 1,474,400 2,649,018 50 33 17 973,104 1,748,352 501,296 900,666 1983 1,614,923 593,048 1,021,875 2.43 1,442,993 2,486,408 2.75 1,633,146 2,814,059 50 34 16 1,110,539 1,913,560 522,607 900,499 1982 1,496,029 601,840 894,189 2.50 1,507,009 2,239,051 2.83 1,705,598 2,534,105 50 35 15 1,193,918 1,773,874 511,679 760,232 1981 1,546,319 118,910 1,427,409 2.67 317,909 3,816,220 3.03 359,802 4,319,108 50 36 14 259,058 3,109,758 100,745 1,209,350 1980 1,689,015 126,371 1,562,644 3.03 383,386 4,740,775 3.43 433,908 5,365,498 50 37 13 321,092 3,970,468 112,816 1,395,029 1979 1,727,910 146,451 1,581,459 3.50 512,015 5,529,024 3.96 579,487 6,257,620 50 38 12 440,410 4,755,791 139,077 1,501,829 1978 846,568 139,706 706,862 4.07 568,464 2,876,224 4.61 643,374 3,255,243 50 39 11 501,832 2,539,089 141,542 716,153 1977 699,346 146,858 552,488 4.48 657,544 2,473,719 5.07 744,193 2,799,697 50 40 10 595,355 2,239,758 148,839 559,939 1976 500,880 152,370 348,510 4.77 726,805 1,662,393 5.40 822,581 1,881,457 50 41 9 674,516 1,542,795 148,065 338,662 1975 505,080 158,245 346,835 5.06 800,816 1,755,196 5.73 906,345 1,986,490 50 42 8 761,330 1,668,652 145,015 317,838 1974 545,897 163,251 382,646 5.54 904,016 2,118,935 6.27 1,023,145 2,398,161 50 43 7 879,904 2,062,419 143,240 335,743 1973 545,960 166,687 379,273 6.15 1,024,296 2,330,642 6.95 1,159,274 2,637,766 50 44 6 1,020,161 2,321,234 139,113 316,532 1972 559,456 195,260 364,196 6.55 1,278,131 2,383,950 7.41 1,446,558 2,698,099 50 45 5 1,301,902 2,428,289 144,656 269,810 1971 507,776 19,884 487,892 6.80 135,304 3,319,940 7.70 153,134 3,757,430 50 46 4 140,883 3,456,836 12,251 300,594 1970 399,854 11,322 388,532 7.06 79,979 2,744,620 7.99 90,519 3,106,296 50 47 3 85,088 2,919,918 5,431 186,378 1969 286,268 286,268 7.43 - 2,128,323 8.41 - 2,408,786 50 48 2 0 2,312,435 0 96,351 1968 269,080 269,080 7.82 - 2,104,459 8.85 - 2,381,777 50 49 1 0 2,334,142 0 47,636 1967 237,827 237,827 8.14 - 1,935,438 9.21 - 2,190,483 50 50 0 0 2,190,483 0 0 1966 243,112 243,112 8.39 - 2,040,489 9.50 - 2,309,378 50 51 0 0 2,309,378 0 0 1965 224,790 224,790 8.54 - 1,920,159 9.67 - 2,173,191 50 52 0 0 2,173,191 0 0 1964 199,375 199,375 7.77 - 1,549,240 8.79 - 1,753,394 50 53 0 0 1,753,394 0 0 1963 127,415 127,415 7.87 - 1,003,018 8.91 - 1,135,193 50 54 0 0 1,135,193 0 0 1962 75,500 75,500 7.98 - 602,213 9.03 - 681,570 50 55 0 0 681,570 0 0 1961 75,500 75,500 8.06 - 608,255 9.12 - 688,408 50 56 0 0 688,408 0 0 1960 72,250 72,250 8.14 - 587,971 9.21 - 665,452 50 57 0 0 665,452 0 0 1959 75,500 75,500 8.95 - 675,375 9.37 - 707,334 50 58 0 0 707,334 0 0 $50,311,547 $9,651,623 $40,659,924 $22,421,405 $97,772,150 $25,370,719 $110,312,767 $16,489,202 $74,144,176 $8,881,516 $36,168,591 1. 1959-1962 only id 2 & 3, 1963-1966 - 2,3,5,6,7,9,10, this is the interest which is not already capitalized (previously). Water Capacity Fee and New Water Supply Fee - Page 9 of 19 Otay Water District - Water Exhibit W-4 Summary of Reserve Funds For the Year Ended June 30, 2016 Account #OPEB New Water Supply Expansion Replacement Betterment Debt Fund Debt Reserve Capital Improvement General Total % CF Eligible (1) Capacity Fee RESTRICTED RESERVES 312207 Betterment Fees - ID 18 $0 $0 $0 $0 $0 $0 $0 $0 0%$0 312209 Betterment Fees - ID 22 0 0 0 0 (66,440,547)20,525,955 0 (45,914,591)0%0 312101 Capacity Fees 0 0 (45,805,909)0 0 0 0 (45,805,909)100%(45,805,909) 312102 Capital Improvement Fund 0 0 0 11,558,182 0 0 0 11,558,182 100%11,558,182 312103 New Supply Fund 0 (220,379)0 0 0 0 0 (220,379)100%(220,379) 312111 New Supply Debt Fund 0 707,438 0 0 0 0 0 707,438 100%707,438 312112 Expansion Debt Fund 0 0 38,224,788 0 0 0 0 38,224,788 100%38,224,788 312113 Replacement Debt Fund 0 0 0 11,760,390 0 0 0 11,760,390 0%0 312121 New Supply CIF 0 0 0 0 0 0 0 0 100%0 312413 State Loan Reserve 0 0 0 0 0 0 0 0 0%0 312414 GO Bonds Reserve 0 0 0 0 0 0 657,076 657,076 0%0 312416 Grants - CIP 0 0 0 0 0 0 0 0 0%0 312421 2010 COPs TE - Reserve 0 0 0 0 0 0 1,074,712 1,074,712 0%0 312422 2010 COPs BABs - Reserve 0 0 0 0 0 0 2,823,059 2,823,059 0%0 TOTAL RESTRICTED $0 $487,059 ($7,581,122)$23,318,572 ($66,440,547)$20,525,955 $4,554,847 $0 $0 ($25,135,235)$4,464,119 DESIGNATED RESERVES 312229 Designated Betterment $0 $0 $0 $0 $47,212,735 $47,212,735 0%0 321203 New Supply Fee Reserve 0 64,711 0 0 0 64,711 100%64,711 312412 Expansion Reserve 0 0 5,808,095 0 0 5,808,095 100%5,808,095 321201 Replacement Reserve 0 0 0 19,312,995 0 19,312,995 0%0 321202 Retiree Health Ins - OPEB (a)127,492 0 0 0 0 127,492 0%0 TOTAL DESIGNATED $127,492 $64,711 $5,808,095 $19,312,995 $47,212,735 $0 $0 $0 $0 $72,526,029 $5,872,806 TOAL RESTRICTED & DESIGNATED $127,492 $551,770 ($1,773,027)$42,631,567 ($19,227,811)$20,525,955 $4,554,847 $0 $0 $47,390,793 $10,336,925 GENERAL FUND (UNRESTRICTED) Annexation (Potable)$11,790,824 $11,790,824 100%$11,790,824 Annexation (Sewer)0 0 0%0 Operating 8,567,364 8,567,364 0%0 11-215101 Developer Deposit 530,923 530,923 0%0 77-215101|215111 Dev/Cell Site Dep 2,151,992 2,151,992 0%0 312415 Lakeview Replacement 294,886 294,886 0%0 312424 Highlands Golf Course, LLC 44,197 44,197 0%0 TOTAL GENERAL FUND $0 $0 $0 $0 $0 $0 $0 $0 $23,380,187 $23,380,187 $11,790,824 TOTALS BY FUND CATEGORY $127,492 $551,770 ($1,773,027)$42,631,567 ($19,227,811)$20,525,955 $4,554,847 $0 $23,380,187 $70,770,980 $22,127,749 Notes: (1) Balance available unrestricted for expansion and new supply. Betterment Water Capacity Fee and New Water Supply Fee - Page 10 of 19 Otay Water District - Water Exhibit W-5 Development of Equivalent Dwelling Units For the Year Ended June 30, 2016 Number of Meters (1) Class of Service 5/8"3/4"1"1 1/2"2"3"4"6"8"10"12" Number of Meters Residential 0 43,202 1,814 18 4 45,038 Master Metered 0 41 185 244 232 42 64 6 3 0 0 817 Commercial & Public 6 329 356 299 388 34 28 10 0 5 0 1,455 Ag, Lds & Construction 0 106 268 382 463 2 8 2 0 0 1,231 Recycled 0 3 99 394 194 4 10 3 0 1 0 708 Temporary 0 7 8 5 2 0 100 1 0 0 0 123 Total Billed 6 43,688 2,730 1,342 1,283 82 210 22 3 6 0 49,372 Less: Temporary 0 7 8 5 2 0 100 1 0 0 0 123 Total Existing Permanent 6 43,681 2,722 1,337 1,281 82 110 21 3 6 0 49,249 Class of Service 5/8"3/4"1"1 1/2"2"3"4"6"8"10"12" AWWA Weighting - 5/8" Meter 1.00 1.00 2.50 5.00 8.00 16.00 25.00 50.00 80.00 115.00 168.75 Total Residential 0 43,202 4,535 90 32 0 0 0 0 0 0 47,859 Master Metered 0 41 463 1,220 1,856 672 1,600 300 240 0 0 6,392 Commercial & Public 6 329 890 1,495 3,104 544 700 500 0 575 0 8,143 Ag, Lds & Construction 0 106 670 1,910 3,704 32 200 100 0 0 0 6,722 Recycled 0 3 248 1,970 1,552 64 250 150 0 115 0 4,352 Temporary 0 7 20 25 16 0 2,500 50 0 0 0 2,618 Residential Meter Equivalency 6 43,688 6,825 6,710 10,264 1,312 5,250 1,100 240 690 0 76,085 Less: Temporary 0 7 20 25 16 0 2,500 50 0 0 0 2,618 Total Existing Permanent 6 43,681 6,805 6,685 10,248 1,312 2,750 1,050 240 690 0 73,467 Projected Ultimate EDUs (2) 106,848 Expansion EDUs (2) 33,381 Notes: (1) Based on data from the utility billing system as of FY 2016. (2) Based on data from the District on Land Use Demand. Fire and temporary services are not included. Total Equivalent Meters Water Capacity Fee and New Water Supply Fee - Page 11 of 19 Otay Water District - Water Page 1 of 6 Exhibit W-6 Development of Capacity Fee - Future Count Project Type Project Type Per RM 17 CIPNo Project Title Projected Project Cost (000s)Expansion Betterment Replacement New Supply % CF Eligible Capacity Fee 1 C M P2083 PS - 870-2 Pump Station Replacement (11,000 GPM)$17,000 0.0% 0.0%100.0%0.0%0%$0 2 RF M P2267 36-Inch Main Pumpouts and Air/Vacuum Ventilation Installations 735 0.0%100.0%0.0% 0.0%0%0 3 RF P P2282 Vehicle Capital Purchases 5,491 0.0% 0.0%100.0%0.0%0%0 4 CF P P2285 Office Equipment and Furniture Capital Purchases 589 0%0% 100%0.0%0%0 5 C P P2286 Field Equipment Capital Purchases 1,734 0.0% 0.0%100.0%0.0%0%0 6 P P P2366 APCD Engine Replacements and Retrofits 3,371 0.0% 0.0%100.0%0.0%0%0 7 P C P2382 Safety and Security Improvements 2,811 0.0% 0.0%100.0%0.0%0%0 8 M C P2451 Otay Mesa DesalinaƟon Conveyance and DisinfecƟon SystemOtay Mesa DesalinaƟon Conveyance and DisinfecƟon System 30,000 0.0%69.0%0.0%31.0%0%0 9 CF C P2453 SR-11 Utility Relocations 4,000 0.0% 0.0%100.0%0.0%0%0 10 C C P2466 Regional Training Facility 300 31.0% 69.0%0.0% 0.0%31%93 11 CF P2066 PL - 30-Inch, 870 Zone, Otay Mesa R/W - Alta/State Prison 608 50.0% 25.0% 25.0%0.0%50%304 12 C CF P2470 Financial System Enhancements 1,765 0.0%40.0% 60.0%0.0%0%0 13 CF P2067 PL - 24-Inch, 870 Zone, Otay Mesa R/W - State Prison/Otay Mesa 810 20.0% 40.0% 40.0%0.0%20%162 14 C C P2485 SCADA Communication System and Software Replacement 2,014 0.0% 0.0%100.0%0.0%0%0 15 P C P2486 Asset Management Plan Condition Assessment and Data Acquisition 957 31.0% 69.0%0.0% 0.0%31%297 16 P M P2493 624-2 Reservoir Interior Coating and Upgrades 1,675 0.0% 0.0%100.0%0.0%0%0 17 M C P2494 Multiple Species Conservation Plan 950 100.0%0.0%0.0% 0.0%100%950 18 M CF P2495 San Miguel Habitat Management/Mitigation Area 2,100 0.0% 0.0%0.0% 0.0%0%0 19 C C P2504 Regulatory Site Access Road and Pipeline Relocation 900 0.0%50.0% 50.0%0.0%0%0 20 M M P2507 East Palomar Street Utility Relocation 940 0.0% 0.0%100.0%0.0%0%0 21 M M P2508 Pipeline Cathodic Protection Replacement Program 725 0.0% 0.0%100.0%0.0%0%0 22 M CF P2511 North District - South District Interconnection System 37,300 31.0% 69.0%0.0% 0.0%31%11,563 23 D RF P2139 PL - 20-Inch, 980 Zone, Otay Lakes Road - P2138/Loop 535 100.0%0.0%0.0% 0.0%100%535 24 M M P2518 803-3 Reservoir Interior/Exterior Coating 700 0.0% 0.0%100.0%0.0%0%0 25 M M P2519 832-2 Reservoir Interior/Exterior Coating 750 0.0% 0.0%100.0%0.0%0%0 26 M C P2520 Motorola Mobile Radio Upgrade 120 0.0% 0.0%100.0%0.0%0%0 27 C M P2529 711-2 Reservoir Interior & Exterior Coating 840 0.0% 0.0%100.0%0.0%0%0 28 M M P2530 711-1 Reservoir Interior & Exterior Coating 1,040 0.0% 0.0%100.0%0.0%0%0 29 C M P2531 944-1 Reservoir Interior & Exterior Coating 410 0.0% 0.0%100.0%0.0%0%0 30 M M P2532 944-2 Reservoir Interior & Exterior Coating 1,050 0.0% 0.0%100.0%0.0%0%0 31 M M P2533 1200-1 Reservoir Interior & Exterior Coating 810 0.0% 0.0%100.0%0.0%0%0 32 M M P2534 978-1 Reservoir Interior & Exterior Coating 715 0.0% 0.0%100.0%0.0%0%0 33 M M P2535 458-2 Reservoir Interior Coating 885 0.0% 0.0%100.0%0.0%0%0 34 M C P2537 Operations Yard Property Acquisition Improvements 775 0.0%100.0%0.0% 0.0%0%0 35 CF M P2538 Administration and Operations Building Fire Sprinkler Replacement Program 110 0.0% 0.0%100.0%0.0%0%0 36 MF M P2539 South Bay Bus Rapid Transit (BRT) Utility Relocations 1,090 0.0% 0.0%100.0%0.0%0%0 37 MF CF P2540 Work Management System Replacement 500 0.0%40.0% 60.0%0.0%0%0 38 M C P2541 624 Pressure Zone PRSs 760 0.0%100.0%0.0% 0.0%0%0 39 M M P2542 850-3 Reservoir Interior Coating 630 0.0% 0.0%100.0%0.0%0%0 40 MF M P2543 850-1 Reservoir Interior/Exterior Coating 875 0.0% 0.0%100.0%0.0%0%0 41 MF M P2544 850-2 Reservoir Interior/Exterior Reservoir Coating 1,070 0.0% 0.0%100.0%0.0%0%0 42 M M P2545 980-1 Reservoir Interior Exterior Coating 1,495 0.0% 0.0%100.0%0.0%0%0 43 C M P2546 980-2 Reservoir Interior/Exterior Coating 1,450 0.0% 0.0%100.0%0.0%0%0 44 M C P2547 Main Breaker Instllation at the District Administration Building 125 31.0% 69.0%0.0% 0.0%31%39 45 D RF P2146 PL - 20-Inch, 980 Zone, Otay Lakes Road - P2139/End 535 100.0%0.0%0.0% 0.0%100%535 46 P CF P2549 Fuel System upgrade 30 0.0% 0.0%100.0%0.0%0%0 47 C C P2550 Fuel Island upgrade 112 0.0% 0.0%100.0%0.0%0%0 48 C C P2551 Blossom Lane Helix WD and Otay WD Interconnection 200 0.0%100.0%0.0% 0.0%0%0 49 CF C P2552 South Barcelona Helix WD and Otay WD Interconnection 200 0.0%100.0%0.0% 0.0%0%0 50 CF C P2553 Heritage Road Bridge Replacement and Utility Relocation 1,820 0%0% 100%0.0%0%0 51 CF RF R2028 RecPL - 8-Inch, 680 Zone, Heritage Road - Santa Victoria/Otay Valley 378 100.0%0.0%0.0% 0.0%100%378 52 CF RF R2042 RecPL - 8-Inch, 927 Zone, Rock Mountain Road - SR-125/EastLake 162 100.0%0.0%0.0% 0.0%100%162 53 CF RF R2047 RecPL - 12-Inch, 680 Zone, La Media Road - Birch/Rock Mountain 234 100.0%0.0%0.0% 0.0%100%234 54 CF P2176 Res - 1090-2 Reservoir 0.5 MG 1,235 50.0% 50.0%0.0% 0.0%50%618 55 D RF P2177 PL - 30-Inch, 1296 Zone, Melody Road to 1296-4 Reservoir 945 66.0% 34.0%0.0% 0.0%66%624 Water Capacity Fee and New Water Supply Fee - Page 12 of 19 Otay Water District - Water Page 2 of 6 Exhibit W-6 Development of Capacity Fee - Future Count Project Type Project Type Per RM 17 CIPNo Project Title Projected Project Cost (000s)Expansion Betterment Replacement New Supply % CF Eligible Capacity Fee 56 C C R2077 RecPL - 24-Inch, 860 Zone, Alta Road - Alta Gate/Airway 4,500 100.0%0.0%0.0% 0.0%100%4,500 57 R RF R2082 RecPL - 24-Inch, 680 Zone, Olympic Parkway - Village 2/Heritage 1,890 100.0%0.0%0.0% 0.0%100%1,890 58 R RF R2083 RecPL - 20-Inch, 680 Zone, Heritage Road - Village 2/Olympic 100 100.0%0.0%0.0% 0.0%100%100 59 R R R2084 RecPL - 20-Inch, 680 Zone, Village 2 - Heritage/La Media 840 100.0%0.0%0.0% 0.0%100%840 60 R RF R2085 RecPL - 20-Inch, 680 Zone, La Media - State/Olympic 1,500 100.0%0.0%0.0% 0.0%100%1,500 61 CF P2258 PS - Lower Otay Pump Station Phase 1 (9,000 GPM)7,805 31.0% 69.0%0.0% 0.0%31%2,420 62 C CF R2107 RWCWRF Screening Compactor and Chlorine Injectors Enclosure 215 0.0% 0.0%100.0%0.0%0%0 63 R C R2109 Sweetwater River Wooden Trestle Improvement for the Recycled Water Forcemain 375 0.0% 0.0%100.0%0.0%0%0 64 C C R2110 RecPS - 944-1 Optimization and Pressure Zone modifications 200 0.0%100.0%0.0% 0.0%0%0 65 C M R2111 RWCWRF - RAS Pump Replacement 570 0.0% 0.0%100.0%0.0%0%0 66 M M R2112 450-1 Disinfection Facility Rehabilitation 265 0.0% 0.0%100.0%0.0%0%0 67 CF P2288 Otay WTP Capacity Increase Participation/Purchase (30 MGD)40,000 31.0% 69.0%0.0% 0.0%31%12,400 68 M CF R2114 Large Recycle Pump Replacement 120 0.0% 0.0%100.0%0.0%0%0 69 RF P2002 PS - 1296-2 Proctor Valley PS (4,000 GPM, upsize from 1,055 gpm for dev)3,500 31.0% 69.0%0.0% 0.0%31%1,085 70 CF P2296 Dis - 624-2 Reservoir Disinfection Facility 1,400 31.0% 69.0%0.0% 0.0%31%434 71 CF P2033 PL - 16-Inch, 1296 Zone, Melody Road - Campo/Presilla 3,072 100.0%0.0%0.0% 0.0%100%3,072 72 RF P2037 Res - 980-3 Reservoir 4 MG (Upsize from 1 MG for dev)6,000 100.0%0.0%0.0% 0.0%100%6,000 73 N/A C P2040 Res - 1655-1 Reservoir 0.5 MG 3,400 100.0%0.0%0.0% 0.0%100%3,400 74 CF P2053 PL - 20-Inch, 944 Zone, Campo Road - 944-1 Pump Station/944 Reservoirs 3,480 100.0%0.0%0.0% 0.0%100%3,480 75 CF P2056 PL - 16-Inch, 1296 Zone, Jamul Drive Parallel 1,080 0.0%100.0%0.0% 0.0%0%0 76 CF P2058 PL - 24-Inch, 1296 Zone, Proctor Valley Road - Pioneer/Campo 4,800 66.0% 34.0%0.0% 0.0%66%3,168 77 CF P2298 Dis - 978-1 Pump Station Disinfection Facility 0 0.0%100.0%0.0% 0.0%0%0 78 CF P2301 Dis - 1296-1 Pump Station Disinfection Facility 850 31.0% 69.0%0.0% 0.0%31%264 79 RF P2104 PL - 12-Inch, 711 Zone, La Media Road - Birch/Rock Mountain 0 100.0%0.0%0.0% 0.0%100%0 80 RF P2106 PL - 12-Inch, 711 Zone, Village 8 Loop 408 100.0%0.0%0.0% 0.0%100%408 81 RF P2107 PL - 12-Inch, 711 Zone, Village 8E, Rock Mountain Road - Magdalena/SR 125 288 100.0%0.0%0.0% 0.0%100%288 82 RF P2116 PL - 16-Inch, 711 Zone, Hunte Parkway - SR 125/EastLake 360 100.0%0.0%0.0% 0.0%100%360 83 RF P2122 PL - 20-Inch, 711 Zone, OTC to Hunte Parkway 3,300 100.0%0.0%0.0% 0.0%100%3,300 84 RF P2135 PL - 20-Inch, 980 Zone, Otay Lakes Road to Village 13 1,320 100.0%0.0%0.0% 0.0%100%1,320 85 RF P2137 PL - 20-Inch, 980 Zone, Village 13 to 980-3 Reservoir Transmission PL 840 100.0%0.0%0.0% 0.0%100%840 86 RF P2138 PL - 20-Inch, 980 Zone, 980-3 Reservoir Transmission PL 528 100.0%0.0%0.0% 0.0%100%528 87 N/A CF P2303 Dis - 1485 Reservoir(s) Recirculation and Disinfection Facility 0 0.0%100.0%0.0% 0.0%0%0 88 RF P2142 Res - 1296-4 Reservoir, Village 14 - 2 MG (Upsize from 1 MG for dev)2,000 100.0%0.0%0.0% 0.0%100%2,000 89 CF P2304 Water System Facilities Seismic Upgrades 1,200 31.0% 69.0%0.0% 0.0%31%372 90 N/A CF P2148 PL - 16-Inch, 850 Zone, Jamacha Boulevard - Sweetwater Springs/Trace 2,496 0.0%100.0%0.0% 0.0%0%0 91 N/A CF P2150 PL - 16-Inch, 458 Zone, East Palomar Street - Medical Center/Raven 432 0.0%100.0%0.0% 0.0%0%0 92 N/A CF P2156 PL - 12-Inch, 1296 Zone, Olive Vista Drive Parallel 900 0.0%100.0%0.0% 0.0%0%0 93 CF P2171 PL - 20-Inch, 1296 Zone, Proctor Valley Road - Pioneer/Melody 1,320 66.0% 34.0%0.0% 0.0%66%871 94 N/A M P2174 PS - 1090-1 Pump Station Replacement (280 GPM)2,500 0.0% 0.0%100.0%0.0%0%0 95 N/A MF P2306 Engine Power Equipment Repair and Replacement Program 0 0.0% 0.0%100.0%0.0%0%0 96 N/A MF P2316 Building Roof Repair and Replacement Program 0 0.0% 0.0%100.0%0.0%0%0 97 RF P2181 PL - 20-Inch, 1296 Zone, Proctor Valley Road - Proctor Valley PS/Echo Valley 2,520 31.0% 69.0%0.0% 0.0%31%781 98 CF P2188 PL - 24-Inch, 832 Zone, Campo Road - Steele Canyon/944-1 Pump Station 2,448 100.0%0.0%0.0% 0.0%100%2,448 99 N/A CF P2190 PL - 10-Inch, 1485 Zone, Jamul Highlands Road to Presilla Drive 138 0.0%100.0%0.0% 0.0%0%0 100 CF P2195 PL - 24-Inch, 640 Zone, Campo Road - Regulatory Site/Millar Ranch 2,952 75.0%0.0%25.0%0.0%75%2,214 101 CF P2196 PL - 24-Inch, 640 Zone, Millar Ranch Road to 832-1 Pump Station 1,584 75.0%0.0%25.0%0.0%75%1,188 102 CF P2197 PL - 24-Inch, 832 Zone, 832-1 Pump Station to 832 Reservoirs 1,296 100.0%0.0%0.0% 0.0%100%1,296 103 CF P2198 PL - 20-Inch, 832 Zone, 832 Reservoirs to Steele Canyon H.S. to Stoney Oak Dr via Campo Rd 3,672 100.0%0.0%0.0% 0.0%100%3,672 104 CF P2203 PL - 20-Inch, 1296 Zone, Proctor Valley Road - Echo Valley/Pioneer 3,000 31.0% 69.0%0.0% 0.0%31%930 105 CF P2204 PL - 20-Inch, 1296 Zone, Pioneer Way - Proctor Valley/1296 Reservoirs 1,860 31.0% 69.0%0.0% 0.0%31%577 106 CF P2228 Res - 870-2 Reservoir 10 MG 20,000 100.0%0.0%0.0% 0.0%100%20,000 107 N/A CF P2256 PS - 978-2 Pump Station (1,500 GPM)3,500 0.0%100.0%0.0% 0.0%0%0 108 N/A CF P2318 PL - 20-Inch, 657 Zone, Summit Cross-Tie and 36-Inch Main Connections 0 0.0%100.0%0.0% 0.0%0%0 109 CF P2319 Dis - 870-1 Reservoir Phase 2 Chloramination Facility 400 100.0%0.0%0.0% 0.0%100%400 110 CF P2336 Central Area Operations Yard and Facilities 3,500 31.0% 69.0%0.0% 0.0%31%1,085 111 N/A MF P2356 PL - 12-Inch, 803 Zone, Jamul Drive Permastran Pipeline Replacement 0 0.0% 0.0%100.0%0.0%0%0 Water Capacity Fee and New Water Supply Fee - Page 13 of 19 Otay Water District - Water Page 3 of 6 Exhibit W-6 Development of Capacity Fee - Future Count Project Type Project Type Per RM 17 CIPNo Project Title Projected Project Cost (000s)Expansion Betterment Replacement New Supply % CF Eligible Capacity Fee 112 N/A CF P2387 PL - 12-Inch, 832 Zone, Steele Canyon Road - Via Caliente/Campo 0 0.0%100.0%0.0% 0.0%0%0 113 N/A MF P2388 Flexible Membrane Cover Tension System Repair and Replacement 0 0.0% 0.0%100.0%0.0%0%0 114 RF P2390 Siempre Viva Bridge Pipeline Crossings 230 100.0%0.0%0.0% 0.0%100%230 115 CF P2395 Perdue WTP Capacity Participation/Purchase (5 MGD)15,000 31.0% 69.0%0.0% 0.0%31%4,650 116 CF P2399 PL - 30-Inch, 980 Zone, 980 Reservoirs to Hunte Parkway 5,480 100.0%0.0%0.0% 0.0%100%5,480 117 N/A C P2402 PL - 16-Inch, 624 Zone, Village 8W - Otay Valley Rd, Main St/School (Developer Reimbursable, No Upsize)0 100.0%0.0%0.0% 0.0%100%0 118 CF P2374 PL - 30-Inch, 870 Zone, 870-2 Reservoir to 870-1 Reservoir 360 100.0%0.0%0.0% 0.0%100%360 119 CF P2415 Raw Water Supply Acquisition Feasibility Assessment 500 31.0% 69.0%0.0% 0.0%31%155 120 N/A CF P2426 PL - 1296/920 PRS Jamul Drive - Mexican Canyon Road 0 0.0%100.0%0.0% 0.0%0%0 121 CF P2392 PS - Lower Otay Pump Station Expansion Phase 2 (9,000 GPM)16,000 31.0% 69.0%0.0% 0.0%31%4,960 122 N/A CF P2393 PS - Pointe Hydro Pump Station Expansion (400 GPM)600 0.0%100.0%0.0% 0.0%0%0 123 N/A CF P2433 978-1 Pump Station Sonic Meter 0 0.0%100.0%0.0% 0.0%0%0 124 P CF P2434 Rancho Del Rey Groundwater Well Development 9,000 0.0%69.0%0.0%31.0%0%0 125 M CF P2440 I-905 Utility Relocations 0 0.0% 0.0%100.0%0.0%0%0 126 N/A CF P2450 Otay River Groundwater Well Demineralization Project 8,700 0.0%69.0%0.0%31.0%0%0 127 N/A MF P2454 Vaults and Meter, Alta Road and Use Area 0 0.0% 0.0%100.0%0.0%0%0 128 RF P2404 PL - 16-Inch, 624 Zone, Village 4 - Main Street, Wolf Canyon/Village 8W 432 100.0%0.0%0.0% 0.0%100%432 129 N/A C P2405 PL - 624/340 PRS, Paseo Ranchero and Otay Valley Road 650 0.0%100.0%0.0% 0.0%0%0 130 N/A MF P2456 Air and Vacuum Valve Upgrades 0 0.0%26.0% 74.0%0.0%0%0 131 N/A CF P2407 Dictionary Hill Fire Flow Capacity Pipeline Enhancements 450 0.0%100.0%0.0% 0.0%0%0 132 N/A CF P2411 PL - 1296/944 PRS Upgrade 1296-1 Pump Station Site 417 0.0%100.0%0.0% 0.0%0%0 133 N/A CF P2412 PL - 944/832 PRS Upgrade 944-1 Pump Station Site 657 0.0%100.0%0.0% 0.0%0%0 134 CF P2464 San Diego 17 Pump Station and Flow Control Facility 22,000 31.0% 69.0%0.0% 0.0%31%6,820 135 CF P2467 San Diego Formation Groundwater Feasibility Study 0 0.0%60.0%0.0% 0.0%0%0 136 CF P2471 850/657 PRS at La Presa Pump Station 0 0.0%100.0%0.0% 0.0%0%0 137 RF P2430 PL - 20-Inch, 980 Zone, Proctor Valley Road - Village 14 Phase 1 2,040 31.0% 69.0%0.0% 0.0%31%632 138 CF P2431 Res - 980-4 Reservoir 5 MG 16,000 100.0%0.0%0.0% 0.0%100%16,000 139 CF P2472 Water Supply Feasibility Studies 175 31.0% 69.0%0.0% 0.0%31%54 140 RF P2435 PL - 20-Inch, 980 Zone, Proctor Valley Road - Village 14 Phase 2 1,560 31.0% 69.0%0.0% 0.0%31%484 141 CF P2437 Dis - 624-4 Reservoir Disinfection Facility 1,400 100.0%0.0%0.0% 0.0%100%1,400 142 N/A CF P2476 Dis - 1090-1 Pump Station Disinfection System Upgrade 0 0.0%100.0%0.0% 0.0%0%0 143 N/A MF P2478 Administration Building Engine/Generator Set 0 0.0% 0.0%100.0%0.0%0%0 144 N/A CF P2481 Middle Sweetwater River Basin Groundwater Well System 8,800 0.0%69.0%0.0%31.0%0%0 145 N/A CF P2482 Otay Mesa Lot 7 Groundwater Well System 4,500 0.0%69.0%0.0%31.0%0%0 146 N/A MF P2483 PS - 870-1Pump Motor and Switch Gear Replacement 0 0.0% 0.0%100.0%0.0%0%0 147 CF P2497 Solar Power Feasibility Study 150 100.0%0.0%0.0% 0.0%100%150 148 N/A MF P2499 Otay Mesa Operations Yard and Facilities 0 0.0% 0.0%100.0%0.0%0%0 149 N/A MF P2522 Potable Water Pipeline Replacement Program 0 0.0% 0.0%100.0%0.0%0%0 150 N/A MF P2523 Potable Water Valve Replacement Program 0 0.0% 0.0%100.0%0.0%0%0 151 N/A C P2496 Otay Lakes Road Utility Relocations 325 0.0% 0.0%100.0%0.0%0%0 152 N/A MF P2524 Potable Water Pipeline Appurtenances Replacement Program 0 0.0% 0.0%100.0%0.0%0%0 153 N/A MF P2525 Potable Water Pump Station Rehabilitation Program 0 0.0% 0.0%100.0%0.0%0%0 154 N/A MF P2526 Potable Water Reservoir Rehabilitation Program 0 0.0% 0.0%100.0%0.0%0%0 155 RF P2500 Padre Dam - Otay Interconnection Dehesa Valley 868 0.0%100.0%0.0% 0.0%0%0 156 CF P2516 PL - 12-Inch, 640 Zone, Jamacha Road - Osage/Elkelton 900 0.0% 0.0%100.0%0.0%0%0 157 CF P2517 Helix - Otay Interconnection, Chase Ave/Fuerte Dr 400 0.0%100.0%0.0% 0.0%0%0 158 CF P2528 30-Inch Potable Water Pipeline Manifold at 624 Reservoirs 7,200 31.0% 69.0%0.0% 0.0%31%2,232 159 N/A CF R2055 RWCWRF - Effluent Meter 0 0.0%100.0%0.0% 0.0%0%0 160 RF R2037 RecPL - 8-Inch, 680 Zone, Main Street/Otay Valley Road - Village 8W 264 100.0%0.0%0.0% 0.0%100%264 161 RF R2038 RecPL – 8-in, 680 Zone, Village 3N – Main St, Heritage Rd/Wolf Canyon 198 100.0%0.0%0.0% 0.0%100%198 162 RF R2043 RecPL - 8-Inch, 927 Zone, Rock Mountain Road - Olympian HS / SR 125 60 100.0%0.0%0.0% 0.0%100%60 163 N/A CF R2067 RWCWRF - Waste Backwash Water Pipeline 0 0.0%100.0%0.0% 0.0%0%0 164 N/A CF R2068 RWCWRF - Load Equalization Tank 0 0.0%100.0%0.0% 0.0%0%0 165 C R2079 RecPL - 6-Inch, 450 Zone, Otay Valley Road - Entertainment, 680/450 PRS 940 100.0%0.0%0.0% 0.0%100%940 Water Capacity Fee and New Water Supply Fee - Page 14 of 19 Otay Water District - Water Page 4 of 6 Exhibit W-6 Development of Capacity Fee - Future Count Project Type Project Type Per RM 17 CIPNo Project Title Projected Project Cost (000s)Expansion Betterment Replacement New Supply % CF Eligible Capacity Fee 166 CF R2080 RecPL - 24-Inch, 680 Zone, Olympic Parkway - Brandywine/Santa Victoria 2,736 100.0%0.0%0.0% 0.0%100%2,736 167 N/A CF R2089 North District Distribution Pipelines and Conversions 14,220 0.0%69.0%0.0%31.0%0%0 168 N/A CF R2093 MBR City of Chula Vista 11,000 0.0%69.0%0.0%31.0%0%0 169 N/A MF R2095 RWCWRF - Filter Storage Reservoir Cover Replacement 0 0.0% 0.0%100.0%0.0%0%0 170 N/A MF R2103 Recycled Water Pump Station Rehabilitation Program 0 0.0% 0.0%100.0%0.0%0%0 171 N/A MF R2104 Recycled Water Reservoir Rehabilitation Program 0 0.0% 0.0%100.0%0.0%0%0 172 N/A MF R2105 RWCWRF Systems Replacement/Rehabilitation Program 0 0.0% 0.0%100.0%0.0%0%0 173 N/A MF R2106 Recycled Water Pipeline Replacement Program 0 0.0% 0.0%100.0%0.0%0%0 174 Developer Reimbursements R P2325 PL-10" to 12" Oversize, 1296 Zone, PB Road-Rolling Hills Hydro PS/PB Bndy 22 100.0%0.0%0.0% 0.0%100%22 175 N/A MF P2400 PL - 20-Inch Pipeline Replacement, 711 Zone, Otay Lakes Road - at Santa Paula 2,280 0.0%40.0% 60.0%0.0%0%0 176 N/A C P2460 I.D. 7 Trestle and Pipeline Demolition 600 0.0% 0.0%100.0%0.0%0%0 177 N/A C P2521 Large Meter Vault Upgrade Program 400 0.0% 0.0%100.0%0.0%0%0 178 N/A M P2555 Administration and Operations Parking Lot Improvements 500 0.0% 0.0%100.0%0.0%0%0 179 N/A R P2556 HWY 94 Upsized Utility Relocations at Melody Lane 100 0.0% 0.0%100.0%0.0%0%0 180 N/A M P2557 520 Res Recirculation Pipeline Chemical Supply and Analyzer Feed Replacement Project 100 0.0% 0.0%100.0%0.0%0%0 181 N/A CF P2558 Additional Pump Station Fuel Storage 25 0.0%100.0%0.0% 0.0%0%0 182 N/A M P2559 Pressure Vessel Repair and Replacement Program 650 0.0% 0.0%100.0%0.0%0%0 183 N/A M P2561 Res - 711-3 Reservoir Cover/Liner Replacement 1,800 0.0% 0.0%100.0%0.0%0%0 184 N/A M P2562 Res - 571-1 Reservoir Cover/Liner Replacement 2,600 0.0% 0.0%100.0%0.0%0%0 185 N/A M P2563 Res - 870-1 Reservoir Cover/Liner Replacement 1,000 0.0% 0.0%100.0%0.0%0%0 186 N/A M P2564 Administration Carpet Replacement Program 215 0.0% 0.0%100.0%0.0%0%0 187 N/A MF P2565 803-2 Reservoir Interior/Exterior Coating & Upgrades 940 0.0% 0.0%100.0%0.0%0%0 188 N/A MF P2566 520-2 Reservoir Interior/Exterior Coating & Upgrades 1,500 0.0% 0.0%100.0%0.0%0%0 189 N/A MF P2567 1004-2 Reservoir Interior/Exterior Coating & Upgrades 905 0.0% 0.0%100.0%0.0%0%0 190 N/A C P2568 Technology Business Processes Improvement 135 0.0% 0.0%100.0%0.0%0%0 191 N/A C P2569 Metro Ethernet Implementation/ District Facilities - Pilot 145 0.0% 0.0%100.0%0.0%0%0 192 N/A C P2570 SCADA Equipment & Infrastructure Enhancement 300 0.0% 0.0%100.0%0.0%0%0 193 N/A CF P2571 Datacenter Network Enhancement & Replacement of Infrastructure Componets 200 0.0% 0.0%100.0%0.0%0%0 194 N/A CF P2572 Enterprise Resource Planning (ERP) Replacement 500 0.0% 0.0%100.0%0.0%0%0 195 N/A M P2573 PL - 12-Inch Pipeline Replacement, 803 Zone, Hillsdale Road 1,750 0.0% 0.0%100.0%0.0%0%0 196 N/A M P2574 PL - 12-Inch and 14-inch Pipeline Replacement, 803 and 978 Zone, Vista Grande, Pence Drive 2,750 0.0% 0.0%100.0%0.0%0%0 197 N/A MF P2578 PS - 711-2 (PS 711-1 Replacement and Expansion) - 14,000 gpm 10,000 0.0%40.0% 60.0%0.0%0%0 198 N/A M P2579 Temporary Lower Otay Pump Station Improvements 140 0.0% 0.0%100.0%0.0%0%0 199 N/A CF P2584 Res - 657-1 and 657-2 Reservoir Demolitions 720 0.0% 0.0%100.0%0.0%0%0 200 N/A M P2592 East H Street Bike Lane Utility Coordination 50 0.0% 0.0%100.0%0.0%0%0 201 N/A MF P2593 458-1 Reservoir Interior/Exterior Coating & Upgrades 840 0.0% 0.0%100.0%0.0%0%0 202 N/A M P2594 Large Meter Replacement 485 0.0% 0.0%100.0%0.0%0%0 203 N/A CF R2108 Res - 927-1 Reservoir Cover Replacement 1,090 0.0% 0.0%100.0%0.0%0%0 204 N/A C R2116 RecPL - 14-Inch, 927 Zone, Force Main Improvements 2,500 0.0%100.0%0.0% 0.0%0%0 205 N/A C R2117 RWCWRF Disinfection System Improvements 2,500 0.0%100.0%0.0% 0.0%0%0 206 N/A C R2118 Steele Canyon Sewer PS Large Solids Handling Improvements 75 0.0%100.0%0.0% 0.0%0%0 207 N/A C R2119 RWCWRF Automation & Security Upgrades 300 0.0%100.0%0.0% 0.0%0%0 208 N/A C R2120 RWCWRF Filtered Water Storage Tank Improvements 500 0.0%100.0%0.0% 0.0%0%0 209 N/A M R2121 Res - 944-1 Reservoir Cover/Liner Replacement 1,400 0.0% 0.0%100.0%0.0%0%0 210 N/A C R2122 Emergency Recycled Water Fire Hydrant Installations 75 0.0%100.0%0.0% 0.0%0%0 211 N/A C R2123 Repurpose Otay Mesa Recycled Water Lines 350 0.0%100.0%0.0% 0.0%0%0 212 N/A C R2124 RecPS - 927-1 Pump 5 Replacement 55 0.0% 0.0%100.0%0.0%0%0 213 N/A CF P2010 PL - 30-Inch, Sweetwater Authority Perdue WTP to 36-Inch Main 5,615 31.0% 69.0%0.0% 0.0%31%1,741 214 Capital Facilities CF P2191 Res - 850-4 Reservoir 2.2 MG 3,435 100.0%0.0%0.0% 0.0%100%3,435 215 Capital Facilities CF P2202 PS - 1296-1 PS Expansion - from 2,900 to 6,000 GPM 3,100 100.0%0.0%0.0% 0.0%100%3,100 216 Capital Facilities CF P2248 PS - 944-1 PS Expansion - from 3,000 to 6,000 GPM 3,000 100.0%0.0%0.0% 0.0%100%3,000 217 Capital Facilities CF P2357 PS - 657-1/850-1 Pump Station Demolition 300 0.0% 0.0%100.0%0.0%0%0 218 Capital Facilities CF P2372 PS - Lower Otay PS Replacement and Expansion - from 12,500 to 18,000 GPM 16,000 31.0% 69.0%0.0% 0.0%31%4,960 219 Capital Facilities CF P2379 PS - 832-1 PS Expansion - from 4,200 to 6,800 GPM 3,000 100.0%0.0%0.0% 0.0%100%3,000 220 Capital Facilities CF P2391 PS - Perdue WTP Pump Station (10,000 GPM)15,000 31.0% 69.0%0.0% 0.0%31%4,650 221 Capital Facilities CF P2398 PL - 20-inch, 624 Zone, Paseo Ladera btwn Telegraph/Olympic Upsizing 1,680 100.0%0.0%0.0% 0.0%100%1,680 Water Capacity Fee and New Water Supply Fee - Page 15 of 19 Otay Water District - Water Page 5 of 6 Exhibit W-6 Development of Capacity Fee - Future Count Project Type Project Type Per RM 17 CIPNo Project Title Projected Project Cost (000s)Expansion Betterment Replacement New Supply % CF Eligible Capacity Fee 222 Replacement MF P2443 Information Technology Mobile Services 1,352 0.0% 0.0%100.0%0.0%0%0 223 Replacement MF P2461 Records Management System Upgrade 256 0.0% 0.0%100.0%0.0%0%0 224 Replacement MF P2473 PS - 711-1 Pump Station Improvement 425 0.0% 0.0%100.0%0.0%0%0 225 Replacement MF P2479 Operations Yard Property Acquisition 370 0.0% 0.0%100.0%0.0%0%0 226 Replacement MF P2484 Large Water Meter Replacement Program 535 0.0% 0.0%100.0%0.0%0%0 227 Replacement MF P2490 1296-1 Reservoir Interior/Exterior Coating and Upgrades 350 0.0% 0.0%100.0%0.0%0%0 228 Replacement MF P2491 850-3 Reservoir Exterior Coating 300 0.0% 0.0%100.0%0.0%0%0 229 Replacement MF P2492 1296-2 Reservoir Interior/Exterior Coating and Upgrades 600 0.0% 0.0%100.0%0.0%0%0 230 Capital Facilities CF P2502 803-1 Pump Station Modifications 575 0.0%40.0% 60.0%0.0%0%0 231 Capital Facilities CF P2503 850-2 Pump Station Modifications 475 0.0%40.0% 60.0%0.0%0%0 232 Replacement MF P2505 657-1 Reservoir Interior/Exterior Coating 375 0.0% 0.0%100.0%0.0%0%0 233 Replacement MF P2506 657-2 Reservoir Interior/Exterior Coating 375 0.0% 0.0%100.0%0.0%0%0 234 Replacement MF P2513 East Orange Avenue Bridge Crossing 750 0.0% 0.0%100.0%0.0%0%0 235 Replacement MF P2527 1200-1 Pump Station Facility Cover 125 0.0% 0.0%100.0%0.0%0%0 236 Capital Facilities CF P2536 HMBP-Emergency Stand-By Generator Secondary Containment 75 0.0%100.0%0.0% 0.0%0%0 237 Capital Facilities CF P2554 640/340 PRS at Energy Way and Nirvana Avenue 1,120 0.0%100.0%0.0% 0.0%0%0 238 Capital Facilities CF P2575 1485/1296 PRS - Presilla Dr and Jamul Highlands Rd (Developer Reimbursable)400 100.0%0.0%0.0% 0.0%100%400 239 Developer Reimbursements RF P2576 Res - 980-5 Reservoir, Village 14 - 2.0 MG (Developer Reimbursable, Upsize from 1 MG)2,785 100.0%0.0%0.0% 0.0%100%2,785 240 Capital Facilities CF P2577 PS - 980-2 PS Expansion - from 12,000 to 16,000 gpm 4,000 31.0% 69.0%0.0% 0.0%31%1,240 241 Capital Facilities CF P2580 PL - 12-inch, 980 Zone, Bob Pletcher Pkwy - SR 125 Crossing 750 100.0%0.0%0.0% 0.0%100%750 242 Developer Reimbursements RF P2581 PL - 16-inch, 624 Zone, Santa Victoria Rd - Olympic/Heritage (Developer Reimbursable, Upsize from 12-inch)432 100.0%0.0%0.0% 0.0%100%432 243 Capital Facilities CF P2582 PL - 20-inch, 711 Zone, Eastlake Pkwy - Olympic/Birch, Upsizing 1,500 100.0%0.0%0.0% 0.0%100%1,500 244 Capital Facilities CF P2583 PL - 20-inch, 624 Zone, Otay Mesa Interconnect 711 PRS Bypass 2,880 100.0%0.0%0.0% 0.0%100%2,880 245 Developer Reimbursements RF P2585 PS - 1200-2 Pump Station - 1,000 gpm (Developer Built)100 31.0% 69.0%0.0% 0.0%31%31 246 Capital Facilities CF P2586 PL - 24-inch, 832 Zone, Campo Road - Florence Terrace / Steele Canyon 1,080 100.0%0.0%0.0% 0.0%100%1,080 247 Capital Facilities CF P2587 PL - 16-inch, 1296 Zone, Jefferson Road - Campo/Lyons Valley 912 100.0%0.0%0.0% 0.0%100%912 248 Capital Facilities CF P2588 PL - 12-inch, 1296 Zone, Jamul Highlands Road to Presilla Drive (Developer Reimbursable, Upsize from 8-inch)132 100.0%0.0%0.0% 0.0%100%132 249 Capital Facilities CF P2589 PL - 24-inch, 870 Zone, Donovan Prison 432 100.0%0.0%0.0% 0.0%100%432 250 Developer Reimbursements RF P2590 PL - 20-inch, 624 Zone, Village 7 (Developer Reimbursable, Upsize from 12-inch)1,536 100.0%0.0%0.0% 0.0%100%1,536 251 Developer Reimbursements RF P2591 PL - 16-inch, 1296 Zone, Proctor Valley to 1296-4 Reservoir (Developer Reimbusable, Upsize from 12-inch)1,140 100.0%0.0%0.0% 0.0%100%1,140 252 Developer Reimbursements RF P2595 PL - 16-inch, 624 Zone, Village 3N - Heritage Road, Main St/Energy Way (Developer Reimbursable, Upsize from 12-inch)144 100.0%0.0%0.0% 0.0%100%144 253 Developer Reimbursements RF P2596 PL - 16-inch, 624 Zone, Village 3N - Main St, Heritage Rd/Wolf Canyon (Developer Reimbursable, Upsize from 12-inch)384 100.0%0.0%0.0% 0.0%100%384 254 Developer Reimbursements RF P2597 PL - 16-inch, 624 Zone, Main St, Wolf Canyon Bridge (Upsize of Developer Financed 12-inch)780 100.0%0.0%0.0% 0.0%100%780 255 Developer Reimbursements RF P2598 PL - 16-inch, 624 Zone, Village 8W - Main St, La Media/Village 4 (Developer Reimbursable, Upsize from 12-inch)120 100.0%0.0%0.0% 0.0%100%120 256 Developer Reimbursements RF P2599 PL - 16-Inch, 624 Zone, Village 8W - Otay Valley Road, School/Village 8E (Developer Reimbursable, Upsize from 8-inch)216 100.0%0.0%0.0% 0.0%100%216 257 Developer Reimbursements RF P2600 PL - 16-Inch, 624 Zone, Village 8E (Developer Reimbursable, Upsize from 12-inch)252 100.0%0.0%0.0% 0.0%100%252 258 Developer Reimbursements RF P2602 PL - 16-inch, 624 Zone, Otay Valley Road, SR 125 Bridge (Upsize of Developer Financed 12-inch)300 100.0%0.0%0.0% 0.0%100%300 259 Developer Reimbursements RF P2603 PL - 16-inch, 711 Zone, Hunte Parkway, SR 125 Bridge (Upsize of Developer Financed 12-inch)360 100.0%0.0%0.0% 0.0%100%360 260 Replacement MF R2099 Recycled System Air and Vacuum Value Retrofit 700 0.0% 0.0%100.0%0.0%0%0 261 Replacement MF R2100 Recycled Force Main Access Road Repairs 210 0.0% 0.0%100.0%0.0%0%0 262 Capital Facilities CF R2125 RecPRS - 927/680 PRS Improvements, Otay Lakes Road 200 31.0% 69.0%0.0% 0.0%31%62 263 Developer Reimbursements RF R2126 RecPL - 8-Inch, 680 Zone, Main Street - Wolf Canyon Bridge (Upsize from Developer Financed 6-inch)390 100.0%0.0%0.0% 0.0%100%390 264 Developer Reimbursements RF R2127 RecPL - 8-Inch, 815/680 Zones, Main Street - La Media/Magdalena - 815/680 PRS (Developer Reimbursable, Upsize from 6-inch)500 100.0%0.0%0.0% 0.0%100%500 265 Capital Facilities CF R2128 RecPL - 16-Inch, 927 Zone, Hunte Parkway/Proctor Valley - North of Otay Lakes 3,504 100.0%0.0%0.0% 0.0%100%3,504 266 Capital Facilities CF R2129 RecPS - 680-1 PS Upgrade, Engine-Driven Pump Addition 1,800 31.0% 69.0%0.0% 0.0%31%558 267 Capital Facilities CF R2130 RecPS - 944-1 PS Upgrade, Engine-Driven Pump Addition 2,000 31.0% 69.0%0.0% 0.0%31%620 268 Capital Facilities CF R2131 Res - 680-2 Storage Reservoir (2.0 MG)4,000 100.0%0.0%0.0% 0.0%100%4,000 269 Developer Reimbursements RF R2132 RecPL - 8-Inch, 680 Zone, Main Street - Village 4 (Developer Reimbursable, Upsize from 6-inch)216 100.0%0.0%0.0% 0.0%100%216 270 Developer Reimbursements RF R2133 RecPL - 8-Inch, 680 Zone, Otay Valley Road - Village 8E (Developer Reimbursable, Upsize from 6-inch)126 100.0%0.0%0.0% 0.0%100%126 271 Developer Reimbursements RF R2134 RecPL - 8-Inch, 680 Zone, Otay Valley Road - Village 9 (Developer Reimbursable, Upsize from 6-inch)240 100.0%0.0%0.0% 0.0%100%240 272 Developer Reimbursements RF R2135 RecPL - 8-Inch, 680 Zone, University/Village 10 (Developer Reimbursable, Upsize from 6-inch)252 100.0%0.0%0.0% 0.0%100%252 273 Developer Reimbursements RF R2136 RecPL - 8-Inch, 680 Zone, Otay Valley Road, SR 125 Bridge (Upsize from Developer Financed 6-inch)150 100.0%0.0%0.0% 0.0%100%150 274 Developer Reimbursements RF R2137 RecPL - 8-Inch, 815 Zone, Hunte Parkway, SR 125 Bridge (Upsize from Developer Financed 6-inch)180 100.0%0.0%0.0% 0.0%100%180 Water Capacity Fee and New Water Supply Fee - Page 16 of 19 Otay Water District - Water Page 6 of 6 Exhibit W-6 Development of Capacity Fee - Future Count Project Type Project Type Per RM 17 CIPNo Project Title Projected Project Cost (000s)Expansion Betterment Replacement New Supply % CF Eligible Capacity Fee $579,085 $208,352 Otay Mesa Recycled Expansion Projects 275 Capital Facilities CF R2073 RecPL - 24-Inch, 860 Zone, Alta Road - Airway/Border 4,750 100.0%0.0%0.0% 0.0%100%4,750 276 C CF R2087 RecPL - 24-Inch, 927 Zone, Wueste Road - Olympic/Otay WTP 7,000 100.0%0.0%0.0% 0.0%100%7,000 277 Capital Facilities CF R2034 RecRes - 860-1 Reservoir 4 MG 3,800 100.0%0.0%0.0% 0.0%100%3,800 278 C CF R2048 RecPL - Otay Mesa Distribution Pipelines and Conversions 2,150 100.0%0.0%0.0% 0.0%100%2,150 279 Capital Facilities CF R2115 RecPS - 944-1 Pump Station Upgrade Phase 2 (10,000 GPM)1,400 100.0%0.0%0.0% 0.0%100%1,400 CF R2088 RecPL - 30-Inch, 860 Zone, County Jail - Roll Reservoir/860-1 Reservoir 3,500 100.0%0.0%0.0% 0.0%100%3,500 $22,600 $22,600 Total $601,685 (in $100s)$230,9520%100%0% Water Capacity Fee and New Water Supply Fee - Page 17 of 19 Otay Water District - Water Exhibit W-7 Current and Proposed Water Capacity Fee Item CF 2015/2016 Existing Capacity Fee Plant $612,327,458 See Exhibit W-1 Future Capacity Fee Plant 230,951,570 See Exhibit W-6 Total Capacity Fee $843,279,028 Existing EDUs 73,467 See Exhibit W-1 Growth EDUs 33,381 See Exhibit W-6 Total EDUs 106,848 Total Capacity Fee $7,892.32 Current Water Capacity Fee 4/1/2017 (1)$8,590.34 Capacity Fee Meter Meter 2015/2016 Size (3)Ratio (4)Current Calculated 3/4"1.00 8,590.34 7,892.32 1"2.50 21,475.85 19,730.81 1-1/2"5.00 42,951.70 39,461.62 2" 8.00 68,722.72 63,138.59 3"16.00 137,445.44 126,277.18 4"25.00 214,758.50 197,308.10 6"50.00 429,517.00 394,616.20 8"80.00 687,227.20 631,385.91 10"115.00 987,889.10 907,617.25 Notes: (1) Current capacity fee as of ENR adjustment on 3/13/2017, fees effective 4/1/2017. (2) Based on "Combined" methodology established in AWWA M1, Sixth Edition, Table VI.2-1, page 273. (3) Recommended for meter sizes larger than 4-inch should be based on projected usage. (4) Based on AWWA meter equivalency from AWWA M1 Manual, Sixth Edition, Table VI.2-5, page 274. Water Capacity Fee and New Water Supply Fee - Page 18 of 19 Otay Water District - Water Exhibit W-8 Development of Capacity Fee - New Supply Count Project Type CIPNo Project Title Projected Project Cost Expansion Betterment Replacement New Supply % CF Eligible Capacity Fee 1 CF P2434 Rancho Del Rey Groundwater Well Development $9,000 0.0%69.0%0.0%31.0%31%$2,790 2 C C P2451 Otay Mesa Desalination Conveyance and Disinfection System 30,000 0.0%69.0%0.0%31.0%31%9,300 3 C P2450 Otay River Groundwater Well Demineralization Project 8,700 0.0%69.0%0.0%31.0%31%2,697 4 CF P2467 San Diego Formation Groundwater Feasibility Study 0 0.0%69.0%0.0%31.0%31%0 5 CF P2481 Middle Sweetwater River Basin Groundwater Well System 8,800 0.0%69.0%0.0%31.0%31%2,728 6 CF P2482 Otay Mesa Lot 7 Groundwater Well System 4,500 0.0%69.0%0.0%31.0%31%1,395 7 CF R2089 North District Distribution Pipelines and Conversions 14,220 0.0%69.0%0.0%31.0%31%4,408 8 CF R2093 MBR City of Chula Vista 11,000 0.0%69.0%0.0%31.0%31%3,410 Total $86,220 $26,728 Expansion Equivalent Dwelling Units (1)33,381 New Supply Water Fee per EDU $800.70 Current Water Capacity Fee 1/1/2017 $1,064.11 Notes: (1) Based on data from the utility billing system as of June 30, 2016 and Land Use Demand. See Exhibit W-5. Water Capacity Fee and New Water Supply Fee - Page 19 of 19 Sewer Capacity Fee Otay Water District - Sewer Exhibit S-1 Development of Capacity Fee - Buy-In Plant Description Original Cost (1) Accumulated Depreciation Original Cost Less Depr. Reproduction Cost (2) Reproduction Cost Less Depr. Pipe Replacement Cost Pipe Replacement Cost Less Depr. OC OCLD RC RCLND RC-Pipe (3) RCLND-Pipe Sewer Land $28,200 $0 $28,200 $33,250 $33,250 $33,250 Sewer Assets Buildings 37,450 7,802 29,648 41,893 33,165 33,165 Sewer Assets Field Equipment 511,321 262,691 248,631 578,597 278,203 278,203 Sewer Assets Chlorination 178,925 141,394 37,531 291,803 61,208 61,208 Sewer Assets Contributed 10,242,832 4,826,562 5,416,270 21,389,594 10,826,525 10,826,525 Sewer Assets Less: Contributed Capital (10,242,832) (4,826,562) (5,416,270) (21,389,594) (10,826,525)(10,826,525)Sewer Assets Capitalized Interest 862,003 389,476 472,528 1,536,953 826,605 826,605 Sewer Assets Jamacha Sewer Basin 17,732,285 15,445,630 2,286,654 39,172,641 4,968,454 4,968,454 Sewer Assets Maps & Plans 235,966 197,432 38,534 923,030 159,310 159,310 Sewer Assets Main Pipe 604,156 267,904 336,252 1,090,521 552,135 $103,959,947 $14,192,410 14,192,410 See Exhibit S2 Pump Stations 3,624 3,624 0 7,239 0 0 Sewer Assets Pumps 22,304 21,583 721 42,346 1,015 1,015 Sewer Assets Power 225,767 166,109 59,659 354,278 92,896 92,896 Sewer Assets Repairs 0 0 0 0 0 0 Sewer Assets Security 26,267 26,267 0 80,444 0 0 Sewer Assets Jamacha Sewer Basin 1,970,929 197,397 1,773,532 2,765,908 2,286,581 2,286,581 Sewer Assets Sewer Pipes 3,235,551 265,579 2,969,972 3,635,824 3,331,590 3,331,590 Sewer Assets Sewer Pumps and Valves 221,277 189,499 31,778 349,810 35,547 35,547 Sewer Assets Sewer Plastic Water Service 99,166 38,777 60,389 215,004 78,399 78,399 Sewer Assets Pump Stations 6,123,709 4,262,378 1,861,331 21,944,711 4,828,468 4,828,468 Sewer Assets Spring Valley Sanitation District 982,002 721,836 260,166 1,184,963 292,495 292,495 Sewer Assets Office Furniture 0 0 0 0 0 0 Sewer Assets Total Sewer $33,100,903 $22,605,377 $10,495,526 $74,249,215 $17,859,321 $103,959,947 $14,192,410 $31,499,597 Total $33,100,903 $22,605,377 $10,495,526 $74,249,215 $17,859,321 $103,959,947 $14,192,410 $31,499,597 Plus: Construction Work in Progress (4)2,168,017 See Exhibit S-3A Less: Outstanding Debt Principal (5) (3,000,000)See Exhibit S-3B Plus: Past Interest Payments (6)8,881,516 See Exhibit S-3C Plus: Capital Fund Reserves (7)(2,018,120)See Exhibit S-4 Total Net Plant $37,531,010 (1) Asset listing as of June 30, 2016. (2) Based on specific in service date of asset and June 2016 Engineering News Record, for LA construction cost index. (3) Based on pipe inventory and $25 per inch diameter. See Exhibit S-2 (4) Construction work in progress as of June 2016. See Exhibit S-3A. (5) Remaining principal as of June 30, 2016. See Exhibit S-3B. (6) Past interest payments from 1959 to 2008 which were not capitalized; net of depreciation at 50 year average life. See Exhibit S-3C. (7) Cash reserves as of December 2013 which are CF eligible. See Exhibit S-4. (8) Based on City input, See Exhibit S-5 with added EDUs 2009 to Feb 2016 per District email. (9) Based on "buy-in" methodology established in AWWA M1, Sixth Edition, Table VI.2-1, page 269. Capacity Fee= RCLND + RCLND- Pipe Reference Sewer Capacity Fee - Page 1 of 10 Otay Water District - Sewer Exhibit S-2 Development of Pipe Replacement Cost Pipe cost based on dollars per inch diameter 2016 = $25 TOTAL DIAMETER MATERIAL LENGTH REPLACEMENT DIAMETER MATERIAL LENGTH REPLACEMENT INCH TYPE FEET COST INCH TYPE FEET COST 3 PVC 168 $12,617 2 PVC 375 $18,750 4 ABS 4,204 420,400 3 PVC 29 2,175 4 CPR 33 3,328 4 PVC 2,558 255,830 4 VPC 587 58,700 4 PVC 1,244 124,400 6 DIP 0 0 6 PVC 14 2,067 6 DIP 2,613 391,950 6 PVC 3,819 572,850 8 ABS 138,290 27,657,998 8 STL 959 191,884 8 CIP 31 6,200 8 HDPE 199 39,800 8 PVC 136 27,200 8 PVC 202,312 40,462,342 8 VCP 34,879 6,975,866 12 CIP 27 8,100 12 DIP 116 34,800 10 PVC 21,865 5,466,288 12 PVC 2,973 891,900 10 VCP 3,044 761,078 10 RPMP 960 239,943 12 ABS 2,612 783,600 12 DIP 0 0 12 PVC 5,078 1,523,394 15 PVC 20,297 7,611,214 18 PVC 10,013 4,505,850 20 PVC 66 0 21 PVC 2,501 1,313,025 27 PVC 5,328 3,596,400 Total $101,822,922 Total $2,137,025 Useful Life Rep. Cost Useful Life Rep. Cost Rep. Cost Contributed Pipelines $76,022,132 Otay Owned 50 25,800,790 Total $101,822,922 Assume no contributed assets 50 $2,137,025 $103,959,947 Assume 8" and smaller were contributed Yearly Depreciation Average Age (1) Accumulated Depreciation Replacement Cost Less Depreciation Yearly Depreciation Average Age (1) Accumulated Depreciation Replacement Cost Less Depreciation Replacement Cost Less Depreciation $516,016 24.6 $12,693,989 $13,106,801 $42,741 24.6 $1,051,416 $1,085,609 $14,192,410 (1) Average age based on 2010 study information. GRAVITY SEWER MAINS SEWER FORCE MAINS Sewer Capacity Fee - Page 2 of 10 Otay Water District - Water Exhibit S-3A Development of Construction Work in Progress For the Year Ended June 30, 2016 Project Fund Description Beg Balance Addition/Accrual Capitalized/ Expensed/Reversed Ending Balance Expansion Betterment Replacement % CF Total CF S2024 22 Campo Road Sewer Main Replacement $603,540 $511,524 $0 $1,115,064 100.0%0.0%0.0%100.0% $1,115,064 S2027 22 Rancho San Diego Pump Station Rehabilita 73,676 226,313 0 299,989 100.0%0.0%0.0%100.0%299,989 S2028 22 Explorer Way 8-Inch Sewer Main Replaceme 10,049 0 10,049 0 100.0%0.0%0.0%100.0%0 S2033 22 Sewer System Various Locations Rehabilit 1,004,934 430,019 744,156 690,798 100.0%0.0%0.0%100.0%690,798 S2041 22 Rancho San Diego Sewer Basin Improvement 21,949 0 0 21,949 100.0%0.0%0.0%100.0%21,949 S2043 22 RWCWRF Sludge Handling System 40,217 0 0 40,217 100.0%0.0%0.0%100.0%40,217 Accrual 0 0 0 0 100.0%0.0%0.0%100.0%0 TOTAL $1,754,365 $1,167,857 $754,205 $2,168,017 $2,168,017 Sewer Capacity Fee - Page 3 of 10 Otay Water District - Sewer Exhibit S-3B Development of Sewer Debt For the Year Ended June 30, 2016 Debt Name TOTAL Principal Interest (1) I. Debt Status: Original Debt $0 $0 # of Years/Rate 0.00% II. Principal and Interest Payments: 2017 $0 $0 $0 $0 2018 0 0 0 0 2019 117,400 75,000 192,400 117,400 2020 120,400 72,100 192,500 120,400 2021 123,400 69,100 192,500 123,400 2022 126,500 66,000 192,500 126,500 2023 129,600 62,800 192,400 129,600 2024 132,900 59,600 192,500 132,900 2025 136,200 56,200 192,400 136,200 2026 139,600 52,800 192,400 139,600 2027 143,100 49,400 192,500 143,100 2028 146,700 45,800 192,500 146,700 2029 150,300 42,100 192,400 150,300 2030 154,100 38,300 192,400 154,100 2031 157,900 34,500 192,400 157,900 2032 161,900 30,500 192,400 161,900 2033 165,900 26,500 192,400 165,900 2034 170,100 22,400 192,500 170,100 2035 174,400 18,100 192,500 174,400 2036 178,700 13,700 192,400 178,700 2037 183,200 9,300 192,500 183,200 2038 187,700 4,700 192,400 187,700 2039 0 0 0 0 2040 0 0 0 0 2041 0 0 0 0 TOTAL $3,000,000 $848,900 $3,848,900 $3,000,000 (1) The sewer debt is anticipated 2018. Sewer Capacity Fee - Page 4 of 10 Otay Water District - Sewer Exhibit S-3C Development of Past Interest Payments Year Total Sewer Water CPI Escalation Factor 2008 Present Day Dollars Sewer Present Day Dollars Water CPI Escalation Factor 2016 Present Day Dollars Sewer Present Day Dollars Water Average Age YTD Remaining Depreciated Sewer Depreciated Water Present Dollars Less Depr. Sewer Present Dollars Less Depr. Water 2008 2,601,252 47,277 2,553,975 1.09 51,683 2,791,997 1.13 $53,192 $2,873,495 50 9 41 $9,575 $517,229 $43,617 $2,356,266 2007 950,479 58,066 892,413 1.03 59,948 921,344 1.17 67,848 1,042,756 50 10 40 13,570 208,551 54,279 834,204 2006 959,225 68,491 890,734 1.06 72,330 940,660 1.20 81,861 1,064,617 50 11 39 18,009 234,216 63,852 830,401 2005 1,327,844 78,562 1,249,282 1.09 85,786 1,364,158 1.24 97,091 1,543,922 50 12 38 23,302 370,541 73,789 1,173,381 2004 1,252,307 88,293 1,164,014 1.13 99,946 1,317,638 1.28 113,117 1,491,272 50 13 37 29,410 387,731 83,706 1,103,541 2003 947,099 97,695 849,404 1.17 114,629 996,632 1.33 129,734 1,127,965 50 14 36 36,326 315,830 93,409 812,135 2002 1,503,063 106,779 1,396,284 1.22 129,973 1,699,564 1.38 147,100 1,923,527 50 15 35 44,130 577,058 102,970 1,346,469 2001 1,543,336 115,556 1,427,780 1.26 145,585 1,798,801 1.43 164,769 2,035,841 50 16 34 52,726 651,469 112,043 1,384,372 2000 1,540,592 124,036 1,416,556 1.32 163,449 1,866,668 1.49 184,988 2,112,652 50 17 33 62,896 718,302 122,092 1,394,350 1999 1,809,747 176,967 1,632,780 1.39 246,694 2,276,112 1.58 279,202 2,576,051 50 18 32 100,513 927,378 178,689 1,648,672 1998 1,952,742 227,266 1,725,476 1.44 328,010 2,490,361 1.63 371,235 2,818,533 50 19 31 141,069 1,071,042 230,165 1,747,490 1997 2,080,744 274,606 1,806,138 1.47 404,084 2,657,737 1.67 457,332 3,007,964 50 20 30 182,933 1,203,186 274,399 1,804,779 1996 1,421,139 319,333 1,101,806 1.50 478,077 1,649,525 1.69 541,076 1,866,893 50 21 29 227,252 784,095 313,824 1,082,798 1995 936,716 362,687 574,029 1.54 557,180 881,856 1.74 630,603 998,064 50 22 28 277,466 439,148 353,138 558,916 1994 1,329,706 394,491 935,215 1.56 615,062 1,458,118 1.76 696,112 1,650,264 50 23 27 320,212 759,121 375,901 891,142 1993 749,618 419,512 330,106 1.60 671,011 528,005 1.81 759,434 597,583 50 24 26 364,528 286,840 394,906 310,743 1992 689,412 296,895 392,517 1.63 485,193 641,462 1.85 549,130 725,992 50 25 25 274,565 362,996 274,565 362,996 1991 1,172,353 336,012 836,341 1.68 564,437 1,404,895 1.90 638,816 1,590,028 50 26 24 332,185 826,814 306,632 763,213 1990 1,454,800 372,559 1,082,241 1.74 648,438 1,883,639 1.97 733,887 2,131,859 50 27 23 396,299 1,151,204 337,588 980,655 1989 1,314,494 408,975 905,519 1.84 754,333 1,670,183 2.09 853,737 1,890,274 50 28 22 478,093 1,058,554 375,644 831,721 1988 1,841,881 444,586 1,397,295 1.95 867,861 2,727,613 2.21 982,225 3,087,049 50 29 21 569,690 1,790,488 412,534 1,296,560 1987 1,339,462 477,707 861,755 2.05 979,340 1,766,671 2.32 1,108,395 1,999,477 50 30 20 665,037 1,199,686 443,358 799,791 1986 1,428,383 509,385 918,998 2.12 1,081,084 1,950,422 2.40 1,223,546 2,207,442 50 31 19 758,599 1,368,614 464,948 838,828 1985 1,508,454 538,914 969,540 2.18 1,175,872 2,115,468 2.47 1,330,824 2,394,237 50 32 18 851,728 1,532,312 479,097 861,925 1984 1,585,069 566,769 1,018,300 2.30 1,302,731 2,340,584 2.60 1,474,400 2,649,018 50 33 17 973,104 1,748,352 501,296 900,666 1983 1,614,923 593,048 1,021,875 2.43 1,442,993 2,486,408 2.75 1,633,146 2,814,059 50 34 16 1,110,539 1,913,560 522,607 900,499 1982 1,496,029 601,840 894,189 2.50 1,507,009 2,239,051 2.83 1,705,598 2,534,105 50 35 15 1,193,918 1,773,874 511,679 760,232 1981 1,546,319 118,910 1,427,409 2.67 317,909 3,816,220 3.03 359,802 4,319,108 50 36 14 259,058 3,109,758 100,745 1,209,350 1980 1,689,015 126,371 1,562,644 3.03 383,386 4,740,775 3.43 433,908 5,365,498 50 37 13 321,092 3,970,468 112,816 1,395,029 1979 1,727,910 146,451 1,581,459 3.50 512,015 5,529,024 3.96 579,487 6,257,620 50 38 12 440,410 4,755,791 139,077 1,501,829 1978 846,568 139,706 706,862 4.07 568,464 2,876,224 4.61 643,374 3,255,243 50 39 11 501,832 2,539,089 141,542 716,153 1977 699,346 146,858 552,488 4.48 657,544 2,473,719 5.07 744,193 2,799,697 50 40 10 595,355 2,239,758 148,839 559,939 1976 500,880 152,370 348,510 4.77 726,805 1,662,393 5.40 822,581 1,881,457 50 41 9 674,516 1,542,795 148,065 338,662 1975 505,080 158,245 346,835 5.06 800,816 1,755,196 5.73 906,345 1,986,490 50 42 8 761,330 1,668,652 145,015 317,838 1974 545,897 163,251 382,646 5.54 904,016 2,118,935 6.27 1,023,145 2,398,161 50 43 7 879,904 2,062,419 143,240 335,743 1973 545,960 166,687 379,273 6.15 1,024,296 2,330,642 6.95 1,159,274 2,637,766 50 44 6 1,020,161 2,321,234 139,113 316,532 1972 559,456 195,260 364,196 6.55 1,278,131 2,383,950 7.41 1,446,558 2,698,099 50 45 5 1,301,902 2,428,289 144,656 269,810 1971 507,776 19,884 487,892 6.80 135,304 3,319,940 7.70 153,134 3,757,430 50 46 4 140,883 3,456,836 12,251 300,594 1970 399,854 11,322 388,532 7.06 79,979 2,744,620 7.99 90,519 3,106,296 50 47 3 85,088 2,919,918 5,431 186,378 1969 286,268 286,268 7.43 - 2,128,323 8.41 - 2,408,786 50 48 2 0 2,312,435 0 96,351 1968 269,080 269,080 7.82 - 2,104,459 8.85 - 2,381,777 50 49 1 0 2,334,142 0 47,636 1967 237,827 237,827 8.14 - 1,935,438 9.21 - 2,190,483 50 50 0 0 2,190,483 0 0 1966 243,112 243,112 8.39 - 2,040,489 9.50 - 2,309,378 50 51 0 0 2,309,378 0 0 1965 224,790 224,790 8.54 - 1,920,159 9.67 - 2,173,191 50 52 0 0 2,173,191 0 0 1964 199,375 199,375 7.77 - 1,549,240 8.79 - 1,753,394 50 53 0 0 1,753,394 0 0 1963 127,415 127,415 7.87 - 1,003,018 8.91 - 1,135,193 50 54 0 0 1,135,193 0 0 1962 75,500 75,500 7.98 - 602,213 9.03 - 681,570 50 55 0 0 681,570 0 0 1961 75,500 75,500 8.06 - 608,255 9.12 - 688,408 50 56 0 0 688,408 0 0 1960 72,250 72,250 8.14 - 587,971 9.21 - 665,452 50 57 0 0 665,452 0 0 1959 75,500 75,500 8.95 - 675,375 9.37 - 707,334 50 58 0 0 707,334 0 0 $50,311,547 $9,651,623 $40,659,924 $22,421,405 $97,772,150 $25,370,719 $110,312,767 $16,489,202 $74,144,176 $8,881,516 $36,168,591 1. 1959-1962 only id 2 & 3, 1963-1966 - 2,3,5,6,7,9,10, this is the interest which is not already capitalized (previously). Sewer Capacity Fee - Page 5 of 10 Otay Water District - Sewer Exhibit S-4 Summary of Reserve Funds For the Year Ended June 30, 2016 Account #OPEB New Water Supply Expansion Replacement Betterment Debt Fund Debt Reserve Capital Improvement General Total % CF Eligible (1) Capacity Fee RESTRICTED RESERVES 312207/312248 (ID 18)(3,156,146)94 (3,156,053)100%(3,156,053) 312209/312252 (ID 22)0 0 0 0%0 312101 Capacity Fees 13,868 13,868 0%0 312102 Capital Improvement Fund 70,164 70,164 0%0 312113 Replacement Debt Fund 884 884 0%0 TOTAL RESTRICTED $0 $0 ($3,071,137)($3,156,053) DESIGNATED RESERVES 312229 Designated Betterment $3,939,495 3,939,495 0%$0 312412 Expansion Reserve (15,034)(15,034)0%0 321201 Replacement Reserve 13,195,476 13,195,476 0%0 321202 Retiree Health Ins - OPEB (a)8,441 8,441 0%0 TOTAL DESIGNATED $8,441 $0 ($15,034)$13,195,476 $3,939,495 $0 $0 $0 $0 $17,128,379 $0 TOAL RESTRICTED & DESIGNATED $8,441 $0 ($15,034)$13,195,476 $3,939,495 $0 $0 $0 $0 $14,057,242 ($3,156,053) GENERAL FUND (UNRESTRICTED) Annexation (Potable)$242,071 $242,071 0%$0 Annexation (Sewer)1,137,933 1,137,933 100%1,137,933 Operating 0 0%0 11-215101 Developer Deposit 0 0%0 77-215101|215111 Dev/Cell Site Dep 0 0%0 312415 Lakeview Replacement 0 0%0 312424 Highlands Golf Course, LLC 0 0%0 TOTAL GENERAL FUND $0 $0 $0 $0 $0 $0 $0 $0 $1,380,004 $1,380,004 $1,137,933 TOTALS BY FUND CATEGORY $8,441 $0 ($15,034)$13,195,476 $3,939,495 $0 $0 $0 $1,380,004 $15,437,246 ($2,018,120) Betterment Sewer Capacity Fee - Page 6 of 10 Otay Water District - Sewer Exhibit S-5 Development of Equivalent Dwelling Units Number of EDUs Number of 2009 EDUs (1)6,714 EDUs added 2009 to 2016 (2)43 Current EDUs 6,757 Expansion EDUs 0 (1) Based on 2010 study. (2) Based on District information per email 12/20/2016 EDUs 2009 to 2016. Sewer Capacity Fee - Page 7 of 10 Otay Water District - Sewer Exhibit S-6 Development of Capacity Fee - Future Count Project Type CIPNo Project Title Projected Project Cost (000s)Expansion Betterment Replacement % CF Eligible (2) Capacity Fee 71 S2034 Vista Grande and Paseo Grande 8-Inch Sewer Main Replacement $250 0.0%0.0%100.0%0%$0 72 S2039 Hidden Mountain Lift Station Enclosure 9 0.0%0.0%0.0%0%0 73 S2040 Calavo Sewer Basin Improvements 142 0.0%0.0%100.0%0%0 74 S2041 Rancho San Diego Sewer Basin Improvements 22 0.0%0.0%100.0%0%0 134 S2042 Sewer Vehicle Capital Purchases 27 0.0%0.0%100.0%0%0 $450 $0 Total $450 (in $000s)$0 Expansions Equivalent Dwelliing Units 0 Future Sewer Fee (Per EDU) $0 Sewer Capacity Fee - Page 8 of 10 Otay Water District - Sewer Exhibit S-7 Current and Proposed Sewer Capacity Fee Item CF 2015/2016 Reference Existing Capacity Fee Plant $37,531,010 See Exhibit S-1 Future Capacity Fee Plant 0 See Exhibit S-7 Total Capacity Fee $37,531,010 Existing EDUs 6,757 See Exhibit S-1 Growth EDUs 0 See Exhibit S-7 Total EDUs 6,757 Total Capacity Fee $5,554.39 Current Sewer Capacity Fee 4/1/2017 (1)$6,886.04 Capacity Fee Example Customer Number of 2015/2016 Classification EDUs (3)Current Calculated Hotel/Motel w/o kitchen; /unit 0.38 $2,616.70 $2,110.67 Hotel/Motel with kitchen; per unit 0.60 4,131.62 3,332.63 Residential units (single & multi-1.00 6,886.04 5,554.39 family, mobile homes - per unit) Commercial - first 1,000 sq.ft.1.20 8,263.25 6,665.27 Commercial - addt'l 1,000 sq.ft.0.70 4,820.23 3,888.07 Notes: (1) Current capacity fee as of ENR adjustment on 3/13/2017, fees effective 4/1/2017. (2) Based on "Combined" methodology established in AWWA M1, Sixth Edition, Table VI.2-1, page 273. (3) EDU's are determined by the District's code, Section 53.09. For example, Single-family, multi-family, condos and mobile homes aer charged 1.0 EDU per unit. Churches are charged prorated as 150 seats = 1.0 EDU. Schools range between 24 to 50 students = 1.0 EDU, depending on the type of school (Elementary to High School). *Churches, theatres, auditoriums - does not include office space, school rooms, day-care facilities, food prep areas, Additional EDUs are assigned for these supplementary/types of uses. Sewer Capacity Fee - Page 9 of 10 Otay Water District - Sewer Exhibit S-7A Calculation of Inside ID Area Capacity Fee - Accounting for Principal and Interest Payments $5,554.39 Calculated Sewer Capacity Fee $5,554.39 Calculated Sewer Capacity Fee $1,535.00 $9.933 M past Interest removed from model (Exh. 3)$773.00 Past Principal discount $4,019.39 Calculated capacity Fee without past interest $4,781.39 Calculated capacity Fee without past principal For $5 M 1990 state loan $5,554.39 Calculated Sewer Capacity Fee -$1,535.00 Reduction for past interest payments -$773.00 Reduction for past principal payments $3,246.39 Calculated fee for inside ID areas Sewer Capacity Fee - Page 10 of 10 Water and Sewer Annexation Fee Otay Water District Exhibit A-1 Summary of Annexation Fee Calculation (A)(B) (C) (D) Line No.Item Original Amount Present Value Resource Water & Recycled Annexation Fee 1 Total 1 % General Tax*$49,809,288 $74,927,985 Exhibit 3 - Present Value in 2016 Dollars of Tax Collections 2 Availability Charges 38,964,204 73,578,099 Exhibit 3 - Present Value in 2016 Dollars of Water Availability Charges 3 Total Gen Tax & Availability $88,773,492 $148,506,085 4 Current EDUs 73,467 73,467 Exhibit 2 - Water EDUs 5 Water & Recycled Annexation Fee $1,208.35 $2,021.40 Exhibit 1 - = Line 3 divided by Line 4 Current Fee 1,911.95 Total Increase (Decrease) to Current Fee $109.45 Sewer Annexation Fee 6 Total 1 % General Tax*$0 $0 1% general tax for water only 7 Availability Charges 3,231,528 7,471,792 Exhibit 3 - Present Value in 2016 Dollars of Sewer Availability Charges 8 Total Gen Tax & Availability $3,231,528 $7,471,792 Exhibit 1 - = Line 4 + Line 7 9 Current EDUs 6,757 6,757 Exhibit 2 - Sewer EDUs 10 Sewer Annexation Fee $478.25 $1,105.79 Exhibit 1 - = Line 8 divided by Line 9 Current Fee 1,095.31 Total Increase (Decrease) to Current Fee $10.48 Water and Sewer Annexation Fee - Page 1 of 6 Otay Water District Exhibit 1A Summary of Water Annexation Fee by Meter Size Meter Size (inch) Hydraulic Capacity Factor [1] Proposed Water Annexation Fee 5/8"1.00 $2,021.40 3/4"1.00 2,021.40 1"2.50 5,053.50 1-1/2"5.00 10,106.99 2"8.00 16,171.19 3"16.00 32,342.38 4"25.00 50,534.96 6"50.00 101,069.93 8"80.00 161,711.88 10"115.00 232,460.83 [1] Based on AWWA capacity rating for 5/8" meter. Otay Water District Exhibit 1B Summary of Sewer Annexation Fee by Number of EDUs [1] Proposed Sewer Annexation Fee 0.38 420.20 0.60 663.47 1.00 1,105.79 1.20 1,326.95 0.70 774.05 (3) EDU's are determined by the District's code, Section 53.09. Water and Sewer Annexation Fee - Page 2 of 6 Otay Water District Exhibit A-2 Summary of Water and Sewer EDUs Number of Meters (1) Class of Service 5/8"3/4"1"1.5"2"3"4"6"8"10"Total Number of Water Meters Residential 0 43,202 1,814 18 4 45,038 Master Metered 0 41 185 244 232 42 64 6 3 0 817 Commercial & Public 6 329 356 299 388 34 28 10 0 5 1,455 Ag, Lds & Construction 0 106 268 382 463 2 8 2 0 0 1,231 Recycled 0 3 99 394 194 4 10 3 0 1 708 Temporary 0 7 8 5 2 0 100 1 0 0 123 Total 6 43,688 2,730 1,342 1,283 82 210 22 3 6 49,372 Less: Temporary 0 7 8 5 2 0 100 1 0 0 123 Total Existing Permanent 6 43,681 2,722 1,337 1,281 82 110 21 3 6 49,249 AWWA Weighting - 5/8" Meter 1.00 1.00 2.50 5.00 8.00 16.00 25.00 50.00 80.00 115.00 Permanent Existing Water EDUs 6 43,681 6,805 6,685 10,248 1,312 2,750 1,050 240 690 73,467 Number of Sewer ASUs (2)6,757 Notes: (1) Based on data from the utility billing system as of FY 2016. (2) Based on estimate provided by District for FY 2016. Water and Sewer Annexation Fee - Page 3 of 6 Otay Water District Exhibit A-3 Summary of Tax Collections and Availability Charges Year State Share of Tax Coll PV Factor Present Value in Today's Dollars Water Avail Present Value in Today's Dollars Sewer Avail Present Value in Today's Dollars FY 1959 1959 34,446 9.37 322,709$ -$ - FY 1960 1960 69,628 9.21 641,302$ -$ - FY 1961 1961 95,352 9.12 869,419$ -$ - FY 1962 1962 73,400 9.03 662,612$ -$ - FY 1963 1963 71,693 8.91 638,742$ 41,883 373,153$ - FY 1964 1964 74,297 8.79 653,401$ 59,677 524,826$ - FY 1965 1965 65,485 9.67 633,087$ 66,763 645,442$ - FY 1966 1966 75,554 9.50 717,705$ 66,175 628,612$ - FY 1967 1967 82,050 9.21 755,714$ 96,460 888,436$ - FY 1968 1968 57,645 8.85 510,248$ 94,834 839,429$ - FY 1969 1969 58,675 8.41 493,718$ 94,876 798,329$ 3,086 25,967 FY 1970 1970 - 7.99 -$ 112,789 901,743$ 20,804 166,327 FY 1971 1971 - 7.70 -$ 105,577 813,086$ 24,549 189,061 FY 1972 1972 120,000 7.41 889,004$ 141,692 1,049,707$ 44,112 326,798 FY 1973 1973 128,000 6.95 890,214$ 114,084 793,431$ 54,132 376,477 FY 1974 1974 150,000 6.27 940,097$ 123,266 772,546$ 60,748 380,727 FY 1975 1975 222,000 5.73 1,271,500$ 83,416 477,763$ 60,800 348,231 FY 1976 1976 262,000 5.40 1,414,426$ 105,200 567,930$ 60,800 328,233 FY 1977 1977 272,018 5.07 1,378,434$ 130,708 662,354$ 60,906 308,637 FY 1978 1978 327,000 4.61 1,505,901$ 162,949 750,413$ 58,611 269,916 FY 1979 1979 163,271 3.96 646,041$ 379,294 1,500,815$ 67,365 266,554 FY 1980 1980 3.43 -$ 595,000 2,042,993$ 68,000 233,485 FY 1981 1981 3.03 -$ 682,000 2,063,621$ 68,000 205,757 FY 1982 1982 137,863 2.83 390,700$ 757,885 2,147,824$ 69,000 195,544 FY 1983 1983 110,000 2.75 302,920$ 909,659 2,505,035$ 69,000 190,013 FY 1984 1984 108,391 2.60 281,970$ 766,718 1,994,550$ 68,000 176,896 FY 1985 1985 107,173 2.47 264,659$ 837,736 2,068,753$ 67,000 165,454 FY 1986 1986 94,431 2.40 226,824$ 797,498 1,915,597$ 66,000 158,533 FY 1987 1987 110,000 2.32 255,226$ 759,875 1,763,091$ 65,000 150,815 FY 1988 1988 200,000 2.21 441,861$ 897,269 1,982,339$ 64,000 141,395 FY 1989 1989 300,000 2.09 626,251$ 856,702 1,788,369$ 63,000 131,513 FY 1990 1990 400,000 1.97 787,942$ 893,639 1,760,340$ 62,000 122,131 FY 1991 1991 500,000 1.90 950,586$ 1,010,761 1,921,630$ 61,000 115,971 FY 1992 1992 550,000 1.85 1,017,269$ 904,588 1,673,107$ 60,000 110,975 FY 1993 1993 600,000 1.81 1,086,167$ 1,086,662 1,967,161$ 52,166 94,435 FY 1994 1994 650,000 1.76 1,146,979$ 959,193 1,692,575$ 54,000 95,287 FY 1995 1995 714,965 1.74 1,243,108$ 1,167,150 2,029,323$ 56,995 99,097 FY 1996 1996 734,935 1.69 1,245,270$ 1,162,252 1,969,313$ 56,995 96,572 FY 1997 1997 752,852 1.67 1,253,809$ 1,095,138 1,823,856$ 56,995 94,920 FY 1998 1998 778,739 1.63 1,272,055$ 1,072,577 1,752,034$ 63,353 103,486 FY 1999 1999 852,078 1.58 1,344,330$ 1,015,615 1,602,344$ 64,899 102,392 FY 2000 2000 962,353 1.49 1,435,254$ 1,015,422 1,514,401$ 64,899 96,791 FY 2001 2001 1,105,495 1.43 1,576,301$ 1,113,297 1,587,426$ 68,512 97,690 FY 2002 2002 1,283,514 1.38 1,768,175$ 1,100,080 1,515,475$ 69,381 95,579 FY 2003 2003 1,554,975 1.33 2,064,928$ 1,076,548 1,429,602$ 69,381 92,134 FY 2004 2004 1,781,421 1.28 2,282,261$ 1,113,609 1,426,697$ 82,392 105,556 FY 2005 2005 947,347 1.24 1,170,777$ 1,091,674 1,349,143$ 82,588 102,066 FY 2006 2006 1,338,279 1.20 1,599,528$ 1,085,726 1,297,673$ 85,310 101,963 FY 2007 2007 2,930,494 1.17 3,424,187$ 1,111,263 1,298,475$ 90,370 105,595 FY 2008 2008 3,279,923 1.13 3,690,264$ 1,118,075 1,257,953$ 114,259 128,553 FY 2009 2009 3,429,830 1.13 3,859,610$ 1,103,565 1,241,849$ 92,029 103,561 FY 2010 2010 3,008,496 1.11 3,341,482$ 1,125,125 1,249,656$ 89,313 99,199 FY 2011 2011 2,923,709 1.08 3,151,655$ 1,097,832 1,183,424$ 89,801 96,802 FY 2012 2012 2,890,156 1.06 3,066,382$ 1,127,195 1,195,925$ 86,951 92,253 FY 2013 2013 2,892,382 1.05 3,029,251$ 1,148,739 1,203,098$ 92,439 96,814 FY 2014 2014 2,894,402 1.03 2,976,088$ 1,207,141 1,241,209$ 75,984 78,129 FY 2015 2015 3,128,961 1.01 3,166,030$ 1,086,212 1,099,080$ 76,480 77,386 FY 2016 2016 3,353,611 1.00 3,353,611$ 1,035,140 1,035,140$ 130,123 130,123 Water and Sewer Annexation Fee - Page 4 of 6 Otay Water District Exhibit A-3 Summary of Tax Collections and Availability Charges Year State Share of Tax Coll PV Factor Present Value in Today's Dollars Water Avail Present Value in Today's Dollars Sewer Avail Present Value in Today's Dollars 49,809,288$ 1.00 74,927,985$ 38,964,204$ 73,578,099$ 3,231,528$ 7,471,792$ PV factor calculated based on San Diego CPI. See Exhibit 4. Water and Sewer Annexation Fee - Page 5 of 6 Otay Water District Exhibit 4 Summary 20 City Average ENR-CCI to ENR-CCI for LA 2017 11,555.03 CPI 272.63 Year 20 City Average ENR-CCI Change of 20 City CCI ENR -CCI for LA PV Factor San Diego CPI PV Factor 1959 797.00 5.0% 882.87 13.09 29.10 9.37 1960 824.00 3.4% 912.78 12.66 29.60 9.21 1961 847.00 2.8% 938.26 12.32 29.90 9.12 1962 872.00 3.0% 965.96 11.96 30.20 9.03 1963 901.00 3.3% 998.08 11.58 30.60 8.91 1964 936.00 3.9% 1,036.85 11.14 31.00 8.79 1965 971.00 3.7% 1,075.62 10.74 28.20 9.67 1966 1,019.00 4.9% 1,128.79 10.24 28.70 9.50 1967 1,074.00 5.4% 1,189.72 9.71 29.60 9.21 1968 1,155.00 7.5% 1,279.45 9.03 30.80 8.85 1969 1,269.00 9.9% 1,405.73 8.22 32.40 8.41 1970 1,381.00 8.8% 1,529.80 7.55 34.10 7.99 1971 1,581.00 14.5% 1,751.35 6.60 35.40 7.70 1972 1,753.00 10.9% 1,941.88 5.95 36.80 7.41 1973 1,895.00 8.1%2,099.18 5.50 39.20 6.95 1974 2,020.00 2,279.66 5.07 43.50 6.27 1975 2,212.00 2,585.93 4.47 47.60 5.73 1976 2,401.00 2,923.33 3.95 50.50 5.40 1977 2,576.00 3,161.75 3.65 53.80 5.07 1978 2,776.00 3,421.25 3.38 59.20 4.61 1979 3,003.00 3,638.81 3.18 68.90 3.96 1980 3,237.00 4,102.37 2.82 79.40 3.43 1981 3,535.00 4,530.96 2.55 90.10 3.03 1982 3,825.00 4,934.14 2.34 96.20 2.83 1983 4,066.00 5,063.89 2.28 99.00 2.75 1984 4,146.00 5,259.93 2.20 104.80 2.60 1985 4,195.00 5,446.69 2.12 110.40 2.47 1986 4,295.00 5,452.20 2.12 113.50 2.40 1987 4,406.00 5,474.14 2.11 117.50 2.32 1988 4,519.00 5,770.84 2.00 123.40 2.21 1989 4,615.00 5,789.77 2.00 130.60 2.09 1990 4,732.00 5,994.55 1.93 138.40 1.97 1991 4,835.00 6,090.12 1.90 143.40 1.90 1992 4,985.00 6,348.55 1.82 147.40 1.85 1993 5,210.00 6,477.84 1.78 150.60 1.81 1994 5,408.00 6,532.95 1.77 154.50 1.76 1995 5,471.00 6,626.22 1.74 156.80 1.74 1996 5,620.00 6,558.44 1.76 160.90 1.69 1997 5,826.00 6,663.55 1.73 163.70 1.67 1998 5,920.00 6,851.95 1.69 166.90 1.63 1999 6,059.00 6,825.97 1.69 172.80 1.58 2000 6,221.00 7,068.04 1.63 182.80 1.49 2001 6,334.00 7,226.92 1.60 191.20 1.43 2002 6,538.00 7,402.75 1.56 197.90 1.38 2003 6,694.00 7,531.77 1.53 205.30 1.33 2004 7,115.00 8,192.14 1.41 212.80 1.28 2005 7,445.98 8,567.42 1.35 220.60 1.24 2006 7,751.20 8,878.97 1.30 228.10 1.20 2007 7,967.25 9,181.67 1.26 233.32 1.17 2008 8,311.12 9,823.19 1.18 242.31 1.13 2009 8,574.84 9,760.69 1.18 242.27 1.13 2010 8,802.40 10,004.30 1.16 245.46 1.11 2011 9,074.08 10,088.80 1.15 252.91 1.08 2012 9,308.15 10,270.93 1.13 256.96 1.06 2013 9,546.61 10,304.68 1.12 260.31 1.05 2014 9,806.50 10,747.68 1.08 265.15 1.03 2015 10,035.59 11,117.28 1.04 269.44 1.01 2016 10,419.90 11,527.03 1.00 272.63 1.00 Current Year ENR-CCI Water and Sewer Annexation Fee - Page 6 of 6 Overview and Summary of the Proposed Fees Overview of the Presentation Review the purpose of the District’s study Defining a capacity fee Review the District’s current capacity fees Annexation fees: definitions and purpose Review the District’s existing annexation fees Summarize the results of the study 2 Purpose of the District’s Study Review and update the capacity fees to reflect existing conditions and value of the assets in place and capacity available Review and update the annexation fees for new customers annexing into the District Inform the development community and the public of the study and the opportunity for review and feedback Present the proposed capacity and annexation fees to the Board 3 Summary of the Current and Proposed Capacity Fees 4 Existing and Maximum Allowable Sewer Capacity Fee ($/EDU) Fee Description Existing Fee Maximum Allowable Sewer Capacity Fee $6,886.04 $5,554.39 Existing and Maximum Allowable Water Capacity and New Water Supply Fee (3/4” Meter) Fee Description Existing Fee Maximum Allowable Water Capacity Fee $8,590.34 $7,892.32 New Water Supply Fee 1,064.11 800.70 Total Fee $9,654.45 $8,693.02 Capacity Fees: A Working Definition One-time charge. Fee for new customer demand only. Fee required of all new customers desiring water service or sewer service, or existing customers requesting increased water or sewer capacity. Charge based on the value of the District’s capacity and the amount of capacity needed by the new customer. 5 Purpose of Capacity Fees To bring equity between existing and new connections to the system Existing customers paid for available capacity New connections pay a buy-in and/or new expansion related facilities To fund infrastructure necessary to serve growth For new connections to pay an equitable share of expansion-related facilities needed to serve them 6 Capacity Fees are Different than Rates Rates in a Nutshell CF’s in a Nutshell 7 How much money does the District need this year? Cost of Service Analysis Residential Rates Industrial Rates Commercial Rates What is the value of a unit of system capacity? New customer capacity needs Capacity Fee Value & Capacity Analysis Capacity Issues Impact Methods of Determining Capacity Fees •Buy-In Approach •Incremental (Marginal) Approach •Combined Method – •Used for both utilities 8 Overview of the Combined Method Demand Supply Capacity Available for Growth Plus, Additional Capacity Needed 9 Water Capacity Fees – Otay Mesa Recycled Moratorium Temporary Moratorium Go to slides 11, 12, 13 Permanent Moratorium Go to slides 14, 15, 16, 17 10 Components of the Water Capacity Fee Assuming a Otay Mesa Recycled Temporary Moratorium 11 Summary of Allowable New Water Supply Fee Components Total “Allowable” Water Supply Fee Total Future Capacity Plant (Expansion) $26,728,000 Future EDUs 33,381 Total Allowable New Water Supply Fee per 3/4” Equivalent Meter $800.70 A permanent moratorium for Otay Mesa recycled water would result in the above Capacity Fee of $7,892.32 being reduced by $211.52 to $7,680.80. Summary of Allowable Water Capacity Fee Based on a 3/4” Meter Equivalency Total “Allowable” Capacity Fee Total Existing Capacity Plant (Repro & Replace. Less Depreciation) $612,327,458 Total Future Capacity Plant 230,951,570 Total Capacity Plant $843,279,028 Existing EDUs 73,467 Future EDUs 33,381 Total EDUs 106,848 Total Allowable Capacity Fee per 3/4” Equivalent Meter $7,892.32 Summary of the Water Capacity Fee Assuming a Otay Mesa Recycled Temporary Moratorium 12 Meter # of Water New Water Total Size Equiv. EDUs Capacity Fee Supply Fee Fees 3/4" 1.00 $7,892.32 $800.70 $8,693.02 1" 2.50 19,730.81 2,001.75 21,732.56 1-1/2" 5.00 39,461.62 4,003.50 43,465.12 2" 8.00 63,138.59 6,405.61 69,544.20 3" 16.00 126,277.18 12,811.22 139,088.40 4" 25.00 197,308.10 20,017.52 217,325.62 6" 50.00 394,616.20 40,035.05 434,651.25 8" 80.00 631,385.91 64,056.08 695,441.99 10" 115.00 907,617.25 92,080.61 999,697.87 Calculated Water Capacity Fee and New Water Supply Fee by Meter Size Triad Area Water Capacity Fees [1] Assuming a Otay Mesa Recycled Temporary Moratorium 13 [1] - New water supply fee and annexation fees apply to Triad Area Calculated Water Capacity and Triad Capacity Fees by Meter Size Meter Size Meter Equivalency Water Capacity Fee Triad Water Capacity Fee 3/4” 1.0 $7,892.32 $5,921.21 1” 2.5 19,730.81 14,803.03 1‐ 1/2” 5.0 39,461.62 29,606.07 2” 8.0 63,138.59 47,369.71 3” 16.0 126,277.18 94,739.42 4” 25.0 197,308.10 148,030.35 6” 50.0 394,616.20 296,060.69 8” 80.0 631,385.91 473,697.11 10” 115.0 907,617.25 680,939.59 Components of the Water Capacity Fee Assuming a Otay Mesa Recycled Permanent Moratorium 14 Summary of Allowable New Water Supply Fee Components Total “Allowable” Water Supply Fee Total Future Capacity Plant (Expansion) $26,728,000 Future EDUs 33,381 Total Allowable New Water Supply Fee per 3/4” Equivalent Meter $800.70 Summary of Allowable Water Capacity Fee Based on a 3/4” Meter Equivalency Total “Allowable” Capacity Fee Total Existing Capacity Plant (Repro & Replace. Less Depreciation) $612,327,458 Total Future Capacity Plant 208,351,570 Total Capacity Plant $820,679,028 Existing EDUs 73,467 Future EDUs 33,381 Total EDUs 106,848 Total Allowable Capacity Fee per 3/4” Equivalent Meter $7,680.80 Summary of the Water Capacity Fee Assuming a Otay Mesa Recycled Permanent Moratorium 15 Meter # of Water New Water Total Size Equiv. EDUs Capacity Fee Supply Fee Fees 3/4" 1.00 $7,680.80 $800.70 $8,481.50 1" 2.50 19,202.01 2,001.75 21,203.76 1-1/2" 5.00 38,404.02 4,003.50 42,407.52 2" 8.00 61,446.43 6,405.61 67,852.04 3" 16.00 122,892.86 12,811.22 135,704.08 4" 25.00 192,020.10 20,017.52 212,037.62 6" 50.00 384,040.20 40,035.05 424,075.25 8" 80.00 614,464.31 64,056.08 678,520.39 10" 115.00 883,292.45 92,080.61 975,373.06 Calculated Water Capacity Fee and New Water Supply Fee by Meter Size Triad Area Water Capacity Fees [1] Assuming a Otay Mesa Recycled Permanent Moratorium 16 [1] - New water supply fee and annexation fees apply to Triad Area Meter Meter Water Triad Water Size Equivalency Capacity Fee Capacity Fee 3/4" 1.00 7,680.80$ 5,762.14$ 1" 2.50 19,202.01 14,405.35 1-1/2" 5.00 38,404.02 28,810.70 2" 8.00 61,446.43 46,097.11 3" 16.00 122,892.86 92,194.22 4" 25.00 192,020.10 144,053.48 6" 50.00 384,040.20 288,106.96 8" 80.00 614,464.31 460,971.13 10" 115.00 883,292.45 662,646.00 Calculated Water Capacity and Triad Capacity Fee by Meter Size Revised Capacity and New Water Supply Fees Assuming Otay Mesa Permanent Moratorium 17 Meter New Water Triad New Water Size Capacity Fee Supply Fee Total Capacity Fee Supply Fee Total 3/4 7,680.80$ 800.70$ 8,481.50$ 5,762.14$ 800.70$ 6,562.84$ 1 19,202.01 2,001.75 21,203.76 14,405.35 2,001.75 16,407.10 1.5 38,404.02 4,003.50 42,407.52 28,810.70 4,003.50 32,814.20 2 61,446.43 6,405.61 67,852.04 46,097.11 6,405.61 52,502.72 3 122,892.86 12,811.22 135,704.08 92,194.22 12,811.22 105,005.44 4 192,020.10 20,017.52 212,037.62 144,053.48 20,017.52 164,071.00 6 384,040.20 40,035.05 424,075.25 288,106.96 40,035.05 328,142.01 8 614,464.31 64,056.08 678,520.39 460,971.13 64,056.08 525,027.21 10 883,292.45 92,080.61 975,373.06 662,646.00 92,080.61 754,726.61 Calculated Water Capacity and New Water Supply Fee by Meter Size (Permanent Moratorium) TriadNon‐Triad Determination of the Sewer Capacity Fee 18 Summary of Allowable Sewer Capacity Fee Based on One EDU Total “Allowable” Capacity Fee Total Existing Capacity Plant (Repro & Replace. Less Depreciation) $37,531,000 Total Future Capacity Plant 0 Total Capacity Plant $37,531,000 Existing EDUs 6,757 Future EDUs 0 Total EDUs 6,757 Total Allowable Capacity Fee per EDU $5,554.39 Calculated Sewer Capacity Fee by Number of EDUs Number of EDUs Sewer Capacity Fee Outside ID Area Sewer Capacity Fee Inside Sewer ID Area 0.38 $2,110.67 $1,233.63 0.60 3,332.63 1,947.83 1.00 5,554.39 3,246.39 1.20 6,665.27 3,895.67 0.70 3,888.07 2,272.47 Inside sewer ID area pay a reduced capacity fee, which is reduced by the principal paid on the 1990 State loan for treatment plant, and all past interest payments. Annexation Fees Purpose: To bring equity to existing customers who have paid the general tax and availability fees into the system over the years and those that have not. Anyone outside of the service area or ID areas that annexes into the system is subject to pay these fees These are a one-time fee to pay into the system, a share equal to the value to the funds paid by others Calculation: The fee is determined by accumulating the past taxes and availability fees, bringing them into current day dollars (applying CPI), and dividing by current EDUs to determine the “buy-in” share per EDU. 19 Overview of the Current Annexation Fees 20 Summary of the Proposed Annexation Fees 21 Concluding Comments Capacity fees are an equitable method to finance the cost of growth and expansion facilities Annexation fees and capacity fees create equity between existing and new customers District has proposed cost-based fees reflective of existing conditions and value of the assets in place and capacity available 22 STAFF REPORT TYPE MEETING: Regular Board Meeting MEETING DATE: May 3, 2017 SUBMITTED BY: Mark Watton, General Manager W.O./G.F. NO: DIV. NO. APPROVED BY: Susan Cruz, District Secretary Mark Watton, General Manager SUBJECT: Board of Directors 2017 Calendar of Meetings GENERAL MANAGER’S RECOMMENDATION: At the request of the Board, the attached Board of Director’s meeting calendar for 2017 is being presented for discussion. PURPOSE: This staff report is being presented to provide the Board the opportunity to review the 2017 Board of Director’s meeting calendar and amend the schedule 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 2017 G:\UserData\DistSec\WINWORD\STAFRPTS\Board Meeting Calendar 5-3-17.doc Board of Directors, Workshops and Committee Meetings 2017 Regular Board Meetings: Special Board or Committee Meetings (3rd Wednesday of Each Month or as Noted) January 4, 2017 February 1, 2017 March 1, 2017 April 5, 2017 May 3, 2017 June 7, 2017 July 5, 2017 August 2, 2017 September 6, 2017 October 4, 2017 November 1, 2017 December 6, 2017 January 18, 2017 February 15, 2017 March 15, 2017 April 19, 2017 May 17, 2017 June 21, 2017 July 19, 2017 August 16, 2017 September 20, 2017 October 18, 2017 November 15, 2017 December 20, 2017 SPECIAL BOARD MEETINGS: BOARD WORKSHOPS: Budget Workshop, Wednesday, May 24, 2017 at 3:00pm STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: May 3, 2017 SUBMITTED BY: Mark Watton General Manager W.O./G.F. NO: N/A DIV. NO. N/A APPROVED BY: Mark Watton, General Manager SUBJECT: General Manager’s Report ADMINISTRATIVE SERVICES: Purchasing & Facilities: BidSync Solicitations – There are currently two items out on the District’s solicitation portal BidSync: 1) “Payroll & Human Resources System”, for a fully integrated payroll and human resource management system solution; and, 2) “870-2 Pump Station Replacement (CIP P2083 & P2562)”, for the construction of a potable water pump station, yard piping, reservoir floating cover and liner replacement, reservoir recirculation system, existing access road improvements and utility connections. Recently completed solicitations pending award include 1) “Carpet Replacement - Administration Building”, for the replacement of the carpet in the District's Administration Building; and, 2) “As Needed Asphalt Concrete Paving Service - FY2018”, for minor paving repairs. Safety & Security: District Safety Programs: o Ergonomics Program - Reviewed, updated, finalized and released for employee consumption. o Treatment Plant Headworks Area – Confined space signage refreshed (new signs replaced) including signs deteriorated by weather and time. o Circle of Safety – Reminder sent to staff as part of accident prevention, to always perform the “Circle of Safety” before moving vehicles and equipment. The procedure and training material was also provided. 2 Emergency Preparedness (WebEOC) – Staff completed the March and April monthly exercises, which consisted of making an emergency test entry into the District’s log and sharing the information with all members of the Water hub, and assigning a task to the Water Authority in Task Tracker and attach the Mutual Aid request form. Staff also discussed overall awareness and District resources utilized during Board meetings, highlighting the importance of getting involved: “if you see something say something”. Supervisor Online Training - Safety introduced an online safety video streaming program to provide access to a safety training video library for supervisors. Supervisors now have access and are able to stream on-demand safety videos for use during the regulatory bi-weekly tailgate meetings. Meetings -- Staff attended the following: o Safety Committee - The Committee met and reviewed/discussed the following topics: FY17 injuries/incidents to date, gas detector meters, ergonomics program, flex and stretch, tracking options for confined space inventory, use of a spotter, rattlesnakes, security facilities mobile app, use of power strips and extension cords, and use of traffic cones. o Water Utility Safety Managers Association (WUSMA) and Water Agencies Emergency Collaborative (WAEC) Quarter 1 meeting hosted at the Santa Fe Irrigation District. Topics discussed include: - Current workforce development issues, and how the water industry is impacted. Every industry is losing its Boomers, otherwise known as the “Silver Tsunami” …almost 50% of California’s Water Utilities Industry workers will turn 65 soon. - Lauren Godfroy, of the San Diego Law Enforcement Coordination Center (SD-LECC) (Water Sector) discussed how the SD-LECC is intended to provide an overview of the respective infrastructure sector to include contact information, maps, and other first responder awareness information. The CIP Unit will be working with the Water Authority to update this document during 2017. - Mike Davis, of the SD County Office of Emergency Services, discussed the County’s security initiative: The County is in the process of assessing all 300+ county facilities with the end goal of creating a site security plan for each facility. Regardless of the type of emergency, they recommend focusing on 3 things when planning for emergencies; prepare to be less 3 vulnerable, train and prepare to respond appropriately, and utilize notification systems to communicate emergency status. - Don Jones, of Cuyamaca College, discussed some of the current job training programs, including the San Diego Regional Water Agency (SDRWA). SDRWA has an 80% job placement rate. Don reiterated the importance of actively collaborating with water industry relevant community college programs so that we can compete for replacement recruits with the other industries. - Oscar Ramirez, of Otay Water District, shared information regarding InfraGard’s mission to mitigate criminal and terrorist threats, risks, and losses for the purpose of protecting the region’s critical infrastructure and people. The San Diego chapter covers both San Diego and Imperial Counties, and focuses on terrorism and law enforcement issues facing the San Diego region. Human Resources: Employee Information Meeting - The District held employee information meetings on April 20th. These meetings are held twice a year to provide employees with relevant information regarding key District projects and District updates. The meeting this month included topics such as: the scoop on the Quino Checkerspot Butterfly, updates on the AMR project, lead testing for schools, and our Employee Assistance Program (EAP) representative gave an overview of the benefits available through the District’s EAP program. Employee Picnic – Please mark your calendars to attend the District’s Annual Employee Picnic. The Picnic will be held at Rohr Park on August 12th from 11:00 am – 4:00 pm. Recruitments/New Hires: o The District is recruiting for a Senior Accountant and Utility Worker I/II. These positions are critical to District operations. o There were no new hires in the months of March or April. IT Operations: GIS-centric Work Order Management System (Cityworks) - The District has been chosen as a recipient for a CityWorks featured article in their bi-annual published magazine, InPrint. The Cityworks team reached out to District IT staff to share information regarding the implementation, successes, and overall project lessons learned. Discussions also focused on leveraging GIS in asset management and new enhancements such as predictive analysis for work order 4 management and reporting. The project story will be published in a few months. SCADA Roadmap - Staff finalized the completion of the District’s SCADA Roadmap report. Several months ago, the team started the assessment of the District’s SCADA Infrastructure/Network with the objective of developing a roadmap. The SCADA Roadmap project calls for further development and functional advancements to include cyber security enhancements, optimization of transmission system, field computing (PLC) replacements, and disaster recovery measures. Staff will begin meeting with department stakeholders and start prioritizing the objectives outlined in the report. SCADA Telecommunications Redesign – Staff continues the redesign efforts of the District’s SCADA network. To date, 34 sites have been converted to physical wired connectivity, with six facilities remaining. SCADA and IT staff continue to test and monitor the new network service to ensure that reliability, redundancy, and security functions are met with minimal to no disruption. In addition, this initiative falls in line with the improvements and security landscape identified in the SCADA Roadmap. Staff anticipates completion of the project by the end of the fiscal year. Enterprise Content and Document Management System - During the last phase of the project implementation, staff held onsite sessions with the selected outside consultant (ECS), to assist the District with the deployment and training of the new document management system, Laserfiche. The objectives of the training focuses on workflow processing automation, records management, administration, and security of the system. Staff also continue working with other departments in finalizing a comprehensive QA/QC checklist to ensure successful data migration from the current solution, HP Trim, to the new system. Go-live of the new solution is targeted for the end of the fiscal year. GIS: Regional Imagery Project – Otay participated in the Regional Imagery collection project. The imagery and contour data will be available to Otay by May. Through the joint effort with 29 agencies in San Diego County, Otay saved about $30,000 in costs. Asset Management Forecasting Tool Project(InfoMaster) – As part of the District’s asset management program, staff recently kicked-off the project implementation of InfoMaster, an asset management capital expenditure forecasting and decision-making application. The application will help evaluate District infrastructure assets based on a variety of factors including age, material type, environmental elements, and condition 5 assessments. Data results will aid staff with maintenance and replacement schedules, as well as financial projections. FINANCE: CAFR Award - The District has been awarded the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association (GFOA) for its FY16 Comprehensive Annual Financial Report (CAFR). To attain this award, the CAFR had to meet the high standards of the program including demonstrating a constructive “spirit of full disclosure” to clearly communicate its financial story and motivate potential users and user groups to read it. This award is the highest form of recognition in the area of governmental accounting and financial reporting. A dedicated finance staff with the support of management and the board made this achievement possible. FY18 Budget – Staff is preparing the FY18 Operating and CIP budgets, which are scheduled to be presented to the Board on May 24th, 2017. SDRMA Property Insurance Renewal – SDRMA has reconsidered the increase in the District’s deductible for FY18 and will now raise the deductible from $5,000 to $12,000, instead of $20,000. This will reduce the impact on the FY18 budget by $40,000. AMR Change-Out Update - The contractor, Concord Utility, plans to complete all FY17 AMR change-outs by the end of April, which is ahead of schedule. Staff began to successfully read new registers in April. Master Meter is sending a technician to the District at the end of April to work with staff on utilizing the reading software to its fullest potential. The financial reporting for February 28, 2017 is as follows: For the eight months ending February 28, 2017, there are total revenues of $62,129,895 and total expenses of $59,966,124. The revenues exceeded expenses by $2,163,771. The financial reporting for investments for February 28, 2017 is as follows: The market value shown in the Portfolio Summary and in the Investment Portfolio Details as of February 28, 2017 total $87,003,080 with an average yield to maturity of 1.115%. The total earnings year-to-date are $557,416. The financial reporting for March 31, 2017 is as follows: 6 For the nine months ending March 31, 2017, there are total revenues of $68,079,326 and total expenses of $66,876,685. The revenues exceeded expenses by $1,202,641. The financial reporting for investments for March 31, 2017 is as follows: The market value shown in the Portfolio Summary and in the Investment Portfolio Details as of March 31, 2017 total $84,389,077 with an average yield to maturity of 1.126%. The total earnings year-to-date are $637,492. ENGINEERING AND WATER SYSTEM OPERATIONS: Engineering: 927 Zone, Force Main Assessment and Repair Project: This project consists of inspection, condition assessment, and repair of the existing Ralph W. Chapman Water Reclamation Facility (RWCWRF) 1980 era, 16,000 feet long, 14-inch diameter steel force main. Charles King Company, Inc. (Charles King), the District’s contractor, completed the construction of the new blow offs and demobilized from the project area last winter. Charles King will return to complete work postponed due to heavy rains (e.g., cathodic protection improvements, access road repairs, punch list items) during the next available environmental window in FY 2018 (October 1, 2017 through January 15, 2018). Pipeline Inspection and Condition Analysis Corporation (PICA), a professional inspection and condition assessment consultant teamed with Brown & Caldwell, are anticipated to provide their final condition assessment report before the end of FY 2017. The overall project is within budget and scheduled to complete in FY 2019. (R2116) 870-2 Pump Station Replacement: This project consists of a new pump station to replace the existing Low Head 571-1 and High Head 870-1 Pump Stations. The project was publicly advertised for construction bid on March 16, 2017. The project is scheduled to begin construction October 2017 and complete October 2019. (P2083) SR-11 Utility Relocations: This project consists of relocating several District potable water pipelines located in Otay Mesa Road, Sanyo Avenue, Enrico Fermi Drive, Alta Road, and within District easements. The first two rounds of relocations (Caltrans Utility Agreement Numbers 33592 and 33622) were completed in FY 2016. Staff recently held three meetings with Caltrans over the last few months to begin planning and design of relocations from Enrico Fermi Drive to the future Mexico/USA international border crossing. (P2453) 7 36-Inch Main Pumpouts and Air/Vacuum Ventilation Installations: This project consists of inspection, repairs, and improvements to the District’s La Presa 36-Inch Pipeline between San Diego County Water Authority Flow Control Facility Number 11 and the District’s Regulatory site. The project consists of relocating six (6) existing air/vacuum valves from underground vaults to above ground locations. The District’s contractor, Underground Pipeline Solutions, Inc., is progressing with relocations located along Jamacha Road and Campo Road. The project is within budget and on schedule to complete in May 2017. (P2267) 978-1 & 850-2 Reservoir Interior/Exterior Coatings & Upgrades: This project consists of removing and replacing the interior and exterior coatings of the 978-1 0.5 MG Reservoir and the 850-2 3.1 MG Reservoir, along with providing structural upgrades, to ensure the tanks comply with both state and federal OSHA standards as well as the American Water Works Association and the County Health Department standards. During April, Blastco, Inc., the District’s contractor, completed blasting and construction of the new coating on the interior ceiling and walls of the 978-1 Reservoir. The contractor is scheduled to continue work on the 978-1 reservoir to remove the existing interior floor coating, construct the new interior floor coating, and begin work on the exterior of the reservoir in May. The contractor is currently behind schedule due to sub-contractor coordination. Work has not started at the 850-2 Reservoir. Release of the 850-2 Reservoir to the contractor is pending satisfactory progress of the work at the 978-1 Reservoir in accordance with the contract. The contractor has been notified that liquidated damages will be assessed for late delivery of the project. The project is within budget with contract ending in June 2017. (P2534 & P2544) State Route 94 Campo Road at Melody Road: The District has entered into an agreement for construction of a water system with the Jamul Indian Village Development Corporation. Under the agreement, the Jamul Indian Village Development Corporation is required to relocate approximately 1,860 linear feet of 16-inch potable water main. The 16-inch main is currently under construction and tie-in of the new main is anticipated in May 2017. Staff has worked with the developer on the tie-in plan for the new main in an effort to minimize any customer impacts during the tie-in. (D0644-090254) Campo Road Sewer Replacement: The existing sanitary sewer from Avocado Road to Singer Drive is undersized and located in environmentally sensitive areas that are difficult to access. Easements have been secured for the project from Vestar and Regency Centers. The District is actively pursuing funding for the project through the Clean Water State Revolving Fund, with the complete 8 submission package currently under review by the state. The opening of bids occurred on March 9, 2017, with the apparent low bidder Wier Construction Corporation at about $7.82 million. An award of a construction contract is scheduled for Board approval at the May 2017 meeting of the Board of Directors. Construction is scheduled to begin in the fall of 2017. Activities near environmentally sensitive areas will be halted during the breeding season of endangered species, between February and September. Staff has performed public outreach to elected officials, planning groups, and other parties that may be impacted by the project including meeting with Supervisor Dianne Jacob on February 21, 2017. (S2024) Hillsdale Road Water and Sewer Replacement: The existing water line in Hillsdale Road between Jamacha Road and Vista Grande Road has experienced several breaks and found to be in need of replacement. As the County plans to repave the road as soon as the project is completed, the replacement of two (2) segments of sanitary sewer are also included in the scope of work. Through the District’s As- Needed Engineering Design Contract, a Task Order was issued on June 23, 2016 to Psomas to design the project. Submission of traffic control plans to Caltrans has been made which is seen as being a primary item on the project critical path. The 100% Design submittal was submitted on March 15, 2017, with the District returning comments on April 6, 2017. The construction Advertisement to Bid was published in The Daily Transcript in late April 2017 in an attempt to begin construction during the summer school break for Valhalla High School. The County of San Diego has yet to comment on construction limitations close to the high school. The project is within budget and on schedule to complete in spring 2018. (P2573 & S2048) Trenchless Sewer Rehabilitation: The District completed the in- house design of sewer repairs for 60 locations using trenchless technologies. A construction contract was awarded to Insituform Technologies, LLC at the March 1, 2017 Board Meeting. The Notice to Proceed has been issued and construction began in late April 2017 with completion anticipated in August 2017. The project is within budget. (S2044) OWD Administration and Operations Parking Lot Improvements, Phase I – Lighting and Vehicle Charging Station: This project consists of replacing the existing parking lot light fixtures in both the Administration and Operations lots with high efficiency LED fixtures. The project also includes constructing an electric vehicle charging station in the Employee Administration parking lot. The District’s as-needed electrical engineer (BSE Engineering) completed the design and the project was advertised for bid on February 2, 2017. Bids were opened on February 23, 9 2017, and Ace Electric, Inc. was the lowest bidder. Staff reviewed the bid for conformance, and checked references. Ace Electric, Inc. was deemed to be a responsive bidder, and highly recommended by their references. The construction contract was approved by the Board at the April 17, 2017 Special Board Meeting. Construction is anticipated to begin in May 2017. (P2555 & P2547) 624-2 Reservoir Interior/Exterior Coatings & Upgrades: This project consists of removing and replacing the interior and exterior coatings of the 624-2 8.0 MG Reservoir. The construction contract was awarded to Advanced Industrial Services (AIS). They completed the project in 2014, however, a warranty dive inspection in 2016 found the coating near the center roof vent was cracking and blistering. The reservoir was recently taken out of service to allow for a closer inspection by AIS and the District’s Coating Inspector. District staff is directing AIS to do the repairs now, which could take six to ten weeks to complete before the reservoir can be placed back in service. (P2493) Rancho San Diego Pump Station Rehabilitation: On April 30, 2014, the District and the San Diego County Sanitation District (Sanitation District) executed a reimbursement agreement for the improvements to the Rancho San Diego Pump Station that were expected to be completed on or about March 2016. The Sanitation District awarded a construction contract to TC Construction Company Inc. on September 14, 2016. To date, staff has reviewed 28 submittals from the contractor and the Sanitation District. Start- up and testing of the pump station is scheduled to begin in December of 2017. On April 14, 2017, the District received an invoice from the County of San Diego for $2,739,824.24 to reimburse the County of expenses they have already incurred and for the District’s half of the remaining construction contract. District CIP Fiscal Year 2016-2017 budget is expected to be exceeded to approximately 105 percent as a result of this invoice. (S2027) Pure Water Update: In October 2014, the Metro JPA/Metro Commission passed a resolution supporting the Point Loma Wastewater Treatment Plant NPDES Modified Permit application. The City of San Diego (City) proposed a goal of producing at least 15 MGD of potable reuse water through the City’s Pure Water Program subject to the approval of secondary equivalency for the Treatment Plant. The Otay Water District wrote a letter to the California Regional Water Quality Control Board San Diego Region (Regional Board) and U.S. Environmental Protection Agency, Region IX in support of the City's request to renew its variance from the secondary treatment requirements contained in section 301(b)(1)(B) of the Clean Water Act and in support of the Tentative Order and the original 15 MGD Pure Water Program released for public comment on October 28, 2016. On January 30, 2017, the City submitted a letter with an updated 10 accelerated schedule of milestones for design and construction to implement the first 30 MGD of the San Diego Pure Water Program. At the April 6, 2017 Metro JPA meeting, the Commissioners directed the Board Chairman to submit a letter to the Regional Board at the April 12, 2017 hearing on the Tentative Order to put into the record the attached letter. This letter changed Metro JPA’s position from “support” to instead “support subject to the following understanding” – that Metro JPA and the City will have time to work out project details before the expanded Pure Water Program becomes a regulatory requirement and that the City will continue to pursue Secondary Equivalency for the Point Loma Outfall (Revised Tentative Order/Permit #CA0107409 – see Attachment A). Rosarito Desalination: On March 2, 2017, the San Diego Regional Water Quality Control Board sent a letter to the Border Environment Cooperation Commission expressing their deep concerns regarding the state of sewage collection and treatment in Tijuana and to place this extremely important need ahead of plans for the desalination facility in Rosarito (see Attachment B). On March 16, 2017, a Voice of San Diego article (see Attachment C) interviewed David Gibson, executive director of the San Diego Regional Water Quality Control Board, who stated the new plant could siphon money from the already strained Tijuana sewer system. The District’s General Manager, Mark Watton, also contributed to this article. On March 20, 2017, in a Water Desalination Report, Securities and Exchange Commission 10-K filing (see Attachment D), Consolidated Water Company said that unless it can increase its proposed water tariff for its Rosarito project, it may be unable to finance the cost of the 100 MGD $463 million Rosarito desalination project. The company said its bid price was adversely impacted due to the falling value of the Mexican Peso (and because the “general macroeconomic conditions in Mexico have declined since the U.S. Presidential election”). On March 6, 2017, the District sent a letter to State Water Resources Control Board Division of Drinking Water asking to reduce the number of test sites from four to two and amend testing protocol currently in place and to eliminate testing for constituents that have come back as non-detect during the previous two years of testing. Staff from the District and Aquas de Rosarito (AdR) continue to coordinate on seawater testing and other issues and held a monthly meeting on April 5, 2017. (P2451) California-Nevada Section, American Water Works Association Workshop: A workshop organized by the CA-NV AWWA’s Recycled Water/Desalination Committee will be held on May 11, 2017 in the District’s Training Room from 8:00AM–4:10PM. The topic this year will be “Desalination/Water Reuse Update for the West: What’s New? What has Changed? Where is it Going?” This workshop is an update of the 2015 workshop that presented Desalination Issues and 11 Technology Trends. Speakers include staff from Padre Dam, Sweetwater Authority, and Otay Water District (see Attachment E). For the month of March 2017, the District sold 10 meters (42 EDUs), generating $410,159 in revenue. Projection for this period was 9.7 meters (28.5 EDUs), with budgeted revenue of $270,175. Total revenue for Fiscal Year 2017 is $2,472,810 against the annual budget of $3,242,100. Water System Operations (reporting for February and March): On February 9, during the daytime, Sweetwater Authority (SWA) reported that the emergency interconnect on E. Naples opened due to a power outage on their hydro station and the interconnect picked up the demand once the hydro station got to a low level. SWA took 300 cubic feet of water and the information was sent to customer service for billing purposes. On February 15, from 8:00 AM to 2:00 PM, Operations staff performed a planned shutdown on Misty Creek in Chula Vista to replace three leaking corporation stops. Twenty-one residential meters were affected and water trailers were on site for customers affected. On February 26, an emergency shutdown was performed on the intersection of Sipes Circle & Biernacki Ct. in Chula Vista. A 2- inch saddle failed. Twenty-five residential meters were affected and water trailers were available during the shutdown. All meters were back in service at 3:45 PM on the same day. On February 28, Sweetwater Authority (SWA) notified the District regarding the release of water from Loveland to Sweetwater beginning that day. The release lasted until March 15. It flowed at a steady rate of 300 CFS for a total amount of 9,000 AF. On March 13, at 11:15 AM an unplanned emergency shutdown was performed at Vista Grande Ct. in Rancho San Diego to delete a leaking two-inch blow off. Six homes were affected during the shutdown and a water trailer was on site for all affected customers. The shutdown extended to 7:30 PM due to the difficulty of the repair. Staff worked on compiling information for a public records request regarding water quality test results throughout the District and actions taken as a result of those water quality tests. On March 14, staff received from the State Water Resources Control Board the 2017 Water Quality Emergency Notification Plan. 12 On March 17 staff received an email from the Department of Public Works, Drinking Water Section, stating that the Annual Drinking Water Report is due by the end of April. Staff compiled the information and submitted the report on April 24. On March 29, an emergency shutdown was performed at 1640 Hilton Head in Rancho San Diego to replace a defective hydrant valve. There were fourteen buildings affected and four water trailers were on site for affected customers. On April 5, an emergency shutdown was performed on Lockland Ct. in Spring Valley to make repairs to a 4-inch asbestos cement pipe (ACP) due to a beam break on a direct tap. There were seven residential meters affected. A water trailer was on site for customers affected. On April 13, Operations staff performed a planned shutdown on Rutgers Avenue in Chula Vista to replace five service saddles, corporation stops and replace poly (plastic) services to copper. In addition, a repair was needed on the 12-inch asbestos cement pipe (ACP). A total of 25 residential meters were affected and water trailers were on site for affected customers. On April 14, Operations Staff performed a shutdown at Villa Monte Vina Apartment complex located between Cuyamaca College Drive East and West to replace a defective fire hydrant valve. There were six residential meters affected between 8:00 AM and 1:45 PM. Water trailers were on site for affected customers. As of April 24 the District has received 44 letters requesting lead testing for schools in the District. Staff time for the school lead sampling has been tracked. It takes staff approximaltey 12 hours to complete lead testing from the initial contact from the school up until the reviewing of the Lab reports and discussing the results with the school. Out of 61 K-12 schools in the District, 44 requested to be tested; 16 have a sampling plan completed; 12 have collected samples and; 7 have received results. The District, however, cannot provide test results to the public for 60 days after receiving the laboratory results. 13 Purchases and Change Orders: The following table summarizes purchases and Change Orders issued during the period of February 8, 2017 through April 13, 2017 that were within staff signatory authority: Date Action Amount Contractor/ Consultant Project 2/8/17 P.O. $4,810.00 Roger B Woodhull 870-2 Pump Station Replacement (P2083) 2/14/17 P.O. $750.00 Chicago Title Co. 12-Inch PL Replacement, 803 Zone, Hillsdale Road (P2573) 2/15/17 P.O. $2,491.80 Mission Communications, LLC Service Renewal 2/16/17 P.O. $74,997.00 Castle Access, Inc. Colocation Services 2/21/17 P.O. (First Amendment to Contract) $35,000.00 Alyson Consulting As-Needed Construction Management and Inspection Services Contract (various) 2/22/17 P.O. $4,000.00 Anthem EAP EAP Agreement 2/23/17 P.O. $2,508.00 Carmel Business Systems, Inc. Recycled Water Irrigation (R1000) 2/27/2017 P.O. $640.00 Rotork Controls Installation of New Actuator Automation on the Filter Storage Tank to Open and Close Valves at the Treatment Plant 3/2/2017 P.O. $6,550.00 HMT Inspection Pressure Vessel Inspection at the 450/680R Reservoir Site 14 3/9/17 P.O. $5,000.00 Employee Benefits Specialists Employee Benefits 3/14/2017 P.O. $6,550.00 HMT Inspection Pressure Vessel Inspection at the 680/944R Pump Station 3/14/2017 P.O. $13,715.00 ASCO Services, Inc. Annual Maintenance on Automatic Transfer Switches 3/14/2017 P.O. $603.00 Advanced Calibration Designs Calibration of a Chlorine Generator at the Treatment Plant 3/29/17 P.O. $4,200.00 Huguenot Laboratories Otay Water District Administration, Operations, and Warehouse Buildings (P2538) 4/3/2017 P.O. $600.00 Eurofins Eaton Analytical School Lead Testing Project 4/5/2017 P.O. $5,201.00 Dynalectric Preventive Maintneance for Medium Voltage Gear at the 980-2 Pump Station 4/5/2017 P.O. $6,550.00 HMT Inspections Pressure Vessel Inspection at the 803-1 Pump Station 4/5/2017 P.O. $2,940.00 TMG Services Review of Single Function Controller Settings and Programs for Treatment Plant Chlorinators 4/13/2017 P.O. $800.00 Eurofins Eaton Analytical School Lead Testing Project 15 Water Conservation and Sales: Water Conservation - Due to the large amount of rainfall, February 2017 usage was 22% lower than February 2013 levels, and March 2017 was 23% lower than March 2013 levels. Since the state’s onservation mandate began in June 2015, customers have saved an average of 18%. On April 7th, the Governor lifted his drought declaration, however, urban water use reporting remains mandatory. The February potable water purchases were 1,355.3 acre-feet which is 16.2% below the budget of 1,617.0 acre-feet. The cumulative purchases through February were 17,856.0 acre-feet which is 4.2% above the cumulative budget of 17,135.9 acre-feet. 16 The February recycled water purchases and production were 14.4 acre-feet which is 86.4% below the budget of 105.3 acre-feet. The cumulative production and purchases through February were 2,253.3 acre-feet which is 6.5% below the cumulative budget of 2,410.7 acre-feet. The March potable water purchases were 1,728.4 acre-feet which is 8.5% above the budget of 1,593.1 acre-feet. The cumulative purchases through March were 19,584.4 acre-feet which is 4.6% above the cumulative budget of 18,729.0 acre-feet. T h e 17 March recycled water purchases and production were 126.52 acre-feet which is 9.9% below the budget of 140.4 acre-feet. The cumulative production and purchases through March were 2,379.9 acre-feet which is 6.7% below the cumulative budget of 2,551.0 acre-feet. Potable, Recycled, and Sewer (Reporting up to the month of February): Total number of potable water meters: 49,601. Recycled water consumption for the month of February: o Total consumption: 22.5 acre-feet or 7,338,628 gallons. o Average daily consumption: 292,094 gallons per day. o Total cumulative recycled water consumption since July 1, 2016: 2,543.3 acre-feet. o Total number of recycled water meters: 717. Wastewater flows for the month of February: o Total basin flow: 1,799,443 gallons per day. This is an increase of 14% from February 2016. o Spring Valley Sanitation District Flow to Metro: 594,834 gallons per day. o Total Otay flow: 1,204,714 gallons per day. o Flow Processed at the Ralph W. Chapman Water Recycling Facility: 274,286 gallons per day. o Flow to Metro from Otay Water District: 947,872 gallons per day. o By the end of February there were 6,104 wastewater EDUs. 18 Potable, Recycled, and Sewer (Reporting up to the month of March): Total number of potable water meters: 49,606. Recycled water consumption for the month of March: o Total consumption: 64.2 acre-feet or 20,926,796 gallons. o Average daily consumption: 675,058 gallons per day. o Total cumulative recycled water consumption since July 1, 2016 is 2607.5 acre-feet. o Total number of recycled water meters: 721. Wastewater flows for the month of March: o Total basin flow: 1,760,687 gallons per day. This is an increase of 6.4% from March 2016. o Spring Valley Sanitation District Flow to Metro: 582,001 gallons per day. o Total Otay flow: 1,178,677 gallons per day. o Flow Processed at the Ralph W. Chapman Water Recycling Facility: 470,484 gallons per day. o Flow to Metro from Otay Water District: 748,591 gallons per day. By the end of March there were 6,104 wastewater EDUs. Attachments: Attachment A: California Regional Water Quality Control Board San Diego Region – U.S. Environmental Protection Agency, Region IX, Response to Comments Report Attachment B: San Diego Regional Water Quality Control Board Letter Dated March 2, 2017, Need for Improved Wastewater Management in Tijuana Attachment C: Article, “Top SD Water Official Wants Tijuana to Prioritize Sewer Water Over Desal Water” Attachment D: Water Desalination Report Dated March 20, 2017 Attachment E: AWWA Workshop Registration Form, “Desalination/Water Reuse Update for the West” Page 1 California Regional Water Quality Control Board San Diego Region U.S. Environmental Protection Agency, Region IX Response to Comments Report Tentative Order No. R9 2017-0007 NPDES NO. CA0107409 Waste Discharge Requirements and National Pollutant Discharge Elimination System Permit for the City Of San Diego E.W. Blom Point Loma Wastewater Treatment Plant Discharge to the Pacific Ocean through the Point Loma Ocean Outfall April 12, 2017 Response to Comments Report April 12, 2017 Tentative Order No. R9-2017-0007 Page 2 U.S. ENVIRONMENTAL PROTECTION AGENCY (USEPA), REGION IX 75 Hawthorne Street San Francisco, CA 94105 https://www.epa.gov/aboutepa/epa-region-9-pacific-southwest CALIFORNIA REGIONAL WATER QUALITY CONTROL BOARD SAN DIEGO REGION 2375 Northside Drive, Suite 100, San Diego, California 92108 Phone • (619) 516-1990 • Fax (619) 516-1994 http://www.waterboards.ca.gov/sandiego Documents are available at: http://www.waterboards.ca.gov/sandiego Response to Comments Report April 12, 2017 Tentative Order No. R9-2017-0007 Page 3 California Regional Water Quality Control Board San Diego Region (San Diego Water Board) Henry Abarbanel, Ph.D. Chair Gary Strawn, Vice Chair Eric Anderson Tomás Morales Stefanie Warren Betty Olson Vacant David W. Gibson, Executive Officer James G. Smith, Assistant Executive Officer Catherine Hagan, Senior Staff Counsel, Office of Chief Counsel Adriana Nunez, Staff Counsel, Office of Chief Counsel U.S. Environmental Protection Agency (USEPA), Region IX Tomás Torres, Water Division Director Hector Aguirre, Hearing Officer This report was prepared under the direction of David T. Barker, P.E., San Diego Water Board Supervising Water Resource Control Engineer Brandi Outwin-Beals, P.E., San Diego Water Board Senior Water Resources Control Engineer David W. Smith, USEPA, Region IX, NPDES Permits Office Chief by Joann Lim, San Diego Water Board Water, Resource Control Engineer Peter Kozelka, USEPA, Region IX, Environmental Scientist Response to Comments Report April 12, 2017 Tentative Order No. R9 2017-0007 NPDES NO. CA0107409 Page 4 Introduction This report contains the San Diego Water Board and USEPA, Region IX responses to written and oral comments received on Tentative Order No. R9 2017-0007, Waste Discharge Requirements and National Pollutant Discharge Elimination System Permit for the City of San Diego E.W. Blom Point Loma Wastewater Treatment Plant Discharge to the Pacific Ocean through the Point Loma Ocean Outfall (Tentative Order). USEPA, Region IX did not receive any comments on the Technical Decision Document. The San Diego Water Board and USEPA, Region IX provided public notice of the release of the Tentative Order and Technical Decision Document on October 28, 2016 and provided a period of 54 days for public review and comment. The San Diego Water Board and USEPA, Region IX conducted a joint Public Hearing during the December 14, 2016 meeting of the San Diego Water Board. The Public Hearing provided the public an opportunity to provide comments on the Tentative Order and Technical Decision Document. The public comment period ended on December 21, 2016. The San Diego Water Board and USEPA, Region IX revised the Tentative Order based on the comments received between October 28, 2016 and December 21, 2016. The San Diego Water Board and USEPA, Region IX provided public notice of the release of the revised Tentative Order on February 10, 2017 and provided a period of 14 days for focused public review and comment on proposed revisions to the Schedule for Pure Water San Diego Potable Reuse Tasks in section VI.C.6 (formerly section VI.C.7) of the Tentative Order, which were a logical outgrowth of the original proposed schedule. The public comment period for the proposed schedule revisions ended on February 24, 2017. Comments were received between October 28 and December 21, 2016 from: Page No. City of San Diego 6 Lemon Grove Sanitation District 9 City of La Mesa 9 San Diego Coastkeeper 9 Coastal Environmental Rights Foundation 12 Surfrider Foundation 12 City of Coronado 14 Otay Water District 14 City of Chula Vista 15 Metro Wastewater Joint Powers Authority 16 Comments were received between February 10 and February 24, 2017 from: Page No. City of San Diego 19 City of Chula Vista 19 City of Poway 20 City of El Cajon 21 Lemon Grove Sanitation District 22 Metro Wastewater Joint Powers Authority 23 Padre Dam Municipal Water District 25 Coastal Environmental Rights Foundation 25 San Diego Coastkeeper 26 Response to Comments Report April 12, 2017 Tentative Order No. R9-2017-0007 Page 5 Comments and Responses The written and oral comments and staff responses are set forth in the table that follows. The San Diego Water Board and USEPA, Region IX organized the comments according to the comment period and then according to the person who submitted the comment. The table includes the San Diego Water Board and USEPA, Region IX’s response to the comment, and any actions taken to revise the Tentative Order in response to the comment. Response to Comments Report April 12, 2017 Tentative Order No. R9 2017-0007 NPDES NO. CA0107409 Page 6 No. Comment Response Action Taken Halla Razak, City of San Diego, written comments dated November 30, 2016 and oral comments at December 14, 2016 Board Meeting 1 The City of San Diego requested a revised reasonable potential analysis (RPA) of tetrachlorodibenzodioxin (TCDD) equivalents. The maximum effluent concentration (MEC) for TCDD equivalents in Table F-11 of the Tentative Order appears to be wrong. The San Diego Water Board and USEPA, Region IX have re-evaluated and corrected the data used for the RPA and determined that there is not a reasonable potential for TCDD equivalents to cause or contribute to an exceedance of water quality objectives contained within the Water Quality Control Plan, Ocean Waters of California, California Ocean Plan (Ocean Plan). Accordingly a water quality-based effluent limitation is not required for TCDD equivalents in accordance with title 40 of the Code of Federal Regulations section 122.44 (d)(1)(iii). The San Diego Water Board and USEPA, Region IX have modified the Tentative Order to replace the effluent limitations for TCDD equivalents with performance goals. Modified Section IV.A, Tables 5 and 6 Attachment F, section IV.C.3, Table F-11, and two paragraphs after Table F-11 Attachment F, section IV.C.4, Tables F-14 and F-15 2 In the Monitoring and Reporting Program (Attachment E), the City of San Diego requested the San Diego Water Board and USEPA, Region IX change the units for total coliform, fecal coliform, and enterococcus from “colony forming units per 100 milliliter” to “units per 100 milliliter” based on the monitoring methods available for the effluent. The San Diego Water Board and USEPA, Region IX have modified the Tentative Order as requested, in order to match the units with the outcome of the monitoring methods available for the effluent. Modified Attachment E, section III.B, Table E-4 3 The Tentative Order requires continuous monitoring for total chlorine residual. Due to a lack of reliable technology, the City of San Diego requested that the monitoring requirement for total chlorine residual be modified to include the same method contained in its current Order: “at least four grab samples per day, representative of the daily discharge, shall be collected immediately prior to entering the [Pt. Loma Ocean Outfall] PLOO and analyzed for total chlorine residual.” The City of San Diego also asked for clarification regarding how to calculate the mass emission rate (MER) for total chlorine residual. Given the lack of reliable technology for continuously monitoring for total chlorine residual, the San Diego Water Board and USEPA, Region IX agree that it is reasonable to allow four grab samples per day in lieu of continuous monitoring. Section VII.J.4 of the Tentative Order provides the methodology for calculating a total chlorine residual MER as follows: “The MER, in lbs/day, shall be obtained from the following calculation for any calendar day: MER (lbs/day) = 8.34 x Q x C, In which Q and C are the flow rate in million gallons per day (MGD) and the constituent concentration in mg/L, respectively, and 8.34 is a conversion factor Modified Attachment E, section III.B, Table E-4 Response to Comments Report April 12, 2017 Tentative Order No. R9 2017-0007 NPDES NO. CA0107409 Page 7 No. Comment Response Action Taken (lbs/gallon of water).” Q is the flow at the time the grab sample was taken and the C is the result from each grab sample. 4 The City of San Diego requests an exception for shoreline monitoring in cases where access to the monitoring stations is hazardous due to stormy weather for more than five days. The San Diego Water Board and USEPA, Region IX have modified the Tentative Order as requested to provide for waiving the requirement to sample at shoreline stations in the event of stormy weather which makes sampling hazardous. Modified Attachment E, section IV.A.2 5 For the sediment monitoring requirements, Table E-7, the City of San Diego requests that the San Diego Water Board and USEPA, Region IX eliminate dissolved sulfides analysis and keep acid volatile sulfides (AVS). All previous data is AVS only. Using AVS allows new data to be consistent with past data and conforms to past practices. The San Diego Water Board and USEPA, Region IX have modified the Tentative Order to require AVS monitoring only for historical data consistency. Modified Attachment E, section IV.C.1.c, Table E-7 6 The City of San Diego points out that it is difficult to conduct all shoreline water quality monitoring required for the Point Loma Ocean Outfall and South Bay Ocean Outfall in one day. The City of San Diego requested removing “at the same time,” from the last sentence in Attachment F, section VII.B.1. The San Diego Water Board and USEPA, Region IX have modified the Tentative Order as requested to clarify that the City of San Diego does not need to complete all water quality monitoring on the same day. Modified Attachment F, section VII.B.1 7 The City of San Diego requests a modification of the seventh Basin Plan Discharge Prohibition, changing the word “its” to “it.” The Basin Plan prohibition referenced in Attachment G of the Tentative Order states: “7. The dumping, deposition, or discharge of waste directly into waters of the State, or adjacent to such waters in any manner which may permit its being transported into the waters, is prohibited unless authorized by the San Diego Water Board.” Because the language cited matches the San Diego Basin Plan exactly, San Diego Water Board and USEPA, Region IX have not modified the Tentative Order. None necessary 8 The City of San Diego pointed out several minor errors and suggested text to clarify the Tentative Order: Section VI.C.5.b.viii.(f): correct the address for Arizona Department of Environmental Quality. The San Diego Water Board and USEPA, Region IX have modified the Tentative Order as requested. Modified Section VI.C.5.b.viii.(f) Attachment E, Response to Comments Report April 12, 2017 Tentative Order No. R9 2017-0007 NPDES NO. CA0107409 Page 8 No. Comment Response Action Taken Attachment E, section III.B, Table E-4: Remove the requirements to calculate a MER for radioactivity. Attachment E, section III.B, Table E-4: Remove footnote 4 because it is no longer necessary. Attachment E, section III.C.3.b: Clarify that the Dendraster excentricus is an alternate species for Strongylocentrotus purpuratus, by adding the text “or the.” Attachment E, section IV.A.2: Correct the footnote reference. Attachment E, section IV.B.1, Table E-6: Correct the units for temperature and depth. Attachment E, section IV.C.1.b: Correct the table reference. Attachment E, section IV.D: Replace tissue with tissues. Attachment E, section IV.D.2.a: Replace i.e. with e.g. Attachment E, section IV.D.2.c: Correct the table reference Attachment E, section IV.E.1: Correct the section reference Attachment E, section IV.E.2: Correct the table reference. Attachment E, section V.A: Modify/add to the description of the kelp report for clarity. Attachment F, section IV.C.4.c: Correct the table reference. Attachment F, section VI.B.6 (formerly section VI.B.7): Correct the table reference. Attachment F, section VII.B.2: Replace ND with very low or ND. Attachment F, section VII.B.3: Add reference to footnote for the U.S. section of the International Boundary and Water Commission. Attachment F, section VII.B.6: Replace reports with report, section III.B, Table E-4 Attachment E, section III.C.3.b Attachment E, section IV.A.2 Attachment E, section IV.B.1, Table E-6 Attachment E, section IV.C.1.b Attachment E, section IV.D Attachment E, section IV.D.2.a Attachment E, section IV.D.2.c Attachment E, section IV.E.1 and 2 Attachment E, section V.A Attachment F, section IV.C.4.c Attachment F, section VI.B.6 (formerly section VI.B.7) Attachment F, Response to Comments Report April 12, 2017 Tentative Order No. R9 2017-0007 NPDES NO. CA0107409 Page 9 No. Comment Response Action Taken and delete redundant sentence and phrases. Attachment F, section VII.C.2: Correct program name and description, and add a period. Attachment F, section VII.D: Replace see with sea. Attachment H: Correct the outfall length. section VII.B.2, 3, and 6 Attachment F, section VII.C.2 Attachment F, section VII.D Attachment H Jerry Jones, Lemon Grove Sanitation District, written comments dated December 8, 2016 and oral comments at December 14, 2016 Board Meeting 9 The Lemon Grove Sanitation District is in full support of the City of San Diego's request to renew its variance from the secondary treatment requirements contained in section 301(b)(1)(B) of the Clean Water Act (CWA). The Lemon Grove Sanitation District also believes that the Pure Water San Diego program as outlined in the City of San Diego’s application submitted in January 2015 will be extremely valuable to the region and to the State of California. The San Diego Water Board and USEPA, Region IX have noted the comment. None necessary Bill Baber, City of La Mesa, oral comments at December 14, 2016 Board Meeting 10 The City of La Mesa supports the Tentative Order. The San Diego Water Board and USEPA, Region IX have noted the comment. None necessary Matt O’Malley, San Diego Coastkeeper, oral comments at December 14, 2016 Board Meeting 11 San Diego Coastkeeper is happy that the Tentative Order incorporates the agreement between the City of San Diego, San Diego Coastkeeper, and other parties and includes the Pure Water San Diego program as enforceable tasks and goals. San Diego Coastkeeper believes that San Diego will eventually go toward zero discharge and that the Pure Water San Diego program is a first good step toward that goal. San Diego Coastkeeper would like the Tentative Order to include the City of San Diego’s approved accelerated schedule of providing 30 MGD of indirect potable reuse, instead of 15 MGD. In 2015, the design and scope of the Pure Water San Diego program was based on meeting a cumulative production rate of 15, 30, and 83 MGD of potable reuse water by the years 2023, 2027, and 2035, respectively. In mid-2015, the State Water Resources Control Board’s (State Water Board’s) Division of Drinking Water (DDW) and its independent expert panel made a decision to include other dilution requirements in the draft regulations under development for potable reuse through surface water augmentation, allowing a wide range of reservoirs in Modified Section VI.C.6 (formerly section VI.C.7) Attachment F, section VI.B.6 (formerly section VI.B.7) Response to Comments Report April 12, 2017 Tentative Order No. R9 2017-0007 NPDES NO. CA0107409 Page 10 No. Comment Response Action Taken potable reuse projects. This allowed the City of San Diego, Public Utilities Department to proceed with a “North City-to-Miramar” potable reuse water project. Since that time, the City of San Diego, Public Utilities Department has made key decisions to 1) centralize processing of the first 30 MGD of recycled water at the City’s North City Water Reclamation Plant and 2) pump the recycled water to Miramar Reservoir (9 miles away) instead of San Vicente Reservoir (18 miles away), thus greatly shortening construction timelines and reducing costs. On October 25, 2016 (three days prior to the release of the Tentative Order for public comment), the City of San Diego Council took action to approve two engineering design contracts that will support an accelerated schedule for the Pure Water San Diego program to bring the first 30 MGD of potable reuse water online in 2022 (versus 2027). The City of San Diego’s decision to accelerate the Pure Water San Diego program schedule came in response to having a heightened sense of urgency for new local water supplies to respond to California’s multi-year historic drought and climate change impacts along with a more favorable program of construction timelines and costs. Bringing the first 30 MGD of the Pure Water San Diego program on-line up to six years earlier than originally planned will reduce the City of San Diego’s reliance on imported water. The Pure Water San Diego program also closely aligns with the strategy and goals of the Strategy for a Sustainable Local Water Supply chapter of the San Diego Water Board’s Practical Vision document. The accelerated schedule also implements the State Water Board’s Recycled Water Policy, which includes the goals of increasing total recycled water use in California by 1 million acre-feet per year by 2020 and 2 million acre-feet per year by 2030. The City of San Diego’s decision to accelerate the Response to Comments Report April 12, 2017 Tentative Order No. R9 2017-0007 NPDES NO. CA0107409 Page 11 No. Comment Response Action Taken schedule also aligns well with the City of San Diego’s Climate Action Plan by utilizing landfill gas to fulfill the energy requirements of the North City Water Reclamation Plant and pumping recycled water to Miramar Reservoir. This serves a dual purpose by reducing greenhouse gas emissions to below limits expected to go into effect in 2019. The accelerated schedule also aligns well with the recently adopted State Water Board Resolution No. 2017- 0012 on Climate Change that sets forth the need for the Water Boards to support water projects that promote water measures mitigating greenhouse gas emissions and contribute to adaptation to the effects of climate change. Based on these considerations and the comments received at and following the San Diego Water Board’s December 14, 2016 public hearing, the Board requested the City of San Diego to make a submittal to the Board defining and detailing the Pure Water San Diego program’s accelerated implementation schedule for the Board’s consideration. The City of San Diego responded by letter dated January 30 2017, with an updated accelerated schedule of milestones for design and construction to implement the first 30 MGD of the Pure Water San Diego program. The San Diego Water Board and USEPA, Region IX has included the City of San Diego’s accelerated schedule for implementation of the first 30 MGD increment of the Pure Water San Diego program in the Tentative Order to accurately reflect the City’s current schedule. However, the City’s compliance with the effluent limitations and discharge specifications contained in the Tentative Order does not depend on the City meeting the milestones set forth in this implementation schedule. The Tentative Order requires the City to submit Task Reports for the milestones on the schedule and Semiannual Progress Reports summarizing its implementation activities during the preceding six months. Moreover, the San Diego Water Board and USEPA, Region IX strongly support the City of Response to Comments Report April 12, 2017 Tentative Order No. R9 2017-0007 NPDES NO. CA0107409 Page 12 No. Comment Response Action Taken San Diego’s plans to accelerate development of potable reuse capacity to reduce the region’s reliance on imported water. 12 San Diego Coastkeeper supports the inclusion of the Climate Change Action Plan requirements in the Tentative Order and would like to see more of this in the future. The San Diego Water Board and USEPA, Region IX have noted the comment. None necessary Marco Gonzales, Coastal Environmental Rights Foundation, oral comments at December 14, 2016 Board Meeting 13 At the time the City of San Diego, Coastal Environmental Rights Foundation, and other parties signed the agreement, the parties based the schedule on information at that time and the goal of completing the project in the shortest timeframe. The City of San Diego is now accelerating that schedule by producing 30 MGD of indirect potable reuse by 2023. During the previous permit renewal, there was a promise to the California Coastal Commission to accelerate recycle water/indirect potable reuse program. By including the accelerated schedule in the Tentative Order, the City of San Diego will show that it is doing everything to accelerate the Pure Water San Diego program. The San Diego Water Board and USEPA, Region IX have modified the Tentative Order as requested. Also, see response to Comment No. 11. See Action Taken for Comment No. 11 Julia Chunn-Heer and Rick Wilson, Surfrider Foundation, written comments dated December 20, 2016 14 The Surfrider Foundation supports the Tentative Order and the City of San Diego’s recent efforts to accelerate the schedule to offload 30 MGD of wastewater by 2021. The Surfrider Foundation believes that the accelerated schedule should be included in the Tentative Order. The San Diego Water Board and USEPA, Region IX have modified the Tentative Order as requested. Also, see response to Comment No. 11 See Action Taken for Comment No. 11 15 The Tentative Order lists some outdated language for the enterococcus single sample maximum. The designations of moderate, light, and infrequent use are from an old USEPA guidance document and were not included in the 2012 Water Quality Criteria. The problem with basing water quality standards on frequency of use include defining what those use intensity designations mean and justifying why someone who is exposed infrequently should get less protection than a frequent user. The Surfrider Foundation recommends The San Diego Water Board and USEPA, Region IX concur with the comment and recognize that USEPA updated recreational water quality criteria for pathogens in 2012. This update eliminated the “use intensity” concept as well as the “single sample maximum” (SSM) phrase, replacing it with “statistical threshold value” (STV). The 2012 recommended criteria are provided for two levels of risk management regarding illness rate, specifically estimated illness rate (NGI) of 36 per 1000 primary Modified Section V.A.2.b Attachment A, Part 1, Abbreviations Attachment F, section V Response to Comments Report April 12, 2017 Tentative Order No. R9 2017-0007 NPDES NO. CA0107409 Page 13 No. Comment Response Action Taken dropping these designations in favor of a uniform single sample maximum of 104 units/100 milliliters. contact recreators or 32 per 1000 primary contact recreators (see 2012 Water Quality Criteria, Table 4, page 43). For marine waters, only enterococcus criteria values are provided: geomean = 35 colony forming units (CFU)/100 mL and STV = 130 CFU/100 mL for an estimated illness rate of 36 NGI per 1,000 primary contact recreators. The San Diego Water Board and USEPA, Region IX have appropriately modified the Tentative Order to address these considerations. Please note that the changes apply only to receiving water limitations for bacterial characteristics applicable to federal ocean waters located beyond the boundaries of the State’s territorial marine waters, which generally extend three nautical miles outward from the mainland. The bacterial objectives from the Ocean Plan apply to ocean waters that are the territorial marine waters of the State as defined by California law to the extent these waters are outside of enclosed bays and estuaries and coastal lagoons. Section V.A.1 of the Tentative Order provides that the bacterial objectives from the Ocean Plan apply throughout the water column within a zone bounded by the shoreline and a distance of three nautical miles from the shoreline, including all kelp beds. 16 The Surfrider Foundation believes the Tentative Order should reiterate the agreed upon effluent concentration limits in the draft Ocean Pollution Reduction Act (OPRA) II language: (iii) discharge no more than a concentration of 60 milligrams per liter of total suspended solids calculated as a thirty-day average. OPRA II has not been enacted into law, therefore, the Tentative Order should not be modified to include the draft language. The concentration effluent limitation for total suspended solids (monthly (30-day average), 60 milligrams per liter) contained in section IV.A.1 of the Tentative Order is derived from the Table 2 of the Ocean Plan. None necessary Response to Comments Report April 12, 2017 Tentative Order No. R9 2017-0007 NPDES NO. CA0107409 Page 14 No. Comment Response Action Taken Richard Bailey, City of Coronado, written comments dated December 19, 2016 17 The City of Coronado is in support of the City of San Diego's request to renew its variance from the secondary treatment requirements contained in section 301(b)(1)(B) of the CWA and in support of the Tentative Order released for public comment on October 28, 2016. The San Diego Water Board and USEPA, Region IX have noted the comment. None necessary 18 The City of Coronado does not support changing any of the tasks and/or goals for the Pure Water San Diego program at this time and feels that the Tentative Order released for public comment on October 28, 2016 is already a substantial commitment to protect the environment. Broadly speaking, the City of San Diego provides wastewater conveyance, treatment, and disposal services to the Participating Agencies under the terms set forth in a 1998 Regional Wastewater Disposal Agreement (Agreement). Under the terms of the Agreement, the City of San Diego is the owner of the Metro System and makes all decisions with respect to the planning, design, construction, operation, and maintenance of Metro System facilities in consultation with the Participating Agencies. The Participating Agencies use the Metro System up to specified capacity limits totaling approximately one third of Metro System flows and together must finance approximately 35 percent of the costs of operating and maintaining the Metro System as well as any needed upgrades and expansions of facilities. The San Diego Water Board and USEPA, Region IX do not play any direct regulatory role in the implementation of the Agreement between the City of San Diego and the Participating Agencies, the determination and allocation of costs for financing the Metro System, and related capital improvement projects such as the Pure Water San Diego program or the timing of the cost allocations. Also, see response to Comment No. 11. None necessary Mark Watton, Otay Water District, written comments dated December 19, 2016 Response to Comments Report April 12, 2017 Tentative Order No. R9 2017-0007 NPDES NO. CA0107409 Page 15 No. Comment Response Action Taken 19 The Otay Water District is in support of the City of San Diego's request to renew its variance from the secondary treatment requirements contained in section 301(b)(1)(B) of the CWA and in support of the Tentative Order released for public comment on October 28, 2016. The San Diego Water Board and USEPA, Region IX have noted the comment. None necessary 20 The Otay Water District does not support changing any of the tasks and/or goals for the Pure Water San Diego program at this time and feels that the Tentative Order released for public comment on October 28, 2016 is already a substantial commitment to protect the environment. The current pace of the tasks and/or goals for the Pure Water San Diego program allow for any needed re-evaluation based on new regulations, such as water conservation regulations that may serve as a significant disincentive for the development of new sustainable water supply sources. See response to Comment Nos. 11 and 18. See Action Taken for Comment Nos. 11 and 18 Mary Casillas Salas, City of Chula Vista, written comments dated December 20, 2016 21 The City of Chula Vista is in support of the City of San Diego's request to renew its variance from the secondary treatment requirements contained in section 301(b)(1)(B) of the CWA and in support of the Tentative Order released for public comment on October 28, 2016. The San Diego Water Board and USEPA, Region IX have noted the comment. None necessary 22 The City of Chula Vista does not support changing any of the tasks and/or goals for the Pure Water San Diego program at this time and feels that the Tentative Order released for public comment on October 28, 2016 is already a substantial commitment to protect the environment while limiting hardship to the ratepayers affected by this permit. See response to Comment Nos. 11 and 18. See Action Taken for Comment Nos. 11 and 18 James Peasley, Metro Wastewater Joint Powers Authority, written comments dated December 21, 2016 Response to Comments Report April 12, 2017 Tentative Order No. R9 2017-0007 NPDES NO. CA0107409 Page 16 No. Comment Response Action Taken 23 The Metro Wastewater Joint Powers Authority (JPA) supports the schedule for the Pure Water San Diego program that is contained in the Tentative Order released for public comment on October 28, 2016. The Metro Wastewater JPA does not support changing any of the tasks and/or goals for the Pure Water San Diego program. The current tasks and goals are consistent with the City of San Diego’s application and the cooperative agreement between the City of San Diego and the environmental non-government agencies. The Metro Wastewater JPA approved these tasks and goals in its October 2014 resolution. In addition, the current tasks and goals allow for flexibility in the time necessary to design, construct, and operate the Pure Water San Diego program and flexibility to account for any complexities that may arise. Accelerating the schedule in the Tentative Order could limit the ability to protect the many effected Metro System ratepayers. The San Diego Water Board and USEPA, Region IX support the on-going efforts of the City of San Diego to involve and build support among local communities, businesses, and citizen groups in developing the Pure Water San Diego program and its relationship to offloading discharge flows and pollutant loads from the Point Loma Wastewater Treatment Plant (WWTP) discharge to the ocean. The San Diego Water Board and USEPA, Region IX understand that the Participating Agencies comprising the JPA are concerned that investing in the infrastructure expansion associated with the Pure Water San Diego program could limit their financial capacity to upgrade treatment at Point Loma WWTP in the event such an upgrade is required. Because of the City of San Diego’s historical facility performance record and the expected Pure Water San Diego offloading of discharge flows and pollutant loads from the Point Loma WWTP, the City of San Diego may not need to upgrade the Point Loma WWTP to achieve secondary treatment standards to protect ocean water quality. In addition, the San Diego Water Board and USEPA, Region IX have not identified any water quality concerns that have not been adequately addressed in the Tentative Order and the modified secondary treatment standards therein. The facility performance record for the current Order term includes a consistent record of: Meeting technology-based effluent limitations based on the CWA section 301(h) and (j)(5) waiver requirements, for total suspended solids (TSS) and biochemical oxygen demand (BOD); Meeting technology-based effluent limitations based on the Ocean Plan for TSS; and Continuing to improve TSS removal rates and thus decrease TSS mass and concentration discharge None necessary . Response to Comments Report April 12, 2017 Tentative Order No. R9 2017-0007 NPDES NO. CA0107409 Page 17 No. Comment Response Action Taken loads. The City of San Diego has also met the requirement under the OPRA of 1994, 33. U.S.C. section 1311(j)(5)(B) and (C), to “achieve a system capacity of 45,000,000 gallons of reclaimed waste water per day by January 1, 2010.” The City of San Diego has also reported compliance through the past 20 years of monitoring results, which show that receiving waters are supporting beneficial uses with no ocean life degradation near the Point Loma Ocean Outfall. The Pure Water San Diego program would reduce influent flows and pollutant loads to the Point Loma WWTP and thus further reduce effluent flow and pollutant loads to the receiving waters. USEPA, Region IX has approved the three prior applications for modified secondary treatment standards for the Point Loma WWTP in 1995, 2002, and 2010 based on administrative records that demonstrated, in each instance, full satisfaction of the provisions of CWA sections 301(h) and 301(j)(5). USEPA Region IX has previously indicated it will be able to continue to renew subsequent CWA 301(h) modified permits for the Point Loma WWTP for as long as there are no relevant changes in the CWA and implementing regulations, no significant deterioration in the quality of the Point Loma WWTP discharge, and no significant adverse response of the receiving ocean ecosystem to the ongoing discharge.1 Also, see responses to Comment Nos. 11 and 18. 24 The Metro Wastewater JPA does not support any policy of favoring zero-ocean discharge. When we closely examine/evaluate the financial cost to ratepayers and the The San Diego Water Board and USEPA, Region IX have noted the comment. None necessary 1 See September 17, 2015 letter from Jared Blumenfield, USEPA Region IX to Mayor Kevin Faulconer, City of San Diego. Response to Comments Report April 12, 2017 Tentative Order No. R9 2017-0007 NPDES NO. CA0107409 Page 18 No. Comment Response Action Taken physical feasibility to divert all discharges, including brine lines, the impracticable nature of implementing something on that scale is apparent. Importantly, there is no path under discussion with public health regulators that would even consider being able to enable compliance with such a policy. Zero-discharge is not a requirement of the CWA or the Porter Cologne Act, the Ocean Plan, or any state of California or federal policy. There is no proven scientific basis to assume that ocean discharges, especially deep ocean discharges such as those through the Point Loma Ocean Outfall, do any significant harm to the marine environment. Response to Comments Report April 12, 2017 Tentative Order No. R9 2017-0007 NPDES NO. CA0107409 Page 19 No. Comment Response Action Taken John J. Helminski, City of San Diego, written comments dated February 24, 2017 25 The City of San Diego requests that the San Diego Water Board and USEPA, Region IX modify Table 8 of the revised Tentative Order to remove the category of North City Renewable Energy Facility and the associated tasks of design and construction. This project is not on the critical pathway to the production of potable reuse water and is still in the conceptual planning and coordination stage with other City of San Diego departments and as such, the timeline is still uncertain. The San Diego Water Board and USEPA, Region IX concur that the North City Renewable Energy Facility is not critical to the production of potable reuse water and have modified the Tentative Order to remove this category and the associated tasks of design and construction. Modified Table 8 in section VI.C.6.a (formerly section VI.C.7.a) 26 The City of San Diego requests that the following sentence be deleted from section VI.C.7.d of the revised Tentative Order: The possible locations for new recycled water/advanced purification treatment facilities include Harbor Drive, Camino Del Rio, and/or Mission Gorge. The San Diego Water Board and USEPA, Region IX have modified the Tentative Order as requested. Modified section VI.C.6.d (formerly section VI.C.7.d) 27 The City of San Diego requests that the San Diego Water Board and USEPA, Region IX add the following footnote to section VI.C.7.d of the revised Tentative Order, after the words “Because the Discharger has committed.” Pursuant to the 2014 Cooperative Agreement between the Discharger and the San Diego Coastkeeper, San Diego County Surfrider, the Coastal Environmental Rights Foundation, and the San Diego Audubon Society. In order to clarify the origin of the commitment, the San Diego Water Board and USEPA, Region IX have added the footnote as requested. Modified section VI.C.6.d (formerly section VI.C.7.d) Mary Casillas Salas, Stephen C. Padilla, Gary Halbert, and Richard Hopkins, City of Chula Vista, written comments dated February 23, 2017 28 The City of Chula Vista does not support the proposed revisions to the Compliance Schedule for the Pure Water San Diego program. The City of Chula Vista states that the accelerated schedule in the proposed revisions will cause untimely significant wastewater financial hardship and that the City of Chula Vista will pass the financial hardship See response to Comment Nos. 11, 18, and 23. Nothing in the Tentative Order precludes the City of Chula Vista or any party from pursuing legislative approval of secondary equivalency for the Point Loma WWTP. See Action Taken for Comment Nos. 11, 18 and 23 Response to Comments Report April 12, 2017 Tentative Order No. R9 2017-0007 NPDES NO. CA0107409 Page 20 No. Comment Response Action Taken through to Chula Vista’s wastewater customers. The City of Chula Vista also states that the accelerated schedule in the proposed revision will limit the time available to adequately determine the costs and revenues of the Pure Water San Diego program, to determine cost allocation among the Participating Agencies, and to conduct appropriate public outreach. The City of Chula Vista supports the original goal of producing at least 15 MGD by 2023 subject to legislative approval of secondary equivalency for the Point Loma WWTP. 29 If the proposed revisions remain, the City of Chula Vista request that the Table 8, footnote number 2 be expanded to include the approval by the Council of the City of Chula Vista, as well as the bodies of the other Participating Agencies. As noted above in the response to Comment No. 18, under the terms set forth in a 1998 Regional Wastewater Disposal Agreement the City of San Diego makes all decisions with respect to the planning, design, construction, operation, and maintenance of the Metro System facilities in consultation with the Participating Agencies. None necessary John Mullin, City of Poway, written comments dated February 23, 2017 30 The City of Poway is in support of the City of San Diego's request to renew its variance from the secondary treatment requirements contained in section 301(b)(1)(B) of the CWA. The San Diego Water Board and USEPA, Region IX have noted the comment. None necessary 31 The following proposed changes to the Compliance Schedule are not needed and unwarranted. The Participating Agencies require more time to evaluate these proposed changes and make decisions at a local level before making commitments. Accelerating the schedule from 15 MGD by 2023 and 30 MGD by 2027, to 30 MGD by 2022. Adding granulated design and construction compliance dates See response to Comment Nos. 11, 18, and 23. See Action Taken for Comment Nos. 11, 18 and 23 Response to Comments Report April 12, 2017 Tentative Order No. R9 2017-0007 NPDES NO. CA0107409 Page 21 No. Comment Response Action Taken Douglas Williford, City of El Cajon, written comments dated February 24, 2017 32 On page 36 of the Tentative Order, footnote 2 misidentifies the Participating Agencies of Metro Wastewater JPA; the City of San Diego is not a Participating Agency of the Metro Wastewater JPA. The San Diego Water Board and USEPA, Region IX have corrected the footnote as requested. Modified section VI.C.6.a (formerly section VI.C.7.a), footnote 33 The City of El Cajon states that it was not informed of the proposed revisions prior to the release of the revised Tentative Order, and as such has not had a chance to review and approve the proposed revisions. Thus, the City of El Cajon does not support the proposed revisions and requests a continuance of the public hearing on the Tentative Order to allow the Metro Wastewater JPA, its Participating Agencies, and the City of San Diego time to discuss and work through its concerns. The Participating Agencies were properly noticed and had adequate time to review and comment on the proposed revisions to the Schedule for Pure Water San Diego Potable Reuse Tasks in section VI.C.6 (formerly section VI.C.7) of the Tentative Order. As noted in the response to Comment No. 11, the schedule revisions were a logical outgrowth of the original proposed schedule that was included in the Tentative Order released for public review on October 28, 2016 and commented on by interested persons at the December 14, 2016 public hearing. The San Diego Water Board and USEPA, Region IX released the revised Tentative Order for public comment on February 10, 2017, and provided two weeks for submittal of written comments on the proposed revisions to the Tentative Order, incorporating the City of San Diego’s current accelerated schedule for implementation of the first 30 MGD increment of the Pure Water San Diego program. None necessary 34 The City of El Cajon states that it needs more time to determine the lowest cost alternative for long-term CWA compliance. Factors that affect this determination include the feasibility of Secondary Equivalency as a compliance strategy and keeping the Point Loma WWTP as an advanced primary treatment plant, effect of water conservation on reaching the Pure Water San Diego goals, and cost of wastewater treatment and disposal versus water supply enhancement. Under the original Compliance Schedule, as Secondary Equivalency is being pursued as a means of long-term CWA See response to Comment Nos. 11, 18, and 23. See Action Taken for Comment Nos. 11, 18 and 23 Response to Comments Report April 12, 2017 Tentative Order No. R9 2017-0007 NPDES NO. CA0107409 Page 22 No. Comment Response Action Taken compliance, the cost to wastewater ratepayers would be minimized to ensure that funds are only expended on activities that lead to long term compliance. Although the City of El Cajon recognizes that the Pure Water San Diego program will deliver a new, highly reliable water supply for the San Diego County region, it does believe the cost responsibility of water supply is the responsibility of the wastewater ratepayers. 35 The City of El Cajon states that the tasks identified in the Compliance Schedule depend on the decisions and approvals affecting the timing, cost, and scope of the overall project (including approvals under the California Environmental Quality Act). The Metro Wastewater JPA/Metro Commission will play an integral role in such decisions (particularly with respect to developing a cost allocation framework, financing plan, and regulations for implementing the Pure Water San Diego program). Nothing in the Tentative Order obviates the need for the City of San Diego to obtain any otherwise required approvals or decisions. None necessary Jerrold L Jones, Lemon Grove Sanitation District, written comments dated February 24, 2017 36 The Lemon Grove Sanitation District opposes the proposed revisions to the Compliance Schedule and requests a continuance of the public hearing on the Tentative Order based on the following: 1. The City of San Diego ceased talks with the Metro Wastewater JPA regarding cost and revenue sharing as well as long term financing for the Pure Water San Diego program in September 2015 and in spite of continued requests has failed to renew that process. With the proposed revisions to the Compliance Schedule, Lemon Grove Sanitation District’s constituents face unpredicted construction costs with no financing mechanism to mitigate affordability and no commitment to a revenue sharing benefit that may come from the Pure Water San Diego program. See response to Comment Nos. 11, 18, and 23. See Action Taken for Comment Nos. 11, 18 and 23 Response to Comments Report April 12, 2017 Tentative Order No. R9 2017-0007 NPDES NO. CA0107409 Page 23 No. Comment Response Action Taken 2. The City of San Diego made the decisions to accelerate the Pure Water San Diego schedule without input from the Participating Agencies and provided little information since it made the decision. 3. The original Compliance Schedule allowed the City of San Diego and the Participating Agencies time to pause and consider a course that could include secondary upgrades and the overall costs within a new model, if a. secondary equivalency is not secured as a compliance option, b. future waivers from secondary treatment are not issued, c. secondary upgrades at the Point Loma WWTP is required, and/or d. Padre Dam Municipal Water District progresses with its purification project to off-load 25 MGD or more from the Point Loma WWTP. Without secondary equivalency as an option, wastewater ratepayers may end up paying for both the Pure Water San Diego program and then secondary treatment upgrades at the Point Loma WWTP. James Peasley and Jerry Jones, Metro Wastewater JPA , written comments dated February 24, 2017 37 On page 36 of the Tentative Order, footnote 2 misidentifies the Participating Agencies of Metro Wastewater JPA; the City of San Diego is not a Participating Agency of the Metro Wastewater JPA. See response to Comment No. 32. See Action Taken for Comment No. 32 38 The Metro Wastewater JPA states that it was not informed of the proposed revisions prior to the release of the revised Tentative Order, and as such has not had a chance to review and approve the proposed revisions. Thus, the Metro Wastewater JPA does not support the proposed revisions and request a continuance of the public hearing on the See response to Comment No. 33. See Action Taken for Comment No. 33 Response to Comments Report April 12, 2017 Tentative Order No. R9 2017-0007 NPDES NO. CA0107409 Page 24 No. Comment Response Action Taken Tentative Order to allow the Metro Wastewater JPA, its Participating Agencies, and the City of San Diego time to discuss and work through its concerns. 39 The Metro Wastewater JPA states that it needs more time to determine the lowest cost alternative for long-term CWA compliance. Factors that affect this determination include the feasibility of Secondary Equivalency as a compliance strategy and keeping the Point Loma WWTP as an advanced primary treatment plant, effect of water conservation on reaching the Pure Water San Diego goals, and cost of wastewater treatment and disposal versus water supply enhancement. Under the original Compliance Schedule, as Secondary Equivalency is being pursued as a means of long-term CWA compliance, the cost to wastewater ratepayers would be minimized to ensure that funds are only expended on activities that lead to long term compliance. Although the Metro Wastewater JPA recognizes that the Pure Water San Diego program will deliver a new, highly reliable water supply for the San Diego County region, it does believe the cost responsibility of water supply is the responsibility of the wastewater ratepayers. See response to Comment Nos. 11, 18, and 23. See Action Taken for Comment Nos. 11, 18 and 23 40 The Metro Wastewater JPA states that the tasks identified in the Compliance Schedule depend on the decisions and approvals affecting the timing, cost, and scope of the overall project (including approvals under the California Environmental Quality Act). The Metro Wastewater JPA/Metro Commission will play an integral role in such decisions (particularly with respect to developing a cost allocation framework, financing plan, and regulations for implementing the Pure Water San Diego program). See response to Comment No. 35. See Action Taken for Comment No. 35 Response to Comments Report April 12, 2017 Tentative Order No. R9 2017-0007 NPDES NO. CA0107409 Page 25 No. Comment Response Action Taken August A. Caires, Padre Dam Municipal Water District , written comments dated February 24, 2017 41 The Padre Dam Municipal Water District states that it needs more time to determine the lowest cost alternative for long- term CWA compliance. Factors that affect this determination include the feasibility of Secondary Equivalency as a compliance strategy and keeping the Point Loma WWTP as an advanced primary treatment plant, effect of water conservation on reaching the Pure Water San Diego goals, and cost of wastewater treatment and disposal versus water supply enhancement. Under the original Compliance Schedule, as Secondary Equivalency is being pursued as a means of long-term CWA compliance, the cost to wastewater ratepayers would be minimized to ensure that funds are only expended on activities that lead to long term compliance. Although the Padre Dam Municipal Water District recognizes that the Pure Water San Diego program will deliver a new, highly reliable water supply for the San Diego County region, it does believe the cost responsibility of water supply is the responsibility of the wastewater ratepayers. See response to Comment Nos. 11, 18, and 23. See Action Taken for Comment Nos. 11, 18 and 23 Marco Gonzales, Coastal Environmental Rights Foundation, written comments dated February 24, 2017 42 The Coastal Environmental Rights Foundation supports the proposed revisions to the Compliance Schedule for the Pure Water San Diego program. The San Diego Water Board and USEPA, Region IX have noted the comment. None necessary 43 The Coastal Environmental Rights Foundation opposes the continuance requested by the Metro Wastewater JPA in its February 24, 2017 letter to the San Diego Water Board and USEPA, Region IX. The Coastal Environmental Rights Foundation does not share Metro Wastewater JPA’s concern that the Point Loma WWTP will be required to upgrade to secondary treatment. If the Point Loma WWTP continues to meet the biological narrative criteria for the Clean Water Act section 301(h) waiver, as it has for approximately two decades now, there is The San Diego Water Board and USEPA, Region IX agree that a continuance is unnecessary. Also, see responses to Comment Nos.11, 18, and 23. See Action Taken for Comment Nos. 11, 18 and 23 Response to Comments Report April 12, 2017 Tentative Order No. R9 2017-0007 NPDES NO. CA0107409 Page 26 No. Comment Response Action Taken no legal rationale for any entity to require the City of San Diego to upgrade to secondary treatment. The Coastal Environmental Rights Foundation also states that the Pure Water San Diego program should not be delayed in light of dwindling imported water resources, rising costs of alternative water sources, lost opportunity costs of discharging partially treated sewage, and the uncertainties associated with global climate change and greenhouse gas emissions. Matt O’Malley, San Diego Coastkeeper, written comments dated February 24, 2017 44 The San Diego Coastkeeper supports the proposed revisions to the Compliance Schedule for the Pure Water San Diego program. The San Diego Water Board and USEPA, Region IX have noted the comment. None necessary HENRY ABARBANEL, PH.D., CHAIR DAVID GIBSON, EXECUTIVE OFFICER 2375 Northside Drive, Suite 100, San Diego, California 92108-2700 www.waterboards.ca.gov/sandiego RECYCLED PAPER ATTACHMENT B March 2, 2017 Border Environment Cooperation Commission P.O. Box 221648 El Paso, Texas 79913 North American Development Bank 203 South St. Mary's, Suite 300 San Antonio, Texas 78205 SUBJECT: NEED TO FOR IMPROVED WASTEWATER MANAGEMENT IN TIJUANA Dear BECC-NADB Board of Directors: On behalf of the California Regional Water Quality Control Board, Region 9 (San Diego Water Board), I want to share with you my appreciation for the work you have supported to improve communities along the border. I would also like to express the San Diego Water Board’s deep concern regarding the state of sewage collection and treatment in Tijuana, and the discharges of sewage into waters shared by Mexico and the United States. Although significant progress has been made during the last 20 years, in no small part due part to the efforts of BECC and NADB, it is abundantly clear from recent events that much more work remains to be done to improve sewer system reliability in order to protect our communities in Tijuana and San Diego, and the quality of the waters we all care about and depend upon. In particular, the recent release of approximately 143 million gallons of raw sewage into the Tijuana River demonstrates both how vulnerable the current sewer system in Tijuana is and how much work remains ahead of us to prevent and respond to planned and unplanned releases of sewage. I would like to respectfully request that you consider the needs of the residents along the border, on both sides, for adequate sewer system reliability and that you consider making it a top priority, placing this extremely important need ahead of plans for the proposed NCS Agua/Comisión Estatal de Servicios Públicos de Tijuana (CESPT) desalination facility in Rosarito until such time as the reliability and performance of sewage collection, treatment and discharge systems in Tijuana and San Antonio de los Buenos treatment facility are functionally equivalent to the standards routinely achieved and maintained in comparably sized districts and municipalities in the San Diego.region. BECC-NADB Board of Directors - 2 - March 2, 2017 HENRY ABARBANEL, PH.D., CHAIR DAVID GIBSON, EXECUTIVE OFFICER 2375 Northside Drive, Suite 100, San Diego, California 92108-2700 www.waterboards.ca.gov/sandiego RECYCLED PAPER I sincerely appreciate the importance of safe, clean drinking water to the people of Tijuana, but I feel compelled by multiple recent discharges of raw sewage into drainages tributary to the Tijuana River Valley and the poor effluent quality of the San Antonio de los Buenos treatment plant to share with you the San Diego Water Board’s concern regarding the serious threat to human and environmental health resulting from the condition and operation of these systems to communities in Tijuana and San Diego. Adding more influent to an already stressed system and an aging, poorly performing sewage treatment plant can only be expected to result in still more similar discharges. Moreover, the San Diego Water Board is concerned that the terms of the project to develop a desalination facility in Rosarito may be such that CESPT will be burdened with so much debt service as to be functionally precluded from making significant investments in its sewer system just as loadings to it are increasing. I am respectfully requesting that you support a thorough and comprehensive review of the Tijuana region wastewater management needs that precedes the commitment of funding for desalination projects, and that you further consider ways of supporting the development of effective reuse of the wastewater in Tijuana to augment water supplies there as is being done by the cities of San Diego and Escondido, the Padre Dam Municipal Water District, and Orange County. I have previously commented on this regarding the proposed Rosarito project, but the nature of recent sewage failures makes the case I suggested in my previous communications even more consequential and I would ask that you add this communication to the public comment file on the proposed Rosarito desalination project that is pending before you. Thank you very much again for your many years of hard work to improve our communities along the border through sound investment in important wastewater and water projects. Please consider taking or supporting the steps and measures necessary to improve sewer system reliability that would build upon the many successful projects supported and funded through your efforts. Respectfully, David W. Gibson Executive Officer Enclosure: February 23, 2017 Transboundary Spill Report ATTACHMENT C Top SD Water Official Wants Tijuana to Prioritize Sewer Water Over Desal Water For years, Mexican officials have been working to build a desalination plant in Rosarito Beach. David Gibson, executive director of the San Diego Regional Water Quality Control Board, says the new plant could siphon money from the already strained Tijuana sewer system. Photo by Ry Rivard Mexican officials are looking to build an ocean water desalination plant near the site of a Rosarito Beach power plant. Partner Voices Interested in Water narrative? Follow By Ry Rivard | 5 hours ago San Diego’s top water quality official worries that a new desalination plant in Mexico could worsen the decades-long problem of sewage spilling across the border into the United States. The connection between that plant and sewage spills may not be obvious. But there are three connections: wastewater management, money and politics. For years, Mexican officials have been working to build a desalination plant in Rosarito Beach that would eventually make 100 million gallons a day of Pacific Ocean water drinkable. David Gibson, executive director of the San Diego Regional Water Quality Control Board, says the new desalination plant could siphon money from the already strained Tijuana sewer system. That worry grew more acute after a recent spill sent millions of gallons of sewage north through the Tijuana River in February, causing foul odors and closing beaches in the South Bay. A collapsed sewer line is believed to be responsible for making the spill the largest in over a decade – though an investigation by U.S. and Mexican officials is still trying to pin down exactly what happened. As the scope of that spill became clear, Gibson wrote on March 2 to the International Boundary and Water Commission, a binational agency that is supposed to help settle differences along the border. He said the costs of the desalination plant could burden the Public Service Commission in Tijuana “with so much debt service obligations as to effectively limit or even preclude funding for sewer system improvements in coming years.” In another letter from the same day to the North American Development Bank, which helps fund projects along the border, Gibson suggested the bank should encourage Tijuana to first focus on its sewer system and recycling sewage into drinkable water, rather than spending money on a new desalination plant. Rosarito Beach is on the southern coastal outskirts of Tijuana, but water from the plant would be sent to Tijuana-area water customers via a 25-mile pipeline. By recycling sewage, something San Diego is also considering, Tijuana would presumably reduce the amount of sometimes poorly treated wastewater that American officials say can foul up San Diego’s coastal waters. Gibson’s complaints are not new, nor as they his alone. As the Rosarito Beach desalination project picked up steam last year, Imperial Beach Mayor Serge Dedina and the environmental group he leads, Wildcoast, lobbied against a federal permit that would allow water from the Rosarito Beach desalination plant to eventually be sold in the United States. They argued Mexican officials should focus on their sewer system before selling drinking water across the border to the Otay Water District. The Rosarito desalination plant would be twice the size of the new desalination plant the San Diego County Water Authority helped build in Carlsbad, which provides about 10 percent of San Diego’s water. Like San Diego, most of Tijuana’s drinking water comes from the Colorado River. While a good winter has helped replenish the Colorado, it has just gone through a historic drought that worried officials in both countries that rely on it. The Otay Water District has backed the Rosarito Beach project for years in an effort to have its own independent supply of water, separate from the San Diego County Water Authority. The permit needed for a four-mile pipeline across the border is pending in the U.S. State Department. Mark Watton, Otay’s general manager, said people trying to connect the desalination project to Tijuana’s sewer problems are misguided. “If Mr. Gibson is suggesting that (Tijuana) have a restricted water supply to reduce sewage flows, I’d submit that restricting utilities or infrastructure of any sort to limit a city’s population growth is an absolute loser,” Watton said in an email. Gibson said he doesn’t oppose drinking water supply projects, but the outcome of the desalination plant should not be neglect of the sewer system. “Since we haven’t been shown the sewer improvement plans, or more importantly how they will be funded, it is far from clear that the agencies in Mexico are truly prepared to significantly change sewer system performance from the status quo and until they are more transparent and forthcoming, I am concerned we will see more spills,” he said in an email. This article relates to: Border, Science/Environment, Water Water Desalination ReporT Volume 53, Number 11 The international weekly for desalination and advanced water treatment since 1965 20 March 2017 Tom Pankratz, Editor, P.O. Box 75064, Houston, Texas 77234-5064 USA Telephone: +1-281-857-6571, www.desalination.com/wdr, email: tp@globalwaterintel.com © 2017 Media Analytics. Published in cooperation with Global Water Intelligence. AustraliaMothballed SWRO begins delivering water Yesterday, nearly four and a half years after it was commissioned, the 450,000 m3/d (119 MGD) Victorian Desalination Plant (VDP) began delivering water via an 84km (52.5 mi) underground pipeline into the Cardinia Reservoir, southeast of Melbourne. From there, the water will enter the Melbourne water supply system. The plant was built in response to a ten-year drought, but by the time it was commissioned, record rainfalls had filled the reservoirs and the plant was mothballed. However, by last March, the water levels had again fallen to the point that an order was subsequently placed to deliver 50 million cubic meters (40,533 AF) by 30 June 2017. When the plant was being readied for a re-start, an electrical fault damaged the switchgear, and it was only recently repaired, enabling yesterday’s successful startup. It has been reported that the there will be a standing order placed—which will be reviewed every three years—for a minimum of 15 million m3/y (12,160 AFY), or ten percent of its capacity, to ensure that the plant remains in operating condition and can respond when needed. The VDP is operated and maintained by Watersure, a SUEZ/ Ventia (formerly Thiess Services) joint venture, under contract to AquaSure, the plant’s owner. Mexico Politics, Exchange rates Impact swro costs In an ominously worded statement in its 16 March Securities and Exchange Commission 10-K filing, Consolidated Water Company (CWCO) said that unless it can increase its proposed water tariff for its Rosarito project, it may be unable to finance the cost of the 100 MGD (378,500 m3/d), $463 million SWRO project. The company said its bid price was adversely impacted due to the falling value of the Mexican Peso (MXN) and because the “general macroeconomic conditions in Mexico have declined since the U.S. Presidential election”. No further details estimating the amount of the possible price increase, or how much future exchange rate fluctuations may impact it, were provided in the filing. However, CWCO CEO Rick McTaggart sounded much more optimistic later in the week. He noted that on 10 February 2017, the company submitted proposals to its Mexican client requesting a water tariff increase to compensate for the changes, which he said also included changes in lending rates and certain changes in law. “We are currently discussing these proposals with our client and while nothing has been finalized, we are encouraged by their initial responses to our proposals. We continue to work closely with our partners, advisors and financing institutions with the goal of commencing construction of this very important project in the third quarter of this year,” he said. When the financial offers were announced on 15 June 2016, the peso was trading at nearly MXN19 per US$, it has since slipped to as low as 22, but finished last week at 19.19. The impacts of the fluctuating rate on the project’s water tariff are illustrated in the following table: Milestone Date Exc Rate Tariff at 100 MGD buildout MXN / $MXN/m3 $/m3 $/kgal Bids submitted 21 Apr 2016 17.31 13.59 0.79 2.97 Project awarded 15 Jun 2016 18.92 13.59 0.72 2.72 Post US election 18 Nov 2016 20.22 13.59 0.67 2.54 Increase request 10 Feb 2017 20.46 13.59 0.66 2.51 Recent close 17 Mar 2017 19.19 13.59 0.71 2.68 How Peso/Dollar exchange rate has impacted the project water cost Aguas de Rosarito (AdR), a special purpose company comprised of CWCO’s NSC Agua subsidiary, NuWater and Degrémont will execute the project on a design-build-own- operate basis. AdR will raise Mexican peso denominated debt financing through a consortium led by the North American Development Bank, which also provided financial advisory services to the consortium through the bidding process and contract negotiations. Page 2 CWCO said that the project’s annual revenues would be approximately MXN1.02 billion, or $52 million, based upon today’s exchange rate. Water rates under the APP Contract are indexed to the Mexican national consumer price index over its term, and electrical energy costs incurred are to be treated as a pass through charge. Plans call for the project’s first 50 MGD phase to be operational by the end of 2019, but not later than 36 months after financial close. The plant will be doubled in size during a second phase, which is to be operational by 2024. At the end of the 37-year operating period, both phases of the plant and pipeline will be handed over to the state. Saudi ArabiaActivity swirls around trio of mega-SWROs Three large-scale IWPs (independent water projects) with a combined production capacity of 1.43 million m3/d (377.8 MGD) are in the process of taking important steps forward as the first quarter nears an end. The projects, all to be located on Saudi Arabia’s Red Sea Coast, are the first large- scale private projects to be developed since the Saline Water Conversion Corporation (SWCC) announced its massive capacity-building program last November. SWCC has appointed a team comprising Banque Saudi Fransi and Alderbrook (financial), Fichtner (technical) and the UK’s DLA Piper (legal) to advise on the procurement of the 600,000 m3/d (158.5 MGD) Rabigh 3 SWRO project. The project, which is the largest of the three new IWPs, was initially planned for development as a conventional EPC project. It should be operational in 2020. Both the 450,000 m3/d (119 MGD) Yanbu IWP and 380,000 m3/d (100.4 MGD) Shuqaiq 3 IWP have begun the process of selecting consulting teams for the projects, with proposals due to be submitted this Wednesday, 22 March. Tendering is planned to begin by the end of this year, with the aim of securing a developer in early 2019. The projects are three of the eight planned large-scale IWP/ IWPPs that are to be developed in the Kingdom by 2025. United StatesEPA budget slashed Under the White House’s proposed 2018 federal budget unveiled last week, the Environmental Protection Agency’s (EPA) budget cut of 31 percent has the distinction of being the hardest hit of any federal agency. The $2.6 billion cut would reduce the budget to $5.7 billion, its lowest inflation- adjusted level in 40 years. Besides shedding 3,200 jobs, representing 19 percent of its employees, the budget proposes to eliminate $100 million for climate change research, reduce regional water pollution cleanup programs by $427 million and slash Superfund site cleanups by $330 million, while terminating the Energy Star program to promote energy-efficient appliances. The plan does provide for a small increase to the $100 million State Revolving Funds program for low interest loans on “high priority” investments in water and sanitation infrastructure. The budget must now go before Congress, where it will be subjected to a strict appropriations process, which is rarely completed before the 1 October start of the fiscal year. Editor’s note: Last year’s 126-page EPA Budget in Brief— which contains an introductory note that it is “printed with vegetable-oil-based inks and is 100-percent postconsumer recycled material, chlorine-free-processed and recyclable”— begins with a review of the EPA’s mission and priorities. It notes that “The issue of highest importance facing the agency over the next few years will continue to be greenhouse gas (GHG) mitigation and climate change adaptation.” Based on current reports, the EPA’s focus on climate change seems likely to be revised even more dramatically than the budget itself. When asked about it, the White House budget director said, “Regarding the question as to climate change… we’re not spending money on that anymore; we consider that to be a waste of your money to go out and do that.” IndonesiaBuyer sought for 4-yr-old SWRO plant In other Consolidated Water Company (CWCO) news, the company said that if it is unable to find a strategic partner for its SWRO plant in the Nusa Dua area of Bali, Indonesia, it might decide to discontinue its Bali operations. The plant, which had an initial capacity of 0.26 MGD (1,000 m3/d), was commissioned in April 2013 and expanded to 0.79 MGD (2,990 m3/d) one year later. Development of the project began in 2012 in what is considered to be one of Bali’s prime tourist areas. According to CWCO CEO Rick McTaggart, the area has a target customer profile consisting of tourist resorts and luxury/ vacation residences comparable to CWCO’s retail service area on Grand Cayman. However, the business has been adversely impacted by reduced demand for water from the plant and a steep decline in the Bali economy. “We believed that the water demands of these properties had already exceeded the local public utility’s supply WATER DESALINATION REPORT – 20 March 2017 Page 3WATER DESALINATION REPORT – 20 March 2017 capacity, and that other areas of Bali will also eventually experience fresh water shortages. However, desalination had not been employed to any meaningful extent in Bali, and we concluded that we must first demonstrate its viability, as well as our capabilities and expertise if we were to obtain customers. Because of this, we elected to construct the plant before obtaining water supply agreements for its production. “Although we initially thought this business had great potential, we’ve been disappointed with its performance, and we may decided to discontinue our Bali operations if we cannot find a strategic partner, or if its prospects do not improve later this year,” said McTaggart. California Merchant plant ramping up production In January, Sweetwater Tech Resources (STR) received a temporary permit to begin commercial operation of California’s first merchant plant to treat 500 bpd (80 m3/d) of oilfield produced water for beneficial reuse. Last week, the regional facility, which is located in Wasco, north of Bakersfield, received its final permit, enabling it to increase production to treat up to 10,000 bpd (1,590 m3/d) of produced water. The initial treatment system for the regional facility was developed and pilot tested by Los Angeles-based Water Planet in early in 2016. The success of the pilot led to the December 2016 installation of Water Planet’s containerized IMS-5000 treatment system, which includes oil-water separation, solids dewatering, ceramic filtration, granular activated carbon, a two-stage RO to meet boron removal requirements and the company’s proprietary Intelliflux self- adaptive control technology. Water Planet CEO Eric Hoek told WDR that the system would now be scaled-up to its full production capacity. Meanwhile, STR has plans to eventually operate multiple recycling facilities that are capable of treating up to 4 MGD (95,240 bpd; 15,140 m3/d) in the Bakersfield area. Hoek also said that the company took the opportunity to operate its new PolyCera UF membranes, in parallel with the ceramic membranes in the unit to successfully demonstrate their performance in a commercial system. STR’s clients currently deliver produced water to the facility by truck. Following treatment, STR is able to sell the treated effluent, the clean brine and dewatered solids to a local mining company. Company NewsSolar desal — one farm at a time KII/Suns River, a Louisiana-based manufacturer of solar stills, has announced a partnership with Dubai’s Merlin Company to address food and water issues in rural desert areas of the Middle East, North Africa, Pakistan and India. The pair said that they would construct a demonstration installation at the American University of Sharjah’s Research Center, in Sharjah, UAE. Suns River CEO Hill Kemp told WDR, “Our solar stills can produce up to 12 L/m2/d [7 gpd/ft2], or about three times more than a conventional still, using a combination of serpentine cooling tubes and an inclined feedwater heating surface in a recirculating, three-stage configuration. The system will be designed to operate on a day/night cycle, using the heated cooling water to produce a significant amount of the total water production overnight. “For locations where brine disposal is a problem, each day’s concentrate can be discharged into one of three flat pan containers for natural evaporation, leaving behind a solid salt cake.” The demonstration facility will consist of a battery of 15 modules—each measuring 1m wide (3.3 ft) by 2.5m (8.2 ft) long and elevated 2m (6.6 ft) above the ground—with a combined production rate of 0.45 m3/d (119 gpd). The units will concentrate the feedwater, which can range from brackish groundwater to seawater, to a TDS of nearly 150,000 mg/L. Suns River solar still arrangement He said that such a system will provide sufficient water to irrigate a shaded area of approximately 130m2 (1,400 ft2), adding, “The UAE has an initiative to assist its citizens that live in rural areas. Our stills will help ensure that those residents have an adequate water supply.” The demonstration system is expected to be operational later this summer. Singapore Company sheds seawater desal assets GWI has confirmed that Singapore’s Hyflux has applied for regulatory approval to sell up to 70 percent of its Tuaspring IWPP. The project—which includes the 318,500 m3/d (84 MGD) Tuaspring SWRO plant with UF pretreatment and a 411 MW combined cycle gas turbine power plant—was commissioned in 2013. The company is also in the process of shortlisting potential buyers for its 100,000 m3/d (26.4 MGD) Dagang SWRO plant in Tianjin, China, which was commissioned in 2009. The company stake in other SWRO projects includes: • 30% stake in Singapore’s 136,380 m3/d (36 MGD) SingSpring plant, commissioned in 2006, • 47% stake in Algeria’s 500,000 m3/d (132.1 MGD) Mactaa SWRO plant, commissioned in 2015, and • 15.3% stake in Algeria’s 200,000 m3/d (52.8 MGD) Souk Tleta SWRO plant, commissioned in 2011. In brief RWL Water has completed the acquisition of Acquavit, the São Paulo, Brazil-based water, wastewater and waste-to- energy company. Acquavit Comércio E Indústria de Sistemas De Tratamento De Água Ltda, which was founded in 2003, has been renamed RWL Water Brasil and joins RWL Water Argentina—formerly Unitek—as evidence of RWL Water’s confidence in the Latin American market. On 6 March, it was revealed that the bid for $35 million of Australian Government funding for a Future Water Co-operative Research Centre was not successful. The Government announced funding for four new CRCs for transport, food, soils and honeybees. The partners of the Future Water bid—some of whom were supporters of the former National Centre of Excellence in Desalination Australia—are considering entering the next round of CRC funding which opens this coming May. CEO-designate Neil Palmer told WDR that while the result was disappointing, the need for water technology research in Australia, the driest inhabited continent, had not diminished and there was a strong push from industry partners to prepare a new proposal. Last week, Jordan commissioned the country’s first seawater desal plant. The 12,000 m3/d (3.2 MGD) Aqaba SWRO plant was delivered by Jordanian-based AquaTreat under a 7-year BOT contract, and will supply 30 percent of its production to the Arab Potash Company’s KEMAPCO fertilizer plant and the balance to the Aqaba Water Company for distribution to its customers. The plant is to be powered with renewable energy generated from a combination of methane gas emitted from the KEMAPCO plant and solar power. The Southeast Desalting Association will hold a workshop titled Salvaging RO/NF Concentration: ZLD at the City of Palm Coast in Palm Coast, Florida, on 29 March. For information, visit http://tinyurl.com/zxq42q3. A joint AMTA/SEDA technology transfer workshop titled MBR and Reuse in the Southeast will be held in Peachtree Corners (Atlanta), Georgia, on 4-6 April. For more infor- mation, visit http://tinyurl.com/zzbb35d. The bid date for the 150,000 m3/d (40 MGD) Chennai Nemmeli II SWRO project has been delayed for a third time, until 7 April. The project will be delivered to Chennai Metro Water under an EPC contract with an attached 20-year O&M agreement. People De Nora has announced the appointment of Brian Shugrue as director of sales for the Americas. Formerly with USFilter and Siemens Water, he is based in Seattle, Washington, and may be contacted at brian.shugrue@denora.com. James Murphy, III, most recently the executive manager for water utility operations at the Guadalupe Blanco River Authority, and formerly the general counsel for Texas’ Trinity River Authority, has announced that he has joined Halff Associates, where he will be responsible for water supply planning. He is based in Austin, Texas, and may be contacted at jmurphy@halff.com. Rate for one year: £355 or US$550. Subscribe and renew online at: www.desalination.com/wdr Reproduction or electronic distribution is forbidden. Subscribers may circulate their copy on their immediate premises. To email or create additional copies for other office locations, contact Jake Gomme (jg@globalwaterintel.com) to arrange a site license. Page 4WATER DESALINATION REPORT – 20 March 2017 .-,'' ii;,i,.,;ir,l"r,.t i i,'l. i :'1'1.: , , ,,r il' lt ,,.t . l i'ì..,,, 'i'þ,,r,, ilil .:-r :' :¡ : ,. j r. t -'. " :r :, 1 'r' ' ! What's New? What has Changed? Where is it Going? Workshop Location: Otay Water District 2554 Sweetwater Springs Blvd Spring Valley, CA 91978 6L9.670.2293 Date: May LL,ZOL7 8:00 am - 4:40 pm AWWA Members $175 / Non-Members $235 This workshop is an update of the 20L5 workshop that presented Desalination lssues and Technology Trends. Topics to be presented and díscussed include membrane research and trends, desalination plants permitting and regulatory frameworlç intake technology, brine discharge, alternative sources of energy for desalination/Water Reuse plants, and plant commissioning. This Workshop is organized by the now combined Desalination/Water Reuse Committee. Speakers: Sunny Wang, Brown & Caldwell; Brian Bernados, Water Board/Division of Drinking Water; Peter Shen, IDE-Americas, lnc; Troy Walker, Hazen & Sawyer; Doug Gillingham, Gillingham Water Planning & Engineering; lnge Wiersema, Carollo Engineers; Enrique Lopezcalva; RMC; MichaelGarrod, SweetwaterAuthority; Al Lau, Padre Dam MunicipalWater District; Bob Kennedy, Otay Water District; Brent Alspach, Arcadis; and Justin Brazil, Sweetwater Authority. lntended Audience: Water Managers, Operators, Consultants, Regulators and persons interested in Desalination/Water Reuse technologies and regulations in general. This workshûp is e!ågible for ¡,.åp tû 7 contact Ërcurs. q Califomia-Nevada Section ü Àmql rq,ln l¡¿ttFr Wçrkf Arçr¡cì¿¡tiçn What's New? What has Changed? Where is it GoinE? Registration Form AWWA Member StlS ¡ Non-member SZSS n Otay Water District - May tI,2017 Attendee Name: Attendee Mailing Address: City:_State:_ Zip Home Phone: Cell Phone Attendee E-mail Company Name: Company Address State -zipCompany Phone: A\ M/A Member #: Fax: Make checks payable, in U.S. funds, to CA-NVAWWA Check # PO# (Must be accompanied by a physical copy of the Purchase Order) Payment Method: Credit Gard: Visa _MC _AMEX _ Name on Card: Credit Card #eR\/# Exp. Date: Billing Zip Code: Authorized Signature TotalAmount Due: lf you need a copy of your receipt, please enter e-mail address: E-mail Please fill out this form completely and mail in with check, money order, or purchase order to: CA-NV Section AWWA 10435 Ashford St.,2nd Floor Rancho Cucamonga, GA 91730 Or fax in with credit card information or physical copy of the purchase order to (909) 291-21 07 (secure fax line). For registration inquiries, please call (909) 291-2117. CONTACT HOURS All Contact Hours are emailed. ln order to receive your Contact Hours, you must include your email address on th¡s form. For attendance verification you must sign in and out. You must be in attendance for lhe full time in order to be awarded full credit. lf your attendance cennot be verified you w¡l¡ not be issued Contact Hours. The Contact Hours advertised by the CA-NV AWWA are only an est¡mate, final hours are determined upon an aud¡t of your record. lt can take up to 30 days to process and ¡ssue your Contact Hour certificates. CA-NV A\AA/VA CANCELLATION POLICY Requests for refunds end requests for transfers must be made in writing and are subject to the following cond¡lions: Full refund of fee paid (minus $50.00 handling fee) will be issued for cancellations received more than two weeks prior lo class date. All fees are non-refundable thereafter. Transfers are based on the availability. No transfer requests will be authorízed withln 72 hours pr¡or to the class date. À ß$¡r i. * rì 1l!'¡!e¡ !üJr¡¡ k : &1!{t{:ì atr{}rìqICa lifomia- Nevade Section Check Total 2,037.11 1,644.28 3,216.00 192.57 22,010.00 5,977.52 5,977.52 LEGAL SERVICES (JAN 2017)59,881.43 59,881.43 2047661 03/01/17 07785 AT&T 000009223425 02/02/17 TELEPHONE SERVICES (1/2/17-2/1/17) 2047741 03/15/17 17264 ARTIANO SHINOFF 215335 03/03/17 923.22 2047660 03/01/17 03492 AQUA-METRIC SALES COMPANY 0063953IN 02/01/17 SENSUS OMNI METERS 3,018.49 3,018.49 52.36 52.36 2047621 02/22/17 08967 ANTHEM EAP 55842 12/29/16 EAP AGREEMENT (JAN-MAR 2017)923.22 UB Refund Cst #0000224398 8.30 8.30 2047620 02/22/17 17831 ANALY ERICSON Ref002475942 02/21/17 UB Refund Cst #0000205610 2047772 03/22/17 17906 ANA POMPA Ref002477771 03/20/17 CM201717 02/07/17 MGMT/INSP (1/1/17-1/31/17)330.00 CM20179 02/07/17 MGMT/INSP (1/1/17-1/31/17)270.00 CM201713 02/07/17 MGMT/INSP (1/1/17-1/31/17)990.00 CM201714 02/07/17 MGMT/INSP (1/1/17-1/31/17)880.00 CM201715 02/07/17 MGMT/INSP (1/1/17-1/31/17)1,650.00 CM201716 02/07/17 MGMT/INSP (1/1/17-1/31/17)1,100.00 11,390.00 CM201711 02/07/17 MGMT/INSP (1/1/17-1/31/17)3,450.00 CM201712 02/07/17 MGMT/INSP (1/1/17-1/31/17)1,950.00 ANNUAL MEMBERSHIP DUES 722.31 722.31 2047659 03/01/17 14462 ALYSON CONSULTING CM201710 02/07/17 MGMT/INSP (1/1/17-1/31/17) 2047658 03/01/17 13203 ALLIANCE FOR WATER EFFICIENCY 4633 08/29/16 24.43 2047771 03/22/17 17890 ALICE SUE PERRY 2158031717 03/17/17 CUSTOMER REFUND 578.96 578.96 159.80 159.80 2047770 03/22/17 17895 ALFREDO DEMASCO Ref002477758 03/20/17 UB Refund Cst #0000070679 24.43 UTILITY LOCATING SERVICES (1/1/17-1/31/17)13,864.50 13,864.50 2047619 02/22/17 06261 ALCANTARA, CYNTHIA 020917 02/16/17 TRAVEL EXPENSE REIMB (2/9/17) 2047657 03/01/17 15024 AIRX UTILITY SURVEYORS INC 1301312017 02/07/17 BREATHING AIR BOTTLES 140.55 9942672544 01/31/17 BREATHING AIR BOTTLES 52.02 131477391 02/17/17 AQUA AMMONIA 1,161.00 2047656 03/01/17 13753 AIRGAS USA LLC 9060132010 02/07/17 2,046.00 2,046.00 2047740 03/15/17 07732 AIRGAS SPECIALTY PRODUCTS INC 131477392 02/17/17 AQUA AMMONIA 2,055.00 SHAREPOINT SERVICES (2/2/17-2/23/17)1,425.00 1,425.00 2047704 03/08/17 17850 ADVANCED INDUSTRIAL SVCS Ref002476289 03/06/17 UB Refund Cst #0000224629 2047739 03/15/17 08488 ABLEFORCE INC 7396 03/06/17 SODIUM HYPOCHLORITE 864.40 1000992 02/02/17 SODIUM HYPOCHLORITE 779.88 2047655 03/01/17 01910 ABCANA INDUSTRIES 1001121 02/08/17 1001429 02/16/17 SODIUM HYPOCHLORITE 605.08 1001711 02/23/17 SODIUM HYPOCHLORITE 318.87 Amount 2047738 03/15/17 01910 ABCANA INDUSTRIES 1001430 02/16/17 SODIUM HYPOCHLORITE 1,113.16 CHECK REGISTER Otay Water District Date Range: 2/16/2017 - 3/22/2017 Check #Date Vendor Vendor Name Invoice Inv. Date Description Page 1 of 10 Check Total Amount CHECK REGISTER Otay Water District Date Range: 2/16/2017 - 3/22/2017 Check #Date Vendor Vendor Name Invoice Inv. Date Description 672.57 103.98 2,763.00 4,395.00 4,395.00 INTERNET CIRCUITS (MAR 2017)1,333.00 1,333.00 2047746 03/15/17 17842 COMMERCIAL TRANSPORTATION 3151 02/24/17 SAFETY TRAINING 88790 01/31/17 BACTERIOLOGICAL TESTING 28.00 2047745 03/15/17 15616 COGENT COMMUNICATIONS INC 0002030117 03/01/17 88788 01/31/17 BACTERIOLOGICAL TESTING (1/10/17)253.00 88791 01/31/17 BACTERIOLOGICAL TESTING (1/12/17)178.00 88787 01/31/17 BACTERIOLOGICAL TESTING (1/3/17)264.50 88792 01/31/17 BACTERIOLOGICAL TESTING 264.00 888793 01/31/17 BACTERIOLOGICAL TESTING (1/17/17 - 1/18/17)604.00 88786 01/31/17 BACTERIOLOGICAL TESTING (1/31/17)340.50 7,920.00 2047666 03/01/17 04119 CLARKSON LAB & SUPPLY INC 88789 01/31/17 BACTERIOLOGICAL TESTING (1/10/17-1/11/17)831.00 4,601.08 4,601.08 2047707 03/08/17 12674 CITY OF CHULA VISTA 071060PU0040717 02/07/17 UTILITY PERMITS (7/1/16-12/31/16)7,920.00 AD&D & SUPP LIFE INS (FEB 2017)4,601.08 4,601.08 2047776 03/22/17 15256 CIGNA GROUP INSURANCE / LINA 9267031017 03/10/17 AD&D & SUPP LIFE INS (MAR 2017) 2047624 02/22/17 15256 CIGNA GROUP INSURANCE / LINA 9267021017 02/10/17 217.39 2047623 02/22/17 17811 CHULA VISTA ELEMENTARY SCHOOL Ref002475948 02/21/17 UB Refund Cst #0000226579 170.10 170.10 750.00 750.00 2047665 03/01/17 02026 CHULA VISTA ELEM SCHOOL DIST AR046853 02/09/17 GARDEN TOURS (12/8/16)217.39 COLOCATION SERVICES 2,098.25 2,098.25 2047664 03/01/17 01828 CHICAGO TITLE COMPANY 737170012281 02/08/17 TITLE REPORT 2047706 03/08/17 17022 CASTLE ACCESS INC 0223093469 03/01/17 SCANNING SERVICES (2/17/17)60.88 8132 02/27/17 SCANNING SERVICES (2/24/17)43.10 2047744 03/15/17 02758 CARMEL BUSINESS SYSTEMS INC 8128 02/21/17 8119 01/31/17 SCANNING SERVICES (1/20/17 & 1/27/17)157.32 8120A 01/31/17 DESTRUCTION SERVICES 15.00 35.00 35.00 2047663 03/01/17 02758 CARMEL BUSINESS SYSTEMS INC 8120 01/31/17 REPROGRAPHICS SERVICES (12/30/16)500.25 UB Refund Cst #0000230977 39.66 39.66 2047622 02/22/17 02758 CARMEL BUSINESS SYSTEMS INC 8101 11/30/16 SCANNING SERVICES (11/23/16) 2047775 03/22/17 17915 CAMEO RAZENELL Ref002477780 03/20/17 2,210.00 2047662 03/01/17 05413 CALPERS 100000014912323 02/13/17 GASB 68 RPT AND SCHEDULES 2,500.00 2,500.00 48.71 48.71 2047705 03/08/17 08156 BROWNSTEIN HYATT FARBER 669741 02/28/17 LEGISLATIVE ADVOCACY (THRU 1/31/17)2,210.00 UB Refund Cst #0000230562 1,839.82 1,839.82 2047774 03/22/17 17916 BOBBY RATHER Ref002477781 03/20/17 UB Refund Cst #0000231747 2047773 03/22/17 17912 BAILEY RSD SELF STORAGE Ref002477777 03/20/17 6,327.47 2047743 03/15/17 12810 ATKINS NORTH AMERICA INC 1853937 02/14/17 2015 WFMP UPDATE (10/1/16-1/31/17)29,384.26 29,384.26 2047742 03/15/17 07785 AT&T 000009353294 03/02/17 TELEPHONE SERVICES (2/2/17-3/1/17)6,327.47 Page 2 of 10 Check Total Amount CHECK REGISTER Otay Water District Date Range: 2/16/2017 - 3/22/2017 Check #Date Vendor Vendor Name Invoice Inv. Date Description 936.18 6,307.82 534.96 401.22 1,353.50 LAB ANALYSIS (1/23/17)310.00 310.00204774903/15/17 03227 ENVIROMATRIX ANALYTICAL INC 7020738 02/14/17 EMPLOYEE BENEFITS (JAN 2017)688.50 0080874IN 02/28/17 EMPLOYEE BENEFITS (FEB 2017)665.00 2047780 03/22/17 08023 EMPLOYEE BENEFIT SPECIALISTS 0080240IN 01/31/17 5.58 2047748 03/15/17 08023 EMPLOYEE BENEFIT SPECIALISTS 0078092IN 09/30/16 EMPLOYEE BENEFITS (SEPT 2016)685.00 685.00 232.83 232.83 2047779 03/22/17 17908 EILEEN JUAREZ Ref002477773 03/20/17 UB Refund Cst #0000225144 5.58 MICRO2000 PARTS 3,143.01 3,143.01 2047778 03/22/17 17900 DENNY STOVER Ref002477763 03/20/17 UB Refund Cst #0000205985 4801030917 03/09/17 TELECOM SVCS / METRO-E (3/9/17-4/8/17)133.74 2047669 03/01/17 11797 D&H WATER SYSTEMS INC I20170104 02/02/17 TELECOM SVCS / METRO-E (3/9/17-4/8/17)133.74 7501030917 03/09/17 TELECOM SVCS / METRO-E (3/9/17-4/8/17)133.74 2047777 03/22/17 17770 COX BUSINESS 0201030917 03/09/17 7501020917 02/09/17 TELECOM SVCS / METRO-E (2/9/17-3/8/17)133.74 0201020917 02/09/17 TELECOM SVCS / METRO-E (2/9/17-3/8/17)133.74 TELECOM SVCS / METRO-E (2/8/17-3/7/17)133.74 4801020917 02/09/17 TELECOM SVCS / METRO-E (2/9/17-3/8/17)133.74 2047625 02/22/17 17770 COX BUSINESS 6701020817 02/08/17 6101022717 02/27/17 TELECOM SVCS / METRO-E (3/1/17-3/28/17)133.74 7001022617 02/26/17 TELECOM SVCS / METRO-E (2/28/17-3/27/17)127.42 0301022617 02/26/17 TELECOM SVCS / METRO-E (2/28/17-3/27/17)133.74 2401022617 02/26/17 TELECOM SVCS / METRO-E (2/28/17-3/27/17)133.74 TELECOM SVCS / METRO-E (2/24/17-3/23/17)5,645.44 9601022417 02/24/17 TELECOM SVCS / METRO-E (2/25/17-3/24/17)133.74 2047711 03/08/17 17770 COX BUSINESS 6702022317 02/23/17 2401030317 03/03/17 TELECOM SVCS / METRO-E (3/3/17-4/2/17)133.74 0501030317 03/03/17 TELECOM SVCS / METRO-E (3/3/17-4/2/17)133.74 8801030417 03/04/17 TELECOM SVCS / METRO-E (3/4/17-4/3/17)133.74 7601030317 03/03/17 TELECOM SVCS / METRO-E (3/3/17-4/2/17)133.74 3001030417 03/04/17 TELECOM SVCS / METRO-E (3/4/17-4/3/17)133.74 6701030817 03/08/17 TELECOM SVCS / METRO-E (3/8/17-4/7/17)133.74 356.00 2047747 03/15/17 17770 COX BUSINESS 9201030417 03/04/17 TELECOM SVCS / METRO-E (3/4/17-4/3/17)133.74 142.00 142.00 2047668 03/01/17 02122 COUNTY OF SAN DIEGO 012142012RI2016 12/20/16 PERMIT FEES # 01214 (MAR 2017-MAR 2018)356.00 CERTIFICATION RENEWAL 260.00 260.00 2047667 03/01/17 00184 COUNTY OF SAN DIEGO 2003193E619700117 02/04/17 SHUT DOWN TEST (1/25/17) 2047710 03/08/17 17239 COUGHLIN, SEAN 323859 03/06/17 14.29 2047709 03/08/17 02643 CORE-ROSION PRODUCTS 2017049 02/15/17 PATZIG TANKS 3,690.00 3,690.00 2047708 03/08/17 17852 CONCETTA MANPINAN Ref002476291 03/06/17 UB Refund Cst #0000225432 14.29 17842 COMMERCIAL TRANSPORTATION 3151 SAFETY TRAINING Page 3 of 10 Check Total Amount CHECK REGISTER Otay Water District Date Range: 2/16/2017 - 3/22/2017 Check #Date Vendor Vendor Name Invoice Inv. Date Description 216.00 4,032.14 256.09 6,937.38 2047754 03/15/17 12907 GREENRIDGE LANDSCAPE INC 15206 01/31/17 LANDSCAPING SERVICES (JAN 2017)8,909.50 8,909.50 72.53 72.53 2047674 03/01/17 14948 GPS INSIGHT LLC 993997 02/01/17 GPS MODEMS 6,937.38 GARDEN TOURS (1/26/17 & 1/31/17)1,520.00 1,520.00 2047717 03/08/17 17855 GASTELUM, HECTOR 111516012517 03/08/17 MILEAGE REIMBURSEMENT (11/15/16-1/25/17) 2047673 03/01/17 13563 FRIENDS OF THE WATER 362 01/31/17 450.35 2047785 03/22/17 02344 FRANCHISE TAX BOARD Ben2477826 03/23/17 BI-WEEKLY PAYROLL DEDUCTION 100.00 100.00 100.00 100.00 2047716 03/08/17 02344 FRANCHISE TAX BOARD Ben2476664 03/09/17 BI-WEEKLY PAYROLL DEDUCTION 450.35 BI-WEEKLY PAYROLL DEDUCTION 275.00 275.00 2047784 03/22/17 01612 FRANCHISE TAX BOARD Ben2477824 03/23/17 BI-WEEKLY PAYROLL DEDUCTION 2047715 03/08/17 01612 FRANCHISE TAX BOARD Ben2476662 03/09/17 1,129.55 2047626 02/22/17 01612 FRANCHISE TAX BOARD Ben2475975 02/23/17 BI-WEEKLY PAYROLL DEDUCTION 275.00 275.00 71.58 71.58 2047753 03/15/17 16119 FORDYCE CONSTRUCTION INC 00017391 03/06/17 RETAINAGE RELEASE 1,129.55 VEHICLE WASHING 101.09 101.09 2047783 03/22/17 17904 FLOR OLIVIERI Ref002477769 03/20/17 UB Refund Cst #0000222028 2047752 03/15/17 11962 FLEETWASH INC x977230 02/24/17 VEHICLE WASHING 148.26 x963703 02/03/17 VEHICLE WASHING 107.83 2047672 03/01/17 11962 FLEETWASH INC x966936 02/10/17 1,031.93 2047714 03/08/17 02591 FITNESS TECH 10357 02/01/17 EQUIPMENT MAINTENANCE (FEB 2017)135.00 135.00 99.00 99.00 2047751 03/15/17 16469 FIRST CHOICE SERVICES 076166 02/21/17 COFFEE SERVICES 1,031.93 POTABLE WATER HOSE 4,537.50 4,537.50 2047671 03/01/17 12187 FIRST AMERICAN DATA TREE LLC 9003400117 01/31/17 ONLINE DOCUMENTS (MONTHLY) 0584899 02/17/17 INVENTORY 570.00 2047713 03/08/17 17792 FIREHOSEDIRECT 55211 02/08/17 995.61 995.61 2047750 03/15/17 03546 FERGUSON WATERWORKS # 1083 0582321 02/27/17 4 INCH VICTAULIC VALVES 3,462.14 BIOXIDE 2,277.95 2,277.95 2047670 03/01/17 03546 FERGUSON WATERWORKS # 1083 0583273 02/03/17 INVENTORY 2047782 03/22/17 15396 EVOQUA WATER TECHNOLOGIES LLC 902920506 12/28/16 L0311061 03/18/17 OUTSIDE LAB SERVICES (2/14/17)800.00 L0309282 03/09/17 OUTSIDE LAB SERVICES 240.00 I0289912 CREDIT MEMO -370.00 I0289911 CREDIT MEMO -54.00 199.53 199.53 2047781 03/22/17 14320 EUROFINS EATON ANALYTICAL INC I0289913 CREDIT MEMO -400.00 LAB ANALYSIS (1/23/17)310.00 310.00 2047712 03/08/17 17847 ERNEALDO SALAZAR Ref002476286 03/06/17 UB Refund Cst #0000184537 2047749 03/15/17 03227 ENVIROMATRIX ANALYTICAL INC 7020738 02/14/17 Page 4 of 10 Check Total Amount CHECK REGISTER Otay Water District Date Range: 2/16/2017 - 3/22/2017 Check #Date Vendor Vendor Name Invoice Inv. Date Description 28,569.75 9,706.54 14,589.35 CUSTOMER REFUND 500.00 500.00 2047680 03/01/17 05840 KIRK PAVING INC 6407 01/30/17 ASPHALTIC CONCRETE PAVING 2047719 03/08/17 17845 KEVIN CRAWFORD 5209030217 03/06/17 131.91 2047791 03/22/17 17913 KARLA SUAREZ Ref002477778 03/20/17 UB Refund Cst #0000230690 75.00 75.00 52.86 52.86 2047632 02/22/17 17828 JOSEPH MARTINEZ Ref002475939 02/21/17 UB Refund Cst #0000089836 131.91 UB Refund Cst #0000084669 25.35 25.35 2047631 02/22/17 17825 JOHN JAMISON Ref002475936 02/21/17 UB Refund Cst #0000044781 2047790 03/22/17 17897 JOE KNOX Ref002477760 03/20/17 2,837.80 2047630 02/22/17 17837 JOANNE KRAUSE Ref002475949 02/21/17 UB Refund Cst #0000230809 60.76 60.76 59.50 59.50 2047758 03/15/17 10563 JCI JONES CHEMICALS INC 713988 02/23/17 CHEMICALS 2,837.80 ANTENNA SUBLEASE (MAR 2017)1,593.00 1,593.00 2047789 03/22/17 17892 JAVIER GARCIA Ref002477755 03/20/17 UB Refund Cst #0000047383 116924 02/02/17 BILL PRINTING SERVICES (12/15/16-1/18/17)332.22 2047718 03/08/17 17106 IWG TOWERS ASSETS II LLC 386400 03/01/17 116869 02/02/17 BILL PRINTING SERVICES (JAN 2017)2,129.66 116664 01/31/17 BILL PRINTING SERVICES (JAN 2017)1,579.94 2,278.00 2,278.00 2047679 03/01/17 08969 INFOSEND INC 116665 01/31/17 BILL PRINTING SERVICES (JAN 2017)5,664.72 UB Refund Cst #0000231937 58.38 58.38 2047678 03/01/17 13349 HUNSAKER & ASSOCIATES 2017010006 02/13/17 LAND SURVEYING (1/1/17-1/27/17) 2047788 03/22/17 17917 HERLINDA RYAN Ref002477782 03/20/17 371.59 2047677 03/01/17 17796 HENDERSON HOSPITALITY GROUP 0917090184 02/13/17 BOND REFUND / LABOR & MAT D0917 80,018.53 80,018.53 2,612.50 2,612.50 2047787 03/22/17 17918 HELIX ENVIRONMENTAL PLANNING Ref002477783 03/20/17 UB Refund Cst #0000232826 371.59 CAPACITY FEE STUDY (1/1/17-2/4/17)2,968.41 2,968.41 2047786 03/22/17 10973 HDR ENGINEERING INC 1200041867 03/20/17 CAPACITY FEE STUDY (2/5/17-3/4/17) G594732 02/02/17 INVENTORY 5,149.38 2047629 02/22/17 10973 HDR ENGINEERING INC 1200036337 02/16/17 4,171.93 4,171.93 2047676 03/01/17 06640 HD SUPPLY WATERWORKS LTD G540557 02/09/17 INVENTORY 23,420.37 PREP & FILING OF DISCLOSURE ANNUAL RPTS 1,300.00 1,300.00 2047757 03/15/17 06640 HD SUPPLY WATERWORKS LTD G770896 02/24/17 INVENTORY 2047756 03/15/17 03668 HARRELL & COMPANY ADVISORS LLC 022717 02/23/17 966.84 2047675 03/01/17 00174 HACH COMPANY 10263162 01/09/17 HACH ANALYZER 2,882.49 2,882.49 125,000.00 125,000.00 2047755 03/15/17 17886 GUADALUPE ARCE 6328031317 03/14/17 CUSTOMER REFUND 966.84 UB Refund Cst #0000221889 25.70 25.70 2047628 02/22/17 17822 GRI-REGENCY LLC 103116 02/16/17 EASEMENT ACQUISITION 2047627 02/22/17 17834 GRICELDA MACIAS Ref002475945 02/21/17 Page 5 of 10 Check Total Amount CHECK REGISTER Otay Water District Date Range: 2/16/2017 - 3/22/2017 Check #Date Vendor Vendor Name Invoice Inv. Date Description 17,100.30 1,025.50 1,025.50 OUTSIDE SERVICES 595.00 595.00 2047687 03/01/17 06419 PLANT SOUP INC 1110 01/05/17 PROFESSIONAL WRITING SERVICES 2047686 03/01/17 15081 PINOMAKI DESIGN 5480 02/01/17 33.61 2047685 03/01/17 00137 PETTY CASH CUSTODIAN 022817 02/28/17 PETTY CASH REIMBURSEMENT 545.33 545.33 28.18 28.18 2047801 03/22/17 17899 PETER HORMIZ Ref002477762 03/20/17 UB Refund Cst #0000196098 33.61 GEOTECHNICAL SERVICES (12/31/16-1/27/17)6,298.25 6,298.25 2047636 02/22/17 17827 PAUL ATKISS Ref002475938 02/21/17 UB Refund Cst #0000084195 2047760 03/15/17 00761 NINYO & MOORE GEOTECHNICAL AND 205779 02/24/17 14,144.25 2047635 02/22/17 16505 NIGHTCLUBPOOL LLC 115 02/15/17 WEB CONSULTING 935.00 935.00 14,749.20 14,749.20 2047800 03/22/17 16255 NATIONWIDE RETIREMENT Ben2477814 03/23/17 BI-WEEKLY DEFERRED COMP PLAN 14,144.25 BI-WEEKLY DEFERRED COMP PLAN 14,749.20 14,749.20 2047634 02/22/17 16255 NATIONWIDE RETIREMENT Ben2475965 02/23/17 BI-WEEKLY DEFERRED COMP PLAN 2047723 03/08/17 16255 NATIONWIDE RETIREMENT Ben2476652 03/09/17 2,491.80 2047799 03/22/17 17902 NATHANIEL DEAN Ref002477765 03/20/17 UB Refund Cst #0000215124 42.59 42.59 2,217.00 2,217.00 2047684 03/01/17 14699 MISSION COMMUNICATIONS LLC 1006699 02/09/17 SERVICE RENEWAL (3/1/17-2/28/18)2,491.80 LEAK DETECTION SERVICES (JAN 2017)7,363.20 7,363.20 2047759 03/15/17 16608 MICHAEL BAKER INT'L INC 969405 02/16/17 870-2 PS INSPECTION SVCS (ENDING 1/29/17) 2047683 03/01/17 15921 MATCHPOINT INC 233 01/31/17 3,718.05 2047722 03/08/17 17848 MARTHA NAVARRO Ref002476287 03/06/17 UB Refund Cst #0000188316 41.52 41.52 1,881.97 1,881.97 2047798 03/22/17 17911 MARINA LANDSCAPE INC Ref002477776 03/20/17 UB Refund Cst #0000226161 3,718.05 UB Refund Cst #0000224257 52.02 52.02 2047797 03/22/17 17914 MARINA LANDSCAPE Ref002477779 03/20/17 UB Refund Cst #0000230885 2047796 03/22/17 17905 MARGARITA ROZILLIO Ref002477770 03/20/17 8,528.85 2047721 03/08/17 17849 MARCO SANCHEZ Ref002476288 03/06/17 UB Refund Cst #0000204760 42.40 42.40 5.19 5.19 2047795 03/22/17 17889 MANUEL REYES 0625031517 03/16/17 CUSTOMER REFUND 8,528.85 UB Refund Cst #0000224730 14.29 14.29 2047794 03/22/17 17903 LUIS ECHEVERRIA Ref002477768 03/20/17 UB Refund Cst #0000217629 2047720 03/08/17 17851 LISA PRIOR Ref002476290 03/06/17 71.47 2047633 02/22/17 17835 LETICIA AGUINIGA Ref002475946 02/21/17 UB Refund Cst #0000223167 40.42 40.42 575.00 575.00 2047793 03/22/17 17891 LAURO CRUZ Ref002477754 03/20/17 UB Refund Cst #0000034217 71.47 ASPHALTIC CONCRETE PAVING 17,122.00 17,122.00 2047682 03/01/17 12276 KONECRANES INC SDG01168768 02/14/17 CRANE INSPECTIONS 01/31/17 TEMPORARY PAVING 2,450.00 2,450.00 2047792 03/22/17 05840 KIRK PAVING INC 6409 02/09/17 6406 01/30/17 ASPHALTIC CONCRETE PAVING 2,510.95 2047681 03/01/17 05840 KIRK PAVING INC 6405 Page 6 of 10 Check Total Amount CHECK REGISTER Otay Water District Date Range: 2/16/2017 - 3/22/2017 Check #Date Vendor Vendor Name Invoice Inv. Date Description 80,930.24 19,601.04 1,837.89 33.52 33.52 2047641 02/22/17 07783 SCRIPPS CENTER FOR EXECUTIVE 28352 01/16/17 EXECUTIVE PHYSICAL 1,837.89 UTILITY EXPENSES (MONTHLY)20,288.59 20,288.59 2047805 03/22/17 17896 SANDRA JACKEL Ref002477759 03/20/17 UB Refund Cst #0000081602 022217 02/22/17 UTILITY EXPENSES (MONTHLY)50.30 2047804 03/22/17 00121 SAN DIEGO GAS & ELECTRIC 030517 03/05/17 UTILITY EXPENSES (MONTHLY)19,489.67 021517 02/15/17 UTILITY EXPENSES (MONTHLY)61.07 2047692 03/01/17 00121 SAN DIEGO GAS & ELECTRIC 021717 02/17/17 56,563.00 022417 02/24/17 UTILITY EXPENSES (MONTHLY)23,753.61 022217a 02/22/17 UTILITY EXPENSES (MONTHLY)613.63 UTILITY EXPENSES (MONTHLY)45,135.70 45,135.70 2047730 03/08/17 00121 SAN DIEGO GAS & ELECTRIC 022717 02/27/17 UTILITY EXPENSES (MONTHLY) 2047763 03/15/17 00121 SAN DIEGO GAS & ELECTRIC 030617 03/06/17 21.84 2047729 03/08/17 17846 RON FELLER Ref002476285 03/06/17 UB Refund Cst #0000013617 20.71 20.71 58.85 58.85 2047640 02/22/17 17838 RODERICK SEWELL Ref002475950 02/21/17 UB Refund Cst #0000231490 21.84 EXPENSE REIMBURSEMENT (FEB 2017)22.00 22.00 2047639 02/22/17 04542 ROBAK, MARK 110316123116 02/16/17 MILEAGE REIMBURSEMENT (11/3/16-12/31/16) 2047728 03/08/17 04542 ROBAK, MARK 020117022817a 03/03/17 150.00 2047727 03/08/17 04542 ROBAK, MARK 020117022817 03/03/17 MILEAGE REIMBURSEMENT (FEB 2017)108.61 108.61 348.52 348.52 2047726 03/08/17 03741 RIVAS, JUAN 02262017 03/02/17 SAFETY BOOTS 150.00 WELDING 12" CCP MAIN (1/31/17)1,304.06 1,304.06 2047638 02/22/17 17826 RITA CORSI Ref002475937 02/21/17 UB Refund Cst #0000058185 2047691 03/01/17 00521 RICK POST WELD & WET TAPPING 11385 02/07/17 450.00 2047803 03/22/17 17910 RICHARD ALVAREZ Ref002477775 03/20/17 UB Refund Cst #0000225406 74.48 74.48 150.00 150.00 2047802 03/22/17 17919 REVOLVE COMMERCIAL LAUNDRY Ref002477784 03/20/17 UB Refund Cst #0000233044 450.00 UB Refund Cst #0000231367 73.27 73.27 2047725 03/08/17 02925 RAHDERS, DOUGLAS 02272017 03/02/17 SAFETY BOOTS 2047724 03/08/17 17854 RADZUKI INVESTMENTS LLC Ref002476293 03/06/17 200,087.10 2047690 03/01/17 01409 PUMP CHECK 6739 02/03/17 PUMP EFFICIENCY TESTING 7,150.00 7,150.00 204,654.42 204,654.42 2047762 03/15/17 00078 PUBLIC EMPLOYEES RET SYSTEM Ben2476654 03/09/17 BI-WEEKLY PERS CONTRIBUTION 200,087.10 DESIGN SERVICES (ENDING 1/25/17)24,886.06 24,886.06 2047689 03/01/17 00078 PUBLIC EMPLOYEES RET SYSTEM Ben2475967 02/23/17 BI-WEEKLY PERS CONTRIBUTION 2047688 03/01/17 03613 PSOMAS 126380R 01/25/17 2,464.08 2047761 03/15/17 03613 PSOMAS 127263R 02/24/17 AS-NEEDED DESIGN (12/30/16-2/2/17)175.00 175.00 1,025.50 1,025.50 2047637 02/22/17 07161 POULIN, WILLIAM 050717051017 02/15/17 TRAVEL EXPENSE REIMB (5/7/17-5/10/17)2,464.08 2047687 03/01/17 06419 PLANT SOUP INC 1110 01/05/17 PROFESSIONAL WRITING SERVICES Page 7 of 10 Check Total Amount CHECK REGISTER Otay Water District Date Range: 2/16/2017 - 3/22/2017 Check #Date Vendor Vendor Name Invoice Inv. Date Description 20,100.44 140.70 150.00 150.00 2047697 03/01/17 14251 THORNTON, ZACHARY 022217 02/23/17 SAFETY BOOTS 140.70 UB Refund Cst #0000225382 46.47 46.47 2047733 03/08/17 02498 THOMPSON, CHAD 030517 03/06/17 SAFETY BOOTS 2047815 03/22/17 17909 THOMAS GRAPENTINE Ref002477774 03/20/17 184.61 2047814 03/22/17 15807 THE WATCHLIGHT CORPORATION 509550 02/15/17 ALARM MONITORING (MAR 2017)1,568.92 1,568.92 184.61 184.61 2047813 03/22/17 15926 TEXAS CHILD SUPPORT UNIT Ben2477828 03/23/17 BI-WEEKLY PAYROLL DEDUCTION 184.61 BI-WEEKLY PAYROLL DEDUCTION 184.61 184.61 2047732 03/08/17 15926 TEXAS CHILD SUPPORT UNIT Ben2476666 03/09/17 BI-WEEKLY PAYROLL DEDUCTION 2047647 02/22/17 15926 TEXAS CHILD SUPPORT UNIT Ben2475977 02/23/17 4,780.00 2047646 02/22/17 17839 TALAN CLOWNEY Ref002475951 02/21/17 UB Refund Cst #0000232887 155.89 155.89 150.00 150.00 2047764 03/15/17 17704 T&T JANITORIAL INC 20113681 01/31/17 JANITORIAL SERVICES (JAN 2017)4,780.00 CONSULTANT SERVICES 2,500.00 2,500.00 2047812 03/22/17 14576 SWIATKOWSKI, KEITH 030417 03/16/17 SAFETY BOOTS 433758 02/02/17 RED DYE DIESEL 4,758.30 2047811 03/22/17 16610 SVPR COMMUNICATIONS 1153 02/01/17 UNLEADED FUEL 9,401.08 433854 02/06/17 DIESEL FUEL 5,941.06 2047696 03/01/17 10339 SUPREME OIL COMPANY 433771 02/02/17 5,098.86 2047645 02/22/17 15974 SUN LIFE FINANCIAL Ben2475963 02/23/17 MONTHLY CONTRIBUTION TO LTD 5,098.86 5,098.86 60.00 60.00 2047810 03/22/17 15974 SUN LIFE FINANCIAL Ben2477812 03/23/17 MONTHLY CONTRIBUTION TO LTD 5,098.86 ANNUAL FEES #3790034 (7/1/15-6/30/16)1,255.80 1,255.80 2047695 03/01/17 05755 STATE WATER RESOURCES 30119022317 02/23/17 CERTIFICATION RENEWAL 2047694 03/01/17 01460 STATE WATER RESOURCES RW1008151 12/12/16 115.00 2047693 03/01/17 00274 STATE OF CALIFORNIA 83269022317 02/23/17 LICENSE RENEWAL 115.00 115.00 225.00 225.00 2047644 02/22/17 00274 STATE OF CALIFORNIA 8205020917 02/09/17 LICENSE RENEWAL 115.00 PROPERTY DEDUCTIBLE 5,000.00 5,000.00 2047809 03/22/17 17538 SSC SURGICAL SPECIALTIES CORP Ref002477767 03/20/17 UB Refund Cst #0000216869 2047808 03/22/17 03516 SPECIAL DISTRICT RISK 0001030917 03/09/17 23.14 2047643 02/22/17 17567 SOUTHLAND PIPE CORP 85725 01/26/17 PIPE FABRICATION & COATING 3,178.44 3,178.44 95.17 95.17 2047807 03/22/17 17907 SOPHIA FARO Ref002477772 03/20/17 UB Refund Cst #0000224986 23.14 UB Refund Cst #0000208996 40.98 40.98 2047806 03/22/17 17901 SHANNON KING Ref002477764 03/20/17 UB Refund Cst #0000206348 2047642 02/22/17 17832 SEAN DAVIS Ref002475943 02/21/17 1,837.89 2047731 03/08/17 17853 SDE ONE LLC Ref002476292 03/06/17 UB Refund Cst #0000230561 1,704.40 1,704.40 2047641 02/22/17 07783 SCRIPPS CENTER FOR EXECUTIVE 28352 01/16/17 EXECUTIVE PHYSICAL 1,837.89 Page 8 of 10 Check Total Amount CHECK REGISTER Otay Water District Date Range: 2/16/2017 - 3/22/2017 Check #Date Vendor Vendor Name Invoice Inv. Date Description 183,323.15 SPARE YSI CONTROLLER02/24/17 2,024.62204776903/15/17 14857 YSI INCORPORATED 678025 106.87 2047821 03/22/17 17893 YOUNG SONG Ref002477756 03/20/17 UB Refund Cst #0000067251 90.00 90.00 12,675.48 12,675.48 2047654 02/22/17 17829 WILLIAM SWITZER Ref002475940 02/21/17 UB Refund Cst #0000154672 106.87 UB Refund Cst #0000215765 120.00 120.00 2047703 03/01/17 00125 WESTERN PUMP INC J005106 10/20/16 RETROFIT FUEL ISLAND 2047820 03/22/17 17833 WENDY THOMAS Ref002477766 03/20/17 127.87 2047653 02/22/17 17833 WENDY THOMAS Ref002475944 02/21/17 UB Refund Cst #0000215765 115.46 115.46 257.33 257.33 2047702 03/01/17 03781 WATTON, MARK 120816013017 02/28/17 MILEAGE REIMBURSEMENT (12/8/16-1/30/17)127.87 HYDRAULIC MODELING (ENDING 1/31/17)595.00 595.00 2047768 03/15/17 03781 WATTON, MARK 020917030317 03/13/17 TRAVEL & MILEAGE REIMB (2/9/17-3/3/17) 2047701 03/01/17 15726 WATER SYSTEMS CONSULTING INC 2395 01/31/17 76.47 2047819 03/22/17 17898 VICTORIA WILLIAMS Ref002477761 03/20/17 UB Refund Cst #0000123237 15.41 15.41 5,924.39 5,924.39 2047818 03/22/17 07451 VICKIE HARTFORD Ref002477753 03/20/17 UB Refund Cst #0000002394 76.47 BI-WEEKLY 401A PLAN 6,524.39 6,524.39 2047817 03/22/17 06414 VANTAGEPOINT TRANSFER AGENTS Ben2477822 03/23/17 BI-WEEKLY 401A PLAN 2047737 03/08/17 06414 VANTAGEPOINT TRANSFER AGENTS Ben2476660 03/09/17 14,642.70 2047652 02/22/17 06414 VANTAGEPOINT TRANSFER AGENTS Ben2475973 02/23/17 BI-WEEKLY 401A PLAN 8,044.40 8,044.40 15,040.39 15,040.39 2047816 03/22/17 01095 VANTAGEPOINT TRANSFER AGENTS Ben2477820 03/23/17 BI-WEEKLY DEFERRED COMP PLAN 14,642.70 BI-WEEKLY DEFERRED COMP PLAN 14,663.58 14,663.58 2047651 02/22/17 01095 VANTAGEPOINT TRANSFER AGENTS Ben2475971 02/23/17 BI-WEEKLY DEFERRED COMP PLAN 2047736 03/08/17 01095 VANTAGEPOINT TRANSFER AGENTS Ben2476658 03/09/17 2047767 03/15/17 06829 US SECURITY ASSOCIATES INC 1626008 02/28/17 PATROLLING SERVICES (FEB 2017)110.00 110.00 2,716.29 2047735 03/08/17 07674 US BANK CC20170222091 02/22/17 CAL CARD EXPENSES (MONTHLY)183,323.15 6,000.00 6,000.00 2047766 03/15/17 07674 US BANK CC20170222146 02/22/17 CAL CARD EXPENSES (MONTHLY)2,716.29 UNDERGROUND ALERTS (MONTHLY)330.00 330.00 2047765 03/15/17 00350 UNITED STATES POSTAL SERVICE 3951031317 03/13/17 PREPAID POSTAGE MACHINE 2047700 03/01/17 00427 UNDERGROUND SERVICE ALERT OF 120170491 02/01/17 30.91 2047699 03/01/17 17586 UNDERGROUND PIPELINE SOLUTIONS 101312017 01/31/17 LA PRESA AIR-VAC RELOCATIONS (ENDING 1/31/17)4,275.00 4,275.00 25.09 25.09 2047650 02/22/17 17830 TYLER LARSON Ref002475941 02/21/17 UB Refund Cst #0000204489 30.91 RSD SEWER REHAB (ENDING 1/31/17)49,893.55 49,893.55 2047649 02/22/17 17836 TREVOR SPARKS Ref002475947 02/21/17 UB Refund Cst #0000224119 2047698 03/01/17 17000 TRANSTAR PIPELINE INC 1001312017 02/02/17 2047648 02/22/17 17824 TONYA STEWART 3239121717 02/16/17 CUSTOMER REFUND 266.22 266.22 Page 9 of 10 Check Total Amount CHECK REGISTER Otay Water District Date Range: 2/16/2017 - 3/22/2017 Check #Date Vendor Vendor Name Invoice Inv. Date Description 3,577.52 UB Refund Cst #0000069425 72.00 72.00 Amount Pd Total:1,616,838.55 Check Grand Total:1,616,838.55 2047822 03/22/17 17894 YVETTE ARAIZA Ref002477757 03/20/17 677930 02/23/17 YSI D.O. PROBE 1,552.90 Page 10 of 10 Check Total 5,963.40 1,296.60 14,840.00 36,010.11 2047872 04/05/17 17922 ASTON CARTER INC TS00165214 03/30/17 TEMPORARY SERVICES (3/13/17-3/17/17)1,964.80 1,964.80 8,499.38 8,499.38 LEGAL SERVICES (FEB 2017)50,528.85 50,528.85 2047998 04/19/17 00108 ASSOCIATION OF CALIFORNIA 4012017 04/14/17 MEMBERSHIP DUES 03/03/17 SENSUS OMNI METERS 3,475.84 3,475.84 2047914 04/12/17 17264 ARTIANO SHINOFF 215444 03/30/17 23,685.80 0064634IN 03/22/17 INVENTORY 12,324.31 2047829 03/29/17 03492 AQUA-METRIC SALES COMPANY 0064409IN EAP AGREEMENT (APR-JUNE 2017)923.22 923.22 2047913 04/12/17 03492 AQUA-METRIC SALES COMPANY 0064633IN 03/22/17 SENSUS OMNI METERS 2047871 04/05/17 08967 ANTHEM EAP 55960 03/31/17 CM201722 03/07/17 MGMT/INSP (2/1/17-2/28/17)1,360.00 CM201723 03/07/17 MGMT/INSP (2/1/17-2/28/17)220.00 CM201720 03/07/17 MGMT/INSP (2/1/17-2/28/17)3,150.00 CM201721 03/07/17 MGMT/INSP (2/1/17-2/28/17)3,150.00 MGMT/INSP (2/1/17-2/28/17)3,600.00 CM201718 03/07/17 MGMT/INSP (2/1/17-2/28/17)3,360.00 2047828 03/29/17 14462 ALYSON CONSULTING CM201719 03/07/17 2047997 04/19/17 17980 ALFREDO RIPA Ref002479552 04/18/17 UB Refund Cst #0000225660 61.13 UB Refund Cst #0000231654 54.87 54.87 61.13 2047996 04/19/17 17982 AJA STALLWORTH Ref002479554 04/18/17 61.32 2047827 03/29/17 15024 AIRX UTILITY SURVEYORS INC 1403062017 03/06/17 UTILITY LOCATING SERVICES (2/1/17-2/28/17)13,132.50 13,132.50 23,112.36 23,112.36 2047826 03/29/17 13753 AIRGAS USA LLC 9943396694 02/28/17 BREATHING AIR BOTTLES 61.32 DISINFECTION SYSTEM (ENDING 2/24/17)2,329.28 2,329.28 2047825 03/29/17 11462 AEGIS ENGINEERING MGMT INC 1421 02/28/17 DEVELOPER PLAN REVIEW (1/7/17-2/17/17) 2047912 04/12/17 12174 AECOM TECHNICAL SERVICES INC 47 03/03/17 2047911 04/12/17 14479 ADVANCED CALIBRATION DESIGNS 28731 03/15/17 CALIBRATION OF GENERATOR 619.00 619.00 79.84 79.84 SHAREPOINT SERVICES (3/8/17-3/22/17)1,200.00 1,200.00 2047995 04/19/17 17971 ADELA GARAICOA Ref002479543 04/18/17 UB Refund Cst #0000006664 2047910 04/12/17 08488 ABLEFORCE INC 7432 04/06/17 SODIUM HYPOCHLORITE 832.71 1002015 03/02/17 SODIUM HYPOCHLORITE 463.89 2047824 03/29/17 01910 ABCANA INDUSTRIES INC 1002302 03/09/17 1002971 03/23/17 SODIUM HYPOCHLORITE 671.35 1002632 03/16/17 SODIUM HYPOCHLORITE 627.17 2,868.85 1002634 03/16/17 SODIUM HYPOCHLORITE 1,075.70 1002633 03/16/17 SODIUM HYPOCHLORITE 720.33 2047909 04/12/17 01910 ABCANA INDUSTRIES INC 1002970 03/23/17 SODIUM HYPOCHLORITE 13,350.00 2047994 04/19/17 17984 AARON BURRUSS Ref002479556 04/18/17 UB Refund Cst #0000232965 1,626.09 1,626.09 Amount 2047823 03/29/17 15876 1903 SOLUTIONS LLC OWD170214ZB 02/28/17 SOFTWARE LICENSE 13,350.00 CHECK REGISTER Otay Water District Date Range: 3/23/2017 - 4/19/2017 Check #Date Vendor Vendor Name Invoice Inv. Date Description Page 1 of 9 Check Total Amount CHECK REGISTER Otay Water District Date Range: 3/23/2017 - 4/19/2017 Check #Date Vendor Vendor Name Invoice Inv. Date Description 3,536.64 3,615.00 1,972.98 315.67 598.90 631.66 4,593.23 778.00 2,363.00 89222 02/28/17 BACTERIOLOGICAL TESTING (2/22/17)226.00 89220 02/28/17 BACTERIOLOGICAL TESTING (2/13/17)206.00 89221 02/28/17 BACTERIOLOGICAL TESTING (2/14/17-2/15/17)414.00 89219 02/28/17 BACTERIOLOGICAL TESTING & (2/9/17)303.00 BACTERIOLOGICAL TESTING (2/1/17)681.00 89218 02/28/17 BACTERIOLOGICAL TESTING (2/8/17-2/11/17)533.00 2047836 03/29/17 04119 CLARKSON LAB & SUPPLY INC 89217 02/28/17 778.00204800204/19/17 00234 CITY TREASURER 1000194347 04/06/17 LABORATORY ANALYSIS (MAR 2017)778.00 AD&D & SUPP LIFE INS (APR 2017)4,593.23 4,593.23 AR046982 03/01/17 GARDEN TOURS (2/8/17)199.88 2048001 04/19/17 15256 CIGNA GROUP INSURANCE / LINA 9267041017 04/17/17 GARDEN TOURS (2/7/17)227.29 AR046928 03/01/17 GARDEN TOURS (1/31/17)204.49 AR047087 03/22/17 GARDEN TOURS (2/1/17)216.55 2047835 03/29/17 02026 CHULA VISTA ELEM SCHOOL DIST AR046981 03/08/17 295,773.00 295,773.00 2047918 04/12/17 02026 CHULA VISTA ELEM SCHOOL DIST AR047086 03/22/17 GARDEN TOURS (2/15 & 22/17)382.35 COLOCATION SERVICES 2,068.25 2,068.25 2047834 03/29/17 17466 CHARLES KING COMPANY 401312017 01/31/17 14-INCH FORCE MAIN (ENDING 1/31/17) 2047917 04/12/17 17022 CASTLE ACCESS INC 0223093671 04/01/17 03/06/17 SCANNING SERVICES (3/3/17)238.67 8137 03/10/17 DESTRUCTION SERVICES (3/9/17)77.00 1,505.86 032317 03/23/17 TRAVEL ADVANCEMENT 467.12 2047833 03/29/17 02758 CARMEL BUSINESS SYSTEMS INC 8136 UB Refund Cst #0000231315 15.53 15.53 2047832 03/29/17 15447 CANNON, LARRY 03222017 03/22/17 TUITION REIMBURSEMENT 2048000 04/19/17 17981 CALM MEADOWS IN Ref002479553 04/18/17 04/03/17 UB Refund Cst #0000230584 1,796.32 1,796.32 3,195.00 75400506 02/28/17 ELECTRICAL SERVICES (ENDING 1/31/17)420.00 2047875 04/05/17 17957 BYCOR GENERAL CONTRACTORS Ref002479384 LEGISLATIVE ADVOCACY (FEB 2017)2,892.50 2,892.50 2047831 03/29/17 14112 BSE ENGINEERING INC 75400410 02/28/17 ELECTRICAL SERVICES (ENDING 1/31/17) 2047916 04/12/17 08156 BROWNSTEIN HYATT FARBER 672781 03/28/17 355.87 2047874 04/05/17 17958 BRIAN RICHARD Ref002479385 04/03/17 UB Refund Cst #0000232496 26.53 26.53 115.07 115.07 2047830 03/29/17 17613 BIENVENUE, DONALD 03282017DB 03/28/17 TUITION REIMBURSEMENT 355.87 CUSTOMER REFUND 3,668.41 3,668.41 2047873 04/05/17 17952 BENITO ZALES Ref002479379 04/03/17 UB Refund Cst #0000206314 2047915 04/12/17 17964 AUDAY SHAMOON 1113040717 04/07/17 TEMPORARY SERVICES (3/20/17-3/24/17)1,964.80 TS00167512 04/13/17 TEMPORARY SERVICES (3/27/17-3/30/17)1,571.84 2047999 04/19/17 17922 ASTON CARTER INC TS00166362 04/06/17 2047872 04/05/17 17922 ASTON CARTER INC TS00165214 03/30/17 TEMPORARY SERVICES (3/13/17-3/17/17)1,964.80 1,964.80 Page 2 of 9 Check Total Amount CHECK REGISTER Otay Water District Date Range: 3/23/2017 - 4/19/2017 Check #Date Vendor Vendor Name Invoice Inv. Date Description 29,972.00 15,372.88 284.00 936.18 6,240.99 15.2615.26204800404/19/17 17976 ELSA LOPEZ Ref002479548 04/18/17 UB Refund Cst #0000223507 15.26 59.05 CUSTOMER REFUND 3,147.21 3,147.21204784103/29/17 17925 ELIZABETH JENNINGS 6219032717 03/27/17 29.48 29.48 2047881 04/05/17 17956 DW CONSTRUCTION Ref002479383 04/03/17 UB Refund Cst #0000229359 59.05 FAILURE ANALYSIS 4,200.00 4,200.00 2047880 04/05/17 17951 DENISE BARAHURA Ref002479378 04/03/17 UB Refund Cst #0000175007 2047922 04/12/17 16167 DECISIVE TESTING INC 130156 03/24/17 5801032917 03/29/17 TELECOM SVCS / METRO-E (3/28/17-4/27/17)133.74 7001032917 03/29/17 TELECOM SVCS / METRO-E (3/28/17-4/27/17)127.42 2401032917 03/29/17 TELECOM SVCS / METRO-E (3/28/17-4/27/17)133.74 0301032917 03/29/17 TELECOM SVCS / METRO-E (3/28/17-4/27/17)133.74 5,444.87 9601032517 03/25/17 TELECOM SVCS / METRO-E (3/25/17-4/24/17)133.74 6101033017 03/30/17 TELECOM SVCS / METRO-E (3/29/17-4/28/17)133.74 TELECOM SVCS / METRO-E (3/14/17-4/13/17)133.74 133.74 2047879 04/05/17 17770 COX BUSINESS 6702032417 03/24/17 TELECOM SVCS / METRO-E (3/24/17-4/23/17) 6701040717 04/07/17 TELECOM SVCS / METRO-E (4/8/17-5/7/17)133.74 2047840 03/29/17 17770 COX BUSINESS 6701031517 03/15/17 3001040417 04/04/17 TELECOM SVCS / METRO-E (4/3/17-5/2/17)133.74 7601040417 04/04/17 TELECOM SVCS / METRO-E (4/3/17-5/2/17)133.74 8801040417 04/04/17 TELECOM SVCS / METRO-E (4/4/17-5/3/17)133.74 2401040417 04/04/17 TELECOM SVCS / METRO-E (4/3/17-5/2/17)133.74 TELECOM SVCS / METRO-E (4/4/17-5/3/17)133.74 0501040417 04/04/17 TELECOM SVCS / METRO-E (4/3/17-5/2/17)133.74 2048003 04/19/17 17770 COX BUSINESS 9201040417 04/04/17 SHUT DOWN TEST (FEB 2017)142.00 2003193E619700217 03/04/17 SHUT DOWN TEST (FEB 2017)142.00 2047839 03/29/17 00184 COUNTY OF SAN DIEGO 2003193E619890217 03/04/17 5,639.76 2047878 04/05/17 00184 COUNTY OF SAN DIEGO 2818021417 02/14/17 UPFP PERMIT RENEWAL (4/30/17-4/30/18)446.00 446.00 5,187.70 5,187.70 2047921 04/12/17 00099 COUNTY OF SAN DIEGO DPWAROTAYMWD021703/14/17 EXCAVATION PERMITS (FEB 2017)5,639.76 BUSINESS MEETING 25.00 25.00 2047838 03/29/17 00099 COUNTY OF SAN DIEGO DPWAROTAYMWD011702/15/17 EXCAVATION PERMITS (JAN 2017) 2047877 04/05/17 02612 COUNCIL OF WATER UTILITIES 032117 03/30/17 PATZIG TANKS 14,413.90 C2017068 02/21/17 BALL VALVES 958.98 2053 03/23/17 METER REPLACEMENT 5,860.00 2047920 04/12/17 02643 CORE-ROSION PRODUCTS C2017105 03/17/17 19,856.00 19,856.00 2047837 03/29/17 17923 CONCORD UTILITY SERVICES 2057 03/24/17 METER REPLACEMENT 24,112.00 INTERNET CIRCUITS (FEB & APR 2017)2,666.00 2,666.00 2047876 04/05/17 17923 CONCORD UTILITY SERVICES 2062 03/31/17 METER REPLACEMENT 2047919 04/12/17 15616 COGENT COMMUNICATIONS INC 0002040117 04/01/17 Page 3 of 9 Check Total Amount CHECK REGISTER Otay Water District Date Range: 3/23/2017 - 4/19/2017 Check #Date Vendor Vendor Name Invoice Inv. Date Description 550.00 600.00 1,040.00 16,028.71 5,796.95 168.48 168.48 100.00 100.00 PLC MODULES 5,387.33 5,387.33204792704/12/17 10817 GEXPRO S116313140001 03/17/17 110.21 2047847 03/29/17 17855 GASTELUM, HECTOR 120716013117 03/22/17 EXPENSE REIMBURSEMENT (12/7/16-1/31/17)45.00 45.00 2,880.16 2,880.16 2047885 04/05/17 17855 GASTELUM, HECTOR 010117022817 03/23/17 MILEAGE REIMBURSEMENT (1/16/17-2/23/17)110.21 GARDEN TOURS (FEB 2017)5,320.00 5,320.00 2047926 04/12/17 03094 FULLCOURT PRESS 31354 02/21/17 PIPELINE NEWSLETTER 2047846 03/29/17 13563 FRIENDS OF THE WATER 368 02/28/17 100.00 100.00 BI-WEEKLY PAYROLL DEDUCTION 100.00 100.00 2048007 04/19/17 02344 FRANCHISE TAX BOARD Ben2479588 04/20/17 BI-WEEKLY PAYROLL DEDUCTION 2047884 04/05/17 02344 FRANCHISE TAX BOARD Ben2479432 04/06/17 100.00 2048006 04/19/17 01612 FRANCHISE TAX BOARD Ben2479586 04/20/17 BI-WEEKLY PAYROLL DEDUCTION 100.00 100.00 2047883 04/05/17 01612 FRANCHISE TAX BOARD Ben2479430 04/06/17 BI-WEEKLY PAYROLL DEDUCTION 100.00 VEHICLE WASHING (3/24/17)101.09 x994216 03/17/17 VEHICLE WASHING (3/17/17)67.39 x983696 03/03/17 VEHICLE WASHING (3/3/17)60.65 2047925 04/12/17 11962 FLEETWASH INC x1000393 03/24/17 662.55 662.55 2047845 03/29/17 11962 FLEETWASH INC x989352 03/10/17 VEHICLE WASHING (3/10/17)107.83 ONLINE DOCUMENTS (MONTHLY)99.00 99.00 2047924 04/12/17 16469 FIRST CHOICE SERVICES 077877 03/20/17 COFFEE SERVICES 2047844 03/29/17 12187 FIRST AMERICAN DATA TREE LLC 9003400217 02/28/17 INVENTORY 4,353.10 0586333 03/16/17 INVENTORY 1,443.85 0587016 03/10/17 6 INCH VICTAULIC VALVES 2,006.31 2047923 04/12/17 03546 FERGUSON WATERWORKS # 1083 0586335 03/14/17 INVENTORY 11,588.43 05853371 03/06/17 INVENTORY 2,433.97 2047843 03/29/17 03546 FERGUSON WATERWORKS # 1083 0585337 02/28/17 L0315517 04/12/17 LEAD ANALYSIS (4/6/17)200.00 L0314261 04/05/17 LEAD ANALYSIS (3/28/17)200.00 L0314263 04/05/17 LEAD ANALYSIS (3/30/17)200.00 OUTSIDE LAB SERVICES (3/20/17)240.00 L0314260 04/05/17 LEAD ANALYSIS (3/29/17)200.00 L0312687 03/28/17 LEAD ANALYSIS (3/22/17)200.00 2048005 04/19/17 14320 EUROFINS EATON ANALYTICAL INC L0313796 04/04/17 LEAD ANALYSIS (3/23/17)200.00 L0312686 03/28/17 LEAD ANALYSIS (3/21/17)200.00 7021177 02/28/17 LAB ANALYSIS (2/21/17)85.00 2047882 04/05/17 14320 EUROFINS EATON ANALYTICAL INC L0312689 03/28/17 15.26 2047842 03/29/17 03227 ENVIROMATRIX ANALYTICAL INC 7030560 03/06/17 LAB ANALYSIS (2/18/17-2/24/17)465.00 2048004 04/19/17 17976 ELSA LOPEZ Ref002479548 04/18/17 UB Refund Cst #0000223507 15.26 Page 4 of 9 Check Total Amount CHECK REGISTER Otay Water District Date Range: 3/23/2017 - 4/19/2017 Check #Date Vendor Vendor Name Invoice Inv. Date Description 2,740.79 31,817.61 445,780.14 8,566.75 11,624.66 1,774.04 11,888.13 17,018.53 3,825.00 2047889 04/05/17 17950 JOSE FERRARA Ref002479377 04/03/17 UB Refund Cst #0000141986 21.27 21.27 387.51 387.51 2047931 04/12/17 17926 JB TELCO SERVICES 20174 03/24/17 TELECOMMUNICATIONS ANALYSIS 3,825.00 ANTENNA SUBLEASE (APR 2017)1,593.00 1,593.00 2047888 04/05/17 17927 JASON AND KELLIE SCHNEIDER MTR16149033017 03/30/17 METER REFUND 2047887 04/05/17 17106 IWG TOWERS ASSETS II LLC 388957 04/01/17 11,285.30 117814 02/28/17 BILL PRINTING SERVICES (FEB 2017)3,645.75 118029 03/02/17 BILL PRINTING SERVICES (FEB 2017)2,087.48 SCANNING DEVICE / AMR REGISTERS 4,499.65 4,499.65 2047854 03/29/17 08969 INFOSEND INC 117815 02/28/17 BILL PRINTING SERVICES (FEB 2017) 0120423 02/16/17 ENVIRONMENTAL SERVICES (1/1/17-1/27/17)518.09 2047853 03/29/17 17924 INFORMATICS HOLDINGS INC 521701349 01/25/17 5,780.00 0120424 02/16/17 ENVIRONMENTAL SERVICES (1/1/17-1/27/17)3,970.02 0120419 02/16/17 ENVIRONMENTAL SERVICES (1/1/17-1/27/17)1,620.02 LAND SURVEYING (2/1/17-2/28/17)7,352.00 7,352.00 2047886 04/05/17 15622 ICF JONES & STOKES INC 0120417 02/16/17 ENVIRONMENTAL SERVICES (1/1/17-1/27/17) 2047852 03/29/17 13349 HUNSAKER & ASSOCIATES 2017010007 03/10/17 2048011 04/19/17 17983 HPS MECHANICAL INC Ref002479555 04/18/17 UB Refund Cst #0000232479 1,774.04 1,774.04 34,632.04 34,632.04 BOND REFUND / PERFORMANCE BOND 75%120,027.79 120,027.79 ENGINE DRIVEN PUMP204785103/29/17 04209 HIDDEN VALLEY PUMP 000328750000 02/28/17 2047850 03/29/17 17796 HENDERSON HOSPITALITY GROUP 0917032717 03/27/17 27 02/17/17 ENVIRONMENTAL SERVICES (1/1/17-1/31/17)3,598.96 2048010 04/19/17 02008 HELIX ENVIRONMNTL PLANNING INC 28 02/28/17 ENVIRONMENTAL SERVICES (2/1/17-2/28/17)8,025.70 CORROSION SERVICES(8/21/16-3/4/17)8,566.75 8,566.75 G916076 03/21/17 MASTER METER ALLEGRO 807.64 2048009 04/19/17 10973 HDR ENGINEERING INC 25 03/15/17 G695460 03/23/17 MASTER METER ALLEGRO 5,656.88 G897242 03/16/17 INVENTORY 2,807.97 G900617 03/21/17 MASTER METER ALLEGRO 48,694.92 G830035 03/21/17 MASTER METER ALLEGRO 18,655.09 31,817.61 2047930 04/12/17 06640 HD SUPPLY WATERWORKS LTD G920717 03/21/17 MASTER METER ALLEGRO 369,157.64 2048008 04/19/17 00169 HAWTHORNE POWER SYSTEMS PS000791267 02/11/17 REMANUFACTURED ENGINE-LOPS 31,817.61 HACH APA6000 1,610.45 1,610.45 10374340 03/21/17 HACH APA6000 1,348.00 2047849 03/29/17 00174 HACH COMPANY 10358977 03/10/17 8,909.50 2047929 04/12/17 00174 HACH COMPANY 10374347 03/21/17 HACH APA6000 1,392.79 5,641.52 5,641.52 2047928 04/12/17 12907 GREENRIDGE LANDSCAPE INC 15289 02/28/17 LANDSCAPING SERVICES (FEB 2017)8,909.50 2047848 03/29/17 10817 GEXPRO S116085912001 03/10/17 PLC PARTS Page 5 of 9 Check Total Amount CHECK REGISTER Otay Water District Date Range: 3/23/2017 - 4/19/2017 Check #Date Vendor Vendor Name Invoice Inv. Date Description 79.44 19.6612,605.05 7,750.00 13,849.20 159.00 1,039.61 1,010.81 1,738.65204793804/12/17 03613 PSOMAS 127540R 02/27/17 DESIGN SERVICES (ENDING 2/2/17)32,349.68 32,349.68 1,738.65 1,738.65 MEAL ADVANCEMENT 146.00 146.00 UB Refund Cst #0000224714204802004/19/17 17977 PRAVA CONSTRUCTION SERVICES Ref002479549 04/18/17 2047937 04/12/17 07161 POULIN, WILLIAM BP041217 04/12/17 1,010.81 85.00 85.00 2048019 04/19/17 03351 POSADA, ROD 041017041317 04/17/17 TRAVEL EXPENSE REIMB (4/10/17-4/13/17)1,010.81 OUTSIDE SERVICES 210.00 210.00 2047936 04/12/17 15081 PINOMAKI DESIGN 5505 03/16/17 OUTSIDE SERVICES 2047858 03/29/17 15081 PINOMAKI DESIGN 5495 03/01/17 2047857 03/29/17 15948 PICA PIPELINE INSPECTION AND 165 02/28/17 INSP/CONDITION ASSESSMENT (3/1/15-2/28/17)97,800.00 97,800.00 1,039.61 1,039.61 UB Refund Cst #0000059889 86.29 86.29 PETTY CASH REIMBURSEMENT204801804/19/17 00137 PETTY CASH CUSTODIAN 041817 04/18/17 2047896 04/05/17 17949 PEDRO BERNAL MATEUS Ref002479376 04/03/17 CUSTOMER REFUND 159.00 159.00204801704/19/17 17968 PAUL SUKATSKI 4559041417 04/14/17 1,567.76 2047935 04/12/17 01002 PACIFIC PIPELINE SUPPLY INC 312871 03/15/17 INVENTORY 9,387.18 9,387.18 2047895 04/05/17 17954 OLYMPIC TRAINING CENTER Ref002479381 04/03/17 UB Refund Cst #0000224528 1,567.76 13,849.20 2048016 04/19/17 16255 NATIONWIDE RETIREMENT Ben2479576 04/20/17 BI-WEEKLY DEFERRED COMP PLAN 13,849.20 13,849.20 218.75 218.75 2047894 04/05/17 16255 NATIONWIDE RETIREMENT Ben2479420 04/06/17 BI-WEEKLY DEFERRED COMP PLAN 13,849.20 870-2 PS INSPECTION SVCS (ENDING 2/26/17)9,775.00 9,775.00 2047934 04/12/17 16613 MISSION RESOURCE CONSERVATION 375 04/04/17 HOME WATER USE EVAL (MAR 2017) 2047856 03/29/17 16608 MICHAEL BAKER INT'L INC 971463 03/09/17 3,521.44 2047933 04/12/17 17965 MGP IX REIT LLC 0611040517 04/07/17 CUSTOMER REFUND 6,873.97 6,873.97 39,376.48 39,376.48 2047932 04/12/17 15921 MATCHPOINT INC 253 03/16/17 LEAK DETECTION SERVICES (MAR 2017)3,521.44 TRAVEL EXPENSE REIMB (2/6/17-2/9/17)1,324.33 1,324.33 2047855 03/29/17 15921 MATCHPOINT INC 247 02/28/17 LEAK DETECTION SERVICES (THRU 2/28/17) 2047893 04/05/17 07591 MA, DONGXING 020617020917 03/30/17 7,750.00 2047892 04/05/17 17955 LONNIE RICHARDSON Ref002479382 04/03/17 UB Refund Cst #0000226203 33.77 33.77 2048015 04/19/17 17969 LONDON MOEDER ADVISORS 1313 02/21/17 ECONOMIC REPORT 7,750.00 12,605.05 ECONOMIC REPORT 9,250.00 9,250.00 ASPHALTIC CONCRETE PAVING 12,605.05 2047891 04/05/17 13749 LONDON GROUP REALTY ADVISORS 1332 04/03/17 2048014 04/19/17 05840 KIRK PAVING INC 6437 03/16/17 30.91 UB Refund Cst #0000058900 19.66 19.66204801304/19/17 17973 KENNETH WALLS Ref002479545 04/18/17 2047890 04/05/17 17948 JOYCE SMITH Ref002479375 04/03/17 UB Refund Cst #0000050382 30.91 UB Refund Cst #0000198689 79.44 79.44204801204/19/17 17975 JOSHUA MAJOR Ref002479547 04/18/17 2047889 04/05/17 17950 JOSE FERRARA Ref002479377 04/03/17 UB Refund Cst #0000141986 21.27 21.27 Page 6 of 9 Check Total Amount CHECK REGISTER Otay Water District Date Range: 3/23/2017 - 4/19/2017 Check #Date Vendor Vendor Name Invoice Inv. Date Description 157.0060.95 39.22 1,225.50 3,341.00 4,672.81 89,625.55 85,021.07 38,363.95 21.04 150.00 30.00 SPONSORSHIP 50.00 50.00204802804/19/17 10975 SPRING VALLEY COMMUNITY CENTER 4292017 04/14/17 18.19 2047864 03/29/17 16229 SMITH, TIMOTHY 010117013117 01/30/17 EXPENSE REIMBURSEMENT (JAN 2017)30.00 2047900 04/05/17 16229 SMITH, TIMOTHY 010117013117a 03/23/17 MILEAGE REIMBURSEMENT (JAN 2017)18.19 21.04 SAFETY BOOTS 150.00 150.00204802704/19/17 02660 SILVA, GABRIEL 041317 04/17/17 2048026 04/19/17 17979 SCOTT SAMS Ref002479551 04/18/17 UB Refund Cst #0000225347 21.04 REGIONAL IMAGERY PROJECT 35,000.00 35,000.00204794304/12/17 17840 SANGIS / COUNTY OF SAN DIEGO SAN558 02/17/17 UTILITY EXPENSES (MONTHLY)25,280.93 022317 02/23/17 UTILITY EXPENSES (MONTHLY)13,083.02 032317 03/23/17 UTILITY EXPENSES (MONTHLY)641.17 2047863 03/29/17 00121 SAN DIEGO GAS & ELECTRIC 032117 03/21/17 UTILITY EXPENSES (MONTHLY)59,380.75 032717 03/27/17 UTILITY EXPENSES (MONTHLY)24,999.15 032617 03/26/17 UTILITY EXPENSES (MONTHLY)24,967.02 2047899 04/05/17 00121 SAN DIEGO GAS & ELECTRIC 032817 03/28/17 4,672.81 2047942 04/12/17 00121 SAN DIEGO GAS & ELECTRIC 040417 04/04/17 UTILITY EXPENSES (MONTHLY)64,658.53 2048025 04/19/17 00121 SAN DIEGO GAS & ELECTRIC 040317 04/03/17 UTILITY EXPENSES (MONTHLY)4,672.81 MWD SCWS - HEWS (FEB 2017)1,850.00 1,850.00204794104/12/17 00003 SAN DIEGO COUNTY WATER AUTH 0000001521 03/14/17 125.00 2047898 04/05/17 00003 SAN DIEGO COUNTY WATER AUTH 0000001517 03/03/17 MWD SCWS - HEWS (JAN 2017)150.00 150.00 16.05 16.05 2047862 03/29/17 02586 SAN DIEGO COUNTY ASSESSOR 201700136 03/02/17 ASSESSOR DATA (2/9/17)125.00 MILEAGE REIMBURSEMENT (JAN 2017)85.07 85.07 2047897 04/05/17 17953 ROBERT ATIENZK Ref002479380 04/03/17 UB Refund Cst #0000221592 0053840 03/21/17 DESIGN SERVICES (1/28/17-2/24/17)1,130.00 2047861 03/29/17 04542 ROBAK, MARK 010117013117 03/13/17 797.71 2047940 04/12/17 08972 RICK ENGINEERING COMPANY 0053751 03/21/17 CAMPO RD SUPPORT SVCS (1/28/17-2/24/17)2,211.00 2047860 03/29/17 08972 RICK ENGINEERING COMPANY 0053451 03/02/17 CAMPO RD SUPPORT SVCS (1/1/17-1/27/17)797.71 PREP OF SUBAREA PLAN (12/1/16-1/31/17)1,225.50 1,225.50204802404/19/17 01890 RECON 55411 03/20/17 2048023 04/19/17 17972 RANDY LINDSEY Ref002479544 04/18/17 UB Refund Cst #0000056826 39.22 39.22 60.95 60.95204802204/19/17 17974 RANDE ROSS Ref002479546 04/18/17 UB Refund Cst #0000121837 157.00 202,166.52 202,166.52 2048021 04/19/17 17616 RAMIREZ, LARRY 041417 04/14/17 REIMBURSE VOL LIFE INS OVERPYMT 157.00 BI-WEEKLY PERS CONTRIBUTION 201,968.10 201,968.10 2047859 03/29/17 00078 PUBLIC EMPLOYEES RET SYSTEM Ben2477816 03/23/17 BI-WEEKLY PERS CONTRIBUTION 2047939 04/12/17 00078 PUBLIC EMPLOYEES RET SYSTEM Ben2479422 04/06/17 2047938 04/12/17 03613 PSOMAS 127540R 02/27/17 DESIGN SERVICES (ENDING 2/2/17)32,349.68 32,349.68 Page 7 of 9 Check Total Amount CHECK REGISTER Otay Water District Date Range: 3/23/2017 - 4/19/2017 Check #Date Vendor Vendor Name Invoice Inv. Date Description 50.001,676.00 80.00 50.93 5,098.86 14,265.55 184.61 49.75 36,211.55 92.59 47,650.00 121,010.50 110.00 14,631.49 3,574.39 61.8261.82 24,405.50 HYDRAULIC MODELING (ENDING 2/27/17)6,200.00 6,200.00204787003/29/17 15726 WATER SYSTEMS CONSULTING INC 2434 02/28/17 61.82 2047946 04/12/17 14879 WATER CONSERVATION GARDEN 1180 03/15/17 GARDEN COSTS (4TH QTR FY 16-17)24,405.50 2048040 04/19/17 17986 VINCENT HOUSEAL Ref002479558 04/18/17 UB Refund Cst #0000054178 2047945 04/12/17 17961 VESTAR CALIFORNIA XVII LLC 121916 04/06/17 EASEMENT ACQUISITION 190,000.00 190,000.00 3,574.39 3,574.39 BI-WEEKLY 401A PLAN 4,274.39 4,274.39 2048039 04/19/17 06414 VANTAGEPOINT TRANSFER AGENTS Ben2479584 04/20/17 BI-WEEKLY 401A PLAN 2047906 04/05/17 06414 VANTAGEPOINT TRANSFER AGENTS Ben2479428 04/06/17 14,631.49 14,644.64 14,644.64 2048038 04/19/17 01095 VANTAGEPOINT TRANSFER AGENTS Ben2479582 04/20/17 BI-WEEKLY DEFERRED COMP PLAN 14,631.49 PATROLLING SERVICES (MAR 2017)110.00 110.00 2047905 04/05/17 01095 VANTAGEPOINT TRANSFER AGENTS Ben2479426 04/06/17 BI-WEEKLY DEFERRED COMP PLAN 2048037 04/19/17 06829 US SECURITY ASSOCIATES INC 1669093 03/31/17 121,010.50 DESIGN SERVICES 2,975.00 2,975.00 CAL CARD EXPENSES (MONTHLY)2047904 04/05/17 07674 US BANK CC20170322072 03/22/17 2047869 03/29/17 16036 UNISOURCE SOLUTIONS INC 641036 02/28/17 47,650.00 2047868 03/29/17 00427 UNDERGROUND SERVICE ALERT OF 220170495 03/01/17 UNDERGROUND ALERTS (MONTHLY)333.00 333.00 2048036 04/19/17 17586 UNDERGROUND PIPELINE SOLUTIONS 303312017 03/27/17 LA PRESA AIR-VAC RELOC (ENDING 3/31/17)47,650.00 LA PRESA AIR-VAC RELOC (ENDING 2/28/17)44,213.76 44,213.76 020117022817 03/12/17 MILEAGE REIMBURSEMENT (FEB 2017)16.59 2047867 03/29/17 17586 UNDERGROUND PIPELINE SOLUTIONS 202282017 03/02/17 2047866 03/29/17 14177 THOMPSON, MITCHELL 020117031017 03/13/17 EXPENSE REIMBURSEMENT (2/1/17-3/10/17)76.00 1,772.92 2048035 04/19/17 15807 THE WATCHLIGHT CORPORATION 510579 02/23/17 SECURITY UPGRADE (1/25/17-2/16/17)36,211.55 36,211.55 2047865 03/29/17 15807 THE WATCHLIGHT CORPORATION 514193 03/15/17 ALARM MONITORING (APR 2017)1,772.92 184.61 UB Refund Cst #0000233132 49.75 49.75204803404/19/17 17985 THE EQUITY COMPANY Ref002479557 04/18/17 2048033 04/19/17 15926 TEXAS CHILD SUPPORT UNIT Ben2479590 04/20/17 BI-WEEKLY PAYROLL DEDUCTION 184.61 BI-WEEKLY PAYROLL DEDUCTION 184.61 184.61 435103 03/14/17 DIESEL FUEL 5,304.12 2047902 04/05/17 15926 TEXAS CHILD SUPPORT UNIT Ben2479434 04/06/17 2047944 04/12/17 10339 SUPREME OIL COMPANY 435102 03/14/17 UNLEADED FUEL 8,961.43 MONTHLY CONTRIBUTION TO LTD 5,098.86 5,098.86204803204/19/17 15974 SUN LIFE FINANCIAL Ben2479574 04/20/17 2048031 04/19/17 17978 STEPHEN ELASAAD Ref002479550 04/18/17 UB Refund Cst #0000224982 50.93 50.93 80.00 80.00204803004/19/17 05755 STATE WATER RESOURCES 40193041717 60.00 60.00 04/17/17 CERTIFICATION RENEWAL ANNUAL PERMIT FEE (4/1/17 - 3/31/18)1,676.00 1,676.00 2047901 04/05/17 05755 STATE WATER RESOURCES 3633033017 03/30/17 CERTIFICATION RENEWAL 2048029 04/19/17 01460 STATE WATER RESOURCES SW0132113 04/05/17 Page 8 of 9 Check Total Amount CHECK REGISTER Otay Water District Date Range: 3/23/2017 - 4/19/2017 Check #Date Vendor Vendor Name Invoice Inv. Date Description 1,436.92 1,436.92 Amount Pd Total:2,821,861.51 Check Grand Total:2,821,861.51 MILEAGE REIMBURSEMENT (3/3/17-3/27/17)117.17 2047908 04/05/17 03151 ZHAO, MING 030617031017 03/29/17 TRAVEL EXPENSE REIMB (3/6/17-3/10/17) 2047907 04/05/17 03781 WATTON, MARK 030317032717 04/03/17 HYDRAULIC MODELING (ENDING 2/27/17)6,200.00 6,200.00 117.17 2047870 03/29/17 15726 WATER SYSTEMS CONSULTING INC 2434 02/28/17 Page 9 of 9