HomeMy WebLinkAboutFY 2018 Comprehensive Annual Financial Report
Otay Water District
Comprehensive Annual Financial Report
for the Fiscal Year Ended June 30, 2018
BOARD OF DIRECTORS
Tim Smith, Division 1 President
Mitch Thompson, Division 2 Vice President
Mark Robak, Division 5 Treasurer
Gary Croucher, Division 3
Hector Gastelum, Division 4
DISTRICT FINANCIAL MANAGEMENT
Mark Watton General Manager
Joseph R. Beachem Chief Financial Officer
Kevin Koeppen Assistant Chief, Finance
PREPARED BY Finance Department
Otay Water District, Spring Valley, California
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Table of Contents
Introductory Section
Letter of Transmittal……………………………………………………………………………………………………………………………………. iii
Organization Chart…………………………………………………………………………………………...………………………………………… xi
List of Principal Officials…………………………………………………………………………………………………...……………………….. xii
GFOA Certificate of Achievement……………………………………………………………………………………………...……………. xii
Financial Section
Independent Auditors’ Report………………………………………………………………………………………………………...………..… 1
Management’s Discussion & Analysis…………………………………………………...…………………………………...………….. 3
Basic Financial Statements:
Statements of Net Position..…………………………………………………………………………………………………………...….….. 13
Statements of Revenues, Expenses, and Changes in Net Position………….…………………………...…… 15
Statements of Cash Flows……………………………………………………………….…………………………………………………...….. 16
Notes to Financial Statements………………………………………………………………………………………………………………... 18
Required Supplementary Information:
Schedule of Changes in the Net OPEB Liability and Related Ratios for Measurement
Periods Ended June 30, ……………………………………………………………………………………………………………………….. 59
Schedule of Contributions for Fiscal Year Ended June 30, ……………………………………………………………. 60
Schedule of Changes in the Net Pension Liability and Related Ratios for Fiscal Year Ended
June 30, …………………………………………………………. ………………………………………………………………………………………... 61
Schedule of Plan Contributions for Fiscal Year Ended June 30, ..…………………………………………………. 62
Statistical Section
Net Position by Component…………………………………………………………………………………………………………………….. 64
Changes in Net Position………………………………………………………………..………………………………………………………….. 65
Operating Revenues by Source…………………………………………………………………………………………….……………….. 66
Operating Expenses by Function………………………………………………………..…………………………………………………. 67
Non-Operating Revenues by Source……………………………………………………………………………………………………. 68
Non-Operating Expenses by Function………………………………………………………………………………………………. 69
Assessed Valuation of Taxable Property within the District…………………………………………………………. 70
Water Purchases, Production, and Sales……………………………………………...………………………….…………………. 71
Meter Sales by Type…………………………………………………………………….……………………………………………………………. 72
Number of Customers by Service Type……………………………………………………………………………………………….. 73
Property Tax Levies and Collections…………………………………………………………………………………………………….. 74
Water Fixed Rates ……….………………………………………………………………………………………………………………………….…. 75
Water Variable Rates…….…………………………………………………………………………………………………………………………... 77
Sewer Variable and Fixed Rates…….………………………………………………………………………..…………………………….. 78
Ten Largest Customers…………………………………………………………………………………………………………………………….. 79
Ratios of Outstanding Debt by Type…………………………………………………….……………………………………………….. 80
Pledged Revenue Coverage……………………………………………………………………………………………………………………. 81
Ratios of General Bonded Debt Outstanding………………………………………………………………….………………..… 82
Computation of Direct and Overlapping Bonded Debt………………………………………………………………… 83
Principal Employers…………………………..……………………………………….......................................................……………….. 85
Demographic and Economic Statistics……………………………………………………………………………………………….. 86
Number of Employees by Function………………………………………………………………………………………………………. 87
Active Meters by Size………………………………………………………………..………………………………………………………………. 88
Operating and Capital Indicators…………………………………………………………………………………………………………... 89
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October 25, 2018
Honorable Board of Directors
Otay Water District
I am pleased to present the Otay Water District’s (the “District”) Comprehensive Annual Financial
Report (CAFR) for the fiscal year ended June 30, 2018.
This report was prepared by the District’s Finance Department following guidelines set forth by the
Government Accounting Standards Board (GASB) and generally accepted accounting principles
(GAAP). Responsibility for the accuracy of the data presented and the completeness and fairness of
the presentation, including all disclosures, rests with the District’s management. The data, as
presented, is accurate in all material respects and is presented in a manner that provides a fair
representation of the financial position and results of the District’s operations. Included are all
disclosures staff believes necessary to enhance your understanding of the financial condition of the
District. GAAP requires that management provide a narrative introduction, overview, and analysis to
accompany the basic financial statements in the form of Management’s Discussion and Analysis
(MD&A), which should be read in conjunction with this report. The District’s MD&A can be found
immediately following the Independent Auditors’ Report.
The District’s financial statements have been audited by Teaman, Ramirez & Smith, Inc., a firm of
licensed certified public accountants. The goal of the independent audit was to provide reasonable
assurance that the financial statements of the District for the fiscal year ended June 30, 2018, are free
of material misstatement. The independent audit involved examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements; assessing the accounting
principles used and significant estimates made by management; and evaluating the overall financial
statement presentation. According to the independent auditors’ opinion, the following financial
statements present fairly, in all material respects, the respective financial position of the District as of
June 30, 2018 and are presented in conformity with GAAP. The Independent Auditors’ Report is
presented as the first component of the financial section of this report.
REPORTING ENTITY
The District is a publicly-owned water and sewer agency, authorized on January 27, 1956 as a
California special district by the State Legislature, with an entitlement to import water under the
provisions of the Municipal Water District Act of 1911. Its ordinances, policies, taxes, and rates for
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service are set by five Directors, elected by voters in their respective divisions, to serve staggered four-
year terms on its Governing Board. The District is a revenue neutral public agency, which does not
operate at a profit. The District also performs cost of service studies to ensure that each end-user pays
their fair share of the District’s costs of water acquisitions, construction, operation, maintenance,
betterment, renewal, and replacement of the public water and sewer service and facilities.
The General Manager reports directly to the Board of Directors and, through the four District chiefs,
oversees day-to-day operations of the Administrative Services, Finance, Water Operations, and
Engineering departments. These and other lines of reporting are shown on the organization chart on
page xi.
Over the last 61 years, the District has grown from a handful of customers and two employees to an
organization operating a network of more than 919 miles of potable, sewer, and recycled water
pipelines, 44 operational reservoirs, a recycled water facility, and one of the largest recycled water
distribution networks in the State of California. The character of the service area has also changed
from predominantly dry-land farming and cattle ranching, to businesses, high-tech industries, and
large master-planned communities.
Today the District provides
water service to approximately
50,045 potable and 724
recycled customers within
roughly 125 square miles of
the southeastern San Diego
metropolitan area. The District
purchases all potable water
sold to its customers from the
San Diego County Water
Authority (CWA) and Helix
Water District. The CWA
purchases much of this water
from the region’s main water
importer; the Metropolitan Water District of Southern California (MWD), and the Imperial Irrigation
District. Beginning in December 2015, a new desalination plant, the Claude “Bud” Lewis Carlsbad
Desalination Plant, began delivering water to the region. The District also entered into an agreement
with the CWA that brought regional water treatment closer to our customers and helped reduce
dependence on water treatment facilities located outside of San Diego County. To receive this locally
treated water and convey it to customers, the District constructed a 5.1-mile, 36-inch diameter pipeline
to Helix Water District’s R.M. Levy Water Treatment Plant, and two 10 million gallon reservoirs in 2010.
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The District also owns and operates a wastewater collection and recycling system providing public
sewer service to approximately 4,700 customer accounts within portions of the communities of La
Mesa, Rancho San Diego, El Cajon, Jamul, Spring Valley, and the Jamacha Basin. Wastewater
collected is conveyed to the District’s Ralph W. Chapman Water Recycling Facility, which is capable
of recycling wastewater at a rate of 1.3 million gallons per day. The District also has the capability to
purchase up to 6 million gallons per day of recycled water from the City of San Diego’s South Bay
Reclamation Plant. Recycled water from these two sources is used to irrigate eastern Chula Vista
schools, public parks, roadway landscapes, a golf course, and various other approved uses per
California Code of Regulations, Title 22. The use of recycled water reduces dependency on imported
supplies and provides a local supply, thereby diversifying District resources.
MISSION, CURRENT ECONOMIC CONDITIONS, AND OUTLOOK
The mission of the District is to provide exceptional water and wastewater services to its customers,
and to manage District resources, in a transparent and fiscally responsible manner.
During the last several years, the State of California has experienced below average rainfall. According
to the United States Geological Survey, until early 2017 the State of California had been in a drought
for more than six years. In January 2014, Governor Jerry Brown issued a voluntary reduction order as
part of declaring a drought emergency. In April 2017, Governor Jerry Brown issued an executive order
officially ending the drought state of emergency in most of California. The Governor also released the
state’s long-term plan to better prepare the state for future droughts and make conservation a way of
life in California. On April 26, 2017, the State Water Resources Control Board (SWRCB) rescinded the
conservation mandates, but continued the water-use reporting requirements and prohibitions against
wasteful practices. In 2018, both the precipitation and snowpack in California have been below
average.
Building on efforts to make water conservation a way of life and to better prepare the state for droughts
and climate change, on May 31, 2018, Governor Brown signed two bills into law, Senate Bill 606 and
Assembly Bill 1668, which establish permanent water-use restrictions throughout California. These
laws outline an overall framework to guide the District and other urban water suppliers in setting water-
use targets and efficiency standards by June 30, 2022. Through the District and its customers’
successful water-use efficiency efforts, overall water-usage decreased six percent from 2013 to 2018.
The District will continue to work with the CWA, other water agencies, and state officials over the next
several years to define how the new laws will be implemented, ensuring the regulations are both
equitable and reflect local conditions.
As part of the Governor’s mandate, the SWRCB adopted Resolution No. 2016-0029, which allowed
individual suppliers to self-certify there would be no supply shortfall assuming three additional dry
years. With the certification of the Carlsbad Desalination Plant, additional water storage capacity, and
upgraded conveyance systems, the San Diego region’s water agencies have the ability to provide
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sufficient water supplies to meet customer demands, assuring there would be no supply shortfall
during a period of three dry years. Since 2007, the region has also experienced large water supply
cost increases totaling more than 106.7 percent. Finally, the deterioration of the Sacramento–San
Joaquin Bay-Delta -- the source of 30 percent of Southern California’s water supply -- and the
uncertainty of the California WaterFix Project, adds further ambiguity to the future cost and availability
of water supplies. Fortunately, the District, as a member of the CWA, is well positioned for water
coming from the Colorado River due to the Quantification Settlement Agreement and the development
of the new desalination plant in Carlsbad.
Growth in San Diego County has remained flat over the last six years, but is now improving. The
District’s Public Services Division has seen improvements in recent years approving an average of 25
permits per month and selling 592 water meters during fiscal 2017-2018 versus. 100 water meters in
2016-2017. According to the San Diego Association of Governments (SANDAG), the regional planning
agency, it is estimated that the District served approximately 225,164 residents during calendar year
2017. SANDAG has estimated the District’s approximate growth will be 1.4 percent per year for the
next decade. Using historical data and considering current economic conditions, staff has moderated
this projection to a growth rate of 0.3 percent for FY 2019. The District projects an ultimate customer
population of 308,000 residents by 2050.
STRATEGIC PLAN
The Strategic Plan is the core document which guides the District’s efforts to adapt to change. The
overall plan is extensively reviewed and revised every three to four years. The current Strategic Plan
(covering fiscal years 2019-2022) is a continuation of the 2015-2018 plan, and is the fifth multi-year
plan.
Since its establishment, the District’s motto has been “Dedicated to Community Service.” From modest
beginnings in 1956 through today, the District stands committed to providing outstanding service to
the residents and businesses the District has the honor to serve. This serves as a great reminder to
our staff and customers as to why the District exists.
During the District’s early years, a key focus of its preceding strategic plans was to meet the demands
of growth. Today, the District’s four-year Strategic Plan still has the word “growth” in its theme of
“Growth and Sustainability,” but “sustainability” is a critical element in managing long-term
maintenance and replacement of the District’s expansive infrastructure. Progressing from growth to
sustainability is based on the recognition that as an organization evolves, fewer staffing resources and
more technological advancements are needed to support growth. Also, prudent planning and
focused effort are mandatory elements in maintaining and upgrading the District’s infrastructure and
assets. This is vital because in this phase of the lifecycle, an organization derives income more from
customer rates and less from developer fees.
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Therefore, the future increased maintenance and replacement costs will place increased pressure on
customer rates. To balance rate pressure, while also maintaining the District’s infrastructure,
investments, and a strong financial position, the District’s management team places greater emphasis
on efficiencies within the agency, including innovation and technology development.
The District’s Strategic Plan also serves as a roadmap to execute its objectives and track day-to-day
performance metrics, which ensure deliverables are being met and essential work processes are
continuously being fine-tuned, having a positive impact on the long-term financial health of the District.
Through the use of the Balanced Scorecard framework, management and staff share a focused
strategy to ensure the District is moving along the right path, and maximizing its limited resources.
In effect, the District leverages its investments in technology to achieve more with the same or fewer
resources. With sound planning, prudent fiscal management, community focus, and a work culture
prepared to adapt to new challenges, the District is well positioned to support its growing customer
base, while sustaining the quality of water service the District’s customers expect.
BUDGETING CONTROLS
The District views the budget as an essential tool for proper financial management and is adopted
prior to the start of each fiscal year. The budget is developed by combining the District’s strategic
objectives and measures with input from the various departments of the organization. By
incorporating these strategic measures and objectives, the budget becomes a direct reflection of the
District’s strategic plan. The budget is designed and presented for the over-arching needs of the
District, its staff, and its customers. It is a comprehensive and balanced financial plan that features
District services, resources and their allocation, financial policies, strategic objectives, and other useful
information that allows its stakeholders to gain a general understanding of the District’s financial status
and future demands. To monitor the District’s performance monthly, comparison reports of budget to
actual are prepared and distributed to department heads, with top-level information provided to the
Board at the monthly board meetings.
BUDGET SUMMARY
The District’s operating expenditures consist of three major sectors: potable water, recycled water, and
sewer service. The total budget is $107,991,100 for FY 2019. Revenues from potable and recycled
water sales are projected to be $96,359,500, about $9,460,100 (10.9 percent) higher than the FY 2018
budget. Water sales volumes are expected to increase by 3.1 percent versus FY 2017. The MWD and
CWA water supply rate increased by 3.9 percent due to the high cost of supply programs, higher
energy costs, and increasing operating costs. District staff projects sewer revenues to be $2,922,600,
approximately $53,200 more than the FY 2018. The remaining budgeted revenues of $8.7 million come
from various special fees, assessments, and miscellaneous income. An increase of 3.2 percent for
water rates, fees, and charges has been budgeted for January 1, 2019, while a 7.0 percent rate
decrease for sewer has been budgeted, effective January 1, 2019.
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The 2018-19 Capital Improvement Program (CIP) budget consists of 105 projects and a budget of $24.2
million. The budget emphasizes maintenance of existing infrastructure and long-term planning for
ongoing programs to meet population growth, while functioning within fiscal constraints. This year’s
six-year CIP budget decreased by $9.5 million, from $102.3 to $92.8, compared to last year’s projection.
The budget emphasizes long-term planning for ongoing programs, while functioning within fiscal
constraints and population growth.
THE FUTURE
The District continues its commitment to diversify water resources, reducing dependence on
traditional water supplies from the Colorado River and the Sacramento-San Joaquin Bay-Delta. The
coming years will continue to pose challenges for those in California’s water community. With the
conservation mandates ending in FY 2017, potable sales volumes increased 9 percent from FY 2017
levels. Regardless of the end of the drought emergency and the District meeting the state’s mandated
conservation targets, the District’s customers were still seeing and hearing public campaigns
promoting conservation and drought-related messages throughout the county from the CWA, the
state, and MWD. Homeowners and businesses have also implemented conservation measures that
are expected to generate permanent reductions in water use. As a result, the District expects sales
volumes to recover 1 percent in FY 2019 due to the easing of conservation mandates. Additional
remaining increases in sales volumes are expected to come from new customers.
SAN DIEGO COUNTY WATER SUPPLY
San Diego County imports about 85 percent of its water from the Colorado River and Northern
California. Since these sources face legal and environmental constraints, the region has been
exploring other ways to ensure an adequate water supply, including increased water recycling,
incorporating water-use efficiency and conservation programs as a way of life, increased water
storage, groundwater desalination, and seawater desalination.
ACCOUNTING SYSTEM
The Finance Department is responsible for providing financial services to the District including
financial accounting, reporting, payroll, accounts payable, investment of funds, water and wastewater
billing and collection of, taxes, and other revenues. The District manages and maintains its books and
records on an enterprise basis, matching revenues against the costs of providing services. The District
records revenues and expenses on an accrual basis in the period in which revenues are earned and
expenses are incurred.
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INTERNAL CONTROLS
The District operates within a system of internal controls established and reviewed by management.
This provides reasonable assurance that assets are adequately safeguarded and transactions are
recorded correctly according to District’s policies and procedures. When establishing or reviewing
controls, management also considers the cost of the control and the value of the benefit derived from
its utilization. Management maintains and implements all sensitive controls and those controls whose
value adequately exceeds their cost.
The District’s internal controls, procedures, and policies adequately safeguard assets and provide
reasonable assurance of proper recording of financial transactions. In addition, the District maintains
controls to provide for compliance with all finance related legal and contractual provisions. The
activities reported within the presented Comprehensive Annual Financial Report comply with these
finance related legal and contractual provisions including bond covenants and fiduciary
responsibilities.
AWARDS AND ACKNOWLEDGMENTS
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a
Certificate of Achievement for Excellence in Financial Reporting to the District for its Comprehensive
Annual Financial Report for the fiscal year ended June 30, 2017. To earn a Certificate of Achievement,
a government agency must publish an easily readable and efficiently organized Comprehensive
Annual Financial Report. This report must satisfy both generally accepted accounting principles and
applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. The District’s current Comprehensive
Annual Financial Report continues to meet the Certificate of Achievement Program’s requirements and
is submitting it to the GFOA to determine its eligibility for another certificate.
In addition to the Certificate of Achievement for Excellence in Financial Reporting, the District has
received the following awards:
The GFOA presented a Distinguished Budget Presentation Award to District, for its annual
budget for the fiscal year 2017-2018. To achieve this award, a governmental unit must publish
a budget document that meets program criteria as a policy document, as an operations guide,
as a financial plan, and as a communications device.
The California Society of Municipal Finance Officers (CSMFO) presented the District with the
Certificate of Award for Excellence in Operating Budgeting for Fiscal Year 2017-2018.
The CSMFO presented the District with the Certificate of Award for Excellence in Capital
Budgeting for Fiscal Year 2017-2018.
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Organization Chart
District Position County – (134 Positions)
Citizens and Customers Board of Directors
General Manager (6)
Safety and
Security
Administration
Purchasing
and Facilities
Controller and
Budgetary
Services
Treasury and
Accounting
Services
Customer
Service
Meter
Services
Water System
Operations
Utility
Maintenance/
Construction
Water Resources,
Planning, Design
and
Environmental
Administrative
Services
(23)
Human
Resources
Information
Technology
Operations/
Applications
Finance
(29)
Geographic
Information
System
Public Services
and
Field Services
Engineering
(24)
Water
Operations
(51)
Collection/
Treatment/
Reclamation
Operations
xi
List of Principal Officials
Tim Smith
President
Division 1
Mitch Thompson
Vice President
Division 2
Mark Robak
Treasurer
Division 5
Gary Croucher
Division 3
Board of Directors
The Otay Water District is a revenue-
neutral public agency established in
accordance with the California Water
Code. This not-for-profit status means
Otay has no private shareholders, pays no
dividends and therefore does not report
to, nor answer to the California Public
Utilities Commission. The District does,
however, answer to the public through a
five-member Board of Directors. Each
Director is elected by voters within their
respective division boundaries to
represent the public's interest with regard
to rates for service, taxes, policies,
ordinances, and other matters related to
the management and operation of the
Otay Water District. Directors serve four-
year alternating terms on the Board.
Hector Gastelum
Division 4
Mission Statement
To provide exceptional water and
wastewater service to its customers, and
to manage District resources in a
transparent and fiscally responsible
manner.
xii
GFOA CERTIFICATE OF ACHIEVEMENT
FOR EXCELLENCE IN FINANCIAL REPORTING
The Government Finance Officers Association (GFOA) awarded a Certificate of
Achievement for Excellence in Financial Reporting to the Otay Water District for its
CAFR for the fiscal year ended June 30, 2017. This is the fourteenth year that the
District has achieved this prestigious award. In order to be awarded a Certificate of
Achievement, the District had to publish an easily readable and comprehensive
report. This report must satisfy both Generally Accepted Accounting Principles
(GAAP) and applicable legal requirements.
This award is valid for a period of one year only. We believe our current CAFR
continues to meet the Certificate of Achievement Program’s requirements, and will
be submitting it to GFOA to determine its eligibility for another certificate.
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INDEPENDENT AUDITORS' REPORT
Board of Directors
Otay Water District
Spring Valley, California
Report on the Financial Statements
We have audited the accompanying financial statements of the business-type activities of the Otay Water District (the “District”),
as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise the
District’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting
principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of
internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance
with auditing standards generally accepted in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of the United States and the State Controller’s
Minimum Audit Requirements for California Special Districts. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the District’s preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal
control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position
of the business-type activities of the Otay Water District as of June 30, 2018, and the respective changes in financial position and
cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of
America, as well as the accounting systems prescribed by the California State Controller’s Office and California regulations
governing Special Districts.
Richard A. Teaman, CPA David M. Ramirez, CPA Javier H. Carrillo, CPA Bryan P. Daugherty, CPA Joshua J. Calhoun, CPA
4201 Brockton Avenue Suite 100 Riverside CA 92501 951.274.9500 TEL 951.274.7828 FAX www.trscpas.com
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Emphasis of Matter
As described in Note 1 to the basic financial statements, the District adopted the provisions of Governmental Accounting
Standards Board Statement No. 75, Accounting and Financing Reporting for Postemployment Benefits Other Than Pensions.
Our opinion is not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's discussion and analysis
and required supplementary information on pages 3-10 and 53-56 be presented to supplement the basic financial statements.
Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards
Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of America, which consisted of
inquiries of management about the methods of preparing the information and comparing the information for consistency with
management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the
basic financial statements. We do not express an opinion or provide any assurance on the information because the limited
procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated October 25, 2018, on our
consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions
of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our
testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on
internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance.
Riverside, California
October 25, 2018
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Management’s Discussion and Analysis
As management of the Otay Water District (the “District”), we offer readers of the District’s financial
statements, this narrative overview, and analysis of the District’s financial performance during the fiscal
year ending June 30, 2018. Please read it in conjunction with the District’s financial statements that follow
Management’s Discussion and Analysis. All amounts, unless otherwise indicated, are expressed in
millions of dollars.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the District’s basic financial
statements, which are comprised of the following: 1) Statement of Net Position, 2) Statement of Revenues,
Expenses, and Changes in Net Position, 3) Statement of Cash Flows, and 4) Notes to the Financial
Statements. This report also contains other supplementary information in addition to the basic financial
statements.
The Statement of Net Position presents information on all of the District’s assets, deferred outflows of
resources, liabilities, and deferred inflows of resources, with the difference reported as Total Net Position.
Over time, increases or decreases in net positions may serve as a useful indicator of whether the financial
position of the District is improving or weakening.
The Statement of Revenues, Expenses and Changes in Net Position presents information showing how the
District’s net position changed during the most recent fiscal year. All changes in net positions are reported
as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash
flows. Thus, revenues and expenses are reported in this statement for some items that will only result in
cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
The Statement of Cash Flows presents information on cash receipts and payments for the fiscal year. The
Notes to the Financial Statements provides additional information that is essential to a full understanding
of the data supplied in each of the specific financial statements listed above.
Financial Highlights
The assets and deferred outflows of resources of the District exceeded its liabilities and deferred inflows of resources at
the close of the most recent fiscal year by $387.5 million (net position). Of this amount, $27.7 million (unrestricted net
position) may be used to meet the District’s ongoing obligations to citizens and creditors.
Total assets decreased by $8.6 million or 1.53% during Fiscal Year 2018, to $554.5 million, due primarily to the
implementation of GASB Statement No. 75 offset by investments in capital infrastructure, contributions, and improved
operating results.
Net Position at July 1, 2017 was decreased by $17.8 million due to the change in assumption of Other Post-Employment
Benefits (OPEB) actuarial valuation as a result of the implementation of GASB Statement No. 75. The most significant
impact of the implementation requires the presentation of Other Post-Employment Benefits (OPEB) Plan’s $4.7 million
Unfunded Actuarial Accrual as a liability on the Statement of Net Position.
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Management’s Discussion and Analysis
In addition to the basic financial statements and accompanying notes, this report also presents certain
required supplementary information concerning the District’s progress in funding its obligation to provide
retirement benefits to its employees.
Financial Analysis:
As noted, net position may serve, over time, as a useful indicator of an entity’s financial position. In the
case of the District, assets and deferred outflows of resources exceeded liabilities and deferred inflows of
resources by $387.5 million at the close of the most recent fiscal year.
By far, the largest portion of the District’s net position, $355.6 million (92%), reflects its investment in capital
assets, less any remaining outstanding debt used to acquire those assets. The District uses these capital
assets to provide services to citizens; consequently, these assets are not available for future spending.
Although the District’s investment in its capital assets is reported effectively as a resource, it should be
noted that the resources needed to repay the debt must be provided from other sources, since the capital
assets themselves cannot be used to liquidate these liabilities.
4
Management’s Discussion and Analysis
Statements of Net Position
(In Millions of Dollars)
2018 2017 2016
Assets
Current and Other Assets $ 103.6 $ 112.9 $ 112.4
Capital Assets 450.9 450.2 454.0
Total Assets 554.5 563.1 566.4
Deferred Outflows of Resources
Deferred Amount on Refunding
Deferred Actuarial Pension Costs
0.0
10.2
0.2
10.7
1.3
7.0
Deferred Actuarial OPEB Costs 2.2 0.0 0.0
Total Deferred Outflows of Resources 12.4 10.9 8.3
Liabilities
Long-Term Debt Outstanding 91.2 95.6 99.8
Net OPEB Liability 4.7 0.0 0.0
Net Pension Liability 49.6 45.2 40.1
Other Liabilities 32.4 28.2 27.8
Total Liabilities 177.9 169.0 167.7
Deferred Inflows of Resources
Deferred Actuarial Pension Costs 0.9 3.8 5.7
Deferred Actuarial OPEB Costs 0.6 0.0 0.0
Total Deferred Inflows of Resources 1.5 3.8 5.7
Net Position (1)
Net Investment in Capital Assets 355.6 351.0 351.6
Restricted for Debt Service 4.2 4.3 4.4
Unrestricted 27.7 45.9 45.3
Total Net Position $ 387.5 $ 401.2 $ 401.3
The District’s operations and population continue to grow, albeit at slower rates than the housing boom
years. Much of this growth has and will continue to occur in the residential sector, especially in the area of
multi-family dwellings, as well as in the commercial area. The District still has available land to develop
unlike other parts of the County, as well as low unemployment and job creation, which has spurred the
development in the service area.
(1) GASB No. 75 implemented in FY 2018. Prior years were not restated as the information was not readily available.
5
Management’s Discussion and Analysis
In FY 2018, the District’s Capital Assets increased by $9.2 million before accumulated depreciation. (See
Note 4 in the Notes to Financial Statements). The District also saw a decrease in long-term debt of $4.4
million due to the annual payments of long-term debt (See Note 5 in the Notes to Financial Statements).
Certain planning and environmental study costs associated with capital projects, such as the Otay Mesa
Desalination, and recycled permanent moratorium in Otay Mesa, do not qualify as capital costs under
Generally Accepted Accounting Principles and are included in the miscellaneous (non-operating)
expenses of the District. For FY 2018 and FY 2017, those expenses were $0.9 million and $2.3 million,
respectively.
At the end of FY 2018, the District is able to report positive balances in all categories of net position. This
situation also held true for the prior two fiscal years.
Statements of Revenues, Expenses, and Changes in Net Position
(In Millions of Dollars)
2018 2017 2016
Water Sales $ 92.6 $ 83.7 $ 73.9
Wastewater Revenue 2.9 3.0 3.2
Connection and Other Fees 2.0 1.8 1.8
Non-operating Revenues 7.9 10.1 8.9
Total Revenues 105.4 98.6 87.8
Depreciation Expense 17.5 17.8 16.5
Other Operating Expenses 88.3 78.8 73.2
Non-operating Expenses 5.0 7.7 6.2
Total Expenses 110.8 104.3 95.9
Loss Before Capital
Contributions (5.4) (5.7) (8.1)
Capital Contributions 9.5 5.6 7.0
Change in Net Position 4.1 (0.1) (1.1)
Beginning Net Position, As Previously Stated 401.2 401.3 402.4
Prior Period Adjustment (17.8) 0.0 ( 0.0)
Beginning Net Position, As Restated 383.4 401.3 402.4
Ending Net Position $ 387.5 $ 401.2 $ 401.3
Water Sales increased by $8.9 million and $9.8 million in FY 2018 and FY 2017, respectively. The increases
were due to both increases in units sold and water rates. The increases in unit sales is largely due to less
rainfall and higher than average temperature as well as the elimination of water use restrictions in FY 2017.
6
Management’s Discussion and Analysis
Other Operating Expenses increased by $9.5 million and $5.6 million in FY 2018 and FY 2017,
predominantly due to the increase in Cost of Water Sales brought about by the increase and units
purchased in FY 2018 and FY 2017, respectively.
Connection and Other Fees revenues increased by $0.2 million in FY 2018 and remains the same in
FY 2017. The improvement in economy has resulted in an increase of $3.9 million in Capital Contributions
in FY 2018 compared to a decrease of $1.4 million in FY 2017.
Non-operating Revenues
Non-operating Revenues by Major Source
(In Millions of Dollars)
2018 2017 2016
Taxes and Assessments $ 4.5 $ 4.1 $ 4.0
Rents and Leases 1.4 1.4 1.3
Other Non-operating Revenue 2.0 4.6 3.6
Total Non-operating Revenues $ 7.9 $ 10.1 $ 8.9
The District’s total non-operating revenues decreased by $2.2 million in FY 2018 and increased by $1.2
million in FY 2017. The change in Non-operating Revenues between Fiscal Years 2018, 2017 and 2016 is
primarily due to the transfer of capacity revenue from capital contribution to fund project expenditures that
do not qualify as capital expenditures. All other Non-operating Revenues remained steady during this
3-year period.
Capital Assets and Debt Administration
The District’s capital assets (net of accumulated depreciation) as of June 30, 2018, totaled $450.9 million.
Included in this amount is land. The District’s net capital assets increased by .16% for FY 2018 and
decreased by .84% for FY 2017.
7
Management’s Discussion and Analysis
Capital Assets
(In Millions of Dollars)
As indicated by figures in the table above, the majority of capital assets added during both fiscal years
were related to the potable and sewer systems. In addition, the majority of the cost of construction-in-
progress is also related to water systems. Additional information on the District’s capital assets can be
found in Note 4 of the Notes to Financial Statements.
At June 30, 2018, the District had $91.2 million in outstanding debt (net of $4.0 million of maturities
occurring in FY 2019), which consisted of the following:
General Obligation Bonds $ 2.8
Certificates of Participation 6.9
Revenue Bonds 81.5
Total Long-Term Debt $ 91.2
Additional information on the District’s long-term debt can be found in Note 5 of the Notes to Financial
Statements
Prior Period Adjustment
The Governmental Accounting Standards Board (GASB) issued Statement No. 75, “Accounting and
Financial Reporting for Postemployment Benefits Other Than Pensions - an amendment of GASB
Statement No. 45”, for periods beginning after June 15, 2017. The District implemented these standards in
FY 2018. The result of the implementation of these standards was to decrease the net position at July 1,
2017 by $17.8 million, which recognizes net OPEB liability, deferred outflows of resources, deferred inflows
of resources, and expenses related to the OPEB plan.
2018 2017 2016
Land $ 14.4 $ 14.4 $ 14.1
Construction in Progress 17.6 14.2 12.5
Potable Water System 484.2 483.8 476.6
Recycled Water System 114.7 112.3 111.8
Sewer System 48.2 44.5 42.8
Field Equipment 8.5 9.0 9.1
Buildings 20.1 20.6 20.6
Transportation Equipment 3.4 3.3 3.4
Communication Equipment 3.5 3.4 3.3
Office Equipment 17.7 17.6 19.4
732.3 723.1 713.6
Less Accumulated
Depreciation (281.4) (272.9) (259.6)
Net Capital Assets $ 450.9 $ 450.2 $ 454.0
8
Management’s Discussion and Analysis
Fiscal Year 2018-2019 Budget
Economic Factors
The San Diego region imports 84% of its potable supply, so factors such as local rainfall as well as weather
conditions elsewhere in the western portion of the nation can affect the region. San Diego received below
average rainfall in FY 2018, and the District anticipates an average rainfall pattern in the coming years.
Between 2008 and 2016, the District’s water sales declined for the District by nearly 30%. This decrease
was driven by many factors including the economic downturn caused by the great recession, increases in
the price of imported water, and State mandated cuts in potable water use due to the prolonged statewide
drought. Decreases in water sales during this period were offset by corresponding decreases in water
purchases and District managed costs such as reduced employee count and internal cost cuts, achieved
through automation and streamlining of processes. Due to record rain and snowfall, the state mandated
conservation ended in FY 2017. The removal of state mandates, dry winters and increased development
have led to water sales volumes increasing 6.7% in 2017 and 9.0% in 2018. The District is budgeting only
1.0% volume growth in FY 2019, which is due solely to growth in the customer base. Should future water
sales volumes decline due to limited supplies or mandated cuts, the District’s actions will be
commensurate with the magnitude of the reduction.
The District continues to respond to the challenges presented by growth, State mandates, and the
potential of drought, by creating new opportunities and new organizational efficiencies. By utilizing and
continuing to refine its Strategic Business Plan, it has captured the Board of Director’s vision and united its
staff in a common mission. The District has achieved a number of significant accomplishments due to its
successful adherence to its Strategic Business Plan. The District is not only poised to continue
successfully providing an affordable, safe, and reliable water supply for the people of its service area, but is
set to reap the rewards of greater efficiencies and economies of scale.
The District is currently at about 69% of its projected ultimate population, serving approximately 225,000
people. Long-term, this percentage should continue to increase as the District's service area continues to
develop and grow. By 2050, the District is projected to serve approximately 308,000 people, with an
average daily demand of 46 million gallons per day (MGD). Currently, the District services the needs of this
growing population by purchasing water from the San Diego County Water Authority (CWA), who in turn
purchases its water from the Metropolitan Water District (MWD) and the Imperial Irrigation District (IID).
Otay takes delivery of the water through several connections of large diameter pipelines owned and
operated by CWA. The District currently receives treated water from CWA directly and from the Helix Water
District via a contract with CWA. In addition, the District has an emergency agreement with the City of San
Diego to purchase water in the case of a shutdown of the main treated water source. The City of San
Diego also has a long-term contract with the District to provide recycled water for landscape and irrigation
usage. Through innovative agreements like these, benefits can be achieved by both parties by using
excess capacity of another agency, and diversifying local supply, thereby increasing reliability.
9
Management’s Discussion and Analysis
Financial
The District is budgeted to deliver approximately 29,377.2 acre-feet of potable water to 50,625 potable
customer accounts during FY 2018-2019. Management feels that these projections are realistic after
accounting for low growth, supply changes, and a focus on conservation. A combination of factors,
including the drought and economic uncertainty, have created challenges in developing projections for the
current fiscal year. Both unemployment and levels of distressed activity in the commercial and residential
resale market have improved from their economic crisis peaks. The housing market has experienced
higher demand compared to the previous years and unemployment is at record lows. District staff
projects that over the next six years the District will sell another 3,630 meters which translates to 4,544
equivalent dwelling units (EDUs). This growth is estimated to increase sales volumes by an average of 1%
per year over the next five years. While all of these factors impact the region’s water usage, people’s need
for water remains an underlying constant. Staff continues working diligently on developing new water
supplies as they work through the financial impacts of conservation and the modest economic turnaround.
Management is unaware of any other conditions that could have a significant impact on the District’s
current financial position, net position, or operating results.
Contacting the District’s Financial Management
This financial report is designed to provide a general overview of the Otay Water District’s finances for the
Board of Directors, citizens, creditors, and other interested parties. Questions concerning any of the
information provided in the report or requests for additional information should be addressed to the
District’s Finance Department, 2554 Sweetwater Springs Blvd., Spring Valley, CA 91978-2004.
10
11
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12
ASSETS
Current Assets:
Cash and Cash Equivalents (Notes 1 and 2)24,147,997$
Restricted Cash and Cash Equivalents (Notes 1 and 2)80,477
Investments (Note 2)30,866,180
Board Designated Investments (Note 2)29,879,617
Restricted Investments (Notes 1 and 2)4,166,548
Accounts Receivable, Net 12,109,378
Accrued Interest Receivable 295,947
Taxes and Availability Charges Receivable, Net 215,704
Restricted Taxes and Availability Charges Receivable, Net 27,480
Inventories 822,737
Prepaid Items and Other Receivables 1,018,820
Total Current Assets 103,630,885
Capital Assets (Note 4):
Land 14,406,778
Construction in Progress 17,618,059
Capital Assets, Net of Depreciation 418,825,726
Total Capital Assets, Net of Depreciation 450,850,563
Total Assets 554,481,448
DEFERRED OUTFLOWS OF RESOURCES
Deferred Actuarial Pension Costs (Note 7)10,186,229
Deferred Actuarial OPEB Costs (Note 8)2,202,004
Total Deferred Outflows of Resources 12,388,233$
Continued
STATEMENT OF NET POSITION
June 30, 2018
The accompanying notes are an integral part of this statement.
13
LIABILITIES
Current Liabilities:
Current Maturities of Long-term Debt (Note 5)4,040,000$
Accounts Payable 15,437,565
Accrued Payroll Liabilities 694,859
Other Accrued Liabilities 4,089,640
Customer and Developer Deposits 3,340,010
Accrued Interest 1,380,446
Unearned Revenues 233,251
Liabilities Payable from Restricted Assets:
Restricted Accrued Interest 45,200
Total Current Liabilities 29,260,971
Non-current Liabilities:
Long-term Debt (Note 5):
General Obligation Bonds 2,823,143
Certificates of Participation 6,893,293
Revenue Bonds 81,465,550
Net OPEB Liability 4,710,492
Net Pension Liability 49,582,316
Other Non-current Liabilities 3,117,705
Total Non-current Liabilities 148,592,499
Total Liabilities 177,853,470
DEFERRED INFLOWS OF RESOURCES
Deferred Actuarial Pension Costs (Note 7)936,234
Deferred Actuarial OPEB Costs (Note 8)539,449
Total Deferred Inflows of Resources 1,475,683
NET POSITIONNet Investment in Capital Assets 355,628,577
Restricted for Debt Service 4,247,025
Unrestricted 27,664,926
Total Net Position 387,540,528$
Statement of Net Position - Continued
June 30, 2018
The accompanying notes are an integral part of this statement.
14
Statement of Revenues, Expenses, and Changes in Net Position
OPERATING REVENUES
Water Sales 92,595,195$
Wastewater Revenue 2,865,520
Connection and Other Fees 2,013,057
Total Operating Revenues 97,473,772
OPERATING EXPENSES
Cost of Water Sales 62,321,213
Wastewater 2,501,240
Administrative and General 23,445,578
Depreciation 17,466,318
Total Operating Expenses 105,734,349
Operating Income (Loss)(8,260,577)
NON-OPERATING REVENUES (EXPENSES)
Investment Earnings 723,860
Taxes and Assessments 4,481,719
Availability Charges 697,724
Gain (Loss) on Sale of Capital Assets (1,709,538)
Rents and Leases 1,439,247
Miscellaneous Revenues 2,255,605
Donations (123,050)
Interest Expense (3,941,321)
Miscellaneous Expenses (900,247)
Total Non-operating Revenues (Expenses)2,923,999
Income (Loss) Before Capital Contributions (5,336,578)
Capital Contributions 9,506,192
Change in Net Position 4,169,614
Total Net Position, Beginning, As Previously Reported 401,186,989
Prior Period Adjustment (Note 14)(17,816,075)
Total Net Position, Beginning, As Restated 383,370,914
Total Net Position, Ending 387,540,528$
For the Year Ended June 30, 2018
The accompanying notes are an integral part of this statement.
15
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from Customers 95,612,497$
Receipts from Connections and Other Fees 2,013,057
Other Receipts 2,183,296
Payments to Suppliers (61,807,704)
Payments to Employees (21,689,670)
Other Payments (899,502)
Net Cash Provided By (Used For) Operating Activities 15,411,974
CASH FLOWS FROM NONCAPITAL AND RELATED
FINANCING ACTIVITIES
Receipts from Taxes and Assessments 4,495,002
Receipts from Property Rents and Leases 1,316,197
Net Cash Provided By (Used For) Noncapital and Related
Financing Activities 5,811,199
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Proceeds from Capital Contributions 9,254,970
Proceeds from Sale of Capital Assets 77,684
Proceeds from Debt Related Taxes and Assessments 697,724
Principal Payments on Long-Term Debt (3,820,000)
Interest Payments and Fees (4,427,336)
Acquisition and Construction of Capital Assets (19,388,972)
Net Cash Provided By (Used For) Capital and Related
Financing Activities (17,605,930)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest Received on Investments 643,924
Proceeds from Sale and Maturities of Investments 12,631,381
Purchase of Investments (10,142,153)
Net Cash Provided By (Used For) Investing Activities 3,133,152
Net Increase (Decrease) in Cash and Cash Equivalents 6,750,395
Cash and Cash Equivalents - Beginning 17,478,079
Cash and Cash Equivalents - Ending 24,228,474$
Continued
Statement of Cash Flows
For the Year Ended June 30, 2018
The accompanying notes are an integral part of this statement.
16
Reconciliation of Operating Income (Loss) to Net Cash Flows
Provided By (Used For) Operating Activities:
Operating Income (Loss)(8,260,577)$
Adjustments to Reconcile Operating Income to
Net Cash Provided By (Used For) Operating Activities:
Depreciation 17,466,318
Miscellaneous Revenues 2,183,296
Miscellaneous Expenses (899,502)
(Increase) Decrease in Accounts Receivable 263,462
(Increase) Decrease in Inventory (85,552)
(Increase) Decrease in Prepaid Items and Other Receivables (56,801)
(Increase) Decrease in Deferred Actuarial Pension Costs 494,900
(Increase) Decrease in Deferred Actuarial OPEB Costs 82,416
Increase (Decrease) in Accounts Payable 3,893,151
Increase (Decrease) in Accrued Payroll and Related Expenses (90,637)
Increase (Decrease) in Other Accrued Liabilities 318,137
Increase (Decrease) in Customer and Developer Deposits (111,680)
Increase (Decrease) in Prepaid Capacity Fees 43,392
Increase (Decrease) in Net OPEB Liability (1,834,367)
Increase (Decrease) in Net Pension Liability 4,332,872
Increase (Decrease) in Deferred Actuarial Pension Costs (2,866,303)
Increase (Decrease) in Deferred Actuarial OPEB Costs 539,449
Net Cash Provided By (Used For) Operating Activities 15,411,974$
Schedule of Cash and Cash Equivalents:
Current Assets:
Cash and Cash Equivalents 24,147,997$
Restricted Cash and Cash Equivalents 80,477
Total Cash and Cash Equivalents 24,228,474$
Supplemental Disclosures
Non-Cash Investing and Financing Activities Consisted of the Following:
Contributed Capital for Water and Sewer System 251,222$
Change in Fair Value of Investments and Recognized Gains/Losses 360,248
Amortization Related to Long-term Debt 364,678
Statement of Cash Flows - Continued
For the Years ended June 30, 2018
The accompanying notes are an integral part of this statement.
17
Notes to Financial Statements
Year Ended June 30, 2018
NOTE DESCRIPTION PAGE
1 Reporting Entity and Summary of Significant Accounting Policies………….. 19-27
2 Cash and Investments………………………………………………………......................................... 27-31
3 Fair Value Measurements…………………………………………..………………………………………... 31-32
4 Capital Assets…………………………………………………..………………………………………………………. 33
5 Long-Term Debt………………………………………………….…………………………………………………... 34-38
6 Net Position…………………………………………………………………………………………………………….... 39
7 Defined Benefit Pension Plan……………………………………………………………..………...….. 39-45
8 Other Post Employment Benefits………………………..…………………………………............... 45-50
9 Water Conservation Authority……………………………………………………………………............ 50-51
10 Commitments and Contingencies…………………………………………………...………….……. 51
11 Risk Management…………………………………………………………………………………………………... 52-53
12 Interest Expense……………………………………………………......................................................... 53
13 Segment Information………………………………………………..……………………………………….….. 53-56
14 Prior Period Adjustment...…………………………………………..……………………………………….... 56
15 Subsequent Events……...…………………………………………..………………………………………….... 56
18
Notes to Financial Statements
Year Ended June 30, 2018
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A) Reporting Entity
The reporting entity Otay Water District (the “District”) includes the accounts of the District, Otay
Service Corporation (the “Corporation”) and the Otay Water District Financing Authority (the
“Financing Authority”).
The Otay Water District (the “District”) is a public entity established in 1956 pursuant to the
Municipal Water District Law of 1911 (Section 711 et. Seq. of the California Water Code) for the
purpose of providing water and sewer services to the properties in the District. The District is
governed by a Board of Directors consisting of five directors elected by geographical divisions
based on District population for a four-year alternating term.
The District formed the Otay Service Corporation on June 21, 1993, a nonprofit public benefit
corporation duly organized and existing under the laws of the State of California. The Service
Corporation was formed to assist the District in the financing of public capital improvements.
The District formed the Financing Authority on March 3, 2010 under the Joint Exercise of Powers
Act, constituting Articles 1 through 4 (commencing with Section 6500) of Chapter 5, Division 7, Title
1 of the California Government Code. The Financing Authority was formed to assist the District in
the financing of public capital improvements.
The financial statements present the District and its component units. The District is the primary
government unit. Component units are those entities which are financially accountable to the
primary government, either because the District appoints a voting majority of the component unit’s
board, or because the component units will provide a financial benefit or impose a financial
burden on the District. The District has accounted for the Service Corporation and Financing
Authority as “blended” component units. Despite being legally separate, the Service Corporation
and Financing Authority are so intertwined with the District that they are in substance, part of the
District’s operations. Accordingly, the balances and transactions of these component units are
reported within the funds of the District. Separate financial statements are not issued for the
Service Corporation and the Financing Authority.
B) Measurement Focus, Basis of Accounting and Financial Statement Presentation
Measurement focus is a term used to describe “which” transactions are recorded within the
various financial statements. Basis of accounting refers to “when” transactions are recorded
regardless of the measurement focus applied. The accompanying financial statements are
reported using the economic resources measurement focus, and the accrual basis of accounting.
Under the economic measurement focus all assets and liabilities (whether current or noncurrent)
associated with these activities are included on the Statement of Net Position. The Statement of
Revenues, Expenses and Changes in Net Position present increases (revenues) and decreases
(expenses) in total net position. Under the accrual basis of accounting, revenues are recorded
when earned and expenses are recorded when a liability is incurred, regardless of the timing of
related cash flows.
19
Notes to Financial Statements
Year Ended June 30, 2018
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
B) Measurement Focus, Basis of Accounting and Financial Statement Presentation - Continued
The District reports its activities as an enterprise fund, which is used to account for operations that
are financed and operated in a manner similar to a private business enterprise, where the intent of
the District is that the costs (including depreciation) of providing goods or services to the general
public on a continuing basis be financed or recovered primarily through user charges.
The basic financial statements of the Otay Water District have been prepared in conformity with
accounting principles generally accepted in the United States of America. The Governmental
Accounting Standards Board (GASB) is the accepted standard setting body for governmental
accounting financial reporting purposes.
Net position of the District is classified into three components: (1) net investment in capital assets,
(2) restricted net position, and (3) unrestricted net position. These classifications are defined as
follows:
Net Investment in Capital Assets
This component of net position consists of capital assets, net of accumulated depreciation and
reduced by the outstanding balances of notes or borrowing that are attributable to the acquisition of
the assets, construction, or improvement of those assets. If there are significant unspent related debt
proceeds at year-end, the portion of the debt attributable to the unspent proceeds are not included in
the calculation of the net investment in capital assets.
Restricted Net Position
This component of net position consists of net position with constrained use through external
constraints imposed by creditors (such as through debt covenants), grantors, contributions, or laws
or regulations of other governments or constraints imposed by law through constitutional provisions
or enabling legislation.
Unrestricted Net Position
This component of net position consists of net position that do not meet the definition of “net
investment in capital assets” or “restricted net position”.
The District distinguishes operating revenues and expenses from those revenues and expenses that
are non-operating. Operating revenues are those revenues that are generated by water sales and
wastewater services while operating expenses pertain directly to the furnishing of those services.
Non-operating revenues and expenses are those revenues and expenses generated that are not
associated with the normal business of supplying water and wastewater treatment services.
The District recognizes revenues from water sales, wastewater revenues, and meter fees as they are
earned. Taxes and assessments are recognized as revenues based upon amounts reported to the
District by the County of San Diego, net of allowance for delinquencies of $27,020 at June 30, 2018.
20
Notes to Financial Statements
Year Ended June 30, 2018
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
B) Measurement Focus, Basis of Accounting and Financial Statement Presentation - Continued
Additionally, capacity fee contributions received which are related to specific operating expenses are
offset against those expenses and included in Cost of Water Sales in the Statements of Revenues
and Expenses and Changes in Net Position.
Sometimes the District will fund outlays for a particular purpose from both restricted (e.g., restricted
bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as
restricted - net position and unrestricted - net position, a flow assumption must be made about the
order in which the resources are considered to be applied.
It is the District’s practice to consider restricted - net position to have been depleted before
unrestricted - net position is applied, however it is at the Board’s discretion.
C) New Accounting Pronouncements
Implemented
Governmental Accounting Standard Board Statement No. 75
In June of 2015, GASB issued Statement No. 75, Accounting and Financial Reporting for
Postemployment Benefits Other Than Pensions. This Statement was issued to improve
accounting and financial reporting for postemployment benefits other than pensions (other
postemployment benefits or OPEB). It also improves information provided by governmental
employers about financial support for OPEB that is provided by other entities. This Statement
replaces the requirements of Statements No. 45, Accounting and Financial Reporting by Employers
for Postemployment Benefits Other Than Pensions, as amended, and No. 57, OPEB Measurements
by Agent Employers and Agent Multiple-Employer Plans, for OPEB. Statement No. 74, Financial
Reporting for Postemployment Benefit Plans Other Than Pension Plans, establishes new
accounting and financial reporting requirements for OPEB plans. The provisions of this Statement
are effective for fiscal years beginning after June 15, 2017. This Statement has been implemented
in the District’s financial statements.
Governmental Accounting Standard Board Statement No. 81
In March of 2016, GASB issued Statement No. 81, Irrevocable Split Interest Agreements. This
statement was issued to improve accounting and financial reporting for irrevocable split-interest
agreements by providing recognition and measurement guidance for situations in which a
government is a beneficiary of the agreement. Split-interest agreements are a type of giving
agreement used by donors to provide resources to two or more beneficiaries, including
governments. Split-interest agreements can be created through trusts—or other legally
enforceable agreements with characteristics that are equivalent to split-interest agreements—in
which a donor transfers resources to an intermediary to hold and administer for the benefit of a
government and at least one other beneficiary. This Statement requires that a government that
21
Notes to Financial Statements
Year Ended June 30, 2018
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
C) New Accounting Pronouncements - Continued
Implemented - Continued
Governmental Accounting Standard Board Statement No. 81 - Continued
receives resources pursuant to an irrevocable split-interest agreement recognize assets, liabilities,
and deferred inflows of resources at the inception of the agreement. Furthermore, this Statement
requires that a government recognize assets representing its beneficial interests in irrevocable
split-interest agreements that are administered by a third party, if the government controls the
present service capacity of the beneficial interests. This Statement requires that a government
recognize revenue when the resources become applicable to the reporting period. The
requirements of this Statement are effective for reporting periods beginning after December 15,
2016. Currently, this statement has no effect on the District’s financial statements.
Governmental Accounting Standard Board Statement No. 82
In March of 2016, GASB issued Statement No. 82, Pension Issues – An Amendment of GASB
Statements No. 67, No. 68, and No. 73. This statement was issued to address certain issues that
have been raised with respect to Statements No. 67, Financial Reporting for Pension Plans, No. 68,
Accounting and Financial Reporting for Pensions, and No. 73, Accounting and Financial Reporting
for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and
Amendments to Certain Provisions of GASB Statements 67 and 68. Specifically, this Statement
addresses issues regarding (1) the presentation of payroll-related measures in required
supplementary information, (2) the selection of assumptions and the treatment of deviations from
the guidance in an Actuarial Standard of Practice for financial reporting purposes, and (3) the
classification of payments made by employers to satisfy employee (plan member) contribution
requirements. Prior to the issuance of this Statement, Statements 67 and 68 required presentation
of covered-employee payroll, which is the payroll of employees that are provided with pensions
through the pension plan, and ratios that use that measure, in schedules of required
supplementary information. This Statement amends Statements 67 and 68 to instead require the
presentation of covered payroll, defined as the payroll on which contributions to a pension plan are
based, and ratios that use that measure. This Statement also clarifies the term deviation used in
Actuarial Standards of Practice and payments made by the employer to satisfy contribution
requirements. The requirements of this Statement are effective for reporting periods beginning
after June 15, 2016, except for the requirements of this Statement for the selection of assumptions
in a circumstance in which an employer’s pension liability is measured as of a date other than the
employer’s most recent fiscal year-end. In that circumstance, the requirements for the selection of
assumptions are effective for that employer in the first reporting period in which the measurement
date of the pension liability is on or after June 15, 2017. The District has implemented GASB No. 82
which is reflected on the District’s financial statements.
22
Notes to Financial Statements
Year Ended June 30, 2018
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
C) New Accounting Pronouncements - Continued
Implemented - Continued
Governmental Accounting Standard Board Statement No. 85
In March of 2017, GASB issued Statement No. 85, Omnibus 2017. This Statement addresses
practice issues that have risen from the implementation of certain GASB Statements; primarily
pension and OPEB related measurement, recognition, timing, and reporting issues. Other issues
include blending of component units for governments whose primary activity is business-type,
goodwill reporting, classifying real estate held by insurance entities and measuring particular
investments at amortized cost. This Statement is effective for reporting periods beginning after
June 15, 2017. Currently, this statement has no effect on the District’s financial statements.
Governmental Accounting Standard Board Statement No. 86
In May of 2017, GASB issued Statement No. 86, Certain Debt Extinguishment Issues. This
Statement expands upon GASB No. 7 Advance Refundings Resulting in Defeasance of Debt which
defines debt defeased in substance and the criteria for the trusts used to extinguish debt. This
Statement establishes essentially the same requirements for when a government places cash and
other monetary assets acquired with only existing resources in an irrevocable trust to extinguish
the debt. This Statement is effective for reporting periods beginning after June 15, 2017. Currently,
this statement has no effect on the District’s financial statements.
Pending Accounting Standards
GASB has issued the following statements which impact the District’s financial reporting
requirements in the future:
i. GASB 83 – “Certain Asset Retirement Obligations”, effective for fiscal years beginning after
June 15, 2018.
ii. GASB 84 – “Fiduciary Activities”, effective for fiscal years beginning after December 15, 2018.
iii. GASB 87 – “Leases”, effective for fiscal years beginning after December 15, 2019.
iv. GASB 88 – “Certain Disclosures Related to Debt, including Direct Borrowings and Direct
Placements” effective for fiscal years beginning after June 15, 2018.
v. GASB 89 – “Accounting for Interest Cost Incurred before the End of a Construction Period”
effective for fiscal years beginning after December 15, 2019.
vi. GASB 90 – “Majority Equity Interests – an amendment of GASB Statements No. 14 and No.
61” effective for fiscal years beginning after December 15, 2018.
D) Deferred Outflows / Inflows of Resources
In addition to assets, the statement of net position will sometimes report a separate section for
deferred outflows of resources. This separate financial statement element, deferred outflows of
resources, represents a consumption of net position that applies to a future period(s) and so will not
23
Notes to Financial Statements
Year Ended June 30, 2018
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
D) Deferred Outflows / Inflows of Resources - Continued
be recognized as an outflow of resources (expense/expenditure) until then. The District has two
items that qualify for reporting in this category, deferred actuarial pension costs and deferred
actuarial OPEB costs are items that are deferred and recognized as an outflow of resources in the
period the amounts become available.
In addition to liabilities, the statement of net position will sometimes report a separate section for
deferred inflows of resources. This separate financial statement element, deferred inflows of
resources, represents an acquisition of net position that applies to a future period(s) and will not be
recognized as an inflow of resources (revenue) until that time. The District has two items that qualify
for reporting in this category. Accordingly, the items, deferred actuarial pension costs and deferred
actuarial OPEB costs, are deferred and recognized as an inflow of resources in the period that the
amounts become available.
E) Statement of Cash Flows
For purposes of the Statement of Cash Flows, the District considers all highly liquid investments
(including restricted assets) with a maturity period, at purchase, of three months or less to be cash
equivalents.
F) Investments
Investments are stated at their fair value, which represents the quoted or stated market value.
Investments that are not traded on a market, such as investments in external pools, are valued
based on the stated fair value as represented by the external pool. All investments are stated at
their fair value, the District has not elected to report certain investments at amortized costs.
G) Inventory and Prepaids
Inventory consists primarily of materials used in the construction and maintenance of the water and
sewer system and is valued at weighted average cost. Both inventory and prepaids use the
consumption method whereby they are reported as an asset and expensed as they are consumed.
H) Capital Assets
Capital assets are recorded at cost, where historical records are available, and at an estimated
historical cost where no historical records exist. Infrastructure assets in excess of $20,000 and other
capital assets in excess of $10,000 are capitalized if they have an expected useful life of two years or
more. The District will also capitalize individual purchases under the capitalization threshold if they
are part of a new capital program. The cost of purchased and self-constructed additions to utility
plant and major replacements of property are capitalized. Costs include materials, direct labor,
transportation, and such indirect items as engineering, supervision, employee fringe benefits,
overhead, and interest incurred during the construction period. Repairs, maintenance, and minor
24
Notes to Financial Statements
Year Ended June 30, 2018
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
H) Capital Assets - Continued
replacements of property are charged to expense. Donated assets are capitalized at their acquisition
value on the date contributed.
The District capitalizes interest on construction projects up to the point in time that the project is
substantially completed. Capitalized interest for fiscal year ending June 30, 2018 of $266,959 is
included in the cost of water system assets and is depreciated on the straight-line basis over the
estimated useful lives of such assets.
Depreciation is calculated using the straight-line method over the following estimated useful lives:
Water System 15-70 Years
Field Equipment 2-50 Years
Buildings 30-50 Years
Communication Equipment 2-10 Years
Transportation Equipment 2-7 Years
Office Equipment 2-10 Years
Recycled Water System 50-75 Years
Sewer System 25-50 Years
I) Compensated Absences
It is the District’s policy to record vested or accumulated vacation and sick leave as an expense and
liability as benefits accrue to employees.
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Compensated
Absences $ 2,733,700 $ 2,977,867 $ 2,903,953 $ 2,807,614 $ 280,761
Current portion is reflected in Accrued Payroll Liabilities and remainder in other non-current
liabilities on the Statement of Net Position.
J) Classification of Liabilities
Certain current liabilities have been classified as current liabilities payable from restricted assets as
they will be funded from restricted assets.
25
Notes to Financial Statements
Year Ended June 30, 2018
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
K) Allowance for Doubtful Accounts
The District charges doubtful accounts arising from water sales receivable to bad debt expense when
it is probable that the accounts will be uncollectible. Uncollectible accounts are determined by the
allowance method based upon prior experience and management’s assessment of the collectibility
of existing specific accounts. The allowance for doubtful accounts was $223,005 for 2018.
L) Property Taxes
Tax levies are limited to 1% of full market value (at time of purchase) which results in a tax rate of
$1.00 per $100 assessed valuation, under the provisions of Proposition 13. Tax rates for voter-
approved indebtedness are excluded from this limitation.
The County of San Diego (the “County”) bills and collects property taxes on behalf of the District. The
County’s tax calendar year is July 1 to June 30. Property taxes attach as a lien on property on January
1. Taxes are levied on July 1 and are payable in two equal installments on November 1 and February
1, and become delinquent after December 10 and April 10, respectively.
M) Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of resources
related to pensions, and pension expense, information about the fiduciary net position of the
District’s California Public Employees’ Retirement System (CalPERS) plans (Plans) and additions
to/deductions from the Plans’ fiduciary net position have been determined on the same basis as
they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee
contributions) are recognized when due and payable in accordance with the benefit terms.
Investments are reported at fair value.
N) Other Post-Employment Benefits (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows/inflows of resources related to
OPEB, and OPEB expense, information about the fiduciary net position of the District’s plan (OPEB
Plan) and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined
on the same basis. For this purpose, benefit payments are recognized when currently due and
payable in accordance with the benefit terms. Investments are reported at fair value.
Generally accepted accounting principles require that the reported results must pertain to liability and
asset information within certain defined timeframes. For this report, the following timeframes are
used:
Valuation Date June 30, 2017
Measurement Date June 30, 2017
Measurement Period July 1, 2016 to June 30, 2017
26
Notes to Financial Statements
Year Ended June 30, 2018
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
O) Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles
in the United States of America requires management to make estimates and assumptions that affect
the reported amounts of assets, deferred outflows of resources, liabilities, and deferred inflows of
resources, and disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
2) CASH AND INVESTMENTS
The primary goals of the District’s Investment Policy are to assure compliance with all Federal, State, and
Local laws governing the investment of funds under the control of the organization, protect the principal
of investments entrusted, and generate income under the parameters of such policies.
Cash and Investments are classified in the accompanying financial statements as follows:
Statement of Net Position:
Cash and Cash Equivalents $ 24,147,997
Restricted Cash and Cash Equivalents 80,477
Investments 30,866,180
Board Designated Investments 29,879,617
Restricted Investments 4,166,548
Total Cash and Investments $ 89,140,819
Cash and Investments consist of the following:
Cash on Hand $ 2,950
Deposits with Financial Institutions 754,437
Investments 88,383,432
Total Cash and Investments $ 89,140,819
Investments Authorized by the California Government Code and the District’s Investment Policy
The table below identifies the investment types that are authorized for the District by the California
Government Code (or the District’s Investment Policy, where more restrictive). The table also identifies
certain provisions of the California Government Code (or the District’s Investment Policy, where more
restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does
not address investments of debt proceeds held by bond trustee that are governed by the provisions of
debt agreements of the District, rather than the general provisions of the California Government Code
or the District’s Investment Policy.
27
Notes to Financial Statements
Year Ended June 30, 2018
2) CASH AND INVESTMENTS – Continued
Investments Authorized by the California Government Code and the District’s Investment Policy -
Continued
Maximum Maximum
Authorized Maximum Percentage Investment
Investment Type Maturity Of Portfolio(1) In One Issuer
U.S. Treasury Obligations 5 years None None
U.S. Government Sponsored Entities 5 years None None
Certificates of Deposit 5 years 15% None
Corporate Medium-Term Notes 5 years 10% None
Commercial Paper 270 days 10% 10%
Money Market Mutual Funds N/A 10% None
County Pooled Investment Funds N/A None None
Local Agency Investment Fund (LAIF) N/A None None
(1) Excluding amounts held by bond trustee that are not subject to California Government Code restrictions.
Investments Authorized by Debt Agreements
Investments of debt proceeds held by the bond trustee are governed by provisions of the debt
agreements, rather than the general provisions of the California Government Code or the District’s
Investment Policy.
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an
investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value
to changes in market interest rates. One of the ways that the District manages its exposure to interest
rates risk is by purchasing investments with shorter durations than the maximum allowable under the
District’s Investment Policy and by timing cash flows from maturities, so that a portion of the portfolio is
maturing or coming close to maturity evenly over time, as necessary, to provide the cash flow and
liquidity needed for operations.
Information about the sensitivity of the fair values of the District’s investments to market interest rate
fluctuations are provided by the following tables that show the distribution of the District’s investments by
maturity as of June 30, 2018.
Remaining Maturity (in Months)
12 Months 13 to 24 25 to 60 More Than
Investment Type Or Less Months Months 60 Months
U.S. Government Sponsored Entities $ 64,967,885 $ 27,845,100 $27,313,861 $ 9,808,924 $ -
Local Agency Investment Fund (LAIF) 11,204,070 11,204,070 - - -
San Diego County Pool 12,131,000 12,131,000 - - -
Money Market Funds 80,477 80,477 - - -
Total $ 88,383,432 $ 51,260,647 $27,313,861 $ 9,808,924 $ -
28
Notes to Financial Statements
Year Ended June 30, 2018
2) CASH AND INVESTMENTS - Continued
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of
the investment. This is measured by the assignment of a rating by a nationally recognized statistical
rating organization. Presented below is the minimum rating required by (where applicable) the California
Government Code or the District’s Investment Policy, or debt agreements, and the Moody’s ratings as of
June 30, 2018.
Minimum Rating as of Year End
Legal Not
Investment Type Rating AAA AA A-1 Rated
U.S. Government Sponsored Entities $ 64,967,885 N/A $64,967,885 $ $ $ -
Local Agency Investment Fund (LAIF) 11,204,070 N/A - 11,204,070
San Diego County Pool 12,131,000 N/A - 12,131,000
Money Market Funds 80,477 N/A - 80,477 -
Total $ 88,383,432 $ 64,967,885 $ $ 80,477 $23,335,070
Concentration of Credit Risk
The investment policy of the District contains various limitations on the amounts that can be invested in
any one type or group of investments and in any issuer, beyond that stipulated by the California
Government Code, Sections 53600 through 53692. Investments in any one issuer (other than U.S.
Treasury securities, mutual funds, and external investment pools) that represent 5% or more of total
District investments as of June 30, 2018:
Issuer Investment Type Reported Amount
Federal Home Loan Bank U.S. Government Sponsored Entities $ 13,877,960
Federal Home Loan Mortgage Corp U.S. Government Sponsored Entities $ 13,789,744
Federal National Mortgage Association U.S. Government Sponsored Entities $ 23,423,521
Federal Farm Credit Banks U.S. Government Sponsored Entities $ 11,890,740
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial
institution, a government will not be able to recover its deposits or will not be able to recover collateral
securities that are in the possession of an outside party. The custodial credit risk for investments is the
risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government
will not be able to recover the value of its investment or collateral securities that are in the possession of
another party. The California Government Code and the District’s Investment Policy do not contain legal
or policy requirements that would limit the exposure to custodial credit risk for deposits or investments,
other than the following provision for deposits: The California Government Code requires that a financial
institution secure deposits made by state or local government units by pledging securities in an
undivided collateral pool held by a depository regulated under state law (unless so waived by the
29
Notes to Financial Statements
Year Ended June 30, 2018
2) CASH AND INVESTMENTS - Continued
Custodial Credit Risk - Continued
governmental unit). The market value of the pledged securities in the collateral pool must equal at least
110% of the total amount deposited by the public agencies. California law also allows financial
institutions to secure deposits by pledging first trust deed mortgage notes having a value of 150% of the
secured public deposits.
As of June 30, 2018, $555,267 of the District’s deposits with financial institutions in excess of federal
depository insurance limits, were held in collateralized accounts.
Local Agency Investment Fund (LAIF)
The District is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by
California Government Code Section 16429 under the oversight of the Treasurer of the State of California.
The fair value of the District’s investment in this pool is reported in the accompanying financial
statements at amounts based upon District’s pro-rata share of the fair value provided by LAIF for the
entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for
withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized
cost-basis.
The LAIF is a special fund of the California State Treasury through which local governments may pool
investments. The District may invest up to $65,000,000 in the fund. Investments in LAIF are highly liquid,
as deposits can be converted to cash within twenty-four hours without loss of interest. Investments with
LAIF are secured by the full faith and credit of the State of California. The yield of LAIF for the quarter
ended June 30, 2018 was 1.90%. The estimated amortized cost and fair value of the LAIF pool at June 30,
2018 was $88,964,875,827 and $88,798,232,977. The District’s share of the pool at June 30, 2018 was
approximately 0.0126%.
San Diego County Pooled Fund
The San Diego County Pooled Investment Fund (SDCPIF) is a pooled investment fund program governed
by the County of San Diego Board of Supervisors, and administered by the County of San Diego
Treasurer and Tax Collector. Investments in SDCPIF are highly liquid as deposits and withdrawals can be
made at anytime without penalty, determined on an amortized cash basis, the same as the fair value of
the District’s position in the pool.
The County of San Diego’s bank deposits are either federally insured or collateralized in accordance with
the California Government Code. Pool detail is included in the County of San Diego Comprehensive
Annual Financial Report (CAFR). Copies of the CAFR may be obtained from the County of San Diego
Auditor-Controller’s Office - 1600 Pacific Coast Highway, San Diego California 92101.
30
Notes to Financial Statements
Year Ended June 30, 2018
2) CASH AND INVESTMENTS - Continued
Restricted Cash and Cash Equivalents
Debt Service:
Water Revenue Bond Series 2010A $ 22,024
Water Revenue Bond Series 2010B 58,453
Total $ 80,477
Board Designated Investments
Investments are Board restricted for the cost of the following District projects:
New Water Supply $ 1,341,075
Replacement 28,538,542
Total $ 29,879,617
Restricted Investments
Debt Service:
General Obligation Bond ID No. 27-2009 $ 487,087
Water Revenue Bond Series 2010A 1,014,684
Water Revenue Bond Series 2010B 2,664,777
Total $ 4,166,548
3) FAIR VALUE MEASUREMENTS
Governmental Accounting Standards Board (GASB) Statement No. 72, Fair Value Measurements and
Application, provides the framework for measuring fair value. The framework provides a fair value
hierarchy that prioritizes the inputs to valuation techniques used to measure fair value with Level 1
given the highest priority and Level 3 the lowest priority. The three levels of the fair value hierarchy are
as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the
organization has the ability to access at the measurement date.
Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly or indirectly. Level 2 inputs include the following:
a. Quoted prices for similar assets or liabilities in active markets.
b. Quoted prices for identical or similar assets or liabilities in markets that are not active.
c. Inputs other than quoted prices that are observable for the asset or liability (for example,
interest rates and yield curves observable at commonly quoted intervals, volatilities,
prepayment speeds, loss severities, credit risks, and default rates).
31
Notes to Financial Statements
Year Ended June 30, 2018
3) FAIR VALUE MEASUREMENTS - Continued
d. Inputs that are derived principally from or corroborated by observable market data by
correlation or other means (market-corroborated inputs).
Level 3 inputs are unobservable inputs for the asset or liability.
Fair value of assets measured on a recurring basis at June 30, 2018, are as follows:
Significant Other
Observable
Inputs
Fair Value (Level 2) Uncategorized
U.S. Government Sponsored Entities $ 64,967,885 $ 64,967,885 $ -
Local Agency Investment Fund (LAIF) 11,204,070 - 11,204,070
San Diego County Pool 12,131,000 - 12,131,000
Money Market Funds 80,477 80,477 -
Total $ 88,383,432 $ 65,048,362 $ 23,335,070
Investments classified in Level 2 of the fair value hierarchy are valued using a matrix pricing technique.
Matrix pricing is used to value securities based on the securities’ relationship to benchmark quoted
prices. Uncategorized investments do not fall under the fair value hierarchy as there is no active
market for the investments.
32
Notes to Financial Statements
Year Ended June 30, 2018
4) CAPITAL ASSETS
The following is a summary of changes in Capital Assets for the year ended June 30, 2018:
Beginning Ending
Balance Additions Deletions Adjustments(1) Balance
Capital Assets, Not Depreciated
Land $ 14,389,187 $ - $ - $ 17,591 $ 14,406,778
Construction in Progress 14,201,511 19,344,410 (15,927,862) - 17,618,059
Total Capital Assets
Not Depreciated 28,590,698 19,344,410 (15,927,862) 17,591 32,024,837
Capital Assets, Being
Depreciated
Infrastructure 640,641,602 14,875,150 (9,312,310) 869,559 647,074,001
Field Equipment 8,988,620 60,471 (530,190) - 8,518,901
Buildings 20,576,125 635,154 (243,913) (887,150) 20,080,216
Transportation Equipment 3,286,998 278,472 (136,166) - 3,429,304
Communication Equipment 3,371,041 155,636 (12,362) - 3,514,315
Office Equipment 17,620,584 554,553 (525,150) - 17,649,987
Total Capital Assets
Being Depreciated 694,484,970 16,559,436 (10,760,091) (17,591) 700,266,724
Less Accumulated Depreciation:
Infrastructure 235,280,822 15,735,932 (7,597,237) 481,160 243,900,677
Field Equipment 7,036,892 307,889 (525,717) - 6,819,064
Buildings 9,596,983 509,171 (119,055) (481,160) 9,505,939
Transportation Equipment 2,608,206 155,029 (136,166) - 2,627,069
Communication Equipment 2,627,246 245,639 (12,362) - 2,860,523
Office Equipment 15,728,569 512,658 (513,501) - 15,727,726
Total Accumulated
Depreciation 272,878,718 17,466,318 (8,904,038) - 281,440,998
Total Capital Assets
Being Depreciated, Net
421,606,252
(906,882)
(1,856,053)
(17,591)
418,825,726
Total Capital Assets, Net $ 450,196,950 $ 18,437,528 $ (17,783,915) $ - $ 450,850,563
(1) Adjustments are related to recategorization of capital assets during the fiscal year.
Depreciation expense for the year ended June 30, 2018 was $17,466,318.
33
Notes to Financial Statements
Year Ended June 30, 2018
5) LONG-TERM DEBT
Long-term liabilities for the year ended June 30, 2018 are as follows:
Beginning Ending Due Within
Balance Additions Deletions Balance One Year
General Obligation Bonds:
Improvement District No. 27 - 2009 $ 3,995,000 $ - $ 605,000 $ 3,390,000 $ 635,000
Unamortized Bond Premium 84,498 - 16,355 68,143 -
Net General Obligation Bonds 4,079,498 - 621,355 3,458,143 635,000
Certificates of Participation:
1996 Certificates of Participation 8,200,000 - 600,000 7,600,000 700,000
1996 COPS Unamortized Discount (7,452) - (745)(6,707) -
Net Certificates of Participation 8,192,548 - 599,255 7,593,293 700,000
Revenue Bonds:
2010 Water Revenue Bonds Series A 8,820,000 - 940,000 7,880,000 975,000
2010 Water Revenue Bonds Series B 36,355,000 - - 36,355,000 -
2013 Water Revenue Refunding Bonds 5,220,000 - 660,000 4,560,000 685,000
2016 Water Revenue Refunding Bonds 32,185,000 - 1,015,000 31,170,000 1,045,000
2010 Series A Unamortized Premium 539,411 - 74,402 465,009 -
2013 Bonds Unamortized Premium 592,588 - 96,095 496,493 -
2016 Bonds Unamortized Premium 3,422,619 - 178,571 3,244,048 -
Net Revenue Bonds 87,134,618 - 2,964,068 84,170,550 2,705,000
Total Long-Term Liabilities $ 99,406,664 $ - $ 4,184,678 $ 95,221,986 $ 4,040,000
General Obligation Bonds
In June 1998, the District issued $11,835,000 of General Obligation Refunding Bonds. The proceeds of this
issue, together with other lawfully available monies, were to be used to establish an irrevocable escrow to
advance refund and defease in their entirety the District’s previous outstanding General Obligation Bond
issue. In November 2009, the District issued $7,780,000 of General Obligation Refunding Bonds
Improvement District No. 27-2009 to refund the 1998 issue. The proceeds from the bond issue were
$7,989,884, which included an original issue premium of $209,884. An amount of $7,824,647, which
consisted of unpaid principal and accrued interest, was deposited into an escrow fund. Pursuant to an
optional redemption clause in the 1998 bonds, the District was able to redeem the 1998 bonds, without
premium at any time after September 1, 2009. On December 15, 2009 the 1998 bonds were refunded.
34
Notes to Financial Statements
Year Ended June 30, 2018
5) LONG-TERM DEBT - Continued
General Obligation Bonds - Continued
These bonds are general obligations of Improvement District No. 27 (ID 27) of the District. The Board of
Directors has the power and is obligated to levy annual ad valorem taxes without limitation, as to rate or
amount for payment of the bonds and the interest upon all property which is within ID 27 and subject to
taxation. The General Obligation Bonds are payable from District-wide tax revenues. The Board may
utilize other sources for servicing the bond debt and interest.
The Improvement District No. 27-2009 General Obligation Refunding Bonds have interest rates from
3.00% to 4.00% with maturities through Fiscal Year 2023.
Future debt service requirements for the bonds are as follows:
For the Year Ended
June 30, Principal Interest
2019 $ 635,000 $ 122,900
2020 650,000 97,200
2021 680,000 70,600
2022 705,000 42,900
2023 720,000 14,400
$ 3,390,000 $ 348,000
Certificates of Participation (COPS)
In June 1996, COPS with face value of $15,400,000 were sold by the Otay Service Corporation to finance
the cost of design, acquisition, and construction of certain capital improvements. An installment
purchase agreement between the District, as Buyer, and the Corporation, as Seller, was executed for the
scheduled payment of principal and interest associated with the COPS. The installment payments are to
be paid from taxes and net revenues, as described in the installment agreement. The certificates bear
interest at a variable weekly rate not to exceed 12%. The variable interest rate is tied to the 30-day LIBOR
index and the Securities Industry and Financial Markets Association (SIFMA) index. An irrevocable letter
of credit facility is necessary to market the District’s variable rate debt. This facility is with Union Bank and
covers the outstanding principal and interest. The facility expires on June 29, 2020. The interest rate at
June 30, 2018 was 1.50%. The installment payments are to be paid annually at $350,000 to $1,100,000
from September 1, 1996 through September 1, 2026.
In March 2007, Revenue Certificates of Participation (COPS) with face value of $42,000,000 were sold by
the Otay Service Corporation to improve the District’s water storage system and distribution facilities. An
installment purchase agreement between the District, as a Buyer, and the Corporation, as Seller, was
executed for the scheduled payment of principal and interest associated with the COPS. The installment
payments are to be paid from taxes and net revenues, as described in the installment agreement. On
May 1, 2016 the 2007 COPS was refunded.
35
Notes to Financial Statements
Year Ended June 30, 2018
5) LONG-TERM DEBT - Continued
There is no aggregate reserve requirement for the COPS. Future debt service requirements for the
certificates are as follows:
For the Year 1996 COPS
Ended June 30, Principal Interest(1)
2019 $ 700,000 $ 105,250
2020 700,000 94,750
2021 700,000 84,250
2022 800,000 72,500
2023 800,000 60,500
2024-2027 3,900,000 102,750
$ 7,600,000 $ 520,000
(1)Variable Rate - Interest reflected at June 30, 2018 at a rate of 1.50%.
The COPS debt issue contain various covenants and restrictions, principally that the District fix, prescribe,
revise and collect rates, fees and charges for the Water System which will at lease sufficient to yield,
during each fiscal year, taxes and net revenues equal to one hundred twenty-five percent (125%) of the
debt service for such fiscal year. The District was in compliance with these rate covenants for the fiscal
year ended June 30, 2018.
Water Revenue Bonds
In April 2010, Water Revenue Bonds with a face value of $50,195,000 were sold by the Otay Water District
Financing Authority to provide funds for the construction of water storage and transmission facilities. The
bond issue consisted of two series; Water Revenue Bonds, Series 2010A (Non-AMT Tax Exempt) with a
face value of $13,840,000 plus a $1,078,824 original issue premium, and Water Revenue Bonds, Series
2010B (Taxable Build America Bonds) with a face value of $36,355,000. The Series 2010A bonds are due
in annual installments of $785,000 to $1,295,000 from September 1, 2012 through September 1, 2025;
bearing interest at 2% to 5.25%. The Series 2010B bonds are due in annual installments of $1,365,000 to
$3,505,000 from September 1, 2026 through September 1, 2040; bearing interest at 6.377% to 6.577%.
Interest on both Series is payable on September 1, 2010 and semiannually thereafter on March 1st and
September 1st of each year until maturity or earlier redemption. The installment payments are to be made
from taxes and net revenues of the Water System as described in the installment purchase agreement,
on parity with the payments required to be made by the District for the 1996 Certificates of Participation
described above and the 2013 and 2016 Water Revenue Refunding Bonds described below.
The proceeds of the bonds will be used to fund the project described above as well as to fund reserve
funds of $1,030,688 (Series 2010A) and $2,707,418 (Series 2010B). $542,666 was used to fund various
costs of issuance.
36
Notes to Financial Statements
Year Ended June 30, 2018
5) LONG-TERM DEBT - Continued
Water Revenue Bonds - Continued
The original issue premium is being amortized over the 14-year life of the Series 2010A bonds.
Amortization for the year ending June 30, 2018 was $74,402 and is included in interest expense. The
unamortized premium at June 30, 2018 is $465,009.
The 2010 Water Revenue Bonds contains various covenants and restrictions, principally that the District
fix, prescribe, revise and collection rates, fees and charges for the Water System which will at least be
sufficient to yield, during each fiscal year, taxes and net revenues equal to one hundred twenty-five
percent (125%) of the debt service for such fiscal year. The District was in compliance with these rate
covenants for the fiscal year ended June 30, 2018.
In June 2013, the 2013 Water Revenue Refunding Bonds were issued to defease the 2004 Refunding
Certificates of Participation. The bonds were issued with a face value of $7,735,000 plus a $984,975
original issue premium. The bonds are due in annual installments of $660,000 to $835,000 from
September 1, 2013 through September 1, 2023; bearing interest at 1% to 4%. The installment payments
are to be made from taxes and net revenues of the Water System, on parity with the payments required
to be made by the District for the 1996 and 2016 Water Revenue Bonds and the 2010A and 2010B
described above.
The original issue premium is being amortized over the 11 year life of the Series 2013 bonds.
Amortization for the year ending June 30, 2018 was $96,095 and is included in interest expense. The
unamortized premium at June 30, 2018 is $496,493.
In May 2016, Water Revenue Refunding Bonds were issued to defease the 2007 Revenue Certificates of
Participation. The bonds are due in annual installments of $1,200,000 to $2,235,000 from September 1,
2016 through September 1, 2036; bearing interest of 2% to 5%. The bonds were issued with a face value
of $33,385,000 plus $3,630,950 original issue premium. The savings between the cash flow required to
service, the old debt and the cash flow required to service the new debt is $5,664,140 and represent an
economic gain on refunding of $4,538,175.
The original issue premium is being amortized over the 20 year life of the Series 2016 bonds.
Amortization for the year ending June 30, 2018 was $178,571 and is included in interest expense. The
unamortized premium at June 30, 2018 is $3,244,048.
37
Notes to Financial Statements
Year Ended June 30, 2018
5) LONG-TERM DEBT - Continued
Water Revenue Bonds - Continued
The total amount outstanding at June 30, 2018 and aggregate maturities of the revenue bonds for the
fiscal years subsequent to June 30, 2018, are as follows:
For the Year
2010 Water Revenue Bond
Series A
2010 Water Revenue Bond
Series B
Ended June 30, Principal Interest Principal Interest
2019 $ 975,000 $ 367,988 $ - $ 2,371,868
2020 1,015,000 323,112 - 2,371,868
2021 1,065,000 271,112 - 2,371,868
2022 1,120,000 216,488 - 2,371,868
2023 1,175,000 159,113 - 2,371,868
2024-2028 2,530,000 132,856 4,360,000 11,453,765
2029-2033 - - 9,320,000 9,049,258
2034-2038 - - 12,795,000 5,459,733
2039-2042 - - 9,880,000 1,002,335
$ 7,880,000 $ 1,470,669 $ 36,355,000 $ 38,824,431
For the Year
2013 Water Revenue
Refunding Bonds
2016 Water Revenue
Refunding Bonds
Ended June 30, Principal Interest Principal Interest
2019 $ 685,000 $ 168,700 $ 1,045,000 $ 1,173,456
2020 715,000 140,700 1,100,000 1,119,831
2021 745,000 111,500 1,155,000 1,063,456
2022 775,000 81,100 1,215,000 1,004,206
2023 805,000 49,500 1,285,000 941,706
2024-2028 835,000 16,700 7,480,000 3,658,132
2029-2033 - - 9,315,000 1,917,682
2034-2037 - - 8,575,000 498,078
$ 4,560,000 $ 568,200 $ 31,170,000 $ 11,376,547
Revenues Pledged
The District has pledged a portion of future water sales revenues to repay its Water Revenue Bonds and
Certificates of Participation. Total principal and interest remaining on the Water Revenue Bonds and
Certificates of Participation is $140,324,846 payable through fiscal year 2042. For the current year,
principal and interest paid by the water sales revenues were $3,215,000 and $4,268,091, respectively.
38
Notes to Financial Statements
Year Ended June 30, 2018
6) NET POSITION
Designations of Net Position
In addition to the restricted net position, a portion of unrestricted net position, have been designated by
the Board of Directors for the following purposes as of June 30, 2018:
Designated Betterment $ 2,293,440
Replacement Reserve 20,510,569
Designated New Supply Fund 325,645
Employee Benefits Reserve 262,404
Total $ 23,392,058
7) DEFINED BENEFIT PENSION PLAN
A) General Information about the Pension Plans
Plan Descriptions
All qualified permanent and probationary employees are eligible to participate in the District’s Plan,
agent multiple-employer defined benefit pension plans administered by the California Public
Employees’ Retirement System (CalPERS), which acts as a common investment and
administrative agent for its participating member employers. Benefit provisions under the Plans
are established by State statute and District resolution. CalPERS issues publicly available reports
that include a full description of the pension plans regarding provisions, assumptions and
membership information that can be found on the CalPERS website.
Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and
death benefits to plan members, who must be public employees and beneficiaries. Benefits are
based on years of credited service, equal to one year of full time employment. Members with five
years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members
are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the
following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death
Benefit. The cost of living adjustments for the plan are applied as specified by the Public
Employees’ Retirement Law.
39
Notes to Financial Statements
Year Ended June 30, 2018
7) DEFINED BENEFIT PENSION PLAN - Continued
A) General Information about the Pension Plans - Continued
Benefits Provided - Continued
The Plans’ provisions and benefits in effect at June 30, 2018 are summarized as follows:
Prior to On or After
Hire Date January 1, 2013 January 1, 2013
Benefit Formula 2.7% at 55 2% at 62
Benefit Vesting Schedule 5 years service 5 years service
Benefit Payments Monthly for life Monthly for life
Retirement Age 50 - 55 52 - 67
Monthly Benefits, as a % of Eligible Compensation 2.0% to 2.7% 1.0% to 2.5%
Required Employee Contribution Rates 8% 6.25%
Required Employer Contribution Rates 20.869% - 25.435% 25.435% - 34.246%
Employees Covered
The following employees were covered by the benefit terms for the Plan:
Inactive Employees or Beneficiaries Currently Receiving Benefits 175
Inactive Employees Entitled to But Not Yet Receiving Benefits 140
Active Employees 134
Total 449
Contributions
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer
contribution rates for all public employers be determined on an annual basis by the actuary and
shall be effective on the July 1 following notice of a change in the rate. Funding contributions for
the Plan are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially
determined rate is the estimated amount necessary to finance the costs of benefits earned by
employees during the year, with an additional amount to finance any unfunded accrued liability.
The District is required to contribute the difference between the actuarially determined rate and the
contribution rate of employees.
B) Net Pension Liability
The District’s net pension liability for the Plan is measured as the total pension liability, less the
pension plan’s fiduciary net position. The net pension liability of the Plan is measured as of June
30, 2017, using the annual actuarial valuation as of June 30, 2016 rolled forward to June 30, 2017
using standard update procedures. A summary of principal assumptions and methods used to
determine the net pension liability is shown below:
40
Notes to Financial Statements
Year Ended June 30, 2018
7) DEFINED BENEFIT PENSION PLAN - Continued
B) Net Pension Liability - Continued
Actuarial Assumptions
The total pension liabilities in the June 30, 2016 actuarial valuations were determined using the
following actuarial assumptions:
Valuation Date June 30, 2016
Measurement Date June 30, 2017
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:
Discount Rate 7.15%
Inflation 2.75%
Payroll Growth 3.0%
Projected Salary Increase 3.3% - 14.2% (1)
Investment Rate of Return 7.5% (2)
(1) Depending on age, service and type of employment.
(2) Net of pension plan investment expenses, including inflation..
The underlying mortality assumptions and all other actuarial assumptions used in the
June 30, 2016 valuation were based on the results of a January 2014 actuarial
experience study for the period 1997 to 2011. Further details of the Experience Study
can be found on the CalPERS website.
Discount Rate
The discount rate used to measure the total pension liability was 7.15% for the Plan. To determine
whether the municipal bond rate should be used in the calculation of a discount rate for each plan,
CalPERS stress tested plans that would most likely result in a discount rate that would be different
from the actuarially assumed discount rate. Based on the testing, none of the tested plans run out
of assets. Therefore, the current 7.15% discount rate is adequate and the use of the municipal
bond rate calculation is not necessary. The long term expected discount rate of 7.15% will be
applied to all plans in the Public Employees Retirement Fund (PERF). The stress test results are
presented in a detailed report that can be obtained from the CalPERS website.
According to Paragraph 30 of Statement 68, the long-term discount rate should be determined
without reduction for pension plan administrator expense. The 7.50% investment return
assumption used in this accounting valuation is net of administrative expenses. Administrative
expenses are assumed to be 15 basis points. An investment return excluding administrative
expenses would have been 7.65%. Using this lower discount rate has resulted in a slightly higher
Total Pension Liability and Net Pension Liability. CalPERS checked the materiality threshold for the
difference in calculation and did not find it to be a material difference.
41
Notes to Financial Statements
Year Ended June 30, 2018
7) DEFINED BENEFIT PENSION PLAN - Continued
B) Net Pension Liability - Continued
Discount Rate - Continued
The long-term expected rate of return on pension plan investments was determined using a
building-block method in which best-estimate ranges of expected future real rates of return
(expected returns, net of pension plan investment expense and inflation) are developed for each
major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term
and long-term market return expectations as well as the expected pension fund cash flows. Using
historical returns of all the funds’ asset classes, expected compound returns were calculated over
the short-term (first 10 years) and the long-term (11-60 years) using a building-block approach.
Using the expected nominal returns for both short-term and long-term, the present value of
benefits was calculated for each fund. The expected rate of return was set by calculating the
single equivalent expected return that arrived at the same present value of benefits for cash flows
as the one calculated using both short-term and long-term returns. The expected rate of return
was then set equivalent to the single equivalent rate calculated above the rounded down to the
nearest one quarter of one percent.
The following table reflects the long-term expected real rate of return by asset class. The rate of
return was calculated using the capital market assumptions applied to determine the discount rate
and asset allocation. These rates of return are net of administrative expenses.
Asset Class
New Strategic
Allocation
Real Return
Years 1 - 10(a)
Real Return
Years 11+(b)
Global Equity 47.0% 4.90% 5.38%
Global Fixed Income 19.0% 0.80% 2.27%
Inflation Sensitive 6.0% 0.60% 1.39%
Private Equity 12.0% 6.60% 6.63%
Real Estate 11.0% 2.80% 5.21%
Infrastructure and Forestland 3.0% 3.90% 5.36%
Liquidity 2.0% -0.40% -0.90%
Total 100%
(a)An expected inflation of 2.5% used for this period.
(b)An expected inflation of 3.0% used for this period.
42
Notes to Financial Statements
Year Ended June 30, 2018
7) DEFINED BENEFIT PENSION PLAN - Continued
C) Changes in the Net Pension Liability
The changes in the Net Pension Liability for the Plan for June 30, 2018:
Increase (Decrease)
Total
Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability/(Asset)
Beginning Balance $119,095,572 $ 73,846,128 $ 45,249,444
Changes in the Year:
Service Cost 2,556,902 - 2,556,902
Interest on the Total Pension Liability 8,836,284 - 8,836,284
Changes in Benefit Terms - - -
Changes in Assumptions 7,308,486 - 7,308,486
Differences Between Actual and
Expected Experience
(1,208,593)
-
(1,208,593)
Contribution - Employer - 4,105,810 (4,105,810)
Contribution - Employees - 1,014,329 (1,014,329)
Net Investment Income - 8,149,097 (8,149,097)
Benefit Payments, Including Refunds of
Employee Contributions
(5,779,040)
(5,779,040)
-
Administrative Expense - (109,029) 109,029
Net Changes 11,714,039 7,381,167 4,332,872
Ending Balance $130,809,611 $ 81,227,295 $ 49,582,316
Sensitivity of the Net Pension Liability to Changes in the Discount Rate
The following presents the net pension liability of the District for the Plan, calculated using the
discount rate for the Plan, as well as what the District’s net pension liability would be if it were
calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than
the current rate:
1% Decrease 6.15%
Net Pension Liability $ 67,205,545
Current Discount Rate 7.15%
Net Pension Liability $ 49,582,316
1% Increase 8.15%
Net Pension Liability $ 34,980,142
43
Notes to Financial Statements
Year Ended June 30, 2018
7) DEFINED BENEFIT PENSION PLAN - Continued
C) Changes in the Net Pension Liability - Continued
Pension Plan Fiduciary Net Position
Detailed information about the pension plan’s fiduciary net position is available in the separately
issued CalPERS financial reports.
D) Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
For the year ended June 30, 2018, the District recognized pension expense of $6,413,616. At June
30, 2018, the District reported deferred outflows of resources and deferred inflows of resources
related to pensions from the following services:
Deferred Outflows
of Resources
Deferred Inflows
of Resources
Pension contributions subsequent to measurement
date $ 4,452,147 $ -
Differences between actual and expected experience - (936,234)
Changes in assumptions 4,601,639 -
Net difference between projected and actual earnings
on pension plan investments
1,132,443
-
Total $ 10,186,229 $ (936,234)
$4,452,147 reported as deferred outflows of resources related to contributions subsequent to the
measurement date will be recognized as a reduction of the net pension liability in the year ended
June 30, 2019. Other amounts reported as deferred outflows of resources and deferred inflows of
resources related to pensions will be recognized as pension expense as follows:
Deferred
Year Ended Outflow/(Inflows)
June 30 of Resources
2018 $ 2,090,840
2019 2,830,327
2020 462,151
2021 (585,470)
2022 -
Thereafter -
44
Notes to Financial Statements
Year Ended June 30, 2018
7) DEFINED BENEFIT PENSION PLAN - Continued
E) Payable to the Pension Plan
At June 30, 2018, the District reported a payable of $88,989 for the outstanding amount of
contributions to the pension plan required for the year ended June 30, 2018 reflected in the
accrued payroll liabilities on the Statement of Net Position.
8) OTHER POST EMPLOYMENT BENEFITS (OPEB)
Plan Description
The District’s defined benefit postemployment healthcare plan, (DPHP), provides medical benefits to
eligible retired District employees and beneficiaries. DPHP is part of the Public Agency portion of the
California Employers’ Retiree Benefit Trust Fund (CERBT), an agent multiple-employer plan
administered by California Public Employees’ Retirement System (CalPERS), which acts as a common
investment and administrative agent for participating public employers within the State of California.
CalPERS issues a separate Comprehensive Annual Financial Report. Copies of the CalPERS’ annual
financial report may be obtained from the CalPERS Executive Office, 400 P Street, Sacramento,
California 95814.
Prior to the plan agreements signed in 2011, the eligibility in the plan was broken into 3 tiers,
employees hired before January 1, 1981, employees hired on or after January 1, 1981 but before July 1,
1993 and employees hired on or after July 1, 1993. Board members elected before January 1, 1995 are
also eligible for the plan. Eligibility also includes age and years of service requirements which vary by
tier. Benefits include up to 100% medical and/or dental premiums for life for the retiree for Tier I, II or III
employees, and up to 100% spouse premium until death of retiree or age 65 whichever is greater and
dependent premium up to age 19 depending on the tier.
Subsequent to the agreements in 2011 and 2012 all employees are eligible for the plan after 20 years
of consecutive service and unrepresented employees hired before January 1, 2013 are eligible after 15
years. Survivor benefits are covered beyond Medicare.
Employees Covered
As of June 30, 2017 actuarial valuation, the following current and former employees were covered by
the benefit terms under the Plan:
Active employees 131
Inactive employees or beneficiaries currently receiving benefits 79
Inactive employees entitled to, but not yet receiving benefits -
Total 210
45
Notes to Financial Statements
Year Ended June 30, 2018
8) OTHER POST EMPLOYMENT BENEFITS (OPEB) - Continued
Contributions
The annual contribution is based on the actuarially determined contribution. For the fiscal year ended
June 30, 2018, the District’s cash contributions were $2,054,208 in payments to the trust and the
estimated implied subsidy was $147,796 resulting in total payments of $2,202,004.
Net OPEB Liability
The District’s net OPEB liability was measured as of June 30, 2017 and the total OPEB liability used to
calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2017 based
on the following actuarial methods and assumptions:
Actuarial Assumptions
Discount Rate 7.00%
Inflation 2.75%
Salary Increases 3.0% plus merit
Investment Rate of Return 7.00%
Mortality Rate(1) Derived using CalPERS Membership Data for all funds
Pre-Retirement Turnover(2) Derived using CalPERS Membership Data for all funds
Healthcare Trend Rate 6.00% HMO/6.50% PPO decreasing to 5.00% HMO/5.00%
PPO
Notes:
(1) Pre-retirement mortality information was derived from data collected during 1997 to 2011 CalPERS
Experience Study dated January 2014 and post-retirement mortality information was derived from the
2007 to 2011 CalPERS Experience Study. The Experience Study Reports may be access on the
CalPERS website www.calpers.ca.gov under Forms and Publications.
(2) The pre-retirement turnover information was developed based on CalPERS specific data. For more
details, please refer to the 2007 to 2011 Experience Study Report. The Experience Study Report may be
accessed on the CalPERS website www.calpers.ca.gov under Forms and Publications.
46
Notes to Financial Statements
Year Ended June 30, 2018
8) OTHER POST EMPLOYMENT BENEFITS (OPEB) - Continued
Net OPEB Liability - Continued
The long-term expected rate of return on OPEB plan investments was determined using a building block
method in which best-estimate ranges of expected future real rates of return (expected returns, net of
OPEB plan investment expense and inflation) are developed for each major asset class. These ranges
are combined to produce the long-term expected rate of return by weighting the expected future real
rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates
of arithmetic real rates of return for each major asset class included in the OPEB plan’s target asset are
summarized in the following table:
Long-term
Target Expected Real
Asset Class Allocation Rate of Return
US Equity 30.0% 4.85%
International Equity 27.0% 5.85%
REITs 8.0% 3.65%
US Fixed Income 27.0% 2.35%
Commodities 3.0% 1.75%
Inflation Assets 5.0% 1.50%
Total 100%
Discount Rate
The discount rate used to measure the total OPEB liability was 7.00%. The projection of cash flows used
to determine the discount rate assumed that District contributions will be made at rates equal to the
actuarially determined contribution rates. Based on those assumptions, the OPEB plan’s fiduciary net
position was projected to be available to make all projected OPEB payments for current active and
inactive employees and beneficiaries. Therefore, the long-term expected rate of return on OPEB plan
investments was applied to all periods of projects benefit payments to determine the total OPEB liability.
47
Notes to Financial Statements
Year Ended June 30, 2018
8) OTHER POST EMPLOYMENT BENEFITS (OPEB) - Continued
Changes in the OPEB Liability
The changes in the net OPEB liability for the Plan are as follows:
Increase (Decrease)
Total OPEB
Liability
(a)
Plan Fiduciary
Net Position
(b)
Net OPEB
Liability/(Asset)
(c) = (a) - (b)
Balance at June 30, 2017
(Valuation Date June 30, 2017) $ 25,037,076 $ 18,492,217 $ 6,544,859
Changes Recognized for the Measurement Period:
Service Cost 687,528 - 687,528
Interest 1,764,343 - 1,764,343
Changes of Assumptions - - -
Contribution - Employer - 2,284,420 (2,284,420)
Net Investment Income - 2,011,985 (2,011,985)
Benefit Payments (1,039,420) (1,039,420) -
Administrative Expense - (10,167) 10,167
Net Changes 1,412,451 3,246,818 (1,834,367)
Balance at June 30, 2018
(Measurement Date June 30, 2017)
$ 26,449,527
$ 21,739,035
$ 4,710,492
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate
The following presents the net OPEB liability of the District if it were calculated using a discount rate
that is one percentage point lower or one percentage point higher than the current rate, for
measurement period ended June 30, 2017:
1% Decrease
(6.00%)
Current
Discount
Rate
(7.00%)
1% Increase
(8.00%)
Net OPEB Liability $ 8,830,538 $ 4,710,492 $ 1,378,817
48
Notes to Financial Statements
Year Ended June 30, 2018
8) OTHER POST EMPLOYMENT BENEFITS (OPEB) - Continued
Sensitivity of the Net OPEB Liability to Changes in the Health Care Cost Trend Rates
The following presents the net OPEB liability of the District if it were calculated using health care cost
trend rates that are one percentage point lower or one percentage point higher than the current rate,
for measurement period ended June 30, 2017:
1% Decrease
(5.00% HMO/5.50%
PPO
Decreasing to
4.00% HMO/4.00%
PPO)
Current Healthcare Cost
Trend Rates
(6.00% HMO/6.5% PPO
Decreasing to
5.00% HMO/5.00%
PPO)
1% Increase
(7.00% HMO/7.50% PPO
Decreasing to
6.00% HMO/6.00% PPO)
Net OPEB Liability $ 1,158,335 $ 4,710,492 $ 9,214,495
OPEB Plan Fiduciary Net Position
CERBT issues a publicly available financial report that may be obtained from the California Public
Employees Retirement System Executive Office, 400 P Street, Sacramento, California 95814.
Recognition of Deferred Outflows and Deferred Inflows of Resources
Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in
OPEB expense systematically over time.
Amounts are first recognized in OPEB expense for the year the gain or loss occurs. The remaining
amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and
are to be recognized in future OPEB expense.
The recognition period differs depending on the source of the gain or loss:
Net difference between projected and actual
earnings on OPEB plan investments
5 years
All other amounts Expected average remaining service lifetime (EARSL)
49
Notes to Financial Statements
Year Ended June 30, 2018
8) OTHER POST EMPLOYMENT BENEFITS (OPEB) - Continued
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB
For the fiscal year ended June 30, 2018, the District recognized OPEB expense of $(39,299). As of fiscal
year ended June 30, 2018, the District reported deferred outflows of resources related to OPEB from
the following services:
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
OPEB contributions subsequent to measurement date $ 2,202,004 $ -
Changes in assumptions - -
Net differences between projected and actual earnings
on OPEB plan investments -
(539,449)
Total $ 2,202,004 $ (539,449)
The $2,202,004 reported as deferred outflows of resources related to contributions subsequent to the
June 30, 2017 measurement date will be recognized as a reduction of the net OPEB liability during the
fiscal year ending June 30, 2019. Other amounts reported as deferred outflows of resources related to
OPEB will be recognized as expense as follows:
Deferred
Year Ended Outflow/(Inflows)
June 30, of Resources
2019 $ (134,862)
2020 (134,862)
2021 (134,862)
2022 (134,863)
2023 -
Thereafter -
9) WATER CONSERVATION AUTHORITY
In 1999 the District formed the Water Conservation Garden Authority (the “Authority”), a Joint Powers
Authority, with other local entities to construct, maintain and operate a xeriscape demonstration
garden in the furtherance of water conservation. The authority is a non-profit public charity
organization and is exempt from income taxes. During the year ended June 30, 2018, the District
contributed $123,050, for the development, construction and operation costs of the xeriscape
demonstration garden.
50
Notes to Financial Statements
Year Ended June 30, 2018
9) WATER CONSERVATION AUTHORITY - Continued
A summary of the Authority’s June 30, 2017 audited financial statement is as follows (latest report
available):
Assets $ 1,250,047
Liabilities 0
Net Position $ 1,250,047
Revenues, Gains and Other Support $ 490,780
Expenses 557,052
Changes in Net Position $ (66,272)
10) COMMITMENTS AND CONTINGENCIES
Construction Commitments
The District had committed to capital projects under construction with an estimated cost to complete of
$21,974,525 at June 30, 2018.
Litigation
Certain claims, suits and complaints arising in the ordinary course of operation have been filed or are
pending against the District. In the opinion of the staff and counsel, all such matters are adequately
covered by insurance, or if not so covered, are without merit or are of such kind, or involved such
amounts, as would not have significant effect on the financial position or results of operations of the
District if disposed of unfavorably.
Refundable Terminal Storage Fees
The District has entered into an agreement with several developers whereby the developers prepaid the
terminal storage fee in order to provide the District with the funds necessary to build additional storage
capacity. The agreement further allows the developers to relinquish all or a portion of such water storage
capacity. If the District grants to another property owner the relinquished storage capacity, the District
shall refund to the applicable developer $746 per equivalent dwelling unit (EDU). There were 17,867
EDUs that were subject to this agreement. At June 30, 2018, 1,750 EDUs had been relinquished and
refunded, 15,086 EDUs had been connected, and 1,031 EDUs have neither been relinquished nor
connected.
Developer Agreements
The District has entered into various Developer Agreements with developers towards the expansion of
District facilities. The developers agree to make certain improvements and after the completion of the
projects the District agrees to reimburse such improvements with a maximum reimbursement amount
for each developer. Contractually, the District does not incur a liability for the work until the work is
accepted by the District. As of June 30, 2018, none of the outstanding developer agreements had been
accepted.
51
Notes to Financial Statements
Year Ended June 30, 2018
11) RISK MANAGEMENT
General Liability
The District is exposed to various risks of loss related to torts, theft, damage and destruction of assets,
errors and omissions, and natural disasters. Beginning in July 2003, the District began participation in an
insurance pool through the Special District Risk Management Authority (SDRMA). SDRMA is a not-for-
profit public agency formed under California Government Code Sections 6500 et. Seq. SDRMA is
governed by a board composed of members from participating agencies. The mission of SDRMA is to
provide renewable, efficiently priced risk financing and risk management services through a financially
sound pool. The District pays an annual premium for commercial insurance covering general liability,
excess liability, property, automobile, public employee dishonesty, and various other claims. Separate
financial statements of SDRMA may be obtained at Special District Risk Management Authority, 1112 “I”
Street, Suite 300, Sacramento, CA 95814.
General and Auto Liability, Public Officials’ Errors and Omissions and Employment Practices Liability:
Total risk financing limits of $10 million combined single limit at $10 million per occurrence, subject to the
following deductibles:
$12,000 per occurrence for third party general liability property damage;
$1,000 per occurrence for third party auto liability property damage;
50% co-insurance of cost expended by SDRMA, in excess of $10,000 up to $210,000, per
occurrence, as respects any employment practices claim or suit arising in whole or any part out
of any action involving discipline, demotion, reassignment or termination of any employee of the
member.
Employee Dishonesty Coverage: Total of $1,000,000 per loss includes Public Employee Dishonesty,
Forgery or Alteration and Theft, Disappearance and Destruction coverage’s effective July 1, 2017.
Property Loss: Replacement cost, for property on file, if replaced, and if not replaced within two years
after the loss, paid on an actual cash value basis, to a combined total of $1 billion per occurrence, subject
to a $1,000 deductible per occurrence, effective July 1, 2017.
Boiler and Machinery: Replacement cost up to $100 million per occurrence, subject to a $1,000
deductible, effective July 1, 2017.
Public Officials Personal Liability: $500,000 each occurrence, with an annual aggregate of $500,000 per
each elected/appointed official to which this coverage applies, subject to the terms, conditions and
exclusions as provided in the Memorandum of Coverage’s, deductible of $500 per occurrence, effective
July 1, 2017.
Comprehensive and Collision: On selected vehicles, with deductibles of $250/$500 or $500/$1,000, as
elected; ACV limits; fully self-funded by SDRMA; Policy No. LCA - SDRMA – 2017-18, effective July 1, 2017.
52
Notes to Financial Statements
Year Ended June 30, 2018
11) RISK MANAGEMENT - Continued
General Liability - Continued
Workers’ Compensation Coverage and Employer’s Liability: Statutory limits per occurrence for Workers’
Compensation and $5.0 million for Employer’s Liability Coverage, subject to the terms, conditions and
exclusions as provided in the Memorandum of Coverage, effective July 1, 2017.
Cyber Coverage: $2,000,000 Annual Aggregate Limit of Liability for each Insured/Member for Information
Security & Privacy Liability. Policy includes at $25,000 deductible per claim.
Health Insurance
Beginning in January 2008, the District began providing health insurance through SDRMA covering all of
its employees, retirees, and other dependents. SDRMA is a pooled medical program, administered in
conjunction with the California State Association of Counties (CSAC).
Adequacy of Protection
During the past three fiscal (claims) years none of the above programs of protection have had
settlements or judgments that exceeded pooled or insured coverage. There have been no significant
reductions in pooled or insured liability coverage from coverage in the prior year.
12) INTEREST EXPENSE
Interest expense for the years ended June 30, 2018 is as follows:
Amount Expensed $ 3,941,321
Amount Capitalized as a Cost of
Construction Projects 266,959
Total Interest $ 4,208,280
13) SEGMENT INFORMATION
The District has issued Water Revenue Bonds in previous fiscal years to finance certain capital
improvements. While water and wastewater services are accounted for jointly in these financial
statements, the investors in the Water Revenue Bonds rely solely on the revenues of the water services
for repayment.
53
Notes to Financial Statements
Year Ended June 30, 2018
13) SEGMENT INFORMATION - Continued
Summary financial information for the water services is presented for June 30, 2018:
Condensed Statement of Net Position
June 30, 2018
Water Services
ASSETS
Cash and Investments $ 83,936,096
Accounts Receivable 11,937,362
Other Current Asset 2,346,388
Capital Assets 425,858,728
Total Assets 524,078,574
DEFERRED OUTFLOWS OF RESOURCES
Deferred Actuarial Pension Costs 9,760,597
Deferred Actuarial OPEB Costs 2,098,510
Total Deferred Outflows of Resources 11,859,107
LIABILITIES
Accounts Payable 14,537,105
Other Miscellaneous Liabilities 4,345,073
Other Current Liabilities 9,038,907
General Obligation Bonds 2,823,143
Certificates of Participation 6,893,293
Net OPEB Liability 4,489,099
Revenue Bonds 81,465,550
Net Pension Liability 47,296,682
Other Non-current Liabilities 3,117,705
Total Liabilities 174,006,557
DEFERRED INFLOWS OF RESOURCES
Deferred Actuarial Pension Costs 916,299
Deferred Actuarial OPEB Costs 514,095
Total Deferred Inflows of Resources 1,430,394
NET POSITION
Net Investment in Capital Assets 330,636,742
Restricted for Debt Service 4,247,025
Unrestricted 25,616,963
Total Net Position $ 360,500,730
54
Notes to Financial Statements
Year Ended June 30, 2018
13) SEGMENT INFORMATION - Continued
Condensed Statement of Revenues, Expenses and Changes in
Net Position
For the Year Ended June 30, 2018
Water Services
Operating Revenues
Water Sales $ 92,595,195
Connection and Other Fees 2,009,084
Total Operating Revenues 94,604,279
Operating Expenses
Cost of Water Sales 62,321,213
Administrative and General 23,448,297
Depreciation 16,459,587
Total Operating Expenses 102,229,097
Operating Income (Loss) (7,624,818)
Non-operating Revenues (Expenses)
Investment Earnings 656,472
Taxes and Assessments 4,480,930
Availability Charges 646,323
Gain (Loss) on Sale of Capital Assets (1,527,679)
Rents and Leases 1,439,247
Miscellaneous Revenues 2,255,605
Donations (123,050)
Interest Expense (3,941,321)
Miscellaneous Expenses (893,623)
Total Non-operating Revenues (Expenses) 2,992,904
Income (Loss) Before Capital Contributions (4,631,914)
Capital Contributions 9,469,083
Change in Net Position 4,837,169
Total Net Position, Beginning , As Previously Reported 372,812,297
Prior Period Adjustment (17,148,736)
Total Net Position, Beginning, As Restated 355,663,561
Total Net Position, Ending $ 360,500,730
55
Notes to Financial Statements
Year Ended June 30, 2018
13) SEGMENT INFORMATION - Continued
Condensed Statement of Cash Flows
For the Year Ended June 30, 2018
Water Services
Net Cash Provided/(Used) by:
Operating Activities $ 14,471,842
Non-capital and Related Financing Activities 5,811,199
Capital and Related Financing Activities (16,598,410)
Investing Activities 3,065,764
Net Increase (Decrease) in Cash and Cash Equivalents 6,750,395
Cash and Cash Equivalents, Beginning 17,478,079
Cash and Cash Equivalents, Ending $ 24,228,474
14) PRIOR PERIOD ADJUSTMENT
The prior period adjustment of $17,816,075 relates to the implementation of GASB Statement 75 for
postemployment benefits other than pensions. According to GASB Statement 75, Accounting and
Financial Reporting for Postemployment Benefits Other Than Pensions, which was implemented by
the District in the 2018 fiscal year, recognizing liabilities, deferred outflows of resources, deferred
inflows of resources, and expenses related to OPEB plan.
15) SUBSEQUENT EVENTS
On July 11, 2018, the Board of Directors approved the transfer of $31.8 million to CalPERS to reduce the
District’s unfunded pension liability.
On September 5, 2018, the Board of Directors approved the issuance of $29,000,000 of 2018 Series A
Water Revenue Bonds. As of the date this report has been issued, the 2018 Series A Water Revenue
Bonds have not been finalized, and interest rates and repayment schedules are not yet available and
have not been approved.
On October 3, 2018, the Board of Directors approved the bond authorization be increased to an
amount not to exceed $36,000,000 and that the additional proceeds be used to refinance the
$6,900,000 outstanding 1996 Variable Rate COPS.
56
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58
Schedule of Changes in the Net OPEB Liability and Related
Ratios for Measurement Periods Ended June 30,
Last Ten Fiscal Years (1)
Measurement Period 2017
Total OPEB Liability
Service Cost $ 687,528
Interest on the Total OPEB Liability 1,764,343
Actual and Expected Experience Difference -
Changes in Assumptions -
Changes in Benefit Terms -
Benefit Payments (1,039,420)
Net Change in Total OPEB Liability 1,412,451
Total OPEB Liability - Beginning 25,037,076
Total OPEB Liability - Ending (a) $ 26,449,527
Plan Fiduciary Net Position
Contribution - Employer $ 2,284,420
Net Investment Income 2,011,985
Benefit Payments (1,039,420)
Administrative Expense (10,167)
Net Change in Plan Fiduciary Net Position 3,246,818
Plan Fiduciary Net Position - Beginning 18,492,217
Plan Fiduciary Net Position - Ending (b) $ 21,739,035
Net OPEB Liability - Ending (a)-(b)$ 4,710,492
Plan Fiduciary Net Position as a Percentage of the Total OPEB Liability 82.2%
Covered-employee Payroll 12,513,000
Net OPEB Liability as a Percentage of Covered-employee Payroll 37.6%
Notes to Schedule:
(1) Historical information is required only for measurement periods for which GASB 75 is applicable. Future years'
information will be displayed up to 10 years as information becomes available.
59
Schedule of Contributions
For Fiscal Year Ended June 30,
Last Ten Fiscal Years (1)
2018
Actuarially Determined Contribution (ADC) $ 1,116,418
Contributions in Relation to the ADC (2,202,004)
Contribution Deficiency (Excess) $ (1,085,586)
Covered-Employee Payroll $ 12,168,663
Contributions as a percentage of covered-employee payroll 18.10%
Notes to Schedule:
The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year
2018 were from the June 30, 2017 actuarial valuation.
Methods and assumptions used to determine contributions:
Actuarial Cost Method Entry Age Normal
Amortization Method/Period Level percent of payroll over a closed rolling 15-year period
Asset Valuation Method Market value
Inflation 2.75%
Payroll Growth 3.00% plus merit
Investment Rate of Return 7.00% per annum
Healthcare Cost-trend Rates 6.00% HMO/6.5% PPO decreasing to 5.00% HMO/5.00% PPO
Retirement Age Tier 1 employees - 2.7% at 55 and Tier 2 employees - 2.0% at 62.
The probabilities of Retirement are based on the 2014 CalPERS
Experience Study for the period from 1997 to 2011.
Mortality Pre-retirement mortality probability based on 2014 CalPERS 1997-
2011 Experience Study covering CalPERS participants. Post-
retirement mortality probability based on CalPERS Experience
Study 2007-2011 covering participants in CalPERS.
(1) Historical information is required only for measurement periods for which GASB 75 is applicable. Future years'
information will be displayed up to 10 years as information become available.
60
Schedule of Changes in the Net Pension Liability
and Related Ratios for Fiscal Years Ended June 30,
Last Ten Fiscal Years (1)
Notes to Schedule:
Benefit Changes: The figures above do not include any liability impact that may have resulted from plan
changes which occurred after June 30, 2016. This applies for voluntary benefit changes as well as any offers
of Two Years Additional Service Credit (a.k.a. Golden Handshakes).
Changes of Assumptions: For the 2018 fiscal year, the accounting discount rate reduced from 7.65% to
7.15%. For the 2017 fiscal year, there were no changes. For the 2016 fiscal year, amounts reported reflect an
adjustment the discount rate of 7.5% (net of administrative expense) to 7.65% (without a reduction for
pension plan administrative expense). In 2014, amounts reported were based on the 7.5% discount rate.
Measurement Period (2) 2017 2016 2015 2014
TOTAL PENSION LIABILITY
Service Cost $ 2,556,902 $ 2,298,617 $ 2,250,860 $ 2,330,709
Interest 8,836,284 8,575,275 8,229,312 7,907,915
Changes of Benefit Terms - - - -
Changes of Assumptions 7,308,486 - (1,996,819) -
Difference Between Expected and Actual
Experience (1,208,593) (613,440) (981,200) -
Benefit Payments, Including Refunds of Employee
Contributions
(5,779,040)
(5,448,218)
(5,288,251)
(4,885,406)
Net Change in Total Pension Liability 11,714,039 4,812,234 2,213,902 5,353,218
Total Pension Liability - Beginning 119,095,572 114,283,338 112,069,436 106,716,218
Total Pension Liability - Ending (a) $ 130,809,611 $ 119,095,572 $ 114,283,338 $ 112,069,436
PLAN FIDUCIARY NET POSITION
Contributions - Employer $ 4,105,810 $ 3,819,770 $ 3,557,098 $ 3,137,174
Contributions - Employee 1,014,329 1,010,337 1,007,023 1,074,954
Net Investment Income 8,149,097 369,214 1,601,760 10,874,999
Benefit Payments, Including Refunds of Employee
Contributions
(5,779,040
(5,448,218)
(5,288,251)
(4,885,406)
Administrative Expense (109,029) (45,185) (83,511) -
Other Changes in Fiduciary Net Position - - - -
Net Change in Fiduciary Net Position 7,381,167 (294,082) 794,119 10,201,721
Plan Fiduciary Net Position - Beginning 73,846,128 74,140,210 73,346,091 63,144,370
Plan Fiduciary Net Position - Ending (b) $ 81,227,295 $ 73,846,128 $ 74,140,210 $ 73,346,091
Plan Net Pension Liability/(Asset) - Ending (a) - (b)$ 49,582,316 $ 45,249,444 $ 40,143,128 $ 38,723,345
Plan Fiduciary Net Position as a Percentage of the
Total Pension Liability
62.10%
62.01%
64.87%
65.45%
Covered Payroll $ 12,829,415 $ 12,767,963 $ 12,451,513 $ 12,276,578
Plan Net Pension Liability/(Asset) as a Percentage
of Covered Payroll
386.47%
354.40%
322.40%
315.42%
(1) Measurement period 2017 (fiscal year 2018) was the fourth year of implementation; therefore, only four years are shown.
(2) Historical information is required only for measurement periods for which GASB 68 is applicable.
61
Schedule of Plan Contributions
For Fiscal Year Ended June 30,
Last Ten Fiscal Years (1)
(1) Historical information is required only for measurement periods for which GASB 68 is applicable.
(2) Employers are assumed to make contributions equal to the actuarially determined contributions. However, some employers may
choose to make additional contributions toward their unfunded liability. Employer contributions for such plans exceed the actuarially
determined contributions.
(3) Includes one year’s payroll growth using 3.00% payroll assumption.
Notes to Schedule:
The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year
2016-17 were from the June 30, 2014 public agency valuations.
Actuarial Cost Method Entry Age Normal
Amortization Method/Period For details see June 30, 2014 Funding Valuation Report
Asset Valuation Method Actuarial Value of Assets. For details, see June 30, 2014 Funding
Valuation Report
Inflation 2.75%
Salary Increases Varies by Entry Age and Service
Payroll Growth 3.00%
Investment Rate of Return 7.50% Net of Pension Plan Investment and Administrative
Expenses; includes Inflation
Retirement Age
The probabilities of Retirement are based on the 2010 CalPERS
Experience Study for the period from 1997 to 2007
Mortality
The probabilities of mortality are based on the 2010 CalPERS
Experience Study for the period from 1997 to 2007. Pre-retirement
and Post-retirement mortality rates include 5 years of projected
mortality improvement using Scale AA published by the Society of
Actuaries.
2018 2017
2016 2015
Actuarially Determined Contribution(2) $ 4,452,147 $ 4,105,810 $ 3,819,770 $ 3,557,098
Contributions in Relation to the Actuarially
Determined Contribution(2)
(4,452,147)
(4,105,810)
(3,819,770)
(3,557,098)
Contribution Deficiency (Excess) $ - $ - $ - $ -
Covered Payroll(3) $ 12,759,085 $ 12,829,415 $12,767,963 $ 12,451,513
Contributions as a Percentage of Covered
Payroll(3) 34.89% 32.00% 29.92% 28.57%
62
Statistical Schedules
The Statistical Schedule is part of understanding what the information in the financial statements, note
disclosures, and required supplementary information says about the District’s overall financial health.
Contents Page
Financial Trends 64
These schedules contain trend information to help the reader understand how the
District’s financial performance and well-being have changed over time.
Revenue Capacity 70
These schedules contain information to help the reader assess the factors affecting the
District’s ability to generate its potable and recycled water, and sewer sales as well as
property and sales taxes.
Debt 80
These schedules present information to help the reader assess the affordability of the
District’s current levels of outstanding debt and the District’s ability to issue additional
debt.
Demographic and Economic Information 85
These schedules offer demographic and economic indicators to help the reader
understand the environment within which the District’s financial activities take place
and to help make comparisons over time and with other governments.
Operating Information 87
These schedules contain information about the District’s operation and resources to
help the reader understand how the District’s financial information relates to the
services the District provides and the activities it performs.
Sources
Unless otherwise noted, the information in these schedules is derived from the comprehensive annual
financial reports of the relevant year. The District implemented GASB Statement 34 in 2001; schedules
presenting government-wide information include information beginning in that year.
63
Fiscal Net Investment Total
Year in Capital Assets Restricted Unrestricted Net Position
2018 355,628,577$ 4,247,025$ 27,664,926$ 387,540,528$ (1)
2017 350,981,714 4,306,724 45,898,551 401,186,989
2016 351,617,201 4,402,301 45,268,275 401,287,777
2015 354,046,090 4,658,306 43,717,930 402,422,326 (2)
2014 357,912,154 3,855,673 83,039,993 444,807,820
2013 376,549,168 4,612,890 67,071,849 448,233,907
2012 381,725,015 4,715,904 67,701,068 454,141,987
2011 377,656,762 4,915,555 74,627,563 457,199,880
2010 375,953,042 5,192,111 80,204,428 461,349,581
2009 382,410,491 1,797,512 76,136,868 460,344,871
(1) For Fiscal Year ending June 30, 2018, the $13.6 million decrease of Total Net Position is primarily a result of the
implementation of GASB Statement No. 75 "Accounting and Financial Reporting for Postemployment Benefits Other
Than Pensions-an amendment of GASB Statement No. 45”. Implementation of this standard decreased the net
position at July 1, 2017 by $17.8 million and recognized a net OPEB liability, deferred outflows of resources, and
expenses related to the OPEB plan.
(2) For Fiscal Year ending June 30, 2015, the $42.4 million decrease of Total Net Position is primarily due to the implementatio
of Governmental Accounting Standards Board (GASB) Statements No. 68 "Accounting and Financial Reporting for Pensi
an amendment of GASB Statement No. 27" and No. 71 "Pension Transistions for Contributions Made Subsequent to the
Measurement Date-an amendment of GASB No. 68". Implementation of these standards resulted in a decrease of Net
Position at July 1, 2014 by $40.4 million.
Source: Otay Water District
Net Position by Component - Last Ten Fiscal Years
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Total Net Positon, in Thousands ($)
64
Total
Operating Non-Operating Income/ (Loss) Changes
Fiscal Operating Operating Income/ Revenues/ Before Capital Capital in Net
Year Revenues Expenses (Loss) (Expenses) Contributions Contributions Position
2018 97,473,772$ 105,734,349$ (8,260,577)$ 2,923,999$ (5,336,578)$ 9,506,192$ 4,169,614$
2017 88,481,254 96,624,381 (8,143,127) 2,471,420 (5,671,707) 5,570,919 (100,788)
2016 78,876,307 89,669,543 (10,793,236) 2,687,368 (8,105,868) 6,971,319 (1,134,549)
2015 83,865,407 91,863,728 (7,998,321) 2,965,607 (5,032,714) 3,081,894 (1,950,820)
2014 86,025,573 92,567,023 (6,541,450) (277,057) (6,818,507) 3,392,420 (3,426,087)
2013 76,881,388 87,335,338 (10,453,950) 1,770,738 (8,683,212) 2,775,132 (5,908,080)
2012 68,400,349 81,795,466 (13,395,117) 3,511,327 (9,883,790) 6,825,897 (3,057,893)
2011 63,204,216 77,266,228 (14,062,012) 4,452,825 (9,609,187) 7,866,190 (1,742,997)
2010 60,686,681 73,126,342 (12,439,661) 5,937,575 (6,502,086) 8,839,892 2,337,806
2009 57,103,311 71,507,161 (14,403,850) 10,932,096 (3,471,754) 6,989,208 3,517,454
Source: Otay Water District
Changes in Net Position - Last Ten Fiscal Years
-$6,000
-$4,000
-$2,000
$0
$2,000
$4,000
$6,000
$8,000
$10,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Changes in Net Position, in Thousands ($)
65
Fiscal Connection and Percent
Year Water Sales Wastewater Other Fees Total Change
2018 92,595,195$ 2,865,520$ 2,013,057$ 97,473,772$ 10.2%
2017 83,720,150 2,983,495 1,777,609 88,481,254 12.2%
2016 73,940,200 3,175,300 1,760,807 78,876,307 -5.9%
2015 79,135,000 3,044,158 1,686,249 83,865,407 -2.5%
2014 81,287,164 2,791,523 1,946,886 86,025,573 11.9%
2013 72,187,081 2,625,087 2,069,220 76,881,388 12.4%
2012 63,830,272 2,400,313 2,169,764 68,400,349 8.2%
2011 58,293,184 2,396,385 2,514,647 63,204,216 4.1%
2010 56,249,816 2,299,585 2,137,280 60,686,681 6.3%
2009 52,428,648 2,182,429 2,492,234 57,103,311 2.5%
Source: Otay Water District
Operating Revenues by Source - Last Ten Fiscal Years
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Operating Revenues, in Thousands ($)
66
Fiscal Cost of Administrative Percent
Year Water Sales Wastewater and General Depreciation Total Change
2018 62,321,213$ 2,501,240$ 23,445,578$ 17,466,318$ 105,734,349$ 9.4%
2017 56,882,487 1,964,855 19,991,542 17,785,497 96,624,381 7.8%
2016 51,826,046 2,051,913 19,318,247 16,473,337 89,669,543 -2.4%
2015 54,364,884 1,866,711 19,437,141 16,194,992 91,863,728 -0.8%
2014 56,068,147 1,834,465 18,608,603 16,055,808 92,567,023 6.0%
2013 50,600,551 1,638,354 18,550,811 16,545,622 87,335,338 6.8%
2012 46,106,403 2,547,929 17,926,430 15,214,704 81,795,466 5.9%
2011 42,029,819 2,592,823 18,763,380 13,880,206 77,266,228 5.7%
2010 39,338,495 2,169,988 18,320,362 13,297,497 73,126,342 2.3%
2009 37,252,482 1,890,804 19,888,161 12,475,714 71,507,161 10.6%
Source: Otay Water District
Operating Expenses by Function - Last Ten Fiscal Years
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
$110,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Operating Expenses, in Thousands ($)
Cost of Water Sales Wastewater Administrative and General Depreciation
67
Fiscal Investment Taxes and Availability Rents and Percent
Year Earnings Assessments Charges Leases Miscellaneous Total Change
2018 723,860$ 4,481,719$ 697,724$ 1,439,247$ 2,255,605$ 9,598,155$ -10.6%
2017 408,754 4,114,583 729,325 1,375,305 4,107,558 (2)10,735,525 20.7%
2016 758,004 3,966,593 616,591 1,281,150 2,274,623 8,896,961 -0.6%
2015 656,925 3,856,276 685,555 1,232,920 2,521,078 8,952,754 15.2%
2014 522,286 3,537,162 729,961 1,317,736 1,661,992 7,769,137 -0.2%
2013 22,155 3,545,595 707,881 1,276,914 2,233,804 7,786,349 -14.9%
2012 436,596 3,502,155 696,863 1,222,060 3,288,111 9,145,785 4.4%
2011 854,440 3,895,938 653,012 1,185,573 2,174,690 8,763,653 0.2%
2010 1,323,844 3,973,328 670,784 1,083,988 1,693,942 8,745,886 -37.7%
2009 2,252,335 4,586,823 625,065 1,029,506 5,545,344 (1)14,039,073 3.5%
(1) The District received a large, one-time legal settlement as a member of a class action lawsuit in FY 2009.
(2) Miscellaneous revenue includes $1.8 million of capacity fee drawdown from contributed capital.
Source: Otay Water District
Non-Operating Revenues by Source - Last Ten Fiscal Years
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Non-Operating Revenues, in Thousands ($)
68
Fiscal Interest Percent
Year Donations (1)Expense Miscellaneous Total Change
2018 123,050$ 3,941,321$ 2,609,785$ 6,674,156$ -19.2%
2017 125,742 5,069,767 3,068,596 (4)8,264,105 33.1%
2016 120,722 4,603,093 1,485,778 6,209,593 3.7%
2015 117,462 4,545,530 1,324,155 5,987,147 -25.6%
2014 119,687 4,872,060 3,054,447 (3)8,046,194 33.8%
2013 120,684 3,977,538 1,917,389 6,015,611 6.8%
2012 121,617 3,899,927 1,612,914 (2)5,634,458 35.6%
2011 120,648 3,877,531 158,337 4,156,516 48.0%
2010 100,240 2,404,530 303,541 2,808,311 -9.6%
2009 95,270 1,340,110 1,671,597 3,106,977 5.6%
(1) Donations are contributions to the Water Conservation Authority formed in 1999. See Note 9 in the Notes to Financial
Statements for more information.
(2) Miscellaneous expense includes $1.4 million of non-capitalizable expenses with corresponding miscellaneous revenues. In
prior years these expenses and revenues were presented, net of revenue, in miscellaneous revenues.
(3) Miscellaneous expense includes $2.3 million of non-capitalizable expenses which were partially funded by capacity revenue
(4) Miscellaneous expense includes $1.8 million of non-capitalizable expenses which were primarily funded by capacity revenu
Source: Otay Water District
Non-Operating Expenses by Function - Last Ten Fiscal Years
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
2009 2010 2011 2012 2013 2014 2015 2017 2018
Non-Operating Expenses, in Thousands ($)
Miscellaneous Interest Expense Donations
69
Fiscal Total Direct
Year Real Personal Total Tax Rate
2018 28,808,597,510$ 578,765,787$ 29,387,363,297$ 1.00%
2017 27,060,627,238 538,359,438 27,598,986,676 1.00%
2016 25,506,243,489 551,455,064 26,057,698,553 1.00%
2015 24,109,906,912 572,400,598 24,682,307,510 1.00%
2014 22,739,584,104 564,518,965 23,304,103,069 1.00%
2013 22,253,255,369 583,080,854 22,836,336,223 1.00%
2012 22,556,489,450 588,978,085 23,145,467,535 1.00%
2011 22,997,752,952 521,424,896 23,519,177,848 1.00%
2010 23,671,616,006 527,200,694 24,198,816,700 1.00%
2009 26,269,630,081 482,465,611 26,752,095,692 1.00%
Source: County of San Diego Auditor and Controller
Last Ten Fiscal Years
Assessed Valuation of Taxable Property within the District -
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Assessed Valuation of Property, In Thousands ($)
70
Fiscal
Year Purchases Sales Production Purchases Sales
2018 12,910,269 12,227,383 377,450 1,460,271 1,810,502
2017 11,762,115 11,251,664 242,800 1,386,600 1,625,790
2016 11,108,105 10,475,379 439,650 1,163,117 1,591,677
2015 13,198,201 12,744,425 443,090 1,447,737 1,841,956
2014 14,554,049 13,720,119 503,120 1,664,630 2,068,330
2013 13,888,496 13,189,042 486,610 1,415,610 1,878,950
2012 13,304,444 12,510,894 285,190 1,381,300 1,652,833
2011 13,007,365 12,363,608 461,060 1,293,310 1,676,775
2010 13,580,004 12,749,799 449,771 1,250,873 1,774,563
2009 15,233,498 14,923,843 367,461 1,593,621 1,991,737
(1) Rates are not presented on this schedule because the District has multiple water rates for various meter sizes
and customer classes and cannot represent rates in a meaningful manner with a weighted average rate. See
Water and Sewer rates on pages 75-78 for meter sizes and their corresponding water rates.
Source: Otay Water District
Per 100 Cubic Feet
Water Purchases, Production, and Sales - Last Ten Fiscal Years
Recycled Water (1)
Per 100 Cubic Feet
Potable Water (1)
0
5,000,000
10,000,000
15,000,000
20,000,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Recycled Purchases Recycled Production Potable Purchases
Water Purchases, Productions, and Sales, in Hundred Cubic Feet (HCF)
71
Fiscal
Year Total (1)
2018 574 14 588
2017 109 9 118
2016 116 4 120
2015 138 8 146
2014 195 3 198
2013 305 5 310
2012 457 24 481
2011 283 9 292
2010 288 17 305
2009 113 44 157
(1) Meters may not be activated in the year sold.
Source: Otay Water District
Meter Sales by Type - Last Ten Fiscal Years
Potable Recycled
0
200
400
600
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Meter Sales by Type
Recycled Potable
72
Fiscal
Year Potable Recycled Sewer Total
2018 50,045 724 4,714 55,483
2017 49,502 721 4,683 54,906
2016 49,425 708 4,677 54,810
2015 49,308 705 4,679 54,692
2014 49,148 702 4,657 54,507
2013 48,962 704 4,655 54,321
2012 48,665 696 4,655 54,016
2011 48,154 685 4,655 53,494
2010 47,845 683 4,646 53,174
2009 47,689 671 4,638 52,998
Source: Otay Water District
Number of Customers by Service Type - Last Ten Fiscal Years
0
8,000
16,000
24,000
32,000
40,000
48,000
56,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Number of Customers by Service Type
Sewer Recycled Potable
73
Fiscal
Year 1% Property Tax
Special
Assessments
Total
Levies
Total
Collections (1)
End of the Year
Percent
Collected
2018 3,795,363 1,960,771 5,756,134 5,691,467
99%
2017 3,539,836 1,999,480 5,539,316 5,532,395
100%
2016 3,367,615 1,998,874 5,366,489 5,127,563
96%
2015 3,276,296 2,012,420 5,288,716 5,071,336
96%
2014 3,032,618 2,096,409 5,129,027 4,885,718
95%
2013 3,014,180 2,139,415 5,153,595 4,790,286
93%
2012 3,115,841 2,108,269 5,224,110 4,809,293
92%
2011 3,156,446 2,497,117 5,653,563 5,199,833
92%
2010 3,622,861 2,179,270 5,802,131 5,272,728
91%
2009 3,661,961 2,455,211 6,117,172 5,591,554
91%
(1) Levies and collections include Current Secured, Current Unsecured, and Supplemental Homeowners Exemptions.
Source: Otay Water District
Property Tax Levies and Collections - Last Ten Fiscal Years
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Levies and Collections, in Thousands ($)
Levy Collections
74
Fixed Rates 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009
System Fee by Meter Size
Residential Potable
3/4"17.38$ 15.91$ 18.91$ 19.39$ 16.19$ 16.74$ 14.58$ 14.58$ 14.58$ 13.83$
1"24.56 22.47 26.71 27.39 22.87 21.26 18.52 18.52 18.52 17.56
1.5"42.49 38.88 46.22 47.40 39.58 32.57 28.37 28.37 28.37 26.90
3/4"38.21 15.91 18.91 19.39 16.19 16.74 14.58 14.58 14.58 13.83
1"53.97 22.47 26.71 27.39 22.87 21.26 18.52 18.52 18.52 17.56
1.5"93.37 38.88 46.22 47.40 39.58 32.57 28.37 28.37 28.37 26.90
2"140.61 58.55 69.61 71.39 59.62 46.13 40.18 40.18 40.18 38.10
3"266.66 111.04 132.02 135.41 113.08 82.29 71.68 71.68 71.68 67.98
4"408.50 170.10 202.24 207.43 173.22 122.99 107.13 107.13 107.13 101.59
6"802.55 334.18 397.31 407.50 340.29 236.02 205.59 205.59 205.59 194.96
8"1,275.34 531.05 631.37 647.56 540.76 371.64 323.73 323.73 323.73 307.00
10"1,826.91 760.72 904.44 927.63 774.64 529.88 461.57 461.57 461.57 437.71
3/4"35.99 15.91 18.91 19.39 16.19 16.74 14.58 14.58 14.58 13.83
1"50.83 22.47 26.71 27.39 22.87 21.26 18.52 18.52 18.52 17.56
1.5"87.95 38.88 46.22 47.40 39.58 32.57 28.37 28.37 28.37 26.90
2"132.45 58.55 69.61 71.39 59.62 46.13 40.18 40.18 40.18 38.10
3"251.19 111.04 132.02 135.41 113.08 82.29 71.68 71.68 71.68 67.98
4"384.79 170.10 202.24 207.43 173.22 122.99 107.13 107.13 107.13 101.59
6"755.97 334.18 397.31 407.50 340.29 236.02 205.59 205.59 205.59 194.96
8"1,201.32 531.05 631.37 647.56 540.76 371.64 323.73 323.73 323.73 307.00
10"1,720.86 760.72 904.44 927.63 774.64 529.88 461.57 461.57 461.57 437.71
3/4"30.40 15.91 18.91 19.39 16.19 16.74 14.58 14.58 14.58 13.83
1"42.93 22.47 26.71 27.39 22.87 21.26 18.52 18.52 18.52 17.56
1.5"74.28 38.88 46.22 47.40 39.58 32.57 28.37 28.37 28.37 26.90
2"111.85 58.55 69.61 71.39 59.62 46.13 40.18 40.18 40.18 38.10
3"212.13 111.04 132.02 135.41 113.08 82.29 71.68 71.68 71.68 67.98
4"324.98 170.10 202.24 207.43 173.22 122.99 107.13 107.13 107.13 101.59
6"638.44 334.18 397.31 407.50 340.29 236.02 205.59 205.59 205.59 194.96
8"1,014.56 531.05 631.37 647.56 540.76 371.64 323.73 323.73 323.73 307.00
10"1,453.33 760.72 904.44 927.63 774.64 529.88 461.57 461.57 461.57 437.71
3/4"36.85 15.91 18.91 19.39 16.19 16.74 14.58 14.58 14.58 13.83
1"52.04 22.47 26.71 27.39 22.87 21.26 18.52 18.52 18.52 17.56
1.5"90.06 38.88 46.22 47.40 39.58 32.57 28.37 28.37 28.37 26.90
2"135.63 58.55 69.61 71.39 59.62 46.13 40.18 40.18 40.18 38.10
3"257.21 111.04 132.02 135.41 113.08 82.29 71.68 71.68 71.68 67.98
4"394.01 170.10 202.24 207.43 173.22 122.99 107.13 107.13 107.13 101.59
6"774.07 334.18 397.31 407.50 340.29 236.02 205.59 205.59 205.59 194.96
8"1,230.08 531.05 631.37 647.56 540.76 371.64 323.73 323.73 323.73 307.00
10"1,762.08 760.72 904.44 927.63 774.64 529.88 461.57 461.57 461.57 437.71
Continued
Water Fixed Rates - Last Ten Fiscal Years
Landscape, Agricultural & Construction Potable (1)
Public Agency & Commercial Potable (1)
Master Meter Potable (1)
Recycled Commercial (1)
75
Fixed Rates 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009
Water Fixed Rates - Last Ten Fiscal Years
System Fee by Meter Size
3/4"31.11 15.91 18.91 19.39 16.19 16.74 14.58 14.58 14.58 13.83
1"43.94 22.47 26.71 27.39 22.87 21.26 18.52 18.52 18.52 17.56
1.5"76.04 38.88 46.22 47.40 39.58 32.57 28.37 28.37 28.37 26.90
2"114.50 58.55 69.61 71.39 59.62 46.13 40.18 40.18 40.18 38.10
3"217.15 111.04 132.02 135.41 113.08 82.29 71.68 71.68 71.68 67.98
4"332.67 170.10 202.24 207.43 173.22 122.99 107.13 107.13 107.13 101.59
6"663.54 334.18 397.31 407.50 340.29 236.02 205.59 205.59 205.59 194.96
8"1,038.56 531.05 631.37 647.56 540.76 371.64 323.73 323.73 323.73 307.00
10"1,487.72 760.72 904.44 927.63 774.64 529.88 461.57 461.57 461.57 437.71
CWA and MWD Pass-through charges by Meter Size
Residential Potable
3/4"15.45 15.00 16.84 13.67 14.45 13.28 14.01 11.82 9.77 4.33
1"28.68 27.84 31.24 25.35 26.79 22.12 23.33 19.69 16.28 6.91
1.5"64.85 62.96 70.66 57.35 60.61 44.31 46.74 39.44 32.61 13.04
Non-Residential & Other Potable
3/4"15.45 15.00 16.84 13.67 14.45 13.28 14.01 11.82 9.77 4.33
1"28.68 27.84 31.24 25.35 26.79 22.12 23.33 19.69 16.28 6.91
1.5"64.85 62.96 70.66 57.35 60.61 44.31 46.74 39.44 32.61 13.04
2"110.30 107.08 120.17 97.53 103.08 70.85 74.74 63.07 52.15 22.54
3"234.60 227.75 255.60 207.44 219.23 141.71 149.48 126.14 104.30 41.53
4"375.68 364.72 409.32 332.20 351.09 221.43 233.58 197.17 162.98 70.98
6"769.02 746.59 837.89 680.02 718.69 442.80 467.09 394.17 325.92 129.82
8"1,241.89 1,205.65 1,353.09 1,098.15 1,160.59 708.53 747.39 630.71 521.51 374.62
10"1,787.55 1,735.39 1,947.62 1,580.67 1,670.55 1,015.06 1,070.74 903.58 749.61 538.52
Fire Services
All Types 30.11 30.11 30.11 28.55
Less than 3 inch 20.77 20.77 24.69 25.32 21.14 34.57
4 inch and higher 27.98 27.98 33.27 34.12 28.49 34.57
(1) Effective 2018 for System Fees, instead of one rate structure for all customers, each class of customers is assigned a different
rate structure.
Source: Otay Water District
Recycled Irrigation (1)
76
Usage Rate 2018 (3)2017 2016 2015 2014 2013 2012 2011 2010 2009 (1)
Tier 1 (conservation tier) -$ 2.53$ 2.13$ 1.95$ 1.86$ 1.73$ 1.58$ 1.49$ 1.35$ 1.12$
Tier 2 3.05 3.95 3.32 3.04 2.90 2.69 2.45 2.31 2.10 1.74
Tier 3 5.44 5.13 4.32 3.95 3.77 3.50 3.19 3.00 2.73 2.26
Tier 4 7.03 7.90 6.65 6.08 5.80 5.39 4.92 4.63 4.21 3.48
Tier 1 2.85 3.90 3.28 3.00 2.86 2.66 2.43 2.29 2.08 1.72
Tier 2 5.17 5.05 4.25 3.89 3.71 3.45 3.15 2.97 2.70 2.23
Tier 3 6.35 7.80 6.56 6.00 5.73 5.32 4.85 4.57 4.15 3.43
Government Fee (2)0.41 0.41 0.37 0.32 0.31 0.29 0.29 0.29 0.29 0.29
Tier 1 3.61 4.17 3.51 3.21 3.06 2.84 2.59 2.44 2.22 1.84
Tier 2 4.23 3.56 3.26 3.14 2.92 2.66 2.50 2.27 1.88
Tier 3 4.30 3.62 3.31 3.19 2.96 2.70 2.54 2.31 1.91
Tier 1 5.27 5.68 4.78 4.37 4.17 3.87 3.53 3.32 3.02 2.50
Tier 2 5.74 4.83 4.42 4.25 3.95 3.60 3.39 3.08 2.55
Tier 3 5.81 4.89 4.47 4.32 4.01 3.66 3.45 3.14 2.60
Tier 1 3.01 3.53 2.97
Tier 2 3.60 3.03
Tier 3 3.65 3.07
Government Fee (2)
Tier 1 4.26 4.85 4.08 3.73 3.56 3.31 3.02 2.84 2.58 2.13
Tier 2 4.92 4.14 3.79 3.61 3.35 3.06 2.88 2.62 2.17
Tier 3 4.99 4.20 3.84 3.68 3.42 3.12 2.94 2.67 2.21
Energy Pumping Fee
Per 100 cubic feet (4)0.053 0.044 0.072 0.050 0.048 0.042 0.045 0.044 0.038 0.034
(1) Effective 2009, all non-residential customers are charged based on a tiered rate system in which the water rates are based on meter
size and amount of water units consumed each month.
(2) An additional charge per unit is assessed to governmental customers in lieu of tax revenues.
(3) Effective 2018, there is no more conservation tier for residential; and there is only one tier each for Public Agency & Commercial,
Landscape, Agricultural & Construction, Recycled Commercial, and Recycled Irrigation.
(4) Water customers are charged an energy pumping charge based on the quantity of water used and the elevation to which the water
has been lifted to provide service. The energy pumping charge is the rate of $.053 per 100 cubic feet of water for each 100 feet of
lift above the base elevation of 450 feet. All water customers are in one of twenty-nine zones based on elevation.
Source: Otay Water District
Recycled Irrigation
Water Variable Rates - Last Ten Fiscal Years
Recycled Commercial
Public Agency & Commercial
Landscape, Agricultural & Construction
Master Meter
Residential
77
Description 2018 2017 2016 2015 2014 2013** 2012 2011 2010 2009
Per Unit 2.77$ 2.58$ 2.46$ 2.46$ 2.46$ 2.35$ 1.77$ 1.67$ 1.56$ 1.47$
Low Strength 2.77 2.58 2.46 2.46 2.46 2.35
Medium Strength 3.98 3.70 3.53 3.53 3.53 3.37
High Strength 6.34 5.90 5.63 5.63 5.63 5.37
Sewer Rate Per ASU 41.75 39.39 36.88 34.79
3/4"17.08 15.89 27.07 15.89 15.89 14.38 12.26 11.57 10.80 10.20
1"17.08 15.89 27.07 15.89 15.89 14.38 17.88 16.87 15.75 14.90
3/4"30.50 28.37 27.07 27.07 27.07 25.83
1"44.94 41.80 39.86 39.86 39.86 38.03
1.5"80.92 75.27 71.82 71.82 71.82 68.53
2"124.12 115.46 110.17 110.17 110.17 105.12
3"224.93 209.24 199.66 199.66 199.66 190.52
4"368.97 343.23 327.51 327.51 327.51 312.51
6"729.04 678.18 647.12 647.12 647.12 617.48
8"1,161.15 1,080.14 1,030.67 1,030.67 1,030.67 983.46
10"1,665.25 1,549.07 1,478.12 1,478.12 1,478.12 1,410.42
Calculation of Monthly Residential Sewer Billing:
Bill calculation beginning calendar year 2008: (Winter Average (8) x .85 (2) x Usage Fee) + Fixed Fee (7)
Calculation of Monthly Non-Residential Sewer Billing:
Footnotes:
(1) Flow in gallons per day (Flow) is calculated using monthly readings from account's water meter.
(2) Flow is reduced by 15% to reflect that not all water purchased is disposed of into the public sewer system.
(3) Flow is divided by 250 gallons per day to convert it into terms of residential equivalence.
(4) Strength factors for business customers are categorized as low, medium or high strength.
(5) The average annual usage is defined as the units of water billed from January-December of previous year.
(6) The usage fee is a per unit charge based on the commercial account's strength factor as shown on the usage fee table as being
either Low, Medium, or High.
(7) The fixed rate is based on the size of the water meter.
(8) The winter average for a residential customer is defined as the units of water billed from January-April of the previous
calendar year divided by the number of months of service.
Source: Otay Water District
Sewer Variable and Fixed Rates - Last Ten Fiscal Years
Non-Residential
Fixed Rates
Usage Fee
**Bill calculation prior to calendar year 2012: (Flow in gallons per day (1) x .85 (2) /250 (3)) x Strength Factor (4)
Bill calculation beginning calendar year 2013: (Average Annual Usage (5) x .85 (2) x Usage Fee (6)) + Fixed Fee (7)
Residential
Non-Residential
Residential
78
Customer Customer Annual % of Water
Name Type Revenues Sales
1. City of Chula Vista Publicly Owned 4,220,009$ 4.6%
2. Eastlake III Community Commercial 1,230,790 1.3%
3. State of California Publicly Owned 1,127,462 1.2%
4. County of San Diego Publicly Owned 981,647 1.1%
5. Sweetwater Union High School District Publicly Owned 853,335 0.9%
6. Chula Vista Elementary School District Publicly Owned 817,826 0.9%
7. Eastlake Country Club Commercial Recycled 569,602 0.6%
8. Windingwalk Master Association Commercial 438,215 0.5%
9. Eastlake I HOA Commercial 429,266 0.5%
10. Elite Athlete Services, LLC Commercial 400,748 0.4%
Total Top Ten Customers 11,068,900$ 12.0%
Other Customers 81,526,295 88.0%
Total Water Sales 92,595,195$ 100.0%
Customer Customer Annual % of Water
Name Type Revenues Sales
1. City of Chula Vista Publicly Owned 2,083,668$ 4.0%
2. Otay River Construction Construction (Potable Temporary) 1,044,277 2.0%
3. County of San Diego Publicly Owned 1,023,342 2.0%
4. State of California Publicly Owned 864,858 1.6%
5. Eastlake III Community Construction (Potable Temporary) 539,324 1.0%
6. Sweetwater School District Publicly Owned 477,150 0.9%
7. Eastlake Country Club Irrigation (Recycled Permanent)458,259 0.9%
8. Steele Canyon Irrigation (Potable Permanent)370,516 0.7%
9. Salt Creek Partners LLC Irrigation (Recycled Permanent)357,528 0.7%
10. Chula Vista School District Publicly Owned 329,848 0.6%
Total Top Ten Customers 7,548,770$ 14.4%
Other Customers 44,879,878 85.6%
Total Water Sales 52,428,648$ 100.0%
Source: Otay Water District
Ten Largest Customers - Current Year and Nine Years Ago
Fiscal Year 2018
Fiscal Year 2009
79
As a Share
Fiscal Population GO Revenue Capital Per of Personal
Year Estimate Bond COPS Bonds Notes Leases Total Capita Income(1)
2018 225,000 3,458,143$ 7,593,293$ 84,170,550$ -$ -$ 95,221,986$ 423.21$ 0.72%
2017 224,000 4,079,498 8,192,548 87,134,618 - - 99,406,664 443.78 0.78%
2016 220,000 4,680,853 8,791,803 (3)90,218,686 - - 103,691,342 471.32 0.84%
2015 217,000 5,267,208 44,990,103 54,887,993 - - 105,145,304 484.54 0.90%
2014 213,000 5,833,563 46,475,314 56,508,490 - - 108,817,367 510.88 0.99%
2013 211,000 6,384,918 47,920,525 (2)58,158,987 - - 112,464,428 533.01 1.06%
2012 208,500 6,921,271 58,023,740 50,321,421 - - 115,266,432 552.84 1.14%
2011 206,500 6,803,577 59,715,531 51,180,822 6,010 - 117,705,940 570.00 1.19%
2010 206,000 7,283,127 61,489,612 51,255,224 359,744 - 120,387,707 584.41 1.28%
2009 195,000 7,726,575 63,213,693 - 701,516 - 71,641,784 367.39 0.83%
(1) See the Demographics and Economic Statistics schedule on page 86 for personal income data.
(2) 2004 COPS were refunded with the issuance of 2013 Water Revenue Refunding Bonds in June 2013.
(3) 2007 COPS were refunded with the issuance of 2016 Water Revenue Refunding Bonds in May 2016.
Source: Otay Water District
Ratios of Outstanding Debt by Type - Last Ten Fiscal Years
$0
$100
$200
$300
$400
$500
$600
$700
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Outstanding Debt, Per Capita
80
Adjusted Net Revenues
Fiscal Adjusted Operating Available for Debt Service Requirements (4)Coverage
Year Revenues (1)Expenses (2)Debt Service Principal Interest Total
Factor (3)
2018 110,274,227$ 86,437,355$ 23,836,872$ 3,215,000$ 4,334,368$ 7,549,368$ 316%
2017 94,551,308 79,062,983 15,488,325 3,335,000 4,420,433 7,755,433 200%
2016 85,417,850 72,117,631 13,300,219 3,120,000 4,640,947 7,760,947 171%
2015 89,646,845 74,320,591 15,326,254 2,945,000 4,767,618 7,712,618 199%
2014 90,948,021 75,575,679 15,372,342 2,935,000 4,895,622 7,830,622 196%
2013 81,778,447 70,228,987 11,549,460 2,800,000 4,988,640 7,788,640 148%
2012 74,484,691 64,028,686 10,456,005 1,850,000 6,050,746 7,900,746 132%
2011 69,653,627 60,117,245 9,536,382 1,795,000 5,084,450 6,879,450 139%
2010 65,573,058 57,084,904 8,488,154 1,745,000 2,720,258 4,465,258 190%
2009 63,739,773 57,076,567 6,663,207 1,700,000 2,342,048 4,042,048 165%
(1) Adjusted revenues exclude sewer revenues and taxes collected for Improvement District 27 and are
inclusive of capacity fees.
(2) Adjusted operating expenses exclude sewer expenses and depreciation expense.
(3) The District's bond covenants require a minimum coverage factor of 125%.
(4) Pledge debts are Certificates of Participation (COPS) and Revenue Bonds.
Source : Otay Water District
Pledged Revenue Coverage - Last Ten Fiscal Years
00%
50%
100%
150%
200%
250%
300%
350%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Coverage Factor, in Percentage (%)
Actual Ratio Minimum ratio
81
Net Bonded
Net Debt to Net Bonded
Fiscal Population Assessed Bonded Assessed Debt Per
Year Estimate Valuation Debt Valuation Capita
2018 225,000 29,387,363,297$ 3,458,143$ 0.01%15.37
2017 224,000 27,598,986,676 4,079,498 0.01%18.21
2016 220,000 26,057,698,553 4,680,853 0.02%21.28
2015 217,000 24,682,307,510 5,267,208 0.02%24.27
2014 213,000 23,304,103,069 5,833,563 0.03%27.39
2013 211,000 22,836,336,223 6,384,918 0.03%30.26
2012 208,500 23,145,467,535 6,921,271 0.03%33.20
2011 206,500 23,519,177,848 6,803,577 0.03%32.95
2010 206,000 24,198,816,700 7,283,127 0.03%35.35
2009 195,000 26,752,095,692 7,726,575 0.03%39.62
Source: Otay Water District
Ratios of General Bonded Debt Outstanding - Last Ten Fiscal Years
0.00%
0.01%
0.02%
0.03%
0.04%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Bonded Debt Ratios, in Percentage (%)
82
Computation of Direct and Overlapping Bonded Debt
June 30, 2018
2017-18 Assessed Valuation: $29,387,363,297
Total Debt District’s Share of
DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: 6/30/18 % Applicable (1) Debt 6/30/18
Metropolitan Water District $ 60,600,000 1.070% $ 648,420
Otay Water District Improvement District No. 27 3,458,143 100. 3,458,143
Grossmont-Cuyamaca Community College District 221,660,377 15.092 33,452,984
Southwestern Community College District 454,043,676 41.208 187,102,318
Grossmont Union High School District 550,714,538 15.466 85,173,510
Sweetwater Union High School District 412,955,090 49.162 203,016,981
Chula Vista City School District and School Facilities Improvement
District 125,870,000 61.462 & 25.268 47,909,352
San Ysidro School District 124,119,286 51.544 63,976,045
Other School Districts 5,039,621,796 Various 58,830,542
Grossmont Healthcare District 261,328,330 13.695 35,788,915
City of Chula Vista Community Facilities District 140,190,000 100. 140,190,000
Sweetwater Union High School District Community Facilities
Districts 82,102,508 10.894-100. 76,723,884
City 1915 Act Bonds 7,260,000 100. 7,260,000
California Statewide Communities Development Authority
San Diego County / Venture Community Center Assessment District 964,487 100. 964,487
TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT $ 944,495,581
DIRECT AND OVERLAPPING GENERAL FUND DEBT:
San Diego County General Fund Obligations $ 273,220,000 5.925% $ 16,188,285
San Diego County Pension Obligation Bonds 558,525,000 5.925 33,092,606
San Diego Superintendent of Schools Certificates of Participation 10,785,000 5.925 639,011
Otay Water District 91,763,843 100. 91,763,843
Grossmont and Southwestern Community College District 1,405,000 15.092 & 41.208 419,665
General Fund Obligations
Sweetwater Union High School District Certificates of Participation 41,745,000 49.162 20,522,677
Chula Vista City School District Certificates of Participation 144,905,000 61.462 89,061,511
San Ysidro School District Certificates of Participation 54,234,715 51.544 27,954,741
Other School District Certificates of Participation 34,271,321 Various 7,467,007
City of Chula Vista Certificates of Participation 170,325,000 69.516 118,403,127
City of San Diego General Fund Obligations 550,774,651 0.814 4,483,306
San Miguel Consolidated Fire Protection District Certificates of
Participation 4,275,000 51.712 2,210,688
TOTAL GROSS DIRECT AND OVERLAPPING GENERAL FUND DEBT $ 412,206,467
Less: Otay Water District Revenue Certificates of Participation &
Revenue Bonds (100% self-supporting) 91,763,843
TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND DEBT $ 320,442,624
Continued
83
Computation of Direct and Overlapping Bonded Debt
OVERLAPPING TAX INCREMENT DEBT (Successor Agency): $ 27,930,000 17.178% $4,797,815
TOTAL GROSS DIRECT DEBT $95,221,986
TOTAL NET DIRECT DEBT $3,458,143 (3)
TOTAL OVERLAPPING DEBT $1,266,277,877
COMBINED TOTAL DEBT $1,269,667,877 (2)
Ratios to 2017-18 Assessed Valuation:
Direct Debt ($3,458,143) ........................................................................... 0.01%
Total Overlapping Tax and Assessment Debt .......................................... 3.21 %
Combined Total Debt............................................................................................. 4.32%
Ratios to Redevelopment Successor Agency Incremental Valuation ($ 317,888,544):
Total Overlapping Tax Increment Debt ........................................................ 1.51%
(1) The percentage of overlapping debt applicable to the district is estimated using taxable assessed property value. Applicable
percentages were estimated by determining the portion of the overlapping district's assessed value that is within the
boundaries of the water district divided by the overlapping district's total taxable assessed value.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.
Qualified Zone Academy Bonds are included based on principal due at maturity.
(3) Excludes $91,763,843 Certificates of Participation and Revenue Bonds supported by water revenues and backed by a rate
covenant.
Source: California Municipal Statistics, Inc. and Otay Water District
84
2009
% of Total % of Total
County County
Employer Employees Rank Employment Employees Rank Employment
State of California (1)47,800 1 3.13% 41,600 1 2.90%
Federal Government (1)47,000 2 3.07% 41,600 2 2.90%
UC San Diego 34,448 3 2.25% 29,337 3 2.05%
Sharp HealthCare 18,364 4 1.20% 14,400 6 1.00%
County of San Diego 17,413 5 1.14% 16,505 4 1.15%
Scripps Health 14,941 6 0.98% 12,622 7 0.88%
San Diego Unified School District 13,815 7 0.90% 14,555 5 1.01%
Qualcomm Inc.11,800 8 0.77% 9,859 9 0.69%
City of San Diego 11,462 9 0.75% 11,087 8 0.77%
Kaiser Permanente 9,606 10 0.63% 7,618 10 0.53%
Total 226,649 14.82% 199,183 13.88%
Sources: San Diego Business Journal (Book of Lists)
(1) EDD Labor Market Information
Principal Employers - Current Year and Nine Years Ago
2018
85
Personal Per Capita
Fiscal Income Personal Unemployment
Year Population (in 000'S)Income Rate
2018 (1) 3,415,000 200,075,000$ 58,950$ 3.57%
2017 (1) 3,378,000 192,107,000 57,085 4.37%
2016 3,340,000 183,056,000 56,400 4.86%
2015 3,275,500 177,300,000 54,100 5.75%
2014 3,212,300 172,900,000 54,000 7.11%
2013 3,182,100 161,100,000 50,288 7.40%
2012 3,143,429 154,200,000 48,674 9.30%
2011 3,140,069 149,600,000 47,776 10.40%
2010 3,095,313 137,525,000 45,627 10.50%
2009 3,173,407 134,696,000 44,412 10.20%
(1) Forecast
Source: SANDAG; Census 2010, California Department of Finance; LAEDC-Los Angeles Economic Development
Corp.
Demographic and Economic Statistics - Last Ten Fiscal Years
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Unemployment Rate, in Percentage (%)
86
Department 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009
General Manager 66555 5 5 6 6 6
Finance 2931323434 36 39 42 45 44
Operations/Maintenance 52 51 51 51 51 54 54 54 56 58
Engineering 24 24 24 24 25 24 26 26 26 28
Administrative Services 23 23 26 26 28 29 31 31 33 33
Total 134 135 138 140 143 148 155 159 166 169
Source : Otay Water District
Number of Employees by Function - Last Ten Fiscal Years
0
25
50
75
100
125
150
175
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Total Employees
87
Meter Size 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009
3/4" & 5/8" 44,485 44,423 44,413 44,395 44,375 44,354 44,376 44,065 43,815 43,641
1" 3,267 2,800 2,756 2,674 2,557 2,412 2,099 1,881 1,815 1,804
1-1/2" 1,299 1,349 1,342 1,335 1,332 1,333 1,326 1,317 1,317 1,309
2" 1,326 1,301 1,299 1,294 1,293 1,295 1,277 1,278 1,292 1,299
3"87 87 82 81 77 76 75 75 75 75
4"272 232 210 207 189 169 180 193 184 202
6"24 22 22 18 18 18 19 21 22 21
Others 9 9 9 9 9 9 9 9 8 9
Total 50,769 50,223 50,133 50,013 49,850 49,666 49,361 48,839 48,528 48,360
% Change 1.1% 0.2% 0.2% 0.3% 0.4% 0.6% 1.1% 0.6% 0.3% 0.3%
Increase 546 90 120 163 184 305 522 311 168 141
Source : Otay Water District
Active Meters by Size - Last Ten Fiscal Years
0
6,500
13,000
19,500
26,000
32,500
39,000
45,500
52,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Active Meters by Size
88
2018 2017 2016 2015 2014 2013 2012 2011 2010 2009
Water System
Service Area (Square Miles) 125.5 125.5 125.5 125.5 125.5 125.5 125.5 125.5 125.5 125.5
Miles of Potable Water Main 727.0 727.0 727.0 727.0 726.0 725.0 724.0 723.0 723.0 722.0
40 40 40 40 40 40 40 40 40 38
Water Storage Capacity
(in Acre-Feet) 672.0 672.0 672.0 668.0 668.0 667.8 670.8 673.8 663.8 655.5
Total Potable Water Connections
(No. of Meters in Service)50,045 49,502 49,425 49,308 49,148 48,962 48,665 48,154 47,845 47,689
Number of Pump Stations 21 21 21 21 21 21 21 21 21 21
Number of Potable Water
Valves 20,746 20,746 20,746 20,676 20,460 20,317 20,317 19,522 19,522 19,192
Sewer System
Miles of Sewer Lines 88.0 88.0 88.0 88.0 88.0 88.0 88.0 88.0 88.0 88.0
Number of Treatment Plants 1 1 1 1 1 1 1 1 1 1
Treatment Plant Capacity
(Million Gallons per Day)1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3
Total Flows for Fiscal
Year (in Million Gallons)381 393 336 388 405 422 423 481 474 483
Total Sewer Connections
(No. of Meters in Service)4,714 4,683 4,677 4,679 4,657 4,655 4,655 4,655 4,646 4,638
Recycled System
Miles of Recycled Water Mains 104.0 104.0 104.0 104.0 102.0 99.0 99.0 98.0 98.0 97.0
Number of Pumping Facilities 3 3 3 3 3 3 3 3 3 3
Number of Operational
Storage Reservoirs in Service 4 4 4 4 4 4 4 4 4 4
Number of Acre-Feet Storage 134.2 134.2 134.2 134.2 134.2 134.1 134.1 134.1 134.1 133.2
Connections
(No. of Meters in Service)724 721 708 705 702 704 696 685 683 671
Number of Recycled
Water Valves 1,497 1,497 1,497 1,492 1,473 1,430 1,430 1,380 1,380 1,338
Source : Otay Water District
Operating and Capital Indicators - Last Ten Fiscal Years
Number of Operational
Storage Reservoirs in Service
89
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