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11-08-23 Board Packet
1 OTAY WATER DISTRICT AND OTAY WATER DISTRICT FINANCING AUTHORITY BOARD OF DIRECTORS MEETING 2554 SWEETWATER SPRINGS BOULEVARD SPRING VALLEY, CALIFORNIA WEDNESDAY NOVEMBER 8, 2023 2:30 P.M. AGENDA 1. ROLL CALL 2. PLEDGE OF ALLEGIANCE 3. APPROVAL OF AGENDA 4. SOLICITATION OF INPUT REGARDING LOCAL AGENCY FORMATION COM- MISSION (LAFCO) MUNICIPAL SERVICE REVIEWS (CHRIS CATE, FOUNDER OF 3MC STRATEGIES) 5. 2023 LEGISLATIVE SESSION UPDATE FROM BROWNSTEIN HYATT FAR- BER SCHRECK (BALTAZAR CORNEJO) 6. PUBLIC PARTICIPATION – OPPORTUNITY FOR MEMBERS OF THE PUBLIC TO SPEAK TO THE BOARD ON ANY SUBJECT MATTER WITHIN THE BOARD’S JURISDICTION INCLUDING AN ITEM ON TODAY’S AGENDA The District’s meeting is live streamed. Information on how to watch and listen to the District’s meeting can be found at this link: https://otaywater.gov/board-of- directors/agenda-and-minutes/board-agenda/. CONSENT CALENDAR 7. ITEMS TO BE ACTED UPON WITHOUT DISCUSSION, UNLESS A REQUEST IS MADE BY A MEMBER OF THE BOARD OR THE PUBLIC TO DISCUSS A PARTICULAR ITEM: a) APPROVE TO INCREASE CIP P2676 IN AN AMOUNT OF $92,000.00 (FROM $3,150,000 TO $3,242,000); APPROVE THE ISSUANCE OF A PUR- CHASE ORDER TO BRAX COMPANY IN THE AMOUNT OF $240,723.76 2 FOR MOTOR REPLACEMENTS FOR PUMP #2 AT THE 980-2 PUMP STA- TION AND PUMP #1 AT THE 980-1 PUMP STATION; AND APPROVE THE SURPLUS OF EXISTING MOTORS, INCLUDING THE ORIGINAL PUMP MOTOR #4 AT THE 980-2 PUMP STATION THAT WAS REPLACED IN DE- CEMBER 2022 b) APPROVE THE AUDITED FINANCIAL STATEMENTS, INCLUDING THE IN- DEPENDENT AUDITORS’ UNQUALIFIED OPINION, FOR THE FISCAL YEAR ENDING JUNE 30, 2023 c) ADOPT RESOLUTION NO. 4437 TO UPDATE BOARD POLICY NO. 22, DRUG FREE WORKPLACE, OF THE DISTRICT’S CODE OF ORDINANCES ACTION ITEMS 8. BOARD a) DISCUSS THE 2023 AND 2024 BOARD MEETING CALENDARS (RAMOS- KROGMAN) INFORMATIONAL ITEMS 9. THE FOLLOWING ITEM IS PROVIDED TO THE BOARD FOR INFORMA- TIONAL PURPOSES ONLY. NO ACTION IS REQUIRED ON THE FOLLOWING AGENDA ITEM: a) SOCIAL MEDIA, MOBILE APPLICATION, AND WEBSITE ANALYTICS UP- DATE (SALMERON) REPORTS 10. GENERAL MANAGER’S REPORT 11. SAN DIEGO COUNTY WATER AUTHORITY UPDATE 12. DIRECTORS' REPORTS/REQUESTS 13. PRESIDENT’S REPORT/REQUESTS RECESS TO CLOSED SESSION 14. CLOSED SESSION a) CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION [GOV- ERNMENT CODE §54956.9] 3 OTAY WATER DISTRICT vs. CITY OF SAN DIEGO; CASE NO. 37-2017- 00019348-CU-WM-CTL b) EVALUATION OF GENERAL COUNSEL Pursuant to Government Code §54954.5 RETURN TO OPEN SESSION 15. REPORT ON ANY ACTIONS TAKEN IN CLOSED SESSION. THE BOARD MAY ALSO TAKE ACTION ON ANY ITEMS POSTED IN CLOSED SESSION. OTAY WATER DISTRICT FINANCING AUTHORITY 16. NO MATTERS TO DISCUSS 17. ADJOURNMENT All items appearing on this agenda, whether or not expressly listed for action, may be deliberated and may be subject to action by the Board. The Agenda, and any attachments containing written information, are available at the District’s website at www.otaywater.gov. Written changes to any items to be considered at the open meeting, or to any attachments, will be posted on the District’s website. Copies of the Agenda and all attachments are also available by contacting the District Secretary at (619) 670-2253. If you have any disability which would require accommodation in order to enable you to participate in this meeting, please call the District Secretary at (619) 670-2253 at least 24 hours prior to the meeting. Certification of Posting I certify that on November 3, 2023, I posted a copy of the foregoing agenda near the regular meeting place of the Board of Directors of Otay Water District, said time be- ing at least 72 hours in advance of the regular meeting of the Board of Directors (Gov- ernment Code Section §54954.2). Executed at Spring Valley, California on November 3, 2023. /s/ Tita Ramos-Krogman, District Secretary Otay Water District Top 10 Legislative Priorities for 2023 in Review Presented by: Baltazar Cornejo Policy Advisor November 8, 2023 AGENDA ITEM 5 Top 10 Legislative Priorities 2023 2 © 2021 Brownstein Hyatt Farber Schreck, LLP www.bhfs.com | Legislative Update •Legislature reconvened on January 4, 2023. —Over 30 new members in both the Assembly and Senate due to term limits expiring and other resignations. •In 2023, over 2800 bills, resolutions and constitutional amendments were introduced. —This is the third highest amount of bills introduced in the last 17 years. —Over 1100 bills made it to the Governor’s Desk. •Key Legislative Deadlines: —January 10 – Governor’s Budget Proposal —February 17 – Bill Introduction deadline —May 15 – May Revision of the January Budget (“May Revise”) —June 2 – Last day for each house pass bills introduced in that house. (“House of Origin Deadline”). —June 15 – Budget must be passed by midnight —September 14 – Deadline to pass bills out of Legislature. (“Final Recess upon Adjournment of Session”) —October 14 – Last day for Governor to sign or veto bills passed on or before September 1 •The Legislature adjourned for the year on September 14th. •The Governor finished signing and vetoing bills on October 14th. •Not urgency clause/different specified date legislation will go into effect on January 1st. •Legislature will reconvene for the 2024 session on January 3rd. 3 © 2021 Brownstein Hyatt Farber Schreck, LLP www.bhfs.com | 1. Affordability •During the 2021-2022 legislative session, Senator Bill Dodd (D-Napa) introduced SB 222: Water Rate Assistance Program. —This legislation sought to establish the Water Rate Assistance Fund in the State Treasury to help provide water affordability assistance, for both drinking water and wastewater services, to low- income ratepayers and ratepayers experiencing economic hardship in California. —Otay adopted an “Oppose Unless Amended” position and joined the Association of California Water Agencies’ (ACWA) coalition. —The bill was vetoed by the Governor on September 28th due to lack of an ongoing funding source. —Following the veto, Senator Dodd, ACWA, and affordable water advocates said they would continue to work closely this year with the Governor’s office and the state water board to find funding for a long-term water assistance program. •Low Income Household Water Assistance Program (LIHWAP) —In 2020, the federal government funded LIHWAP to provide financial assistance to low-income Californians with residential water utility costs and debt repayment. —California has been allocated $116 million in one-time funding to provide LIHWAP assistance. —Administering Agency – Department of Community Services and Development (CSD). •In response to low LIHWAP participation and grant expenditure, CSD expanded eligibility to include current bills to maximize grant expenditures. •LIHWAP benefit payments began to be issued to households in June 2022 and all funds must be expended by March 31, 2024 due to a recent extension. 4 © 2021 Brownstein Hyatt Farber Schreck, LLP www.bhfs.com | 2. Water Quality •MCL Compliance Periods – State Water Board/ACWA determined that legislation was not needed to establish compliance periods for MCLs; State Water Board to use its existing authority. —The SWRCB adopted a resolution for drinking water regulations development for this calendar year on the March 7-8 workshop. •The Division of Drinking Water has established a proposed prioritized list for regulatory development projects for 2023. •DDW staff use multiple factors in prioritizing drinking water regulations, including the protection of public health, establishment of a new or revised federal regulation or rule, existence of statutory mandates, etc. This includes MCLs for: •Chromium (hexavalent), Arsenic, Perfluoro-octanoic acid (PFOA) and perfluoro-octane sulfonic acid (PFOS), N-nitrosodimethylamine (NDMA), Disinfection Byproducts, Styrene, Cadmium, and Mercury. •State Water Board - Maximum Contaminant Level on Chrome-6: • Proposed MCL: 10 ppb (0.010 mg/L) •Proposed DLR: 0.1 ppb (0.0001 mg/L) •Update: Written comments were due on August 18th. ACWA still in conversations with SWRCB staff and will continue to provide updates. •Lead Testing in Schools – Assemblymember Chris Holden introduced AB 249, which would lower the standards for lead levels at TK-12 school buildings built after 2010. The bill passed the legislature but the Governor vetoed the bill due to cost concerns. —Lowers standard from 15 parts per billion (ppb) to 5ppb. —Community water systems would have to test water faucets once over the next 5 years. —There are current changes pending to the federal Lead and Copper Rule through October 16, 2024, which could result in conflicting or duplicative requirements if this legislation is signed. 5 © 2021 Brownstein Hyatt Farber Schreck, LLP www.bhfs.com | 3. Water Use and Efficiency •November 2021 – DWR and the State Water Board submitted its final report to the Legislature recommending an indoor water use efficiency standard of 55 GPCD by 2023, declining to 47 GCPD by 2025, and 42 GCPD by 2030 and beyond. •January 2022 – AB 1434 (Friedman) was amended to mirror the recommendations in this report. However, the bill failed to move forward. •In 2022, then-Senator Robert Hertzberg introduced SB 1157 (Hertzberg), which also mirrors the recommendations in the report and the language that was in AB 1434 (Friedman). —Otay initially joined ACWA’s “Oppose Unless Amended” coalition on SB 1157 but moved its position to neutral following language adding a quantitative study, adding flexibility to the timeline to achieve the standards, and adopting additional variances. —SB 1157 was signed by the Governor on September 28, 2022. •Assemblymember Friedman introduced AB 1572 to prohibit the use of potable water for irrigation of nonfunctional turf on specified properties. Signed into law by Governor. —Nonfunctional turf” would be defined as “any turf that is not functional turf, and includes turf located within street rights-of-way and parking lots”. —Urban water retail suppliers would be required to adopt these same nonfunctional turf bans within their terms and conditions of water service by January 1, 2027. (Was 2026 when introduced). —A reduction in irrigation due to removal of turf may not have a large impact on urban water suppliers’ ability to meet their overall objective, but the proposed ban on the irrigation of nonfunctional turf on multifamily properties envisioned under AB 1572 may result in some water savings toward that overall objective for urban water suppliers. 6 © 2021 Brownstein Hyatt Farber Schreck, LLP www.bhfs.com | 4. Drought Response & Extreme Weather •California experienced significant rainfall and flooding during the series of atmospheric rivers that hit the state in late December through late March. •On March 24th the Governor issued an executive order amending the Emergency Drought Proclamation and previous executive orders on conservation. —Ended the voluntary 15% water conservation target, —Ended requirement that local water agencies implement level 2 of their drought contingency plans, —Retained a state of emergency for all 58 counties to allow for drought response and recovery efforts, —Retained the non-functional turf irrigation ban in commercial, industrial, and institutional areas, including HOA common, set to expire in June 2024, unless the Board takes further action. —Emergency Regulation to Prohibit Wasteful Water Uses (refilling fountains without recirculating pumps, overwatering landscapes, watering grass within 48 hours of rainfall, etc.) is set to expire in December 2023, unless the Board takes further action. •Governor Newsom’s California’s Water Supply Strategy —Water Supply Strategy announced August 2022 due to hotter and drier weather conditions (spurred by climate change) potentially reducing California’s water supply by up to 10% by the year 2040. —To help make up for the water supplies California could lose over the next two decades, the strategy prioritizes actions to capture, recycle, de-salt and conserve more water. •Create storage space for up to 4 million acre-feet of water. •Recycle and reuse at least 800,000 acre-feet of water per year by 2030. •Free up 500,000 acre-feet of water for new purposes each year. •Make new water available for use by capturing stormwater and desalinating ocean water and salty water in groundwater basins. —One year Progress Report released in October highlights actions taken by the administration over the last year in pursuit of these goals. (Groundwater recharge permitting, rehabilitating dams, expanding desal, Direct Potable Reuse Regulations, etc). 7 © 2021 Brownstein Hyatt Farber Schreck, LLP www.bhfs.com | 5. Water Rights Modernization •Due to the ongoing drought and greater federal level discussions on the Colorado River water rights, water rights is poised to rise to the top of the Legislature’s agenda. —Several bills were introduced this year that collectively present a fundamental change in California’s water rights system and a coordinated effort is underway to see that this year ends with a foundational change to how the water rights system is implemented and enforced. —AB 1337 (Wicks) gives the State Water Board authority to adopt sweeping curtailment regulations for water conservation purposes to prevent the waste, unreasonable use, or unreasonable method of diversion of water. —AB 460 (Bauer-Kahan) would authorize the State Water Board to issue an interim relief order on water rights. —Other spot bills on water rights have been introduced with no indication on what they will do. —AB 676 (Bennett) would declare ‘domestic purposes’ as the highest use of water, providing specific examples of ‘domestic purposes’ and explicitly states that all water rights remain subject to the reasonable use and public trust doctrines. •ACWA considered proposing its own water rights legislation as an alternative to the above-described legislation, however no agreement was reached by its membership. Instead ACWA will led a coalition in opposition of the above-described legislation, which was successful. The bills are expected to return next session. 8 © 2021 Brownstein Hyatt Farber Schreck, LLP www.bhfs.com | 6. Advanced Clean Fleets Rulemaking •Executive Order N-79-20 accelerates the state’s transition to carbon neutrality by setting a course to end sales of internal combustion passenger vehicles by 2035. •The Advanced Clean Fleets proposed rulemaking for Public Fleets would require. —100 percent zero-emission drayage trucks by 2035. —100 percent zero-emission off-road vehicles and equipment by 2035, where feasible. —100 percent zero-emission medium and heavy-duty vehicles by 2045, where feasible. •Otay Water District submitted comments to CARB and met with CARB staff, seeking an exemption for emergency response vehicles. •CARB adopted the rule on April 27th workshop after 15 days of public comment. Otay WD submitted comments and Brownstein policy advisor provided public comment. The Office of Administrative law approved the rule on September 29th and it is official as of October 1st. •AB 1594 (E. Garcia) was introduced to provide flexibility not present in the adopted regulations. The bill was signed by the Governor (Otay submitted letters of support & a request for signature). •- Requires any state regulation that seeks to require the procurement of medium- and heavy-duty ZEVs to authorize public agency utilities to purchase replacements for traditional utility-specialized vehicles that are at the end of life, as determined by CARB in consultation with public utility agencies, when needed to maintain reliable service and respond to major foreseeable events, including severe weather, wildfires, natural disasters, and physical attacks, without regard to the model year of the vehicle being replaced. •- Authorizes a public agency utility, for the purposes of determining the daily usage of a medium- or heavy-duty vehicle, to provide comprehensive usage data for a class of vehicles that does not exclusively rely on the lowest mileage reading and does not exclude the highest usage days. •- Defines "public agency utility" as a local publicly owned electric utility, a community water system, a water district, and a wastewater treatment provider. 9 © 2021 Brownstein Hyatt Farber Schreck, LLP www.bhfs.com | 7. Proposed Bonds (Recycled Water, Climate Resiliency, Flood Protection) SB 867 (Allen): Drought and Water Resilience, Wildfire and Forest Resilience, Coastal Resilience, Extreme Heat Mitigation, Biodiversity and Nature-Based Climate Solutions, Climate Smart Agriculture, and Park Creation and Outdoor Access Bond Act of 2023. •Would authorize the issuance of bonds in an unspecified amount pursuant to the State General Obligation Bond Law to finance projects for drought and water resilience, wildfire and forest resilience, coastal resilience, extreme heat mitigation, biodiversity and nature- based climate solutions, climate smart agriculture, and park creation and outdoor access programs. AB 1567 (E. Garcia): Safe Drinking Water, Wildfire Prevention, Drought Preparation, Flood Protection, Extreme Heat Mitigation, and Workforce Development Bond Act of 2023. Would authorize the issuance of bonds in the amount of $15,105,000,000 pursuant to the State General Obligation Bond Law to finance projects for safe drinking water, wildfire prevention, drought preparation, flood protection, extreme heat mitigation, and workforce development programs. SB 638 (Eggman):Climate Resiliency and Flood Protection Bond Act of 2024 . Would authorize the issuance of bonds in the amount of $4,500,000,000, pursuant to the State General Obligation Bond Law, for flood protection and climate resiliency projects. All Bond legislation were made 2-year bills as the Governor wanted to focus on his Mental Health Bond Proposal. 10 © 2021 Brownstein Hyatt Farber Schreck, LLP www.bhfs.com | 8. State Budget/Infrastructure Funding The enacted 2023-24 budget balanced package of solutions to bridge an approximately $31.7 billion shortfall while avoiding deep and damaging program cuts. Zero Emission Vehicles •The 2021 and 2022 Budget Acts committed $10 billion over 5 years in investments to the state’s ZEV agenda—ranging from cleaning up short-haul trucks and school buses to accelerating equitable electrification of passenger vehicles—coupled with infrastructure and incentives for in-state manufacturing. •The 2023-2024 Budget maintains $10.1 billion (100%) over 6 years in investments to the state’s ZEV agenda—including targeted investments. Water The 2021 and 2022 Budget Acts committed $8.7 billion over multiple years to support drought resilience and response programs to help communities and fish and wildlife avoid immediate impacts from extreme drought, while advancing programs that will improve the state’s resilience to future droughts and floods. The Budget maintains $8.1 billion (93%) of these investments over multiple years. The Budget reflects $632 million in General Fund reductions and $455 million in delays across various programs which include,, water recycling, Salton Sea restoration, and water conservation programs. At the same time, the Budget includes new strategic investments to continue supporting the state’s drought response, accelerate implementation of the state’s Water Supply Strategy, and increase flood preparedness and response. SIGNIFICANT ADJUSTMENTS •Water and Wastewater Arrearages—Shifts $200 million Coronavirus Fiscal Recovery Fund of 2021 from the Department of Community Services and Development to the State Water Resources Control Board to extend the California Water and Wastewater Arrearage Payment Program supported by the American Rescue Plan Act of 2021. The Budget extends the end date of the eligible period of arrearage forgiveness from June 15, 2021, to December 31, 2022. These funds are in addition to approximately $400 million already available to support the Program. 11 © 2021 Brownstein Hyatt Farber Schreck, LLP www.bhfs.com | •Lead in Schools—An increase of $25 million one-time General Fund for the State Water Resources Control Board to support work associated with lead in schools, contingent on enactment of associated legislation. Other Water Investments •Water Urban Flood Risk Reduction — $135.5 million over two years to support local agencies working to reduce urban flood risk. •Delta Levee — $40.6 million for ongoing Delta projects that reduce risk of levee failure and flooding, provide habitat benefits, and reduce the risk of saltwater intrusion contaminating water supplies. •2023 Drought Contingency — $135 million one-time General Fund as a flood contingency set aside to support costs associated with preparedness, response, recovery, and other associated activities related to the 2023 storms, the resulting snowmelt, and other flooding risks, including, but not limited to, supporting communities and vulnerable populations, such as farmworkers, from these impacts and to better withstand future flood events. This includes $20 million to support flood relief in the community of Pajaro and $20 million to support flood relief in the community of Planada. •Flood Control Subventions—$75 million one-time General Fund to support local flood control projects, including in communities impacted by recent storms, such as the Pajaro River Flood Risk Management Project. 12 8.5 State Budget/Infrastructure Funding Continued… © 2021 Brownstein Hyatt Farber Schreck, LLP www.bhfs.com | 9. Recycled Water •AB 1152 (Patterson): California Environmental Quality Act (CEQA): exemption: recycled water. Bill did not move and is still pending in the Assembly Committee Process. —Provides a CEQA exemption for the construction or expansion of recycled water pipelines built to mitigate drought conditions if the project meets certain criteria. —Lead agencies would be required to determine if a project qualified for the exemption under a state- mandated local program. —Also exempts development and approval of building standards by state agencies for recycled water systems. •SB 149 (Caballero): California Environmental Quality Act (CEQA): administrative and judicial procedures: record of proceedings: judicial streamlining. Signed by Governor. —Allows energy, transportation, water (including recycled water projects), and semiconductor projects, as specified, to be eligible for expedited judicial review under CEQA. 13 © 2021 Brownstein Hyatt Farber Schreck, LLP www.bhfs.com | 10. State Water Project/Delta Conveyance •State Water Project —State water officials in late January 2023 had announced a major boost, from 5% of requested water supply to 30%. February saw another update, with the SWP allocation increased to 35%, reflecting nine atmospheric river storms from late December through late January. On March 24th DWR increased the allocation to 75% after more recent storms. On Thursday April 21st the State Water Project allocations were boosted 75% to 100%, meeting 100% of all water requests for the first time since 2006 —The increase translates to an additional 2.26 million acre-feet of water for the 29 public water agencies that serve 27 million Californians. —State Water Project allotments are set each year on Dec. 1, & updated monthly through May or June. •Delta Conveyance Project —2022 marked the release and public review of the Draft Environmental Impact Report (EIR), evaluating the proposed Delta Conveyance Project under the California Environmental Quality Act. —Building on that progress, DWR states that it will continue to advance environmental planning and permitting activities, as well as public outreach and engagement, in 2023, including but not limited to CEQA, NEPA, CESA Incidental Take Permits, ESA Biological Opinions, etc. —DWR has released an Adapting to Climate Change fact sheet after the January winter storms, detailing that if the DCP had been operational, it would have moved 202,000-acre feet of water into the San Luis Reservoir, enough supply for 2.1 million people for one year or 710,000 households. This is about 35% of the total volume exported by the SWP in water year 2022. 14 © 2021 Brownstein Hyatt Farber Schreck, LLP www.bhfs.com | Other 2023 Legislative Actions by Otay WD and Brownstein AB 399 (Boerner)- Water Ratepayers Protections Act of 2023. Otay Water District Authorized Brownstein Policy Advisors to lobby in support of the bill, joining the San Diego County Water Authority’s and City of San Diego’s lobbying effort. The bill passed the legislature and signed by the Governor. •The bill would require, as an additional condition to the Local Agency Formation Commission (LAFCO) process for allowing the detachment of a public agency from their relevant county water authority, that the majority of the voters within the jurisdiction of the county water authority vote to approve the detachment at a scheduled election. Essentially it would give voters within a County Water Authority the chance to have a voice, through the electoral process, over governance decisions that impact their rates. ACA 13 (Ward)- Voting thresholds. Otay Water District Authorized Brownstein Policy Advisors to lobby in support of the bill, joining ACWA in support. The amendment passed the legislature and will be placed in the primary election ballot as a proposition. •Requires an initiative constitutional amendment to comply with any increased voter approval threshold that it seeks to impose on future ballot measures. Guarantees in the state constitution the ability of local governments to submit advisory questions to voters. 15 Questions? Baltazar Cornejo bcornejo@bhfs.com (916)594-9705 ATTACHMENT A SUBJECT/PROJECT: 2023 Legislative Session Update COMMITTEE ACTION: The Conservation, Public Relations, Legal and Legislative Committee (Committee) reviewed this item at a meeting held on October 18, 2023, and the following comments were made: •Staff introduced Mr. Baltazar Cornejo who provided aPowerPoint Presentation of the top 10 legislativepriorities for 2023 to the Committee. •In response to a question from the Committee, Mr. Baltazar stated that he will research if the Governor rescinded theprohibition to use potable water for irrigation ornonfunctional turf on specified properties. •Mr. Baltazar noted that AB 1594 (E. Garcia) was recently signed into law, which provides flexibility that is notpresent in the adopted CARB regulations. •It was indicated that AB 399 (Boerner) Water RatepayersProtections Act of 2023 passed the legislature and was signed by the Governor. Essentially, this bill would givevoters within a County Water Authority the chance to have avoice, through the electoral process, over governance decisions that impact their rates. •There was a discussion on the Governor’s vetoes and thelegislature’s authorization to overturn vetoes. In responseto a question from the Committee, Mr. Baltazar stated that the State has the Legislative and Analyst Office that isequivalent the Congressional Budget Office in Congress thatmonitors legislation and makes recommendations on fiscalspending. Following the discussion, the Committee supported staffs’ recommendation and presentation to the full Board as an Informational Item. STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: November 8, 2023 SUBMITTED BY: Charles Mederos, Utility Services Manager PROJECT: P2676 P2700 DIV. NO. ALL APPROVED BY: Andrew Jackson, Chief Water Operations Jose Martinez, General Manager SUBJECT: APPROVAL TO INCREASE CIP P2676 IN AN AMOUNT OF $92,000.00; APPROVAL TO REPLACE PUMP MOTORS AT THE 980-2 and 980-1 PUMP STATIONS; AND APPPROVAL OF THE SURPLUS OF EXISTING MOTORS GENERAL MANAGER’S RECOMMENDATION: That the Board authorize the General Manager to: 1.Approve to increase CIP P2676 total budget by $92,000.00, from $3,150,000.00 to $3,242,000.00.2.Approve the issuance of a purchase order to Brax Company inthe amount of $240,723.76 for the motor replacements for pump #2 at the 980-2 Pump Station and pump #1 at the 980-1 PumpStation; and 3.Approve the surplus of existing motors, including theoriginal pump motor #4 at the 980-2 Pump Station that wasreplaced in December 2022. COMMITTEE ACTION: See “Attachment A.” PURPOSE: To obtain Board authorization for the replacement of motors for pump #2 at 980-2 Pump Station and pump #1 at the 980-1 Pump Station, located in Chula Vista (Exhibit A), to increase CIP P2676 total budget by $92,000.00, from $3,150,000.00 to $3,242,000.00, and surplus the existing motors. AGENDA ITEM 7a ANALYSIS: The District’s 980-2 Pump Station is located at the 624-3 (30 million) Reservoir site in Chula Vista. The pump station is critical for water distribution and consists of four individual pumps and motors with a total pumping capacity of up to 12,000 Gallons Per Minute (GPM) from the 624-3 to the 980-pressure zone for system demand and storage. The pump station was built in 2006 and the station runs more than 12 hours a day during high demand periods. The water demand for this pump station was 6.7 Million Gallons a Day (MGD) in 2006 and has now increased to approximately 7.00 MGD during peak usage. Currently, the 980-2 Pump Station has one motor out of service, located at position #2, that requires replacement. This is a 4,160-volt motor that has never been replaced since the original pump station was built. Electrical tests conducted by an outside company indicate that the pump motor has a ground fault due to low insulation resistance; to corroborate the motor failure, a second comparative test was conducted with another motor from the same pump station, taking representative winding insulation readings that confirmed the failure. It is critical to replace the motor for redundancy and to meet water demands. The typical life expectancy of a pump motor is 10 to 15 years, and this pump motor is 17 years old. The 980-1 Pump Station is located at 2406 Otay Lakes Road in Chula Vista. The pump station was the main source of water distribution to the 980-pressure zone before the 980-2 Pump station was built. The pump station is critical for water distribution redundancy when the 980-2 Pump Station needs to be taken out of service for preventive and corrective maintenance or to run concurrently when there are high water demands. The 980-1 Pump Station was built in 1988 and consists of three individual pumps and motors with a total pumping capacity of 8,000 GPM from the 711-pressure zone for system demand and storage. Currently, the pump station has one 4,160-volt motor out of service, located in position #1, and requires replacement. According to the records of tests performed under the preventive maintenance program and professional assessment by an outside vibration analysis company, this motor has vibration issues and repetitive failures. Staff have made every effort to repair the pump motor with no successful results. Therefore, it is recommended to replace it to prevent the risk of a major motor failure at an unpredictable date. Included in the approved FY 2024 budget, CIP P2676 six-year budget was increased from $725,000.00 to $3,150,000.00 for 980-2 Pump Station miscellaneous replacements with $50,000.00 allocated for 980-2 pump motor #2 rebuild. At the time the budget was created, staff presumed that pump motor #2 would only require rebuilding. Once the District obtained the outside condition assessment results, it was determined that a full replacement was required which will increase the cost, compared to budget, by $92,000.00. CIP P2700 was created with an overall six-year budget of $750,000.00 for the replacement of motors, pumps, pump valves, etc., to allow for the quick rehab/replacement of equipment at Pump Stations. Staff solicited quotes for the replacement of pump motors at 980- 1 and 980-2 Pump Stations via Periscope, the District’s purchasing solicitation system. Five quotes were received and are shown below. Prices include all materials, installation, freight, taxes, performance, and payment bonds. Company Sloan Electromechanical DXP Enterprises, Inc. Brax Company Weber Water Resources Sulzer EMS Motor #1 980-1 Pump Station $84,224.00 Not Responsive $99,111.00 Not Responsive Not Responsive Motor #2 980-2 Pump Station $129,226.00 Not Responsive $141,612.76 Not Responsive Not Responsive TOTAL BID: $213,450.00 Not Responsive $240,723.76 Not Responsive Not Responsive Comments: No guarantee that motor will fit; history of change orders DIR required Subcontractor Form missing Most Responsible Missing Bid Bond Missing Bid Bond Staff is recommending that the Purchase Order is issued to Brax Company for the replacement of pump motor #2 at the 980-2 Pump Station and pump motor #1 at the 980-1 Pump Station. The other three companies that submitted quotes did not meet the requirements of the Request For Quotes (RFQ). Sulzer EMS did not submit a bid bond with their quote. DXP Enterprises did not submit a subcontractor form, specified installation limited to one day only, and since the motor was too old and the manufacturer has limited information on the original motor, any deviation would require a re-quote. Sloan Electromechanical requires additional work to couple the new pump motor to the pump since they stated that pump head shaft will need to be shortened and requested additional verification of the pump head shaft diameters for both motors. Weber Water Resources did not submit a Bid bond and subcontractor forms. Brax Company is the recommended choice since they were responsive, adhered to the RFQ, and have previously performed work for the District with no issues. FISCAL IMPACT: Joe Beachem, Chief Financial Officer The total actual cost for the two pump motors is $240,723.76, of which $99,111.00 will be charged against CIP 2700 and $141,612.76 will be charged to CIP P2676. The Project Manager anticipates that CIP P2700 has sufficient funds in the current year budget to cover all currently known pump motor replacements. The total budget for CIP P2676, as approved in the FY 2024 budget is $3,150,000.00. Total expenditures, plus outstanding commitments and forecast, including this contract, are $3,242,000.00. Based on a review of the financial budget, the Project Manager anticipates that with a budget increase of $92,000.00, CIP P2676 will be completed within the new budget amount of $3,242,000.00. The Finance Department has determined that 100 percent of the budget and reserve funds are available to cover the cost of the pump motors. Expenditure Summary CIP P2700 Six-Year Budget $750,000.00 Cost for 980-1 Pump Station Pump Motor $99,111.00 CIP P2676 Six-Year Budget $3,150,000.00 CIP P2676 Six-Year Budget proposed increase $3,242,000.00 Cost for 980-2 Pump Station Pump Motor $141,612.76 STRATEGIC GOAL: Operate the system to meet demand 24 hours a day, seven days a week. LEGAL IMPACT: None. Attachments: Attachment A - Committee Action Attachment B - Photos Exhibit A – Pump Stations Location ATTACHMENT A SUBJECT/PROJECT: APPROVAL TO INCREASE CIP P2676 IN AN AMOUNT OF $92,000.00; APPROVAL TO REPLACE PUMP MOTORS AT THE 980-2 and 980-1 PUMP STATIONS; AND APPPROVAL OF THE SURPLUS OF EXISTING MOTORS COMMITTEE ACTION: The Finance and Administration Committee reviewed this item at a meeting held on Monday, October 23, 2023, and the following comments were made: •Staff indicated that the total CIP P2676 budget will increase from $3,150,000.00 to $3,242,000.00. •It was noted that the district received five (5) quotes, which three (3) were non-responsive, and one (1) quote requiredadditional work with no guarantee that the pump motor will fit. BRAX Company was responsive, adhered to the RFQ, and haspreviously performed work for the district with no issues. •In response to a comment and question from the Committee, staffstated that Motor #2 is a 17-year-old 4160-volt motor and has outlived its life expectancy of 15 years. •The Committee inquired about the residual values, approximately ten cents to the dollar, received for surplused equipment andwhere the funds would be allocated in the district’s budget. Staff stated that the surplus funds would be allocated to thegeneral fund where they would be used for general usage. TheCommittee inquired about returning the funds to the CIP Budget. Staff stated that funds from surplused equipment are consideredunrestricted and are placed into the general funds in accordance with accounting rules. During the budget process the unrestrictedfunds may be designated to the CIP Budget as needed. •In response to a question from the Committee, Legal Counselstated that the district can go with a higher bidder based on performance and a competitive purchase order/bid. Following the discussion, the Committee supported staffs’ recommendation and presentation to the full board as a Consent Item. Attachment B 980-1 Pump Station Pump Motor # 1 980-2 Pump Station Pump Motor # 2 STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: November 8, 2023 SUBMITTED BY: Marissa Dychitan Senior Accountant PROJECT: DIV. NO. All APPROVED BY: Eid Fakhouri, Finance Manager Kevin Koeppen, Assistant Chief of Finance Joseph R. Beachem, Chief Financial Officer Jose Martinez, General Manager SUBJECT: Approve the Audited Financial Statements for the Fiscal Year Ended June 30, 2023 GENERAL MANAGER'S RECOMMENDATION: That the Board approve the Audited Financial Statements (Attachment B), including the Independent Auditors' unqualified opinion, for the fiscal year ending June 30, 2023. COMMITTEE ACTION: See Attachment A. PURPOSE: To inform the Board of the significant financial events which occurred during the fiscal year ended June 30, 2023, as reflected in the audited financial statements. ANALYSIS: Davis Farr LLP performed the audit and found that, in all material respects, the financial statements correctly represent the District's AGENDA ITEM 7b 2 financial position. They found no material errors in the financial records or statements (Attachment D). Total Assets: Total assets increased by $6.7 million, or 1.09%, during Fiscal Year 2023, to $619.8 million, due to increases in cash and investments, as well as lease receivables, which were partially offset by depreciation. Deferred Outflows & Deferred Inflows: Deferred outflows increased by $15.1 million, or 199.35%, in Fiscal Year 2023 due to increases in pension and OPEB actuarial costs. Deferred inflows decreased by $10.5 million, or 18.21%, due to decreases in deferred investment income for the Pension and OPEB plans, partially offset by the increase in deferred inflows from leases. Total Liabilities & Net Positions: Total liabilities increased by $25.9 million, or 18.70%, from the previous fiscal year to $164.3 million. The increase is attributable to the increases in net pension and OPEB liabilities, partially offset by the annual debt payment of $5.5 million. The net position increased by $6.4 million, or 1.50%, to $431.1 million as of June 30, 2023. Capital Contributions: Capital contributions for Fiscal Year 2023 were $9.2 million. These contributions consist of developers' contributions of $5.3 million in capacity fees and $3.1 million in contributed fixed assets, $0.2 million in CIP grants, and $0.1 million from Caltrans as reimbursements for utility relocations. Additionally, ratepayers paid $0.5 million in availability fees, which are considered a part of capital contributions. Results of Operations: Operating revenues decreased by $2.6 million, or 2.36%, due to a decrease in water sales volume because of higher rainfall, partially offset by increases in water and wastewater rates. The cost of water sales increased by $0.8 million, or 1.11%, due to increased unit purchase costs, partially offset by a reduction in volumes purchased. 3 Non-Operating Revenues & Expenses: Non-operating revenues increased by $2.7 million, or 21.66%, for Fiscal Year 2023, primarily due to a $6.5 million increase in investment income, partially offset by a decrease in miscellaneous revenue of $3.4 million. Non-operating expenses decreased by $0.5 million, or 8.50%, in Fiscal Year 2023, primarily due to the decrease in interest expense and expenses associated with non-capitalizable CIP costs. Conclusion: In summary, the overall audit process was successful, and the auditors found no material errors or misstatements in the District's financial statements. Additional Audit Correspondence: As a part of completing the audit engagement, Davis Farr LLP also provided the following letters summarizing their observations and conclusions concerning the District's overall financial processes: •Management Letter: The auditors did not identify any internal control deficiencies that they considered material weaknesses.(Attachment C). •Audit Committee Letter: This letter describes the overallaspects of the audit, including audit principles, performance, dealings with management, and significant findings or issues. There were no disagreements with management concerningfinancial accounting, reporting, or auditing matters, andthere were no significant difficulties in dealing with management in performing the audit. (Attachment D). •Report on Applying Agreed-Upon Procedures: A review of theDistrict's investment portfolio at year-end and a sample ofspecific investment transactions completed throughout the fiscal year were performed. There were no exceptions tocompliance from the District's Investment Policy. (Attachment E). FISCAL IMPACT: None. 4 STRATEGIC GOAL: The District ensures its continued financial health through long-term financial planning, formalized financial policies, enhanced budget controls, fair pricing, debt planning, and improved financial reporting. LEGAL IMPACT: None. Attachments: A) Committee ActionB) Audited Annual Financial Statements C) Management LetterD) Audit Committee Letter E) Report on Applying Agreed-Upon ProceduresF) PowerPoint Presentation by Davis Farr LLP ATTACHMENT A SUBJECT/PROJECT: Approve the Audited Financial Statements for the Fiscal Year Ended June 30, 2023 COMMITTEE ACTION: This item was presented to the Finance and Administration Committee on October 23, 2023, and the following comments were made: • Staff provided the staff report to the Committee and introduced Ms. Shannon Ayala, CPA and Partner with Davis Farr LLP, who presented a PowerPoint presentation of the district’s audit result fiscal year ended June 30, 2023. • Ms. Ayala stated that audit reports/unmodified opinion will be issued to the district on October 25, 2023. • Ms. Ayala discussed Capital Asset Testing and indicated that $7.7 million of the district’s $11.7 million of outstanding projects were tested. This resulted in approximately 66% of the balance being tested that included CIP repairs and inactive projects to ensure that projects that are active will result in a capital asset to the district. She noted that there were no adjustments or exceptions during the testing. • Also discussed were cash disbursement testing procedures and Benford’s Law that recommends investigation into payment transactions that appear to be suspicious/highly suspicious based on the first two digits of the payment amount and the dollar volume. Ms. Ayala stated that district activities that were considered suspicious or highly suspicious were related to repetitive high payments to the County Water Authority and the city of San Diego. The results of the cash disbursement testing determined that there were no errors, exceptions, or issues that need to be further investigated. • In response to a question from the Committee, staff stated that the reason for the increase with Net Pension Liability (from $0.3 million in FY 2022 to $25.9 million in FY 2023) was due to stock market performance. Following the discussion, the Committee supported staffs’ recommendation and presentation to the full board as a consent item. OTAY WATER DISTRICT FINANCIAL STATEMENTS WITH REPORT ON AUDIT BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS JUNE 30, 2023 Attachment B Table of Contents Year Ended June 30, 2023 Page Number Independent Auditor’s Report 1 Management’s Discussion & Analysis 4 Basic Financial Statements: Statement of Net Position 13 Statement of Revenues, Expenses, and Changes in Net Position 15 Statement of Cash Flows 16 Notes to Financial Statements 18 Required Supplementary Information: Schedule of Changes in the Net OPEB Liability and Related Ratios 63 Schedule of Contributions 64 Schedule of Changes in the Net Pension Liability and Related Ratios 65 Schedule of Plan Contributions 67 Independent Auditor’s Report Board of Directors Otay Water District Spring Valley, California Report on the Audit of the Financial Statements Opinion We have audited the financial statements of the Otay Water District (District), as of and for the year ended June 30, 2023 and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents. In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the District as of June 30, 2023, and the respective changes in financial position and cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinion We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Emphasis of Matter As described further in Note 5 to the financial statements, during the year ended June 30, 2023, the District implemented Governmental Accounting Standards Board (GASB) Statement No.96, Subscription-Based Information Technology Arrangements Accounting. Our opinion is not modified with respect to this matter. Responsibilities of Management for the Financial Statements The District’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. 1 In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for one year after the date that the financial statements are issued. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS, we: Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, no such opinion is expressed. Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit. Report on Summarized Comparative Information We have previously audited the District’s 2022 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated October 19, 2022. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2022, is consistent, in all material respects, with the audited financial statements from which it has been derived. 2 Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, Schedule of Changes in the Net OPEB Liability and Related Ratios, Schedule of Contributions, Schedule of Changes in the Net Pension Liability and Related Ratios, and Schedule of Plan Contributions, be presented to supplement the basic financial statements.Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Management is responsible for the other information included in the Annual Comprehensive Financial Report. The other information comprises the introductory section and statistical section but does not include the financial statements and our auditor's report thereon. Our opinions on the financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 25, 2023 on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance.That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance. Irvine, California October 25, 2023 3 Management’s Discussion and Analysis As the management of the Otay Water District (the "District"), we offer readers of the District's financial statements,this narrative overview,and an analysis of the District's financial performance during the fiscal year ending June 30, 2023.Please read it in conjunction with the District's financial statements that follow Management's Discussion and Analysis.All amounts, unless otherwise indicated, are expressed in millions of dollars. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the District's basic financial statements, which are comprised of the following: 1) Statement of Net Position, 2) Statement of Revenues, Expenses,and Changes in Net Position, 3) Statement of Cash Flows, and 4) Notes to the Financial Statements.This report also contains other supplementary information in addition to the basic financial statements. The Statement of Net Position presents information on the District's assets,deferred outflows of resources, liabilities,and deferred inflows of resources, with the difference reported as Total Net Position.Over time, increases or decreases in net positions may serve as a valuable indicator of whether the District's financial position is improving or weakening. The Statement of Revenues, Expenses,and Changes in Net Position presents information showing how the District's net position changed during the most recent fiscal year.All changes in net positions are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows.Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). The Statement of Cash Flows presents information on cash receipts and payments for the fiscal year.The Notes to the Financial Statements provide additional information essential to a complete understanding of the data supplied in the specific financial statements listed above. Financial Highlights The assets and deferred outflows of resources of the District exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $431.1 million (net position). Of this amount, $83.4 million (unrestricted net position)may be used to meet the District’s ongoing obligations to residents and creditors. Total assets increased by $6.7 million or 1.09% during Fiscal Year 2023, to $619.8 million,due to increases in cash and investments, and the recording of new lease receivables which were partially offset by a drop in capital assets due to depreciation exceeding current year additions. 4 Management’s Discussion and Analysis In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the District's progress in funding its obligation to provide retirement benefits to its employees. Financial Analysis: As noted, net position may serve,over time,as a valuable indicator of an entity's financial position.In the case of the District, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $431.1 million at the close of Fiscal Year 2023. The most significant portion of the District's net position, $341.2 million (79.15%), reflects its investment in capital assets,less any remaining outstanding debt used to acquire those capital assets.The District uses these capital assets to provide services to customers; consequently, these assets are not available for future spending.Although the District's investment in its capital assets is reported effectively as a resource, it should be noted that the resources needed to repay the debt must be provided from other sources since the capital assets themselves cannot be used to liquidate these liabilities. 5 Management’s Discussion and Analysis Statement of Net Position (In Millions of Dollars) 2023 2022 Assets Current and Other Assets $ 176.3 $ 166.4 Capital Assets 443.5 446.7 Total Assets 619.8 613.1 Deferred Outflows of Resources Deferred Actuarial Pension Costs 15.9 4.5 Deferred Actuarial OPEB Costs 6.7 3.0 Total Deferred Outflows of Resources 22.6 7.5 Liabilities Current Liabilities 34.2 33.5 Long-Term Debt Outstanding 95.4 100.9 Net Pension Liability 25.9 0.3 Net OPEB Liability 5.0 0.0 Other Liabilities 3.8 3.7 Total Liabilities 164.3 138.4 Deferred Inflows of Resources Deferred Inflows from Leases 45.4 36.6 Deferred Actuarial Pension Costs 0.0 14.4 Deferred Actuarial OPEB Costs 1.6 6.5 Total Deferred Inflows of Resources 47.0 57.5 Net Position Net Investment in Capital Assets 341.2 340.3 Restricted for Debt Service 3.5 3.7 Restricted for OPEB Asset 0.0 3.0 Restricted for Capital Assets 3.0 3.0 Unrestricted 83.4 74.7 Total Net Position $ 431.1 $ 424.7 The District's operations and population are growing.Much of this expansion has occurred in the residential sector, particularly in the multi-family dwellings and commercial areas. By 2055, the District's service area population is expected to increase by 13% to 271,500 residents.The District has created 6 Management’s Discussion and Analysis several future planning documents to ensure a reliable water supply and sewer system in the future, including the maintenance of current infrastructure. In FY 2023,the District's Capital Assets increased by $14.0 million before accumulated depreciation.(See Note 4 in the Notes to Financial Statements).The District also saw a decrease in long-term debt of $5.5 million (excluding current maturities)due to annual debt service payments (See Note 5 in the Notes to Financial Statements). Total liabilities increased by $25.9 million in FY 2023 primarily due to increases in Net Pension and OPEB liabilities partially offset by the annual debt service payments. In FY 2023, deferred outflows of resources increased by 15.1 million due to increases in the actuarial pension and OPEB costs. Deferred inflows of resources decreased by $10.5 million in FY 2023 due to decreases in the actuarial pension and OPEB costs partially offset by the increase in deferred inflows from leases. At the end of FY 2023,the District reports positive balances in all net position categories.This situation also applies to the prior fiscal year. 7 Management’s Discussion and Analysis Statement of Revenues, Expenses,and Changes in Net Position (In Millions of Dollars) 2023 2022 Water Sales $99.9 $ 102.8 Wastewater Revenue 3.3 3.1 Connection and Other Fees 3.0 2.9 Non-operating Revenues 14.6 11.9 Total Revenues 120.8 120.7 Depreciation Expense 17.9 17.7 Other Operating Expenses 100.9 91.5 Non-operating Expenses 4.8 5.3 Total Expenses 123.6 114.5 Income (Loss) Before Capital Contributions (2.8)6.2 Capital Contributions 9.2 13.2 Change in Net Position 6.4 19.4 Beginning Net Position 424.7 405.3 Ending Net Position $ 431.1 $ 424.7 Water Sales decreased by $2.9 million in FY 2023 due to the decrease in units sold caused by higher rainfall partially offset by increases in water rates necessary to pass through increasing costs placed on the District. Other Operating Expenses increased by $9.4 million in FY 2023,predominantly due to the increase in administrative and general expenses caused by increases in pension and OPEB costs and an increase in the cost of water. Specific planning and environmental study costs associated with capital projects do not qualify as capital costs under Generally Accepted Accounting Principles. These costs are included in the District's miscellaneous (non-operating) expenses.For FY 2023 those expenses were $0.3 million. Connection and Other Fees increased by $0.1 million in FY 2023 due to an increase in expansion related operating costs, which are funded by capacity fees. 8 Management’s Discussion and Analysis Capital Contributions decreased by $4.0 million in FY2023 due to less developer-built facilities. Non-operating Revenues Non-operating Revenues by Major Source (In Millions of Dollars) 2023 2022 Taxes and Assessments $5.6 $5.2 Rents and Leases 2.2 2.1 Other Non-operating Revenue 6.8 4.6 Total Non-operating Revenues $ 14.6 $ 11.9 The District's total non-operating revenues increased by $2.7 million in FY 2023 due primarily to the increase in investment earnings.During FY 2023, the Federal Funds Rate increased from 1.75% to 5.25% which resulted in the overall increase in the market rates of return. Capital Assets and Debt Administration The District's capital assets (net of accumulated depreciation) as of June 30, 2023, totaled $443.5 million. Included in this amount is land, which is a non-depreciable asset.The District's net capital assets decreased by 0.72% in FY 2023. 9 Management’s Discussion and Analysis Capital Assets (In Millions of Dollars) As indicated by the figures in the table above, most capital assets added during the current fiscal year are related to the water systems.Additionally,most of the construction-in-progress cost is associated with water systems.Additional information on the District's capital assets can be found in Note 4 of the Notes to Financial Statements. On June 30, 2023,the District had $95.4 million in outstanding debt (net of $5.2 million of maturities occurring in FY 2024), which consisted of the following: Lease Payable $ 0.7 Subscription-Based IT Payable 0.1 Revenue Bonds 94.6 Total Long-Term Debt $ 95.4 Additional information on the District's long-term debt can be found in Note 5 of the Notes to Financial Statements. 2023 2022 Land $14.5 $14.4 Construction in Progress 11.7 7.3 Potable Water System 542.6 535.5 Recycled Water System 119.2 117.8 Wastewater System 59.4 59.1 Field Equipment 8.3 8.1 Buildings 19.7 19.6 Transportation Equipment 3.9 3.8 Communication Equipment 2.6 2.5 Office Equipment 8.1 8.1 Right to Use Assets 0.9 0.7 Total Capital Assets 790.9 776.9 Less Accumulated Depreciation (347.4)(330.2) Net Capital Assets $ 443.5 $ 446.7 10 Management’s Discussion and Analysis Fiscal Year 2023-2024 Budget Economic Factors The San Diego region imports 72%of its potable supply; therefore, factors such as local rainfall and weather conditions elsewhere in the western portion of the nation can affect the region.San Diego received above-average rainfall of 17.12 inches in FY 2023.The 10-year average of 9.94 inches for San Diego rainfall reflects the long-term drought conditions for our area.San Diego's rainfall average over 20 years is 9.52 inches,the 30-year average is 9.40 inches,and the 40-year average is 9.77 inches. While water sales peaked in 2008, prolonged droughts led to an increase in conservation which has had permanent influence on volumes.Higher rainfall resulted in an 8.73% decline in potable water sales volume in FY 2023.The FY 2024 sales volume is budgeted to increase modestly by 0.84% compared to the previous year's budget. The District continues to respond to the challenges presented by growth, State mandates,and drought by creating new opportunities and new organizational efficiencies.Utilizing and refining its Strategic Business Plan has captured the Board of Directors'vision and united its staff in a joint mission.The District has achieved several significant accomplishments due to its successful adherence to its Strategic Business Plan.The District is poised to continue successfully providing an affordable,safe, and reliable water supply for the people of its service area, while also passing through the benefits of greater efficiencies and economies of scale. The District is currently at about 87%of its projected ultimate population, serving approximately 240,000 people.Long-term, this percentage should continue to increase as the District's service area develops and grows.By 2055,the District is projected to serve approximately 271,500 people, with an average daily demand of 38.5.million gallons per day (MGD)compared to the current average daily demand of 28.9 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), which in turn purchases its water from the Metropolitan Water District (MWD) and the Imperial Irrigation District (IID). Otay takes delivery of water through several connections of large-diameter pipelines owned and operated by CWA.The District receives treated water from CWA directly and from the Helix Water District via a CWA contract.Also, the District has an emergency agreement with the City of San Diego to purchase water in the case of a shutdown of the primary treated water source.The City of San Diego also has a long-term contract with the District to provide recycled water for landscape and irrigation usage.Through innovative agreements like these, both parties can benefit by using another agency's excess capacity and diversifying local supply, thereby increasing reliability. 11 Management’s Discussion and Analysis Financial The District is budgeted to deliver approximately 27,566.5 acre-feet of potable water to 51,758 potable customer accounts during FY 2024.The FY 2024 budget was prepared with the continuing challenges of inflation,regulatory compliance requirements, and endeavors related to the District’s strategic plan. Inflation is expected to have a significant impact on material and administrative expenses in FY 2024, with an estimated $1.2 million impact and $18.4 million impact on the CIP. SDG&E rate increases are expected to increase energy costs by 10.1%, resulting in a $392 thousand increase. Regulatory mandates are also adding pressure to both operating and CIP budgets, increasing material and administrative expense budgets by $848 thousand. The District partially mitigates inflationary impacts through returns on investments and long-term contracts that fix District expenses. The London Moeder Advisors' economic report suggests inflation will likely continue into 2024 at a moderately tempered pace,supported by March 2023 CPI data at a 5.3% inflation rate. The six-year rate model assumes administrative and material inflation to decrease gradually from 5.5% in FY 2025 to 4.0% by 2028. District staff projects that the District will sell another 1,123 meters over the next six years,translating to 3,964.5 equivalent dwelling units (EDUs).This growth is estimated to increase sales volumes by an average of less than 1% per year over the next five years.While all these factors impact the region's water usage, people's water needs remain an underlying constant. Management is unaware of any other conditions that are likely to have a significant impact on the District's current financial position, net position,or operating results. Contacting the District's Financial Management This financial report provides a general overview of the Otay Water District's finances for the Board of Directors, customers, creditors, and other interested parties.Questions concerning any information provided in the report or requests for additional information should be addressed to the District's Finance Department, 2554 Sweetwater Springs Blvd., Spring Valley, CA 91978-2004. 12 STATEMENT OF NET POSITION June 30, 2023 (with comparative totals as of June 30, 2022) 2023 2022 ASSETS Current Assets: Cash and Cash Equivalents (Notes 1 and 2)43,753,408$ 87,556,645$ Restricted Cash and Cash Equivalents (Notes 1 and 2)3,078,363 3,208,111 Investments (Notes 1 and 2)59,781,150 11,689,224 Restricted Investments (Notes 1 and 2)3,444,377 3,499,094 Accounts Receivable, Net 14,313,664 15,450,919 Accrued Interest Receivable 846,231 262,315 Taxes and Availability Charges Receivable, Net 305,094 277,505 Restricted Taxes and Availability Charges Receivable, Net 6,182 15,059 Current Lease Receivable (Note 11)962,482 1,055,499 Inventories 2,053,393 1,350,220 Prepaid Items and Other Receivables 1,501,252 2,507,703 Total Current Assets 130,045,596 126,872,294 Non-current Assets: Capital Assets (Note 4): Land 14,479,573 14,423,773 Construction in Progress 11,741,448 7,306,003 Capital Assets, Net of Depreciation 417,230,754 425,017,900 Net OPEB Asset - 3,005,037 Lease Receivable (Note 11)46,270,266 36,446,255 Total Non-current Assets 489,722,041 486,198,968 Total Assets 619,767,637 613,071,262 DEFERRED OUTFLOWS OF RESOURCES Deferred Actuarial Pension Costs (Note 7)15,951,074 4,481,769 Deferred Actuarial OPEB Costs (Note 8)6,679,231 3,078,056 Total Deferred Outflows of Resources 22,630,305 7,559,825 Continued The accompanying notes are an integral part of this statement. 13 STATEMENT OF NET POSITION Continued June 30, 2023 (with comparative totals as of June 30, 2022) 2023 2022 LIABILITIES Current Liabilities: Current Maturities of Long-term Debt (Note 5)5,212,060$ 5,525,676$ Accounts Payable 14,985,218 15,694,680 Accrued Payroll Liabilities 1,102,208 978,174 Other Accrued Liabilities 5,729,278 4,973,784 Customer and Developer Deposits 5,573,296 4,658,907 Accrued Interest 1,573,222 1,649,672 Liabilities Payable from Restricted Assets: Restricted Accrued Interest - 9,600 Total Current Liabilities 34,175,282 33,490,493 Non-current Liabilities: Long-term Debt (Note 5): General Obligation Bonds - 2,726 Revenue Bonds 94,634,295 100,237,053 Lease Payable 690,539 707,725 Subscription-Based IT Payable (Note 5)35,476 - Net Pension Liability (Note 7)25,951,095 280,298 Net OPEB Liability (Note 8)5,051,261 - Other Non-current Liabilities (Note 1)3,768,468 3,704,232 Total Non-current Liabilities 130,131,134 104,932,034 Total Liabilities 164,306,416 138,422,527 DEFERRED INFLOWS OF RESOURCES Deferred Inflows from Leases 45,442,359 36,619,439 Deferred Actuarial Pension Costs (Note 7)- 14,422,139 Deferred Actuarial OPEB Costs (Note 8)1,574,138 6,444,195 Total Deferred Inflows of Resources 47,016,497 57,485,773 NET POSITION Net Investment in Capital Assets 341,227,728 340,274,496 Restricted for Debt Service 3,476,509 3,685,440 Restricted for OPEB Asset - 3,005,037 Restricted for Capital Assets 3,046,231 3,021,765 Unrestricted (Note 6)83,324,561 74,736,049 Total Net Position 431,075,029$ 424,722,787$ The accompanying notes are an integral part of this statement. 14 STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION Year Ended June 30, 2023 (with comparative totals for the year ended June 30, 2022) 2023 2022 OPERATING REVENUES Water Sales 99,901,174$ 102,807,098$ Wastewater Revenue 3,315,754 3,073,326 Connection and Other Fees 2,975,495 2,874,174 Total Operating Revenues 106,192,423 108,754,598 OPERATING EXPENSES Cost of Water Sales 71,342,741 70,562,038 Wastewater 2,497,316 1,802,256 Administrative and General 27,073,523 19,174,479 Depreciation 17,880,335 17,688,535 Total Operating Expenses 118,793,915 109,227,308 Operating Income (Loss)(12,601,492)(472,710) NON-OPERATING REVENUES (EXPENSES) Investment Earnings (Losses)4,088,331 (1,506,486) Taxes and Assessments 5,618,253 5,244,584 Availability Charges 710,954 740,928 Gain (Loss) on Disposal of Capital Assets (111,029)(187,313) Rents and Leases 2,181,634 2,071,200 Miscellaneous Revenues 1,961,168 5,417,588 Donations (92,000)(106,913) Interest Expense (4,310,352)(4,551,134) Miscellaneous Expenses (330,421)(447,192) Total Non-operating Revenues (Expenses)9,716,538 6,675,262 Income (Loss) Before Capital Contributions (2,884,954)6,202,552 Capital Contributions 9,237,196 13,269,160 Change in Net Position 6,352,242 19,471,712 Total Net Position, Beginning 424,722,787 405,251,075 Total Net Position, Ending 431,075,029$ 424,722,787$ The accompanying notes are an integral part of this statement. 15 STATEMENT OF CASH FLOWS For the Year Ended June 30, 2023 (with comparative totals for the year ended June 30, 2022) 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from Customers 105,268,572$ 105,448,398$ Receipts from Connections and Other Fees 2,975,495 2,874,174 Receipts from Property Rents and Leases 314,995 109,941 Other Receipts 1,178,333 4,634,753 Payments to Suppliers (75,408,680) (73,728,635) Payments to Employees (25,602,901) (22,002,283) Other Payments (422,421)(554,105) Net Cash Provided By (Used For) Operating Activities 8,303,393 16,782,243 CASH FLOWS FROM NONCAPITAL AND RELATED FINANCING ACTIVITIES Receipts from Taxes and Assessments 6,065,432 5,483,041 Net Cash Provided By (Used For) Noncapital and Related Financing Activities 6,065,432 5,483,041 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from Capital Contributions 6,148,060 9,236,895 Proceeds from Sale of Capital Assets 64,042 35,370 Proceeds from Property Rents and Leases 1,503,495 1,553,886 Proceeds from Debt Related Taxes and Assessments 245,063 483,260 Principal Payments on Long-Term Debt (5,563,365) (5,265,100) Interest Payments and Fees (4,074,051) (4,324,324) Acquisition and Construction of Capital Assets (11,547,330) (8,325,724) Net Cash Provided By (Used For) Capital and Related Financing Activities (13,224,086) (6,605,737) CASH FLOWS FROM INVESTING ACTIVITIES Interest Received on Investments 2,407,520 518,928 Proceeds from Sale and Maturities of Investments 7,600,000 3,666,096 Purchase of Investments (55,085,244) (17,806,819) Net Cash Provided By (Used For) Investing Activities (45,077,724) (13,621,795) Net Increase (Decrease) in Cash and Cash Equivalents (43,932,985) 2,037,752 Cash and Cash Equivalents - Beginning 90,764,756 88,727,004 Cash and Cash Equivalents - Ending 46,831,771$ 90,764,756$ Continued The accompanying notes are an integral part of this statement. 16 STATEMENT OF CASH FLOWS Continued For the Year Ended June 30, 2023 (with comparative totals for the year ended June 30, 2022) 2023 2022 Reconciliation of Operating Income (Loss) to Net Cash Flows Provided By (Used For) Operating Activities: Operating Income (Loss)(12,601,492)$ (472,710)$ Adjustments to Reconcile Operating Income to Net Cash Provided By (Used For) Operating Activities: Depreciation 17,880,335 17,688,535 Receipts from Property Rents and Leases 314,995 109,941 Miscellaneous Revenues 1,178,333 4,634,753 Miscellaneous Expenses and Donations (422,421)(554,105) (Increase) Decrease in Accounts Receivable 1,137,255 (609,982) (Increase) Decrease in Inventory (703,173)(494,657) (Increase) Decrease in Prepaid Items and Other Receivables 1,006,451 202,534 (Increase) Decrease in Net OPEB Asset 3,005,037 (3,005,037) (Increase) Decrease in Deferred Actuarial Pension Costs (11,469,305) 939,754 (Increase) Decrease in Deferred Actuarial OPEB Costs (3,601,175) (638,424) Increase (Decrease) in Accounts Payable (709,462)958,954 Increase (Decrease) in Accrued Payroll and Related Expenses 124,034 68,001 Increase (Decrease) in Other Accrued Liabilities 755,494 (11,909) Increase (Decrease) in Customer and Developer Deposits 914,389 177,956 Increase (Decrease) in Other Non-current Liabilities 64,236 (88,779) Increase (Decrease) in Net OPEB Liability 5,051,261 (1,801,159) Increase (Decrease) in Net Pension Liability 25,670,797 (19,763,221) Increase (Decrease) in Deferred Actuarial Pension Costs (14,422,139) 14,422,139 Increase (Decrease) in Deferred Actuarial OPEB Costs (4,870,057) 5,019,659 Net Cash Provided By (Used For) Operating Activities 8,303,393$ 16,782,243$ Schedule of Cash and Cash Equivalents: Current Assets: Cash and Cash Equivalents 43,753,408$ 87,556,645$ Restricted Cash and Cash Equivalents 3,078,363 3,208,111 Total Cash and Cash Equivalents 46,831,771$ 90,764,756$ Supplemental Disclosures Non-Cash Investing and Financing Activities Consisted of the Following: Contributed Capital for Water and Sewer System 3,089,136$ 4,032,265$ Change in Fair Value of Investments and Recognized Gains/Losses (551,965)2,618,502 Amortization Related to Long-term Debt 460,484 474,108 The accompanying notes are an integral part of this statement. 17 Notes To Financial Statements Year Ended June 30, 2023 1)REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A)Reporting Entity The reporting entity Otay Water District (the “District”) includes the accounts of the District and the Otay Water District Financing Authority (the “Financing Authority”). The District is a public entity established in 1956 pursuant to the Municipal Water District Law of 1911 (Section 711 et. Seq. of the California Water Code) for the purpose of providing water and wastewater services to the properties in the District.The District is governed by a Board of Directors consisting of five directors elected by geographical divisions based on District population for a four-year alternating term. The District formed the Financing Authority on March 3, 2010 under the Joint Exercise of Powers Act, constituting Articles 1 through 4 (commencing with Section 6500) of Chapter 5, Division 7, Title 1 of the California Government Code. The Financing Authority was formed to assist the District in the financing of public capital improvements. The financial statements present the District and its component unit. The District is the primary government unit.Component units are those entities which are financially accountable to the primary government, either because the District appoints a voting majority of the component unit’s board, or because the component units will provide a financial benefit or impose a financial burden on the District. The District has accounted for the Financing Authority as a “blended” component unit. Despite being legally separate, the Financing Authority is so intertwined with the District that it is in substance, part of the District’s operations. Accordingly, the balances and transactions of this component unit are reported within the funds of the District. Separate financial statements are not issued for the Financing Authority. B)Measurement Focus, Basis of Accounting and Financial Statement Presentation Measurement focus is a term used to describe “which” transactions are recorded within the various financial statements. Basis of accounting refers to “when” transactions are recorded regardless of the measurement focus applied. The accompanying financial statements are reported using the economic resources measurement focus, and the accrual basis of accounting. Under the economic measurement focus all assets and liabilities (whether current or noncurrent) associated with these activities are included on the Statement of Net Position. 18 Notes To Financial Statements Year Ended June 30, 2023 1)REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES –Continued B)Measurement Focus, Basis of Accounting and Financial Statement Presentation -Continued The Statement of Revenues, Expenses and Changes in Net Position present increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. The District reports its activities as an enterprise fund, which is used to account for operations that are financed and operated in a manner similar to a private business enterprise, where the intent of the District is that the costs (including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges. The basic financial statements of the Otay Water District have been prepared in conformity with accounting principles generally accepted in the United States of America. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for governmental accounting financial reporting purposes. Net position of the District is classified into three components: (1) net investment in capital assets, (2) restricted net position, and (3) unrestricted net position. These classifications are defined as follows: Net Investment in Capital Assets This component of net position consists of capital assets, net of accumulated depreciation and reduced by the outstanding balances of notes or borrowing that are attributable to the acquisition of the assets, construction, or improvement of those assets. If there are significant unspent related debt proceeds at year-end, the portion of the debt attributable to the unspent proceeds are not included in the calculation of the net investment in capital assets. Restricted Net Position This component of net position consists of net position with constrained use through external constraints imposed by creditors (such as through debt covenants), grantors, contributions, or laws or regulations of other governments or constraints imposed by law through constitutional provisions or enabling legislation. 19 Notes To Financial Statements Year Ended June 30, 2023 1)REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -Continued B)Measurement Focus, Basis of Accounting and Financial Statement Presentation -Continued Unrestricted Net Position This component of net position consists of net position that do not meet the definition of “net investment in capital assets” or “restricted net position”. The District distinguishes operating revenues and expenses from those revenues and expenses that are non-operating. Operating revenues are those revenues that are generated by water sales and wastewater services while operating expenses pertain directly to the furnishing of those services. Non- operating revenues and expenses are those revenues and expenses generated that are not associated with the normal business of supplying water and wastewater treatment services. The District recognizes revenues from water sales, wastewater revenues, and meter fees as they are earned. Taxes and assessments are recognized as revenues based upon amounts reported to the District by the County of San Diego, net of allowance for delinquencies of $34,587 at June 30, 2023. Additionally, capacity fee contributions received which are related to specific operating expenses are offset against those expenses and included in Cost of Water Sales in the Statement of Revenues and Expenses and Changes in Net Position. Sometimes the District will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted -net position and unrestricted -net position, a flow assumption must be made about the order in which the resources are considered to be applied.It is the District’s practice to consider restricted -net position to have been depleted before unrestricted -net position is applied, however it is at the Board’s discretion. 20 Notes To Financial Statements Year Ended June 30, 2023 1)REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -Continued C)New Accounting Pronouncements Implemented as of June 30, 2023 Governmental Accounting Standard Board Statement No. 94 In March 2020, GASB issued Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements. The primary objective of this Statement is to improve financial reporting by addressing issues related to public-private and public-public partnership arrangements (PPPs). As used in this Statement, a PPP is an arrangement in which a government (the transferor) contracts with an operator (a governmental or nongovernmental entity) to provide public services by conveying control of the right to operate or use a nonfinancial asset, such as infrastructure or other capital asset (the underlying PPP asset), for a period of time in an exchange or exchange-like transaction. Currently this Statement has no effect on the District’s financial statements. Governmental Accounting Standard Board Statement No. 96 In May 2020, GASB issued Statement No. 96, Subscription-Based Information Technology Arrangements. This Statement provides guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for government end users (governments). This Statement (1) defines a SBITA; (2) establishes that a SBITA results in a right-to- use subscription asset –an intangible asset –and a corresponding liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. To the extent relevant, the standards for SBITAs are based on the standards established in Statement No. 87, Leases, as amended. Pending Accounting Pronouncements GASB has issued the following statements which may impact the District’s financial reporting requirements in the future: i.GASB Statement 99 -“Omnibus 2022”, effective for reporting periods beginning after June 15, 2023. ii.GASB Statement 100 -“Accounting Changes and Error Corrections”, effective for reporting periods beginning after June 15, 2023. iii.GASB Statement 101 -“Compensated Absences”, effective for reporting periods beginning after December 15, 2023. 21 Notes To Financial Statements Year Ended June 30, 2023 1)REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -Continued D)Deferred Outflows/Deferred Inflows In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The District has two items that qualify for reporting in this category, deferred actuarial pension costs and deferred actuarial OPEB costs are items that are deferred and recognized as an outflow of resources in the period the amounts become available. In addition to liabilities, the Statement of Net Position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to a future period(s) and will not be recognized as an inflow of resources (revenue) until that time. The District has two items that qualify for reporting in this category. Accordingly, the items deferred actuarial OPEB costs and deferred lease revenue are deferred and recognized as an inflow of resources in the period that the amounts become available. E)Statement of Cash Flows For purposes of the Statement of Cash Flows, the District considers all highly liquid investments (including restricted assets) with a maturity period, at purchase, of three months or less to be cash equivalents. F)Investments Investments are stated at their fair value, which represents the quoted or stated market value. Investments that are not traded on a market, such as investments in external pools, are valued based on the stated fair value as presented by the external pool. All investments are stated at their fair value. The District has not elected to report certain investments at amortized costs. 22 Notes To Financial Statements Year Ended June 30, 2023 1)REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES –Continued G)Inventory and Prepaid Items Inventory consists primarily of materials used in the construction and maintenance of the water and wastewater system and is valued at weighted average cost. Both inventory and prepaid items use the consumption method whereby they are reported as an asset and expensed as they are consumed. H)Capital Assets Capital assets are recorded at cost, where historical records are available, and at an estimated historical cost where no historical records exist. Right-to-use assets for leases and subscription-based information technology arrangements are recorded at net present value at the time of inception. Infrastructure assets in excess of $20,000 and other capital assets in excess of $10,000 are capitalized if they have an expected useful life of two years or more. The District will also capitalize individual purchases under the capitalization threshold if they are part of a new capital program. The cost of purchased and self-constructed additions to utility plant and major replacements of property are capitalized. Costs include materials,direct labor, transportation, and such indirect items as engineering, supervision, employee fringe benefits and overhead. Repairs, maintenance, and minor replacements of property are charged to expense. Donated assets are capitalized at their acquisition value on the date contributed. Depreciation is calculated using the straight-line method over the following estimated useful lives: Water System 15-70 Years Field Equipment 2-50 Years Buildings 30-50 Years Communication Equipment 2-10 Years Transportation Equipment 2-7 Years Office Equipment 2-10 Years Recycled Water System 15-70 Years Wastewater System 25-50 Years Right to Use Asset The estimated life of the leased/subscribed asset or the contract term whichever is shorter 23 Notes To Financial Statements Year Ended June 30, 2023 1)REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -Continued I)Other Non-Current Liabilities For compensated absences, the District’s policy is to record vested and accumulated vacation and sick leave as an expense and liability as benefits accrue to employees. The current portion is reflected in accrued payroll liabilities and remainder in other non-current liabilities on the Statement of Net Position. J)Classification of Liabilities Certain current liabilities have been classified as current liabilities payable from restricted assets as they will be funded from restricted assets. K)Allowance for Doubtful Accounts The District charges doubtful accounts arising from water sales receivable to bad debt expense when it is probable that the accounts will be uncollectible. Uncollectible accounts are determined by the allowance method based upon prior experience and management’s assessment of the collectability of existing specific accounts. The allowance for doubtful accounts was $166,312 for 2023. 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. Beginning Ending Due Within Balance Additions Deletions Balance One Year Compensated absences 3,424,551$1,483,424$(1,422,524)$3,485,451$ 348,545$ Customer credits 265,493 9,425 - 274,918 - Reimbursement agreements 356,644 - - 356,644 - Total 4,046,688$1,492,849$(1,422,524)$4,117,013$ 348,545$ 24 Notes To Financial Statements Year Ended June 30, 2023 1)REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -Continued L)Property Taxes -Continued 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,deferred outflows of resource, and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Plan and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis.For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. Valuation Date June 30, 2021 Measurement Date June 30, 2022 Measurement Period July 1, 2021 to June 30, 2022 N)Other Post-Employment Benefits (OPEB) For purposes of measuring the net OPEB liability(asset), deferred outflows/inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the District’s plan (OPEB Plan) and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined on the same basis. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. 25 Notes To Financial Statements Year Ended June 30, 2023 1)REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -Continued N) Other Post-Employment Benefits (OPEB) Generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used: Valuation Date June 30, 2021 Measurement Date June 30, 2022 Measurement Period July 1, 2021 to June 30, 2022 O)Leases The District is a lessor and lessee for leases as detailed in Footnotes 5 and 11. The District recognizes a lease receivable, a deferred inflow of resources, right to use capital assets, and a lease payable in the financial statements. At the commencement of the lease, the District initially measures the lease receivable at the present value of payments expected to be received and paid during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received and the lease payable is reduced by the principal portion of lease payments made. The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date.Subsequently, the deferred inflows of resources are recognized as revenue over the life of the lease term. Key estimates and judgments include how the district determines the discount rate it uses to discount the expected lease receipts and payments to present value, lease term and lease receipts. The District used the weighted average cost of capital rate as the discount rate for leases. The lease term includes the non-cancellable period of the lease. The District monitors changes in circumstances that would require a remeasurement of its leases and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable. P)Subscription Based Information Technology Arrangements (SBITAs) The District is a participant in subscription-based IT arrangements as detailed in Footnote 5. The District recognizes a subscription-based IT payable and right to use IT assets in the financial statements. 26 Notes To Financial Statements Year Ended June 30, 2023 1)REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -Continued P)Subscription Based Information Technology Arrangements (SBITAs)-Continued At the commencement of the arrangement, the District initially measures the payable at the present value of payments expected to be paid during the arrangement term. Subsequently, the payable is reduced by the principal portion of payments made. The right to use assets are initially measured at the initial amount of the subscription-based IT payable. Subsequently, the right to use assets are amortized over the life of the arrangement term. Q)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. R)Prior Year Comparative Information Selected information regarding the prior year has been included in the accompanying financial statements. This information has been included for comparison purposes only and does not represent a complete presentation in accordance with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the government’s prior year financial statements, from which this selected financial data was derived. In addition, certain minor reclassifications of the prior year data have been made to enhance their comparability to the current year. 2)CASH AND INVESTMENTS The primary goals of the District’s Investment Policy are to assure compliance with all Federal, State, and Local laws governing the investment of funds under the control of the organization, protect the principal of investments entrusted, remain sufficiently liquid to enable the District to meet all operating requirements and generate income at a market rate of return under the parameters of such policies. 27 Notes To Financial Statements Year Ended June 30, 2023 2)CASH AND INVESTMENTS -Continued Cash and Investments are classified in the accompanying financial statements as follows: Cash and Investments consist of the following: Investments Authorized by the California Government Code and the District’s Investment Policy The table below identifies the investment types that are authorized for the District by the California Government Code (or the District’s Investment Policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the District’s Investment Policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the District, rather than the general provisions of the California Government Code or the District’s Investment Policy. Statement of Net Position: Cash and Cash Equivalents 43,753,408$ Restricted Cash and Cash Equivalents 3,078,363 Investments 59,781,150 Restricted Investments 3,444,377 Total Cash and Investments 110,057,298$ Cash on Hand 2,950$ Deposits with Financial Institutions 629,278 Investments 109,425,070 Total Cash and Investments 110,057,298$ 28 Notes To Financial Statements Year Ended June 30, 2023 2)CASH AND INVESTMENTS -Continued Maximum Maximum Authorized Maximum Percentage Investment Investment Type Maturity Of Portfolio(1)In One Issuer U.S. Treasury Obligations 5 years 100%100% U.S. Government Sponsored Entities 5 years 100% 100% Certificates of Deposit 5 years 15%100% Corporate Medium-Term Notes 5 years 10%2% Commercial Paper 270 days 10%2% Money Market Mutual Funds N/A 10%100% County Pooled Investment Funds N/A 100%N/A Local Agency Investment Fund (LAIF)N/A $75 Million N/A (1)Excluding amounts held by bond trustee that are not subject to California Government Code restrictions. Investments Authorized by Debt Agreements Investments of debt proceeds held by the bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the District’s Investment Policy. Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally,the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the District manages its exposure to interest rate risk is by purchasing investments with shorter durations than the maximum allowable under the District’s Investment Policy and by timing cash flows from maturities,so that a portion of the portfolio is maturing or coming close to maturity evenly over time,as necessary,to provide the cash flow and liquidity needed for operations. Information about the sensitivity of the fair values of the District’s investments to market interest rate fluctuations are provided by the following tables that show the distribution of the District’s investments by maturity as of June 30, 2023. 29 Notes To Financial Statements Year Ended June 30, 2023 2)CASH AND INVESTMENTS –Continued Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code or the District’s Investment Policy, or debt agreements, and the Moody’s ratings as of June 30, 2023. Concentration of Credit Risk The investment policy of the District contains various limitations on the amounts that can be invested in any one type or group of investments and in any issuer, beyond that stipulated by the California Government Code, Sections 53600 through 53692. All the investments for fiscal year 2023 are within the limitations of the District’s investment policy. 12 Months 13 to 36 More than Investment Type Total Or Less Months 36 Months U.S. Government Sponsored Entities $ 66,215,327 29,737,950$ 36,477,377$ -$ U.S. Treasury Obligations 4,939,250 4,939,250 -- Local Agency Investment Fund (LAIF) 18,543,575 18,543,575 -- San Diego County Pool 14,948,000 14,948,000 -- Money Market Funds 4,778,918 4,778,918 -- Total $ 109,425,070 $ 72,947,693 $ 36,477,377 -$ Remaining Maturity (in Months) Legal Minimum Not Investment Type Total Rating AAA Rated U.S. Government Sponsored Entities $ 66,215,327 A 66,215,327$ -$ U.S. Treasury Obligations 4,939,250 N/A -4,939,250 Local Agency Investment Fund (LAIF) 18,543,575 N/A -18,543,575 San Diego County Pool 14,948,000 AAA 14,948,000 - Money Market Funds 4,778,918 AAA -4,778,918 Total $ 109,425,070 81,163,327$ 28,261,743$ Rating as of Year End 30 Notes To Financial Statements Year Ended June 30, 2023 2)CASH AND INVESTMENTS –Continued The investments listed below disclose the concentration of risk within the District’s investment portfolio. Investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of total District investments as of June 30, 2023: Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, the District 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, the District will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the District’s Investment Policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local government units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the District. 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, 2023, $2,199,718 of the District’s deposits with financial institutions in excess of federal depository insurance limits, were held in collateralized accounts. Local Agency Investment Fund (LAIF) The District is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the District’s investment in this pool is reported in the accompanying financial statements at amounts based upon District’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. Reported Issuer Investment Type Amount Federal Home Loan Bank U.S. Government Sponsored Entities 34,611,320$ Federal National Mortgage Assoc.U.S. Government Sponsored Entities 11,423,540 Federal Farm Credit Bank U.S. Government Sponsored Entities 10,788,950 Federal Home Loan Mortgage U.S. Government Sponsored Entities 9,391,517 31 Notes To Financial Statements Year Ended June 30, 2023 2)CASH AND INVESTMENTS –Continued The LAIF is a special fund of the California State Treasury through which local governments may pool investments. The District may invest up to $75,000,000 in the fund. Investments in LAIF are highly liquid, as deposits can be converted to cash within twenty-four hours without loss of interest. Investments with LAIF are secured by the full faith and credit of the State of California. The annualized yield of LAIF for the quarter ended June 30, 2023 was 3.01%. The estimated amortized cost and fair value of the LAIF pool at June 30, 2023 was $18,543,575. San Diego County Pooled Fund The San Diego County Pooled Investment Fund (SDCPIF) is a pooled investment fund program governed by the County of San Diego Board of Supervisors and administered by the County of San Diego Treasurer and Tax Collector. Investments in SDCPIF are highly liquid as deposits and withdrawals can be made at any time without penalty, determined on an amortized cash basis, the same as the fair value of the District’s position in the pool. The County of San Diego’s bank deposits are either federally insured or collateralized in accordance with the California Government Code. Pool detail is included in the County of San Diego Comprehensive Annual Financial Report (“Annual Report”). Copies of the Annual Report may be obtained from the County of San Diego Auditor-Controller’s Office –1600 Pacific Coast Highway, San Diego California 92101. Cash and investments are restricted for the cost of the following District projects and debt service: Cash and Cash Equivalents: New Water Supply 3,046,231$ Cash and Cash Equivalents: Debt Service: Water Revenue Bond Series 2010A 10,452$ Water Revenue Bond Series 2010B 21,680 32,132$ 32 Notes To Financial Statements Year Ended June 30, 2023 2)CASH AND INVESTMENTS –Continued Restricted Investments 3)FAIR VALUE MEASUREMENTS Governmental Accounting Standards Board (GASB) Statement No. 72, Fair Value Measurements and Application, provides the framework for measuring fair value. The framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value with Level 1 given the highest priority and Level 3 the lowest priority. The three levels of the fair value hierarchy are as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the organization has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include the following: a.Quoted prices for similar assets or liabilities in active markets. b.Quoted prices for identical or similar assets or liabilities in markets that are not active. c.Inputs other than quoted prices are observable for the asset or liability (for example, interest rates and yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks, and default rates). d.Inputs that are derived principally from or corroborated by observable market data by correlation or other means (market-corroborated inputs). Level 3 inputs are unobservable inputs for the asset or liability. Debt Service: Water Revenue Bond Series 2010A 948,202$ Water Revenue Bond Series 2010B 2,496,175 3,444,377$ 33 Notes To Financial Statements Year Ended June 30, 2023 3)FAIR VALUE MEASUREMENTS -Continued Fair value of assets measured on a recurring basis at June 30, 2023 are as follows: Investments classified in Level 2 of the fair value hierarchy are valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities’ relationship to benchmark quoted prices. Investments not measured at fair value do not fall under the fair value hierarchy as there is no active market for the investments. Ouoted Prices in Significant Other Active Markets Observable Inputs Not Measured Total (Level 1)(Level 2)at Fair Value U.S. Government Sponsored Entities 66,215,327$ -$66,215,327$ -$ U.S. Treasury Obligations 4,939,250 4,939,250 -- Local Agency Investment Fund (LAIF) 18,543,575 -- 18,543,575 San Diego County Pool 14,948,000 --14,948,000 Money Market Funds 4,778,918 --4,778,918 Total $109,425,070 $ 4,939,250 $ 66,215,327 $ 38,270,493 34 Notes To Financial Statements Year Ended June 30, 2023 4)CAPITAL ASSETS The following is a summary of changes in Capital Assets for the year ended June 30, 2023: Depreciation expense for the year ended June 30, 2023 was $17,880,335. Beginning Ending Balance Additions Deletions Balance Capital Assets, Not Depreciated: Land $ 14,423,773 $ 55,800 $ - $ 14,479,573 Construction in Progress 7,306,003 11,547,328 (7,111,883) 11,741,448 Total Capital Assets, Not Depreciated 21,729,776 11,603,128 (7,111,883) 26,221,021 Capital Assets, Being Depreciated: Infrastructure 712,401,304 9,071,961 (316,856) 721,156,409 Field Equipment 8,109,764 286,247 (59,010) 8,337,001 Buildings 19,618,254 195,140 (84,091) 19,729,303 Transportation Equipment 3,739,832 357,857 (181,536) 3,916,153 Communication Equipment 2,511,818 223,867 (132,830) 2,602,855 Office Equipment 8,101,720 10,146 (47,491) 8,064,375 Right to Use Assets 738,501 123,039 - 861,540 Total Capital Assets, Being Depreciated 755,221,193 10,268,257 (821,814) 764,667,636 Less Accumulated Depreciation: Infrastructure 300,713,023 16,326,675 (184,603) 316,855,095 Field Equipment 6,594,349 274,193 (59,010) 6,809,532 Buildings 10,507,211 550,471 (42,103) 11,015,579 Transportation Equipment 2,740,153 280,505 (181,536) 2,839,122 Communication Equipment 2,289,429 92,724 (132,830) 2,249,323 Office Equipment 7,323,961 282,751 (46,664) 7,560,048 Right to Use Assets 35,167 73,016 - 108,183 Total Accumulated Depreciation 330,203,293 17,880,335 (646,746) 347,436,882 Total Capital Assets, Being Depreciated, Net 425,017,900 (7,612,078) (175,068) 417,230,754 Total Capital Assets, Net $ 446,747,676 $ 3,991,050 $ (7,286,951) $ 443,451,775 35 Notes To Financial Statements Year Ended June 30, 2023 5) LONG-TERM DEBT Long-term liabilities for the year ended June 30, 2023 are as follows: General Obligation Bonds In June 1998, the District issued $11,835,000 of General Obligation Refunding Bonds. The proceeds of this issue, together with other lawfully available monies, were to be used to establish an irrevocable escrow to advance refund and defease in their entirety the District’s previous outstanding General Obligation Bond issue. In November 2009, the District issued $7,780,000 of General Obligation Refunding Bonds Improvement District No. 27-2009 to refund the 1998 issue. The proceeds from the bond issue were $7,989,884, which included an original issue premium of $209,884. At June 30, 2023, the bonds were paid off. Beginning Ending Due Within Balance Additions Deletions Balance One Year General Obligation Bonds: Improvement District No. 27 – 2009 720,000$ -$ (720,000)$ -$ -$ Unamortized Bond Premium 2,726 - (2,726) - - Net General Obligation Bonds 722,726 - (722,726) - - Revenue Bonds: 2010 Water Revenue Bonds Series A 3,705,000 - (1,175,000) 2,530,000 1,235,000 2010 Water Revenue Bonds Series B 36,355,000 - - 36,355,000 - 2013 Water Revenue Refunding Bonds 1,640,000 - (805,000) 835,000 835,000 2016 Water Revenue Refunding Bonds 26,655,000 - (1,285,000) 25,370,000 1,350,000 2018 Water Revenue Bonds 28,510,000 - (1,455,000) 27,055,000 1,650,000 2019 Wastewater Revenue Bonds 3,055,000 - (70,000) 2,985,000 75,000 2010 Series A Unamortized Premium 167,404 - (74,402) 93,002 - 2013 Bonds Unamortized Premium 112,111 - (96,096) 16,015 - 2016 Bonds Unamortized Premium 2,529,762 - (178,572) 2,351,190 - 2018 Bonds Unamortized Premium 2,310,303 - (109,149) 2,201,154 - 2019 Bonds Unamortized Discount (12,527) - 461 (12,066) - Net Revenue Bonds 105,027,053 - (5,247,758) 99,779,295 5,145,000 Lease Payable 723,401 - (15,674) 707,727 17,188 Subscription-Based IT Payable - 123,039 (37,691) 85,348 49,872 Total Long-Term Liabilities 106,473,180$123,039$(6,023,849)$ 100,572,370$5,212,060$ 36 Notes To Financial Statements Year Ended June 30, 2023 5)LONG-TERM DEBT –Continued Water Revenue Bonds In April 2010, Water Revenue Bonds with a face value of $50,195,000 were sold by the Otay Water District Financing Authority to provide funds for the construction of water storage and transmission facilities. The bond issue consisted of two series; Water Revenue Bonds, Series 2010A (Non-AMT Tax Exempt) with a face value of $13,840,000 plus a $1,078,824 original issue premium, and Water Revenue Bonds,Series 2010B (Taxable Build America Bonds) with a face value of $36,355,000. The Series 2010A bonds are due in annual installments of $785,000 to $1,295,000 from September 1, 2012 through September 1, 2025; bearing interest at 2% to 5.25%. The Series 2010B bonds are due in annual installments of $1,365,000 to $3,505,000 from September 1, 2026 through September 1, 2040; bearing interest at 6.377% to 6.577%. Interest on both Series is payable on September 1, 2010 and semiannually thereafter on March 1st and September 1st of each year until maturity or earlier redemption. The installment payments are to be made from taxes and net revenues of the Water System as described in the installment purchase agreement, on parity with the payments required to be made by the District for the 2013, 2016 Water Revenue Refunding Bonds and 2018 Water Revenue Bonds described below. The original issue premium is being amortized over the 14-year life of the Series 2010A bonds. Amortization for the year ending June 30, 2023 was $74,402. The amortization is included in interest expense. The unamortized premium at June 30, 2023 is $93,002. The 2010 Water Revenue Bonds contains various covenants and restrictions, principally that the District fix, prescribe, revise and collect rates, fees and charges for the Water System which will at least be sufficient to yield, during each fiscal year, taxes and net revenues equal to one hundred twenty-five percent (125%) of the debt service for such fiscal year. The District was in compliance with these rate covenants for the fiscal year ended June 30, 2023. In June 2013, the 2013 Water Revenue Refunding Bonds were issued to defease the 2004 Refunding Certificates of Participation. The bonds were issued with a face value of $7,735,000 plus a $984,975 original issue premium. The bonds are due in annual installments of $660,000 to $835,000 from September 1, 2013 through September 1, 2023; bearing interest at 1% to 4%. The installment payments are to be made from taxes and net revenues of the Water System, on parity with the payments required to be made by the District for the 2016 Water Revenue Refunding Bonds, the 2010A, 2010B and 2018 Water Revenue Bonds. 37 Notes To Financial Statements Year Ended June 30, 2023 5)LONG-TERM DEBT –Continued Water Revenue Bonds –Continued The original issue premium is being amortized over the 11-year life of the Series 2013 bonds. Amortization for the year ending June 30, 2023 was $96,096. The amortization is included in interest expense. The unamortized premium at June 30, 2023 is $16,015. 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, 2023 was $178,572. The amortization is included in interest expense. The unamortized premium at June 30, 2023 is $2,351,190. In November 2018, Water Revenue Bonds were issued by the Otay Water District Financing Authority to provide funds for construction of water storage, treatment and transmission facilities and to refinance the 1996 Certificates of Participation. The bonds are due in annual installments of $775,000 to $1,915,000 from September 1, 2019 through September 1, 2043; bearing interest of 3% to 5%. The bonds were issued with a face value of $32,435,000 plus $2,710,512 original issue premium. The original issue premium is being amortized over the 25-year life of the Series 2018 bonds. Amortization for the year ending June 30, 2023 was $109,149. The amortization expense is included in interest expense. The unamortized premium at June 30, 2023 is $2,201,154. 38 Notes To Financial Statements Year Ended June 30, 2023 5)LONG-TERM DEBT –Continued Water Revenue Bonds –Continued The total amount outstanding at June 30, 2023 and aggregate maturities of the revenue bonds for the fiscal years subsequent to June 30, 2023, are as follows: For the Year Ended June 30,Principal Interest Principal Interest Principal Interest 2024 1,235,000$ 98,863$ -$ 2,371,868$ 835,000$ 16,700$ 2025 1,295,000 33,994 - 2,371,868 - - 2026 - - 1,365,000 2,328,345 - - 2027 - - 1,450,000 2,238,589 - - 2028 - - 1,545,000 2,143,093 2029-2033 - - 9,320,000 9,049,258 - - 2034-2038 - - 12,795,000 5,459,732 - - 2039-2043 - - 9,880,000 1,002,335 - - 2,530,000$ 132,857$ 36,355,000$26,965,088$ 835,000$ 16,700$ 2013 Water Revenue Refunding Bonds 2010 Water Revenue Bond Series A 2010 Water Revenue Bond Series B For the Year Ended June 30,Principal Interest Principal Interest 2024 1,350,000$ 875,831$ 1,650,000$ 1,145,788$ 2025 1,420,000 806,581 1,730,000 1,061,288 2026 1,495,000 733,706 1,820,000 972,538 2027 1,570,000 657,081 1,915,000 879,163 2028 1,645,000 584,931 1,030,000 805,538 2029-2033 9,315,000 1,917,681 5,950,000 3,207,338 2034-2038 8,575,000 498,078 6,715,000 1,855,625 2039-2043 - - 5,445,000 655,894 2044 - - 800,000 16,000 25,370,000$ 6,073,889$ 27,055,000$ 10,599,172$ 2016 Water Revenue 2018 Water Revenue Refunding Bonds Refunding Bonds 39 Notes To Financial Statements Year Ended June 30, 2023 5)LONG-TERM DEBT –Continued Wastewater Revenue Bonds In December 2019, Wastewater Revenue Bonds were issued by the Otay Water District Financing Authority to provide funds to pay for certain capital improvements to the District’s wastewater system. The bonds are due in annual installments of $65,000 to $160,000 from September 1, 2021 through September 1, 2049; bearing interest of 2% to 3.125%. The bonds were issued with a face value of $3,120,000 less a $13,680 original issue discount. The original issue discount is being amortized over the 30-year life of the Series 2019 bonds. Amortization for the year ending June 30, 2023 was $461. The amortization expense is included in interest expense. The unamortized discount at June 30,2023 is $12,066. The 2019 Wastewater Revenue Bonds contains various covenants and restrictions, principally that the District fix, prescribe, revise and collect rates, fees and charges for the Wastewater System which will at least be sufficient to yield, during each fiscal year, net revenues equal to one hundred fifteen percent (115%) of the debt service for such fiscal year. The District was in compliance with these rate covenants for the fiscal year ended June 30, 2023. Future debt service requirements for the bonds are as follows: For the Year Ended June 30,Principal Interest 2024 75,000$ 87,291$ 2025 75,000 85,416 2026 80,000 83,091 2027 80,000 80,691 2028 85,000 78,216 2029-2033 455,000 352,234 2034-2038 520,000 285,497 2039-2043 600,000 204,422 2044-2048 700,000 105,469 2049-2051 315,000 9,922 2,985,000$ 1,372,249$ 2019 Wastewater Revenue Bonds 40 Notes To Financial Statements Year Ended June 30, 2023 5)LONG-TERM DEBT –Continued Revenues Pledged The District has pledged a portion of future water sales revenues to repay its Water Revenue and Water Revenue Refunding Bonds. The total principal and interest remaining on the water revenue bonds and water revenue refunding bonds is $135,932,706 payable through fiscal year 2044. For June 30, 2023, principal and interest paid by the water sales revenues were $4,720,000 and $4,745,600 respectively. The District has pledged a portion of future wastewater sales revenues to repay its Wastewater Revenue Bonds. The total principal and interest remaining on the wastewater revenue bonds is $4,357,249 payable through fiscal year 2050. For June 30, 2023, principal and interest paid by the wastewater sales revenues were $70,000 and $88,741, respectively. Lease Payable Antenna Site Lease The District has one antenna site sublease payable with a lease term of forty-eight years. The District is required to make annual fixed payments ranging from $15,100 to $64,303, with a discount rate of 1.39%. The lease has three extension options of 5 years each. As of June 30, 2023, the value of the lease payable is $707,727. Future lease payable requirements are as follows: For the Year Ended June 30,Principal Interest 2024 17,188$ 9,728$ 2025 18,781 9,479 2026 20,469 9,207 2027 22,253 8,911 2028 24,134 8,590 2029-2033 152,686 37,142 2034-2038 217,905 24,399 2038-2042 234,311 6,914 707,727$ 114,370$ 41 Notes To Financial Statements Year Ended June 30, 2023 5)LONG-TERM DEBT –Continued Subscription-Based Information Technology Arrangements Fracta AI-Based Condition Assessment Software On July 20, 2022, the District entered into a 36-month subscription for the use of Fracta AI-Based Condition Assessment Software. An initial subscription liability was recorded in the amount of $35,494. As of June 30, 2023, the value of the subscription liability is $23,500. The District is required to make annual fixed payments of $11,995. The subscription has an interest rate of 1.39%. The value of the right to use asset as of June 30, 2023 is $35,494 with accumulated amortization of $11,831 is included in note 4 with right to use assets. Samsara Networks, Inc. On July 5, 2022, the District entered into a 36-month subscription for the use of GPS fleet management system software. An initial subscription liability was recorded in the amount of $70,934. As of June 30, 2023, the value of the subscription liability is $46,962. The District is required to make annual fixed payments of $23,972. The subscription has an interest rate of 1.39%. The value of the right to use asset as of June 30, 2023 of $70,934 with accumulated amortization of $23,645 is included in note 4 with right to use assets. Drone Deploy On April 30, 2023, the District entered into a 14-month subscription for the use of Drone Deploy software. An initial subscription liability was recorded in the amount of $16,611. As of June 30, 2023, the value of the subscription liability is $14,887. The District is required to make annual fixed payments of $1,743 for fiscal year 2022-23, and $14,999 for fiscal year 2023-24. The subscription has an interest rate of 1.39%.The value of the right to use asset as of June 30, 2023 of $16,611 with accumulated amortization of $2,373 is included in note 4 with right to use assets. For the Year Ended June 30,Principal Interest 2024 49,872$ 1,092$ 2025 35,476 493 85,348$ 1,585$ 42 Notes To Financial Statements Year Ended June 30, 2023 6)NET POSITION Designations of Net Position In addition to the restricted net position, a portion of unrestricted net position has been designated by the Board of Directors for the following purposes as of June 30, 2023: 7)DEFINED BENEFIT PENSION PLAN A)General Information about the Pension Plans Plan Descriptions All qualified permanent and probationary employees are eligible to participate in the District’s Plan, agent multiple-employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plans are established by State statute and District resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding provisions, assumptions and membership information that can be found on the CalPERS website. CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 (52 if new PERS member)with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1959 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost-of-living adjustments for the plan are applied as specified by the Public Employees’ Retirement Law. Designated Betterment 3,076,209$ Replacement Reserve 62,800,637 Designated Insurance 889,183 Designated New Supply Fund 6,132 Undesignated 16,552,400 Total $ 83,324,561 43 Notes To Financial Statements Year Ended June 30, 2023 7) DEFINED BENEFIT PENSION PLAN –Continued Benefits Provided The Plans’ provisions and benefits in effect at June 30, 2023 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 2023 8.00% 7.00% Required Employer Contribution Rates 2023 22.59% 22.59% Employees Covered The following employees were covered by the benefit terms for the Plan: Inactive Employees or Beneficiaries Currently Receiving Benefits 215 Inactive Employees Entitled to But Not Yet Receiving Benefits 122 Active Employees 134 Total 471 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. The total plan contributions for the Plan are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. 44 Notes To Financial Statements Year Ended June 30, 2023 7)DEFINED BENEFIT PENSION PLAN –Continued The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended. 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, 2022 rolled forward to June 30, 2023 using standard update procedures. A summary of actuarial assumptions and methods used to determine the net pension liability is shown below: Actuarial Assumptions The total pension liabilities in the June 30, 2022 actuarial valuations were determined using the following actuarial assumptions: Actuarial Cost Method Entry-Age Normal Cost Method Actuarial Assumptions: Discount Rate 6.90% Inflation 2.30% Salaries Increases Varies by entry age and service Mortality Rate Table Derived using CalPERS membership data for all funds(1) Post Retirement Benefit Increase See Footnote(2) (1)The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study for the period from 2001 to 2019. Pre- retirement and Post-retirement mortality rates include generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021 that can be found on the CalPERS website. (2)The lesser of contract COLA or 2.30% until Purchasing Power Protection Allowance floor on purchasing power applies, 2.30% thereafter. 45 Notes To Financial Statements Year Ended June 30, 2023 7)DEFINED BENEFIT PENSION PLAN –Continued Discount Rate The discount rate used to measure the total pension liability was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Long-term Expected Rate of Return The long-term expected rate of return on pension plan investments was determined using a building- block method in which 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. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points. The expected real rates of return by asset class are as follows: (a)An expected inflation of 2.30% used for this period. (b)Figures are based on the 2021 Asset Liability Management study. Assumed Asset Class(a)Asset Allocation Real Return(b) Global Equity - Cap-weighted 30.00%4.54% Global Equity - Non-Cap-weighted 12.00 3.84 Private Equity 13.00 7.28 Treasury 5.00 0.27 Mortgage-backed Securities 5.00 0.50 Investment Grade Corporates 10.00 1.56 High Yield 5.00 2.27 Emerging Market Debt 5.00 2.48 Private Debt 5.00 3.57 Real Assets 15.00 3.21 Leverage (5.00)(0.59) 46 Notes To Financial Statements Year Ended June 30, 2023 7)DEFINED BENEFIT PENSION PLAN –Continued C)Changes in the Net Pension Liability (Asset) The changes in the Net Pension Liability (Asset) for the Plan for the year ending June 30, 2023: Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (Asset) Beginning Balance 154,871,502$154,591,204$ 280,298$ Changes in the Year: Service Cost 2,994,291 -2,994,291 Interest on the Total Pension Liability 10,864,205 -10,864,205 Changes in Benefit Terms --- Changes in Assumptions 4,984,447 -4,984,447 Difference Between Expected and Actual Experience 174,717 -174,717 Net Plan to Plan Resource Movement --- Contributions - Employer 3,928,187 (3,928,187) Contributions - Employees 1,099,592 (1,099,592) Net Investment Income (11,584,615) 11,584,615 Benefit Payments, Including Refunds of Employee Contributions (8,151,116)(8,151,116) - Administrative Expense -(96,301)96,301 Other Miscellaneous Income (Expense)--- Net Changes 10,866,544 (14,804,253) 25,670,797 Ending Balance 165,738,046$139,786,951$ 25,951,095$ Increase ( Decrease) 47 Notes To Financial Statements Year Ended June 30, 2023 7)DEFINED BENEFIT PENSION PLAN –Continued Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the District for the Plan, calculated using the discount rate for the Plan, as well as what the District’s net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate: Pension Plan Fiduciary Net Position Detailed information about the pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports. D) Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2023, the District recognized pension expense of $5,275,049. At June 30, 2023, the District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following services: 1% Decrease 5.90% Net Pension Liability 47,137,614$ Current Discount Rate 6.90% Net Pension Liability 25,951,095$ 1% Increase 7.90% Net Pension Liability/(Asset)8,293,919$ Deferred Outflows Deferred Inflows of Resources of Resources Pension contributions subsequent to measurement date 5,477,698$ -$ Changes of assumptions 3,204,287 - Differences between actual and expected experience 313,868 - Net difference between projected and actual earnings on pension plan investments 6,955,221 - Total 15,951,074$ -$ 48 Notes To Financial Statements Year Ended June 30, 2023 7)DEFINED BENEFIT PENSION PLAN –Continued D)Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions -Continued For fiscal year 2023, $5,477,698 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the fiscal year ended June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows: Under GASB 68, gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time.The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense.The amortization period differs depending on the source of the gain or loss: Net difference between projected and actual earnings on pension plan investments 5-year straight-line amortization All other amounts Straight-line amortization over the expected average remaining service lifetime (EARSL) of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period Fiscal Deferred Year Ended Outflow/(Inflows) June 30 of Resources 2024 3,039,724$ 2025 2,506,829 2026 500,203 2027 4,426,620 2028 - Thereafter - 49 Notes To Financial Statements Year Ended June 30, 2023 7)DEFINED BENEFIT PENSION PLAN –Continued E)Payable to the Pension Plan At June 30, 2023, the District reported a payable of $122,701 for the outstanding amount of contributions to the pension plan required for the year ended June 30, 2023. These payables are reflected in the accrued payroll liabilities on the Statement of Net Position. 8)OTHER POST EMPLOYMENT BENEFITS (OPEB) Plan Description The District’s defined benefit postemployment healthcare plan, (DPHP), provides medical benefits to eligible retired District employees and beneficiaries. DPHP is part of the Public Agency portion of the California Employers’ Retiree Benefit Trust Fund (CERBT), an agent multiple-employer plan administered by California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for participating public employers within the State of California. CalPERS issues a separate Comprehensive Annual Financial Report. Copies of the CalPERS’ annual financial report may be obtained from the CalPERS Executive Office, 400 P Street, Sacramento, California 95814. Prior to the plan agreements signed in 2011, the eligibility in the plan was broken into 3 tiers, employees hired before January 1, 1981, employees hired on or after January 1, 1981 but before July 1, 1993 and employees hired on or after July 1, 1993. Board members elected before January 1, 1995 are also eligible for the plan. Eligibility also includes age and years of service requirements which vary by tier. Benefits include up to 100% medical and/or dental premiums for life for the retiree for Tier I or II employees, and up to 100% spouse premium until death of retiree or age 65 whichever is greater and dependent premium up to age 19.Tier III employees received up to 50% medical (no dental coverage) up to age 65 and did not include dependent coverage. Subsequent to the agreements in 2011 and 2012 all employees are eligible for the plan after 20 years of consecutive service and unrepresented employees hired before January 1, 2013 are eligible after 15 years. Survivor benefits are covered beyond Medicare. 50 Notes To Financial Statements Year Ended June 30, 2023 8)OTHER POST EMPLOYMENT BENEFITS (OPEB) -Continued Employees Covered As of June 30, 2021 actuarial valuation, the following current and former employees were covered by the benefit terms under the Plan: Contributions The annual contribution is based on the actuarially determined contribution. For the fiscal year ended June 30, 2023, the District made cash contributions to the trust of $1,265,368 and had an estimated implied subsidy of $129,513, resulting in total payments of $1,394,881. Net OPEB Liability The District’s net OPEB liability was measured as of June 30, 2022 and the total OPEB liability used to calculate the net OPEB liability was determined by actuarial valuations dated June 30, 2021 based on the following actuarial methods and assumptions: Actuarial Assumptions Discount Rate 6.75% Inflation 2.50% Salary Increases 2.75% plus merit Investment Rate of Return 6.75% Mortality Rate(1)Derived using CalPERS Membership Data for all funds Pre-Retirement Turnover(2)Derived using CalPERS Membership Data for all funds Healthcare Trend Rate 6.00% PPO decreasing to 4.50% PPO Notes: (1)The pre-retirement mortality information is derived from the 2017 CalPERS Retiree Mortality for All Employees table created by CalPERS. CalPERS periodically studies mortality for participating agencies and establishes mortality tables that are modified versions of commonly used tables. This table incorporates mortality projection as deemed appropriate based on CalPERS analysis. Active Employees 132 Inactive Employees or Beneficiaries Currently Receiving Benefits 80 Inactive Employees Entitled to But Not Yet Received Benefits - Total 212 51 Notes To Financial Statements Year Ended June 30, 2023 8)OTHER POST EMPLOYMENT BENEFITS (OPEB) -Continued Net OPEB Liability (Continued) (2)The pre-retirement turnover information is based on the 2017 CalPERS Turnover for Miscellaneous Employees table created by CalPERS. CalPERS periodically studies the experience for participating agencies and establishes tables that are appropriate for each pool. The long-term expected rate of return on OPEB plan investments was determined using a building block method in which best-estimate ranges of expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the OPEB plan’s target asset are summarized in the following table for the June 30, 2021 actuarial valuation: Discount Rate The discount rate used to measure the total OPEB liability was 6.75% for the June 30, 2022 measurement period. The projection of cash flows used to determine the discount rate assumed that District contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected OPEB payments for current active and inactive employees and beneficiaries. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projects benefit payments to determine the total OPEB liability. Long-Term Target Expected Real Asset Class Allocation Rate of Return Global Equity 59.00%7.55% Global Fixed Income 25.00%4.25% TIPS 5.00% 3.00% Commodities 3.00% 7.55% REITs 8.00% 7.25% 52 Notes To Financial Statements Year Ended June 30, 2023 8)OTHER POST EMPLOYMENT BENEFITS (OPEB) -Continued Changes in the OPEB Liability (Asset) The changes in the net OPEB liability (asset) for the Plan for the year ending June 30, 2023: Sensitivity of the Net OPEB Liability (Asset) to Changes in the Discount Rate The following presents the net OPEB liability (asset) of the District if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for the measurement period ended June 30, 2022: Total OPEB Plan Fiduciary Net OPEB Liability Net Position Liability (Asset) Beginning Balance 32,530,042$ 35,535,079$ (3,005,037)$ Changes in the year: Service Cost 991,108 - 991,108 Interest on TOL/Return on FNP 2,189,619 (4,739,093) 6,928,712 Difference Between Expected and Actual Experience 254,888 - 254,888 Changes of Assumptions - - - Contributions - Employer 127,444 (127,444) Benefit Payments (1,428,491) (1,428,491) - Administrative Expenses - (9,034) 9,034 Net Changes 2,007,124 (6,049,174) 8,056,298 Ending Balance 34,537,166$ 29,485,905$ 5,051,261$ Increase ( Decrease) Current 1% Decrease Discount Rate 1% Increase 2023 Net OPEB Liability (Asset) (2022 Measurement Date)9,858,523$ 5,051,261$ 1,087,142$ 53 Notes To Financial Statements Year Ended June 30, 2023 8)OTHER POST EMPLOYMENT BENEFITS (OPEB) -Continued Sensitivity of the Net OPEB Liability (Asset) to Changes in the Healthcare Cost Trend Rates The following presents the net OPEB liability of the District if it were calculated using health care cost trend rates that are one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2022: OPEB Plan Fiduciary Net Position CERBT issues a publicly available financial report that may be obtained from the California Public Employees Retirement System Executive Office, 400 P Street, Sacramento, California 95814. Recognition of Deferred Outflows and Deferred Inflows of Resources Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time. Amounts are first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense. The recognition period differs depending on the source of the gain or loss: Net difference between projected and actual earnings on OPEB plan investments 5 years All other amounts Expected average remaining service lifetime (EARSL) Current Healthcare Cost 1% Decrease Trend Rates 1% Increase (4.00% HMO/4.00% PPO (5.00% HMO/5.00% PPO (6.00% HMO/6.00% PPO Decreasing to Decreasing to Decreasing to 3.50% HMO/3.50% PPO)4.50% HMO/4.50% PPO)5.50% HMO/5.50% PPO) 2023 Net OPEB Liability (Asset) (2022 Measurement Date)230,573$5,051,261$11,042,643$ 54 Notes To Financial Statements Year Ended June 30, 2023 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, 2023, the District recognized OPEB credit of ($400,921). As of the fiscal year ended June 30, 2023, the District reported deferred outflows and inflows of resources related to OPEB from the following sources: For fiscal year 2023, $1,394,881 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB liability in the fiscal year ended June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows: Deferred Outflows Deferred Inflows of Resources of Resources OPEB contributions subsequent to measurement date 1,394,881$-$ Differences between expected and actual experience 2,769,724 (405,822) Changes in assumptions -(1,168,316) Net difference between projected and actual earnings on OPEB plan investments 2,514,626 - Total 6,679,231$(1,574,138)$ Fiscal Deferred Year Ended Outflows/(Inflows) June 30, of Resources 2024 307,081$ 2025 749,881 2026 566,721 2027 1,752,895 2028 303,651 Thereafter 29,983 55 Notes To Financial Statements Year Ended June 30, 2023 9)COMMITMENTS AND CONTINGENCIES Construction Commitments The District has commitments related to capital projects under construction with an estimated cost to complete of $8,239,534 at June 30, 2023. Litigation Certain claims, suits and complaints arising in the ordinary course of operation have been filed or are pending against the District. In the opinion of the staff and counsel, most of those matters are adequately covered by insurance, or if not so covered,are without merit or are of such kind, or involved such amounts, as would not have significant effect on the financial position or results of operations of the District if disposed of unfavorably. There is one potential case, see below, that could have a significant effect on the District’s financial position. In November 2015, a District ratepayer filed a lawsuit against the District (Coziahr v.Otay Water District, Superior Court of the State of California, County of San Diego, contending that the District’s water rates violated Article XIIID of the California Constitution (“Proposition 218”). The court subsequently certified the action as a class action on behalf of all single-family residential ratepayers who have received water service at any time after July 14, 2014. On March 4, 2021, the court issued a decision in favor of the plaintiffs holding its tiered water rates adopted in 2013 and 2017 for the following 5-year periods were not proportionate to the cost of service attributable to each customer’s parcel, as required by Proposition 218. On June 15, 2022, the court issued a Statement of Decision in the case. The Statement of Decision adopts a methodology for computing overcharges to ratepayers in the class based on the court’s earlier finding that the District’s tiered water rates adopted in 2013 and 2017 were not proportionate to the cost of service attributable to each customer’s parcel, as required by Proposition 218. Applying its methodology, the court states that the overcharges to ratepayers through June 2021 is estimated to be approximately $18,105,256, with an approximate additional $208,762 of overcharges, plus interest accruing each month subsequent to June 2021 until the District changes its rates to be consistent with Proposition 218. 56 Notes To Financial Statements Year Ended June 30, 2023 9)COMMITMENTS AND CONTINGENCIES –Continued The District’s position is that the Court decision is inconsistent with rates set by water districts across the State and the District will vigorously defend its interests. The District also notes that the court’s ruling is inconsistent with some case law. The District and its Attorney has objected to the decision and the District filed an appeal to the Courts decision and believes a favorable outcome is reasonable and as such a liability has not been recorded. 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, 2023, 1,750 EDUs had been relinquished and refunded, 15,100 EDUs had been connected, and 1,017 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, 2023, none of the outstanding developer projects had been completed. 10)RISK MANAGEMENT General Liability and Property The District is exposed to various risks of loss related to torts, theft, damage and destruction of assets, errors and omissions, and natural disasters. Beginning in July 2020, the District began participation as a member in an insurance pool through the Association of California Water Agencies Joint Powers Insurance Authority (ACWA JPIA). ACWA JPIA is a not-for-profit public agency formed under California Government Code Sections 6500 et. Seq. 57 Notes To Financial Statements Year Ended June 30, 2023 10)RISK MANAGEMENT -Continued ACWA JPIA is governed by a board composed of members from participating agencies. The District pays an annual premium for commercial insurance covering general liability, excess liability, property, automobile, public employee dishonesty, and various other claims. Separate financial statements of ACWA JPIA may be obtained at ACWA JPIA 2100 Professional Drive, Roseville, CA 95661-3700. General and Auto Liability, Public Officials’ Errors and Omissions and Employment Practices Liability: Total limits of $5 million combined single limit at $5 million per occurrence, with excess aggregate coverage at $55 million subject to the following deductibles: $50,000 per occurrence for third party general liability property damage; $50,000 per occurrence for third party auto liability property damage; Employee Dishonesty Coverage: Total of $1,000,000 per loss includes Public Employee Dishonesty, Forgery or Alteration and Theft and Faithful Performance of Duty effective July 1, 2022. Property Loss: Replacement cost, for property on file, paid on an actual cash value basis, to a combined total of $500 million per occurrence, subject to a $25,000 deductible per occurrence, effective July 1, 2022. Boiler and Machinery: Replacement costs up to $100 million per occurrence, subject to a $25,000 deductible, effective July 1, 2022. Comprehensive and Collision: Deductibles of $1,000, as elected; ACV limits; fully self-funded by ACWA, effective July 1, 2022. Workers’ Compensation Coverage and Employer’s Liability: Statutory limits per occurrence for Workers’ Compensation and $2.0 million for Employer’s Liability Coverage, subject to the terms, conditions and exclusions as provided in the Memorandum of Coverage, effective July 1, 2022. Cyber Coverage: $5,000,000 Annual Program-Wide Aggregate Limit of Liability and $2,000,000 maximum for each Insured/Member for Information Security & Privacy Liability. The policy includes a $50,000 deductible per claim,effective July 1, 2022. 58 Notes To Financial Statements Year Ended June 30, 2023 11) LEASES RECEIVABLE Leases Receivable The District has entered into 32 cell site leases with lease terms ranging from less than one year to sixty years. The lessees are required to make annual fixed payments ranging from $29,532 to $60,503, with discount rates of 1.39%. As of June 30, 2023, the lease receivable is $47,232,748 and deferred inflows of resources is $45,442,359. The District recognized $1,508,382 of lease revenue during the fiscal year. 12)SEGMENT INFORMATION The District has issued Water and Wastewater Revenue Bonds in the previous fiscal years to finance certain capital improvements. While water and wastewater services are accounted for jointly in these financial statements, the investors in the Water Revenue Bonds rely solely on the revenues of the water services for repayment and the Wastewater Revenue Bonds solely on the revenues of the wastewater services for repayment. Summary financial information for the water and wastewater services is presented for June 30, 2023: 59 Notes To Financial Statements Year Ended June 30, 2023 12)SEGMENT INFORMATION –Continued Water Wastewater Services Services Total Assets Cash and Investments 104,214,333$ 5,842,965$ 110,057,298$ Accounts Receivable, Net 14,103,005 210,659 14,313,664 Other Current Assets 4,444,567 267,585 4,712,152 Leases Receivable 47,232,748 -47,232,748 Capital Assets 415,372,735 28,079,040 443,451,775 Total Assets 585,367,388 34,400,249 619,767,637 Deferred Outflows of Resources Deferred Actuarial Pension Costs 15,369,944 581,130 15,951,074 Deferred Actuarial OPEB Costs 6,394,398 284,833 6,679,231 Total Deferred Outflows of Resources 21,764,342 865,963 22,630,305 Liabilities Accounts Payable 14,875,947 109,271 14,985,218 Other Miscellaneous Liabilities 5,872,516 958,970 6,831,486 Other Current Liabilities 12,254,231 104,347 12,358,578 Revenue Bonds 91,736,361 2,897,934 94,634,295 Lease Payable 690,539 -690,539 Subscription-Based IT Payable 35,476 -35,476 Net Pension Liability 25,109,322 841,773 25,951,095 Net OPEB Liability 4,834,231 217,030 5,051,261 Other Non-current Liabilities 3,768,468 -3,768,468 Total Liabilities 159,177,091 5,129,325 164,306,416 Deferred Inflows of Resources Deferred Actuarial Pension Costs 21,458 (21,458)- Deferred Actuarial OPEB Costs 1,517,621 56,517 1,574,138 Deferred Inflows from Leases 45,442,359 -45,442,359 Total Deferred Inflows of Resources 46,981,438 35,059 47,016,497 Net Position Net Investment in Capital Assets 316,121,622 25,106,106 341,227,728 Restricted for Debt Service 3,476,509 -3,476,509 Restricted for Capital Assets 3,046,231 -3,046,231 Unrestricted 78,328,839 4,995,722 83,324,561 Total Net Position 400,973,201$ 30,101,828$ 431,075,029$ June 30, 2023 Condensed Statement of Net Position 60 Notes To Financial Statements Year Ended June 30, 2023 12)SEGMENT INFORMATION –Continued Water Wastewater Services Services Total Operating Revenues Water Sales 99,901,174$ -$99,901,174$ Wastewater Revenue -3,315,754 3,315,754 Connection and Other Fees 2,959,693 15,802 2,975,495 Total Operating Revenues 102,860,867 3,331,556 106,192,423 Operating Expenses Cost of Water Sales 71,342,741 -71,342,741 Wastewater -2,497,316 2,497,316 Administrative and General 27,073,523 -27,073,523 Depreciation 16,801,306 1,079,029 17,880,335 Total Operating Expenses 115,217,570 3,576,345 118,793,915 Operating Income (Loss)(12,356,703) (244,789) (12,601,492) Non-Operating Revenues (Expenses) Investment Earnings (Losses)4,032,973 55,358 4,088,331 Taxes and Assessments 5,618,253 -5,618,253 Availability Charges 659,061 51,893 710,954 Gain (Loss) on Sale of Capital Assets (111,029) -(111,029) Rents and Leases 2,181,634 -2,181,634 Miscellaneous Revenues 1,952,540 8,628 1,961,168 Donations (92,000)-(92,000) Interest Expense (4,221,662) (88,690)(4,310,352) Miscellaneous Expenses (274,285) (56,136)(330,421) Total Non-operating Revenues (Expenses)9,745,485 (28,947)9,716,538 Income (Loss) Before Capital Contributions and Transfers (2,611,218) (273,736) (2,884,954) Capital Contributions 9,195,101 42,095 9,237,196 Change in Net Position 6,583,883 (231,641) 6,352,242 Total Net Position, Beginning 394,389,318 30,333,469 424,722,787 Total Net Position, Ending 400,973,201$ 30,101,828$ 431,075,029$ Condensed Statement of Revenues, Expenses and Changes in Net Pension Year Ended June 30, 2023 61 Notes To Financial Statements Year Ended June 30, 2023 12)SEGMENT INFORMATION –Continued 13)IMPLEMENTATION OF NEW ACCOUNTING STANDARDS As described in Note 5 to the financial statements, the District changed accounting policies related to subscription-based information technology arrangements by adopting Statement of Governmental Accounting Standards Board (GASB) Statement No. 96, Subscription-Based Information Technology Arrangements, in the fiscal year 2023. The District did not restate the prior year balances as it was not practical to do so. Water Wastewater Services Services Total Net Cash Provided/(Used) by: Operating Activities 7,175,806$ 1,127,587$ 8,303,393$ Non-capital and Related Financing Activities 6,013,539 51,893 6,065,432 Capital and Related Financing Activities (12,590,597) (633,489) (13,224,086) Investing Activities (45,122,081) 44,357 (45,077,724) Net Increase(Decrease) in Cash and Cash Equivalents (44,523,333) 590,348 (43,932,985) Cash and Cash Equivalents, Beginning 85,512,139 5,252,617 90,764,756 Cash and Cash Equivalents, Ending 40,988,806$ 5,842,965$ 46,831,771$ For the Year Ended June 30, 2023 Condensed Statement of Cash Flows 62 Schedule of Changes in the Net OPEB Liability and Related Ratios Last Ten Years (1) June 30, 2023 Measurement Period: June 30 2022 2021 2020 2019 2018 2017 Total OPEB Liability Service Cost 991,108$ 755,756$ 735,529$ 757,725$ 735,655$ 687,528$ Interest on the Total OPEB Liability 2,189,619 2,077,446 1,915,358 1,970,613 1,864,967 1,764,343 Actual and Expected Experience Difference 254,888 2,595,855 1,151,927 (2,029,118) - - Changes in Assumptions - (1,557,334) - (345,110) - - Changes in Benefit Terms - - - - - - Benefit Payment (1,428,491) (1,201,678) (1,120,146) (1,141,344) (1,085,586) (1,039,420) Net Change in Total OPEB Liability 2,007,124 2,670,045 2,682,668 (787,234) 1,515,036 1,412,451 Total OPEB Liability - Beginning 32,530,042 29,859,997 27,177,329 27,964,563 26,449,527 25,037,076 Total OPEB Liability - Ending (a)34,537,166$ 32,530,042$ 29,859,997$ 27,177,329$ 27,964,563$ 26,449,527$ Plan Fiduciary Net Position Contributions - Employer 127,444$ 807,867$ 1,011,358$ 2,206,363$ 2,202,004$ 2,284,420$ Net Investment Income (4,739,093) 7,880,863 983,790 1,595,092 1,734,626 2,011,985 Benefit Payments (1,428,491) (1,201,678) (1,120,146) (1,141,344) (1,085,586) (1,039,420) Administrative Expenses (9,034) (10,811) (13,514) (12,299) (11,784) (10,167) Other Expenses - - - - - - Net Change in Plan Fiduciary Net Position (6,049,174) 7,476,241 861,488 2,647,812 2,839,260 3,246,818 Plan Fiduciary Net Position - Beginning 35,535,079 28,058,838 27,197,350 24,549,538 21,739,035 18,492,217 Plan Fiduciary Net Position - Ending (b)29,485,905$ 35,535,079$ 28,058,838$ 27,197,350$ 24,578,295$ 21,739,035$ Net OPEB Liability/(Asset) - Ending (a)-(b)5,051,261$ (3,005,037)$ 1,801,159$ (20,021)$ 3,386,268$ 4,710,492$ Plan Fiduciary Net Position as a Percentage of the Total OPEB Liability 85.37%109.24%94.00%100.10%87.80%82.20% Covered-Employee Payroll 14,148,052$ 14,006,918$ 13,538,959$ 13,176,602$ 12,677,000$ 12,513,000$ Net OPEB Liability/(Asset) as a Percentage of Covered-Employee Payroll 35.70%-21.45%13.30%-0.20%26.90%37.60% Notes to Schedule (1)Historical information is required only for measurement periods for which GASB 75 is applicable.Future years’information will be displayed up to 10 years as information becomes available.Contributions are determined by an actuarial valuation based on eligible participants’ estimated medical and dental benefits. 63 Schedule of Contributions Last Ten Years (1) June 30, 2023 Actuarially Determined Contributions in Contribution Contributions as a Fiscal Contribution Relation to the Deficiency Covered-Percentage of Covered- Year (ADC)ADC (Excess)Payroll Payroll 2018 1,116,418$ (2,202,004)$ (1,085,586)$ 12,677,000$ 17.37% 2019 1,149,911 (2,206,363) (1,056,452) 13,176,602 16.74% 2020 1,011,358 (1,011,358) - 13,538,959 7.47% 2021 807,867 (807,867) - 14,006,918 5.80% 2022 - - - 14,148,052 0.00% 2023 - (1,394,881) (1,394,881) 14,054,264 9.92% Notes to Schedule: Methods and assumptions used to determine contributions: Actuarial Cost Method Entry Age Normal Amortization Method/Period Level percent of payroll over a closed rolling 15-year period Asset Valuation Method Market value Inflation 2.50% Payroll Growth 2.75% Investment Rate of Return 6.75% Healthcare Cost-trend Rates 6.00% HMO/6.00% PPO decreasing to 4.50% HMO/4.50% PPO Retirement Age Mortality The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2023 were from the June 30, 2021 actuarial valuation.Also note,that some of the data from prior years were updated with the most current available information. Tier 1 employees -2.7%at 55 and Tier 2 employees -2.0%at 62.The probabilities of Retirement are based on the 2014 CalPERS Experience Study for the period from 1997 to 2011. Pre-retirement mortality and post-retirement mortality probability based on CalPERS Experience Study with mortality improvements using Mortality Improvement Scale MP2018 (1)Historical information is required only for measurement periods for which GASB 75 is applicable.Future years’ information will be displayed up to 10 years as information becomes available.Contributions are determined by an actuarial valuation based on eligible participants’ medical and dental benefits. 64 Schedule of Changes in the Net Pension Liability and Related Ratios Last Ten Years(1) June 30, 2023 Measurement Period: June 30 2022 2021 2020 2019 Total Pension Liability Service Cost 2,994,291$ 2,662,845$ 2,623,208$ 2,586,911$ Interest 10,864,205 10,489,284 10,043,778 9,638,674 Changes in Benefit Terms - - - - Changes in Assumptions 4,984,447 - - - Difference Between Expected and actual Experience 174,717 705,426 260,337 1,183,213 Benefit Payments, including Refunds of Employee Contributions (8,151,116) (7,304,947) (7,017,816) (6,658,719) Net Change in Total Pension Liability 10,866,544 6,552,608 5,909,507 6,750,079 Total Pension Liability - Beginning 154,871,502 148,318,894 142,409,387 135,659,308 Total Pension Liability - Ending (a)165,738,046$ 154,871,502$ 148,318,894$ 142,409,387$ Plan Fiduciary Net Position Net Plan to Plan Resource Movement -$ -$ -$ -$ Contributions - Employer 3,928,187 3,945,147 2,437,119 36,706,983 Contributions - Employee 1,099,592 1,095,898 1,055,769 1,019,255 Net Investment Income (11,584,615) 28,707,870 6,185,108 7,516,686 Benefit Payments, Including Refunds of Employee Contributions (8,151,116) (7,304,947) (7,017,816) (6,658,719) Administrative Expenses (96,301) (128,139) (177,337) (62,278) Other Changes in Fiduciary Net Position - - - 203 Net Change in Plan Fiduciary Net Position (14,804,253) 26,315,829 2,482,843 38,522,130 Plan Fiduciary Net Position - Beginning 154,591,204 128,275,375 125,792,532 87,270,402 Plan Fiduciary Net Position - Ending (b)139,786,951$ 154,591,204$ 128,275,375$ 125,792,532$ Plan Net Pension Liability/(Asset) - Ending (a)-(b)25,951,095$ 280,298$ 20,043,519$ 16,616,855$ Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 84.34%99.82%86.49%88.33% Covered Payroll 14,148,052$ 13,768,586$ 13,383,715$ 12,892,655$ Plan Net Pension Liability/(Asset) as a Percentage of Covered Payroll 183.43%2.04%149.76%128.89% (1)Measurement period 2021-22 (fiscal year 2022-2023)was the ninth year of implementation;therefore,only nine years are shown. (2)Historical information is required only for measurement periods for which GASB 68 is applicable.Future years’ information will be displayed up to 10 years as information becomes available. 65 Schedule of Changes in the Net Pension Liability and Related Ratios Last Ten Years(1) June 30, 2023 Measurement Period: June 30 2018 2017 2016 2015 2014 Total Pension Liability Service Cost 2,528,271$ 2,556,902$ 2,298,617$ 2,250,860$ 2,330,709$ Interest 9,168,092 8,836,284 8,575,275 8,229,312 7,907,915 Changes in Benefit Terms - - - - - Changes in Assumptions (1,312,634) 7,308,486 - (1,996,819) - Difference Between Expected and actual Experience 461,917 (1,208,593) (613,440) (981,200) - Benefit Payments, including Refunds of Employee Contributions (5,995,949) (5,779,040) (5,448,218) (5,288,251) (4,885,406) Net Change in Total Pension Liability 4,849,697 11,714,039 4,812,234 2,213,902 5,353,218 Total Pension Liability - Beginning 130,809,611 119,095,572 114,283,338 112,069,436 106,716,218 Total Pension Liability - Ending (a)135,659,308$ 130,809,611$ 119,095,572$ 114,283,338$ 112,069,436$ Plan Fiduciary Net Position Net Plan to Plan Resource Movement (203)$ -$ -$ -$ -$ Contributions - Employer 4,441,517 4,105,810 3,819,770 3,557,098 3,137,174 Contributions - Employee 1,015,008 1,014,329 1,010,337 1,007,023 1,074,954 Net Investment Income 6,949,676 8,149,097 369,214 1,601,760 10,874,999 Benefit Payments, Including Refunds of Employee Contributions (5,995,949) (5,779,040) (5,448,218) (5,288,251) (4,885,406) Administrative Expenses (126,575) (109,029) (45,185) (83,511) - Other Changes in Fiduciary Net Position (240,367) - - - - Net Change in Plan Fiduciary Net Position 6,043,107 7,381,167 (294,082) 794,119 10,201,721 Plan Fiduciary Net Position - Beginning 81,227,295 73,846,128 74,140,210 73,346,091 63,144,370 Plan Fiduciary Net Position - Ending (b)87,270,402$ 81,227,295$ 73,846,128$ 74,140,210$ 73,346,091$ Plan Net Pension Liability/(Asset) - Ending (a)-(b)48,388,906$ 49,582,316$ 45,249,444$ 40,143,128$ 38,723,345$ Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 64.33%62.10%62.01%64.87%65.45% Covered Payroll 12,969,485$ 12,829,415$ 12,767,963$ 12,451,513$ 12,276,578$ Plan Net Pension Liability/(Asset) as a Percentage of Covered Payroll 373.10%386.47%354.40%322.40%315.42% '(1) Measurement period 2021-22 (fiscal year 2022-2023) was the ninth year of implementation; therefore, only nine years are shown. (2)Historical information is required only for measurement periods for which GASB 68 is applicable.Future years’information will be displayed up to 10 years as information becomes available. 66 Schedule of Plan Contributions Last Ten Years(1) June 30, 2023 Actuarially Determined Contributions in Contribution Covered-Contributions as a Fiscal Contribution Relation to the Deficiency Employee Percentage of Covered- Year (ADC)(2)ADC(2)(Excess)Payroll(3)Employee Payroll(3) 2015 3,557,098$(3,557,098)$ -$12,451,513$ 28.57% 2016 3,819,770 (3,819,770)-12,767,963 29.92% 2017 4,105,810 (4,105,810)-12,829,415 32.00% 2018 4,441,517 (4,441,517)-12,969,485 34.25% 2019 4,906,983 (36,706,983) (31,800,000) 12,892,655 284.71% 2020 2,437,119 (2,437,119)-13,383,715 18.21% 2021 2,765,952 (3,965,952)(1,200,000)13,768,586 28.80% 2022 2,971,785 (3,960,785)(989,000)14,148,052 28.00% 2023 3,163,698 (5,477,698)(2,314,000)14,539,529 37.67% Notes to Schedule: Actuarial Cost Method Entry Age Normal Amortization Method/Period For details see June 30, 2020 Funding Valuation Report Asset Valuation Method Equal to the market value of assets. Asset values includes accounts receivable Discount Rate 7.15% Inflation 2.50% Salary Increases Varies by Entry Age and Service Payroll Growth 2.75% Investment Rate of Return 7.00% Net of Pension Plan Investments and Administrative Expenses, includes inflation. Retirement Age Mortality The probabilities of mortality are based on the 2017 CalPERS (1)Historical information is required only for measurement periods for which GASB 68 is applicable.Future years’information will be displayed up to 10 years as information becomes available. (2)Employers are assumed to make contributions equal to the actuarially determined contributions.However,some employers may choose to make additional contributions toward their unfunded liability.Employer contributions for such plans exceed the actuarially determined contributions. (3)Includes one year’s payroll growth assumption using 2.75% payroll growth assumption for fiscal years 2018-2021; 3.00% payroll growth assumption for fiscal years 2015-2017. The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2022-23 were from the June 30, 2020 public agency valuations. Also note, that some of the data from prior years were updated with the most current available information. The probabilities of Retirement are based on the 2017 CalPERS 67 Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Board of Directors Otay Water District Spring Valley, California Independent Auditor’s Report We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Otay Water District (“the District”), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated October 25, 2023. Report on Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the District's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that have not been identified. Attachment C Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the District's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements.However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Irvine, California October 25, 2023 To the Board of Directors Otay Water District Spring Valley, California We have audited the financial statements of the Otay Water District (“the District”)as of and for the year ended June 30, 2023 and have issued our report thereon dated October 25, 2023. Professional standards require that we advise you of the following matters relating to our audit. Our Responsibility in Relation to the Financial Statement Audit As communicated in our engagement letter dated February 17, 2023, our responsibility, as described by professional standards, is to form and express an opinion about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your respective responsibilities. Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, as part of our audit, we considered the internal control of the District solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to communicate to you. Planned Scope and Timing of the Audit We conducted our audit consistent with the planned scope and timing we previously communicated to you. Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, and as appropriate, our firm, have complied with all relevant ethical requirements regarding independence. We identified self-review threats to independence as a result of non-attest services provided. Those non-attest services included the preparation of the financial statements. To mitigate the risk,management has compared the draft financial statements and footnotes to the underlying accounting records to verify accuracy and has reviewed a disclosure checklist to ensure footnotes are complete and accurate. Attachment D Additionally, we utilize a quality control reviewer to perform a second review of the financial statements. We believe these safeguards are sufficient to reduce the independence threats to an acceptable level. Significant Risks Identified We have identified implementation of Governmental Accounting Standards Board No. 96 – Subscription Based IT Arrangements (SBITAs) as a significant risk. We compared the terms of the agreements to the information included in the calculation of the SBITA payable for 83% of the outstanding balance. Qualitative Aspects of the Entity’s Significant Accounting Practices Significant Accounting Policies Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by the District is included in Note 1 to the financial statements. As described in Note 5 to the financial statements, the District changed accounting policies related to SBITAs by adopting Statement of Governmental Accounting Standards (GASB Statement) No. 96, Subscription-Based Information Technology Arrangements, in the fiscal year 2023.No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus. Significant Accounting Estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s current judgments.Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ markedly from management’s current judgments. The most sensitive accounting estimates affecting the financial statements are: Management’s estimate of which capital projects represent ordinary maintenance activities necessary to keep an asset operational for its originally intended useful life versus significant improvement, replacement, and life extending projects that should be capitalized as additions to capital assets is based on management’s knowledge of the assets and their useful lives. We evaluated the key factors and assumptions used to develop the amounts added to capital assets in determining that it is reasonable in relation to the financial statements taken as a whole. Management’s estimate of transactions related to net pension liabilities based on actuarial information. We evaluated the key factors and assumptions used to develop the amounts by the actuary and determined that it is reasonable in relation to the financial statements taken as a whole. Management’s estimate of transactions related to net OPEB liabilities based on actuarial information. We evaluated the key factors and assumptions used to develop the amounts by the actuary and determined that it is reasonable in relation to the financial statements taken as a whole. Financial Statement Disclosures Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the District’s financial statements were: The disclosure of pensions in note 7 of the financial statements. The disclosure of OPEB in note 8 to the financial statements. The financial statement disclosures are neutral, consistent, and clear. Significant Unusual Transactions For purposes of this communication, professional standards require us to communicate to you significant unusual transactions identified during our audit.There were no significant unusual transactions identified as a result of our audit procedures. Identified or Suspected Fraud We have not identified or have obtained information that indicates that fraud may have occurred. Significant Difficulties Encountered during the Audit We encountered no significant difficulties in dealing with management relating to the performance of the audit. Uncorrected and Corrected Misstatements For purposes of this communication, professional standards also require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole and each applicable opinion unit.There were no uncorrected misstatements that we identified as a result of our audit procedures. In addition, professional standards require us to communicate to you all material, corrected misstatements that were brought to the attention of management as a result of our audit procedures. There were no material misstatements that we identified as a result of our audit procedures. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the District’s financial statements or the auditor’s report. No such disagreements arose during the course of the audit. Circumstances that Affect the Form and Content of the Auditor’s Report For purposes of this letter, professional standards require that we communicate any circumstances that affect the form and content of our auditor’s report. There were none. Representations Requested from Management We have requested certain written representations from management, which are included in the attached letter dated October 25, 2023. Management’s Consultations with Other Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters. Other Significant Matters, Findings, or Issues In the normal course of our professional association with the District, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, significant events or transactions that occurred during the year,operating and regulatory conditions affecting the entity, and operational plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as the District’s auditors. Restriction on Use This report is intended solely for the information and use of the Board of Directors and management of the District and is not intended to be and should not be used by anyone other than these specified parties. Irvine, California October 25, 2023 Otay Water District Spring Valley, California INDEPENDENT ACCOUNTANT’S REPORT We have performed the procedures enumerated below, in reviewing the Otay Water District’s (“the District”) compliance with the requirements of the Investment Policy as such requirements apply to the Investments of the District for the period July 1, 2022, through June 30, 2023. The District is responsible for compliance with the requirements as noted in the referenced Investment Policies. The District has agreed to acknowledge that the procedures performed are appropriate to meet the intended purpose of determining compliance by the District with respect to the Investment Policy for the period July 1, 2022, through June 30, 2023.This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes. The procedures performed, and the results of those procedures are as follows: 1.Obtain a copy of the District’s investment policy and determine that it is in effect for the fiscal year ended June 30, 2023. Results:No exceptions were noted as a result of applying the above procedure. 2.Select 4 investments held at year end and determine if they are allowable investments under the District’s Investment Policy. Results:No exceptions were noted as a result of applying the above procedure. 3.For the four investments selected in #2 above, determine if they are held by a third-party custodian designated by the District. Results:No exceptions were noted as a result of applying the above procedure. 4.Confirm the par or original investment amount and market value for the four investments selected above with the custodian or issuer of the investments. Results:No exceptions were noted as a result of applying the above procedure. 5.Select two investment earnings transactions that took place during the year and recompute the earnings to determine if the proper amount was received. Results:No exceptions were noted as a result of applying the above procedure. Attachment E Otay Water District Spring Valley, California Page 2 6.Trace amounts received for transactions selected at #5 above into the District’s bank accounts. Results:No exceptions were noted as a result of applying the above procedure. 7.Select five investment transactions (buy, sell, trade or maturity) occurring during the year under review and determine that the transactions are permissible under the District’s investment policy. Results:No exceptions were noted as a result of applying the above procedure. 8.Review the supporting documents for the five investments selected at #7 above to determine if the transactions were appropriately recorded into the District’s general ledger. Results:No exceptions were noted as a result of applying the above procedure. We were engaged by Otay Water District to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the District’s accounting records. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures other matters might have come to our attention that would have been reported to you. We are required to be independent of the District and to meet our other ethical responsibilities in accordance with the relevant ethical requirement related to our agreed-upon procedures engagement. This report is intended solely for the information and use of management of Otay Water District and is not intended to be and should not be used by anyone other than those specified parties. Irvine, California October 25, 2023 OTAY WATER DISTRICT AUDIT RESULT FISCAL YEAR ENDED JUNE 30, 2023 October 23, 2023 Attachment F Audit Reports 2 ❑Basic Financial Statements ❑Unmodified opinion will be dated October 25, 2023 ❑Implementation of GASB 96 – SBITA ❑Government Auditing Standards Opinion ❑Letter to Those in Governance ❑Agreed-Upon Procedures Report over Investments Audit Results 3 ❑Finance staff was prepared for the audit ❑No material journal entries detected as a result of the audit procedures ❑Noted no instances of noncompliance with laws and regulations that are direct and material to the financial statements ❑No material weaknesses or significant deficiencies in internal controls Areas of Audit Focus 4 Cash Disbursement Testing Implementation of GASB 96 Capital Asset Testing Benford’s Law 5 Questions? Shannon Ayala | Partner Davis Farr LLP | 5927 Priestly Drive, Suite 201 | Carlsbad, CA 92008 Phone: Direct:760.298.5872 | Email:sayala@davisfarr.com STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: November 8, 2023 PROJECT: Various DIV. NO. ALL SUBMITTED BY: Suzie Lawson Human Resources Manager Emilyn B. Zuniga Safety & Security Specialist APPROVED BY: Adolfo Segura, Chief, Administrative Services Jose Martinez, General Manager SUBJECT: ADOPT RESOLUTION #4437 TO REVISE BOARD POLICY #22, “DRUG FREE WORKPLACE POLICY AND PROCEDURE” GENERAL MANAGER’S RECOMMENDATION: That the Otay Water District (District) Board of Directors (Board) adopt Resolution #4437 to revise Board Policy #22, “Drug Free Workplace Policy and Procedure” due to Assembly Bill 2188 (AB 2188), effective January 1, 2024, and administrative updates. COMMITTEE ACTION: See “Attachment A”. PURPOSE: To request that the Board adopt Resolution #4437 to revise Board Policy #22, “Drug Free Workplace Policy and Procedure” due to AB 2188 and administrative updates. ANALYSIS: The District periodically reviews and updates its Board policies as needed or as legally required. The District’s “Drug Free Workplace Policy and Procedure” is being revised due to AB 2188, which addresses employment actions based on testing of employees or potential employees AGENDA ITEM 7c for cannabis use. AB 2188, which becomes operative on January 1, 2024, amends the California Fair Employment and Housing Act (FEHA) to generally prohibit an employer from discriminating against an employee or applicant because of the employee’s or applicant’s cannabis use off the job and away from work. AB 2188 makes it unlawful for a covered employer to discriminate against a person in hiring, termination, or any term or condition of employment, or otherwise penalizing a person, if the discrimination is based upon any of the following: • The person’s use of cannabis off the job and away from the workplace; or • An employer-required drug-screening test has found the person to have non-psychoactive cannabis metabolites in their hair, blood, urine, or other bodily fluids. AB 2188 only applies to marijuana, not other drugs. AB 2188 does not permit an employee to possess, be impaired by, or use cannabis on the job. AB 2188 also does not affect the rights or obligations of an employer to maintain a drug- and alcohol-free workplace under California Health and Safety Code Section 11362.45, or by federal law or regulation. AB 2188 does not impact drug testing for Department of Transportation (DOT)-regulated positions. AB 2188 also expressly allows employers to make employment-related decisions based on tests that apply to current impairment, in particular, scientifically valid pre-employment drug screening conducted through methods that do not screen for non-psychoactive cannabis metabolites, such as those that test for tetrahydrocannabinol (THC). Although AB 2188 takes effect on January 1, 2024, the legislation preceded the drug testing technology. Drug testing service providers are still working to establish scientifically valid drug screening methods to comply with this legislation. In addition, employers and the legal community are still determining how employers can best abide by this legislation. More information and legal guidance are expected in 2024, at which time additional policy revisions will be brought forward to the Board. The District’s “Drug Free Workplace Policy and Procedure” also includes and allows for the testing of non-safety sensitive management staff and are currently subject to random testing. However, after surveying other water agencies, consulting with ACWA JPIA, consultants, and legal resources, and barring any reasonable suspicion, staff is recommending that non-safety sensitive management staff be removed from the District’s random testing. The District has been recently advised that conducting a random drug test of management staff who do not perform safety-sensitive duties and without reasonable suspicion creates significant risks and liability exposure for the District. Given these risks, staff recommends removing management staff from the random testing unless they hold a safety-sensitive position. Note that removing management staff from the program will not exempt them and all employees for being tested under the reasonable suspicion procedures, which are still part of District’s “Drug Free Workplace Policy and Procedure.” Federal authorities still require California employers to establish a controlled substance and alcohol testing program that includes random testing. The District will continue to engage in and enforce random testing for employees working in safety-sensitive positions, and commercial drivers as required by DOT and the Federal Motor Carrier Safety Administration. These positions perform duties which, if performed under the influence of drugs, would pose imminent safety or health risks with irremediable consequences. Before you is Resolution #4437 to revise Board Policy #22, “Drug Free Workplace Policy and Procedure”. This policy provides a directive of zero tolerance for the use of controlled substances or the abuse of alcohol while employed at the District. It provides guidelines and requirements for exceptions of over-the-counter or prescription drugs. It also provides definitions for terms and processes related to this policy. Revisions required at this time are detailed in the attached strike- through version of the policy (Attachment C). Based on the above, staff recommends that the Board adopt Resolution #4437 (Attachment B) in support of the proposed revisions. FISCAL IMPACT: Joe Beachem, Chief Financial Officer Based on policy and legal changes, existing budget funds are anticipated to cover expenditures for ongoing and routine testing services. STRATEGIC GOALS: 1) Improve organization effectiveness. 2) Coordinate workforce planning activities to determine future needs, identify gaps, and implement actions to close the gaps. LEGAL IMPACT: None. ATTACHMENTS: Attachment A – Committee Action Report Attachment B – Resolution #4437 Exhibit 1 – Board Policy #22, “Drug Free Workplace Policy and Procedure” Attachment C - Recommended Revisions to Board Policy #22, “Drug Free Workplace Policy and Procedure” Attachment D – Proposed Copy of Board Policy #22, “Drug Free Workplace Policy and Procedure” Attachment E – PowerPoint Presentation ATTACHMENT A SUBJECT/PROJECT: ADOPT RESOLUTION #4437 TO REVISE BOARD POLICY #22, “DRUG FREE WORKPLACE POLICY AND PROCEDURE” COMMITTEE ACTION: The Finance & Administration Committee reviewed this item at a meeting held on October 23, 2023, and the following comments were made: • Staff noted that Policy No. 22 is being revised due to AB 2188, which takes effect on January 1, 2024. Staff provided information about AB 2188 and stated that the bill amends the California Fair Employment and Housing Act to generally prohibit an employer from discriminating against an employee or applicant because of their cannabis use off the job and away from work. • Staff explained the four different types of drug testing pool, which were Pre-Employment and Promotions/Transfers, Random Testing, Post Accidents, and For Cause/Reasonable Suspicion. Only two groups fall under Random testing, the safety-sensitive group and the management group. • Staff stated that HR will evaluate management positions and determine which positions may now fall under the “sensitive- safety” definition; the final list will be made available to staff by January 1, 2024. The rest of the non-safety managers will be placed under the “For Cause/Reasonable Suspicion” pool. • In response to a question from the Committee, staff stated that they do not anticipate a fiscal impact for drug testing but will evaluate the costs of available testing options. • The committee noted one of the proposed changes in Policy No. 22 includes an increased percentage of drug testing, from 25% to 50%, as required by DOT. •It was indicated that the revised Policy No. 22 has been shared with the Employees Association. •In response to comments from the Committee, staff stated that training will be held before the end of the year to discuss the revised Policy No. 22 and impacts from alcohol, prescription and over-the-counter drugs, and AB 2188’s legal requirements. Following the discussion, the Committee supported staffs’ recommendation and presentation to the full board as a consent item. 1 RESOLUTION NO. 4437 RESOLUTION OF THE BOARD OF DIRECTORS OF THE OTAY WATER DISTRICT TO REVISE BOARD POLICY #22, “DRUG FREE WORKPLACE POLICY AND PROCEDURE” WHEREAS, the Board of Directors of Otay Water District have established policies, procedures, ordinances, and resolutions for the efficient operation of the District; and WHEREAS, it is the policy of the District to establish procedures to review policies, procedures, ordinances, and resolutions periodically to ensure they are current and relevant; and WHEREAS, District staff has identified Board Policy #22, “Drug Free Workplace Policy and Procedure” as requiring legal updates mandated by Assembly Bill 2188. WHEREAS, District staff has identified administrative updates to Board Policy #22, “Drug Free Workplace Policy and Procedure”, based on legal consultation. NOW, THEREFORE, BE IT RESOLVED that the Board of Directors of the Otay Water District amend the Board Policy indicated above in the form presented to the Board at this meeting. PASSED, APPROVED AND ADOPTED by the Board of Directors of the Otay Water District at a regular meeting held this 8th of November 2023. __________________________ Board President ATTEST: ___________________________ District Secretary ATTACHMENT B OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised DRUG FREE WORKPLACE POLICY AND PROCEDURE 22 9/19/90 7/6/16 Page 1 of 17 A. Policy The Otay Water District (‘‘District’’) has zero tolerance for the use of controlled substances or the abuse of alcohol. Employees who are under the influence of a drug or alcohol on the job compromise the District’s interests and endanger their own health and safety as well as the health and safety of others. The District prohibits the use, possession, manufacture, distribution, or being under the influence of alcohol or controlled substances by any District employee while on District property or while on duty, except as specified herein. Violation of this policy is an act of misconduct meriting dismissal without prior warning or disciplinary action in accordance with the District’s Discipline Policy and Procedures. B. Exceptions The following exceptions apply to this policy: 1.Events -- Authorized Use of Alcohol The General Manager or his/her designee, at his/her discretion, may authorize the use of alcohol at a District event, subject to any conditions he/she elects to impose. 2. Customary Use of Over-the Counter or Prescription Drugs The exceptions set forth in this section do not extend to the use of marijuana, or any product made or derived from marijuana, regardless of whether the employee’s doctor prescribes, recommends, or authorizes its use. With respect to an employee, use of an over-the-counter drug, or a prescription-only drug under a prescription for the employee, in the manner prescribed, will not be treated as a violation of this policy unless the drug has potential side effects which impair the employee’s ability to perform any safety-sensitive duty and/or the core duties of his/her position and the employee has failed to notify his/her supervisor or Human Resources of such side effects before performing duties while under the influence of the drug. The District may require a note from the employee’s doctor concerning authorization for a prescription and/or the possible side effects of the prescribed drugs. The District shall comply with all applicable laws concerning the privacy of employees’ medical information. With respect to an applicant, use of an over-the-counter drug, or a prescription-only drug under a prescription for the applicant, in the manner prescribed, will not disqualify the applicant for employment if he/she satisfactorily explains such use upon being informed of a positive test for controlled EXHIBIT 1 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised DRUG FREE WORKPLACE POLICY AND PROCEDURE 22 9/19/90 7/6/16 Page 2 of 17 substances. The District may require a note from the applicant’s doctor concerning authorization for a prescription and/or the possible side effects of the prescribed drugs. C. Definitions 1. Accident: a.Any accident, in which an employee is driving on District business, and is at fault or suspected of having significantly contributed to an accident. This shall apply to employees covered by the Department of Transportation (‘‘DOT’’) policy only if the accident is not subject to the DOT policy. b.Any accident, not involving the driving of a District vehicle, that is reasonably believed by management or credibly reported by another person to have been caused by an on-duty employee and which results in serious physical injury. 2. Controlled Substance: a. Any drug or substance identified by section 40.85 of title 49 of the Code of Federal Regulations or sections 11054-11058 of the California Health and Safety Code. b. Any drug or substance. 3. Dilute Specimen: A specimen with creatinine and specific gravity values that are lower than expected for human urine or a specimen that is adulterated in any way. 4.Drug Paraphernalia: This term has the same definition as is used in section 11364.5(d) of the California Health and Safety Code and applies only to paraphernalia deemed unlawful under section 11364.5(d). 5.Manager/Management: A District employee who is designated as a supervisor, manager, or executive. 6.Medical Review Officer: A person who is a licensed physician and who is responsible for receiving and reviewing laboratory results for substance tests and evaluating medical explanations for certain test results. 7.Negative: A person is considered to have tested negative for a substance if his/her substance test does not produce a positive result. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised DRUG FREE WORKPLACE POLICY AND PROCEDURE 22 9/19/90 7/6/16 Page 3 of 17 8.Positive: A person is considered positive for alcohol if he/she has a blood alcohol concentration of 0.04 or greater at the time he/she submits to testing. A person is considered positive for a Controlled Substance if he/she has any amount of a Controlled Substance at or above a ‘‘cutoff concentration’’ specified in section 40.87 of title 49 of the Code of Federal Regulations at the time he/she submits to testing. 9. Reasonable Suspicion: A reasonable suspicion exists that a person is under the influence of a substance if a trained observer (who has received the appropriate training to recognize the signs and symptoms of drug and alcohol use) reasonably comes to the conclusion that the person is under the influence of a substance due to having personally observed, with respect to the person, some or all of the effects specified in Appendix A of this policy. Additionally, a reasonable suspicion exists that a person is under the influence of a substance if an observer has seen the person use a substance. No one factor is sufficient to create a reasonable suspicion, but an observer may make a reasonable assessment based on the quantity, degree, and/or severity of applicable factors. 10. Refusal to Submit to Testing. Each of the following constitutes a refusal to submit to testing: a. Failing to immediately report for substance testing when directed to do so; b. Failing to complete the testing process (including signing any forms necessary to authenticate or identify a specimen); c. Failing to provide an adequate amount of breath, saliva, or urine for a test; d. Failing to cooperate with any aspect of the testing process, including but not limited to refusing to wash hands when directed, being confrontational with testing personnel, or failing to comply with instructions in a ‘‘direct observation,’’ as that term is used in section 40.197 of title 49 of the Code of Federal Regulations; e. Using or wearing a prosthetic device to interfere with the collection process; f. Admitting to adulterating or diluting the specimen; or g. Any act or failure to act that is intended to interfere with the testing or alter the results of the testing. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised DRUG FREE WORKPLACE POLICY AND PROCEDURE 22 9/19/90 7/6/16 Page 4 of 17 11.Safety-Sensitive Duties: Duties which consist of any of the following: Operating any assigned District vehicle or equipment (includes management and non-management employees); Work in ‘‘confined spaces,’’ as that term is defined in District regulations or CalOSHA regulations; Performing maintenance on any vehicle; Loading, unloading or attending any District vehicle or equipment; Access to sensitive/classified information related to emergency response, safety or security duties; Participation in Hazardous Waste Operations and Emergency Response Confined Space Rescue Team; Work performed at elevated or depth locations more than 4ft above or below ground; or Work involving the use or disposal of hazardous chemicals as that term is defined in District regulations or Cal OSHA regulations. 12. Serious Physical Injury: An injury to an employee that causes the employee to be absent from work following an Accident or which requires hospitalization of the employee. 13.Substance: Any substance containing alcohol or any Controlled Substance. 14.Under the Influence: With respect to alcohol, a person is under the influence at the time he/she is ordered to submit to testing if he/she tests Positive for alcohol at the time he/she submits to testing. With respect to Controlled Substances, a person is under the influence at the time he/she is ordered to submit to testing if he/she tests Positive for a Controlled Substance at the time he/she submits to testing. D. Conflicts with DOT Policy As to applicants or employees to whom the DOT Policy applies, to the extent this policy imposes a requirement that is less stringent than the DOT Policy the more stringent requirements of the DOT Policy will control. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised DRUG FREE WORKPLACE POLICY AND PROCEDURE 22 9/19/90 7/6/16 Page 5 of 17 E. Testing Procedures When an employee or applicant is to be tested, the District shall use the same testing procedures that are used for testing under the DOT Drug and Alcohol Testing Policy, including the procedures for testing a ‘‘split specimen,’’ as that term is defined in section 40.3 of title 49 of the Code of Federal Regulations. The service providers shall comply with section 40.47 of title 49 of the Code of Federal Regulations except they shall use a non-federal custody and control form for applicants and employees. 1. Alcohol Testing Alcohol testing will be conducted using evidential breath testing devices (‘‘EBT’’) approved by the National Highway Traffic Safety Administration. A screening test must be conducted first. If the result is an alcohol concentration level of less than 0.02, the test is considered a Negative test. If the alcohol concentration level is 0.02 or more, a second confirmation test must be conducted. Alcohol testing shall be accomplished by a laboratory certified by the U.S. Department of Health and Human Services. 2. Controlled Substance Testing a. The test must be conducted by analyzing the employee's urine. b. The urinalysis shall be done at a laboratory certified by the U.S. Department of Health and Human Services. c. The urine specimen must be split into two bottles labeled as "primary" and "split" specimen. Both bottles must be sent to the laboratory. d. If the urinalysis of the primary specimen tests Positive for the presence of illegal Controlled Substances, the employee has 72 hours from time of notification to request that the split specimen be analyzed by a different certified laboratory. e. The urine sample shall be tested for the following: marijuana metabolites, cocaine metabolites, opiates, amphetamines and phencyclidine (‘‘PCP’’); f. If the test is Positive for one or more of the drugs listed in subsection "e" above, a confirmation test must be performed using gas chromatography/mass spectrometry analysis. g. All drug test results will be reviewed and interpreted by the Medical Review Officer before they are reported to the District. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised DRUG FREE WORKPLACE POLICY AND PROCEDURE 22 9/19/90 7/6/16 Page 6 of 17 h. With all Positive drug tests, the Medical Review Officer will contact the employee to determine if there is a medical explanation for the Positive test result. If documentation is provided and the Medical Review Officer determines that there is a legitimate medical use for the prohibited drug, the test result may be reported to the District as Negative. F. Testing 1. Persons Subject to Substance Screening All applicants for employment, in conjunction with pre- employment physical examination; All employees reasonably suspected of using Substances while on duty or on District property or while working while Under The Influence of Substances; All employees reasonably suspected of possessing, manufacturing, or distributing Substances while on duty or on District property; Any employee at fault or reasonably suspected of having significantly contributed to an Accident while on duty; Any employee who performs Safety-Sensitive Duties whose name is selected for testing pursuant to the District’s random testing procedure; or Any District employee who applies for and is selected for a position that will require the performance of Safety- Sensitive Duties. 2. Pre-employment, Promotions and Transfer Physicals All applicants for employment shall, as part of their pre- employment physical examination, submit to a urine analysis or other legally authorized testing methods as selected by the District for Substances. Any District employee who applies for a position that will require the performance of Safety-Sensitive Duties shall, as a precondition to appointment to such position, submit to a urine analysis or other legally authorized testing method as selected by the District for Substances. 3. Random Testing of Managers and Safety-Sensitive Duty Employees Each year the District shall randomly conduct Substance tests of employees who perform Safety-Sensitive Duties. Based on the number of such employees employed by the District on January 1, the District shall conduct by the following December 31, a OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised DRUG FREE WORKPLACE POLICY AND PROCEDURE 22 9/19/90 7/6/16 Page 7 of 17 number of tests for Controlled Substances equal to 25 percent of the total number of employees who perform Safety-Sensitive Duties, or the minimum amount required by DOT regulations, whichever is greater. Within the same time period, the District shall randomly conduct a number of tests for alcohol equal to 25 percent of the same number of safety-sensitive employees, or the minimum amount required by DOT regulations, whichever is greater. Each year the District shall randomly conduct Substance tests of managers who are not randomly tested as employees performing Safety-Sensitive Duties. Based on the number of managers employed by the District on January 1, the District shall conduct by the following December 31 a number of tests for Controlled Substances equal to 25 percent of the total number of such managers, or the minimum amount required by DOT regulations, whichever is greater. Within the same time period, the District shall randomly conduct a number of tests for alcohol equal to 25 percent of the same number of such managers, or the minimum amount required by DOT regulations, whichever is greater. Managers who perform Safety-Sensitive Duties and who are included in the pool of Safety-Sensitive Duty employees selected for random testing shall not be included in the pool of non-Safety-Sensitive Duty managers who are selected for random testing. The General Manager will contract with a service provider to perform the random selection of employee names for Substance testing and select the dates upon which the employees will be tested. The service provider must ensure that every Safety- Sensitive employee has an equal chance of being selected each time a name is randomly drawn and that any employee whose name is selected is not exempt from having his/her name selected in any subsequent drawing in the same year. The service provider shall provide the selected names and dates to the Safety and Security Specialist and/or Human Resources Manager, who shall not disclose this information to any other person except to the employee selected for testing and the employee’s supervisor at the time that the employee is required to submit to testing. If the employee is absent from duty on a date that he/she has been randomly selected for testing, an alternate name may be selected or he/she may be required to submit to a test immediately upon returning to work, without prior notice. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised DRUG FREE WORKPLACE POLICY AND PROCEDURE 22 9/19/90 7/6/16 Page 8 of 17 Upon being informed that he/she is required to submit to a random test, the employee must report to the testing location, as quickly as possible but no greater than one hour from being informed, and complete the test as directed by personnel at the testing location. Upon completing testing, the employee shall report back to duty if his/her duty day has not yet concluded. Random testing is separate from the other forms of testing described in this policy. An employee who submits to a Reasonable Suspicion or post-Accident test does not satisfy the requirement that he/she submit to a random test when ordered. 4. Post-Accident Testing If an employee is involved in an Accident that under this policy requires that the employee submit to Substance testing, the employee’s supervisor shall immediately contact Human Resources and the Safety and Security Specialist to report the Accident and the necessity of testing. After consultation with Human Resources, if it is determined that the employee should be tested, then the supervisor shall direct the employee to report to the testing location and complete the test as directed by personnel at the testing location. The supervisor shall arrange to transport the employee to the testing location. Upon completing testing, the employee shall report back to duty if his/her duty day has not yet concluded, unless a Reasonable Suspicion exists, based on the observation of the employee’s supervisor and in consultation with Human Resources, that the employee was Under the Influence of a Substance at the time or shortly after the Accident. If such a Reasonable Suspicion exists, the employee shall be released from duty for the remainder of the day. The supervisor, in consultation with Human Resources, thereafter shall determine on a day-to-day basis whether to permit the employee to return to duty, until the results of the test have returned. If an employee has been ordered to submit to Substance testing for post-Accident testing, and Reasonable Suspicion exists, the District may place the employee on leave without pay pending the test results. If the employee’s test results are Negative, the District shall restore any salary lost by the employee for the days he/she was on leave, as though the employee had reported for duty. If the employee requires immediate medical assistance due to the Accident, such that he/she is unable to report to the testing location, the supervisor shall coordinate with the OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised DRUG FREE WORKPLACE POLICY AND PROCEDURE 22 9/19/90 7/6/16 Page 9 of 17 hospital to conduct the test or require the employee to report to the testing location as soon as is practicable. The determination as to whether an employee is involved in an Accident shall be made by the employee’s supervisor in consultation with the Safety and Security Specialist and Human Resources, based on the information available to him/her. If it cannot be immediately determined whether the employee was involved in an Accident, the supervisor shall not order the employee to testing until a determination can be made. The following criteria apply when conducting drug and alcohol tests due to an Accident: a. A breath alcohol test must be administered as soon as possible. Every effort should be made to ensure that a breath alcohol test is performed within eight hours following the Accident. If testing has not occurred within eight hours, attempts to test should be discontinued. However, if testing did not occur within eight hours, and Reasonable Suspicion existed at the time or shortly after the Accident the employee may resume duties with his/her next shift that begins after the eight hours have passed. Prior to the employee’s return, management shall observe the employee’s condition before the employee is allowed to resume duties to ensure that there is no longer Reasonable Suspicion. b. A drug screening test should be initiated prior to the 32nd hour following an Accident. c. The employee must remain readily available for testing or he or she will be deemed to have refused the test (see Refusal to Submit to Testing). This rule does not require the delay of necessary medical attention for injured persons following the Accident nor prohibit the employee from leaving the scene to obtain assistance or necessary emergency medical care. d. An employee subject to post-Accident testing may not use alcohol within eight hours following the Accident or before an alcohol test, whichever comes first. e. Testing will not be conducted on any deceased employee. f. The results of a breath or blood test for the use of alcohol or a urine test for Controlled Substances, conducted by Federal, State, or local officials having independent authority for the test, shall be considered to meet the requirements of this policy provided such results are obtained by the employer, and conform to the applicable Federal, State or local requirements. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised DRUG FREE WORKPLACE POLICY AND PROCEDURE 22 9/19/90 7/6/16 Page 10 of 17 g. The potentially affected employee will not be allowed to proceed alone to or from the collection site. Time spent in complying with post-Accident testing is compensable. h. Documentation of the activity being performed by the employee that supports the determination to conduct post- Accident testing should be prepared and signed by the supervisor requesting the test within 24 hours of the Accident or before the results of the drug test are released, if possible. 5. Reasonable Suspicion Testing If a supervisor, manager, the Safety and Security Specialist, other personnel has a Reasonable Suspicion that the employee is Under the Influence of a Substance while on District property or on duty, he/she shall consult with Human Resources of this observation to determine if testing is appropriate. After consultation with Human Resources, if it is determined that the employee should be tested, a supervisor shall direct the employee to immediately report for testing and complete the test as directed by personnel at the testing location. The supervisor shall arrange to transport the employee to the testing location. If the person who advises Human Resources of the Reasonable Suspicion is not the employee’s supervisor, Human Resources must immediately notify the supervisor of the Reasonable Suspicion, and the supervisor shall arrange to transport the employee to the testing location. The supervisor(s) witnessing the impairment must document the specific observations upon which the Reasonable Suspicion is based. Upon completing testing, the employee shall be released from duty for the remainder of the day. The supervisor, in consultation with Human Resources, thereafter, shall determine on a day-to-day basis whether to permit the employee to return to duty, until the results of the test have returned. If an employee has been ordered to submit to Substance testing for Reasonable Suspicion, the District may place the employee on leave without pay pending the test results. If the employee’s test results are Negative, the District shall restore any salary lost by the employee for the days he/she was on leave, as though the employee had reported for duty. The following criteria apply when conducting drug and alcohol tests due to Reasonable Suspicion: OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised DRUG FREE WORKPLACE POLICY AND PROCEDURE 22 9/19/90 7/6/16 Page 11 of 17 a. Alcohol A breath alcohol test must be administered as soon as possible. Every effort should be made to ensure that a breath alcohol test is performed within eight hours. If testing has not occurred within eight hours, attempts to test should be discontinued and the employee may resume duties with his/her next shift that begins after the eight hours have passed. However, prior to the employee’s return, management shall observe the employee’s condition before the employee is allowed to resume duties to ensure that there is no longer Reasonable Suspicion. b. Controlled Substances A urinalysis test for Controlled Substances must be administered as soon as possible. Every effort should be made to ensure the urinalysis is performed within 32 hours of the observation. c. The employee may not proceed alone to or from the collection site. The supervisor or other appropriate person making the observation shall arrange to transport the employee to the testing site. d. Documentation to support the determination to conduct Reasonable Suspicion testing should be prepared and signed by the person who made the determination within 24 hours of the determination or before the results of the test are released, whichever is earlier, if possible. 6. Acknowledgment and Consent Any employee subject to testing under this policy will be asked to sign a form acknowledging the procedures governing testing, and consenting to (1) the collection of a urine sample for the purpose of determining the presence of alcohol or Controlled Substances, and (2) the release to the District of medical information regarding the test results. Refusal to sign the agreement and consent form, or to submit to the drug test, will result in the revocation of an applicant’s job offer, or will subject an employee to discipline up to and including termination. 7. Refusal to Submit to Testing If an applicant refuses to submit to testing for any Substance, the applicant is disqualified for employment. If a District employee who has applied for a position that requires the performance of Safety-Sensitive Duties refuses to submit to testing for any Substance, the employee is disqualified for such position. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised DRUG FREE WORKPLACE POLICY AND PROCEDURE 22 9/19/90 7/6/16 Page 12 of 17 If an employee refuses to submit to testing for any Substance, the District may treat such refusal as an act of insubordination. The District shall also impose the same disciplinary action of dismissal for a refusal to test that it would impose for a Positive test result, so as not to encourage employees to refuse to test in the hope of avoiding more severe disciplinary action. The District may immediately place an employee on leave without pay if the employee refuses to submit for testing. 8. Refusal to Authorize Disclosure of Results of Testing If an applicant refuses to authorize the disclosure of the testing results to the District, the applicant is disqualified for employment. If a District employee who has applied for a position that requires the performance of Safety-Sensitive Duties refuses to authorize the disclosure of the test results to the District, the employee is disqualified for such position. If an employee refuses to authorize the disclosure of results of testing to the District, the District will impose the same disciplinary action of dismissal for a refusal to authorize the disclosure of results of testing, that it would impose for a Positive test result, so as not to encourage employees to refuse to authorize the disclosure of test results in the hope of avoiding more severe disciplinary action. 9. Positive Test If an applicant tests Positive for a Controlled Substance, he/she shall be disqualified for employment unless he/she meets the requirements for the over-the-counter/prescription drug exception set forth in Section B(2) of this policy. If a District employee who has applied for a position that requires the performance of Safety-Sensitive Duties tests Positive for a Substance, the employee is disqualified for such position. If an employee tests Positive for a Substance, the employee shall not be returned to duty and shall not receive pay during his/her absence until the employee requests that the split urine specimen be tested and the test of that specimen is not Positive for a Substance. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised DRUG FREE WORKPLACE POLICY AND PROCEDURE 22 9/19/90 7/6/16 Page 13 of 17 This unpaid absence shall not be considered a disciplinary or punitive action against the employee and any record of such absence shall be maintained separately from the employee’s personnel file. The absence is for the administrative and safety interests of the District. This unpaid absence has no effect on the District’s decision or ability to discipline an employee for violating this policy. If the Medical Review Officer determines that an employee’s specimen is a Dilute Specimen and the specimen is Positive for a Substance, the employee shall be considered to have tested Positive for that Substance. If a Dilute Specimen produces a Negative result then the employee shall be required to submit to a second Substance test, in the manner prescribed in section 40.197 of title 49 of the Code of Federal Regulations. 10. Request for Retest If an employee tests Positive for any Substance, the employee may, within 72 hours of being notified of the Positive test result, request of the Medical Review Officer that the split specimen be tested. If the employee does not timely submit a request, the employee shall be considered to have waived his/her right to have the split specimen tested. The employee shall pay for the cost of testing the split specimen. If the employee is unable to pay this cost at the time of the request, the District must ensure that the split specimen is tested even if it means that the District may have to initially bear the cost. The District may recover the cost from the employee at a later time. If a split specimen does not produce a Positive result for a Substance, the District shall restore any salary lost by the employee as a result of an absence imposed because of the Positive result on the first specimen. The employee shall be considered to have not tested Positive for a Substance. The District shall also reimburse the employee for the cost of the retest if the employee paid for the retest. The District may not request that the split specimen be tested. G. Employee Assistance Programs The District may refer any employee, including an employee who is dismissed because of a Positive test for a Substance, to its employee assistance program. If in any instance the District is required to lawfully accommodate an employee’s disability related OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised DRUG FREE WORKPLACE POLICY AND PROCEDURE 22 9/19/90 7/6/16 Page 14 of 17 to Substance abuse, the District shall refer the employee to a Substance abuse professional. H. Suspicion of Possession/Distribution/Manufacture of Controlled Substances If a supervisor has a Reasonable Suspicion that an employee unlawfully possesses or is distributing or manufacturing a Controlled Substance or Drug Paraphernalia on or in District property, or while on duty, the supervisor must report this suspicion to Human Resources. 1. For purposes of Section H only, ‘‘Reasonable Suspicion’’ means the following: a.As to possession, the supervisor or a reporting credible source must have seen a Substance or item on the person of the employee, in the employee’s work area, or in or on District property assigned to the use of the employee that a reasonable person would believe is a Controlled Substance or Drug Paraphernalia, or have seen in any of the same areas a container that a reasonable person would believe contains a Controlled Substance or Drug Paraphernalia. b.As to distribution, the supervisor must have seen the employee convey to another person a Substance or item that a reasonable person would believe is a Controlled Substance or Drug Paraphernalia, or have seen the employee convey a container to another person that a reasonable person would believe contains a Controlled Substance or Drug Paraphernalia, or have received a report of observation of the same from a credible source. c.As to manufacture, the supervisor must have observed conditions that a reasonable person would equate to the manufacture of a Controlled Substance or Drug Paraphernalia, which may include the observation of smell, appearance, or sound. The supervisor must also have observed conditions that would attribute suspected manufacture to the employee, such as observing these conditions in the employee’s work area or in or on District property assigned to the use of the employee. If the conditions are observed on the person of the employee, the supervisor must consider whether the employee reported to duty in such condition instead of changing to such condition while on duty, or have received a report of observation of the same from a credible source. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised DRUG FREE WORKPLACE POLICY AND PROCEDURE 22 9/19/90 7/6/16 Page 15 of 17 2. After a report of a Reasonable Suspicion has been made to Human Resources, the Human Resources Manager must confer with management representatives to consider whether the reported observation constituted Reasonable Suspicion, and decide what steps to take in response to the reported observation. a.If the decision is to take no further action, the matter will be dismissed. b.If the decision is to discuss the observation with the employee, Human Resources and the supervisor will meet with the employee to discuss the observation. If as a result of the discussion, Human Resources and/or the supervisor believe that a search is necessary, they will confer with management representatives to determine whether to conduct a search. c.If the decision is to conduct a search, the search must be limited to a search of District property, such as the employee’s work area (including desk drawers and file cabinets), District vehicle or equipment, and District facilities. The search may be performed by the Human Resources representative or another person designated by the Human Resources representative, which may include the supervisor. The employee does not need to be present during the search. If any material is retrieved that appears to bear out the supervisor’s Reasonable Suspicion, the Human Resources representative must take possession of the material. d.If the decision is to conduct a search and the distribution of Controlled Substances or Drug Paraphernalia is reasonably suspected, the search may include not only the work area/equipment of the employee suspected of distributing Controlled Substances or Drug Paraphernalia, but the work area/equipment of any employee whom was observed receiving the item from the employee suspected of distributing Controlled Substances or Drug Paraphernalia. The receiving employee is entitled to the same rights as the distributing employee. e.Any search of the person of the employee or personally-held possessions of the employee, such as a briefcase, purse, pocketbook, backpack or personal vehicle, must be conducted by a law enforcement officer. If the decision to conduct a search extends to these areas, Human Resources should contact law enforcement to request such a search. 3. If the Human Resources representative takes possession of any material as a result of the search, and the employee does not OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised DRUG FREE WORKPLACE POLICY AND PROCEDURE 22 9/19/90 7/6/16 Page 16 of 17 confirm that it is a Controlled Substance or Drug Paraphernalia, the District shall contact the local law enforcement agency and will forward the Substance to have the item tested/analyzed to determine if it is a Controlled Substance or Drug Paraphernalia. If a law enforcement officer takes possession of an item as a result of a search, and the employee does not confirm that it is a Controlled Substance or Drug Paraphernalia, the District shall follow up with the law enforcement agency to verify the item is a Controlled Substance or Drug Paraphernalia. The employee shall not return to duty and shall not receive pay during his/her absence until the law enforcement agency has verified that the tested/analyzed item is not Positive for a Controlled Substance or Drug Paraphernalia. If the tested/analyzed item does not produce a Positive result for a Controlled Substance or Drug Paraphernalia, the District shall restore any salary lost by the employee as a result of the absence. I. Disciplinary Action Disciplinary action for violations of this policy will be taken in accordance with the District’s Discipline Policy and Procedures. J. Accommodation of Individuals with Disabilities Nothing in this policy shall be construed so as to relieve the District of its lawful obligation to accommodate individuals with disabilities. K. Confidentiality All alcohol and drug-testing records will be treated as confidential. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised DRUG FREE WORKPLACE POLICY AND PROCEDURE 22 9/19/90 7/6/16 Page 17 of 17 APPENDIX A INDICATION OF DRUG USE REMEMBER THAT THESE SYMPTOMS ARE ONLY INDICATIONS. THEY MAY BE A SIGN OF SOMETHING OTHER THAN DRUG OR ALCOHOL USE. PHYSICAL 1. Increased pulse rate 10. Nasal sores 2. Weak and rapid pulse 11. Slowed respirations 3. Increased blood pressure 12. Shallow respiration 4. Increased body temperature 13. Cold and clammy skin 5. Constricted pupils 14. Chills and sweats 6. Dilated pupils 15. Cramps 7. Bloodshot eyes 16. Nausea 8. Water eyes 17. Convulsions 9. Runny nose MENTAL AND EMOTIONAL 1. Increased alertness 10. Disorientation 2. Excitation 11. Visual illusions 3. Anxiety 12. Hallucinations 4. Irritability 13. Paranoia 5 Euphoria 14. Delirium 6. Increased emotionality 15. Irrational fears 7. Impaired attention 16. Panic 8. Impaired memory 17. Depressed mood 9. Altered perceptions BEHAVIORAL 1. Slurred speech 8. Hyperactivity 2. Staggered gait 9. Agitation 3. Fatigue 10. Argumentative 4. Apathy 11. Hostility 5. Drowsiness 12. Tremors 6. Loss of appetite 13. Insomnia 7. Increased appetite Page 1 of 20 Page 1 of 20 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 7/6/16 11/8/23 A.Policy The Otay Water District (“‘‘District”’’) has zero tolerance for the use of controlled substances or the abuse of alcohol. Employees who are under the influence of a drug or alcohol on the job compromise the District’s interests and endanger their own health and safety as well as the health and safety of others. The District prohibits the use, possession, manufacture, distribution, or being under the influence of alcohol or controlled substances by any District employee while on District property or while on duty, except as specified herein. Violation of this policy is an act of misconduct meriting dismissal without prior warning or disciplinary action in accordance with the District’s Discipline Policy and Procedures. Effective January 1, 2024, theOtay Water District will abide by California Assembly Bill 2188 (AB 2188). 1.Non-Discrimination: a.It is the District’s policy to comply with AB 2188, which prohibits discrimination against individuals based on the presence of non-psychoactive cannabis metabolites detected in employer-required drug screening tests. The District will not discriminate against employees or job applicants based on such test results. b.Exceptions for Safety Reasons: There are limited exceptions to the off-duty cannabis use policy. The following categories of employees are not covered by the protection of AB 2188: •Building and construction trades employees •Federal contractors •Federal funding recipients •Federal licensees required to maintain drug- free workplaces. 2.Cannabis Use on the Job: Employees are prohibited from possessing, being impaired by, or using cannabis while on the job. This includes all work- related activities and premises. Violation of this policy may result in disciplinary action, up to and including termination. 1.3. Drug- and Alcohol-Free Workplace: ATTACHMENT C Page 2 of 20 Page 2 of 20 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 7/6/16 11/8/23 a.AB 2188 does not affect the District’s commitment to maintaining a drug and alcohol-free workplace. All employees are expected to comply with the District’s existing policies regarding substance abuse. Violation of these policies may result in disciplinary action, up to and including termination. B.Exceptions The following exceptions apply to this policy: 1.Events - Authorized Use of Alcohol The General Manager or his/hertheir designee, at his/hertheir discretion, may authorize the use of alcohol at a District event, subject to any conditions he/shethey elects to impose. 2.Customary Use of Over-the Counter or Prescription DrugsPrescription Medications And Over- The- Counter Drugs The exceptions set forth in this section do not extend to the use of marijuana, or any product made or derived from marijuana, regardless of whether the employee’s doctor prescribes, recommends, or authorizes its use. With respect to an employee, use of an over-the-counter drug, or a prescription-only drug under a prescription for the employee, in the manner prescribed, will not be treated as a violation of this policy unless the drug has potential side effects which impair the employee’s ability to perform any safety-sensitive duty and/or the core duties of his/her position and the employee has failed to notify his/her supervisor or Human Resources of such side effects before performing duties while under the influence of the drug.Employees are responsible to report to duty free from the effects of any controlled substance or alcohol. Covered employees must report the use of prescriptions and over-the-counter drugs that could have a disabling effect, bares a prescription warning label or otherwise adversely affect the covered employee’s fitness for duty or job performance to their immediate supervisor (without giving the name of prescription/over- the- counter drug). It is the covered employee’s responsibility to determine from the physician, pharmacist, or other health care professional whether or not the prescribed or over-the-counter drugs could affect the covered employee’s fitness for duty or impair job performance. Covered employees may be required to provide a written medical authorization to work from a physician, upon reporting the use of prescription or over-the-counter drugs. Failure to report the Page 3 of 20 Page 3 of 20 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 7/6/16 11/8/23 use of prescription or over-the-counter drugs that have disabling effects or otherwise affect the covered employee’s fitness for duty while at work and failure to provide proper evidence of medical authorization to work may result in discipline, up to and including suspension and/or termination. The District may require a note from the employee’s doctor concerning authorization for a prescription and/or the possible side effects of the prescribed drugs. The District shall comply with all applicable laws concerning the privacy of employees’ medical information. With respect to an applicant, use of an over-the-counter drug, or a prescription-only drug under a prescription for the applicant, in the manner prescribed, will not disqualify the applicant for employment if he/shethey satisfactorily explains such use upon being informed of a positive test for controlled substances. The District may require a note from the applicant’s doctor concerning authorization for a prescription and/or the possible side effects of the prescribed drugs. C.Definitions 1.Accident: a.Any accident, in which an employee is driving on District business, and is at fault or suspected of having significantly contributed to an accident. This shall apply to employees covered by the Department of Transportation (‘‘DOT’’) policy only if the accident is not subject to the DOTunder this policy. b.Any accident, not involving the driving of a District vehicle, that is reasonably believed by management or credibly reported by another person to have been caused by an on-duty employee and which results in serious physical injury. 2.Controlled Substance: a.Any drug or substance identified by section 40.85 of title 49 of the Code of Federal Regulations or sections 11054-11058 of the California Health and Safety Code. b.Any drug or substance. 3.Dilute Specimen: A specimen with creatinine and specific gravity values that are lower than expected for human urine or a specimen that is adulterated in any way. 4.Drug Paraphernalia: This term has the same definition as is used Page 4 of 20 Page 4 of 20 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 7/6/16 11/8/23 in section 11364.5(d) of the California Health and Safety Code and applies only to paraphernalia deemed unlawful under section 11364.5(d). 5.Manager/Management: A District employee who is designated as a supervisor, manager, or executive. 6.Medical Review Officer (MRO): A person who is a licensed physician and who is responsible for receiving and reviewing laboratory results for substance tests and evaluating medical explanations for certain test results. D. 1.7. Negative: A person is considered to have tested negative for a substance if his/hertheir substance test does not produce a positive result. 2.8. Positive: A person is considered positive for alcohol if he/she hasthey have a bloodan alcohol concentration of 0.04 or greater at the time he/shethey submits to testing. A person is considered positive for a Controlled Substance if he/she hasthey have any amount of a Controlled Substance at or above a “‘‘cutoff concentration”’’ specified in section 40.87 of title 49 of the Code of Federal Regulations at the time he/shethey submits to testing. 3.9. Reasonable Suspicion: A reasonable suspicion exists that a person ismay be under the influence of a substance if a trained observer (who has received the appropriate training to recognize the signs and symptoms of drug and alcohol use) reasonably comes to the conclusion that the person ismay be under the influence of a substance due to having personally observed, with respect to the person, some or all of the effects specified in Appendix A of this policy. Additionally, a reasonable suspicion exists that a person is under the influence of a substance if an observer has seen the person use a substance. No one factor is sufficient to create a reasonable suspicion, but an observer may make a reasonable assessment based on the quantity, degree, and/or severity of applicable factors. 4.10. Refusal to Submit to Testing. Each of the following constitutes a refusal to submit to testing: Page 5 of 20 Page 5 of 20 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 7/6/16 11/8/23 a.Failing to immediately report for substance testing when directed to do so; b.Failing to complete the testing process (including signing any forms necessary to authenticate or identify a specimen); c.Failing to provide an adequate amount of breath, salivaoral fluids, or urine for a test; d.Failing to cooperate with any aspect of the testing process, including but not limited to refusing to wash hands when directed, being confrontational with testing personnel, or failing to comply with instructions in a ‘‘direct observation,’’ as that term is used in section; 40.197 of title 49 of the Code of Federal Regulations; e.Using or wearing a prosthetic device to interfere with the collection process; f.Admitting to adulterating or diluting the specimen; or g.Any act or failure to act that is intended to interfere with the testing or alter the results of the testing. 5.11. Safety-Sensitive Duties: Duties, which consist of any of the following: ▪Operating any assigned District vehicle or equipment; (includes management and non-management employees); ▪Working in “‘‘confined spaces,”’’ as that term is defined in District regulations or CalOSHACal/OSHA regulations; ▪Performing maintenance on any vehicle; ▪Loading, unloading, or attending any District vehicle or equipment; ▪Access to sensitive/classified information related to emergency response, safety, or security duties; ▪Participation in Hazardous Waste Operations Materials (HazMat) Team and Emergency Response Confined Space Operations Rescue Team; ▪ ▪Work performed at elevated or depth locations more than four feet (4’ft) above or below ground; or ▪Work involving the use or disposal of hazardous chemicals as that term is defined in District regulations or Cal/ OSHA regulations. Page 6 of 20 Page 6 of 20 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 7/6/16 11/8/23 6.12. Serious Physical Injury: An injury to an employee that causes the employee to be absent from work following an Accident or which requires hospitalization of the employee. 7.13. Substance: Any substance containing alcohol or any Controlled Substance. 8.14. Under the Influence: With respect to alcohol, a person is under the influence at the time he/she isthey are ordered to submit to testing if he/shethey tests Positive for alcohol at the time he/shethey submits to testing. With respect to Controlled Substances, a person is under the influence at the time he/she isthey are ordered to submit to testing if he/shethey tests Positive for a Controlled Substance at the time he/shethey submits to testing. A.D. Conflicts with DOT Policy As to applicants or employees to whom the DOT Policy applies, to the extent this policy imposes a requirement that is less stringent than the DOT Policy the more stringent requirements of the DOT Policy will control. Page 7 of 20 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/231 0/1/23 E. E.D. Testing Procedures When an employee or applicant is to be tested, the District shall use the same testing procedures that are used for testing under the DOT Drug and Alcohol Testing Policy, including the procedures for testing a “‘‘split specimen,”’’ as that term is defined in section 40.3 of title 49 of the Code of Federal Regulations. The service providers shall comply with section 40.47 of title 49 of the Code of Federal Regulations except they shall use a non-federal custody and control form for applicants and employees. Drug Screening Method: As part of the District’s drug screening process on non-DOT positions, the District may utilize lab-based oral fluid testing. This method does not test for THC metabolites, specifically Carboxy-THC. Instead, the District’s focus is on detecting the parent drug, Delta-9-THC. This policy is subject to change based on future developments in the law or regulations, or available drug screening methods. 1.Alcohol Testing Alcohol testing will be conducted using evidential breath testing devices (“‘‘EBT”’’) approved by the National Highway Traffic Safety Administration. A screening test must be conducted first. If the result is an alcohol concentration level of less than 0.02, the test is considered a Negative test. If the alcohol concentration level is 0.02 or more, a second confirmation test must be conducted. Alcohol testing shall be accomplished by a laboratory certified by the U.S. Department of Health and Human ServicesBreath Alcohol Technician. 1.2.Controlled Substance Testing a.The test must be conducted by analyzing the employee's urineoral fluid. b.The urinalysissample shall be donetested at a laboratory certified by the U.S. Department of Health and Human Services. c.The urinesample specimen must be split into two bottles labeled as “"primary”" and “"split”" specimen. Both bottles must be sent to the laboratory. d.If the urinalysis of the primary sample specimen tests Positive for the presence of illegal Controlled Substances, the Page 8 of 20 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/231 0/1/23employee has 72 hours from time of notification by the MRO to request that the split specimen be analyzed by a different certified laboratory. e.The urine sample shall be tested for the following: marijuana metabolitesparent drug, cocaine metabolites, opiates, opioids, amphetamines, Methamphetamines, MDMA, Barbiturates, Benzodiazepine, Methadone, and phencyclidine (“‘‘PCP”’’).;All tests will be performed following AB 2188. By using Oral fluids the window of detection becomes less than urinalysis. f.If the test is Positive for one or more of the drugs listed in subsection “"e”" above, a confirmation test must be performed using gas chromatography/mass spectrometryanalysis. g.All drug test results will be reviewed and interpreted by the MROedical Review Officer before they are reported to the District. g. h.With all Positive drug tests, the MROMedical Review Officer will contact the employee to determine if there is a medical explanation for the Positive test result. If documentation is provided and the MROedical Review Officer determines that there is a legitimate medical use for the prohibited drug, the test result maywill be reported to the District as Negative. F. F. E. Testing 1.Persons Subject to Substance Screening ▪All applicants for employment, will have a pre-employment drug test. in conjunction with pre- employment physical examination; ▪All employees reasonably suspected of using Substances while on duty or on District property or while working while Under The Influence of Substances; ▪All employees reasonably suspected of possessing, manufacturing, or distributing Substances while on duty or on District property; ▪Any employee at fault or reasonably suspected of having significantly contributed to an Accident while on duty; ▪Any employee who performs Safety-Sensitive Duties whose name is selected for testing pursuant to the District’s random Page 9 of 20 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/231 0/1/23testing procedure; or ▪Any District employee who applies for and is selected for a position that will require the performance of Safety- Sensitive Duties. The list of positions requiring the performance of Safety-Sensitive Duties will be maintained by Human Resources. 2.Pre-employment, Promotions and Transfer Drug Screening Physicals Pre-employment Drug Screening: The District will conduct scientifically valid pre-employment drug screenings that do not screen for non-psychoactive cannabis metabolites. If a positive result is obtained from this testing, the District may take action based on it, in accordance with applicable laws and regulations. All applicants for employment shall, as part of their pre- employment physical examinationprocess, submit to a urine analysisdrug test or other legally authorized testing methods as selected by the District for Substances. Any District employee who applies for a position that will require the performance of Safety-Sensitive Duties shall, as a precondition to appointment to such position, submit to a urine analysis or other legally authorized testing method as selected by the District for Substances. 3.Random Testing of Managers and Safety-Sensitive Duty Employees Each year the District shall randomly conduct Substance tests of employees who perform Safety-Sensitive Duties. Based on the number of such employees employed by the District on January 1, the District shall conduct by the following December 31, a number of tests for Controlled Substances equal to 2550 percent of the total number of employees who perform Safety-Sensitive Duties, or the minimum amount required by DOT regulations, whichever is greater. Within the same time period, the District shall randomly conduct a number of tests for alcohol equal to 2510 percent of the same number of safety-sensitive employees, or the minimum amount required by DOT regulations, whichever is greater. Each year the District shall randomly conduct Substance tests of managers who are not randomly tested as employees performing Safety-Sensitive Duties. Based on the number of managers employed by the District on January 1, the District shall conduct by the following December 31 a number of tests for Controlled Substances Page 10 of 20 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/231 0/1/23equal to 25 percent of the total number of such managers, or the minimum amount required by DOT regulations, whichever is greater. Within the same time period, the District shall randomly conduct a number of tests for alcohol equal to 25 percent of the same number of such managers, or the minimum amount required by DOT regulations, whichever is greater. Managers who perform Safety- Sensitive Duties and who are included in the pool of Safety- Sensitive Duty employees selected for random testing shall not be included in the pool of non-Safety-Sensitive Duty managers who are selected for random testing. The General Manager will contract with a service providerThird party administrator (TPA) to perform the random selection of employee names for Substance testing and select the dates upon which the employees will be testedabuse/alcohol testing. The service provider must ensure that every Safety- Sensitive employee has an equal chance of being selected each time a name is randomly drawn and that any employee whose name is selected is not exempt from having his/hertheir name selected in any subsequent drawing in the same year. The service provider shall provide the selected names and dates to the Safety and Security Specialist and/or Human Resources Manager, or designee, who shall not disclose this information to any other person except to the employee selected for testing and the employee’s supervisor at the time that the employee is required to submit to testing. If the employee is absent from duty on a date that he/she hasthey have been randomly selected for testing, an alternate name may be selected or theyhe/she may be required to submit to a test immediately upon returning to work, without prior notice. Upon being informed that he/she isthey are required to submit to a random test, the employee must report to the testing location, as quickly as possible but no greater than one (1) hour from being informed, and complete the test astesting directed by personnel at the testing location. Upon completing testing, the employee shall report back to duty if his/hertheir duty day has not yet concluded. Random testing is separate from the other forms of testing described in this policy. An employee who submits to a Reasonable Suspicion or post-Accident test does not satisfy the requirement that he/shethey submit to a random test when ordered. 4.Post-Accident Testing Page 11 of 20 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/231 0/1/23If any an employee is involved in an Accident that under this policy requires that the employee submit to Substance testing, the employee’s supervisor shall immediately contact Human Resources and the Safety and Security Specialist to report the Accident and the necessity of testing. After consultation with Human Resources, if it is determined that the employee should be tested, then the supervisor shall direct the employee to report to the testing location and complete the test as directed by personnel at the testing location. The supervisor shall arrange to transport the employee to the testing location. Upon completing testing, the employee shall report back to duty if his/hertheir duty day has not yet concluded, unless a Reasonable Suspicion exists, based on the observation of the employee’s supervisor and in consultation with Human Resources, that the employee was Under the Influence of a Substance at the time or shortly after the Accident. If such a Reasonable Suspicion exists, the employee shall be released from duty for the remainder of the day. The supervisor, in consultation with Human Resources, thereafter shall determine on a day-to-day basis whether to permit the employee to return to duty, until the results of the test have returned. If an employee has been ordered to submit to Substance testing for post-Accident testing, and Reasonable Suspicion exists, the District may place the employee on leave without pay pending the test results. If the employee’s test results are Negative, the District shall restore any salary lost by the employee for the days he/she wasthey were on leave, as though the employee had reported for duty. If the employee requires immediate medical assistance due to the Accident, such that he/she isthey are unable to report to the testing location, the supervisor shall coordinate with the TPA and hospital to conduct the test or require the employee to report to the testing location as soon as is practicable. The determination as to whether an employee is involved in an Accident shall be made by the employee’s supervisor in consultation with the Safety and Security Specialist and Human Resources, based on the information available to him/her. If it cannot be immediately determined whether the employee was involved in an Accident, the supervisor shall not order the employee to testing until a determination can be made. The following criteria apply when conducting drug and alcohol tests due to an Accident: a.A breath alcohol test must be administered as soon as Page 12 of 20 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/231 0/1/23possible. Every effort should be made to ensure that a breath alcohol test is performed within eight (8) hours following the Accident. If testing has not occurred within eight (8) hours, attempts to test should be discontinued. However, if testing did not occur within eight (8) hours, and Reasonable Suspicion existed at the time or shortly after the Accident the employee may resume duties with his/hertheir next shift that begins after the eight (8) hours have passed. Prior to the employee’s return, management shall observe the employee’s condition before the employee is allowed to resume duties to ensure that there is no longer Reasonable Suspicion. a.b.A drug screening test should be initiated prior to the 32nd nd hour following an Accident. c.The employee must remain readily available for testing or he or she will be deemed to have refused the test (see Refusal to Submit to Testing). This rule does not require the delay of necessary medical attention for injured persons following the Accident nor prohibit the employee from leaving the scene to obtain assistance or necessary emergency medical care. d.An employee subject to post-Accident testing may not use alcohol within eight (8) hours following the Accident or d.before an alcohol test, whichever comes first. e.Testing will not be conducted on any deceased employee. f.The results of a breath or blood test for the use of alcohol or a urinedrug test for Controlled Substances, conducted by Federal, State, or local officials having independent authority for the test, shall be considered to meet the requirements of this policy provided such results are obtained by the employer, and conform to the applicable Federal, State or local requirements. The potentially affected employee will not be allowed to proceed alone to or from the collection site. Time spent in complying with post-Accident testing is compensable. g.Documentation of the activity being performed by the employee that supports the determination to conduct post- Accident testing should be prepared and signed by the supervisor requesting the test within 24 hours of the Accident or before the results of the drug test are released, if possible. 5.Reasonable Suspicion Testing Page 13 of 20 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/231 0/1/23If a supervisor, manager, the Safety and Security Specialist, and/or other personnel has a Reasonable Suspicion that the employee is Under the Influence of a Substance while on District property or on duty, he/shethey shall consult with Human Resources aboutof this observation to determine if testing is appropriate. After consultation with Human Resources, if it is determined that the employee should be tested, a supervisor shall direct the employee to immediately report for testing and complete the test as directed by personnel at the testing location. The supervisor shall arrange to transport the employee to the testing location. If the person who advises Human Resources of the Reasonable Suspicion is not the employee’s supervisor, Human Resources must immediately notify the supervisor of the Reasonable Suspicion, and the supervisor shall arrange to transport the employee to the testing location. The supervisor(s) witnessing the impairment must document the specific observations upon which the Reasonable Suspicion is based. Upon completing testing, the employee shall be released from duty for the remainder of the day. The supervisor, in consultation with Human Resources, thereafter, shall determine on a day-to- day basis whether to permit the employee to return to duty, until the results of the test have returned. If an employee has been ordered to submit to Substance testing for Reasonable Suspicion, the District may place the employee on leave without pay pending the test results. If the employee’s test results are Negative, the District shall restore any salary lost by the employee for the days he/she wasthey were on leave, as though the employee had reported for duty. The following criteria apply when conducting drug and alcohol tests due to Reasonable Suspicion: a.Alcohol A breath alcohol test must be administered as soon as possible. Every effort should be made to ensure that a breath alcohol test is performed within eight (8) hours. If testing has not occurred within eight (8) hours, attempts to test should be discontinued and the employee may resume duties with his/hertheir next shift that begins after the eight (8) hours have passed. However, prior to the employee’s return, management shall observe the employee’s condition before the employee is allowed to resume duties to ensure that there is no longer Reasonable Suspicion. b.Controlled Substances Page 14 of 20 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/231 0/1/23A urinalysis test for Controlled Substances must be administered as soon as possible. Every effort should be made to ensure the urinalysissample is performed withinas soon as possible but no later than 32 hours of the observation. b.c.The employee may not proceed alone to or from the collection site. The supervisor or other appropriate person making the observation shall arrange to transport the employee to and from the testing site. c.d.Documentation to support the determination to conduct Reasonable Suspicion testing should be prepared and signed by the person who made the determination within 24 hours of the determination or before the results of the test are released, whichever is earlier, if possible. 6.Acknowledgment and Consent Any employee subject to testing under this policy will be asked to sign a form acknowledging the procedures governing testing, and consenting to (1) the collection of a urine sample tofor the purpose of determineing the presence of alcohol or Controlled Substances, and/or Breath for Alcohol and (2) the release to the District of medical information regarding the test results. Refusal to sign the agreement and consent form, or to submit to the drug test, will result in the revocation of an applicant’s job offer, or will subject an employee to discipline up to and including termination. 7.Refusal to Submit to Testing If an applicant refuses to submit to testing for any Substance, the applicant is disqualified for employment. If a District employee who has applied for a position that requires the performance of Safety-Sensitive Duties refuses to submit to testing for any Substance, the employee is disqualified for such position. If an employee refuses to submit to testing for any Substance, the District may treat such refusal as an act of insubordination. The District shall also impose the same disciplinary action of dismissal for a refusal to test that it would impose for a Positive test result, so as not to encourage employees to refuse to test in the hope of avoiding more severe disciplinary action. The District may immediately place an employee on leave without pay if the employee refuses to submit for testing. Page 15 of 20 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/231 0/1/238.Refusal to Authorize Disclosure of Results of Testing If an applicant refuses to authorize the disclosure of the testing results to the District, the applicant is disqualified for employment. If a District employee who has applied for a position that requires the performance of Safety-Sensitive Duties refuses to authorize the disclosure of the test results to the District, the employee is disqualified for such position. If an employee refuses to authorize the disclosure of results of testing to the District, the District will impose the same disciplinary action of dismissal for a refusal to authorize the disclosure of results of testing, that it would impose for a Positive test result, so as not to encourage employees to refuse to authorize the disclosure of test results in the hope of avoiding more severe disciplinary action. 9.Positive Test If an applicant tests Positive for a Controlled Substance, he/shethey shall be disqualified for employment unless theyhe/she meets the requirements for the over-the-counter/prescription drugexception set forth in Section B(2) of this policy. If a District employee who has applied for a position that requires the performance of Safety-Sensitive Duties tests Positive for a Substance, the employee is disqualified for such position. If an employee tests Positive for a Substance, the employee shall not be returned to duty and shall not receive pay during his/hertheir absence until the employee requests that the split urine specimen be tested and the test of that specimen is not Positive for a Substance. This unpaid absence shall not be considered a disciplinary or punitive action against the employee and any record of such absence shall be maintained separately from the employee’s personnel file. The absence is for the administrative and safety interests of the District. This unpaid absence has no effect on the District’s decision or ability to discipline an employee for violating this policy. If the MROMedical Review Officer determines that an employee’s specimen is a Dilute Specimen and the specimen is Positive for a Substance, the employee shall be considered to have tested Positive for that Substance. If a Dilute Specimen produces a Negative result then the employee shall be required to submit to a second Substance test, in the manner prescribed in section Page 16 of 20 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/231 0/1/2340.197 of title 49 of the Code of Federal Regulations. 10.Request for Retest If an employee tests Positive for any Substance, the employee may, within 72 hours of being notified of the Positive test result, request of the MROedical Review Officer that the split specimen be tested. If the employee does not timely submit a request within 72 hours, the employee shall be considered to have waived his/hertheir right to have the split specimen tested. The employee shall pay for the cost of testing the split specimen. If the employee is unable to pay this cost at the time of the request, the District must ensure that the split specimen is tested even if it means that the District may have to initially bear the cost. The District may recover the cost from the employee at a later time. If a split specimen does not produce a Positive result for a Substance, the District shall restore any salary lost by the employee as a result of an absence imposed because of the Positive result on the first specimen. The employee shall be considered to have not tested Positive for a Substance. The District shall also reimburse the employee for the cost of the retest if the employee paid for the retest. The District may not request that the split specimen be tested. G. G. F. Employee Assistance Programs The District may refer any employee, including an employee who is dismissed because of a Positive test for a Substance, to its employee assistance program. If in any instance the District is required to lawfully accommodate an employee’s disability related to Substance abuse, the District shall refer the employee to a Substance abuse professional. H. H. G. Suspicion of Possession/Distribution/Manufacture of Controlled Substances If a supervisor has a Reasonable Suspicion that an employee unlawfully possesses or is distributing or manufacturing a Controlled Substance or Drug Paraphernalia on or in District property, or while on duty, the supervisor must report this suspicion to Human Resources. 3.1. For purposes of Section H G only, “‘‘Reasonable Suspicion”’’ means the following: Page 17 of 20 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/231 0/1/23a.As to possession, the supervisor or a reporting credible source must have seen a Substance or item on the person of the employee, in the employee’s work area, or in or on District property assigned to the use of the employee that a reasonable person would believe is a Controlled Substance or Drug Paraphernalia, or have seen in any of the same areas a container that a reasonable person would believe contains a Controlled Substance or Drug Paraphernalia. b.As to distribution, the supervisor must have seen the employee convey to another person a Substance or item that a reasonable person would believe is a Controlled Substance or Drug Paraphernalia, or have seen the employee convey a container to another person that a reasonable person would believe contains a Controlled Substance or Drug Paraphernalia, or have received a report of observation of the same from a credible source. c.As to manufacture, the supervisor must have observed conditions that a reasonable person would equate to the manufacture of a Controlled Substance or Drug Paraphernalia, which may include the observation of smell, appearance, or sound. The supervisor must also have observed conditions that would attribute suspected manufacture to the employee, such as observing these conditions in the employee’s work area or in or on District property assigned to the use of the employee. If the conditions are observed on the person of the employee, the supervisor must consider whether the employee reported to duty in such condition instead of changing to such condition while on duty, or have received a report of observation of the same from a credible source. 2.After a report of a Reasonable Suspicion has been made to Human Resources, the Human Resources Manager must confer with management representatives to consider whether the reported observation constituted Reasonable Suspicion, and decide what steps to take in response to the reported observation. a.a. If the decision is to take no further action, the matter will be dismissed. b.If the decision is to discuss the observation with the employee, Human Resources and the supervisor will meet with the employee to discuss the observation. If as a result of the discussion, Human Resources and/or the supervisor believe Page 18 of 20 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/231 0/1/23that a search is necessary, they will confer with management representatives to determine whether to conduct a search will be conducted. b.c.If the decision is to conduct a search, the search must be limited to a search of District property, such as the employee’s work area (including desk drawers and file cabinets), District vehicle or equipment, and District facilities. The search may be performed by the Human Resources representative or another person designated by the Human Resources representative, which may include the supervisor. The employee does not need to be present during the search. If any material is retrieved that appears to bear out the supervisor’s Reasonable Suspicion, the Human Resources representative must take possession of the material. c.d.If the decision is to conduct a search and the distribution of Controlled Substances or Drug Paraphernalia is reasonably suspected, the search may include not only the work area/equipment of the employee suspected of distributing Controlled Substances or Drug Paraphernalia, but the work area/equipment of any employee whom was observed receiving the item from the employee suspected of distributing Controlled Substances or Drug Paraphernalia. The receiving employee is entitled to the same rights as the distributing employee. d.e.Any search of the person of the employee or personally- held possessions of the employee, such as a briefcase, purse, pocketbook, backpack or personal vehicle, must be conducted by a law enforcement officer. If the decision to conduct a search extends to these areas, Human Resources should contact law enforcement to request such a search. 3.If the Human Resources representative takes possession of any material as a result of the search, and the employee does not confirm that it is a Controlled Substance or Drug Paraphernalia, the District shall contact the local law enforcement agency and will forward the Substance to have the item tested/analyzed to determine if it is a Controlled Substance or Drug Paraphernalia. If a law enforcement officer takes possession of an item as a result of a search, and the employee does not confirm that it is a Controlled Substance or Drug Paraphernalia, the District shall follow up with the law enforcement agency to verify the item is a Controlled Substance or Drug Paraphernalia. The employee shall not return to duty and shall not receive pay during his/hertheir Page 19 of 20 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/231 0/1/23absence until the law enforcement agency has verified that the tested/analyzed item is not Positive for a Controlled Substance or Drug Paraphernalia. If the tested/analyzed item does not produce a Positive result for a Controlled Substance or Drug Paraphernalia, the District shall restore any salary lost by the employee as a result of the absence. B.I.H. Disciplinary Action Disciplinary action for violations of this policy will be taken in accordance with the District’s Discipline Policy and Procedures. C.J. I. Accommodation of Individuals with Disabilities Nothing in this policy shall be construed so as to relieve the District of its lawful obligation to accommodate individuals with disabilities. D.K. J. Confidentiality All alcohol and drug-testing records will be treated as confidential. Page 20 of 20 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/231 0/1/23 APPENDIX A INDICATION OF DRUG USE REMEMBER THAT THESE SYMPTOMS ARE ONLY INDICATIONS. THEY MAY BE A SIGN OF SOMETHING OTHER THAN DRUG OR ALCOHOL USE. THIS LIST IS NOT EXHAUSTIVE. PHYSICAL 1.Increased pulse rate 10.Nasal sores 2.Weak and rapid pulse 11.Slowed respirations 3.Increased blood pressure 12.Shallow respiration 4.Increased body temperature 13.Cold and clammy skin 5.Constricted pupils 14.Chills and sweats 6.Dilated pupils 15.Cramps 7.Bloodshot eyes 16.Nausea 8.Water eyes 17.Convulsions 9.Runny nose MENTAL AND EMOTIONAL 1.Increased alertness 10.Disorientation 2.Excitation 11.Visual illusions 3.Anxiety 12.Hallucinations 4.Irritability 13.Paranoia 5 Euphoria 14.Delirium 6.Increased emotionality 15.Irrational fears 7.Impaired attention 16.Panic 8.Impaired memory 17.Depressed mood 9.Altered perceptions BEHAVIORAL 1.Slurred speech 8.Hyperactivity 2.Staggered gait 9.Agitation 3.Fatigue 10.Argumentative 4.Apathy 11.Hostility 5.Drowsiness 12.Tremors 6.Loss of appetite 13.Insomnia 7.Increased appetite 14.Absenteeism patterns Page 1 of 18 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/23 A.Policy The Otay Water District (“District”) has zero tolerance for the use of controlled substances or the abuse of alcohol. Employees who are under the influence of a drug or alcohol on the job compromise the District’s interests and endanger their own health and safety as well as the health and safety of others. The District prohibits the use, possession, manufacture, distribution, or being under the influence of alcohol or controlled substances by any District employee while on District property or while on duty, except as specified herein. Violation of this policy is an act of misconduct meriting dismissal without prior warning or disciplinary action in accordance with the District’s Discipline Policy and Procedures. Effective January 1, 2024, the District will abide by California Assembly Bill 2188 (AB 2188). 1.Non-Discrimination: a.It is the District’s policy to comply with AB 2188, which prohibits discrimination against individuals based on the presence of non-psychoactive cannabis metabolites detected in employer-required drug screening tests. The District will not discriminate against employees or job applicants based on such test results. b.Exceptions for Safety Reasons: There are limited exceptions to the off-duty cannabis use policy. The following categories of employees are not covered by the protection of AB 2188: •Building and construction trades employees •Federal contractors •Federal funding recipients •Federal licensees required to maintain drug-free workplaces. 2.Cannabis Use on the Job: 3.Employees are prohibited from possessing, being impaired by, or using cannabis while on the job. This includes all work-related activities and premises. Violation of this policy may result in disciplinary action, up to and including termination. Drug- and Alcohol-Free Workplace: ATTACHMENT D Page 2 of 18 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/23 a.AB 2188 does not affect the District’s commitment to maintaining a drug and alcohol-free workplace. All employees are expected to comply with the District’s existing policies regarding substance abuse. Violation of these policies may result in disciplinary action, up to and including termination. B.Exceptions The following exceptions apply to this policy: 1.Events - Authorized Use of Alcohol The General Manager or their designee, at their discretion, may authorize the use of alcohol at a District event, subject to any conditions they elect to impose. 2.Prescription Medications And Over-The-Counter Drugs Employees are responsible to report to duty free from the effects of any controlled substance or alcohol. Covered employees must report the use of prescriptions and over-the-counter drugs that could have a disabling effect, bares a prescription warning label or otherwise adversely affect the covered employee’s fitness for duty or job performance to their immediate supervisor (without giving the name of prescription/over-the-counter drug). It is the covered employee’s responsibility to determine from the physician, pharmacist, or other health care professional whether or not the prescribed or over-the-counter drugs could affect the covered employee’s fitness for duty or impair job performance. Covered employees may be required to provide a written medical authorization to work from a physician, upon reporting the use of prescription or over-the-counter drugs. Failure to report the use of prescription or over-the-counter drugs that have disabling effects or otherwise affect the covered employee’s fitness for duty while at work and failure to provide proper evidence of medical authorization to work may result in discipline, up to and including suspension and/or termination. The District may require a note from the employee’s doctor concerning authorization for a prescription and/or the possible side effects of the prescribed drugs. The District shall comply with all applicable laws concerning the privacy of employees’ medical information. With respect to an applicant, use of an over-the-counter drug, or a prescription-only drug under a prescription for the applicant, in the manner prescribed, will not disqualify the Page 3 of 18 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/23 applicant for employment if they satisfactorily explain such use upon being informed of a positive test for controlled substances. The District may require a note from the applicant’s doctor concerning authorization for a prescription and/or the possible side effects of the prescribed drugs. C.Definitions 1.Accident: a.Any accident, in which an employee is driving on District business, and is at fault or suspected of having significantly contributed to an accident. This shall apply to employees covered under this policy. b.Any accident, not involving the driving of a District vehicle, that is reasonably believed by management or credibly reported by another person to have been caused by an on-duty employee and which results in serious physical injury. 2.Controlled Substance: a.Any drug or substance identified by section 40.85 of title 49 of the Code of Federal Regulations or sections 11054-11058 of the California Health and Safety Code. b.Any drug or substance. 3.Dilute Specimen: A specimen with creatinine and specific gravity values that are lower than expected for human urine or a specimen that is adulterated in any way. 4.Drug Paraphernalia: This term has the same definition as is used in section 11364.5(d) of the California Health and Safety Code and applies only to paraphernalia deemed unlawful under section 11364.5(d). 5.Manager/Management: A District employee who is designated as a supervisor, manager, or executive. 6.Medical Review Officer (MRO): A person who is a licensed physician and who is responsible for receiving and reviewing laboratory results for substance tests and evaluating medical explanations for certain test results. 7.Negative: A person is considered to have tested negative for a substance if their substance test does not produce a positive result. Page 4 of 18 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/23 8.Positive: A person is considered positive for alcohol if they have an alcohol concentration of 0.04 or greater at the time they submit to testing. A person is considered positive for a Controlled Substance if they have any amount of a Controlled Substance at or above a “cutoff concentration” specified in section 40.87 of title 49 of the Code of Federal Regulations at the time they submit to testing. 9.Reasonable Suspicion: A reasonable suspicion exists that a person may be under the influence of a substance if a trained observer (who has received the appropriate training to recognize the signs and symptoms of drug and alcohol use) reasonably comes to the conclusion that the person may be under the influence of a substance due to having personally observed, with respect to the person, some or all of the effects specified in Appendix A of this policy. Additionally, a reasonable suspicion exists that a person is under the influence of a substance if an observer has seen the person use a substance. No one factor is sufficient to create a reasonable suspicion, but an observer may make a reasonable assessment based on the quantity, degree, and/or severity of applicable factors. 10.Refusal to Submit to Testing. Each of the following constitutes a refusal to submit to testing: a.Failing to immediately report for substance testing when directed to do so; b.Failing to complete the testing process (including signing any forms necessary to authenticate or identify a specimen); c.Failing to provide an adequate amount of breath, oral fluids, or urine for a test; d.Failing to cooperate with any aspect of the testing process, including but not limited to refusing to wash hands when directed, being confrontational with testing personnel; e.Using or wearing a prosthetic device to interfere with the collection process; f.Admitting to adulterating or diluting the specimen; or g.Any act or failure to act that is intended to interfere with the testing or alter the results of the testing. Page 5 of 18 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/23 11.Safety-Sensitive Duties: Duties, which consist of any of the following: ▪Operating any assigned District vehicle or equipment; ▪Working in “confined spaces” as that term is defined in District regulations or Cal/OSHA regulations; ▪Performing maintenance on any vehicle; ▪Loading, unloading, or attending any District vehicle or equipment; ▪Access to sensitive/classified information related to emergency response, safety, or security duties; ▪Participation in Hazardous Materials (HazMat) and Confined Space Operations Rescue Team; ▪Work performed at elevated or depth locations more than four feet (4’) above or below ground; or ▪Work involving the use or disposal of hazardous chemicals as that term is defined in District regulations or Cal/OSHA regulations. 12.Serious Physical Injury: An injury to an employee that causes the employee to be absent from work following an Accident or which requires hospitalization of the employee. 13.Substance: Any substance containing alcohol or any Controlled Substance. 14.Under the Influence: With respect to alcohol, a person is under the influence at the time they are ordered to submit to testing if they test Positive for alcohol at the time they submit to testing. With respect to Controlled Substances, a person is under the influence at the time they are ordered to submit to testing if they test Positive for a Controlled Substance at the time they submit to testing. D. Testing Procedures When an employee or applicant is to be tested, the District shall use the testing procedures that are used for testing under the DOT Drug and Alcohol Testing Policy, including the procedures for testing a “split specimen,” as that term is defined in section 40.3 of title 49 of the Code of Federal Regulations. The service providers shall comply with section 40.47 of title 49 of the Code of Federal Page 6 of 18 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/23 Regulations except they shall use a non-federal custody and control form for applicants and employees. Drug Screening Method: As part of the District’s drug screening process on non-DOT positions, the District may utilize lab-based oral fluid testing. This method does not test for THC metabolites, specifically Carboxy-THC. Instead, the District’s focus is on detecting the parent drug, Delta-9-THC. This policy is subject to change based on future developments in the law or regulations, or available drug screening methods. 1.Alcohol Testing Alcohol testing will be conducted using evidential breath testing devices (“EBT”) approved by the National Highway Traffic Safety Administration. A screening test must be conducted first. If the result is an alcohol concentration level of less than 0.02, the test is considered a Negative test. If the alcohol concentration level is 0.02 or more, a second confirmation test must be conducted. Alcohol testing shall be accomplished by Breath Alcohol Technician. 2.Controlled Substance Testing a.The test must be conducted by analyzing the employee's oral fluid. b.The sample shall be tested at a laboratory certified by the U.S. Department of Health and Human Services. c.The sample specimen must be split into two bottles labeled as “primary” and “split” specimen. Both bottles must be sent to the laboratory. d.If the primary sample specimen tests Positive for the presence of illegal Controlled Substances, the employee has 72 hours from time of notification by the MRO to request the split specimen be analyzed by a different certified laboratory. e.The sample shall be tested for the following: marijuana parent drug, cocaine, opioids, amphetamines, Methamphetamines, MDMA, Barbiturates, Benzodiazepine, Methadone, and phencyclidine (“PCP”). All tests will be performed following AB 2188. By using Oral fluids the window of detection becomes less than urinalysis. f.If the test is Positive for one or more of the drugs listed in subsection “e” above, a confirmation test must be performed using gas chromatography/mass spectrometry analysis. Page 7 of 18 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/23 g.All drug test results will be reviewed and interpreted by the MRO before they are reported to the District. h.With all Positive drug tests, the MRO will contact the employee to determine if there is a medical explanation for the Positive test result. If documentation is provided and the MRO determines that there is a legitimate medical use for the prohibited drug, the test result will be reported to the District as Negative. E.Testing 1.Persons Subject to Substance Screening ▪All applicants for employment will have a pre-employment drug test; ▪All employees reasonably suspected of using Substances while on duty or on District property or while working while Under The Influence of Substances; ▪All employees reasonably suspected of possessing, manufacturing, or distributing Substances while on duty or on District property; ▪Any employee at fault or reasonably suspected of having significantly contributed to an Accident while on duty; ▪Any employee who performs Safety-Sensitive Duties whose name is selected for testing pursuant to the District’s random testing procedure; or ▪Any District employee who applies for and is selected for a position that will require the performance of Safety- Sensitive Duties. The list of positions requiring the performance of Safety-Sensitive Duties will be maintained by Human Resources. 2.Pre-employment, Promotions and Transfer Drug Screening Pre-employment Drug Screening: The District will conduct scientifically valid pre-employment drug screenings that do not screen for non-psychoactive cannabis metabolites. If a positive result is obtained from this testing, the District may take action based on it, in accordance with applicable laws and regulations. All applicants for employment shall, as part of their pre- employment process, submit to a drug test or other legally authorized testing methods as selected by the District for Substances. Page 8 of 18 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/23 Any District employee who applies for a position that will require the performance of Safety-Sensitive Duties shall, as a precondition to appointment to such position, submit to a urine analysis or other legally authorized testing method as selected by the District for Substances. 3.Random Testing of Safety-Sensitive Duty Employees Each year the District shall randomly conduct Substance tests of employees who perform Safety-Sensitive Duties. Based on the number of such employees employed by the District on January 1, the District shall conduct by the following December 31, a number of tests for Controlled Substances equal to 50 percent of the total number of employees who perform Safety-Sensitive Duties, or the minimum amount required by DOT regulations, whichever is greater. Within the same time period, the District shall randomly conduct a number of tests for alcohol equal to 10 percent of the same number of safety-sensitive employees, or the minimum amount required by DOT regulations, whichever is greater. The General Manager will contract with a Third party administrator (TPA) to perform the random selection of employee names for Substance abuse/alcohol testing. The service provider must ensure that every Safety- Sensitive employee has an equal chance of being selected each time a name is randomly drawn and that any employee whose name is selected is not exempt from having their name selected in any subsequent drawing in the same year. The service provider shall provide the selected names to the Safety and Security Specialist and/or Human Resources Manager, or designee, who shall not disclose this information to any other person except to the employee selected for testing and the employee’s supervisor at the time that the employee is required to submit to testing. If the employee is absent from duty on a date that they have been randomly selected for testing, an alternate name may be selected or they may be required to submit to a test immediately upon returning to work, without prior notice. Upon being informed that they are required to submit to a random test, the employee must report to the testing location, as quickly as possible but no greater than one (1) hour from being informed, and complete testing directed by personnel at the testing location. Upon completing testing, the employee shall report back to duty if their duty day has not yet concluded. Page 9 of 18 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/23 Random testing is separate from the other forms of testing described in this policy. An employee who submits to a Reasonable Suspicion or post-Accident test does not satisfy the requirement that they submit to a random test when ordered. 4.Post-Accident Testing If any employee is involved in an Accident that under this policy requires that the employee submit to Substance testing, the employee’s supervisor shall immediately contact Human Resources and the Safety and Security Specialist to report the Accident and the necessity of testing. After consultation with Human Resources, if it is determined that the employee should be tested, then the supervisor shall direct the employee to report to the testing location and complete the test as directed by personnel at the testing location. The supervisor shall arrange to transport the employee to the testing location. Upon completing testing, the employee shall report back to duty if their duty day has not yet concluded, unless a Reasonable Suspicion exists, based on the observation of the employee’s supervisor and in consultation with Human Resources, that the employee was Under the Influence of a Substance at the time or shortly after the Accident. If such a Reasonable Suspicion exists, the employee shall be released from duty for the remainder of the day. The supervisor, in consultation with Human Resources, thereafter shall determine on a day-to-day basis whether to permit the employee to return to duty, until the results of the test have returned. If an employee has been ordered to submit to Substance testing for post-Accident testing, and Reasonable Suspicion exists, the District may place the employee on leave without pay pending the test results. If the employee’s test results are Negative, the District shall restore any salary lost by the employee for the days they were on leave, as though the employee had reported for duty. If the employee requires immediate medical assistance due to the Accident, such that they are unable to report to the testing location, the supervisor shall coordinate with the TPA and hospital to conduct the test or require the employee to report to the testing location as soon as is practicable. The determination as to whether an employee is involved in an Accident shall be made by the employee’s supervisor in consultation with the Safety and Security Specialist and Human Resources, based on the information available to him/her. If it cannot be immediately determined whether the employee was involved in an Accident, the supervisor shall not order the Page 10 of 18 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/23 employee to testing until a determination can be made. The following criteria apply when conducting drug and alcohol tests due to an Accident: a.A breath alcohol test must be administered as soon as possible. Every effort should be made to ensure that a breath alcohol test is performed within eight (8) hours following the Accident. If testing has not occurred within eight (8) hours, attempts to test should be discontinued. However, if testing did not occur within eight (8) hours, and Reasonable Suspicion existed at the time or shortly after the Accident the employee may resume duties with their next shift that begins after the eight (8) hours have passed. Prior to the employee’s return, management shall observe the employee’s condition before the employee is allowed to resume duties to ensure that there is no longer Reasonable Suspicion. b.A drug screening test should be initiated prior to the 32nd hour following an Accident. c.The employee must remain readily available for testing or he or she will be deemed to have refused the test (see Refusal to Submit to Testing). This rule does not require the delay of necessary medical attention for injured persons following the Accident nor prohibit the employee from leaving the scene to obtain assistance or necessary emergency medical care. d.An employee subject to post-Accident testing may not use alcohol within eight (8) hours following the Accident or before an alcohol test, whichever comes first. e.Testing will not be conducted on any deceased employee. f.The results of a breath test for the use of alcohol or a drug test for Controlled Substances, conducted by Federal, State, or local officials having independent authority for the test, shall be considered to meet the requirements of this policy provided such results are obtained by the employer, and conform to the applicable Federal, State or local requirements. The potentially affected employee will not be allowed to proceed alone to or from the collection site. Time spent complying with post-Accident testing is compensable. g.Documentation of the activity being performed by the employee that supports the determination to conduct post-Accident Page 11 of 18 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/23 testing should be prepared and signed by the supervisor requesting the test within 24 hours of the Accident or before the results of the drug test are released, if possible. 5.Reasonable Suspicion Testing If a supervisor, manager, the Safety and Security Specialist, and/or other personnel has a Reasonable Suspicion that the employee is Under the Influence of a Substance while on District property or on duty, they shall consult with Human Resources about this observation to determine if testing is appropriate. After consultation with Human Resources, if it is determined that the employee should be tested, a supervisor shall direct the employee to immediately report for testing and complete the test as directed by personnel at the testing location. The supervisor shall arrange to transport the employee to the testing location. If the person who advises Human Resources of the Reasonable Suspicion is not the employee’s supervisor, Human Resources must immediately notify the supervisor of the Reasonable Suspicion, and the supervisor shall arrange to transport the employee to the testing location. The supervisor(s) witnessing the impairment must document the specific observations upon which the Reasonable Suspicion is based. Upon completing testing, the employee shall be released from duty for the remainder of the day. The supervisor, in consultation with Human Resources, thereafter, shall determine on a day-to- day basis whether to permit the employee to return to duty, until the results of the test have returned. If an employee has been ordered to submit to Substance testing for Reasonable Suspicion, the District may place the employee on leave without pay pending the test results. If the employee’s test results are Negative, the District shall restore any salary lost by the employee for the days they were on leave, as though the employee had reported for duty. The following criteria apply when conducting drug and alcohol tests due to Reasonable Suspicion: a.Alcohol A breath alcohol test must be administered as soon as possible. Every effort should be made to ensure that a breath alcohol test is performed within eight (8) hours. If testing has not occurred within eight (8) hours, attempts to test should be discontinued and the employee may resume duties with their next shift that begins after the eight (8) hours have Page 12 of 18 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/23 passed. However, prior to the employee’s return, management shall observe the employee’s condition before the employee is allowed to resume duties to ensure that there is no longer Reasonable Suspicion. b.Controlled Substances A test for Controlled Substances must be administered as soon as possible. Every effort should be made to ensure the sample is performed as soon as possible but no later than 32 hours of the observation. c.The employee may not proceed alone to or from the collection site. The supervisor or other appropriate person making the observation shall arrange to transport the employee to and from the testing site. d.Documentation to support the determination to conduct Reasonable Suspicion testing should be prepared and signed by the person who made the determination within 24 hours of the determination or before the results of the test are released, whichever is earlier, if possible. 6.Acknowledgment and Consent Any employee subject to testing under this policy will be asked to sign a form acknowledging the procedures governing testing, and consenting to (1) the collection of a sample to determine the presence of Controlled Substances, and/or Breath for Alcohol and (2) the release to the District of medical information regarding the test results. Refusal to sign the agreement and consent form, or to submit to the drug test, will result in the revocation of an applicant’s job offer, or will subject an employee to discipline up to and including termination. 7.Refusal to Submit to Testing If an applicant refuses to submit to testing for any Substance, the applicant is disqualified for employment. If a District employee who has applied for a position that requires the performance of Safety-Sensitive Duties refuses to submit to testing for any Substance, the employee is disqualified for such position. If an employee refuses to submit to testing for any Substance, the District may treat such refusal as an act of insubordination. The District shall also impose the same disciplinary action of Page 13 of 18 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/23 dismissal for a refusal to test that it would impose for a Positive test result, so as not to encourage employees to refuse to test in the hope of avoiding more severe disciplinary action. The District may immediately place an employee on leave without pay if the employee refuses to submit for testing. 8.Refusal to Authorize Disclosure of Results of Testing If an applicant refuses to authorize the disclosure of the testing results to the District, the applicant is disqualified for employment. If a District employee who has applied for a position that requires the performance of Safety-Sensitive Duties refuses to authorize the disclosure of the test results to the District, the employee is disqualified for such position. If an employee refuses to authorize the disclosure of results of testing to the District, the District will impose the same disciplinary action of dismissal for a refusal to authorize the disclosure of results of testing, that it would impose for a Positive test result, so as not to encourage employees to refuse to authorize the disclosure of test results in the hope of avoiding more severe disciplinary action. 9.Positive Test If an applicant tests Positive for a Controlled Substance, they shall be disqualified for employment unless they meet the requirements for the over-the-counter/prescription drug exception set forth in Section B(2) of this policy. If a District employee who has applied for a position that requires the performance of Safety-Sensitive Duties tests Positive for a Substance, the employee is disqualified for such position. If an employee tests Positive for a Substance, the employee shall not be returned to duty and shall not receive pay during their absence until the employee requests that the split urine specimen be tested and the test of that specimen is not Positive for a Substance. This unpaid absence shall not be considered a disciplinary or punitive action against the employee and any record of such absence shall be maintained separately from the employee’s personnel file. The absence is for the administrative and safety interests of the District. This unpaid absence has no effect on the District’s decision or ability to discipline an employee for violating this policy. Page 14 of 18 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/23 If the MRO determines that an employee’s specimen is a Dilute Specimen and the specimen is Positive for a Substance, the employee shall be considered to have tested Positive for that Substance. If a Dilute Specimen produces a Negative result then the employee shall be required to submit to a second Substance test, in the manner prescribed in section 40.197 of title 49 of the Code of Federal Regulations. 10.Request for Retest If an employee tests Positive for any Substance, the employee may, within 72 hours of being notified of the Positive test result, request of the MRO that the split specimen be tested. If the employee does not submit a request within 72 hours, the employee shall be considered to have waived their right to have the split specimen tested. The employee shall pay for the costof testing the split specimen. If the employee is unable to pay this cost at the time of the request, the District must ensure that the split specimen is tested even if it means that the District may have to initially bear the cost. The District may recover the cost from the employee at a later time. If a split specimen does not produce a Positive result for a Substance, the District shall restore any salary lost by the employee as a result of an absence imposed because of the Positive result on the first specimen. The employee shall be consideredto have not tested Positive for a Substance. The District shall also reimburse the employee for the cost of the retest if the employee paid for the retest. The District may not request that the split specimen be tested. F. Employee Assistance Programs The District may refer any employee, including an employee who is dismissed because of a Positive test for a Substance, to its employee assistance program. If in any instance the District is required to lawfully accommodate an employee’s disability related to Substance abuse, the District shall refer the employee to a Substance abuse professional. G. Suspicion of Possession/Distribution/Manufacture of Controlled Substances If a supervisor has a Reasonable Suspicion that an employee unlawfully possesses or is distributing or manufacturing a Controlled Substance or Drug Paraphernalia on or in District property, or while on duty, the supervisor must report this suspicion to Human Resources. Page 15 of 18 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/23 1.For purposes of Section G only, “Reasonable Suspicion” means the following: a.As to possession, the supervisor or a reporting credible source must have seen a Substance or item on the person of the employee, in the employee’s work area, or in or on District property assigned to the use of the employee that a reasonable person would believe is a Controlled Substance or Drug Paraphernalia, or have seen in any of the same areas a container that a reasonable person would believe contains a Controlled Substance or Drug Paraphernalia. b.As to distribution, the supervisor must have seen the employee convey to another person a Substance or item that a reasonable person would believe is a Controlled Substance or Drug Paraphernalia, or have seen the employee convey a container to another person that a reasonable person would believe contains a Controlled Substance or Drug Paraphernalia, or have received a report of observation of the same from a credible source. c.As to manufacture, the supervisor must have observed conditions that a reasonable person would equate to the manufacture of a Controlled Substance or Drug Paraphernalia, which may include the observation of smell, appearance, or sound. The supervisor must also have observed conditions that would attribute suspected manufacture to the employee, such as observing these conditions in the employee’s work area or in or on District property assigned to the use of the employee. If the conditions are observed on the person of the employee, the supervisor must consider whether the employee reported to duty in such condition instead of changing to such condition while on duty or have received a report of observation of the same from a credible source. 2.After a report of a Reasonable Suspicion has been made to Human Resources, the Human Resources Manager must confer with management representatives to consider whether the reported observation constituted Reasonable Suspicion and decide what steps to take in response to the reported observation. a.If the decision is to take no further action, the matter will be dismissed. b.If the decision is to discuss the observation with the Page 16 of 18 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/23 employee, Human Resources and the supervisor will meet with the employee to discuss the observation. If as a result of the discussion, Human Resources and/or the supervisor believe that a search is necessary, they will confer with management representatives to determine whether a search will be conducted. c.If the decision is to conduct a search, the search must be limited to a search of District property, such as the employee’s work area (including desk drawers and file cabinets), District vehicle or equipment, and District facilities. The search may be performed by the Human Resources representative or another person designated by the Human Resources representative, which may include the supervisor. The employee does not need to be present during the search. If any material is retrieved that appears to bear out the supervisor’s Reasonable Suspicion, the Human Resources representative must take possession of the material. d.If the decision is to conduct a search and the distribution of Controlled Substances or Drug Paraphernalia is reasonably suspected, the search may include not only the work area/equipment of the employee suspected of distributing Controlled Substances or Drug Paraphernalia, but the work area/equipment of any employee whom was observed receiving the item from the employee suspected of distributing Controlled Substances or Drug Paraphernalia. The receiving employee is entitled to the same rights as the distributing employee. e.Any search of the person of the employee or personally-held possessions of the employee, such as a briefcase, purse, pocketbook, backpack or personal vehicle, must be conducted by a law enforcement officer. If the decision to conduct a search extends to these areas, Human Resources should contact law enforcement to request such a search. 3.If the Human Resources representative takes possession of any material as a result of the search, and the employee does not confirm that it is a Controlled Substance or Drug Paraphernalia, the District shall contact the local law enforcement agency and will forward the Substance to have the item tested/analyzed to determine if it is a Controlled Substance or Drug Paraphernalia. If a law enforcement officer takes possession of an item as a result of a search, and the employee does not confirm that it is a Controlled Substance or Drug Paraphernalia, the District shall follow up with the law enforcement agency to verify the item is Page 17 of 18 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/23 a Controlled Substance or Drug Paraphernalia. The employee shall not return to duty and shall not receive pay during their absence until the law enforcement agency has verified that the tested/analyzed item is not Positive for a Controlled Substance or Drug Paraphernalia. If the tested/analyzed item does not produce a Positive result for a Controlled Substance or Drug Paraphernalia, the District shall restore any salary lost by the employee as a result of the absence. H. Disciplinary Action Disciplinary action for violations of this policy will be taken in accordance with the District’s Discipline Policy and Procedures. I. Accommodation of Individuals with Disabilities Nothing in this policy shall be construed so as to relieve the District of its lawful obligation to accommodate individuals with disabilities. J.Confidentiality All alcohol and drug-testing records will be treated as confidential. Page 18 of 18 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject DRUG AND ALCOHOL-FREE WORKPLACE POLICY AND PROCEDURE Policy Number Date Adopted Date Revised 22 9/19/90 11/8/23 APPENDIX A INDICATION OF DRUG USE REMEMBER THAT THESE SYMPTOMS ARE ONLY INDICATIONS. THEY MAY BE A SIGN OF SOMETHING OTHER THAN DRUG OR ALCOHOL USE. THIS LIST IS NOT EXHAUSTIVE. PHYSICAL 1.Increased pulse rate 10.Nasal sores 2.Weak and rapid pulse 11.Slowed respirations 3.Increased blood pressure 12.Shallow respiration 4.Increased body temperature 13.Cold and clammy skin 5.Constricted pupils 14.Chills and sweats 6.Dilated pupils 15.Cramps 7.Bloodshot eyes 16.Nausea 8.Water eyes 17.Convulsions 9.Runny nose MENTAL AND EMOTIONAL 1.Increased alertness 10.Disorientation 2.Excitation 11.Visual illusions 3.Anxiety 12.Hallucinations 4.Irritability 13.Paranoia 5 Euphoria 14.Delirium 6.Increased emotionality 15.Irrational fears 7.Impaired attention 16.Panic 8.Impaired memory 17.Depressed mood 9.Altered perceptions BEHAVIORAL 1.Slurred speech 8.Hyperactivity 2.Staggered gait 9.Agitation 3.Fatigue 10.Argumentative 4.Apathy 11.Hostility 5.Drowsiness 12.Tremors 6.Loss of appetite 13.Insomnia 7.Increased appetite 14.Absenteeism patterns Drug & Alcohol-Free Workplace Policy & Procedure Revision Assembly Bill (AB) 2188 ATTACHMENT E Assembly Bill (AB) 2188 •AB 2188 goes into effect on January 1, 2024. •Prohibits employers from taking adverse employment actions against a person based on their recreational cannabis use outside of work. •Tetrahydrocannibol (THC) (Delta 9) is the pertinent cannabis metabolite that causes impairment and psychoactive effects. •THC can remain in the body for up to several weeks, after THC is metabolized and the psychoactive effects have fully dissipated. •A person can have nonpsychoactive cannabis metabolites in their body but not be presently impaired. Assembly Bill (AB) 2188 •AB 2188 prohibits employers from taking adverse employment action based on a test showing positive for nonpsychoactive cannabis metabolites. •Employers should implement and make decisions based upon scientifically valid drug testing methods that screen for THC to detect active impairment, not nonpsychoactive cannabis metabolites. •Many drug tests do not distinguish the nonpsychoactive metabolites from the psychoactive metabolites. Assembly Bill (AB) 2188 •The CA Civil Rights Division is expected to issue regulations, but whether those regulations will be finalized by the end of 2023 is unclear. •Future policy revisions are anticipated as drug testing methods, regulations, and legal advice are updated. Assembly Bill (AB) 2188 • Additional information: ▪ Current revisions included: o Removing management positions which are not designated as “safety-sensitive” from the random drug and alcohol testing program. Questions? STAFF REPORT TYPE MEETING: Regular Board Meeting MEETING DATE: November 8, 2023 SUBMITTED BY: Tita Ramos-Krogman, District Secretary W.O./G.F. NO: DIV. NO. APPROVED BY: Tita Ramos-Krogman, District Secretary Jose Martinez, General Manager SUBJECT: Board of Directors 2023 and 2024 Calendars of Meetings GENERAL MANAGER’S RECOMMENDATION: At the request of the Board, the attached Board of Director’s meeting calendars for 2023 and 2024 are being presented for discussion. PURPOSE: This staff report is being presented to provide the Board the opportunity to review the 2023 and 2024 Board of Director’s meeting calendars and amend the schedules as needed. COMMITTEE ACTION: N/A ANALYSIS: The Board requested that this item be presented at each meeting so they may have an opportunity to review the Board meeting calendar schedule and amend it as needed. STRATEGIC GOAL: N/A FISCAL IMPACT: None. LEGAL IMPACT: None. Attachment: Calendar of Meetings for 2023 and 2024 G:\UserData\DistSec\WINWORD\STAFRPTS\Board Meeting Calendar 11-08-23.doc AGENDA ITEM 8a Board of Directors, Workshops and Committee Meetings 2023 Regular Board Meetings: Special Board or Committee Meetings (3rd Wednesday of Each Month or as Noted) January 4, 2023 February 1, 2023 March 1, 2023 April 5, 2023 May 3, 2023 June 7, 2023 July 5, 2023 August 2, 2023 September 6, 2023 October 4, 2023 November 1, 2023 December 6, 2023 January 18, 2023 February 15, 2023 March 15, 2023 April 19, 2023 May 17, 2023 June 21, 2023 July 19, 2023 August 16, 2023 September 20, 2023 October 18, 2023 November 15, 2023 December 20, 2023 Board of Directors, Workshops and Committee Meetings 2024 Regular Board Meetings: Special Board or Committee Meetings (3rd Wednesday of Each Month or as Noted) January 3, 2024 February 7, 2024 March 6, 2024 April 3, 2024 May 1, 2024 June 5, 2024 July 3, 2024 August 7, 2024 September 4, 2024 October 2, 2024 November 6, 2024 December 4, 2024 January 17, 2024 February 21, 2024 March 20, 2024 April 17, 2024 May 15, 2024 June 19, 2024 July 17, 2024 August 21, 2024 September 18, 2024 October 16, 2024 November 20, 2024 December 18, 2024 1 STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: November 8, 2023 SUBMITTED BY: Eileen Salmeron, Communications Assistant PROJECT: Various DIV. NO. All APPROVED BY: Jose Martinez, General Manager SUBJECT: Social Media, Mobile Application, and Website Analytics Update GENERAL MANAGER’S RECOMMENDATION: No recommendation. This is an informational item only. COMMITTEE ACTION: See Attachment B. PURPOSE: To provide the Board with an update on the Otay Water District’s social media, mobile application, and website analytics. ANALYSIS: District communications staff uses online services, including social media platforms, a mobile application, and the website, to share news with customers and the public. Through social media, the District can provide up-to-date information regarding water-related programs, events, and local- and state-wide news. Social media engagement enhances the interaction between the public and public agencies. It also increases the reach to demographics that do not regularly consume traditional media. Staff also manages and monitors the District’s website and its “Make Every Drop Count” mobile application to stay current with evolving technology, encourage water-use efficiency, and ensure customer AGENDA ITEM 9a 2 satisfaction. It also manages and monitors its daily social media presence and stays current with evolving online trends. Included in Attachment B are the social media, mobile application, and website analytics for fiscal year 2023. Social Media The District’s social media presence, online audience, and stakeholder engagement has steadily increased each year. Staff continues its online reach to promote water-related programs such as education, conservation, operational efficiencies, and capital improvement projects. Staff increases its social media followers and engagement by creating visual content, publishing posts in English and Spanish, and partnering with other water agencies and organizations to launch water-related campaigns and programs. The District uses the following social media platforms: • YouTube – Joined November 2010 • Twitter – Joined February 2011 • Facebook – Joined November 2011 • Nextdoor – Joined July 2016 • LinkedIn – Joined August 2017 • Instagram – Joined November 2018 The social media analytics report in Attachment B shows a comparison of the cumulative number of followers the District has gained in the last two fiscal years. Twitter: From June 30, 2022, to June 30, 2023, the number of Twitter followers increased by 0.4%, from 2,236 to 2,245. Compared to other retail water agencies in the San Diego region, the District continues to be number one with the most Twitter followers. Instagram: From June 30, 2022, to June 30, 2023, the number of Instagram followers increased by 7%, from 1,045 to 1,113. Compared to other retail water agencies in the San Diego region, the District is number one with the most Instagram followers. LinkedIn: From June 30, 2022, to June 30, 2023, the number of LinkedIn followers increased by 20%, from 833 to 1,003. Compared to other retail water agencies in the San Diego region, the District is in the top two with the most LinkedIn followers. Facebook: From June 30, 2022, to June 30, 2023, the number of Facebook followers increased by 5%, from 694 to 727. Compared to 3 other retail water agencies in the San Diego region, the District is in the top five with the most Facebook followers. YouTube: From June 30, 2022, to June 30, 2023, the number of channel subscribers increased by 3%, from 225 to 231. Compared to other retail water agencies in the San Diego region, the District is in the top two with the most subscribers. Also, YouTube video views increased by 7%, from 180,615 to 193,023. Nextdoor: Unlike the other social media platforms, Nextdoor followers or members, are based on the number of residents within the District’s service area who have joined the platform. If they are in its service area, they are automatically subscribed to receive the District’s posts. Since all its members are customers, staff also uses the platform to geo-target specific neighborhoods within the District’s service area to share exclusive messaging regarding projects in those neighborhoods. From June 30, 2022, to June 30, 2023, the number of Nextdoor members in the District’s service area increased by 17%, from 56,295 to 65,839. Communications staff will continue to assess its current use of social media platforms and their effectiveness. Mobile App The District first launched its “Make Every Drop Count” mobile application in August 2015. In 2020, IT and communications staff collaborated to enhance the app for iOS and Android users. The application’s features include utility bill payment, water waste reports, programs and resources, water-saving tips, water-use restrictions, contact information, and social media interaction. Its iOS downloads increased by 13 %, from 5,542 as of June 30, 2022, to 6,274 as of June 30, 2023. Android downloads increased by 53%, from 519 as of June 30, 2022, to 795 as of June 30, 2023. Website Staff also manages and maintains the District’s website, otaywater.gov. The goal is to better serve customers by enhancing its web presence and user-friendliness, communicating the most current information, and visually conveying that it uses state-of-the-art technologies and is a forward-thinking agency. Attachment B includes the District’s website analytics. During fiscal year 2023, its top 20 most viewed website pages were the following: 1) Home Page2) Payment Options3) Customer Service 4 4) Billing Information 5) Employment 6) Start or Terminate Service Page 7) Contact Us 8) Start or Terminate Service Form 9) Update Your Info 10) Owner Acknowledgement Form 11) Engineering Bids 12) Conservation Programs 13) About Otay 14) Water Services 15) Outages 16) Water Agency Search 17) Otay Employees 18) Bid Opportunities 19) Water and Sewer Rates 20) Board Agenda In fiscal year 2023, the District’s web page views decreased by 7% from 347,347 to 324,925, compared to fiscal year 2022. Its users increased by 2%, from 108,072 to 109,980, compared to fiscal year 2022. In fiscal year 2023, about 82% of its website users were new, and about 19% were returning. Attachment B shows how users arrived to the website and which URLs are considered the top 10 referral sources. To address the Spanish-speaking population in the District’s service area, the website includes functionality that displays most of the web content in Spanish. Staff works with a consultant to have the English content translated to Spanish. As part of its strategic plan, staff assesses and implements ways to improve the website. It enhances its functionality and navigational structure, crafting content aligned with key messaging, conveying information searched by visitors in English and Spanish, and publishing content more frequently to keep pages attractive and engaging. Critical to owning, maintaining, and cultivating integrated communication, outreach, and marketing strategy, staff will continue to explore best practices for cross-promoting messaging through social media, its website, and other outreach tools. It will post new content to social media platforms, including short and long videos, photos, graphics, and other material necessary depending on the topic, resources available, and value added. It will also continue to work closely with IT staff to evaluate best practices for websites and monitor online trends to effectively reach customers. 5 FISCAL IMPACT: Joe Beachem, Chief Financial Officer There is no fiscal impact associated with this action. STRATEGIC GOAL: Execute and deliver services that meet or exceed customer expectations, and increase customer engagement in order to improve District Services. LEGAL IMPACT: None. Attachments: A) Committee ActionB) Presentation: Social Media, Mobile Application, and Website Analytics 6 ATTACHMENT A SUBJECT/PROJECT: Social Media, Mobile Application, and Website Analytics Update COMMITTEE ACTION: The Conservation, Public Relations, Legal and Legislative Committee (Committee) reviewed this item at a meeting held on October 18, 2023, and the following comments were made: • Staff stated that one of the most popular post on all the district’s social media was the election of director Robak as president of the board. The post had the most engagements on LinkedIn with 113. In response to a question from the Committee, staff stated that the meaning of “engagements” is the number of times a post receives likes, comments, clicks or other engagement. • Staff indicated that customers can pay their bill through the mobile application. • Staff stated that the Landscape Contest Digital Ad generated 131 clicks to the District’s website and a click- through-rate of .52%. • There was a discussion on the Top 10 Cities viewing the district’s website, which 18.79% came from Los Angeles and 2.62% from San Jose. The Committee directed staff to research why these regions are viewing the district’s website. The Committee also directed staff to research the possibility of upgrading to Twitter Premium and adding TikTok to the district’s social media platforms. • In response to comments at a previous committee meeting regarding Yelp reviews about the district, staff provided an update on the district’s procedures to respond to reviews not only on Yelp but also on Google Review. It was noted that staff continues to monitor these platforms as they do with all social media comments and private inboxes. Following the discussion, the Committee supported staffs’ recommendation and presentation to the full Board as an informational item. Social Media, Mobile Application, and Website Analytics CPRL&L Committee MeetingOctober 18, 2023 Otay Water District 1 Attachment B 3.90% 4.10% 9.40% 22.50% 58.80% Social Media in Fiscal Year 2023 2 Facebook X / Twitter LinkedIn Instagram Nextdoor YouTube 12,835IMPRESSIONS ENGAGEMENTS 952 FOLLOWERS 727 5% increase from 694in FY22 47,798IMPRESSIONS ENGAGEMENTS 1,746 FOLLOWERS 2,245 0.4% increase from 2,236in FY22 12,709IMPRESSIONS ENGAGEMENTS 820 FOLLOWERS 1,003 20% increase from 833in FY22 11,060IMPRESSIONS ENGAGEMENTS 1,228 FOLLOWERS 1,113 7% increase from 1,045 in FY22 48,919IMPRESSIONS ENGAGEMENTS 32 FOLLOWERS 65,839 9,120VIDEO VIEWS CUMULATIVE VIEWS193,023 SUBSCRIBERS23117% increase from 56,295 in FY22 3% increase from 225 in FY22 YouTube Traffic Sources Suggested Videos External Browse Features Direct or Unknown2.85% 3.61% 4.00% 4.50% 6.10%Otay Ranch Village 1 Eastlake Greens Rolling Hills Ranch Rancho San Diego Eastlake Nextdoor Top FollowersLinkedIn Top Followers 3.90% 4.50%5.10% 9.20% 15.90%Water Supply and Irrigation Systems GovernmentAdministration Utilities 7% increase from 180,615 in FY22 Civil Engineering Construction YouTube Search Agency Comparison in Followers Twitter Instagram YouTube LinkedIn Facebook SDCWA 6,527Otay 2,245Sweetwater 2,098 Total Number of Followers as of June 30, 2023 SDCWA 3,344Otay 1,113 Otay 231 Padre 986 SDCWA 1,190Vallecitos 326 Otay 1,003Sweetwater 1,346 SDCWA 8,796 SDCWA11,000 Otay 727 Vallecitos 2,500Sweetwater 1,300Padre 853 Olivenhain 675 Helix 790 3 Fiscal Year 2023 Highlights 4 820 IMPRESSIONS ENGAGEMENTS 89 Facebook 691 IMPRESSIONS ENGAGEMENTS 50 / Twitter Published Sept. 8, 2022 Published March 29, 2023 Fiscal Year 2023 Highlights Cont’d. 5 LinkedIn 1,736 IMPRESSIONS ENGAGEMENTS 113 Instagram 314 REACH VIEWS 17 ENGAGEMENT 596 Published Jan. 20, 2023 Published Dec. 7, 2022 Fiscal Year 2023 Highlights Cont’d. 6 2,877 IMPRESSIONS ENGAGEMENTS 1 Published Jan. 20, 2023 How to Read Your New DigitalWater Meter/Register Published July 22, 2017 Nextdoor YouTube 3,234 VIEWS IN FY 23 VIEWS SINCE PUBLISHED27,364 Mobile Application 7 iOS Downloads AndroidDownloads 6,274 (13% increase) AS OFJUNE 30, 2023 5,542 AS OF JUNE 30, 2022 795 (53% increase) AS OF JUNE 30, 2023 519 AS OF JUNE 30, 2022 Website Analytics – Most Viewed Pages 8 Total Page Views in Fiscal Year 2023: 324,925 PAGE VIEWS PAGE VIEWS 1. Home Page 42.92%11. Engineering Bids 1.21% 2. Payment Options 10.25%12. Conservation Programs 1.07% 3. Customer Service 4.35%13. About Otay 1.04% 4. Billing Information 3.40%14. Water Services 0.98% 5. Employment 3.12%15. Outages 0.91% 6. Start or Terminate Service Page 2.72%16. Water Agency Search 0.88% 7. Contact Us 1.89%17. Otay Employees 0.63% 8. Start or Terminate Service Form 1.64%18. Bid Opportunities 0.60% 9. Update Your Info 1.56%19. Water and Sewer Rates 0.60% 10. Owner Acknowledgement Form 1.33%20. Board Agenda 0.55% Total Page Views and Users 9 347,347 108,072 324,925 109,980 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 Views Users 2022 2023 7% decrease 2% increase Website Referrals 10 New Users 81.50% Returning Users, 18.50% Organic Search 52.00%Direct 43.20% Referral 3.00% Other 1.20%Social Media 0.60% New Users vs. Returning Users Total Users in Fiscal Year 2023: 109,980 How Users Arrived to otaywater.gov Referral Sources 11 Total Referrals in Fiscal Year 2023: 4,003 1. otay-3y354o0pajyrfwiyyvs.netdna-ssl.com – Otay’s home page 2.duckduckgo.com – Search engine 3. facebook.com – Facebook 4. newsbreakapp.com – News application 5. com.google.android.googlequicksearchbox – Android Google search app 6. governmentjobs.com – Government job search website 7. com.google.android.gm – Gmail Android app 8. sandiegowaterworks.org – SDCWA water industry job website 9. t.co - Twitter 10. search.aol.com - AOL Search Top 10 Cities 12 Total Users in Fiscal Year 2023: 109,980 0.73%0.89% 0.94% 1.36% 1.40% 2.62% 2.70% 18.79% 22.24% 25.32%Chula Vista San Diego Los Angeles El Cajon San Jose Spring Valley (not set) La Mesa Santee Rancho San Diego Top 5 Computer Browsers 13 1.08% 2.15% 7.06% 40.48% 46.70% 0.05% 20.15% 79.80%iOS Android Windows Total Mobile Users in FY23: 53,317Total Users in FY23: 109,980 Safari Chrome Edge Firefox Top Mobile Operating Systems Samsung Internet Questions? 14 Otay Water District otaywater.gov (619) 670-2222 info@otaywater.gov STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: November 8, 2023 SUBMITTED BY: Jose Martinez General Manager W.O./G.F. NO: N/A DIV. NO. N/A APPROVED BY: Jose Martinez, General Manager SUBJECT: General Manager’s Report ADMINISTRATIVE SERVICES: GIS: •Data Assessment for GIS Migration to Cloud – Staff has begun to prepare for the migration of Otay's enterprise on-premises GIS system to the cloud. This project will consist of the development of a plan to include data and application preparation, consultant assistance, cloud service contract, end-user testing, and parallel performance testing to name a few of the project elements. Human Resources: •Open Enrollment - Held October 16 - 27. HR worked with Keenan, our benefits broker, and IT staff in preparation. A virtual Open Enrollment meeting was held on October 25, 2023, and it was well attended. •Annual Employee Appreciation Event – Employees enjoyed the October 11th event with department updates, recognitions, and raffle prizes. •Anti-Harassment/Discrimination Prevention Training – This training is required of all employees every two years; two sessions were held: o Tuesday, October 17, 2023: 2-hour session for Leads, Supervisors, Managers, Chiefs, and General Manager o Wednesday, October 18, 2023: 1.5-hour session for non- supervisory employees. AGENDA ITEM 10 2 •COVID Cases – HR continues to process each case and continues to monitor for potential workplace outbreaks. •Annual Performance Evaluations - The 2023 performance evaluation process is in progress. •New Hires/Recruitments - The District recently filled the following positions: o Human Resources Assistant II o Water Systems Operator I (internal promotion) The District is recruiting for the following positions: o Engineering Manager (pursuing final candidate) o Utility Worker I/II (pursuing final candidate) o Customer Service Field Representative I/II o Reclamation Plant Operator I/II/III o SCADA/Instrumentation Technician or Senior SCADA/ Instrumentation Technician IT Operations: •District Innovation Committee - Staff identified and selected participants for the District’s Innovation Committee. As outlined in the District’s strategic plan, the group’s goal is to create a framework to proactively identify opportunities for innovation, enhance employee development, and provide feedback while contributing to the future of the District’s water services and organizational development. The committee will convene quarterly for productive discussions, each lasting 1 – 1.5 hours. The first meeting was held on November 1, 2023. •Colocation Hardware Maintenance – On October 18, 2023, staff upgraded the technology hardware devices at the District’s colocation facility and replaced outdated devices no longer supported with newer, more modern hardware. The upgraded hardware model offers improved security and faster communication capabilities. •District Website Maintenance - Staff recently performed minor maintenance on the District’s public-facing website, otaywater.gov. The maintenance is designed to improve website security and update content management features. Purchasing & Facilities: •Leak Detection by Drone Thermal Imaging – On October 10, the District’s drone consultant flew 4 segments of pipeline identified by Water Operations as inaccessible to visual inspection due to the steep terrain. Each segment runs along a north-facing slope with abundant native undergrowth. Utilizing a drone outfitted with a thermal imaging sensor, the pilot flew pipeline easements between 3 the 832 Reservoir (Res) and 832 Pumpstation (PS); 832 PS and Target/YMCA Shopping Center; 832/Steele Canyon Access Road and Jamul Dr; and the 1090 Res and 1090 PS. Each flight captured both thermal and live video. Areas within the thermal images range from bright yellow indicating warmer dry surface conditions to deep purple or cooler and possibly wet conditions. The challenge with the north-facing slopes is the heavy vegetation which shows up as dark purple and can camouflage underlying damp or wet areas that might indicate that a leak exists. 4 However, by comparing the thermal images to the live video, it can be determined that the vegetation is in an expected natural state and not an overwatered one. This is also confirmed in that the surrounding grasses are dry and not growing. Additional flights over easements running through different types of terrain are in the planning stages and will be scheduled over the next weeks and months. Safety & Security: • Annual District Vaccine Event – CVS Pharmacy was selected to provide multiple vaccines onsite, including COVID-19 and flu. • Quarterly Hazard Mitigation (HazMit) Plan Strategies Review Meeting – Staff met and received a presentation from Finance about the single audit and recordkeeping requirements for federal grants. To get an idea of the California water agencies/special districts approved for 2023 FEMA grant funding, staff reviewed a list of approved state water agencies and their mitigation strategy plans. • California Water/Wastewater Agency Response Network (CalWARN) and CA Water Association/Safety, Security & Emergency Management Committee – Staff is one of the co-chairs for Region 6 and attended the bi-monthly CalWARN Board Meeting and the Ca Water Association meeting to provide a brief overview of the mutual assistance agency. 5 • Bionomics (Body Mechanics) Safety Training - Operations staff received the annual refresher of the body mechanics training. Employees last received this training in August 2022. The Safety Office has seen a 50% reduction in OSHA-recordable sprains and strains from August 2022 to August 2023. • Dog Bite Prevention Training – Bulli Ray Services conducted interactive sessions demonstrating encountered situations in which field staff are likely to find themselves around dogs in the field. The engaging sessions included participation from staff and interaction with a real live dog. Training included canine/human postures, site evaluations, entering the yard, making a safe exit, and defending a single dog or pack attack. 6 FINANCE: • FY 2022-2023 Annual Comprehensive Financial Report (ACFR) – Now that the FY 2023 Financial Statement audit has been successfully concluded, staff is currently compiling the supplementary reports, which include statistical data and the transmittal letter that accompany the audit, to be included in the ACFR. These materials will be distributed to the SEC, State of California, the public, and the Government Finance Officers Association. The ACFR is scheduled to be completed in mid-December. • FEMA COVID-19 Grant Update – The District currently has four COVID- 19 projects under review with FEMA, each of which corresponds to a specific period during the pandemic when the District incurred expenses in response to the pandemic disaster declaration issued by the President. Our requests have been pending with FEMA for an extended duration, as FEMA has been unresponsive to our inquiries regarding the status of our applications due to a significant backlog of submissions. CalOES has recently assigned a new resource to assist the District in expediting FEMA's response to our submissions. On a positive note, staff received confirmation from CalOES on October 16, 2023, that FEMA has completed their review of project 181436 (Safe Opening and Operation Work - covering the period from September 15, 2020, to December 31, 2021) and has obligated $37,284 of our requested amount of $37,553. FEMA will fully reimburse the obligated amount. CalOES has informed us that, "FEMA will inform CalOES shortly after the project get[s] obligated to initiate the process for the project payment. In the coming weeks, the Authorized Agent on file with CalOES should receive a notification of obligation email from the CalOES Financial Processing Unit (FPU) that will provide details on the next steps for payment." The District currently has the following COVID-19 projects under review with FEMA, with no confirmed timeline for finalizing these requests for payment: 1) Covered Period (2/24/2020 – 09/14/2020): Project 140037 (COVID- 19 Response) was submitted for $218,371.14. This submission primarily covers expenses related to IT equipment, EOC meetings, COVID-19 testing, trainings, temporary waterline, customer communications, and facility disinfection. 2) Covered Period (1/01/2022 – 07/01/2022): Project 667900 (Safe Opening and Operation Work) was submitted for $16,259.33, mainly related to COVID-19 testing and facility disinfection. 3) Covered Period (7/01/2022 – 05/11/2023): Project 723101 (Safe Opening and Operation Work) was submitted for $5,444.93, primarily for expenses related to facility disinfection. 7 Furthermore, upon the obligation of all projects, the District may seek an additional 7% of the total award amount for management and administration costs related to these projects under the FEMA "Category Z" project. Category Z projects are not due until May 11, 2025. • FY 2023 Water Loss Audit Validation – Finance staff, in collaboration with the Engineering and Operations departments, convened with the District's Water Loss Validation Auditors, E Source Consulting, on September 28. During this meeting, a comprehensive review of various data points was conducted, encompassing District meter accuracy data, water inventory levels, a hydraulic pressure model, water purchase and sales data, among others. E Source Consulting formally issued the Final Validation Certificate, Final Water Audit, and all relevant supporting documents on October 12, 2023. The District is in the process of preparing these documents for submission to the California State Department of Water Resources (DWR). We will submit these materials as soon as the DWR's water loss reporting portal becomes accessible and can receive the documents. The filing deadline for these submissions is December 31, 2023. It is anticipated that DWR’s online portal will be open to accept the 2023 reports by the end of October. E Source Consulting will also send a notification email once the portal is operational to ensure that we are informed of its availability. • 2023-2024 General Liability Contribution – ACWA-JPIA has completed its calculation of members' contributions for Fiscal Year 2024. This computation encompasses a comprehensive assessment of numerous factors, including the three-year loss history of its members. While there was a program-wide increase of 10%, we are pleased to report that our contribution experienced a slight decrease, amounting to 9.6%. This reduction can be attributed to the decline in our claims during Fiscal Year 2023 in comparison to Fiscal Year 2018. The District's Fiscal Year 2024 Budget had already factored in an anticipated 10% increase, and it has been confirmed that these provisions are adequate to cover the required premiums. • FY 2024 Bi-Annual OPEB Valuation Report – Staff is currently collaborating with the District's Actuary to finalize the Bi-Annual Other Post-Employment Benefits (OPEB) report. The results of this report will be presented at the December Finance and Administration 8 (F&A) Committee meeting and subsequently discussed at the January Board Meeting. • 1099 Tax Statements – Staff is starting to review and update Vendor Records in anticipation of issuing 1099 Tax Statements in January. • Infosend Online Bill Pay Site Update – The online bill payment site underwent an upgrade on October 2. Staff encountered a surge in calls during the initial week of October, seeking assistance with accessing the new site. Many customers faced issues related to forgotten usernames or the necessity to update passwords due to changed email addresses. While change often presents challenges, the majority of customer feedback regarding the new site has been positive. Customer Service staff has noted that the site is more user-friendly for backend users. Since the beginning of October, the volume of calls has decreased. However, staff continues to field calls and emails concerning site access, diligently working to ensure that all customers can successfully log into the new system. • AMI Update - Master Meter successfully transitioned one route in Chula Vista for billing in October. Route 1302 comprises 981 meters, of which 913 meters are currently transmitting data electronically. Staff managed to export the non-AMI meters into the meter reading system to read via AMR and subsequently imported the entire route into the District’s billing system. Following this achievement, Master Meter plans to convert around 2,600 meters in cycles 3 and 4 to AMI for billing in November. • Rate Increase Testing – IT, Customer Service, and Finance will begin testing the January 2024 water and sewer rate increases in November. Staff utilizes a test database to guarantee the accurate updating of all new rates within Eden. Multiple billing cycles will be tested to ensure all rate classes are updated. New rates will go into effect with all bills processed in January. Financial Reporting: The financial reporting as of September 30, 2023, is as follows: • As of the third month ending September 30, 2023, there are total revenues of $33,296,494 and total expenses of $34,135,129. The expenses exceeded revenues by $838,635. The deficit is beyond the budgeted surplus due to lower than budgeted sales volumes which are a result of below average temperatures. 9 • The financial reporting for investments as of September 30, 2023, is as follows: o The market value shown in the Portfolio Summary and in the Investment Portfolio Details as of September 30, 2023, total $106,726,332 with an average yield to maturity of 3.850%. The total earnings year to date are $1,034,423. ENGINEERING AND WATER SYSTEM OPERATIONS: Engineering: • Vista Diego Hydropneumatic Pump Station Replacement and 12-inch Pipeline Replacement, 1530 Zone, Vista Diego Road: This project includes replacement of the existing Pump Station, which serves the small 1530 Pressure Zone, containing approximately thirty-seven (37) potable water meters and four (4) hydrants. The project also includes 1530 Pressure Zone distribution system improvements in support of the Pump Station Replacement project and replacement of the existing emergency standby generator. An alternative concept, intended to avoid relocating overhead utilities, was presented and well received by District staff on January 31, 2023. A 60% drawing submittal for the replacement pump station incorporating alternative retaining walls (rock nail in lieu of typical CMU) and an alternative surge mitigation design was completed August 16, 2023, and a review meeting was held August 29, 2023. A 60% peer review by the District’s as-needed engineering design consultant, NV5 was completed October 16, 2023. The District’s as-needed electrical engineer, EPI completed their 90% submittal September 29, 2023. Coastal California gnatcatcher surveys are expected to be completed in mid-December 2023. The project is within budget and on schedule as projected during the FY 2024 budget cycle. (P2639, P2680, and P2688) • RWCWRF Disinfection System Improvements: The project involves the replacement of the chlorine gas disinfection system with an ultraviolet (UV) process at the Ralph W. Chapman Water Reclamation Facility. Consultant selection for design and construction support went to Carollo Engineers and design work initiated in July 2021. A Memorandum of Understanding has been reached with Trojan for procuring the UV system through the construction contractor at a bid obtained cost. This will also reduce materials acquisition delays related to this equipment, which is projected to take a year to ship. A construction contract has been awarded to GSE Construction Co., Inc. with the UV submittal to be top priority for getting the project started. The plant engineering report has been updated for preparation of completing the permitting process with the State. The contractor is processing the Trojan UV system 10 submittal and a preconstruction meeting will be scheduled in early November 2023.(R2117 and R2157) • Olympic Parkway Recycled Water Line Replacement: Several main breaks within the past few years of the 20-inch recycled water line in Olympic Parkway between Heritage Road and La Media Road resulted in the establishment of this Capital Improvement Program project at the May 2021 Board meeting. The engineering firm, NV5, was selected to design the replacement waterline using the District’s As-Needed Engineering Design Services contract. The project was awarded to Burtech in January 2023. The City of Chula Vista permits have been obtained. Consideration was given to potentially using trenchless installation, but several drawbacks and limitations eliminated it from selection. Traffic control design was handled through the As-Needed Traffic Engineering Services contract. The contractor has started procuring materials and a Pre-Construction Meeting was held on June 8, 2023. The valve manufacturer has notified the Contractor that the valves will not be delivered until March 2024. The project is within budget. (R2159) • Paso de Luz and Vista Sierra Waterlines Replacement: The existing 1950’s steel water lines in the Hillsdale area have been identified for replacement due to past failures. Under this contract, the water line between Vista Grande and Vista Sierra will be replaced. Included in this project is the replacement of a water line between Paso de Luz and Telegraph Canyon Road in Chula Vista that is located in an easement on an embankment. The water line was isolated due to a leak, removing the redundancy for this neighborhood. Board awarded the contract to CCL Contracting, Inc. in April 2022. Work is completed for both sites, and the final closeout change order (CO #2) was approved at the October 4, 2023, Board meeting. Helix Environmental will begin revegetation of the Paso de Luz site in late October. The District will review the condition of the abandoned Vista Sierra pipeline to determine necessary timing for completing Phase 2 of the project involving the remaining pipeline that extends to Pence Drive. Air-vacuum cans were on back order and are expected to arrive in late October which is the last punchlist item for acceptance of the project. The project is within budget and on schedule. (P2612 & P2616) • Cottonwood Sewer Pump Station Replacement: The project involves the replacement of the existing sewer pump station, originally constructed in 1986 as a temporary facility, due to operational and accessibility deficiencies. The station serves both the District and County of San Diego customers on the southside of Sweetwater River. Improvements will incorporate increased station capacity now and in the future with a force main upgrade, as well as emergency storage to avoid a sewage spill. Design is being 11 prepared by Wood Rodgers, Inc., with the preliminary design report completed in October 2023. The geotechnical investigation of the site has been completed by Atlas using the District’s As-Needed Geotechnical contract. The project is within budget and on schedule. (S2069) • 870-2 Reservoir and 870-1 Reservoir Floating Cover/Liner Replacement: This project consists of constructing a new 3.4 MG prestressed concrete potable water tank adjacent to the existing 870-1 Reservoir. The project also includes lowering the existing 870-1 Reservoir 30-inch inlet pipe and replacing the existing floating cover and liner within the existing 870-1 Reservoir. District staff designed the floating cover/liner replacement portion of the project in-house to the 50% level and a recognized expert in floating covers, Hilts Consulting Group, reviewed and commented on the floating cover/liner design in February 2023. The District’s as-needed engineering design consultant, Wood Rodgers, teamed with Richard Brady and Associates (Wood Rodgers/Brady), and delivered the 60% civil design the week of June 22 and a review meeting was held July 17, 2023. The District's as-needed electrical consultant, BSE, delivered the 60% electrical and instrumentation/control design August 25, 2023 and a review meeting was held September 11, 2023. The District’s as-needed corrosion engineer delivered a preliminary design on October 6, 2023. All disciplines are anticipated to reach 90% level of completion mid- December 2023. Biweekly Gnatcatcher Bird Surveys are expected to begin late October 2023. Two proposals for construction management and inspection services were received on October 12, 2023. Award for construction management and inspection services is scheduled for the January 2024 Board Meeting. Public construction bid advertisement is tentatively scheduled for April 2024. The Addendum to the Program Environmental Impact Report (PEIR)and construction award is tentatively scheduled for the June 2024 Board meeting. The project is within budget and on schedule. (P2228 & P2563) • Advanced Metering Infrastructure Upgrade Project: This project will provide the District with the ability to measure water usage in real time. This will allow customers to access their consumption data online and compare historic usage. Currently, the District has approximately 24,000 AMI-compatible meters installed throughout the service area. This phase of the project will install the base antennas, repeaters, as well as network hardware and software to implement the system. The contractor has completed all work, and Master Meter is upgrading the software in the meters. The Notice of Completion is currently being processed. The project is within budget and on schedule. (P2682) 12 • 1004-2 & 485-1 Reservoir Interior/Exterior Coating: This project consists of removing and replacing the interior and exterior coatings of the 1004-2 (1.4 MG) and the 485-1 (1.0 MG) Reservoirs, along with providing structural upgrades, to ensure the tanks comply with both state and federal OSHA standards as well as the American Water Works Association and the County Health Department standards. Unified Field Services Corp. (Unified) was awarded the construction contract at the November 2022 Board Meeting. Unified completed work on the 1004-2 tank and Operations has replaced the defective valves on site. The 1004-2 Reservoir was returned to service on October 6, 2023. The work on the 485-1 Tank is complete and the contractor is performing cleanup in anticipation of the returning the tank to service in early November 2023. The project is within budget and on schedule. (P2567 & P2614) • FY 2023 Sewage Flows to Metro vs Planned Capacity: The Metro Amended and Restated Regional Wastewater Disposal Agreement became effective at the start of FY 2023. The District’s annual capacity of 0.38 MGD (139 MG) is now in effect, though the District would need to exceed this capacity for three (3) consecutive years before additional capacity must be acquired. Metro capacity was set based upon the District’s sewer system requirements through planning year 2050. Sewage flow to Metro for FY 2023 was 101.24 MG, below the 139 MG Agreement capacity limit. The Ralph W. Chapman Water Reclamation Facility had an upset occur in September, resulting in a week and a half of no recycled water production. The District is still on track though to meet the annual capacity limit.  13 • Summary of Budgeted and Sold Meters and EDUs for Fiscal Year 2024 through September 30, 2023: Water Operations: • During Friday, September 15th to Monday, September 25th, the Treatment Plant was offline due to an unknown slug that impacted the biological microorganisms that created process control issues on the final effluent. This event is not uncommon for a Treatment Plant to experience. The Treatment Plant was able to reach out, through interagency assistance, to Padre Dam Municipal Water District and received 20,000 gallons of seed sludge to help improve the biological process. This helped the Treatment Plant to get back online on Monday, September 25th. • On Friday, September 15th, Water Systems staff performed a planned shutdown to replace a leaking two-inch meter stop located on Siempre Viva Road and Otay Pacifica Drive in Otay Mesa. This shutdown had no customer impact. • The following events occurred on Wednesday, September 20th: o The District’s Confined Space Rescue and Hazwop Response Team participated in an Emergency Chlorine Response Training held at the Treatment Plant. The Emergency Chlorine Response Training is performed at least once annually and follows CCR Title 8-5192 (e)(8). The team is comprised of staff from various departments and trained in chlorine gas container repair scenarios, donning and doffing HAZWOP A-suits with Self Contained Breathing Apparatuses (SCBA’s). o Water Systems staff assisted the Inspections section with commissioning a new recycled water pressure reducing station on Main Street East for Otay Ranch Village 8 West. This pressure reducing station will provide a redundant source of recycled water during high water demands for the new housing development. • On Tuesday, September 19th and Thursday, September 21st, Water Systems staff performed a mock shutdown on Proctor Valley Road and Campo Road in Jamul to identify system valve conditions for an upcoming capital improvement project (CIP) to replace a thin wall steel main that is approaching the end of its useful life. Three Date Meters (Budgeted) Meters Sold (Actual) EDUs (Budgeted) EDUs Sold (Actual) Total $ (Budgeted) Total $ Collected (Actual) September 2023 23.4 69 73 154 $955,391 $2,192,386 Totals FY 2024 70.3 96 219.1 296.5 $2,866,172 $4,139,693 14 (3) 12-inch mainline valves and one (1) 6-inch fire hydrant valve on Maxfield and Proctor Valley Road were identified with excessive leak by. One 12-inch valve and the six-inch fire hydrant valve will be replaced in a scheduled shutdown on Tuesday, October 24th. • On Monday, September 25th, Water Systems staff reported several failures in the SCADA notification system. SCADA staff immediately worked with IT staff to find the fault and identified that there was a communication failure on the secondary redundant SCADA alarm notification system due to a hardware update. IT staff immediately began troubleshooting to resolve the problem. During the outage period, SCADA and IT staff ensured that the alerting system was operating within the required range using the primary notification system as the main component for SCADA alarm notifications is meeting the daily demands of the system. • On Tuesday, September 26th, Water Systems staff performed a mock shutdown on the Steel Canyon Road bridge in El Cajon to identify system valve conditions for an upcoming shutdown, scheduled Thursday, October 26th, to inspect interior pipe coating on the 20- inch steel main. The mock shutdown indicated that the valves were in good condition. • The following events occurred on Wednesday, September 27th: o The District hosted the first Interagency Collaborative Information Committee Meeting with 10 regional water agencies in attendance. The Committee’s goals are to share knowledge, network, skills development, collaboration opportunities, share resources, problem solving, education, and outreach opportunities. A round table discussion on asset management was held, which resulted in active participation from all attendees. The meeting was successful, and it was agreed to schedule future meetings every three months. o The Treatment Plant hosted a site tour for the instructor and students enrolled in a wastewater treatment class from the Center for Water Studies at Cuyamaca College. The Reclamation Plant Supervisor conducted the tour, and the tour was well received by the students and the instructor. This was the second tour staff has conducted for Cuyamaca College this year. • On Saturday, September 30th, Utility Maintenance staff responded to an emergency one-inch copper service leak at 2575 Pine Glen Lane in El Cajon. Staff replaced the copper service and backfilled the same day. 15 • The following events occurred on Sunday, October 1st: o Water System staff reported a failure on the four-inch San Miguel Pressure Reducing Station. This is an important pressure reducing station since it provides water from the 711-pressure zone to the 580-pressure zone. Pump Mechanics were dispatched to the site and found that the valve was damaged when a fire hydrant was knocked down in the vicinity and debris entered into the body of the four-inch Cla-Valve and proceeded to completely rebuild it. The problem was resolved, and the pressure reducer was returned to operation. o Utility Maintenance staff responded to an emergency one-inch copper service leak at 1702 Porterfield Place in El Cajon. Staff replaced the copper service and backfilled the same day. • On Monday, October 2nd and Tuesday, October 3rd, Water Systems staff filled the 1004-2 Reservoir to operating level after the recoating work for CIP P2567 was completed. It was placed back in service on Friday, October 6th after all required water quality samples and required approvals were obtained. • On Wednesday, October 4th, staff completed the replacement of the compressor at the 1050 Hydro Station. The replacement was necessary to prevent a major failure that could affect the operation of the Hydro Station since moisture was found in the motor oil during preventive maintenance performed. The compressor operated until replaced and staff established a program of frequent site visits to continuously purge the compressor and drain the water from the compressor to prevent a failure. Staff consulted with the Engineering Department to search for and procure the proper size and best option for replacement based on current water system demands. The purpose of a compressor is to keep compressed air in a hydro-pneumatic tank to store water under pressure. The air acts as a cushion that can absorb or apply pressure as needed to maintain water demand on the pressure zone. • On Friday, October 6th, SCADA/Pump/Electrical staff assisted Water Systems staff to place 1004 Pump Station back in service for CIP P2567. The work included starting the pumps, setting up the SCADA transmitter on the reservoir, adjusting the SCADA pump system, pressure set at the relief valve, adjustments on control valves, and starting the reservoir recirculation pump. This pump station was not operating because the 1004 Reservoir was undergoing re- coating work. During the period of this work, a pumping trailer equipped with a Variable Frequency Drive (VFD) was set up to keep up with the water demands of the area for approximately 10 months. The VFD trailer plays an important role in the success of the recoating CIP project because it allows the pressure zone to run in a closed system. The VFD trailer is fully automated and supplies 16 pressure and flow as needed. With the VFD trailer online, it allows the District to take the 1004-2 Reservoir offline with no customer impact. • On Tuesday, October 10th, Water Systems staff assisted with flushing the inlet and outlet to the 485-1 Reservoir for CIP P2614. The contractor recoating the reservoir also began the interior wash down and cleaning. • On Friday, October 13th, Water Systems staff performed a mock shutdown on Siempre Viva Road and Cactus Road in Otay Mesa. This mock shutdown was required for an upcoming developer project for tie-ins of new pipelines. The mock shutdown tests were inconclusive due to all of the valves having excessive leak by over 100 gallons per minute, and additional mock shutdowns are required and will be performed at a later date. • On Saturday, October 14th, Utility Maintenance staff responded to an emergency one-inch poly service leak at 1247 Calle Santiago in Chula Vista. Staff made a temporary repair to stop the leak by replacing a 10-foot section under the sidewalk with one-inch copper. Staff returned on Monday, October 16th to finish the replacement to the main with a one-inch copper. • On Monday, October 16th, the bi-yearly maintenance began of the floating reservoir covers on the 711-3, 624-1, 571-1 and 870-1 Reservoirs, and included the yearly maintenance of the 927-1 and 944-1 Recycled Reservoirs. This maintenance is performed to ensure floating cover liners remain in good working order and to perform any needed maintenance on floating cover appurtenances. This maintenance also helps prolong the useful life of the floating covers and is a regulatory maintenance requirement for the potable floating cover reservoirs. • During this period: o Electricians completed oil sampling at 10 pump stations with 50 samples. This work is part of the new efficiency projects in the SCADA/Pump/Electrical section, which consists of testing and analyzing oil in a laboratory to see the condition of the oil and determine if an oil change is needed in the electric motors. This work is expected to result in annual savings for the District. o Pump Mechanics completed vibration testing at the following 16 Pump Stations: 1050 Pump Station, 1100 Hydro Station, 1200-1 Pump Station, 1296 Pump Station, 1485 Pump Station, 1655 Pump Station, 711-1 Pump Station, 803 Pump Station, 832-1 Pump Station, 850 Pump Station, 870-2 Pump Station, 944-1 Pump 17 Station, 927 Pump Station, 978 Pump Station, 980-1 Pump Station, and 980-2 Pump Station. The digital information collected was sent to a District vendor for analysis and reporting. Vibration testing allows the District to schedule required repairs and acquire needed parts. It also identifies faulty equipment offline before a hazardous condition occurs. o Fleet Mechanics performed four generator site tests. The generator site tests are performed annually to ensure function reliability in case of a power outage since they provide auxiliary power during power outages to operate the pump stations. Two deficiencies were noted, one multifunction HOA switch failed and was replaced at Hidden Mountain Sewer Lift Station. Four bulk tank filters were plugged in and replaced at the 803/850 Pump Stations. • Fleet Mechanics performed quarterly APCD emissions tests at 870-1 Pump Station and 927-1 Effluent Pump Station, no issues were found. Purchase and Change Orders: • The following table summarizes purchases and change orders issued during the period from September 19 through October 12, 2023, that were within staff signatory authority: Date Action Amount Project Contractor/ Consultant/Vendor 09/19/2023 P.O. $8,715.03 OFFICE FURNITURE CULTURA 09/19/2023 P.O. $26,000.00 FY24 INVESTMENT ADVISOR FOR DEFERRED COMP PLANS SAGEVIEW ADVISORY GROUP, LLC 09/28/2023 P.O. $5,200.00 GATES INSTALLED AT THE HMA ALL AROUND FENCE, INC. 09/29/2023 P.O. $4,950.00 CMIS FOR THE 870-2 PUMP STATION WARRANTY RESOLUTION P2083) ARCADIS U.S., INC. 09/29/2023 P.O. $3,419.88 ALARM AND ACCESS SERVICE WATCHLIGHT CORPORATION 10/02/2023 P.O. $12,562.84 FY24 PALO ALTO FIREWALL SFTW SUBSCRIPTION & SUPPORT RENEWAL NTH GENERATION COMPUTING, INC 10/05/2023 P.O. $10,000.00 FY24 AS-NEEDED SCADA SUPPORT SERVICES FREEDOM AUTOMATION, INC 10/06/2023 P.O. $20,000.00 FY24 UNMANNED AIRCRAFT SYSTEMS (UAS) PROGRAM SERVICES TEEDEEUAS, LLC 18 Water Conservation and Sales: • Water Conservation – September 2023 usage was 24% lower than September 2013 usage. Since September 2022, customers have saved an average of 17% over 2013 levels. • Potable Water Purchases – The September potable water purchases were 2,538 acre-feet which is 18.0% below the budget of 3,094 acre- feet. Cumulative purchases for the year are 8,208 acre-feet, 9.5% under the year-to-date budget of 9,073 acre-feet. 10/10/2023 P.O. $28,490.22 ANNUAL HARDWARE MAINTENANCE GHA TECHNOLOGIES, INC 10/12/2023 P.O. $66,276.57 FY24 WORKERS' COMP PROGRAM (QTR 1) ACWA JPIA 19 • Recycled Water Purchases – The September recycled water purchases from the City of San Diego and production at the District’s treatment facility were 333 acre-feet which is 33.7% below the budget of 502 acre-feet. Cumulative purchases and production for the year are 1244 acre-feet, 18.4% under the year-to-date budget of 1,525 acre-feet. • Temperatures for the month of September were approximately 5 degrees under the historical average, reducing consumption for the month of September. Rainfall for the month of September can be seen in the table below. Rainfall September Y-T-D Actual 0.05 0.14 Three-year Historical Average 0.38 0.46 Variance -0.33 (-86.8%) -0.32 (-69.6%) Potable, Recycled, and Sewer (Reporting up to the month of September): • Total number of potable water meters: 51,781. • Total number of sewer connections: 4,751. • Recycled water consumption for the month of September: o Total consumption: 371.39 acre-feet or 121,009,944 gallons. o Average daily consumption: 4,033,664 gallons per day. 20 o Total cumulative recycled water consumption since September 1, 2022: 1,317.4 acre-feet. o Total number of recycled water meters: 789. • Wastewater flows for the month of September: o Total basin flow: 1,727,133 gallons per day. ▪ This is an increase of 12.13 percent from September 2022. o Spring Valley Sanitation District flows to Metro: 575,711 gallons per day. o Total Otay flow: 1,151,367 gallons per day. o Flow processed at the Ralph W. Chapman Water Recycling Facility: 605,733 gallons per day. o Flow to Metro from Otay Water District: 545,633 gallons per day. o By the end of September there were 6,752 wastewater EDUs. Exhibit A Annual YTD REVENUES: Budget Actual Budget Variance Var % Potable Water Sales 70,298,000$ 19,340,839$ 21,927,000$ (2,586,161)$ (11.8%) Recycled Water Sales 10,906,000 3,571,788 4,287,234 (715,446) (16.7%) Potable Energy Charges 2,916,000 825,580 884,500 (58,920) (6.7%) Potable System Charges 13,011,000 3,159,944 3,141,000 18,944 0.6% Potable MWD & CWA Fixed Charges 13,746,000 3,340,048 3,330,000 10,048 0.3% Potable Penalties and Other Fees 978,000 258,909 309,439 (50,530) (16.3%) Total Water Sales 111,855,000 30,497,108 33,879,173 (3,382,065) (10.0%) Sewer Charges 3,468,000 861,342 858,000 3,342 0.4% Meter Fees 168,000 78,644 42,000 36,644 87.2% Capacity Fee Revenues 2,352,000 734,680 588,000 146,680 24.9% Non-Operating Revenues 2,770,600 625,575 649,800 (24,225) (3.7%) Tax Revenues 6,243,000 204,945 157,000 47,945 30.5% Interest 1,091,000 294,200 272,700 21,500 7.9% Total Revenues 127,947,600$ 33,296,494$ 36,446,673$ (3,150,179)$ (8.6%) EXPENSES: Potable Water Purchases 48,147,000$ 13,198,304$ 14,588,600$ 1,390,296$ 9.5% Recycled Water Purchases 5,798,000 2,555,798 2,555,798 - 0.0% CWA-Infrastructure Access Charge 3,146,000 776,442 776,400 (42) (0.0%) CWA-Customer Service Charge 1,971,000 483,591 483,600 9 0.0% CWA-Reliability Charge 3,235,000 784,347 784,500 153 0.0% CWA-Emergency Storage Charge 4,865,000 1,196,613 1,196,700 87 0.0% MWD-Capacity Res Charge 562,000 159,450 159,300 (150) (0.1%) MWD-Readiness to Serve Charge 654,000 155,082 163,500 8,418 5.1% Subtotal Water Purchases 68,378,000 19,309,627 20,708,398 1,398,771 6.8% Power Charges 4,285,000 1,453,634 1,406,500 (47,134) (3.4%) Payroll & Related Costs 24,590,600 6,195,220 6,490,400 295,180 4.5% Materials & Maintenance 4,824,900 1,162,809 1,206,100 43,291 3.6% Administrative Expenses 8,585,300 1,662,696 2,136,399 473,703 22.2% Legal Fees 357,000 119,643 89,400 (30,243) (33.8%) Expansion Reserve 4,320,000 1,080,000 1,080,000 - 0.0% Betterment Reserve 2,562,000 640,500 640,500 - 0.0% Replacement Reserve 8,774,800 2,193,600 2,193,600 - 0.0% OPEB Trust 1,270,000 317,400 317,400 - 0.0% Total Expenses 127,947,600$ 34,135,129$ 36,268,697$ 2,133,568$ 5.9% EXCESS REVENUES(EXPENSE) -$ (838,635)$ 177,976$ (1,016,611)$ OTAY WATER DISTRICT COMPARATIVE BUDGET SUMMARY FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2023 F:/MORPT/FS2024-P3.xlsx 10/31/2023 7:27 AM The year-to-date deficit of $838,635 is $1,016,611 less than the budgeted surplus of $177,976. COMPARATIVE BUDGET SUMMARY NET REVENUE AND EXPENSES FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2023 ‐$1,600,000 ‐$1,400,000 ‐$1,200,000 ‐$1,000,000 ‐$800,000 ‐$600,000 ‐$400,000 ‐$200,000 $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN YTD Actual Net Revenues YTD Budget Net Revenues YTD Variance in Net Revenues OTAY WATER DISTRICT INVESTMENT PORTFOLIO REVIEW September 30, 2023 INVESTMENT OVERVIEW & MARKET STATUS: At the Federal Reserve Board's regular meeting on July 26, 2023, the Committee increased the target range for the federal funds rate from 5.25% to 5.50%. There have been no further changes made to the federal funds rate at the most recent meeting which was held on September 20, 2023. Recent indicators show modest growth in spending and production, and job gains, while the unemployment rate remains low, and inflation remains elevated. The Committee will closely monitor incoming information and assess the implications for monetary policy. The Committee's long-term goal is to attain maximum employment and inflation of 2%. The Committee will continue to reduce its holdings of Treasury securities, agency debt, and agency mortgage-backed securities, as outlined in the Plans for Reducing the Size of the Federal Reserve's Balance Sheet issued in May 2022. The Committee will continue to observe the effects of incoming information on the economic outlook. In determining the timing and size of future adjustments to the target range for the federal funds rate, they went on to say: "The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments." The District's effective rate of return for September 2023 was 3.83%, nine basis points higher than the previous month. LAIF's return was ten basis points higher than the last month, reaching an average effective yield of 3.53% for September 2023. Based on our success at maintaining a competitive rate of return on our portfolio during this period of increasing interest rates, no changes in investment strategy regarding returns on investment are being considered. Under the District's Investment Policy, all District funds continue to be managed based on the objectives, in priority order, of safety, liquidity, and return on investment. PORTFOLIO COMPLIANCE: September 30, 2023 Investment State Limit Otay Limit Otay Actual 8.01: Treasury Securities 100% 100% 4.60% 8.02: Local Agency Investment Fund (Operations) $75 Million $75 Million $18.82 Million 8.03: Federal Agency Issues 100% 100% 63.16% 8.04: Certificates of Deposit 30% 15% 0 8.05: Short-Term Commercial Notes 25% 10% 0 8.06: Medium-Term Commercial Debt 30% 10% 0 8.07: Money Market Mutual Funds 20% 10% 0.12% 8.08: San Diego County Pool 100% 100% 14.27% 12.0: Maximum Single Financial Institution 100% 50% 0.51% $557,724 0.51% $34,313,011 31.61% $73,690,144 67.88% Otay Water District Investment Portfolio: 09/30/2023 Banks (Passbook/Checking/CD)Pools (LAIF & County)Agencies,Treasury Securities & Money Market Mutual Funds Total Cash and Investments: $108,560,879 (Book Value) July FY23 Aug FY23 Sep FY23 1st Qtr FY23 Oct FY23 Nov FY23 Dec FY23 2nd Qtr FY23 Jan FY23 Feb FY23 Mar FY23 3rd Qtr FY23 Apr FY23 May FY23 June FY23 4th Qtr FY23 Jul FY24 Aug FY24 Sep FY24 1st Qtr FY24 Otay 1.32 1.46 1.74 1.50 2.06 2.52 2.91 2.49 3.00 3.44 3.46 3.30 3.65 3.58 3.74 3.66 3.71 3.74 3.83 3.76 LAIF 1.09 1.28 1.51 1.29 1.77 2.01 2.17 1.98 2.43 2.62 2.83 2.63 2.87 2.99 3.17 3.01 3.31 3.43 3.53 3.42 Difference 0.23 0.18 0.23 0.21 0.29 0.51 0.74 0.51 0.57 0.82 0.63 0.67 0.78 0.59 0.57 0.65 0.40 0.31 0.30 0.34 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 Re t u r n o n I n v e s t m e n t s Month Performance Measure FY-24 Return on Investment Otay LAIF Difference Target: Meet or Exceed 100% of LAIF Month End Portfolio Management September 30, 2023 Portfolio Summary % of Portfolio Book ValueInvestmentsMarket Value Par Value Days to MaturityTerm YTM 360 Equiv. YTM 365 Equiv. Federal Agency Issues- Callable 24,996,273.68 56523.14 4.06022324,787,880.0025,000,000.00 4.116 Treasury Securities - Coupon 4,998,737.98 2214.63 4.96715,000,000.005,000,000.00 5.035 Federal Agency Issues - Bullet 43,566,746.41 73740.34 3.80639842,647,970.9643,796,000.00 3.859 Money Market 128,386.95 10.12 5.1451128,386.95128,386.95 5.216 Local Agency Investment Fund (LAIF)18,822,087.10 117.43 3.486118,564,370.1718,822,087.10 3.534 San Diego County Pool 15,490,923.59 114.34 3.344115,040,000.0015,490,923.59 3.390 108,003,155.71 100.00%Investments 106,168,608.08108,237,397.64 439 213 3.798 3.850 Cash (not included in yield calculations) Passbook/Checking 557,723.58 1 0.6691557,723.58557,723.58 0.678 108,560,879.29Total Cash and Investments 106,726,331.66108,795,121.22 439 213 3.798 3.850 Current Year September 30 338,449.61 Fiscal Year To Date 1,034,423.15 Average Daily Balance Effective Rate of Return 107,509,267.52 109,287,335.66 3.76%3.83% Total Earnings Month Ending I hereby certify that the investments contained in this report are made in accordance with the District Investment Policy Number 27 adopted by the Board of Directors on May 03, 2023. The investments provide sufficient liquidity to meet the cash flow requirements of the District for the next six months of expenditures. __________________________________________________ ____________________ Joseph Beachem, Chief Financial Officer Portfolio OTAY NL! APData Updated: SET_PM1: 10/24/2023 16:17 Reporting period 09/01/2023-09/30/2023 Run Date: 10/24/2023 - 16:18 PM (PRF_PM1) 7.3.11 Report Ver. 7.3.11 10/26/2023 YTM 360 Page 1 Par Value Book Value Maturity Date Stated RateMarket Value September 30, 2023 Portfolio Details - Investments Average BalanceIssuer Portfolio Management Month End Days to MaturityMoody'sCUSIP Investment # Purchase Date Federal Agency Issues- Callable 1.294Federal Home Loan Bank2395 2,000,000.00 1,996,273.68 07/26/20241.08002/03/2022 1,927,960.00 Aaa3130AQL68 299 1.973Federal Home Loan Bank2396 2,000,000.00 2,000,000.00 03/28/20242.00003/30/2022 1,966,060.00 Aaa3130ARE31 179 2.615Federal Home Loan Bank2398 2,000,000.00 2,000,000.00 02/16/20242.65005/16/2022 1,978,300.00 Aaa3130ARWD9 138 3.652Federal Home Loan Bank2401 3,000,000.00 3,000,000.00 06/13/20243.70009/13/2022 2,964,180.00 Aaa3130AT4S3 256 4.818Federal Home Loan Bank2412 5,000,000.00 5,000,000.00 10/27/20234.87501/27/2023 4,997,200.00 P-13130AUGF5 26 4.942Federal Home Loan Bank2415 5,000,000.00 5,000,000.00 01/05/20245.00004/05/2023 4,991,500.00 P-13130AVKB7 96 4.932Federal Home Loan Mortgage2406 3,000,000.00 3,000,000.00 04/25/20255.00010/25/2022 2,979,480.00 Aaa3134GX6A7 572 5.055Federal Home Loan Mortgage2408 3,000,000.00 3,000,000.00 11/22/20245.12511/28/2022 2,983,200.00 Aaa3134GY3P5 418 24,996,273.6824,787,880.0025,000,000.0024,996,090.53Subtotal and Average 4.060 223 Treasury Securities - Coupon 4.967US TREASURY2414 5,000,000.00 4,998,737.98 10/02/20230.25002/23/2023 5,000,000.00 Aaa91282CDA6 1 4,998,737.985,000,000.005,000,000.004,990,198.32Subtotal and Average 4.967 1 Federal Agency Issues - Bullet 2.855Federal Farm Credit Bank2397 2,000,000.00 1,995,677.22 04/25/20252.75004/26/2022 1,921,680.00 Aaa3133ENVC1 572 4.261Federal Farm Credit Bank2402 3,000,000.00 2,996,105.42 09/30/20254.25009/30/2022 2,949,180.00 Aaa3133ENP95 730 4.488Federal Farm Credit Bank2405 3,000,000.00 2,994,799.89 10/17/20244.37510/19/2022 2,955,000.00 Aaa3133ENS43 382 4.284Federal Farm Credit Bank2410 3,000,000.00 2,996,740.06 12/20/20244.25012/20/2022 2,958,060.00 Aaa3133EN4N7 446 3.449Federal Home Loan Bank2400 3,000,000.00 2,997,565.47 06/14/20243.37509/08/2022 2,953,110.00 Aaa3130AT4D6 257 4.338Federal Home Loan Bank2404 3,000,000.00 2,999,400.88 09/13/20244.37510/18/2022 2,969,970.00 Aaa3130ATND5 348 4.724Federal Home Loan Bank2411 2,000,000.00 1,999,837.83 12/15/20234.75012/20/2022 1,996,380.00 Aaa3130AUBA1 75 4.912Federal Home Loan Bank2413 5,000,000.00 5,000,148.41 11/08/20235.00002/10/2023 4,997,250.00 P-13130AUUB8 38 4.928Federal Home Loan Bank2417 4,000,000.00 4,000,000.00 02/28/20255.00007/03/2023 3,980,000.00 Aaa3130AV7L0 516 0.612Federal Home Loan Mortgage2391 1,045,000.00 1,039,986.60 09/23/20250.37509/16/2021 952,789.20 Aaa3137EAEX3 723 0.618Federal Home Loan Mortgage2392 2,751,000.00 2,737,529.61 09/23/20250.37509/22/2021 2,508,251.76 Aaa3137EAEX3 723 0.996Federal National Mortage Assoc2393 2,000,000.00 2,015,299.87 01/07/20251.62512/09/2021 1,908,660.00 Aaa3135G0X24 464 1.129Federal National Mortage Assoc2394 2,000,000.00 1,973,610.10 11/07/20250.50012/15/2021 1,818,760.00 Aaa3135G06G3 768 4.787Federal National Mortage Assoc2416 8,000,000.00 7,820,045.05 07/02/20241.75005/26/2023 7,778,880.00 Aaa3135GOV75 275 43,566,746.4142,647,970.9643,796,000.0043,556,085.31Subtotal and Average 3.806 398 Money Market 5.158Blackrock T - Fund Inst9010 12,545.47 12,545.47 5.23007/01/2023 12,545.47RESERVE-10A WRB 1 5.158Blackrock T - Fund Inst9011 27,117.14 27,117.14 5.23007/01/2023 27,117.14RESERVE 10 BABS 1 5.139FIRST AMERICAN US TREASURY9016 88,724.34 88,724.34 5.21007/01/2023 88,724.34OWD TRUST & CUS 1 Portfolio OTAY NL! APData Updated: SET_PM1: 10/24/2023 16:17 Run Date: 10/24/2023 - 16:18 PM (PRF_PM2) 7.3.11 Report Ver. 7.3.11 YTM 360 Page 2 Par Value Book Value Maturity Date Stated RateMarket Value September 30, 2023 Portfolio Details - Investments Average BalanceIssuer Portfolio Management Month End Days to MaturityMoody'sCUSIP Investment # Purchase Date 128,386.95128,386.95128,386.95513,776.28Subtotal and Average 5.145 1 Local Agency Investment Fund (LAIF) 3.486STATE OF CALIFORNIA9001 18,822,087.10 18,822,087.10 3.53418,564,370.17LAIF 1 18,822,087.1018,564,370.1718,822,087.1016,285,420.43Subtotal and Average 3.486 1 San Diego County Pool 3.344San Diego County9007 15,490,923.59 15,490,923.59 3.39015,040,000.00SD COUNTY POOL 1 15,490,923.5915,040,000.0015,490,923.5915,418,709.76Subtotal and Average 3.344 1 107,509,267.52 108,237,397.64 3.798 213106,168,608.08 108,003,155.71Total and Average Portfolio OTAY NL! APData Updated: SET_PM1: 10/24/2023 16:17 Run Date: 10/24/2023 - 16:18 PM (PRF_PM2) 7.3.11 YTM 360 Page 3 Par Value Book Value Stated RateMarket Value September 30, 2023 Portfolio Details - Cash Average BalanceIssuer Portfolio Management Month End Days to MaturityMoody'sCUSIP Investment # Purchase Date US Bank 0.009STATE OF CALIFORNIA9002 0.00 0.00 0.00907/01/2023 0.00US BANK MONEY 1 0.000STATE OF CALIFORNIA9003 2,950.00 2,950.002,950.00PETTY CASH 1 0.740STATE OF CALIFORNIA9004 504,474.87 504,474.87 0.750504,474.87OPERATING 1 0.000STATE OF CALIFORNIA9005 33,382.03 33,382.0307/01/2023 33,382.03PAYROLL 1 0.000STATE OF CALIFORNIA9014 16,916.68 16,916.6807/01/2023 16,916.68FLEX ACCT 1 0.00 107,509,267.52 108,795,121.22 3.798 213 1Average Balance 106,726,331.66 108,560,879.29Total Cash and Investments Portfolio OTAY NL! APData Updated: SET_PM1: 10/24/2023 16:17 Run Date: 10/24/2023 - 16:18 PM (PRF_PM2) 7.3.11 Month End Activity Report Sorted By Issuer September 1, 2023 - September 30, 2023 Current Rate Transaction Date Balance Beginning Balance Ending Par Value Percent of Portfolio Par Value CUSIP Investment # Issuer Purchases or Deposits Redemptions or Withdrawals Issuer: Blackrock T - Fund Inst Money Market Blackrock T - Fund Inst9010 2,006.085.230 0.00RESERVE-10A WRB Blackrock T - Fund Inst9011 5,255.005.230 0.00RESERVE 10 BABS 0.0032,401.53 39,662.61Subtotal and Balance 7,261.08 7,261.08 0.0032,401.53 39,662.610.036%Issuer Subtotal Issuer: STATE OF CALIFORNIA US Bank STATE OF CALIFORNIA9004 338,881.650.750 1,229,154.28OPERATING STATE OF CALIFORNIA9014 190.74 5,123.49FLEX ACCT 1,234,277.771,452,928.96 557,723.58Subtotal and Balance 339,072.39 Local Agency Investment Fund (LAIF) STATE OF CALIFORNIA9001 15,200,000.003.534 9,500,000.00LAIF 9,500,000.0013,122,087.10 18,822,087.10Subtotal and Balance 15,200,000.00 15,539,072.39 10,734,277.7714,575,016.06 19,379,810.6817.813%Issuer Subtotal Issuer: FIRST AMERICAN US TREASURY Money Market FIRST AMERICAN US TREASURY9016 3,137,444.965.210 3,245,000.00OWD TRUST & CUS 3,245,000.00196,279.38 88,724.34Subtotal and Balance 3,137,444.96 3,137,444.96 3,245,000.00196,279.38 88,724.340.082%Issuer Subtotal Issuer: Federal Farm Credit Bank Federal Agency Issues - Bullet 11,000,000.00 11,000,000.00Subtotal and Balance Portfolio OTAY NL! APData Updated: SET_PM1: 10/24/2023 16:17 Run Date: 10/24/2023 - 16:18 DA (PRF_DA) 7.3.11 Report Ver. 7.3.11 Current Rate Transaction Date Balance Beginning Balance Ending Par Value Page 2 Percent of Portfolio Par Value September 1, 2023 - September 30, 2023 Activity Report Month End CUSIP Investment # Issuer Purchases or Deposits Redemptions or Withdrawals 0.00 0.0011,000,000.00 11,000,000.0010.111%Issuer Subtotal Issuer: Federal Home Loan Bank Federal Agency Issues- Callable 19,000,000.00 19,000,000.00Subtotal and Balance Federal Agency Issues - Bullet Federal Home Loan Bank2399 0.003.375 09/01/2023 3,000,000.003130AT5B9 3,000,000.0020,000,000.00 17,000,000.00Subtotal and Balance 0.00 0.00 3,000,000.0039,000,000.00 36,000,000.0033.090%Issuer Subtotal Issuer: Federal Home Loan Mortgage Federal Agency Issues- Callable 6,000,000.00 6,000,000.00Subtotal and Balance Federal Agency Issues - Bullet 3,796,000.00 3,796,000.00Subtotal and Balance 0.00 0.009,796,000.00 9,796,000.009.004%Issuer Subtotal Issuer: Federal National Mortage Assoc Federal Agency Issues - Bullet 12,000,000.00 12,000,000.00Subtotal and Balance 0.00 0.0012,000,000.00 12,000,000.0011.030%Issuer Subtotal Issuer: San Diego County San Diego County Pool San Diego County9007 77,371.963.390 0.00SD COUNTY POOL 0.0015,413,551.63 15,490,923.59Subtotal and Balance 77,371.96 77,371.96 0.0015,413,551.63 15,490,923.5914.239%Issuer Subtotal Issuer: US TREASURY Portfolio OTAY NL! APData Updated: SET_PM1: 10/24/2023 16:17 Run Date: 10/24/2023 - 16:18 DA (PRF_DA) 7.3.11 Report Ver. 7.3.11 Current Rate Transaction Date Balance Beginning Balance Ending Par Value Page 3 Percent of Portfolio Par Value September 1, 2023 - September 30, 2023 Activity Report Month End CUSIP Investment # Issuer Purchases or Deposits Redemptions or Withdrawals Issuer: US TREASURY Treasury Securities - Coupon 5,000,000.00 5,000,000.00Subtotal and Balance 0.00 0.005,000,000.00 5,000,000.004.596%Issuer Subtotal 107,013,248.60 108,795,121.22Total 16,979,277.7718,761,150.39100.000% Portfolio OTAY NL! APData Updated: SET_PM1: 10/24/2023 16:17 Run Date: 10/24/2023 - 16:18 DA (PRF_DA) 7.3.11 Report Ver. 7.3.11 Month End Duration Report Sorted by Investment Type - Investment Type Through 09/30/2023 Investment #Security ID Issuer Investment Class Book Value Par Value Market Value Current Rate YTM Current Yield Maturity/ Call Date Duration Modified 360Fund Federal Home Loan Bank2395 99 2,000,000.00 1,927,960.003130AQL68 5.642 07/26/2024 0.7941,996,273.68 1.294Fair 1.0800000 Federal Home Loan Bank2396 99 2,000,000.00 1,966,060.003130ARE31 5.525 03/28/2024 0.4902,000,000.00 1.973Fair 2.0000000 Federal Home Loan Bank2398 99 2,000,000.00 1,978,300.003130ARWD9 5.564 02/16/2024 0.3782,000,000.00 2.615Fair 2.6500000 Federal Home Loan Bank2401 99 3,000,000.00 2,964,180.003130AT4S3 5.470 06/13/2024 0.6723,000,000.00 3.652Fair 3.7000000 Federal Home Loan Mortgage2406 99 3,000,000.00 2,979,480.003134GX6A7 5.464 04/25/2025 1.4543,000,000.00 4.932Fair 5.0000000 Federal Home Loan Mortgage2408 99 3,000,000.00 2,983,200.003134GY3P5 5.645 11/22/2024 1.0753,000,000.00 5.055Fair 5.1250000 Federal Home Loan Bank2412 99 5,000,000.00 4,997,200.003130AUGF5 5.511 10/27/2023 0.0715,000,000.00 4.818Fair 4.8750000 Federal Home Loan Bank2415 99 5,000,000.00 4,991,500.003130AVKB7 5.588 01/05/2024 0.2635,000,000.00 4.942Fair 5.0000000 US TREASURY2414 99 5,000,000.00 5,000,000.0091282CDA6 5.035 10/02/2023 0.0004,998,737.98 4.967Fair .25000000 Federal Home Loan Mortgage2391 99 1,045,000.00 952,789.203137EAEX3 5.123 09/23/2025 1.9221,039,986.60 0.612Fair .37500000 Federal Home Loan Mortgage2392 99 2,751,000.00 2,508,251.763137EAEX3 5.123 09/23/2025 1.9222,737,529.61 0.618Fair .37500000 Federal National Mortage Assoc2393 99 2,000,000.00 1,908,660.003135G0X24 5.406 01/07/2025 1.2212,015,299.87 0.996Fair 1.6250000 Federal National Mortage Assoc2394 99 2,000,000.00 1,818,760.003135G06G3 5.106 11/07/2025 2.0341,973,610.10 1.129Fair .50000000 Federal Farm Credit Bank2397 99 2,000,000.00 1,921,680.003133ENVC1 5.391 04/25/2025 1.4851,995,677.22 2.855Fair 2.7500000 Federal Home Loan Bank2400 99 3,000,000.00 2,953,110.003130AT4D6 5.683 06/14/2024 0.6752,997,565.47 3.449Fair 3.3750000 Federal Farm Credit Bank2402 99 3,000,000.00 2,949,180.003133ENP95 5.152 09/30/2025 1.8862,996,105.42 4.261Fair 4.2500000 Federal Home Loan Bank2404 99 3,000,000.00 2,969,970.003130ATND5 5.473 09/13/2024 0.9142,999,400.88 4.338Fair 4.3750000 Federal Farm Credit Bank2405 99 3,000,000.00 2,955,000.003133ENS43 5.879 10/17/2024 0.9832,994,799.89 4.488Fair 4.3750000 Federal Farm Credit Bank2410 99 3,000,000.00 2,958,060.003133EN4N7 5.456 12/20/2024 1.1562,996,740.06 4.284Fair 4.2500000 Federal Home Loan Bank2411 99 2,000,000.00 1,996,380.003130AUBA1 5.552 12/15/2023 0.2051,999,837.83 4.724Fair 4.7500000 Federal Home Loan Bank2413 99 5,000,000.00 4,997,250.003130AUUB8 17.248 11/08/2023 0.1045,000,148.41 4.912Fair 5.0000000 Federal National Mortage Assoc2416 99 8,000,000.00 7,778,880.003135GOV75 5.554 07/02/2024 0.7287,820,045.05 4.787Fair 1.7500000 Federal Home Loan Bank2417 99 4,000,000.00 3,980,000.003130AV7L0 5.377 02/28/2025 1.3354,000,000.00 4.928Fair 5.0000000 Blackrock T - Fund Inst9010 99 12,545.47 12,545.47RESERVE-10A 5.230 0.00012,545.47 5.158Amort 5.2300000 Blackrock T - Fund Inst9011 99 27,117.14 27,117.14RESERVE 10 5.230 0.00027,117.14 5.158Amort 5.2300000 FIRST AMERICAN US TREASURY9016 99 88,724.34 88,724.34OWD TRUST & 5.210 0.00088,724.34 5.139Amort 5.2100000 Portfolio OTAY NL! AP Page 1 Data Updated: SET_PM1: 10/24/2023 16:17 Run Date: 10/24/2023 - 16:18 DU (PRF_DU) 7.3.11 Report Ver. 7.3.11 Investment #Security ID Issuer Investment Class Book Value Par Value Market Value Current Rate YTM Current Yield Maturity/ Call Date Duration Modified 360 Sorted by Investment Type - Investment Type Duration Report Month End Through 09/30/2023 Fund STATE OF CALIFORNIA9001 99 18,822,087.10 18,564,370.17LAIF 3.534 0.00018,822,087.10 3.486Fair 3.5340000 San Diego County9007 99 15,490,923.59 15,040,000.00SD COUNTY 3.390 0.00015,490,923.59 3.344Fair 3.3900000 5.381 0.550108,003,155.71 108,237,397.64 106,168,608.08Report Total † = Duration can not be calculated on these investments due to incomplete Market price data. Portfolio OTAY NL! AP Page 2 Data Updated: SET_PM1: 10/24/2023 16:17 Run Date: 10/24/2023 - 16:18 DU (PRF_DU) 7.3.11 Report Ver. 7.3.11 Month End GASB 31 Compliance Detail Sorted by Fund - Fund September 1, 2023 - September 30, 2023 Investment #Maturity Date Beginning Invested Value Purchase of Principal Investment ClassFundCUSIP Adjustment in Value Ending Invested Value Addition to Principal Redemption of Principal Amortization Adjustment Change in Market Value Fund: Treasury Fund 2391 953,499.80Fair Value 09/23/2025 -710.6099 952,789.203137EAEX3 0.00 0.00 0.00 0.00 2406 2,980,320.00Fair Value 04/25/2025 -840.0099 2,979,480.003134GX6A7 0.00 0.00 0.00 0.00 2408 2,982,300.00Fair Value 11/22/2024 900.0099 2,983,200.003134GY3P5 0.00 0.00 0.00 0.00 2392 2,510,122.44Fair Value 09/23/2025 -1,870.6899 2,508,251.763137EAEX3 0.00 0.00 0.00 0.00 2393 1,908,980.00Fair Value 01/07/2025 -320.0099 1,908,660.003135G0X24 0.00 0.00 0.00 0.00 2394 1,822,160.00Fair Value 11/07/2025 -3,400.0099 1,818,760.003135G06G3 0.00 0.00 0.00 0.00 2416 7,755,680.00Fair Value 07/02/2024 23,200.0099 7,778,880.003135GOV75 0.00 0.00 0.00 0.00 2401 2,962,950.00Fair Value 06/13/2024 1,230.0099 2,964,180.003130AT4S3 0.00 0.00 0.00 0.00 2404 2,972,640.00Fair Value 09/13/2024 -2,670.0099 2,969,970.003130ATND5 0.00 0.00 0.00 0.00 2395 1,920,580.00Fair Value 07/26/2024 7,380.0099 1,927,960.003130AQL68 0.00 0.00 0.00 0.00 2396 1,960,300.00Fair Value 03/28/2024 5,760.0099 1,966,060.003130ARE31 0.00 0.00 0.00 0.00 2400 2,950,590.00Fair Value 06/14/2024 2,520.0099 2,953,110.003130AT4D6 0.00 0.00 0.00 0.00 2413 4,994,350.00Fair Value 11/08/2023 2,900.0099 4,997,250.003130AUUB8 0.00 0.00 0.00 0.00 2398 1,973,820.00Fair Value 02/16/2024 4,480.0099 1,978,300.003130ARWD9 0.00 0.00 0.00 0.00 2399 3,000,000.00Fair Value 09/01/2023 0.0099 0.003130AT5B9 0.00 0.00 3,000,000.00 0.00 2415 4,988,200.00Fair Value 01/05/2024 3,300.0099 4,991,500.003130AVKB7 0.00 0.00 0.00 0.00 2412 4,992,800.00Fair Value 10/27/2023 4,400.0099 4,997,200.003130AUGF5 0.00 0.00 0.00 0.00 2417 3,999,160.00Fair Value 02/28/2025 -19,160.0099 3,980,000.003130AV7L0 0.00 0.00 0.00 0.00 2411 1,994,420.00Fair Value 12/15/2023 1,960.0099 1,996,380.003130AUBA1 0.00 0.00 0.00 0.00 9014 21,849.43Amortized 0.0099 16,916.68FLEX ACCT 0.00 190.74 5,123.49 0.00 9001 12,923,005.34Fair Value -58,635.1799 18,564,370.17LAIF 0.00 15,200,000.00 9,500,000.00 0.00 9004 1,394,747.50Amortized 0.0099 504,474.87OPERATING 0.00 338,881.65 1,229,154.28 0.00 9003 2,950.00Amortized 0.0099 2,950.00PETTY CASH 0.00 0.00 0.00 0.00 9005 33,382.03Amortized 0.0099 33,382.03PAYROLL 0.00 0.00 0.00 0.00 2405 2,957,460.00Fair Value 10/17/2024 -2,460.0099 2,955,000.003133ENS43 0.00 0.00 0.00 0.00 2402 2,961,210.00Fair Value 09/30/2025 -12,030.0099 2,949,180.003133ENP95 0.00 0.00 0.00 0.00 2397 1,924,160.00Fair Value 04/25/2025 -2,480.0099 1,921,680.003133ENVC1 0.00 0.00 0.00 0.00 2410 2,962,620.00Fair Value 12/20/2024 -4,560.0099 2,958,060.003133EN4N7 0.00 0.00 0.00 0.00 2414 4,979,550.00Fair Value 10/02/2023 20,450.0099 5,000,000.0091282CDA6 0.00 0.00 0.00 0.00 9007 14,979,000.00Fair Value -16,371.9699 15,040,000.00SD COUNTY POOL 0.00 77,371.96 0.00 0.00 9016 196,279.38Amortized 0.0099 88,724.34OWD TRUST & CUS 0.00 3,137,444.96 3,245,000.00 0.00 Portfolio OTAY NL! APData Updated: SET_PM1: 10/24/2023 16:17 Run Date: 10/24/2023 - 16:18 GD (PRF_GD) 7.3.11 Report Ver. 7.3.11 Investment #Maturity Date Beginning Invested Value Purchase of Principal Investment Class Sorted by Fund - Fund Fund Page 2 CUSIP Adjustment in Value Ending Invested Value Addition to Principal Redemption of Principal Amortization Adjustment Change in Market Value GASB 31 Compliance Detail Month End Fund: Treasury Fund 9010 10,539.39Amortized 0.0099 12,545.47RESERVE-10A WRB 0.00 2,006.08 0.00 0.00 9011 21,862.14Amortized 0.0099 27,117.14RESERVE 10 BABS 0.00 5,255.00 0.00 0.00 104,991,487.45Subtotal -47,028.41 106,726,331.660.00 18,761,150.39 16,979,277.77 0.00 104,991,487.45Total 106,726,331.66-47,028.410.00 18,761,150.39 16,979,277.77 0.00 Portfolio OTAY NL! APData Updated: SET_PM1: 10/24/2023 16:17 Run Date: 10/24/2023 - 16:18 GD (PRF_GD) 7.3.11 Report Ver. 7.3.11 Month End Interest Earnings Sorted by Fund - Fund September 1, 2023 - September 30, 2023 Yield on Beginning Book Value Maturity Date Current Rate Ending Par Value EndingSecurity TypeFund Book Value Beginning Book Value Adjusted Interest Earnings Accretion Amortization/ Earnings Adjusted InterestAnnualized YieldCUSIP Investment # Interest Earned Fund: Treasury Fund 1,039,986.602391 1,045,000.00 0.375FAC 09/23/2025 326.56 211.24 537.800.62999 1,039,775.363137EAEX3 3,000,000.002406 3,000,000.00 5.000MC1 04/25/2025 12,500.00 0.00 12,500.005.06999 3,000,000.003134GX6A7 3,000,000.002408 3,000,000.00 5.125MC1 11/22/2024 12,812.50 0.00 12,812.505.19699 3,000,000.003134GY3P5 2,737,529.612392 2,751,000.00 0.375FAC 09/23/2025 859.69 567.58 1,427.270.63499 2,736,962.033137EAEX3 2,015,299.872393 2,000,000.00 1.625FAC 01/07/2025 2,708.33 -1,006.57 1,701.761.02799 2,016,306.443135G0X24 1,973,610.102394 2,000,000.00 0.500FAC 11/07/2025 833.33 1,047.22 1,880.551.16099 1,972,562.883135G06G3 7,820,045.052416 8,000,000.00 1.750FAC 07/02/2024 11,666.67 19,921.21 31,587.884.92799 7,800,123.843135GOV75 3,000,000.002401 3,000,000.00 3.700MC1 06/13/2024 9,250.00 0.00 9,250.003.75199 3,000,000.003130AT4S3 2,999,400.882404 3,000,000.00 4.375FAC 09/13/2024 10,937.50 52.56 10,990.064.45899 2,999,348.323130ATND5 1,996,273.682395 2,000,000.00 1.080MC1 07/26/2024 1,800.00 378.94 2,178.941.32899 1,995,894.743130AQL68 2,000,000.002396 2,000,000.00 2.000MC1 03/28/2024 3,333.33 0.00 3,333.332.02899 2,000,000.003130ARE31 2,997,565.472400 3,000,000.00 3.375FAC 06/14/2024 8,437.50 288.68 8,726.183.54299 2,997,276.793130AT4D6 5,000,148.412413 5,000,000.00 5.000FAC 11/08/2023 20,833.34 -120.34 20,713.005.04099 5,000,268.753130AUUB8 2,000,000.002398 2,000,000.00 2.650MC1 02/16/2024 4,416.67 0.00 4,416.672.68799 2,000,000.003130ARWD9 0.002399 0.00 3.375FAC 09/01/2023 0.00 0.00 0.0099 3,000,000.003130AT5B9 5,000,000.002415 5,000,000.00 5.000MC1 01/05/2024 20,833.33 0.00 20,833.335.06999 5,000,000.003130AVKB7 5,000,000.002412 5,000,000.00 4.875MC1 10/27/2023 20,312.50 0.00 20,312.504.94399 5,000,000.003130AUGF5 4,000,000.002417 4,000,000.00 5.000FAC 02/28/2025 16,666.66 0.00 16,666.665.06999 4,000,000.003130AV7L0 1,999,837.832411 2,000,000.00 4.750FAC 12/15/2023 7,916.66 65.75 7,982.414.85799 1,999,772.083130AUBA1 16,916.689014 16,916.68PA1 0.00 0.00 0.0099 21,849.43FLEX ACCT 18,822,087.109001 18,822,087.10 3.534LA1 47,303.57 0.00 47,303.574.38699 13,122,087.10LAIF 504,474.879004 504,474.87 0.750PA1 1,042.72 0.00 1,042.720.91099 1,394,747.50OPERATING 2,950.009003 2,950.00PA1 0.00 0.00 0.0099 2,950.00PETTY CASH 33,382.039005 33,382.03PA1 0.00 0.00 0.0099 33,382.03PAYROLL 2,994,799.892405 3,000,000.00 4.375FAC 10/17/2024 10,937.50 414.90 11,352.404.61399 2,994,384.993133ENS43 2,996,105.422402 3,000,000.00 4.250FAC 09/30/2025 10,625.00 162.50 10,787.504.38199 2,995,942.923133ENP95 1,995,677.222397 2,000,000.00 2.750FAC 04/25/2025 4,583.33 229.94 4,813.272.93599 1,995,447.283133ENVC1 2,996,740.062410 3,000,000.00 4.250FAC 12/20/2024 10,625.00 222.78 10,847.784.40499 2,996,517.283133EN4N7 4,998,737.982414 5,000,000.00 0.250TRC 10/02/2023 990.44 18,299.27 19,289.714.71299 4,980,438.7191282CDA6 15,490,923.599007 15,490,923.59 3.390LA3 42,961.17 0.00 42,961.173.39199 15,413,551.63SD COUNTY POOL Portfolio OTAY NL! APData Updated: SET_PM1: 10/24/2023 16:17 Run Date: 10/24/2023 - 16:18 IE (PRF_IE) 7.3.11 Report Ver. 7.3.11 Maturity Date Current Rate Ending Par Value EndingSecurity TypeFund Page 2 Book Value Beginning Book Value Adjusted Interest Earnings Accretion Amortization/ Earnings Adjusted Interest September 1, 2023 - September 30, 2023 Interest Earnings Month End Annualized YieldCUSIP Investment # Interest Earned Fund: Treasury Fund 88,724.349016 88,724.34 5.210PA2 2,054.63 0.00 2,054.6312.73699 196,279.38OWD TRUST & CUS 12,545.479010 12,545.47 5.230PA2 47.19 0.00 47.195.44899 10,539.39RESERVE-10A WRB 27,117.149011 27,117.14 5.230PA2 98.83 0.00 98.835.50099 21,862.14RESERVE 10 BABS 108,795,121.22Subtotal 108,560,879.29 3.793 338,449.6140,735.66297,713.95106,738,271.01 108,795,121.22Total 108,560,879.29 3.793 338,449.6140,735.66297,713.95106,738,271.01 Portfolio OTAY NL! APData Updated: SET_PM1: 10/24/2023 16:17 Run Date: 10/24/2023 - 16:18 IE (PRF_IE) 7.3.11 Report Ver. 7.3.11 SUMMARY FOR PERIOD 9/21/2023 - 10/18/2023 NET DEMANDS CHECKS (2060597 - 2060755)$ 1,904,336.26 VOID CHECKS (0)$ 0.00 TOTAL CHECKS $ 1,904,336.26 WIRE TO: BENEFITS COORDINATORS - DENTAL BENEFITS ADMIN FEE FOR CLAIMS (SEPT 2023)$ 663.91 BENEFITS COORDINATORS - DENTAL BENEFITS PREM ADMIN FEES (SEPT 2023)$ 266.25 BENEFITS COORDINATORS - DENTAL CLAIMS (SEPT 2023)$ 9,909.00 CALPERS - CERBT CONTRIBUTIONS FY24(OPEB)$ 94,888.42 CITY TREASURER - RECLAIMED WATER PURCHASE (SEPT 2023)$ 282,675.12 OTAY WATER DISTRICT - BI-WEEKLY PAYROLL DEDUCTION $ 665.00 OTAY WATER DISTRICT - BI-WEEKLY PAYROLL DEDUCTION $ 679.00 PUBLIC EMPLOYEES RET SYSTEM - BI-WEEKLY PERS CONTRIBUTION $ 122,348.97 PUBLIC EMPLOYEES RET SYSTEM - BI-WEEKLY PERS CONTRIBUTION $ 123,549.21 SAN DIEGO COUNTY WATER AUTH - WATER DELIVERIES & CHARGES (AUG 2023)$ 5,437,293.50 US BANK - BI-WEEKLY PAYROLL TAXES $ 186,026.88 US BANK - BI-WEEKLY PAYROLL TAXES $ 175,517.10 US BANK - CAL CARD EXPENSES (MONTHLY)$ 220,826.85 VOYA FINANCIAL - BI-WEEKLY 401A & 457 PLAN $ 72,953.94 VOYA FINANCIAL - BI-WEEKLY 401A & 457 PLAN $ 35,085.04 TOTAL CASH DISBURSEMENTS $ 8,667,684.45 RECOMMENDED ACTION: That the Board received the attached list of demands. Jb/Attachment PURPOSE: Attached is the list of demands for the Board's information. FISCAL IMPACT: STAFF REPORT TYPE MEETING: SUBMITTED BY: APPROVED BY: APPROVED BY: SUBJECT: Regular Board Eid Fakhouri, Finance Manager, Treasury & Accounting Services Joseph Beachem, Chief Financial Officer Jose Martinez, General Manager Accounts Payable Demand List MEETING DATE: W.O./G.F. NO:DIV. NO. November 8, 2023 Check Total 2,612.90 250.00 1,030.56 1,030.56 2060693 10/11/23 22093 CARLOS ROMERO 100423 10/04/23 EXPENSE REIMBURSEMENT 250.00 ELECTRICAL ENGINEERING SERV (JULY 2023)7,219.20 7,219.20 2060612 09/27/23 22078 CAL ATLANTIC GROUP INC Ref002708323 09/22/23 UB Refund Cst #0000268324 2060692 10/11/23 14112 BSE ENGINEERING INC 22075411403 07/31/23 13,040.05 2060611 09/27/23 14112 BSE ENGINEERING INC 22075411404 08/31/23 ELECTRICAL ENGINEERING SERV (AUG 2023)3,020.40 3,020.40 302.11 302.11 2060691 10/11/23 08156 BROWNSTEIN HYATT FARBER 986783 09/30/23 LEGISLATIVE ADVOCACY CONSULTING SERV 13,040.05 UB Refund Cst #0000291076 7.91 7.91 2060711 10/18/23 21775 BRINKS INC 12426794 10/01/23 ARMORED TRANSPORTATION SERVICES FY24 2060678 10/11/23 22107 BRIAN HAAGENSEN Ref002708450 10/06/23 1,021.90 2060710 10/18/23 00145 BARRETT ENGINEERED PUMPS 130773 09/29/23 624-3 PS REPAIR PUMP #2 7,185.25 7,185.25 8,578.00 8,578.00 2060690 10/11/23 22106 B&T SERVICE STATION CONTRACTOR Ref002708449 10/06/23 UB Refund Cst #0000286287 1,021.90 WELDING WORK 4,620.00 4,620.00 2060709 10/18/23 20125 AZTEC LANDSCAPING INC J1613 09/30/23 JANITORIAL SERVICES FY24 2060638 10/04/23 21369 AUBREY FIELD WELDING 0380 09/12/23 66,276.57 2060637 10/04/23 07785 AT&T 00002050792 09/12/23 TELEPHONE SERVICES (8/12/2023-9/11/2023)3,958.67 3,958.67 3,567.14 3,567.14 2060708 10/18/23 20199 ASSOC OF CA WATER AGENCIES QTR 1 WC 10/03/23 FY24 WORKERS' COMP PROGRAM (QTR 1)66,276.57 2023 EMPLOYEE EVENT 200.00 200.00 2060636 10/04/23 03492 AQUA-METRIC SALES COMPANY 0096872 09/13/23 OMNI V2 W/ BUTTERFLY VALVE 2060707 10/18/23 22108 ANTONIO RUIZ SOTO DEPOSIT 10/17/23 29.26 2060689 10/11/23 21096 ANTHONY BERRY 2917100623 10/06/23 CUSTOMER REFUND 315.42 315.42 395.00 395.00 2060597 09/27/23 22081 ANGELA BANZHOFF Ref002708326 09/22/23 UB Refund Cst #0000277039 29.26 UB Refund Cst #0000203530 366.94 366.94 2060610 09/27/23 21387 AMERICAN FENCE CORP 2503442 09/01/23 TEMP FENCE RENTAL 2060609 09/27/23 22074 ALTA PARCELS LP Ref002708319 09/22/23 1,636.64 9142212056 09/19/23 AS-NEEDED AQUA AMMONIA FY24 771.15 9142211794 09/19/23 AS-NEEDED AQUA AMMONIA FY24 205.11 INTERNET CIRCUITS (SEPT 2023)1,323.91 1,323.91 2060635 10/04/23 07732 AIRGAS SPECIALTY PRODUCTS INC 9142212055 09/19/23 AS-NEEDED AQUA AMMONIA FY24 2060706 10/18/23 18122 ACC BUSINESS 232605959 09/27/23 614.78 2060634 10/04/23 08488 ABLEFORCE INC 11881 10/02/23 SHAREPOINT & INTRANET SUPP SVCS FY24 1,800.00 1,800.00 Amount 2060705 10/18/23 15416 24 HOUR ELEVATOR INC 152199 10/17/23 ELEVATOR GENERAL MAINTENANCE FY24 614.78 CHECK REGISTER Otay Water District Date Range: 9/21/2023 - 10/18/2023 Check #Date Vendor Vendor Name Invoice Inv. Date Description Page 1 of 8 4,470.00 193E635940923 10/04/23 SHUT DOWN TEST (9/22/23)226.00 193E638040923 10/04/23 DEVELOPER INSPECTION (9/7/23)226.00 193E619540923 10/04/23 SHUT DOWN TEST (9/15/23)226.00 193E639080923 10/04/23 SHUT DOWN TEST (9/21/23-9/22/23)339.00 193E602200923 10/04/23 SHUT DOWN TEST (9/27/23)271.20 193E602150923 10/04/23 SHUT DOWN TEST (9/27/23-9/28/23)384.20 193E602160923 10/04/23 SHUT DOWN TEST (9/27/23-9/28/23)361.60 193E602420923 10/04/23 SHUT DOWN TEST (9/27/23-9/28/23)384.20 193E602370923 10/04/23 SHUT DOWN TEST (9/27/23-9/28/23)384.20 193E602500923 10/04/23 SHUT DOWN TEST (9/26/23-9/27/23)565.00 193E602120923 10/04/23 SHUT DOWN TEST (9/27/23-9/28/23)406.80 264.50 264.50 2060721 10/18/23 00184 COUNTY OF SAN DIEGO 193E639410923 10/04/23 DEVELOPER INSPECTION (9/8/23; 9/15/23)565.00 UB Refund Cst #0000290188 645.53 645.53 2060720 10/18/23 00099 COUNTY OF SAN DIEGO DPWMWD0823 09/28/23 EXCAVATION PERMITS (AUG 2023) 2060614 09/27/23 22085 CORRPRO CO INC Ref002708330 09/22/23 9,266.50 2060719 10/18/23 15049 CORELOGIC SOLUTIONS LLC 82189892 09/30/23 DATA SERV - REALQUEST PROPERTY DATA 540.75 540.75 100.00 100.00 2060718 10/18/23 18331 CORE & MAIN LP T606515 09/26/23 INVENTORY 9,266.50 REFUND FOR SEWER ANNEX 2,450.13 2,450.13 2060717 10/18/23 20894 COFFMAN ENGINEERS INC 212362 10/03/23 CORROSION SERVICES (5/26/23-9/25/23) 2060716 10/18/23 22109 CLAUDIA & JIM L CADE ANX23005 10/12/23 33106 09/30/23 BACTERIOLOGICAL TESTING (9/25/23)250.00 33101 09/30/23 BACTERIOLOGICAL TESTING (9/14/23)145.00 33104 09/30/23 BACTERIOLOGICAL TESTING (9/19/23)290.00 33105 09/30/23 BACTERIOLOGICAL TESTING (9/21/23)250.00 33099 09/30/23 BACTERIOLOGICAL TESTING (9/7/23-9/9/23)430.00 33102 09/30/23 BACTERIOLOGICAL TESTING (9/14/23-9/16/23)325.00 33100 09/30/23 BACTERIOLOGICAL TESTING (9/11/23-9/12/23)660.00 33103 09/30/23 BACTERIOLOGICAL TESTING (9/18/23-9/19/23)660.00 578.93 578.93 2060715 10/18/23 04119 CLARKSON LAB & SUPPLY INC 33098 09/30/23 BACTERIOLOGICAL TESTING (8/28/23-9/1/23)1,460.00 UB Refund Cst #0000063901 88.44 88.44 2060613 09/27/23 21050 CHULA VISTA ELEMENTARY SCHOOL AR054292 09/20/23 WATER CONSERVATION BUS TRANSPORT 2060679 10/11/23 22098 CHRISTY ALLEN Ref002708441 10/06/23 400.00 2060640 10/04/23 19833 CHARLES F NEUMAN 007 09/18/23 OUTSIDE SERVICES - PHOTOGRAPHY SERV 2,100.00 2,100.00 1,200.24 1,200.24 2060714 10/18/23 19833 CHARLES F NEUMAN 008 09/25/23 OUTSIDE SERVICES - PHOTOGRAPHY SERV 400.00 CLASS 7 & 8 DUMP TRUCKS 151,418.81 151,418.81 2060639 10/04/23 22089 CHARLES COON 1919100423 10/04/23 CUSTOMER REFUND 2060713 10/18/23 21675 CERTIFIED STAINLESS SERV INC D00894 09/25/23 2060712 10/18/23 21414 CDCE INCORPORATED 141764 09/26/23 TOUGHBOOKS FY24 2,101.13 2,101.13 Page 2 of 8 6,010.20 1,405.38 45,993.10 29,935.75 134.19 150.00 150.00 2060726 10/18/23 11962 FLEETWASH INC Q88690 09/29/23 FLEETWASH FY24 134.19 DOCUMENT SERVICE FY24 99.00 99.00 2060725 10/18/23 02591 FITNESS TECH 12517 10/01/23 GYM EQUIPMENT MAINTENANCE FY24 0835344 09/15/23 DI FITTINGS, SPOOLS, AND HARDWARE 7,460.72 2060724 10/18/23 17888 FIRST AMERICAN DATA TREE LLC 9003400923 09/30/23 INVENTORY 13,776.21 0836143 09/19/23 CLA-VAL PARTS 8,698.82 2060646 10/04/23 03546 FERGUSON WATERWORKS # 1083 0836694 09/19/23 0837979 10/03/23 INVENTORY 4,913.40 0836852 09/25/23 2" OVAL FLANGE METER GASKETS 1,336.10 0827900 09/27/23 INVENTORY 9,600.53 0835273 09/22/23 INVENTORY 7,111.50 INVENTORY 13,091.63 0836614 09/27/23 INVENTORY 9,939.94 165949771 09/20/23 VISION BENEFITS ADMIN (SEPT 2023)27.83 2060723 10/18/23 03546 FERGUSON WATERWORKS # 1083 0814932 09/27/23 55.81 2060645 10/04/23 20511 EYEMED (FIDELITY)165949409 09/20/23 VISION BENEFITS ADMIN (SEPT 2023)1,377.55 107.37 107.37 2060600 09/27/23 22072 EVELYN ROMERO Ref002708316 09/22/23 UB Refund Cst #0000124694 55.81 UB Refund Cst #0000176825 70.00 70.00 2060681 10/11/23 22099 ERIN MARMION Ref002708442 10/06/23 UB Refund Cst #0000120652 2060599 09/27/23 16414 ERIC BANKER Ref002708317 09/22/23 96.54 2060615 09/27/23 20794 ENTISYS 360 201966 09/20/23 MS SOFTWARE MAINTENANCE RENEWAL 3,182.51 3,182.51 243.31 243.31 2060598 09/27/23 22071 EDMUNDO GUERINA Ref002708315 09/22/23 UB Refund Cst #0000036368 96.54 UB Refund Cst #0000223900 507.42 507.42 2060644 10/04/23 02447 EDCO DISPOSAL CORPORATION 5458 093023 09/30/23 RECYCLED WASTE SERVICE FY24 2060680 10/11/23 22101 DOUGLAS LATHREM Ref002708444 10/06/23 6,536.77 2060643 10/04/23 21128 DAVIS FARR LLP 15106 09/15/23 AUDIT SERVICES FY23 FINANCIAL STMT 14,000.00 14,000.00 2,645.27 2,645.27 2060722 10/18/23 11797 D&H WATER SYSTEMS INC 2023-1334 09/22/23 ACUTEC 35 AMMONIA SENSORS 6,536.77 CRANE QUARTERLY PM SERV INSPECT 500.00 500.00 2060642 10/04/23 11797 D&H WATER SYSTEMS INC 2023-1292 09/14/23 CHEMICAL FEED SYSTEM PARTS 2060641 10/04/23 04497 D & R CRANE INC 16731 09/13/23 193E638400923 10/04/23 SHUT DOWN TEST (9/8/23)113.00 193E633760923 10/04/23 DEVELOPER INSPECTION (9/8/23)89.00 193E639580923 10/04/23 SHUT DOWN TEST (9/28/23)226.00 193E632660923 10/04/23 DEVELOPER INSPECTION (9/13/23)113.00 193E639600923 10/04/23 SHUT DOWN TEST (9/29/23)226.00 193E639590923 10/04/23 SHUT DOWN TEST (9/28/23)226.00 193E639070923 10/04/23 SHUT DOWN TEST (9/29/23)226.00 193E639610923 10/04/23 SHUT DOWN TEST (9/29/23)226.00 193E636720923 10/04/23 SHUT DOWN TEST (9/15/23)226.00 Page 3 of 8 2,073.52 31,572.38 24,942.17 3,797.50 35,439.00 35,439.00 WATER FACILITIES MASTER PLAN (JUNE 2023)4,965.00 4,965.00 2060618 09/27/23 02008 HELIX ENVIRONMENTAL 119945 08/25/23 ENVIRONMENTAL SERVICES (AUG 2023) 2060649 10/04/23 18436 HAZEN AND SAWYER DPC 2009400619 07/12/23 WATER FACILITIES MASTER PLAN (JULY 2023)2,397.50 2009405A5 09/29/23 WATER FACILITIES MASTER PLAN (AUG 2023)1,400.00 920579 09/21/23 AS-NEEDED SODIUM HYPOCHLORITE FY24 693.41 2060729 10/18/23 18436 HAZEN AND SAWYER DPC 2009400620 09/28/23 920353 09/20/23 AS-NEEDED SODIUM HYPOCHLORITE FY24 1,209.78 921851 09/27/23 AS-NEEDED SODIUM HYPOCHLORITE FY24 958.97 922668 10/02/23 AS-NEEDED SODIUM HYPOCHLORITE FY24 1,416.33 920581 09/21/23 AS-NEEDED SODIUM HYPOCHLORITE FY24 1,227.49 922176 09/28/23 AS-NEEDED SODIUM HYPOCHLORITE FY24 2,876.92 920578 09/21/23 AS-NEEDED SODIUM HYPOCHLORITE FY24 1,528.46 921135 09/25/23 AS-NEEDED SODIUM HYPOCHLORITE FY24 3,505.42 920584 09/21/23 AS-NEEDED SODIUM HYPOCHLORITE FY24 3,354.93 AS-NEEDED SODIUM HYPOCHLORITE FY24 4,130.97 920582 09/21/23 AS-NEEDED SODIUM HYPOCHLORITE FY24 4,039.49 2060728 10/18/23 19978 HASA INC.922178 09/28/23 918956 09/14/23 AS-NEEDED SODIUM HYPOCHLORITE FY24 1,017.99 917164 09/07/23 AS-NEEDED SODIUM HYPOCHLORITE FY24 855.70 917170 09/07/23 AS-NEEDED SODIUM HYPOCHLORITE FY24 1,563.87 918646 09/13/23 AS-NEEDED SODIUM HYPOCHLORITE FY24 1,380.92 917163 09/07/23 AS-NEEDED SODIUM HYPOCHLORITE FY24 1,953.36 916815 09/06/23 AS-NEEDED SODIUM HYPOCHLORITE FY24 1,681.89 917168 09/07/23 AS-NEEDED SODIUM HYPOCHLORITE FY24 2,154.00 918957 09/14/23 AS-NEEDED SODIUM HYPOCHLORITE FY24 2,035.98 918960 09/14/23 AS-NEEDED SODIUM HYPOCHLORITE FY24 3,549.68 917165 09/07/23 AS-NEEDED SODIUM HYPOCHLORITE FY24 3,540.83 4,449.64 918959 09/14/23 AS-NEEDED SODIUM HYPOCHLORITE FY24 3,732.62 917946 09/11/23 AS-NEEDED SODIUM HYPOCHLORITE FY24 3,655.90 MONOCHLORAMINE ANALYZER SUPPLIES 4,623.92 4,623.92 2060648 10/04/23 19978 HASA INC.919682 09/18/23 AS-NEEDED SODIUM HYPOCHLORITE FY24 2060617 09/27/23 00174 HACH COMPANY 13722807 08/31/23 5500SC ANALYZER SUPPLIES FY24 1,671.83 13756766 09/28/23 5500SC ANALYZER SUPPLIES FY24 401.69 2060727 10/18/23 00174 HACH COMPANY 13760327 09/29/23 88.50 2060683 10/11/23 22096 GREGORY STICKNEY Ref002708439 10/06/23 UB Refund Cst #0000008682 134.23 134.23 100.00 100.00 2060682 10/11/23 22100 GLENNA DITTAMORE Ref002708443 10/06/23 UB Refund Cst #0000184088 88.50 BI-WEEKLY PAYROLL DEDUCTION 100.00 100.00 2060694 10/11/23 22008 FRANCHISE TAX BOARD Ben2708479 10/12/23 BI-WEEKLY PAYROLL DEDUCTION 2060616 09/27/23 22008 FRANCHISE TAX BOARD Ben2708350 09/28/23 2060647 10/04/23 11962 FLEETWASH INC Q77939 09/08/23 FLEETWASH FY24 275.75 275.75 Page 4 of 8 120.78 20,577.39 15,055.60 11,606.52 REFUND FOR POTABLE METER 16,395.79 16,395.79206069610/11/23 22088 NABIL SOMO MTR19206 10/04/23 170.84 2060686 10/11/23 22105 MURSAID KUSHALIYEV Ref002708448 10/06/23 UB Refund Cst #0000284874 54.35 54.35 900.00 900.00 2060695 10/11/23 22091 MUJDE T EVIZI 885810062023 10/06/23 CUSTOMER REFUND 170.84 UB Refund Cst #0000026581 109.85 109.85 2060736 10/18/23 21723 MERINO LANDSCAPE INC 11083 09/30/23 ADMIN LANDSCAPE UPGRADE MAINTENANCE 2060685 10/11/23 22097 MAX SCRIVENS Ref002708440 10/06/23 2,401.09 2060605 09/27/23 22080 MATTHEW ZAFRA Ref002708325 09/22/23 UB Refund Cst #0000276992 35.66 35.66 26,778.71 26,778.71 2060604 09/27/23 22076 MARIA ISABEL MORENO Ref002708321 09/22/23 UB Refund Cst #0000240867 2,401.09 UB Refund Cst #0000290990 1,609.37 1,609.37 2060620 09/27/23 18905 M RAE ENGINEERING INC 00019471 09/18/23 RETAINAGE RELEASE 2060619 09/27/23 22086 LUSARDI CONSTRUCTION Ref002708331 09/22/23 600.00 2060684 10/11/23 22102 LUIS DUKES Ref002708445 10/06/23 UB Refund Cst #0000265135 90.50 90.50 64.52 64.52 2060735 10/18/23 21524 LINDSAY POLIC CONSULTING INC 4008 10/02/23 SAFETY WALKWAY INSPECT/CONSULT 600.00 EXPENSE REIMBURSEMENT 549.00 549.00 2060603 09/27/23 22075 LEON BROOKS Ref002708320 09/22/23 UB Refund Cst #0000204492 23-119-3R 08/22/23 RETAINAGE RELEASE 713.63 2060654 10/04/23 14808 KOEPPEN, KEVIN 092723 09/27/23 AS-NEEDED PAVING SERVICES FY24 9,826.75 23-119-5 09/07/23 AS-NEEDED PAVING SERVICES FY24 1,066.14 2060653 10/04/23 05840 KIRK PAVING INC 23-119-4 09/07/23 AS-NEEDED PAVING SERVICES FY24 14,599.60 23-119-7 09/22/23 AS-NEEDED PAVING SERVICES FY24 456.00 2060734 10/18/23 05840 KIRK PAVING INC 23-119-6 09/22/23 35.75 2060733 10/18/23 20835 KENNY CONSULTING SERV INC KCS0724427 10/02/23 IN-PLANT INSPECTION SERVICES (SEPT 2023)411.00 411.00 40.65 40.65 2060602 09/27/23 22073 JASON EVERT Ref002708318 09/22/23 UB Refund Cst #0000195210 35.75 ANTENNA SUBLEASE FY24 2,243.00 2,243.00 2060601 09/27/23 22083 JAMIE WAHL Ref002708328 09/22/23 UB Refund Cst #0000283326 2060652 10/04/23 20752 IWG TOWERS ASSETS II LLC 4375863 10/01/23 248276 09/29/23 BILL PROCESSING SERVICES FY24 3,707.59 248619 10/02/23 BILL PROCESSING SERVICES FY24 3,152.62 15,181.00 2060732 10/18/23 08969 INFOSEND INC 242877 09/29/23 BILL PROCESSING SERVICES FY24 13,717.18 2,733.54 2,733.54 2060651 10/04/23 13349 HUNSAKER & ASSOCIATES 32023080004 09/07/23 LAND SURVEYING (AUG 2023)15,181.00 METER READING RECEIVER 4,135.95 4,135.95 2060731 10/18/23 21322 HPS WEST INC.0002222 10/03/23 4" MASTER METER OCTAVE 54283101023 10/05/23 WATER USAGE (8/8/23-10/05/23)60.39 2060650 10/04/23 21322 HPS WEST INC.0002198 09/19/23 35,439.00 35,439.00 2060730 10/18/23 00062 HELIX WATER DISTRICT 433000101023 10/10/23 WATER USAGE (8/8/23-10/5/23)60.39 2060618 09/27/23 02008 HELIX ENVIRONMENTAL 119945 08/25/23 ENVIRONMENTAL SERVICES (AUG 2023) Page 5 of 8 8,500.11 12,670.76 13,723.78 275.00 125.00 125.00 2060698 10/11/23 00003 SAN DIEGO COUNTY WATER AUTH 10172023 10/10/23 BUSINESS MEETING 275.00 EXPENSE REIMBURSEMENT 438.00 438.00 2060743 10/18/23 02586 SAN DIEGO COUNTY ASSESSOR 202300797 10/09/23 MONTHLY ASSESSOR DATA FY24 2060624 09/27/23 22087 RYAN S KEYES 082823083123 08/31/23 125.00 2060623 09/27/23 21706 ROOIBAARD GROUP LLC RB-03015 09/20/23 STRAT PLAN SOFTWARE REPORTING APP 1,875.00 1,875.00 940.41 940.41 2060742 10/18/23 06412 ROMERO, TANYA 101623 10/16/23 EXPENSE REIMBURSEMENT 125.00 SKID STEER 79,137.65 79,137.65 2060697 10/11/23 19836 RED WING BUSINESS ADV ACCOUNT 1010069504 10/10/23 AS-NEEDED SAFETY BOOTS FY24 2060665 10/04/23 02950 RDO EQUIPMENT CO E0508337 09/29/23 5,131.25 2060606 09/27/23 22077 RAWAA KADHIM Ref002708322 09/22/23 UB Refund Cst #0000259702 22.46 22.46 797.85 797.85 2060664 10/04/23 20861 RAFTELIS 29993 09/14/23 WATER & SEWER COST OF SERVICE STUDIES 5,131.25 PIPELINE OBSERVE SYST MGMT SFTW SUPP 5,500.00 5,500.00 2060663 10/04/23 21580 PRISM 24400840 10/02/23 EMPLOYEE ASSISTANCE PROG (OCT 2023) 2060662 10/04/23 16208 POSM SOFTWARE LLC 3487 09/13/23 1,980.00 2060622 09/27/23 06419 PLANT SOUP INC 1479 08/26/23 OUTSIDE SERVICES - PROFESSIONAL WRITING 1,412.25 1,412.25 4,300.00 4,300.00 2060661 10/04/23 00137 PETTY CASH CUSTODIAN 092823 09/28/23 PETTY CASH REIMBURSEMENT 1,980.00 TOWEL LAUNDRY SERVICE FY24 369.09 369.09 2060660 10/04/23 21783 PARADIGM GEOSPATIAL INC 230905 09/18/23 LAND SURVEYING (8/1/23-9/20/23) S100455514.003 09/26/23 INVENTORY 661.24 2060659 10/04/23 19310 PALM LAUNDRY INC 311 10/01/23 INVENTORY 7,693.35 S100454576.002 09/26/23 INVENTORY 5,369.19 S100455857.001 09/19/23 INVENTORY 185.87 2060741 10/18/23 01002 PACIFIC PIPELINE SUPPLY INC S100451396.002 09/26/23 S100455521.001 09/12/23 INVENTORY 1,973.74 S100455514.001 09/07/23 INVENTORY 580.78 INVENTORY 7,781.83 S100455514.002 09/19/23 INVENTORY 2,148.54 2060658 10/04/23 01002 PACIFIC PIPELINE SUPPLY INC S100455659.001 09/13/23 3,376.67 2060657 10/04/23 17527 OTERO, TENILLE 092123 09/21/23 EXPENSE REIMBURSEMENT 790.83 790.83 1,300.00 1,300.00 2060621 09/27/23 19939 OTAY MESA SALES INC 129088-1 09/08/23 WATER TRUCK RENTAL 3,376.67 8" CLA-VAL 90A PRESSURE REDUCING VALVE 9,671.81 9,671.81 2060656 10/04/23 19636 OT ELECTRICAL 10262 09/19/23 850-2 SITE ILLUMINATION 2060655 10/04/23 21692 ONE STOP BACKFLOW SUPPLY 0000906 09/15/23 4" AND 8" WILKINS 375 REPAIR KITS 6,229.51 0000942 09/28/23 2" 375XL BACKFLOW LF 2,270.60 2060740 10/18/23 21692 ONE STOP BACKFLOW SUPPLY 0000918 09/20/23 120.75 2060739 10/18/23 18332 NV5 INC 352970 10/02/23 ENGINEERING DESIGN SERVICES (AUG 2023)300.00 300.00 9,789.00 9,789.00 2060738 10/18/23 20996 NORTH CAROLINA DEPT OF REVENUE 601397030 10/17/23 WITHHOLDING TAX 3RD QTR 2023 120.75 2060737 10/18/23 17261 NATURESCAPE SERVICES 7590 09/30/23 LANDSCAPE MAINTENANCE SERVICES FY24 Page 6 of 8 108,310.33 186,537.41 163,774.69 30,248.86 TRAVEL/MEAL ADVANCEMENT 189.00 189.00206067110/04/23 08159 TORRES, LEONEL LT100223 10/02/23 899.00 2060670 10/04/23 21144 TORO NETWORK SERVICES CORP 10091 09/30/23 DATACENTER & NETWORK SUPP CONSULT 525.00 525.00 1,522.41 1,522.41 2060749 10/18/23 03236 THE CENTRE FOR ORGANIZATION TCFOE4335 10/03/23 SUPERVISORY TRAINING 899.00 SCADA SYSTEM SUPPORT SERVICES FY24 3,500.00 3,500.00 2060702 10/11/23 21394 TEEDEEUAS LLC Otay 09 09/30/23 UAS PROGRAM SERVICES FY24 2060748 10/18/23 02376 TECHKNOWSION INC 3121 10/06/23 22.92 2060629 09/27/23 22084 TC CONSTRUCTION CO INC Ref002708329 09/22/23 UB Refund Cst #0000285890 1,657.58 1,657.58 1,000.00 1,000.00 2060687 10/11/23 22103 TAMMY JOHNSTON Ref002708446 10/06/23 UB Refund Cst #0000277520 22.92 UB Refund Cst #0000275558 47.93 47.93 2060747 10/18/23 18376 SVPR COMMUNICATIONS LLC 1636 09/30/23 COMMUNICATIONS CONSULTING SVCS FY24 430053 09/13/23 UNLEADED AND DIESEL FUEL 11,575.76 2060608 09/27/23 22079 SUSAN BROUSSARD Ref002708324 09/22/23 11,631.93 11,631.93 2060669 10/04/23 10339 SUPREME OIL COMPANY 429950 09/13/23 UNLEADED AND DIESEL FUEL 18,673.10 UB Refund Cst #0000003558 146.28 146.28 2060668 10/04/23 15974 SUN LIFE FINANCIAL 38166090123 09/01/23 LIFE & STD/LTD INSURANCE (SEPT 2023) 2060701 10/11/23 22095 STREET PROPERTIES Ref002708438 10/06/23 60.00 2060667 10/04/23 20411 STC TRAFFIC INC 6424 09/19/23 TRAFFIC ENGINEERING SERVICES (JULY 2023)12,332.50 12,332.50 4,978.17 4,978.17 2060628 09/27/23 00373 STATE WATER RESOURCE FC092623 09/26/23 SWRCB RECERTIFICATION FEE 60.00 BI-WEEKLY PAYROLL DEDUCTION 553.85 553.85 2060627 09/27/23 19401 SOUTHWEST MILLWORKS INC 7285 09/20/23 WAREHOUSE & PUMP/ELECTRIC MILLWORKS 2060626 09/27/23 21115 SONIA RIVAS Ben2708348 09/28/23 11.49 2060700 10/11/23 21115 SONIA RIVAS Ben2708477 10/12/23 BI-WEEKLY PAYROLL DEDUCTION 553.85 553.85 150.00 150.00 2060607 09/27/23 22082 SHANNON STARZEC Ref002708327 09/22/23 UB Refund Cst #0000283111 11.49 TRAVEL/MEAL ADVANCEMENT 153.00 153.00 2060746 10/18/23 19603 SECURITAS SECURITY SVC USA INC 11452117 09/30/23 ON-DEMAND SECURITY RESPONSE FY24 2060745 10/18/23 07442 SCHULTZ, ALEXANDER AS101323 10/13/23 UTILITY EXPENSES (MONTHLY)163,730.69 100323 10/03/23 UTILITY EXPENSES (MONTHLY)44.00 2060744 10/18/23 00121 SAN DIEGO GAS & ELECTRIC 100923 10/09/23 092623 09/26/23 UTILITY EXPENSES (MONTHLY)1,213.10 092523 09/25/23 UTILITY EXPENSES (MONTHLY)242.39 78,705.45 092823 09/28/23 UTILITY EXPENSES (MONTHLY)54,861.35 092723 09/27/23 UTILITY EXPENSES (MONTHLY)51,515.12 UTILITY EXPENSES (MONTHLY)30,574.75 30,574.75 2060666 10/04/23 00121 SAN DIEGO GAS & ELECTRIC 092523A 09/25/23 UTILITY EXPENSES (MONTHLY) 100223 10/02/23 UTILITY EXPENSES (MONTHLY)36,220.02 2060625 09/27/23 00121 SAN DIEGO GAS & ELECTRIC 092123 09/21/23 275.00 2060699 10/11/23 00121 SAN DIEGO GAS & ELECTRIC 100223A 10/02/23 UTILITY EXPENSES (MONTHLY)72,090.31 2060698 10/11/23 00003 SAN DIEGO COUNTY WATER AUTH 10172023 10/10/23 BUSINESS MEETING 275.00 Page 7 of 8 5,194.95 1,051.26 431,632.90 873.52 250.00 60,571.50 Amount Pd Total:1,904,336.26 Check Grand Total:1,904,336.26159 Checks 10,792.36 2060677 10/04/23 03151 ZHAO, MING MZ100223 10/02/23 TRAVEL/MEAL ADVANCEMENT 189.00 189.00 5.72 5.72 2060676 10/04/23 14857 XYLEM/YSI INCORPORATED 1036666 09/14/23 NITRATE ELECTRODES 10,792.36 EMPLOYEE BENEFITS BILLING ADMIN SERV 847.50 847.50 2060688 10/11/23 22104 XOCHITL HERNANDEZ Ref002708447 10/06/23 UB Refund Cst #0000284489 1736103469360 08/31/23 HYDRAULIC MODELING (AUG 2023)4,710.00 2060704 10/11/23 08023 WORKTERRA 108397 09/26/23 ENGINEERING DESIGN SERVICES (AUG 2023)42,674.00 172998 08/31/23 COTTONWOOD PS REPLACE (AUG 2023)13,187.50 68148 10/03/23 AS-NEEDED BEE REMOVAL FY24 125.00 2060633 09/27/23 19866 WOOD RODGERS INC 1735703027 08/31/23 12,641.25 2060755 10/18/23 01343 WE GOT YA PEST CONTROL INC 67328 09/25/23 AS-NEEDED BEE REMOVAL FY24 125.00 3,419.88 3,419.88 2060754 10/18/23 15726 WATER SYSTEMS CONSULTING INC 8452 09/30/23 HYDRAULIC MODELING (SEPT 2023)12,641.25 SECURITY ALARM MONITORING FY24 2,576.92 2,576.92 2060675 10/04/23 15807 WATCHLIGHT CORPORATION 817493 08/28/23 ALARM AND ACCESS SERVICE 2060753 10/18/23 15807 WATCHLIGHT CORPORATION 822240 10/15/23 483.20 2060632 09/27/23 20909 VOLT WORKFORCE SOLUTIONS 46138808 09/17/23 WATER INTERNS - A. KEEGAN PE 091723 483.20 483.20 483.20 483.20 2060703 10/11/23 20909 VOLT WORKFORCE SOLUTIONS 46168455 10/01/23 WATER INTERNS - A. KEEGAN PE 100123 483.20 CMIS (8/1/23-8/31/23)5,280.00 5,280.00 2060674 10/04/23 20909 VOLT WORKFORCE SOLUTIONS 46151531 09/24/23 WATER INTERNS - A. KEEGAN PE 092423 2060673 10/04/23 08028 VALLEY CONSTRUCTION MANAGEMENT SD222208 09/06/23 PORT. TOILET RENTAL FY24 727.05 02029293 09/19/23 PORT. TOILET RENTAL FY24 146.47 2060631 09/27/23 15675 UNITED SITE SERVICES INC 02031049 09/19/23 09/20/23 1004-2 & 485-1 RES UPGRADES (JULY 2023)293,743.80 708312023 09/20/23 1004-2 & 485-1 RES UPGRADES (AUG 2023)137,889.10 780.00 23241094 10/01/23 DIG SAFE BOARD FEES FY24 271.26 2060630 09/27/23 20409 UNIFIED FIELD SERVICES CORP 607312023 DIG SAFE BOARD FEES FY24 271.26 271.26 2060752 10/18/23 00427 UNDERGROUND SERVICE ALERT 920230505 10/01/23 UNDERGROUND ALERT TICKETS FY24 313973617 09/26/23 TRACER BUILDING AUTOMATION SYS 1,491.39 2060672 10/04/23 00427 UNDERGROUND SERVICE ALERT 23240701 09/08/23 188.64 188.64 2060751 10/18/23 02641 TRANE US INC 313826878 08/02/23 HVAC EQUIPMENT REPLACEMENT 3,703.56 TRAVEL/MEAL ADVANCEMENT 189.00 189.00 2060750 10/18/23 08159 TORRES, LEONEL 101623 10/16/23 MILEAGE REIMBURSEMENT 2060671 10/04/23 08159 TORRES, LEONEL LT100223 10/02/23 Page 8 of 8