SWEETWATER AUTHORITY GOVERNING BOARD 505 GARRETT AVENUE TERESA "TERRY" THOMAS, CHAIR POST OFFICE BOX 2328 RON MORRISON, VICE CHAIR JOSIE CALDERON-SCOTT CHULA VISTA, CALIFORNIA 91912-2328 STEVE CASTANEDA (619) 420-1413 JOSEF. CERDA FAX (619) 425-7469 JOSE PRECIADO http://www.sweetwater.org JESS VANDEVENTER
TISH BERGE GENERAL MANAGER
JENNIFER H. SABINE ASSISTANT GENERAL MANAGER
AGENDA Regular Meeting Governing Board of Sweetwater Authority Wednesday, October 24, 2018 - 3:30 p.m.
• Call Meeting to Order and Roll Call
• Pledge of Allegiance to the Flag Director Cerda
• Opportunity for Public Comment Opportunity for members of the public to address the Board (Government Code Section 54954.6) • Chair's Presentation A. Introduction of New Employees B. Employee Service Awards C. Comments from the Public Regarding Agency Staff
ACTION CALENDAR AGENDA The following items on the Action Agenda call for discussion and action by the Board. All items are placed on the Agenda so that the Board may discuss and take action on the item if the Board is so inclined, including items listed for information.
1. Old and Unfinished Business Consideration to Adopt Resolution 18-21 in Support of a Loop Trail at Sweetwater Reservoir
2. Items to be Added, Withdrawn, or Reordered on the Agenda
3. Approval of Minutes - Regular Meeting of October 10, 2018
Consent Calendar Items Items to be acted upon without discussion, unless a request is made by a member of the Board, the Staff, or the Public to discuss a particular item, including items listed for information. All consent calendar items are approved by a single motion.
4. Approval of Demands and Warrants
A Public Water Agency Serving National City, Chula Vista and Surrounding Areas 1 SWEETWATER AUTHORITY GOVERNING BOARD AGENDA - Regular Meeting of October 24, 2018 - 3:30 p.m. Page 2 of 4
5. Announcement of Purchase of 10.5 Acres Along Sequan Truck Trail in the Loveland Watershed (Information Item) (Operations Committee Meeting of 10/17/18, Item 4. B.) Recommendation: No action is required by the Governing Board.
6. Quarterly Report of One-time Water Bill Adjustments for July through September 2018 (Information Item) (Finance and Personnel Committee Meeting of 10/17/18, Item 4. B.) Recommendation: No action is required by the Governing Board.
7. Consideration to Award a Contract for Preparation of Inundation Maps for Sweetwater and Loveland Dams (Finance and Personnel Committee Meeting of 10/17/18, Item 4. C.) Recommendation: Award a contract in an amount not to exceed $89,500 to GEi Consultants, Inc., Carlsbad, CA.
Action and Discussion Items
8. Consideration to Reject a Nonresponsive Bid and Award a Contract for Construction of the O.D. Arnold Fire Flow Pump Station to sew Contracting Corporation, the Second Low Bidder (Operations Committee Meeting of 10/17/18, Item 4. A.) Recommendation: Defer to the Governing Board for decision pending additional information from staff and legal counsel.
9. Consideration to Accept the Fiscal Year 2017-18 Comprehensive Annual Financial Report (Finance and Personnel Committee Meeting of 10/17/18, Item 4. A.) Recommendation: Accept the report.
10. Approval of Directors' Attendance at Meetings and Future Agenda Items Per diem approval for Director Cerda to attend the San Diego County Water Authority Colorado River Aqueduct Tour- October 27-28, 2018 (Sponsored by the Metropolitan Water District of Southern California)
REPORTS AND INFORMATIONAL ITEMS The following Agenda items are placed on the Agenda to allow the persons designated to provide information to the Board and the Public. There is no action called for in these items. The Board may engage in discussion on any report upon which specific subject matter is identified on the Agenda, but may not take any action other than to place the matter on a future Agenda.
11. Committee Minutes
12. September 2018 Financial Reports
13. Quarterly Report of Directors' Expenses - First Quarter FY 2018-19
14. Report of Sweetwater Authority Director to the Water Conservation Garden Authority
15. Management Report A. Report of Assistant General Manager • Quarterly Performance Measurement Report (July 1 - September 30, 2018) B. Report of General Manager
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16. Report of the South Bay Irrigation District Representative and the City of National City Representative to the San Diego County Water Authority Report by representatives for the purposes of briefing the Board on items of interest and importance that appear on the previous or future San Diego County Water Authority agendas and to receive direction from the Sweetwater Authority Governing Board in representing its interests at the San Diego County Water Authority.
17. Reports by Directors on Events Attended Reports and discussion relating to events attended by the Directors. A. Water Education Foundation Northern California Tour- October 10-12, 2018 (Note: Director Cerda provided a written report under tab 17) B. Council of Water Utilities Meeting - October 16, 2018
18. Directors' Comments Directors' comments are comments by Directors concerning Authority business that may be of interest to the Board. Directors' comments are placed on the Agenda to enable individual Board members to convey information to the Board and the Public. There is no discussion or action taken on comments made by Board members.
CLOSED SESSION At any time during the regular session, the Governing Board may adjourn to closed session to consider litigation, personnel matters, or to discuss with legal counsel matters within the attorney-client privilege. Government Code Section 54954.5.
A. Conference with Labor Negotiator pursuant to Government Code Section 54957.6: Agency Negotiator: Tish Berge, General Manager Unrepresented Employees: Assistant General Manager Director of Administrative Services Director of Engineering Director of Distribution Director of Finance Director of Water Quality
B. Conference with Legal Counsel - Anticipated Litigation - Significant exposure to litigation pursuant to Government Code Section 54956.9 (d)(2): One potential case
C. Conference with Legal Counsel - Existing Litigation pursuant to Government Code Section 54956.9 (d)(1): United States, et al. ex rel John Hendrix v. J-M Manufacturing Company Inc., and Formosa Plastics Corporation, U.S.A., Case No. ED CV06-00055-GW
19. Adjournment
This agenda was posted at least seventy-two (72) hours before the meeting in a location freely accessible to the Public on the exterior bulletin board at the main entrance to the Authority's office and it is also posted on the Authority's website at www.sweetwoter.org. No action may be taken on any item not appearing on the posted agenda, except as provided by California Government Code Section 54954.2.
3 SWEETWATER AUTHORITY GOVERNING BOARD AGENDA- Regular Meeting of October 24, 2018 - 3:30 p.m. Page 4 of 4
Any writings or documents provided to a majority of the members of the Sweetwater Authority Governing Board regarding any item on this agenda will be made available for public inspection at the Authority Administration Office, located at 505 Garrett Avenue, Chula Vista, CA 91910, during normal business hours. Upon request, this agenda will be made available in appropriate alternative formats to persons with disabilities, as required by Section 202 of the Americans with Disabilities Act of 1990. Any person with a disability who requires a modification or accommodation in order to participate in a meeting should direct such request to the Board Secretary at {619} 409-6703 at least forty-eight {48} hours before the meeting, if possible.
To e-subscribe to receive meeting agendas and other pertinent information, please visit www.sweetwater.org.
PUBLIC COMMENT PROCEDURES Members of the general public may address the Board regarding items not appearing on the posted agenda, which are within the subject matter jurisdiction of the Governing Board. Speakers are asked to state name, address, and topic, and to observe a time limit of three {3} minutes each. Public comment on a single topic is limited to twenty {20} minutes. Anyone desiring to address the Governing Board regarding an item listed on the agenda is asked to fill out a speaker's slip and present it to the Board Chair or the Secretary. Request to Speak forms are available at the Speaker's podium and at www.sweetwater.org/speakerform.
4 TO: Governing Board
FROM: Tish Berge, General Manager
DATE: October 19, 2018
SUBJECT: Comments from the Public Regarding Agency Staff and Agency Recognition in the Press
SUMMARY The Authority has a long tradition of sharing comments from the public with the Governing Board. This allows the Board to monitor a primary goal area of the Authority: to provide high quality customer service. Employees strive to provide this high quality customer service by being understanding, supportive, and responsive to customers' needs.
1 The September 20 h issue of The Star News featured an article on one of National City's mayoral candidates, Mitch Beauchamp; on September 27, the Authority's Customer Service staff received a thank you note for good customer service; on October 9, the Authority received an email from the Chula Vista Elementary School District thanking Management and Public Affairs staff for hosting its "World of Work" event at the Perdue Plant and support and participation in the event; an article in the October 1ih issue of the Daily Press features Greg Snyder, the Authority's newly hired Director of Distribution; and lastly, Televisa filmed a news segment at the Perdue Plant featuring Authority staff, which will be presented to the Board at its October 24th meeting.
While negative comments regarding customer service are rare, when they are received, they are handled by Management as personnel related issues.
POLICY Strategic Plan Goal #4 Customer Service: Provide high quality customer service.
CONCLUSION This is an information item only.
Attachments: as referenced
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6 To serve and represent I The Star News Page 1 of 4
To serve and represent Chula Vista and national city voters will hove an opportunity in November to elect members to the city council and other elected offices. now through october the star-news is publishing interviews with candidates to help educate voters.
By Robert Moreno - September 20, 2018
Mitch Beauchamp is running for National City mayor,
Mitch Beauchamp has held various positions in National City throughout his 24-year elected career.
For the past decade, Beauchamp has been National City's city treasurer where, among other tasks, he monitors the status of investments the city has made.
Before that he was a two-term councilman from 1994 to 2006. Adding to his public service, Beauchamp was a board member at the Sweetwater Authority for six years.
But one the elected office that Beauchamp has not held is mayor of National City, though he has unsuccessfully ran for that seat in 2006. Now, he seeking that office once again. Beauchamp, 72, is one of four National City mayoral candidates on the November ballot.
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Beauchamp said he decided to run for mayor this time around because with so much political turmoil on the city council, National City needs a mayor that can provide be the voice of reason.
"In that (mayoral) position I can do a belter job (than the other candidates) in trying to calm the waters," he said.
He points to the relationships he has with current mayor Ron Morrison, who's a city council candidate and Councilwomen Mona Rios and Alejandra Sotelo Solis as being able to be a mediator on the dais, Beauchamp whose family has lived in the city for three generations, said he's worked with Morrison over the years, he has history with Sotelo-Solis' family and is on good terms with Rios.
He said those relationships will be vital with moving the city forward.
"l feel that I can work with all sides and try to bring together some harmony in the management of this city," he said.
If elected mayor, Beauchamp said his priorities would include getting control of the homeless problem, improve traffic calming and preserving the history of National City.
In regards to the homeless problem, Beauchamp said the city hasn't found the answer. They've tried the Alpha Project and other methods to get the problem under control, but those have not worked, he said.
Beauchamp said he does not have the immediate answer to the homeless issue but as mayor he said he would work to find a viable solution.
Beauchamp, who is on the South Bay Historical Society board, said preserving the history of the city includes designating homes in National City as historic, homes don't have that designation.
He said National City does not have any official designations for historic homes and he would like to work on that.
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Beauchamp said in June he voted against both measures that had to do with term limits for National City office holders.
He said he is not a fan of term limits as voters should decide when someone's time is up.
11 If you have a candidate that is better than who1s in there now,put them in there," he said. "Let the people decide."
Beauchamp said he also opposes Prop. W, a rent control measure on the November ballot.
"I think it will ... destroy property values and it will lead to the degradation of housing equality," he said. 11 And we will not have investment of any more rentals in this town. 11
Beauchamp said as the city treasurer he does not know much about the in custody police death of Earl McNeil other then what's been made public.
He said he has not sat in closed session when the council would discuss the matter so the information that he knows about the case is very limited. Regardless, he said, with the information he has he would like to see the National City Police Department meet the demands of protestors by releasing all videos leading up to McNeil's death.
"I don't know what happened," he said. "I just know somebody needs to show some videos pretty quick. These people need to be told what happened, good or bad."
Beauchamp said now is a great time to be National City's next mayor because the city has a positive outlook.
He said the city has managed its budget where it would be fiscally sound for the next few years, he said potholes are being filled and crime has been down.
Being city treasurer is a part-time job for Beauchamp. He's a full-time biological consultant who does environmental assessments, Since 1976 he
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has owned Pacific Southwest Biological Services, and at one point, he said he employed 50 people. Beauchamp said he has dual citizenship with Mexico and is fluent in Spanish. He used to be the manager of the freight railroad between Tijuana and Tecate, he said.
In his free time, Beauchamp said he plays the organ every Sunday morning at two National City churches.
In April Beauchamp was charged by the District Attorney with cruelty to animals. The prosecution stemmed from a 2017 incident in which he
drowned skunks1 Beauchamp said.
The city treasurer said that he would occasionally trap skunks that came onto his property and relocate them to the Otay Valley Regional Park.
However, one time three trapped skunks sprayed him before he could transport them so in anger he drowned them at his home, Beauchamp said.
He entered into a diversion agreement May 8, requiring that he complete 80 hours of volunteer work, pay $900 to the police department's Animal Control Division and violate no laws for six months.
10 https://www.thestarnews.com/to-serve-and-represent/ 10/18/2018 Subject: FW: Customer Compliment Attachments: Customer Compliment.pdf
From: Harpenau-Parks, Gregg Sent: Thursday, September 27, 2018 8:51 AM To: Sabine, Jennifer; Berge, Tish; Yorba, Dina Subject: Customer Compliment
Good Morning,
This morning I received a thank you note in the mail from Ms. Lyn Frumkin. She received a one-time adjustment and wanted to thank me for my timely response and she felt that was amount written off was fair and decent.
Thank you Gregg •
Thinking of you with heartfelt thanks.
I want you to know how much you're appreciated!
•
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12 Subject: FW: Thank You!
From: Bruder, Michael [mailto:[email protected] Sent: Tuesday, October 09, 2018 12:35 PM To: Berge, Tish; Payne, Leslie; Shoecraft, Gwyneth Cc: Tessier, Matthew; Motsinger, Sarah; Dare, Erin Subject: Thank You!
Hello Tish, Leslie, and Gwen,
I just wanted to sincerely thank you for all that you did to support our professional development event yesterday. As you know, we are very passionate about this work and all feel very strongly about bringing opportunities to explore the World of Work to life for our teachers and students. From the beautiful venue, to Tish's words on the work Sweetwater Authority does and the career opportunities there, to Joe's information on the educational opportunities, as well as the tours that were provided, it was a great experience for our teachers. Please let Justin and Pete know that we are very grateful to them for taking the time to explain their World of Work to our teachers. I know that they found it very interesting and informative. I promise you that between Feaster, Muraoka, and our future Hydro Station students, you will definitely have some #FutureWaterleaders coming from CVESD as a result of this work!
Thank you again!
Michael Bruder Resource Teacher, Innovation and Instruction Chula Vista Elementary School District (619) 425-9600 Ext. 1517 Arranger I Learner I Belief I lncluder I Ideation •••
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14 Apple Valley schedules water system acquisition update meeting for Tuesday Page 1 of2
DAILY~PRESS
Apple Valley schedules water system acquisition update meeting for Tuesday By ~~~~ ~~yp~ ~~ ~r~z Staff Writer Posted Oct 12, 2018 at 9:39 AM Updated Oct 12, 2018 at 9:39 AM APPLE VALLEY - The Town will host a special meeting next week to update residents regarding its efforts to acquire Liberty Utilties' water system.
Attorneys from Best, Best, and Krieger will be on hand at the Apple Valley Town Conference Center beginning at 6:30 p.m. Tuesday to present a recap of the California Environmental Quality Act trial, a status update and next steps in the water system acquisition process.
The meeting comes nearly three weeks after Public Works Director Greg Snyder exited his position to work for Sweetwater Authority, a publicly owned water agency that serves residents in National City, Bonita and portions of Chula Vista.
Mike Molinari, who serves as Apple Valley's public works supervisor, wastewater and grounds maintenance, was recently appointed interim public works manager, town spokeswoman Charlene Engeron told the Daily Press.
Apple Valley officials confirmed last month that Snyder - whose expertise in water and wastewater operations partly earned him the job - would resign his position effective Sept. 21.
Rather than fill Snyder's position, a public works supervisor would become interim director of the department and a maintenance worker will take on the role of interim supervisor, said town spokesperson Orlando Acevedo last month.
Snyder was originally hired mostly bring credibility to the assertion that the town could run a water system if given the chance to do so via an eminent domain lawsuit filed against Liberty Utilities, the Daily Press reported.
Tuesday night's special meeting is free and open to the public. For additional information, call
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Acevedo at 760-240-7000, ext. 7015.
Reporter Rene Ray De La Cruz may be reached at 760-951-6227, [email protected], Twitter@DP_ReneDeLaCruz
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18 TO: Governing Board
FROM: Management
DATE: October 15, 2018
SUBJECT: Consideration of Resolution 18-21, In Support of a Proposed Loop Trail at Sweetwater Reservoir
SUMMARY The County of San Diego (County) currently has a trail on the south side of Sweetwater Reservoir, and on Sweetwater Authority (Authority) property, pursuant to a Revocable License Agreement. The County desires to expand this trail by creating a loop trail around the reservoir. The proposed expanded loop trail lies within the Authority's watershed and portions are on the Authority's property. The Authority and the County have been working together over the past four years via a joint Ad Hoc Trails Committee, established at the request of Supervisor Cox, to explore this concept and to address other issues in the proximity of Sweetwater Reservoir. In support of this joint committee, the Authority formed the Ad Hoc Trails Subcommittee.
These meetings have been beneficial as several outstanding items have been discussed and resolved. However, the focus of the Ad Hoc Trails Committee to evaluate the potential for a proposed loop trail around Sweetwater Reservoir ("Loop Trail") has not resulted in a proposed project scope acceptable to both agencies.
At the August 22nd Board meeting, staff requested Board direction regarding the County's proposed Loop Trail. The agenda report included issues and concerns Authority staff have with the County's proposed trail. At the August 22nd Board Meeting, Supervisor Cox presented a Proposed Motion for the Board's consideration directing Authority staff to work with the San Diego County Parks and Recreation Department to develop an implementation plan and bring back a resolution for consideration within 30 days to allow the County to construct a proposed Loop Trail, including a portion across the Authority's property. The Board directed staff to: convene the Ad Hoc Trails Subcommittee to review the new information presented by the County; meet with County staff to discuss as needed; and report to the Board within 45 to 60 days.
The Authority Ad Hoc Trails Subcommittee, consisting of Directors Calderon-Scott, Castaneda and Morrison met multiple times to consider information presented by the County at the August 22nd Board meeting and subsequently. In addition, the Ad Hoc
19 Memo to: Governing Board Subject: Consideration to Adopt Resolution 18-21 in Support of a Proposed Loop Trail at Sweetwater Reservoir October 19, 2018 Page 2 of 3
Trails Committee met twice to further understand the County's proposal and discuss issues pertaining to the proposed Loop Trail.
Summary of Meetings in Response to Board Direction on August 22
Date Parties September 24, 2018 Authority Ad Hoc Trails Subcommittee In addition to these meetings, staff met regularly internally and in consultation with Legal Counsel to review information provided by the County, coordinate meetings, and formulate recommended policy. Based on the review of the information from Authority and County staffs, and in consultation with the Authority Ad Hoc Trails Subcommittee, Management drafted the attached resolution for Board consideration. If approved, the resolution would serve as policy direction to staff in future negotiations with the County. Resolution 18-21 acknowledges the Board's desire to support the County's mission to provide exceptional recreation experiences, without financially impacting ratepayers and while protecting water quality at the Sweetwater Reservoir, which provides drinking water to nearly 190,000 rate payers in National City, western Chula Vista, and portions of the County of San Diego in Bonita and Lincoln Acres. The resolution chronologically outlines many successful endeavors by both the County and the Authority over the past several decades which have either enhanced recreation opportunities or improved water quality in and around Sweetwater Reservoir. The resolution also states conditions under which the Authority would be able to support the proposed Loop Trail concept and allow the proposed project to move forward in a cooperative spirit. FISCAL IMPACT To date, the estimated cost of staff time spent on the County's proposed Loop Trail project is approximately $100,000 prior to August 22, 2018. Since that time, additional staff time and Legal Counsel review have taken place in support of the Ad Hoc Trails Committee. Annually and based on current conditions, the Authority expends approximately $200,000 in efforts associated with the trails and fishing at Loveland and Sweetwater Reservoirs; these efforts are primarily supported by nonrate revenue. 20 Memo to: Governing Board Subject: Consideration to Adopt Resolution 18-21 in Support of a Proposed Loop Trail at Sweetwater Reservoir October 19, 2018 Page 3 of 3 POLICY/STRATEGIC PLAN OBJECTIVE Strategic Plan Goal 1, Water Quality: Provide high quality water that meets regulatory requirements. Strategic Plan Goal 3, Financial Viability: Ensure long-term financial viability of the agency. The Authority's Strategic Plan does not address recreation. ALTERNATIVES 1. Adopt Resolution 18-21 as presented. 2. Adopt Resolution 18-21 as modified by the Board. 3. Refer the resolution back to the Authority Ad Hoc Trails Subcommittee for further modifications based on feedback from the Board. 4. Do not adopt Resolution 18-21 and direct staff to discontinue work on the proposed Loop Trail. RECOMMENDATION The Ad Hoc Trails Subcommittee recommends that the Board adopt Resolution 18-21, in Support of a Proposed Loop Trail at Sweetwater Reservoir. Attachments: Attachment 1 -August 17, 2018 Board documents Authority Board Memo with Staff Recommendation County Recommendation Attachment 2 - Resolution 18-21 21 This page intentionally left blank. 22 Attachment 1 TO: Governing Board FROM: Management DATE: August 17, 2018 SUBJECT: Request for Board Direction Regarding County of San Diego's Propose Loop Trail at Sweetwater Reservoir SUMMARY The Authority and the County of San Diego have been working together over the past four years via a joint Ad Hoc Trails Subcommittee, established at the request of Supervisor Cox, to address trail-related and other issues in the proximity of Sweetwater Reservoir. Five Ad Hoc Trails Subcommittee meetings have been held, along with several additional staff meetings. These meetings have been beneficial as other outstanding and unrelated items have been discussed and resolved. However, the focus of the Ad Hoc Trails Subcommittee to evaluate the potential for a loop trail around Sweetwater Reservoir (Loop Trail) has not resulted in a conclusion acceptable to both agencies. The County's goal is to develop the Loop Trail, preferably for use by hikers, mountain bikers, pet owners, and equestrians; the Authority's goal is to protect the quality of the water in Sweetwater Reservoir because it serves as a primary water source for drinking water used by nearly 190,000 San Diego County residents who live within the Authority's service area. Although both parties have engaged in good faith dialogue and negotiations, the parties have not been able to resolve competing and apparently incompatible concerns. While the Ad Hoc Trails Subcommittee has been meeting for the past four years, the issue of a Loop Trail has been considered and discussed since 2002. This long standing attempt to implement the Loop Trail and the apparent impasse and inability to reach consensus was recognized in mid-2017 by Authority staff and the Authority's members of the Ad Hoc Trails Subcommittee. Staff had prepared a Board Action Memo with substantial supporting documentation for the June 28, 2017 Governing Board meeting. That documentation included the Board Action Memo, dated June 9, 2017, for the June 13, 2017 Authority Ad Hoc Trails Subcommittee, which is voluminous and can be downloaded from the Authority's web site from the June 28, 2017 Board meeting. In short, the June 9, 2017 Board Action Memo provided a conclusion that allowing the construction of the Loop Trail as proposed is not in the best interest of the Authority. The Authority had received a written request from Supervisor Dianne Jacob prior to the June 28, 2017 Board meeting requesting to continue this item to a later date. Supervisor Greg Cox and Adam Wilson (Supervisor Dianne Jacob's representative) spoke to the 117 23 Memo to: Governing Board Subject: Request for Board Direction Regarding County of San Diego's Proposed Loop Trail at Sweetwater Reservoir August 17, 2018 Page 2 of 4 Board at the June 28, 2017 Board meeting requesting that this item be continued to a later date, and to convene the Ad Hoc Trails Subcommittee to further discuss and resolve some issues. Several members of the public spoke in support of the Loop Trail. County and Authority staffs met on November 21, 2017 to further the discussion related to the Loop Trail. The discussion of that meeting focused on the following three areas: • South Trail reroute to avoid vernal pools: County staff reported that they had been working with SDG&E and the U.S. Fish and Wildlife Service (USFWS) Refuge staff to finalize the new trail alignment that will result in avoidance of the vernal pools on Authority property. For reference, the USFWS provided a temporary permit to allow continued use of the Riding and Hiking Trail on the south side of Sweetwater Reservoir for five years after the construction of bridges over the vernal pools in May 2014. • Segment 8: County staff provided a conceptual plan layout for discussion of the portion of the Loop Trail on Authority property near the intersection of Reservoir Drive and Jamacha Boulevard. • Northern Loop Draft Operation and Maintenance (O&M) Plan: County staff provided a draft of the plan for review. A copy of the draft O&M Plan is attached for reference. County staff had previously referenced the O&M Plan in an Ad Hoc Trails Subcommittee meeting. The Authority had conveyed concern about a maintenance plan that relies on voluntary staff to provide clean-up and maintenance services, and had suggested that the County could alleviate those concerns by demonstrating to the Authority that these proposed measures are effective by maintaining the South Side Trail for a period of one year. This demonstration project, or pilot program, was brought up again at the November 21, 2017 staff meeting, only to be rejected by the County staff. On March 9, 2018, the Authority provided written comments to the County's Northern Loop Draft O&M Plan. A copy of the response is attached for reference. In summary, the Authority's comments were: • The Authority provided feedback on the inadequacies of the proposed plans to address operational needs, including trash receptacles and manure bin, sanitary facilities, mutt mitts, and signage. • The County staff's rejection of the Authority's suggestion that a one-year pilot O&M program using volunteers with support of County Department of Parks and Recreation staff to maintain the existing South Side Trail does not instill confidence that the County's proposed O&M Plan is viable. 118 24 Memo to: Governing Board Subject: Request for Board Direction Regarding County of San Diego's Proposed Loop Trail at Sweetwater Reservoir August 17, 2018 Page 3 of 4 • The Authority provided comments on operational duties, pre-storm and post- storm maintenance protocol, and outreach. On Maroh 19, 2018, the fifth meeting of the Ad Hoc Trails Subcommittee was held with County Supervisors Cox and Jacob in attendance, along with Authority Ad Hoc Trails Subcommittee members (Directors Calderon-Scott, Morrison, and Preciado)), County staff, and Authority staff. The Authority's meeting notes from the March 19, 2018 Ad Hoc Trails Subcommittee meeting are attached for reference. As promised to Supervisors Cox and Jacob at the June 28, 2017 Board meeting, the Ad Hoc Trails Subcommittee convened to discuss the Loop Trail and resolve the fundamental differences that have prevented reaching an agreement that is acceptable to both agencies. The issues remaining regarding the Loop Trail are summarized below: 1. Even though the County has provided what appears to be a viable alignment for Segment 9 by directing the trail up to the existing trail around the Pointe Development on the mesa above Sweetwater Reservoir, there has not been a viable alternative presented for Segment 10 to connect the Pointe Development trail to the existing South Side Trail in a manner that meets the Authority's operational desire to eliminate co-existent trail and maintenance road alignments, and that meets the State's Division of Drinking Water (DDW) guidelines for separation of trails and water supply sources. 2. In addition, the issue of whether to allow equestrian use and/or pet use of the Loop Trail has not been determined. If equestrian and/or pet usage of the Loop Trail is desired by the County, the Urban Runoff Diversion System (URDS) would likely need to be operated in diversion mode throughout the year, resulting in lost runoff that would have otherwise entered Sweetwater Reservoir. The County has not committed to reimburse the Authority for the value of this lost runoff water. 3. Implementation of recreational trails is not included in the Authority's Strategic Plan. If the Loop Trail is to be pursued, the Strategic Plan should be updated to address recreational trails and the work plan should be modified to allocate staff resources to the project. On August 1, 2018, General Manager Berge met with Supervisor Greg Cox and his Policy Advisor, Victor Avina. During that meeting, the topic of the existing trail and proposed trail segments, which combined would create the Loop Trail, were discussed. It was agreed that the financial impacts of constructing and maintaining trails in a manner that would support the Authority's mission to provide customers with a safe and reliable water supply are, at this time, unknown. 119 25 Memo to: Governing Board Subject: Request for Board Direction Regarding County of San Diego's Proposed Loop Trail at Sweetwater Reservoir August 17, 2018 Page 4 of 4 FISCAL IMPACT To date, the estimated cost of staff resources spent on the County's proposal is approximately $100,000. If the Board decides to continue work on the Loop Trail, the Authority's budget and work plan will need to be modified. POLICY/STRATEGIC PLAN OBJECTIVE The Authority's Strategic Plan does not address recreational trail use. ALTERNATIVES 1. Direct staff to seek proposals to conduct a preliminary analysis of capital and operational costs necessary to mitigate impacts to the Authority's water supply as a result of a Loop Trail at Sweetwater Reservoir. 2. Direct staff to discontinue use of Authority resources for consideration of a Loop Trail at Sweetwater Reservoir. RECOMMENDATION Staff defers to the Governing Board for direction. Attachments: Draft Sweetwater Loop Trail - Operation and Maintenance of Northern Loop Trail (from County of San Diego) Authority Comments on Draft O&M Plan for Northern Loop Trail, Letter dated March 9, 2018 Meeting Notes from March 19, 2018 Ad Hoc Subcommittee Meeting 120 26 Sweetwater Loop Trail Operation and Maintenance of Northern Loop Trail To have unrestricted use of the northern trail of the Sweetwater Reservoir Loop Trail the following operational and enforcement measures will be implemented. A. Operational needs • Trash receptacles and manure bin - An appropriate number of 32 gallon trash cans with lids anchored to prevent tip ci\fer and spills will be provided at Lakeview Staging Area and accessible trail access points. An animal waste/ horse manure collection bin w111 be installed at the staging area and anchored to prevent tip over and spills as well. Equestrians will be asked to pick up their animal droppings or use horse diapers and dispose of manure in the collection bin. Volunteers or staff will patrol the trail a minimum of once a week and pick up animal waste from the trails. The collected animal waste and trash will be removed ftom the staging area and trail access points on a weekly basis at a minimum. Frequency may be adjusted based on need. There will be no long-term storage of trash or animal waste in the staging area. . . • Sanitary facility- A portable toilet Will be installed at Lakeview Staging area, properly anchored to prevent tip overand spills. Since the distance from the staging $rea to the e.nd of segment 8 is only 2 miles, the portable toilet placed al the staging area will be adequate. The portable toilet will be maintained and serviced once a week. • Mutt Mitts dispensers wlll .be installed at the staging area and trail access points; Trail users with pets will be advised to collect their pet droppings and to dispose Qf prcip!!rly in the provided trash receptacles. • . Signage pro[llbiting trai.1 users from entering the property beyond the trail Jenee line will be. installed. Additional regulatory/warning, informational and educational trail markers, such as trail etiquette, will be strategically installed alon9 trail segm~nts. B. Trail operation and. management utilizing Volunteer Groups or DPR Staff: (Note: No operational resources/funding has been approved at this time.) Options: 1. Volunteer Group - Expand the trail patrol program that is currently serving Sweetwater Regional Park. The existing Sweetwater Trail patrol group, 14 members, consists of horseback riders, bikers and pedestrians. 2. Partner with the Bonita Valley Horsemen. 121 27 3. Use DPR Staff C. Operational Duties to be performed: Regular maintenance protocol during dry and normal weather conditions • Open and close the gate every day • Patrol the trail a minimum of once a week. Parks contact information will be Included on trail slgnage to facilitate Inquiries and/or reports of inappropriate activities, enabling staff to quickly respond to complaints/Issues. · • Collect manure from the trail and dispose of it in the dumpster at the staging area • Perform weed abatement on thEI trail • Collect trash from the trail and staging area • Educate trail users about rules & regulations, resources and safe use of trails • Perform trail maintenance ,, • Empty trash receptacles a minimum of once a week (or more frequently ifneed~d) ·. · • Refill · mu as needed . • Repair fen . • Remove graffiti • Erosion control D. Additional management and maint~nance protocol during pre-storm, storm and post storm P!'!riods In addition to.the maintenance protocol highlighted in the dot points above, OPR staff will inspect and assess trail condition prior to a forecasted 0.5 inch ·rain at a 50% chance of rain event to make sure the trail is clear of trash and horse manure, and that all tr.i.sh cans and manure collection bins lids are covered and securecl., If manure, trash, litter and debris is detected during pre storm Inspection, it \/\!iii be removed in a timely manner prior to a rain/storm event. During and after a storm/rain event, staff will assess the condition of the trail and If It is unsafe due to hazardous conditions created by the storm/rain or the use of the trail will result in damage to the trail surfacing, trail will be closed until it is deemed to be safe to use. Temporary signage advising users about the closure of trail wlll be installed at the trail heads/entry points and posted on DPRs website and social media. E. Outreach: Educational outreach explaining the Sweetwater River watershed, flora and fauna will be provided during special events like clean up days, public gatherings, and guided trail walks, etc. 122 28 Sample signs to be posted on trails and at the staging area TRAIL RULES • BICYCLISTS YIELD TO PEDESTRIANS • CARRY IN, CARRY OUT • CLEAN UP AFTER PETS • NO SMOKfNG OR FIRES • NOALCOHOL • NO MOTORIZED VEHICLES • TRAIL HOURS: DAWN TO DUSK STAY ON TRAliL 123 29 This page intentionally left blank. 30 SWEETWATER AUTHORITY aC!Clr?~ 605 GARRETT AVENUE TERESA '7EAA\'" THOMAS, OHAIR POST OFFICE BOX 2528 RONMORRISON, VIOECHruR CHULA VISTA, CALIFORNIA 81912•2528 JOSIE OALOEIDN-8001T arava Cl.ST ANEOA (618) 420·1418 J08~ F. CERDA FAX (619)426-7469 JOSE PR!roi,100 htip1/www•weetwa1ar.org JESS VAN OEVENTEA TISHBEROE OENERAL MANAa,R March 9, 201 JENNFER H.SABINE a A8618TANT GENERAL MANAGER Renea HIiton, Assistant Director County of San Dia go, Parks ll!nd Recreation 5500 Overland Avenue, Suite 410 San Diego,. CA 92123 Subject: SWEETINATER RESERVOIR LOOP TRAIL COMMENTS ON DRAFT O&M PLAN FOR NORTHERN LOOP TRAIL SWA FILE: ST. IMP. 08-08 Dear Ms. HIiton: Sweetwater Authority (Authority) reviewed the draft Operations and Maintenance Plan provided by the County for the Northam Loop Trail near Sweeiwater Reservoir. The Authority's comments are summarized In the attached document. If you have any questions, please contact Jennifer Sabine at {619) 409-6702, or [email protected] or Ron Mosher at (619) 409-6750, or [email protected]. Sincerely, nfd!J General Manager TB:RRM enclosures: as cited cc: Jennifer H. Sabine, Sweeiwater Authority Ron R. Mosher, Sweetwater Authority Pete Baranov, Sweetwater Authority A Public Water Agency Serving National Clt;y, Chula 11'1Sta and Surrounding Areas 125 31 Sweetwater Loop Trail Operation and Maintenance of Northern Loop Trail SWA Commente on Draft Submittal by the County of San Diego A. Operational Needs Trash Js!ceptaclea and manure bin: • The statement that trash receptacles will be placed at aooesslble trail access poinl is ambiguous. In addition, Sweetwater Authority ($WA) does not believe placing trash receptacles at the Lakeview Staging Area and at accessible trail access poln\1 ls adequate. SWA was required by the State Division of Drinking Water (ODW) io place trash receptacles at least every 500 feet for the shoreline fishing program. SWA would like the Operation and Maintenance Plan to designate the location of trash receptacles and to provide at least one receptacle every 500 feet. • SWA does not believe that one manure bin Is adequate to assure that iiquestrians wlll comply with the requirement to clean up Immediately and dispose of the manure. • SWA staff believes that Is unrealistic to assume that equestrians will oarry manure any significant distance to properly dispose of it. In addition, how would equestrian and pet owner waste clean-up be monitored and enforced? • Reasonable means would need to be provided to accommodate the collection of manure (l.e., shovel and bags large enough). • What !f1easures will be implemented to assure the trash receptacles do not overflow? Weekly monitoring does not seem frequent enough. • The County must commit to immediate and proper collection and disposal of all waste materials that may be illegally dumped along the trail alignment (e.g., green waste, furniture, tires, appliances, hazardous waste, etc.). Define the detailed mechanism to achieve this requirement. Sanitary Faoilltles: • The County's proposal only addresses a small portion of the proposed loop trail alignment. Obviously, one single portable toilet would not be adequate. SWA continues to remain concerned that trail users will not always use portable toilets, particularly In the remote areas of the proposed loop trail. • &NA was reqUlred by DDW to place portable toilets every 500 feet for the shoreline fishing program, and SWA would require the County to provide similar spacing. 1 126 32 Mutt Mitts: • Mutt mitt dispensers would be required in close proximity to the trash receptacles. SWA remains concerned that potential trail users will not be consistent In the collection and proper disposal of waste-filled bags. Slgnaae: • Identify the spacing of proposed signage on the barrier fence. • How will trail rules be enforced? Describe the enforcement and penalty mechanism for trail use violations. • Sign samples provided do not identify the required County contact Information. B. Trall Operation and Management Utlllxlng Volunteer Groups or DPR Staff • SWA proposed and the County verbally rejected a one-year pilot volunteer operation and maintenance plan using volunteers to maintain the existing South Trail. Therefore, SWA has no ability to assess the effectiveness and rellablllty of the volunteer group. In addition, the current volunteer group will change over time and there is no way to ascertain the effectiveness of a future volunteer group, or If one will be available to meet the required operation and maintenance needs. • The Bonita Valley Horsemen are volunteers and SWA's concerns Identified above would.apply. • The use of County DPR staff, under a maintenance agreement, would be the preferred option. • All operation and maintenance activities would need to be funded by the County. C. Operational Duties , Patrolllng once per week is not adequate. Continuous patrolling while the trail is open will be required. • SWA would have concerns about the application of unapproved herbicides and/or pesticides by either County staff or volunteers due to the proximity of the loop trail to the drinking water supply (Sweetwater Reservoir). • Identify how the County proposes to educate trail users about rules and regulations, resources, and safe use of trails. • Define the measures proposed for erosion control. • Define how rules and regulations would be enforced and how citations would be issued. 2 127 33 D. Pre-storm and Poet-storm Maintenance Protocol • Identify the source and applicability of forecasted rain events. , Identify In detail the proposed protocol, Including names, phone numbers, email addresses, etc. for activating a pre-storm cleaning event. , Provide the contact Information and sample of the temporary trail closure slgnage. E. Outreach • Identify who would be providing the education and guided trail walks. • What types of public gatherings are anticipated? 3 128 34 Sweetwater Reservoir Loop Trail Ad Hoc Subcommittee Meeting - March 19, 2018 Sweetwater Desalination Facility Assembly Room A. Vernal Pool Re-Route , The County presented a map showing the proposed alignment of the trail on the USFWS Refuge and on SDG&E property • The Bonita Valley Horsemen have requested that the existing trail through the vernal pools be retained - the County has referred them to the USFWS • Director Preciado stated that SWA's position is that the existing trail not be retained • Director Morrison commented that enforcement of the trail closure will be important • County staff indicated that the County has 350 miles of trails and they rely on County staff, seasonal staff, and a robust volunteer program to monitor and report on trail conditions • Director Calderon-Scott commented that her experience in Bonita is that the pool of volunteers is diminishing and that the equestrian bridge over the SR-125 near Sweetwater Reservoir is not being cleaned, resulting in an accumulation of manure on the bridge • Supervisor Cox commented that the San Diego Mountain Biking Association has a monthly trail maintenance activity that draws 30-40 people • The County indicated that the new trail will be completed by May 2019, in time to meet the USFWS temporary permit deadline • Supervisor Jacob committed that if SWA needs assistance with signage, the County could probably assist in some way (even though County staff had indicated the County could not do anything if the trail is on SWA property) B. North Side Trail • County staff referenced a map the County distributed showing the latest plan o Less than 1 mile of Segment 8 on SWA property o Segment 9 is shown as connecting to the trail on the Pointe Development property o Note: No information was provided on how Segment 9 would connect via Segment 10 to the existing South Loop Trail 1 129 35 • Supervisor Cox indicated the County and SWA have been discussing the North Side Trail for over 10 years o Referenced the public campaign for the creation of SWA - Recreational uses to be available at Sweetwater Reservoir o Suggested that equestrian use be taken off the table in certain sections, but open to hiking, mountain biking, and pets • Supervisor Jacob said she is reluctant to remove the ability for equestrian use • Director Preciado stated that taking the equestrian use off the table helps • Supervisor Cox committed that URDS improvement costs would be paid by the County • Director Preciado indicated he would support the trail if a way could be found to mitigate SWA's concerns, including maintenance activities and facility relocation costs being covered by the County • Director Morrison stated that Segments 8, 9 and 10 each have their own issues and that SWA is not sure if it can absorb any additional costs (SWA does not have a Parks and Recreation Department) • Tish Berge compared SWA's situation to the County's in relation to air pollution and the rules required by the California Air Resources Board (i.e., SWA must adhere to the Division of Drinking Water rules), and that SWA should be compensated for the time required as this goes forward • Supervisor Jacob disagreed with the concept of reimbursing SWA for staff costs incurred as this goes forward and referenced the trail from Santee Lakes to Poway, which crosses through Miramar Air Station, and the process developed to issue permits to the users of the trail - perhaps this concept could be used at Sweetwater Reservoir • Director Preciado said SWA will start tracking its costs and if the costs grow to a level of concern, SWA will be looking for some mechanism to offset its costs • County staff indicated that the USFWS Refuge has identified a conceptual trail alignment for Segment 10; SWA staff expressed concern over potential combined use of the maintenance road and trail use; Supervisor Cox commented that SDG&E often allows for trail use on maintenance roads • Supervisor Jacob requested that SWA focus on Segment 8 since that segment is on SWA property, and discuss Segment 10 later; she stated that SWA has no authority on any property not owned by SWA and that the County or the Refuge could build a trail anywhere tomorrow 2 130 36 C. Parameters for Moving Forward • SWA Board will decide (yes or no) regarding the proposed North Side Trail • If yes, confirmation that an appropriate maintenance plan for use (humans only or humans+ pets) is covered • SWA to track costs 3 131 37 This page intentionally left blank. 38 COUNTY OF SAN DIEGO SUGGESTED MOTION: Direct SWA staff to work with the San Diego County Parks and Recreation Department to develop an implementation plan and bring back a resolution for consideration within 30 days to allow the County of San Diego to construct a trail across Sweetwater Authority property (Section 8, and a portion of Section 9) subject to the following conditions: 1. Trail would be open for use by walkers, joggers, mountain bikers with non-motorized bicycles. 2. Trail for a one-year trial period could be used for people walking their dogs on a leash. At the end of a one-year period of time, the Sweetwater Authority, in its sole discretion, could make a determination as to whether they are willing to continue to allow dogs on leashes on the trail. The County will agree to bring a capital project to the Board of Supervisors for approval using county generated funds for the design, environmental, and construction of the Sweetwater Loop Trail. 3. Upon County Board of Supervisors approval: a. The County will agree that it will be their responsibility to maintain the portion of the trail on Sweetwater Authority property. b. The County will agree to maintain up to DPR trail standards which would include: i. at least on a weekly basis, inspect the trail to ensure that it is free of any dog feces, trash or other debris. c. The County will agree to put in portable toilets at the Lakeview staging area and at the confluence of Segments 8 and 9, provided SWA is able to provide access for servicing of the portable toilet. d. Any trail segments on SWA property would fall under the County's trail indemnification, indemnifying the SWA of any liability. e. The County will install trash receptacles and mutt mitt stations at either end of Segment 8, to be emptied and replenished, respectively, at a minimum of once a week. f. DPR staff will inspect and assess trail condition prior to a forecasted 0.5 inch rain at a 50% chance of rain event to make sure the trail is clear of trash and dog feces, if any, and that all trash cans are covered and lids are secured. If trash, litter and debris is detected during pre-storm inspection, it will be removed in a timely manner prior to a rain/storm event. During and after a storm/rain event, staff will assess the condition of the trail and if it is unsafe due to hazardous 39 conditions created by the storm/rain or the use of the trail will result in hazardous conditions created by the storm/rain or the use of the trail will result in damage to the trail surfacing, trail will be closed until it is deemed to be safe to use. Temporary sign age advising users about the closure of trail will be installed at the trail heads/entry points and posted on DP Rs website and social media. g. County agrees to reimburse the Sweetwater Authority staff for reasonable, documented costs associated with review of documents produced in relation to this project moving forward. A staff cost estimation should be provided in 30 days with the return to the Board. h. County will install appropriate gates to restrict equestrian use on the eastern and western ends of Section 8. i. The County will install signage providing information about regulations governing use of the trail, usage restrictions (e.g., no equestrian use), trail etiquette and the sensitivity of the adjacent reservoir. Contact information for the Department of Parks and Recreation would be included, providing a method for trail users to contact the County regarding any maintenance needs, safety concerns or usage issues. In addition, Parks and Recreation staff will disseminate this information through their website and social media. 4. The County will coordinate with the SWA as it continues to work with US FWS Refuge staff on the segment 10 alignment on Refuge land to ensure the safety of trail users and SWA staff. 5. The Sweetwater Authority will issue a revocable license to operate a trail on Sweetwater Authority property. If at any point the operation of this trail on Sweetwater Authority property is not to the satisfaction of the Sweetwater Authority, it can revoke the County's license to operate the trail until their conditions are satisfied. 40 Attachment 2 RESOLUTION 18-21 RESOLUTION OF THE GOVERNING BOARD OF SWEETWATER AUTHORITY IN SUPPORT OF A PROPOSED LOOP TRAIL AT SWEETWATER RESERVOIR WHEREAS, Sweetwater Authority (Authority) is a joint powers agency, the members of which are the South Bay Irrigation District and the City of National City; and WHEREAS, the Authority's mission states that the Authority will provide customers with a safe and reliable water supply through a balanced approach to human and environmental needs; and WHEREAS, the Authority is responsible to its ratepayers and the California State Water Resources Control Board, Division of Drinking Water (DOW) for compliance with all applicable regulations; and WHEREAS, the Authority provides safe, reliable water services to approximately 190,000 people within its boundaries within National City, portions of the County of San Diego (County), including Bonita and Lincoln Acres, and the western portions of Chula Vista; and WHEREAS, the Authority owns and operates various water infrastructure facilities including but not limited to the Sweetwater Reservoir; and WHEREAS, Sweetwater Reservoir provides drinking water for residents and recreational activities within the reservoir watershed present additional risks to the drinking water supply; and WHEREAS, the Authority constructed the Vista Del Lago Runoff Diversion System in 1979 after the California Department of Public Health (CDPH, predecessor to DOW) recommended that the Authority mitigate the impacts of urban runoff to Sweetwater Reservoir; and WHEREAS, the Authority incurs costs associated with maintenance as a result of the Pointe Development phasing, which allowed for housing development without mitigating the impacts of sediment and erosion that flows into Sweetwater Reservoir; and WHEREAS, the Authority adopted Resolution 84-8 (amended as 88-5) to provide for source water protection, environmental stewardship, and habitat management programs; and WHEREAS, the Authority constructed the Urban Runoff Diversion System I in 1991 to mitigate the impacts of urban runoff to the Sweetwater Reservoir from northerly urban runoff in the vicinity of the Jamacha Boulevard corridor; and WHEREAS, the Authority constructed the Urban Runoff Diversion System II in 1998 to mitigate the impacts of urban runoff from Middle Sweetwater River areas upstream of the Sweetwater Reservoir property at the Low Flow Barrier; and 41 RESOLUTION 18-21 WHEREAS, the California Department of Public Health issued draft Guidelines for Recreational Use Permits at Reservoirs in 2000; and WHEREAS, the County and the Authority are both parties to a Revocable License Agreement (RLA) for a multi-use trail on Authority property at Sweetwater Reservoir, first entered into on June 11, 1980, and terminated on April 10, 2013, when the parties entered into a new RLA; and WHEREAS, the County desires to expand the trail system to construct a complete loop trail around Sweetwater Reservoir ("Loop Trail"), that incorporate segments on both the North and South side of Sweetwater Reservoir; and WHEREAS, the entire proposed Loop Trail is within the Sweetwater River Reservoir watershed and portions of the proposed Loop Trail are on Sweetwater Authority property; and WHEREAS, the County has successfully implemented recreational opportunities in the vicinity of Sweetwater Reservoir, including construction of Sweetwater Summit Regional Park, creating more than 100 campground sites with direct access to the trails around Sweetwater Reservoir, and allows pets and horses in the campground sites for a fee payable to the County; and WHEREAS, the Authority recognizes that the County desires to preserve natural resources and provide exceptional recreation experiences and further recognizes the following activities undertaken by the County in this regard: a. on January 12, 2005, the San Diego County Board of Supervisors unanimously approved the adoption of the County Trails Program and the Community Trails Master Plan; b. the County commissioned the Sweetwater Reservoir Loop Trail Implementation Plan in 2002; c. with some capital funds provided by the County and all maintenance funds managed and provided by the Authority, the Sweetwater Reservoir Fishing Program was constructed in 2003; d. the County finalized the Technical Report for Proposed Trail at Segment 8 at Sweetwater Reservoir in 2007; and e. in 2008, the County prepared a final Mitigated Negative Declaration for Sweetwater Reservoir Loop Trail Project: COFD-00251 which incorporated some of the Authority's comments on the draft; and WHEREAS, the Authority submitted a permit amendment application to CDPH in 2007 (predecessor to DOW) for a proposed Loop Trail Application as required to obtain an official response from State regarding a proposed loop trail; and 2 42 RESOLUTION 18-21 WHEREAS, in 2014, the U.S. Fish and Wildlife Setvice issued a five-year permit for temporary use of bridges to allow the County to reroute the existing trail to protect vernal pools surrounding the Sweetwater Resetvoir; and WHEREAS, in 2018, the Authority submitted comments on the Otay Regional Trail Alignment Study, which proposes setbacks to protect aquatic resources; and WHEREAS, the Authority's rate structure complies with the substantive requirements of Proposition 218, which require generally that rates do not exceed the cost of providing water setvice, are proportional to the cost of providing water setvice on a parcel basis, and the revenues generated are used exclusively for providing water setvice, and may not be used for general governmental setvices available in substantially the same manner to the public at large; and WHEREAS, the Authority wishes to work cooperatively with the County in its endeavor to further develop the proposed Loop Trail at Sweetwater Resetvoir in a manner that not only is consistent with the Authority's mission, but also protects Authority rate payers. NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BOARD OF SWEETWATER AUTHORITY AS FOLLOWS: 1. RECITALS. The above recitals are incorporated herein by reference. 2. PROPOSED LOOP TRAIL SUPPORT. The Governing Board of Sweetwater Authority supports the development of a proposed Loop Trail at Sweetwater Resetvoir subject to conditions to ensure that the proposed Loop Trail would be consistent with the Authority's mission and with no financial impact to the Authority and its rate payers, including but not limited to the following conditions to be memorialized, as may be appropriate, in an agreement or agreements entered into by and between the County following compliance with al/ legal requirements: A. No portion of the proposed Loop Trail crosses Sweetwater River other than at an existing or future bridge. B. The County reimburses the Authority for any loss of runoff caused by the proposed Loop Trail, at the then-current rate of untreated water from the San Diego County Water Authority. C. The County reimburses the Authority for all staff, legal, and consulting costs associated with the proposed Loop Trail, including but not limited to all costs borne by the Authority associated with construction, operation, oversight, administration, and maintenance of the proposed Loop Trail. D. The County consults with the Authority, as a Responsible Agency under CEQA, regarding any environmental review associated with a proposed Loop Trail. E. The County mitigates any impacts to jurisdictional waters resulting from the proposed Loop Trail. F. The County obtains appropriate approvals from Olay Water District (OWD) for any portions of the proposed Loop Trail that cross or impact OWD's property or easements. 3 43 RESOLUTION 18-21 G. The County fully indemnifies, defends, and holds harmless the Authority for all related proposed Loop Trail activities. H. The County enters into a reimbursement agreement with the Authority for costs incurred if future County Operations & Maintenance Plans are not implemented to the satisfaction of the Authority by the County. I. The Revocable License Agreement (RLA) for the proposed Loop Trail is amended to include performance metrics that, if not met, trigger revocation of the RLA. J. The proposed Loop Trail does not include concurrent use of any maintenance road used by Sweetwater Authority. K. All proposed Loop Trail segments are upstream of the Urban Runoff Diversion System (URDS), or the URDS is relocated at County cost and per the Authority's requirements. L. The environmental analysis and documentation prepared by the County considers the entirety of the proposed Loop Trail. M. The proposed Loop Trail conforms to the Olay Regional Trail Alignment Study setback criteria for aquatic resources. N. No equestrian on Segments 5 through 10 of the proposed Loop Trail. 0. Pets (nonequestrian) may be considered at the discretion of the Authority's Governing Board. P. Other conditions identified by the Authority and County during good faith negotiations. 3. This resolution shall take effect upon adoption by the Authority's Governing Board. PASSED AND ADOPTED at a Regular meeting of the Governing Board of Sweetwater Authority held on the 24th day of October 2018, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: Teresa Thomas, Chair ATTEST: Janet Gonzalez, Board Secretary 4 44 SWEETWATER AUTHORITY GOVERNING BOARD MINUTES OF THE REGULAR MEETING October 10, 2018 The Governing Board of Sweetwater Authority held a Regular meeting on Wednesday, October 10, 2018, at the Sweetwater Authority Administrative Office, 505 Garrett Avenue, Chula Vista, California. Chair Thomas called the meeting to order at 6:00 p.m. • Roll Call Directors Present: Josie Calderon-Scott, *Steve Castaneda (6:05 p.m.), *Ron Morrison (6:05 p.m.), Jose Preciado, Terry Thomas, and Jess Van Deventer Directors Absent: Jose F. Cerda Management, Staff General Manager Tish Berge, Assistant General Manager Jennifer and Others Present: Sabine, Legal Counsel Paula de Sousa Mills, and Board Secretary Janet Gonzalez. Staff members: Administrative Assistant Ligia Perez, Director of Finance Rich Stevenson, and Director of Administrative Services Dina Yorba. Others present: Bill Best. • Pledge of Allegiance to the Flag • Opportunity for Public Comment (Government Code Section 54954.3) Bill Best spoke to the Authority's requirements for backflow prevention devices. (Note: Directors Castaneda and Morrison entered the meeting at 6:05 p.m.) (Note: Director Castaneda left the meeting at 6:06 p.m.J 1. Items to be Added, Withdrawn, or Reordered on the Agenda Per Chair Thomas's request, the Governing Board concurred to move agenda item 1 before the Chair's Presentation and to reorder all subsequent agenda items. (Note: Director Castaneda reentered the meeting at 6:07 p.m.) 2. Adoption of Resolution 18-19 of the Governing Board of Sweetwater Authority Recognizing, Honoring, and Commending Janet Gonzalez, Board Secretary/ Administrative Assistant, Upon Her Retirement on December 28, 2018 from Sweetwater Authority Upon a motion made by Director Preciado, seconded by Director Morrison, the following resolution: RESOLUTION 18-19 RESOLUTION OF THE GOVERNING BOARD OF SWEETWATER AUTHORITY RECOGNIZING, HONORING, AND COMMENDING JANET GONZALEZ, BOARD SECRETARY/ADMINISTRATIVE ASSISTANT, UPON HER RETIREMENT ON DECEMBER 28, 2018 FROM SWEETWATER AUTHORITY 45 Sweetwater Authority Governing Board Minutes - October 10, 2018 Page 2 of4 was passed and adopted by the following vote to wit: Ayes: Directors Calderon-Scott, Castaneda, Morrison, Preciado, Thomas, and Van Deventer Noes: None Absent: Director Cerda Abstain: None Chair Thomas read the resolution of recognition into the record and presented Ms. Gonzalez with a copy of the resolution, a framed photo of Sweetwater Dam, a recognition plaque with a photo of Loveland Dam, a check, and a lifetime access card for the Authority's fishing program as tokens of appreciation for her service. Ms. Gonzalez thanked the Governing Board for allowing her to serve as its Secretary for the last eight years, thanked Legal Counsel de Sousa Mills for her assistance and guidance, and thanked Management for being a great team. The Governing Board thanked Ms. Gonzalez for her dedicated service and congratulated her on her upcoming retirement. At 6:23 p.m., Chair Thomas called for a short recess. The meeting was called back to order at 6:34 p.m. • Chair's Presentation Video Presentation - KSDY San Diego "Presa de Sweetwater" ACTION CALENDAR AGENDA 3. Approval of Minutes Regular Meeting of September 26, 2018 Chair Thomas made a motion, seconded by Director Castaneda, that the Governing Board approve the minutes of the September 26, 2018 Regular meeting. The motion carried unanimously, with Director Cerda absent. Consent Calendar Items Director Preciado made a motion, seconded by Director Morrison, that the Governing Board approve the consent calendar. Director Castaneda recused himself from consideration of warrant numbers 149746 and 149805 due to his contract negotiation with SDG&E, and Director Van Deventer recused himself from consideration of warrant number 149750 due to his position of Director on the U.S. Bank Advisory Board, which both Directors Castaneda and Van Deventer disclosed on the record. The motion carried unanimously, with Director Cerda absent. 4. Approval of Demands and Warrants - Check numbers 149717 through 149812 and electronic fund transfers 23801 through 24069 46 Sweetwater Authority Governing Board Minutes- October 10, 2018 Page 3 of4 Action and Discussion Items 5. New Business Consideration to Adopt Resolution 18-20, Adopting a Revised Salary Schedule for All Employees, Effective July 1, 2018 Director Preciado made a motion, seconded by Director Calderon-Scott, that the Governing Board refer this item back to Management and Legal Counsel for further information, and directed that it be brought back to the October 24, 2018 Regular meeting for Board consideration. The motion carried unanimously, with Director Cerda absent. 6. Approval of Directors' Attendance at Meetings and Future Agenda Items A. Council of Water Utilities Meeting, San Diego County - Hotel Karlan San Diego - Tuesday, October 16, 2018, 7: 15 a.m. - Program Title: "2019 Weather Outlook," presented by Alexander Tardy, Warning Coordination Meteorologist, National Oceanic and Atmospheric Administration. Directors who wish to attend this event will contact the Secretary. No action was required by the Governing Board. B. National Water Resources Association 8?1h Annual Conference, Coronado, CA - November 7-9, 2018. Directors who wish to attend this event will contact the Secretary. No action was required by the Governing Board. C. Per diem approval for Directors who wish to attend the Water Education Foundation San Joaquin River Restoration Tour 2018 (begins and ends in Fresno, CA) - November 7-8, 2018 Director Castaneda made a motion, seconded by Director Preciado, that the Governing Board approve per diem approval for Directors who wish to attend the Water Education Foundation San Joaquin River Restoration Tour 2018 - November 7-8, 2018. The motion carried unanimously, with Director Cerda absent. REPORTS AND INFORMATIONAL ITEMS 7. Report of Legal Counsel Ms. de Sousa Mills reported on the legislative session. 8. Management Report A. Report of Assistant General Manager - There was none. B. Report of General Manager Ms. Berge reported that the Authority is using new construction signs throughout its service area; and that the Authority is participating in several internship programs and currently has one intern from the San Diego Regional Water and Wastewater Internship Program, two interns from the Cuyamaca College Water & Wastewater Technology Program Cooperative Work Experience Class, and one Water Quality Laboratory intern. 47 Sweetwater Authority Governing Board Minutes - October 10, 2018 Page4of4 9. Reports by Directors on Events Attended A. BonitaFest - September 22, 2018 Director Cerda provided a written report. B. California Special Districts Association 2018 Annual Conference - September 24-27, 2018 Director Cerda provided a written report. 10. Directors' Comments -There were none. CLOSED SESSION - There was none. 10. Adjournment With no further business before the Board, Chair Thomas adjourned the meeting at 7:13 p.m. Teresa Thomas, Chair Attest: Janet Gonzalez, Board Secretary 48 SWEETWATER AUTHORITY REVENUE FL~D Disbursements October 19, 2018 Warrant Number Amount Payable Description 149813- $2,346.76 Payroll Payroll 149816 149817 52.92 Josephine L. Calderon-Scott Reimbursement - expenses 149818 11,880.94 John Hancock USA Employer's contributions 149819 584.00 Lincoln National Life Insurance Co. Employees' contributions 149820 2,529.61 Nationwide Retirement Solutions, Inc. Employees' contributions 149821 274.62 Payroll Payroll 149822 26.97 Moshail Camel Customer refund 149823 736.92 City Ventures Homebuilding LLC Customer refund 149824 533.86 DMI Gen Eng Contractors Customer refund 149825 606.94 Maria Elguezabal Customer refund 149826 1,079.00 J.T. Kruer & Company Customer refund 149827 4,500.00 Xochilt Padilla Customer refund 149828 92.36 Payroll Payroll 149829 108,804.20 ACWA/Joint Powers Insurance Authority Quarterly workers' compensation 149830 192,697.00 ACWA/Joint Powers Insurance Authority General liability and auto insurance premium 149831 150.00 California Aquatics Monthly fountain service 149832 1,010.00 California Department of Tax & Fee Use tax Administration 149833 1,150.00 Cox Communications, Inc. Monthly cable services 149834 2,400.00 Dig-Smart LLC Software renewal 149835 69,727.40 Enterprise Automation, Inc. SCADA - capital and expense projects 149836 650.00 Firemaster Hazmat building inspection 149837 88.10 Golden State Overnight Delivery services 149838 1,774.33 Hanson Aggregates, Inc. Operating supplies 149839 15,223.00 Hudson Safe*T*Lite Rentals Traffic control plans 149840 18,000.00 Innovyze, Inc. Software license upgrade 149841 3,864.17 International Dioxcide, Inc. Water treatment chemicals 149842 301.80 National Safety Compliance, Inc. Department of Transportation regulatory drug testing 149843 1,727.72 Otay Landfill - 4531 Landfill waste fees 149844 7,990.00 PACE, Inc. Construction management - Desai Facility expansion 149845 151.05 Republic Services, Inc. Waste collection 149846 900.00 Rosson Realty and Mortgage Services Quarterly real estate listing data 149847 1,323.49 S & J Supply Company, Inc. Inventory supplies 149848 7,273.88 Salzano Engineering, Inc. Equipment and operator rental 149849 6,232.61 Sharp Business Systems Copier maintenance contract Page 1 of 4 49 SWEETWATER AUTHORITY REVENUE FUND DISBURSEMENTS October 19, 2018 149850 $231. 7 5 Sweetwater Authority Petty cash reimbursement 149851 14,681.72 Timberline Engineering, Inc. SCADA - capital and expense projects 149852 450.00 Video Fact Documentation Service Preconstruction audio video survey 149853 15,161.33 West Coast Sand & Gravel, Inc. Construction supplies 149854 60.00 Erick Del Bosque Reimbursement - certification 149855 60.00 Filipo Sua Reimbursement - certification 149856 34.88 Michael D. Bailey Reimbursement - expenses 149857 973 .10 ACE Excavating Customer refund 149858 1,052.22 Chula Vista Elementary Customer refund 149859 368.32 Montgomery Elementary School District Customer refund 149860 88.81 Patrick Smith Customer refund 149861 539.81 Payroll Payroll 149862 35.00 Asbury Environmental Services, Inc. Hazardous waste removal 149863- 109.93 AT&T Monthly phone service - Loveland 149864 149865 175.00 California Title Search Co. Document search 149866- 180.00 Council of Water Utilities Reservations - Directors Castaneda, Cerda, and 149867 staff 149868 5,880.00 Energage, LLC. Survey services 149869 29.01 Federal Express Corporation Delivery service 149870 1,782.74 Harrington Industrial Plastics, Inc. Maintenance supplies 149871 1,217.81 Hudson Safe*T*Lite Rentals Traffic control plans 149872 13,857.55 Ninyo & Moore Geotechnical services 149873 5,648.24 Otay Water District Water purchase 149874 500.00 PARS - Public Agency Retirement Services Monthly trust administrator service fee 149875 62.13 Pitney Bowes Global Financial Services LLC Quarterly postage scanner lease 149876 168,195.00 San Diego County Water Authority Capacity charges 149877 240,166.71 San Diego Gas & Electric Gas and electric service 149878 2,229.00 Sharp Rees-Stealy Medical Group Regulatory medical exams and tests 149879 1,855.58 Thermo Fisher Scientific LLC Laboratory supplies 149880 30,197.65 Timberline Engineering, Inc. SCADA - capital and expense projects 149881 2,150.00 UC Regents, Inc. Laboratory testing 149882 8,183.16 Union-Tribune Publishing Co. Employment and bid notices 149883 9,797.31 Uni var USA, Inc. Water treatment chemicals 149884 1,433.46 Vallen Distribution, Inc. Maintenance supplies 149885 5,869.39 West Coast Sand & Gravel, Inc. Construction supplies 149886 7,301.53 Western Water Works Supply Co., Inc. Inventory supplies 149887 93 .20 Daniel Hayes Reimbursement - expenses 149888 86.59 Hugo Alvarez Reimbursement - safety shoes 149889 748.00 James Smith Reimbursement - tuition 149890 6.60 Encore Realty Customer refund 149891 263 .08 Ronald Peterson Customer refund Page 2 of 4 50 SWEETWATER AUTHORITY REVENUE FUND DISBURSEMENTS October 19, 2018 Electronic Transfer: 24070- $301,490.28 Payroll Payroll 24251 24252 20.71 Jessie E. Van Deventer Reimbursement - expenses 24253 406.00 Jose F. Cerda Reimbursement - expenses 24254 52.43 Steven Castaneda Reimbursement - expenses 24255 6.00 Teresa Thomas Reimbursement - expenses 24256 757.84 Payroll Payroll 24257 275.00 City Employees Association (CEA) Employees' contributions 24258 90.00 SW A Confidential Group Employees' contributions 24259 3,244.09 SWA Employees Committee (SAEC) Employees' contributions 24260 417.00 SWA Association (SARA) Employees' contributions 24261 19,136.46 CalPERS 457 Pian Employees' contributions 24262 72,967.52 CalPERS Retirement Plan Employees' and employer's contributions 24263 20,428.91 EDD State of California State income tax withheld 24264 113,644.02 Internal Revenue Service Federal income tax and Social Security tax withheld 24265 l 6,973.82 EPX Credit Card Fees Customer credit card fees 24266- 362.08 WageWorks, Inc. Employees' contributions 24267 24268 200.00 CalPERS Retirement Plan Administrative fee 24269 619.30 Advanced Chemical Transport, Inc. Hazardous waste removal 24270 1,167.62 Airgas USA, LLC Cylinder rental 24271 578.05 Certified Laboratories Operating supplies 24272 184.34 Corodata Media Storage, Inc. Monthly backup data storage service 24273 350.47 Corodata Records Management, Inc. Monthly record storage 24274 2,099.41 Diamond Environmental Services Monthly portable toilet rentals 24275 326.87 Environmental Resource Associates Laboratory supplies 24276 165.00 Eurofins Eaton Analytical, Inc. Laboratory testing 24277 3,191.69 Hi-Tech Air Conditioning, Inc. HVAC maintenance - various location 24278 4,762.30 Hidden Valley Pump Systems, Inc. Pump repairs 24279 461.10 Indoff, Inc. Ergonomic supplies 24280 7,307.28 JCI Jones Chemicals, Inc. Water treatment chemicals 24281 177.85 Jena! Engineering Corporation Pump repairs 24282 300.00 Mobil Construction Sweeping Monthly street sweeping services 24283 1,088.00 OfficeTeam Temporary help 24284 164.43 Onesource Distributors LLC Maintenance supplies 24285 420.00 Pacific Safety Center Annual membership renewal 24286 1,390.55 Sparling Instruments, Inc. Replace water treatment chemical flow meter 24287 11,360.90 Terracare Associates, LLC Landscape maintenance services 24288 1,321.42 The SoCo Group, Inc. Monthly fuel purchase Page 3 of 4 51 SWEETWATER AUTHORITY REVENUE FUND DISBURSEMENTS October 19, 2018 24289 $455.50 Underground Service Alert of Southern Monthly underground location services California 24290 27.00 United Parcel Service Delivery services 24291 2,304.00 Urban Corps of San Diego County, Inc. Habitat brush management 24292 100.00 Gwyneth Shoecraft Reimbursement - cell phone 24293 33.19 Patricia Berge Reimbursement - expenses 24294 168.95 Richard Stevenson Reimbursement - expenses 24295 611.77 Thomas K. Kasner Reimbursement - expenses 24296 2,029,819.39 San Diego County Water Authority Water purchase 24297 215,708.96 SD County Escrow, A Non Independent Land purchase Broker Escrow 24298 1,261.55 Airgas USA, LLC Cylinder rental 24299 290.62 Boot World, Inc. Safety shoes 24300 2,002.00 Clinical Laboratory of San Bernardino, Inc. Laboratory testing 24301 287.10 Door-Man Door repairs - Administration Building 24302 50.00 Eurofins Eaton Analytical, Inc. Laboratory testing 24303 14,137.50 Ferguson Enterprises, Inc. Inventory supplies 24304 361.47 Fisher Scientific Company, LLC Laboratory supplies 24305 8,069.58 Infosend, Inc. Monthly utility billing service 24306 2,012.92 JCI Jones Chemicals, Inc. Water treatment chemicals 24307 943.56 Jena! Engineering Corporation Fuel compliance test and services 24308 52.61 NDS Courier services 24309 148.28 Prudential Overall Supply Uniform services 24310 49.62 Weck Laboratories, Inc. Laboratory testing $3,876,177.77 Warrant Disbursements Page 4 of 4 52 TO: Governing Board (Operations Committee) FROM: Management DATE: October 12, 2018 SUBJECT: Purchase of 10.5 Acres along Sequan Truck Trail in the Loveland Watershed SUMMARY In June of this year, the Authority became aware of land for sale in the Loveland watershed as shown on the attached map. The identified property is 10.5 acres of undeveloped land along Sequan Truck Trail located on the north side of the reservoir. Staff presented the acquisition opportunity to the Board in closed session and the Board directed staff to negotiate with the owner for acquisition of the property. The property was listed for sale at $219,000. Per direction of the Board, the Authority, acting through Legal Counsel, initially offered $100,000. This offer was rejected immediately. The Authority was prepared to increase the offer, when the broker informed the Authority that an offer from a third party in the amount of $170,000 had been rejected. The Authority offered to pay the owner's asking price for the parcel. On October 5, 2018, the Authority closed escrow and is now the owner of the property. FISCAL IMPACT The Authority incurred the following costs in acquiring the parcel: Purchase Price $219,000 Legal Fees 6,246 Escrow and Recording Fees 2,017 Environmental Site Assessment 5 975 TOTAL $233,238 This land purchase was funded with undesignated reserves. POLICY/STRATEGIC PLAN OBJECTIVE Goal 1: Water Quality. Provide high quality water that meets regulatory requirements. This purchase is consistent with the Authority's goal to maintain control of lands around the reservoir and to protect water quality of the drinking water sources of supply. 53 Memo to: Governing Board (Operations Committee) Subject: Purchase of 10.5 Acres along Sequan Truck Trail in the Loveland Watershed October 12, 2018 Page 2 of 2 ALTERNATIVES Not applicable. CONCLUSION This is an information item only. Attachment: Map of subject property 54 D C IRONSIDE ROBERT W LIVING TRUST 10-08-03 TE DE DO APN: 5200601800 HE R SA A R D D O E S J PUEL B W I J A L E A I P J P V M D E M A N C N IN A A : O : N A B A G R A 5 5 F PN R R V R Y E Y BEN J P I 2 P 2 1 T A S : J ANELLA L 0 0 L A 5 O N O 3 2 R N 2 F A 3 - U D L M 0 H &JILL D : 0 R 0 0 IV P 3 N IN E 5 L 4 H 0 V HE S 2 1 A 1 S A IN S 2 C E 21600 SA A M E 0 1 - T & P O 0 K : 52030 RAZOOKY MAJED Z R 0 T T 0 9 R N G 1 APN D P I 3 9 8 N 0 R T I &KAZUKO P I 0 N : 0 E N 0 C 0 O 20 F 0 H 1 JAWED GHIAS 0 0 H 5 E 0 APN: 5200203700 : IA N O H 2 0 A 2 0 APN: 5203010600 J 0 0 2 1 HEALY PAUL& 5 R 5 A 0 3 CH M 2 2 O TA 0 KS N 4 0 T S IN 30 0 V SMITH E N 0 R 2 R R 0 2 2 8 CIAMACCO SAM JR AKERS PATRICIA 0 B ER 0 E A 0 E 0 U &E 5 UNITED STATES OF AMERICA 3 E W E 3 S V 2 S : 0 UNITED STATES OF AMERICA 1 N REVOCABLE D 20 S 0 T N - UNITED STATES OF AMERICA APN: 5200202100 R R O 5 F M O N 0 P Y APN: 5200202200 3 T D : A 1 NATIONAL FOREST S A I C E 0 NATIONAL FOREST 3 0 M FAMILY TRU ST I N T A L 2 APN: 5201600500 0 M - E P A 1 H A 0 UNITED STATES OF AMERICA NATIONAL FOREST APN: 5201602400 0 R A - B S A A 4 I 1 APN: 5201602600 01-08-02 P & P 0 L R P L O L D 8 Y N & 0 1 APN: 5200601200 PEARSON DALE A&TINA L N N E N S I A E 2 WARTMAN JOANNE M B T O TRUST 12-15-08 M : N V -0 : F APN: 5203010400 : T T F T I V 0 A T 5 D I 2 5 F APN: 5200204100 H IMBUZAN ATTILA &DANIELLE T APN: 5203010800 2 D 5 R A A R 2 S P O 3 APN: 5200310400 APN: 5200312400 N R 0 2 0 U M E GARRISON JAMES A&JULIE S APN: 5203010700 M U : O 3 D C 3 0 ROBERT SMITH 0 U 5 B E 0 S I J APN: 5200313500 0 L 20 E L 2 3 S A T 2 0 R 0 2 Y R S T B 0 T 5 HEALY PAUL& HEALY 3 B 0 0 G M 6 1 2 T 3 A 0 3 7 : IT L AKERS PATRICIA APN: 5200311200 A 5 P H 00 C 0 0 0 0 -1 N D E Y N R 5 0 N E O 1 0 0 7 U : O H - L P 5 B E V 9 0 0 -0 I 2 APN: 5203021700 S O 0 E A E 1 3 E 7 A YOUNG ROBERT J 0 R 0 R - 0 M 3 R Y T D 1 V 1 1 0 3 0 0 P A 3 O 9 O 0 3 KIRBY PARADISE FOUND TRUST 03-24-07 F R T SAMUELS 0 0 0 L E S 2 R 2 &ALICIA C &ALICIA F U 5 S APN: 5203021000 G BRANDON J 0 HEALY PAUL& HEALY R R : R E T N 3 Y AKERS PATRICIA APN: 5200202300 E APN: 5203010200 B T O TRUST 12-15-08 T P 0 N A 2 N WINN DEE A APN: 5203020700 5 APN: 5200312500 O T JA PA : T TRUST 02-10-03 UL R REVOCABLE TRUST APN: 5203010100 M RD N WILKINSON SCOTT WILKINSON &KATHRYN FAMILY A R P 03-22-05 P A A APN: 5203020800 ANTHONY C& WENDYJ APN: 5201101700 JAMES D MILLER H E N N APN: 5201003500 A APN: 5201003300 I BISHOP DAVID M DAVID BISHOP APN: 5201003000 APN: 5201003400 REID BLAINEREID K APN: 5201003100 R APN: 5201101300 APN: 5201003200 0 APN: 5201100600 A 0 NEVARES THOMASE 0 M REVOCABLE TRUST 11-02-05 4 TRUST 12-12-91 TH OMAS FA MILY APN: 5201101500 & WARREN WILLIAM S &JANICE J 0 APN: 5201101400 VANDUSSEN RICHARD B 0 H LEMON GROVE ROD&GUN CLUB ROD&GUN GROVE LEMON AGUILAR JORGE A&SOCORRO F 1 GEORGI YOUNG SCOTT 0 M J APN: 5201003700 A 2 P REVOCABLE LIVING TRUST 07-30-06 A BANUELOSTRUST MARIA T 08-28-98 A I PARTRIDGEBRIAN S&KIM L T 5 U L UNITED STATES OF AMERICA NATIONAL FOREST L : APN: 5201004100 RD L UNITED STATES OF AMERICA NATIONAL FOREST I N APN: 5201301000 RONALD W&TAMMY L P W APN: 5201401000 WINN DEE A CARRILLO TIMOTHY J A TL G &DENISE E SEQ REVOCABLE TRUST 03-22-05 K N UA UC U N APN: 5201101800 APN: 5201002700 TR R O UC T Y K N HOSTETLER JAY D TL A QU APN: 5201002600 SE APN: 5201000200 WHEELER ROY R APN: 5201002800 LEMON GROVE ROD&GUN CLUB ROD&GUN GROVE LEMON WINN DEE A AGUILAR ARMANDO G& REVOCABLE TRUST 03-22-05 ANDREA E APN: 5201003800 &ELECTRIC CO APN: 5201101900 SAN DIEGO DIEGO SAN GAS APN: 5201002900 APN: 5201001700 APN: 5201003900 AGUILAR ARMANDO G& APN: 5201000500 HOSTETLER JAY D GUN CLUB(CORP) ANDREA E LEMON GROVE ROD& GROVE LEMON APN: 5201002600 APN: 5201002900 YOUNG WILLIAM H&MARIANNE L III&JANICE P JOSEPH MCANDREWS RAZO ROGELIO APN: 5201400800 HORSCROFT RONALD N C C C ALPINE L P C C C ALPINE L P D R TRUST 07-31-01 APN: 5201000900 APN: 5201000800 Loveland Reservoir Lands TE A APN: 5201400600 IV R P JOHNSON KIRBY G APN: 5201400900 HORSCROFT RONALD N TRUST 07-31-01 SCHNAUTZ KIM T APN: 5201401800 E A LEMON GROVE INVESTMENT CLUB &SHARON A TOW ALIC E A 00 APN: 5210203400 APN: 5201001400 REVOCABLE TRUST 03- APN: 5201401900 LINCOLN ELEANORE M REVOCABLE TRUST 03-05-07 APN: 5201001200 D R TOW A LICE A E REVOCABLE TRUST 03-09-07 AT 55 IV APN: 5201401700 R CALDWELL LOUIS A P &DEBRA S D APN: 5201001600 SANDERS JOHN F &DORIS M APN: 5210201200 NEWTON ROLLIN F BENGE LAUREN E REVOCABLE TRUST APN: 5210600900 11-24-08 ESKRIDGE FAMILY APN: 5210601000 TRUST 01-24-06 APN: 5210201300 LEMON GROVE INVESTMENT CLUB HECKEROTH FAMILY APN: 5210203500 Loveland Reservoir TRUST 11-15-02 NEW TON FA MILY NEW TON FA MILY APN: 5210201400 TRUST (FAMILY TRUST (FAMILY SUB TRUST) SUB TRUST) APN: 5210601900 APN: 5210602200 COVEY KEITH APN: 5210202800 6 0 - 2 A 1 - A 4 L 0 Y T N 0 0 S & 0 0 U 3 7 UNITED STATES OF AMERICA G 2 R 1 0 0 D T NATIONAL FOREST 6 6 O 0 G 0 O APN: 5210603100 1 1 N 2 I 2 W 5 V 5 L I : : E L N N Y P N P R A A O A S N D M H R S N O O K Y J S N IC A H LO C A N E UNITED STATES OF AMERICA NATIONAL FOREST SINDELAR JOHN A&MARCIA A APN: 5210500700 JOHN A&MARCIA A APN: 5210201900 : 5210201800 UNITED STATES OF AMERICA NATIONAL FOR APN: 5210610400 TH IEFES EMIL HOODY MARY K APN: 5210402000 APN: 5210201700 IULI LINO E I APN: 5210401500 A L I UNITED STATES OF AMERICA L R A ARY K PUB LIC DO MA IN O KELADA MERVAT 0 S T 0 R 0 0 & 200900 0 APN: 5210202100 C APN: 5210500400 T 0 0 I 7 DUNN PAUL&JOAN A 1 2 0 V 0 NATIONS CAROL S 2 Loveland Reservoir Land Ownership Information WETHERILL FAMILY TRUST 02-23-90 W S NATIONS CAROL S 0 TRUST 05-15-70 & 0 4 A 4 L L 0 APN: 5210300400 APN: 5210300700 4 0 APN: 5210300600 APN: 5210402100 L 1 E U 0 I 1 O 2 HOODY 1 A 2 N 5 2 H 5 P CHRIST RO BIN J A WRENCE W 5 : : C : I N D N APN: 5210402400 : 5210200800 N N N N P P Legend R P U A APN: 5210401100 R A E A D This map was developed by Sweetwater Authority for internal E Y E G HITCHCOCK MARSHALL illustration only. It is not designed to provide technical detail E E Loveland Reservoir Lands L DUNN PAUL W TR H and should not be used for any other purpose without the LOVELAND LN APN: 5210402300 express written permission of Sweetwater Authority. WEST BOUNDARY TT Loveland Reservoir Watershed Boundary BIRD APN: 5211102800 Sweetwater Authority BERARD SUZANNE NORMAN E GRIGSBY & SUSAN R 505 Garrett Avenue STATE OF CALIFORNIA JIMMY L JR KILPATRICK ROBERT A WU MIEN HSIA MIEN WU APN: 5211100700 Assessor's Parcel Chula Vista, CA 91910 HOODY MARY K APN: 5210901900 TIGHE TIMOTHY F APN: 5211100200 & MANGAN MICHELE A APN: 5210200600 BROWN & NANCY J APN: 5211002600 APN: 5211002300 APN: 5211105500 FRANK A JR & KILPATRICK KILPATRICK MILLIC ENT FAMILY ROBERT A WILLIAMS PAUL B&GEORGETTA M DUNN PAUL W&JOAN M TRUST 05-13-70 WETHERILL FAMILY TRUST 02-23-90 ROBERT A & This map may contain certain GIS data derived fromSanGIS (San TRUST 01-14-94 &MANGAN APN: 5211000100 APN: 5211000200 APN: 5211000500 MICHELLE A Diego Geographic Information Source) and SANDAG (San Diego APN: 5210900400 MICHELE A APN: 5211105000 Association of Governments) regional information system APN: 5211105400 downloadable data. SanGIS/SANDAG disclaim any ± responsiblility for the accuracy or correctness of this data. EDWARDS 600 0 600 FAMILY TRUST 07-01-05 APN: 5211105600 Feet SanGIS www.sangis.org BRETZ WILLIAM L 56 Quarterly Report of One-Time Water Bill Adjustments July through September 2018 Date of Excess Amount of Name Street Name, City Division Approved by Ad;ustment HCF Adiustment Feret Millien Bonita Road. Bonita 5 07/05/18 110 $352.00 Staff Yolanda Duhn Kina Street, Chula Vista 4 07/06/18 32 $124.05 Staff Erick Ala"O 3rd Avenue, Chula Vista 4 07/11/18 247 $790.40 General Manaaer First Christian Church East 17th Street National Citv NC 07/12/18 137 $438.40 General Manaaer Patricia Aldana Munoz Club View Terrace, Chula Vista 4 07/18/18 47 $184.86 Staff Laura Vasnuez Montcalm Street, Chula Vista 3 07/18/18 25 $95.91 Staff Ed Kwok Putter Drive, Bonita 5 07/23/18 37 $145.68 Staff ARRT Gas Hiahland Avenue National Citv NC 07/27/18 228 $729.60 General Mananer Manuel Juarez Paseo De La Vista, Bonita 5 08/01 /18 82 $329.64 Staff Walter Shaw Palm Drive, Bonita 5 08/02/18 25 $100.50 Staff Bernardo Bustamante Beech Avenue, Chula Vista 1 08/03/18 27 $83.95 Staff Tiffanv Butler Wallace Drive, Bonita 5 08/06/18 123 $494.46 General Manaaer Carlos Bettencourt Camino Vista Real, Chula Vista 3 08/07/18 48 $187.35 Staff Elva Vera Guatav Avenue, Chula Vista 3 08/07/18 24 $90.87 Staff David Acosta Camino Elevado, Bonita 5 08/09/18 319 $1,280.34 General Mananer Eleanor Carleton East J Street, Chula Vista 3 08/14/18 16 $120.10 Staff Gavina Lemus North R Avenue, National Citv NC 08/15/18 55 $221.10 Staff Alma Mvrna Estrada Prosnect Street, National City NC 08/15/18 52 $158.60 Staff Jose F Diaz Steer. lechase Road, Bonita 5 08/15/18 99 $523.47 General Manaaer Mexico Travel Net East 24th Street National Citv NC 08/15/18 187 $730.19 General Manaaer Imelda Gamboa Oxford Street, Chula Vista 4 08/15/18 40 $155.70 Staff Teresa Arellano Madison Ave# B, Chula Vista 2 08/29/18 95 $377.82 Staff Saher Kindo 3rd Avenue# 2, Chula Vista 4 08/30/18 179 $572.80 General Mananer Maria Hamnton Calle Escaroada Bonita 5 08/30/18 122 $480.53 General Manaaer Erick Del Bosnue Geornina Street, Chula Vista 3 08/31/18 27 $105.48 Staff James Thorton Grove Street National Citv NC 08/31/18 91 $347.31 Staff Fernando Garcia Granados Del Mar Avenue, Chula Vista 5 09/04/18 70 $279.87 Staff Rodolfo Ellorin East 4th Street National Citv NC 09/04/18 39 $142.57 Staff Aaron Mcclasin Camino Vista Real, Chula Vista 3 09/04/18 46 $182.37 Staff Derek Wallace Norfolk Street National Citv NC 09/05/18 41 $154.91 Staff Michael Eckes Bonita Woods Drive, Bonita 5 09/06/18 41 $192.42 Staff Lvn Frumkin I Street, Chula Vista 4 09/06/18 88 $348.15 Staff Juana A Hart Palm Avenue, National Citv NC 09/06/18 86 $262.30 Staff Nicole Lonez Portillo Maria Wav. Chula Vista 3 09/06/18 54 $217.08 Staff Wilfrido & Thelma Naval Shell Avenue, National Citv NC 09/12/18 52 $204.45 Staff Salvador Pulido Shv Lane Chula Vista 2 09/12/18 22 $83.34 Staff Michael J Crone Ethel Place, National Citv NC 09/12/18 30 $120.60 Staff Herberto Nino East 8th Street National Citv NC 09/14/18 344 $1 049.20 General Manaaer Daniel Jansen 4th Avenue, Chula Vista 2 09/17/18 38 $151.74 Staff Peter & Julieta Looez H Street, Chula Vista 4 09/17/18 206 $628.30 General Manaqer Maria Mcdaniel Ancurza Wav, Chula Vista 2 09/17/18 128 $504.65 General Mananer Sharon Coleman Winnetka Drive Bonita 5 09/20/18 78 $313.56 Staff Donna C Smith H Street, Chula Vista 4 09/20/18 99 $381.62 Staff Teresita Lavunan South Clairmont Street, National Citv NC 09/21 /18 64 $257.28 Staff Cesar Fernandez Cedar Avenue, Chula Vista 2 09/21 /18 33 $132.66 Staff Tala Tauanuu Wilson Avenue, National Citv NC 09/25/18 200 $804.00 General Manaaer HG Fenton Prooertv Comoanv West 35th Street, National Citv NC 09/25/18 175 $560.00 General Manaoer Michael Nunez Buckv Lane National. Citv NC 09/25/18 15 $57.24 Staff Kathleen Munrane Winnetka Drive, Bonita 5 09/25/18 59 $237.18 Staff Mike Mcmillon Cresta Verde Lane, Bonita 5 09/25/18 97 $389.94 Staff Elaine Skinker Camino E!evado Bonita 5 09/25/18 165 $663.30 General Manaaer Nikki Reves Cresta Verde Lane, Bonita 5 09/27/18 135 $532.79 General Manaaer Total number of accounts given adjustments: 52 Total consumption (HCF) at the discounted rate: 4879 Total amount of adjustments: $18,072.63 Total billing amount for 3rd quarter: $14,319,265.00 Adjustment percent of total billing: 0.13% Adjustment Authorization Limit: Staff - less than $400 General Manager - less than $1,500 Governing Board - Over $1,500 57 This page intentionally left blank. 58 TO: Governing Board (Finance and Personnel Committee) FROM: Management DATE: October 12, 2018 SUBJECT: Consideration to Award a Contract for Preparation of Inundation Maps for Sweetwater and Loveland Dams SUMMARY California Water Code section 6161 (Water Code) stipulates that an owner of a State jurisdictional dam shall submit electronically an inundation map to the California Department of Water Resources Division of Safety of Dams (DSOD) that shows the area that would be subject to flooding under various failure scenarios unique to the dam, and the critical appurtenant structures of the dam. DSOD has classified both Sweetwater and Loveland Dams as extremely high hazard dams; therefore, inundation maps for each dam are required to be submitted to DSOD. The Water Code also stipulates that upon approval of inundation map(s) by DSOD, the owner of the dam shall develop and submit electronically an Emergency Action Plan (EAP) to the California Office of Emergency Services (Cal OES) that is based upon the approved inundation map(s). In November 2017, the Authority submitted EAPs dated May 11, 2017 to Cal OES for Sweetwater and Loveland Dams, along with inundation maps prepared in 1974. The Authority received a letter from Cal OES dated March 9, 2018 indicating that the EAPs were submitted with unapproved inundation maps, and that the review of the EAPs would begin once Cal OES is notified by DSOD that the inundation maps for Sweetwater and Loveland Dams are approved. The inundation maps from 1974 are outdated, in part, because they only exist in paper form (not electronic as is currently required). The Water Code stipulates that the owner of the dam shall prepare inundation maps with due diligence and submit the map(s) to DSOD for review and approval. By due diligence, the Water Code means that the owner of a dam is progressing toward completion of the inundation maps for the dam and all critical appurtenant structures according to a reasonable schedule proposed by the owner and approved by DSOD. No schedule has been proposed to DSOD yet. Preparation of updated inundation maps require a dam breach analysis based on the design and construction of the dams, and elevation-area-capacity curves of the reservoirs. The Authority's on-call dam consultant, GEi Consultants, Inc. (GEi), has done 59 Memo to: Governing Board (Finance and Personnel Committee) Subject: Consideration to Award a Contract for Preparation of Inundation Maps for Sweetwater and Loveland Dams October 12, 2018 Page 2 of 3 extensive work at Sweetwater Dam and its appurtenant structures, including but not limited to, the analysis of the Probable Maximum Flood for the dam and the subsequent analysis and design of the Sweetwater Dam and South Dike Improvements Project. GEi is also preparing the design for the Stairway Replacement Project at Loveland Dam. The Authority recently requested a proposal from GEi to update the inundation maps for both dams in accordance with DSOD's emergency regulations and the Federal Emergency Management Agency's guidelines for preparing inundation maps. The Authority received a proposal from GEi in the amount of $89,500 to prepare inundation maps as specified (see attachment). The proposal from GEi indicates that based on review of available dam information, GEi anticipates that inundation maps will need to be prepared for the following scenarios: • Failure of Sweetwater Dam • Failure of the South Dike at Sweetwater Reservoir • Failure of the South Spillway at Sweetwater Dam • Failure of Loveland Dam In addition to the above failure scenarios, a sequential dam failure scenario would be evaluated for the failure analysis of Loveland Dam to determine if Sweetwater Dam or the South Dike at Sweetwater Reservoir would be overtopped during the downstream routing of the Loveland Dam failure flood wave. Due to GEi's extensive in-house expertise with both dams, and in order to maintain continuity of work, the procurement exception clauses indicated above can be applied in this situation, and that GEi is the best qualified consultant to perform this task. FISCAL IMPACT FY 2018-19 Operating Expense Budget $95,000 Less Proposed Contract Amount <89,500> Less Projected Authority Engineering Labor <5,500> BALANCE $0 POLICY/STRATEGIC PLAN OBJECTIVE Section 6.1 of the Authority's Procurement Policy and Procedures allows for sole-source selection of professional consultants with specific expertise and/or purpose of retaining such consultant for a specific project area to maintain continuity (e.g., Sweetwater/Loveland Dam, etc.). Selection of GEi for preparation of inundation maps is consistent with this policy. 60 Memo to: Governing Board (Finance and Personnel Committee) Subject: Consideration to Award a Contract for Preparation of Inundation Maps for Sweetwater and Loveland Dams October 12, 2018 Page 3 of 3 Strategic Plan Goal #6 (Administrative Effectiveness) Objective AE1 is to maintain a ready state of emergency preparedness, response, and recovery, capable of effectively responding to emergencies as they arise. ALTERNATIVES 1) Award a contract for preparation of inundation maps to GEi Consultants, Inc., Carlsbad, CA, (the Authority's on-call dam consultant) for an amount not to exceed $89,500. 2) Reject GEi's proposal and direct staff to issue a formal RFP to have a competitive consultant selection process. RECOMMENDATION Staff recommends that the Governing Board award a contract for preparation of inundation maps to GEi Consultants, Inc., Carlsbad, CA, (the Authority's on-call dam consultant) for an amount not to exceed $89,500. Attachment: Proposal from GEi for Dam Breach Inundation Mapping for Sweetwater and Loveland Dams 61 This page intentionally left blank. 62 GE I •Co,sul\41ts Geotechnical September 21, 2018 :::.._.,vu:omr.ental W11ter ~sour,;:es GEI Project 1700117 Ec.ologital Erick Del Bosque, P.E. Engineering Manager Sweetwater Authority 505 Garrett Ave. Chula Vista, CA 91910 Re: Proposal for Dam Breach Inundation Mapping for Sweetwater and Loveland Dams Dear Mr. Del Bosque: This letter is a proposal by GEI Consultants, Inc. (GEI) to perform dam breach analysis and inundation mapping for Sweetwater and Loveland Dams owned by Sweetwater Authority (Authority). The dams are under the regulatory jurisdiction of the California Department of Water Resources (DWR) Division of Safety of Dams (DSOD). Under the newly enacted state law, effective July 1, 2017, dam owners are required to prepare inundation maps for their dams and critical appurtenant structures if the dams have a hazard classification of "extremely hig~" "high," or "significant" (California Water Code Sections 6160 and 6161). Sweetwater and Loveland Dams have a hazard classification of "extremely high." These inundation maps must be submitted to DSOD for approval and be included in the dams' Emergency Action Plan (EAP). The inundation mapping scope of work described below is intended to meet these new regulatory requirements. Scope of Work Task 1 - Inundation Study Preparation and Reconnaissance GEI will coordinate with the Authority to obtain all necessary geo-referenced shape files and data the Authority may have or would like to incorporate into the studies as applicable and relevant to this project. GEI will define the downstream reaches using GIS and the most appropriate and available elevation mapping data. We will also review recent aerial photography and other currently available information to perform a preliminary evaluation of the do\'.11stream reaches. A reconnaissance of the downstream reaches will be performed to support the hydraulic analyses. The reconnaissance will generaJly include estimation of the size and features of bridges and culverts that are expected to impact the results of the dam failure study. GEI Cornmlt.t."lts, Inc. www.geiconsultants.com 2141 Palomar Airport Road, Suite 300, Carlsbad, Ct\ 920~ 1 760.929,91:36 :"ax 760.929.0!H6 63 Erick Del Bosque, P.E. - 2 - September 21, 2018 Task 2 - Dam Failure and Inundation Analyses Dam breach analyses of Sweetwater and Loveland Dams will be performed consistent with the California Emergency Regulations - Inundation Maps and the Federal Emergency Mapping Agency (FEMA) Guidelines for Inundation Mapping of Flood Risks Associated with Dam Incidents and Failures (FEMA P-946), July 2013. The analyses will be based on information on the design and construction of the dams and elevation-area-capacity curves of the reservoirs. We plan to use either USGS National Elevation Dataset (NED) topographic mapping or processed Light Detection and Ranging (LiDAR) data available for San Diego County for the potential inundation areas. Following the FEMA P-946 guidelines, a fair weather (sunny day) failure case will be analyzed for each dam. The breach analyses will be modeled as a piping failure with breach parameters developed in accordance with guidelines outlined in FEMA P-946. The critical appurtenant structures of the dams will be evaluated to determine if separate inundation maps are required for these structures. Based on our review of available dam information, we anticipate that inundation maps for Sweetwater and Loveland Dams will need to be prepared for the following scenarios: • Sweetwater Dam Failure • Sweetwater Reservoir South Dike Failure • Sweetwater Dam South Spillway Failure • Loveland Dam Failure As specified in California Code of Regulations Section 335.12, a sequential dam failure scenario will be evaluated for the failure analysis of Loveland Dam. If Sweetwater Dam or South Dilce is overtopped during the downstream routing of the Loveland Dam failure flood wave, an overtopping failure mode for Sweetwater Dam/South Dilce will be included in the dam failure analysis. GEI will evaluate the sequential dam failure for starting reservoir levels at the spillway crests. We will develop hydraulic computer models using the latest version ofUSACE HEC RAS software, version 5.0.5, to route the dam breach flood wave downstream to determine the peak water surface elevations, peak discharges, times to peak stage, arrival times, and velocities from the dam breach conditions. GEI will also use HEC RAS to test and document the sensitivity of the dam breach outflow hydrographs to the breach parameters and select the most reasonable parameters. GEI anticipates that a 2D model will be used and the downstream hydraulic routing will extend to a point downstream of the dams where the dam failure flood impacts no longer pose a hazard. Following the FEMA P-946 guidelines, the downstream model limits will be set to a point where the breach flood is either absorbed by a large body of water or the flood water depth becomes less than one foot, and/or to a point where flood flows are no longer considered to pose a hazard. 64 Erick Del Bosque, P .E. - 3 - September 21, 2018 Task 3 - Inundation Map Preparation GEI will prepare Environmental Systems Research Institute (ESRI) shapefile format inundation maps based on the dam failure evaluations in conformance with DSOD requirements. We will develop color 22- by 34-inch inundation maps that include the best available National Agricultural Imagery Program (NAIP) color aerial imagery. The maps will detail the flood inundation extents with color-coded hazard depth zones and arrival time contours. The inundation maps will also be provided in the Inundation Technical Study reports (see Task 4) as 11- by 17-inch maps. The inundation maps will be developed at a scale of one-inch to 2,000 feet, except in rural areas with minimal development. The inundation maps will show the sunny day dam failure flood boundary and identify dam breach information at critical locations including distance from dam, flood wave arrival time, time to peak, deflood time, peak discharge, maximum flow depth, and maximum flow velocity. The inundation maps will also indicate the maximum flood depths with color-coded hazard ratings. The inundation mapping will also identify roads and other critical infrastructure impacted by the dam breach flood wave. The maps will also include information regarding the dam, graphic scale and north arrow, breach assumptions and routing methods, proprietary statement, and data sources used to develop the maps. Electronic copies of draft inundation maps in PDF format will be provided to the Authority for review and comment. After addressing the Authority's comments, GEI will provide hard copies of the final inundation maps as well as electronic copies of the inundation maps in PDF format. Task 4 - Inundation Study Report Preparation After performing the dam failure and routing analyses, GEI will develop draft Dam Inundation Technical Study reports, one for each dam, to summarize our hydraulic analyses. The reports will include an executive summary and will be organized as follows: • Introduction • Project Description • Downstream Reach • Previous Studies • Dam Breach Failure Analysis • Results • Recommendations ( if necessary) • References • Appendices 65 Erick Del Bosque, P .E. - 4 - September 21, 2018 Electronic copies of the draft Dam Inundation Technical Study reports in MS Word and PDF formats will be provided to the Authority for review and comment. The reports will include reservoir capacity tables, other relevant dam and reservoir data, tabular hydraulic data for each cross-section or critical structure location, and abbreviated output from computer models. The reports will be suitable as an appendix or supporting information in the dam's EAP documents. GEI will incorporate Authority comments on the draft reports into the final Dam Inundation Technical Study reports. GEI will provide hard copies of the final reports, as well as a compact disk containing the reports, electronic files in MS Word and PDF, PDFs of inundation maps, supporting calculations and hydraulic models. Task 5 Address DSOD Comments and Finalize Reports GEI understands that the final reports and inundation maps will be provided to DSOD for review. GEI will address DSOD's comments on the final Dam Inundation Technical Study reports and inundation maps to the extent that the reports/maps are deemed incomplete. GEI will coordinate with the Authority and DSOD to ensure all comments are addressed before sending the final approved submittal package to DSOD. Fee Estimate and Schedule We estimate that the scope of work described above can be performed for $89,500. GEI will not exceed the authorized budget unless written approval to do so is received from the Authority. We anticipate that draft inundation maps and technical study reports can be submitted to the Authority for review within four months of receiving notice to proceed. Please contact me at 760-795-1972 or [email protected] if you have any questions regarding this proposal. Sincerely, GEi CONSULTANTS, INC. Thomas 0. Keller, P.E., G.E. Project Manager TOK/drw 66 TO: Governing Board (Operations Committee) FROM: Management DATE: October 12, 2018 SUBJECT: Consideration to Reject Nonresponsive Bid and Award a Contract for Construction of the O.D. Arnold Fire Flow Pump Station to the Second Low Bidder SUMMARY The FY 2018-19 Budget includes an item for the construction of the O.D. Arnold Fire Flow Pump Station to replace the existing pump station on the site of the O.D. Arnold Tanks. On October 4, 2018, seven bids were submitted to the Authority, as listed below by bid amount. CONTRACTOR BID AMOUNT NEWest Construction Company, Inc. $1,385,000 sew Contracting Corporation $1,391,175 Pacific Hydrotech Corporation $1,440,995 Wier Construction Corporation $1,506,937 General Consolidated Constructors, Inc. $1,595,625 Caliagua, Incorporated $1,628,831 Piperin Corporation $1,860,000 The apparent low bidder was NEWest Construction Company, Inc. (NEWest). Upon staff review of the bid, it was noted that NEWest's contractor's license was expired at the time of bid submission, as indicated by the September 30, 2018 expiration date listed in the NEWest bid; the license expiration date was confirmed through the Contractors State License Board website. Subsequent to the low bid review by staff, a protest was received from the second low bidder, sew Contracting Corporation (SCW), citing its protest of the bid on the basis of the expired license. In its protest, SCW requests the Authority deem NEWest's bid nonresponsive and award the project to sew. NEWest's bid, the bid protest, and NEWest's response to the protest were reviewed by legal counsel. Based on the review, it was determined that NEWest's bid is nonresponsive, as NEWest was not licensed in accordance with state law at time of bid, 67 Memo to: Governing Board (Operations Committee) Subject: Consideration to Reject Nonresponsive Bid and Award Contract for Construction of the O.D. Arnold Fire Flow Pump Station to the Second Low Bidder October 12, 2018 Page 2 of 3 and therefore, the Authority must reject the bid. Notice of this determination was given to NEWest, and communications with SCW confirmed that they are prepared to accept the contract as the next lowest bidder. A review of SCW's bid by staff and legal counsel confirmed that its bid is valid and is confirmed to be the lowest responsive, responsible bidder. SCW has successfully completed projects of similar size and scope for other water agencies in the region and is deemed to be qualified to perform the work. The bids received are significantly higher than the budgeted amount for the construction of this project. Staff reviewed the results of this project bid and offer the following observations: • The bid results are consistent with escalating costs observed in recent bids (e.g., pipeline projects) and general cost trends within the industry. • The $6,175 difference in the two low bids provides a degree of confirmation regarding escalating costs and the competitiveness of bids. • Based on the above, rebidding the project is not expected to result in lower bids. • Evaluation of the project confirms that there are no project elements that can be reasonably reduced or eliminated to make up for the budget shortfall. FISCAL IMPACT FY 2018-19 Capital Budget $1,256,000 Less Proposed Contract Amount <1,391, 175> 1 Less PACE Eng. Construction Support( > <53,000> 2 Instrumentation lntegration( > <98,000> Electrical Engineering Support(3l <60,000> SWA Engineering & Inspection <128,825> Transfer from Operating Budget(4l 475,000 BALANCE $ 0 (1) Construction phase services (e.g., shop drawing reviews) by design consultant. (2) By Enterprise Automation; authorized at Sept. 13, 2017 Board meeting. (3) By Timberline Engineering; authorized at Sept. 13, 2017 Board meeting. (4) Recommended reallocation of funding from Operating Budget to Capital Budget. POLICY/STRATEGIC PLAN OBJECTIVE The Authority's Purchasing Policy requires Governing Board approval to award public work contracts in excess of $50,000. Additionally, this project is in accordance with 68 Memo to: Governing Board (Operations Committee) Subject: Consideration to Reject Nonresponsive Bid and Award Contract for Construction of the O.D. Arnold Fire Flow Pump Station to the Second Low Bidder October 12, 2018 Page 3 of 3 Strategic Plan Objective SR1, to implement the current Water Distribution System Master Plan to include additional pumping capacity for hydropneumatic pressure zones. ALTERNATIVES 1. Reject the low bid submitted by NEWest Construction Company, Inc. as nonresponsive; transfer $475,000 from the FY 2018-19 Operating Budget to the Capital Budget; and award a contract in the amount of $1,391,175 to sew Contracting Corporation, Fallbrook, CA, for the construction of the O.D. Arnold Fire Flow Pump Station. 2. Reject all bids and rebid. RECOMMENDATION Staff recommends that the Governing Board reject the low bid submitted by NEWest Construction Company, Inc. as nonresponsive; transfer $475,000 from the FY 2018-19 Operating Budget to the Capital Budget; and award a contract in the amount of $1,391,175 to sew Contracting Corporation of Fallbrook, CA, for the construction of the O.D. Arnold Fire Flow Pump Station. 69 This page intentionally left blank. 70 TO: Governing Board (Finance and Personnel Committee) FROM: Management DATE: October 12, 2018 SUBJECT: Consideration to Accept the Fiscal Year 2017-18 Comprehensive Annual Financial Report SUMMARY The Authority's auditing firm, Davis Farr LLP, recently completed an audit of the fiscal year 2017-18 financial statements. This is the second year of the agreement with Davis Farr LLP to audit the Authority's financial statements and review internal controls. The auditors found that the financial statements were presented fairly in all material respects and no comments were received regarding internal control maters. The significant changes to the financial statements from the previous year are provided in the Management's Discussion and Analysis section on page four of the Fiscal Year 2017-18 Comprehensive Annual Financial Report (CAFR). This is the second consecutive year that staff will present the financials in the CAFR format that adds an Introductory and a Statistical section to the financial statements. The Authority received the Certificate of Achievement for Excellence in Financial Reporting Program from the Government Financial Officers Association (GFOA) for the Fiscal Year 2016-17 CAFR. The goal of GFOA's program is to ensure that users of financial statements have the information needed to evaluate an entity. Staff intends to submit the Fiscal Year 2017-18 CAFR to the award program. FISCAL IMPACT There is no fiscal impact associated with presenting the FY 2017-18 CAFR. POLICY/STRATEGIC PLAN OBJECTIVE GOAL #3 Financial Viability - Ensure long-term financial viability of the agency. ALTERNATIVES 1) Accept the completed Fiscal Year 2017-18 Comprehensive Annual Financial Report. 2) Provide staff with additional comments to complete the Fiscal Year 2017-18 Comprehensive Annual Financial Report. 71 Memo to: Governing Board (Finance and Personnel Committee) Subject: Consideration to Accept the Fiscal Year 2017-18 Comprehensive Annual Financial Report October 12, 2018 Page 2 of 2 RECOMMENDATION Staff recommends that the Governing Board accept the completed Fiscal Year 2017-18 Comprehensive Annual Financial Report. Attachments: Fiscal Year 2017-18 Comprehensive Annual Financial Report Auditor's Communication regarding Government Auditing Standards Auditor's Communication of Internal Control Related Matters 72 Sweetwater Authority Chula Vista, California Comprehensive Annual Financial Report for the year ended June 30, 2018 Providing safe, reliable water 73 Sweetwater Authority Comprehensive Annual Financial Report for the year ended June 30, 2018 District Financial Management Tish Berge, General Manager Jennifer H. Sabine, Assistant General Manager Rich Stevenson, Director of Finance Prepared by Finance Department Sweetwater Authority 505 Garrett Avenue Chula Vista, California 91910 74 Sweetwater Authority Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2018 Table of Contents Page Introductory Section Letter of Transmittal i Certificate of Achievement for Excellence in Financial Reporting vii Organization Chart viii List of Principal Officers ix Financial Section Independent Auditor’s Report 1 Management’s Discussion & Analysis 4 Basic Financial Statements Statement of Net Position 8 Statement of Revenues, Expenses and Changes in Net Position 10 Statement of Cash Flows 11 Notes to Basic Financial Statements 13 Required Supplementary Information Schedule of Changes in the Net Pension Liability and Related Ratios 37 Schedule of Contributions - Defined Benefit Pension Plan 38 Schedule of Changes in Net OPEB Liability and Related Ratios 39 Schedule of Contributions – OPEB 40 Statistical Section Net Position by Component – Last Ten Fiscal Years 41 Changes in Net Position – Las Ten Fiscal Years 42 Water Sold by Type of Customer – Last Ten Fiscal Years 44 Customers by Revenue Type – Last Ten Fiscal Years 45 Water Rates – Last Ten Fiscal Years 46 Ten Largest Customers – Current and Nine Years Prior 47 Ratios of Outstanding Debt – Last Ten Fiscal Years 48 Debt Coverage Ration – Last Ten Fiscal Years 49 Demographic and Economic Statistics – Last Ten Fiscal Years 50 Local Area Employment Profile – For the Years 2015 and 2010 51 Active Meters by Size – Last Ten Fiscal Years 52 Employee Count – Last Ten Fiscal Years 53 Capital Indicators – Last Ten Fiscal Years 54 Key Operational Indicators – Last Ten Fiscal years 55 75 October 17, 2018 Governing Board, We are pleased to submit the Comprehensive Annual Financial Report (CAFR) for the Sweetwater Authority (Authority) for the fiscal year ended June 30, 2018. The purpose of this report is to provide the Governing Board (Board), the public, and other interested parties, with reliable financial information about the Authority. Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal controls that it has established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. Davis Farr, LLP, Certified Public Accountants, have issued an opinion that stated the Authority’s financial statements for the year ended June 30, 2018 are presented fairly, in all material respects. The independent auditors' report is located at the front of the financial section of this report. The Management’s Discussion and Analysis (MD&A) immediately follows the independent auditor’s report in the Financial Section and provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements this letter of transmittal. Following the MD&A are the basic financial statements, notes to the statements, and an unaudited section of statistical information. In addition to the MD&A, the notes to the financial statements provide important information relating to the financial statements themselves. This report has been prepared using the financial reporting model recommended in the Government Accounting Standards Board's (GASB) Statement 34. The GASB requires proprietary fund governments to use the full accrual basis of accounting. The accompanying statements have been prepared using the full accrual basis. Authority Profile Sweetwater Authority was formed in 1977 under a Joint Powers Agreement (the “JPA”) between the City of National City and South Bay Irrigation District (SBID) pursuant to Article 1, Chapter 5, Division 7, Title 1 of the Government Code of the State. SBID was established in 1951 pursuant to the Irrigation District Law (Division 11 of the Water Code of the State). National City is a general law city incorporated in 1887. The JPA was first entered into on February 1, 1972. The Authority has no taxing power but may otherwise exercise certain common powers of SBID and National City. The JPA provides, in general, Sweetwater Authority - A Public Water Agency i Serving National City, Chula Vista and Surrounding Areas 76 that the Authority may acquire, own, lease, operate, manage, maintain, and improve its Water System. The agreement grants the Authority several specific powers required to carry out its main purpose. The Authority provides water service to the western and northern portions of the City of Chula Vista (west of Interstate 805 to San Diego Bay) and National City, plus adjacent unincorporated areas, including the communities of Lincoln Acres, Bonita, Lynwood Hills and Sunnyside. The service area currently has a population of approximately 191,500. Local Water Resources The Authority’s function is to provide potable water to the customers in its service area. The local natural water resources available to the Authority can provide up to 100 percent of water supply requirements, depending on local rainfall. The local supplies include two major raw water reservoirs; Loveland Reservoir and Sweetwater Reservoir located east of its service area with a combined capacity of 53,466 acre-feet. The Authority is responsible for maintaining much of the watershed that surrounds each reservoir. The reservoirs can store more than one year’s supply of water; however, the Loveland Reservoir is used for longer term storage. The Authority owns and operates the Perdue Water Treatment Plant that treats water stored in the Sweetwater Reservoir and from a raw water pipeline connection to the San Diego County Water Authority (SDCWA). In addition, the Authority has two groundwater production facilities: the Reynolds Desalination Facility that extracts and treats brackish ground water and the National City Wells that extracts fresh water. The Authority delivers water which meets all current Federal and State primary drinking water standards. The State has experienced severe drought patterns in recent years. The Authority’s watershed did receive some rain fall in the prior fiscal year; however, for FY 2017-18 the dry weather patterns returned and the Authority’s watershed received rainfall that was near record low levels. Local rainfall is collected in the surface water reservoirs and is an important component of the Authority’s water supply portfolio. The sources of water supply for prior fiscal years are included in the Statistical Section of the CAFR. The Authority projects that 46 percent of water supplies will come from its own local sources in fiscal year 2018-19 and the remaining 54 percent of supplies will be purchased from the local wholesaler, SDCWA. Drought The Authority’s financial statements can fluctuate widely in response to drought conditions which can impact the Authority’s access to local water resources. The hydrological conditions in California vary widely from year to year. In 2013, much of California experienced one of the driest years on record and Governor Edmund G. Brown (the “Governor”) proclaimed a drought state of emergency on January 17, 2014. Subsequently, the drought in California has eased and on April 7, 2017, Governor Brown officially declared the five-year-long drought over in most of California. The declaration left in place the requirement that agencies report urban water usage and continued the prohibition on eight wasteful water practices. The prohibitions are watering lawns in a manner that causes runoff; watering lawns within 48 hours of rain; using potable water to irrigate turf on public street medians; hosing off sidewalks, driveways, or other hardscapes except as necessary for immediate safety or sanitary hazards; running fountains or other decorative water features unless connected to a recirculating system; and washing automobiles with hoses not equipped with an automatic shut- off nozzle. The public outreach messages associated with drought can affect how Sweetwater Authority - A Public Water Agency Serving National City, Chula Vista and Surrounding Areas ii 77 much water customers conserve and the resulting water revenue that the Authority receives. Water use reduction from implementation of the Executive Order issued in 2014-2016 adversely affected the Authority’s operating results in prior fiscal years. However in fiscal years 2016-17 and 2017-18, the Authority’s customers increased water use slightly due to easing of drought restrictions. The increased use resulted in a corresponding increase in water sales. Drought also affects the availability of local water supplies, and the low amount of local rain in fiscal year 2017-18 left surface water reservoirs nearly depleted. The Authority treats surface water directly from the Sweetwater Reservoir, and as of June 30, 2018, the reservoir was at 18.4 percent of capacity. The fiscal year 2018-19 budget forecasts the available water in the reservoir to be fully utilized by October 2018. The Authority will rely solely on ground water sources and purchased wholesale water once the reservoir has reached the minimum emergency storage level. The Authority recently adopted new water rates and fiscal policies that are design to smooth out the financial fluctuations caused by dry weather patterns. These new rates and policies are further discussed in the Financial Policies section. Local Economy In general, the Authority’s financial status is affected more by environmental factors than economic factors. While the local economy was highly affected by the economic downturns that occur in the last decade, the area has seen some economic recovery since that time. However, the Authority’s service area has one of the lowest median household incomes in San Diego County. The most recent median household income was $48,447 based on a 2013 census tract analysis. The Authority relies on revenue from water sales to maintain operations. Changes in local property values do not affect revenues since no property taxes are collected. Long-term Planning and Major Initiatives The Authority has a number of planning documents to establish short and long term goals. The Authority’s Strategic Plan is the framework that provides decision-making guidance, including a structure for tracking and advancing policies, plans, and programs in a disciplined effort to make fundamental decisions for a rational course of action. The framework includes a mission, vision, values, guiding principles, goals and objectives, and performance measures. The Board updates the Plan annually in advance of the budget process that addresses the goals and objectives for the pending fiscal year. The Board adopts an annual budget that includes a five-year financial and capital plan. The Budget allocates funds for operating expenses, capital improvements and additions, engineering studies, and repayment of existing debt. In addition to the Strategic Plan and Budget, the Authority adopted a Water Distribution System Master Plan. This plan presents an evaluation of the transmission, pumping, storage, and distribution pipeline network, and recommends additions and/or replacement of facilities to meet anticipated demands through the year 2040. In fiscal year 2017-18, the Authority completed a project to expand its local water supplies through the expansion of its Reynolds Desalination Facility. This facility can now provide a drought proof water Sweetwater Authority - A Public Water Agency Serving National City, Chula Vista and Surrounding Areas iii 78 groundwater and uses reverse-osmosis treatment along with a finishing treatment prior to delivering the water to customers. The facility, originally constructed in 1999, can produce five million gallons per day (MGD) of drinking water. The expansion cost approximately $42 million to complete, of which the Authority secured 75 percent of the funding from Federal and State grants. The resulting water produced by the facility costs less than imported water and uses solar panels to fully power the facility and reduce the Authority’s carbon footprint. The Authority was awarded the Corky McMillin Best of South County for its forward thinking and strategic planning. The Authority has a number of future initiatives that will be funded with the recently issued Sweetwater Authority Water Revenue Bond Series 2017A debt issue and reserve funding. The projects to be funded consists of: (i) the design and construction of certain segments of the Authority’s secondary mains, (ii) the design and construction of certain segments of the Authority’s 36-inch transmission main, (iii) the replacement of a stairway at the Loveland Dam, and (iv) the design and replacement of the Central- Wheeler Tank, (v) and construction of Sweetwater Dam improvements. The total cost of the Project is budgeted to be $29 million, of which $21.8 million will be financed from the recent debut issue proceeds and the balance funded from Authority reserves. Standard & Poor recently affirmed the Authority’s rating on all outstanding debt as AA with a stable outlook; for more information on the current and new debt issues, see the notes to these financial statements. Financial Policies The Authority follows a set of Financial Policies that are reviewed annually and updated as needed. The first section of the Financial Policy is the Budget Policy. Prior to June 30 of each year, the General Manager submits to the Board a proposed budget at a regular Board meeting(s) or a special Board meeting(s) to review the budget material and obtain comments from ratepayers. The Board typically approves the budget prior to July 1. The Authority’s budget can be amended mid-year for unanticipated revenues and/or expenditures due to changed circumstances that are not included in budget assumptions. The Board approved and adopted the budget for fiscal year 2018-19 on June 13, 2018. The adopted operating budget for fiscal year 2017-18 was $40 million in total and the adopted budget for fiscal year 2018-19 increased by 23.2 percent to $49.3 million. This increase is due to the need to purchase more wholesale water in fiscal year 2018-19, and this increase will be supported by use of available reserve funds and an increase in water rates adopted by the Governing Board on August 20, 2018. Sweetwater Authority - A Public Water Agency Serving National City, Chula Vista and Surrounding Areas iv 79 The Debt Policy and Disclosure Procedures Policy provide best practices for the Authority’s debt issuance activities. Investment Policy and Reserve Policy, provide guidance on how the Authority manages its fund balances. The Reserve Policy was recently updated in association with the newly adopted water rates. The Authority’s water rates now have a component to directly pass-through to customers the cost of purchased wholesale water. This rate fluctuates as the need to purchase more or less wholesale water occurs in response to dry and wet weather patterns. The new pass-through wholesale water rate is also authorized to fund a newly adopted reserve fund. This new reserve, the Rate Stabilization Reserve, will be utilized to smooth the impact on customers when the wholesale water pass-through rates fluctuates in response for the need to purchase more or less wholesale water. Operating Results and Projections The Authority’s operating results mostly fluctuate due to two major influences: 1) customer water use that affects water revenues and 2) fluctuation in local rainfall that affects the volume of stored water in local surface reservoirs and subsequently affecting the need for the Authority to purchase wholesale water, an expense. The recent drought and lower than average local rainfall has created the need to purchase more wholesale water; thus, increasing expenses. The Authority continues to maintain financial viability through rate increases and prudent use of reserves. In fiscal years 2016-17 and 2017- 18 there was a slight increase in revenue due to an increase in water use. The Authority projects a 0.5 percent increase in customer water use over each of the next five years. The volume of water required to supply customer needs will affect the Cost of Water Sales on the financial statements. Additionally, the Cost of Water Sales will fluctuate based on the increase in the rate the Authority pays to SDCWA for purchased water and the cost of power and chemicals to treat water. The SDCWA wholesale water rate and treatment costs are expected to increase by 4.9 percent each of the four future fiscal years. The projected water supplies available in Sweetwater Reservoir assume that the local watershed will receive rainfall in an amount approximately equal to 50 percent of the ten-year average over each of the future four years. The actual amount of rainfall in any year will impact the Cost of Water Sales by requiring the Authority to purchase either more or less wholesale water from SDCWA, thus increasing or decreasing Cost of Water Sales expense, respectively. The variation in expenses related to water purchase will correlate with the variation in rainfall. The Desalination Facility and National City Wells water supplies make up approximately 46 percent of the Authority’s total annual water supply and are not subject to weather variations. Sweetwater Authority - A Public Water Agency Serving National City, Chula Vista and Surrounding Areas v 80 Awards The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to Sweetwater Authority for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2017. To earn a Certificate of Achievement, a government agency must publish an easily readable and efficiently organized Comprehensive Annual Financial Report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. Staff believes that the Authority’s current Comprehensive Annual Financial Report continues to meet the Certificate of Achievement Programs’ requirements and is submitting it to the GFOA to determine its eligibility for another certificate. Acknowledgements We would like to thank the Governing Board for their continued leadership supporting the highest level of prudent fiscal management. Additionally, preparation of this report could not have been accomplished without support and input from all departments, and from our independent auditors, Davis Farr LLP, Certified Public Accountants. Respectfully submitted, Sweetwater Authority - A Public Water Agency Serving National City, Chula Vista and Surrounding Areas vi 81 GFOA Certificate of Achievement for Excellence in Financial Reporting The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the Sweetwater Authority for its CAFR for the fiscal year ended June 30, 2017. This was the first year that the District has achieved this prestigious award. In order to be awarded a Certificate of Achievement, the District had to publish an easily readable and comprehensive report. This report must satisfy both Generally Accepted Accounting Principles (GAAP) and applicable legal requirements. This award is valid for a period of one year only. We believe our current CAFR continues to meet the Certificate of Achievement Program’s requirements, and will be submitting it to GFOA to determine its eligibility for another certificate. vii 82 SWEETWATER AUTHORITY AUTHORITY CUSTOMERS BOARD OF DIRECTORS LEGAL COUNSEL GENERAL MANAGER Board Secretary/ Admin. Asst Public Affairs Manager Administrative ASSISTANT Assistant GENERAL MANAGER Director of Director of Administrative Director of Director of Director of Finance/ Services/ Distribution Water Quality Engineering Information Customer Systems Service 07/01/18 viii 83 List of Principal Officials Chair Vice Chair Terry Mayor Ron Thomas Morrison South Bay National City Irrigation District Division 4 Steve Josè F. Jose Josie Jess Castaneda Cerda Preciado Calderon-Scott Van Deventer South Bay South Bay South Bay South Bay National City Irrigation District Irrigation District Irrigation District Irrigation District Division 1 Division 2 Division 3 Division 5 The Sweetwater Authority governing board, or board of directors, is composed of 7 members. Five directors are elected by division by the citizens of the South Bay Irrigation District (SBID). Two directors are appointed by the Mayor of National City, subject to City Council confirmation. The governing board establishes policies and procedures for Sweetwater Authority operations. ix 84 Board of Directors Sweetwater Authority Chula Vista, California Independent Auditors’ Report Report on the Financial Statements We have audited the accompanying financial statements of the Sweetwater Authority (Authority), as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise the Authority’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Authority’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Authority’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 1 85 Board of Directors Sweetwater Authority Chula Vista, California Page 2 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the Sweetwater Authority, as of June 30, 2018, and the respective changes in financial position and cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As described further in Note 12 to the financial statements, during the year ended June 30, 2018, the Authority implemented Governmental Accounting Standards Board (GASB) Statements No. 75 and 89. The Authority reported two prior period adjustments related to the implementation of GASB No. 75 and to correct capital assets as described further in Note 12 to the financial statements. Our opinion is not modified with respect to these matters. Report on Summarized Comparative Information We have previously audited the Authority’s 2017 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated October 17, 2017. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2017 is consistent, in all material respects, with the audited financial statements from which it has been derived. Required Supplementary Information Accounting principles generally accepted in the United States of America require that management’s discussion and analysis, schedule of changes in net pension liability and related ratios, schedule of plan contributions – defined benefit pension plan, schedule of changes in net OPEB liability and related ratios, and schedule of contributions – OPEB be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Authority’s basic financial statements. The introductory section and the statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. 2 86 Board of Directors Sweetwater Authority Chula Vista, California Page 3 The introductory section and the statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 2, 2018 on our consideration of the Authority’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Authority’s internal control over financial reporting and compliance. Irvine, California October 2, 2018 3 87 SWEETWATER AUTHORITY MANAGEMENT’S DISCUSSION AND ANALYSIS This section of the Authority’s annual financial report presents management's analysis of the Authority’s financial performance for the year ended June 30, 2018. Please read in conjunction with the financial statements, which follow this section. FINANCIAL HIGHLIGHTS • The Authority has implemented the Governmental Accounting Standards Board’s (GASB) accounting standard, Statement 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions (OPEB). Referred to as GASB 75, this standard establishes the measurement and recognition of liabilities, deferred outflows of resources, and deferred inflows of resources, and expense/expenditures for post-employment benefits, other than pension, provided to retirees. OPEB for the Authority mainly consists of a contribution toward retirees health insurance costs up to the age of 65. Fiscal year 2017-18 was the first year that the authority was required to comply with GASB 75 and present its OPEB related transactions in the financial statements. The June 30, 2018 deficit balance for the difference between the total amount of OPEB liability and the total amount of assets in trust to offset the OPEB benefits, or Net OPEB Liability, is $2.2 million. • Cash and cash equivalents increase by $12.7 million in fiscal year 2017-18 primarily as a result of the receipt of grant funds for the expansion of the Richard A. Reynolds Desalination Facility and also higher than expected water sales. • Long-term Liabilities increased by $27.8 million in fiscal year 2017-18 due primarily to an increase in the Net Pension Liability of $5.6 million, increase in Net OPEB Liability of $2.2 million, and the issuance of the Water Revenue Bond Series 2017A in the amount of $21.8 million. • The Authority's debt service coverage ratio for fiscal year ending June 30, 2018 was 4.42. This ratio demonstrates the Authority's ability to service debt from its current operations. The Authority's bond debt covenant requires that the Authority maintain a minimum service coverage ratio of 1.25. • Operating Revenues increased by $3.1 million in fiscal year 2017-18 or an increase of 6.1 percent, and this additional revenue corresponds to an increase in water sales. • The CalPERS employer contribution rate for the Authority in the fiscal year 2017-18 was 8.077 percent with an additional required payment of $2,486,203 toward the Authority’s unfunded pension liability; in total the Authority’s pension contribution as a percent of payroll is 26.625 percent. The employee pension contribution rates were 5.5 to 8 percent. The Authority has made all employer contributions required by CalPERS for the fiscal year. • The Authority’s Net Position for prior fiscal year 2016-17 was restated to correct for an increase in capital assets in the prior year and for the implementation of GASB 75. The adjustment increased the fiscal year 2016-17 Net Position by $106,838 to $177.9 million. OVERVIEW OF THE FINANCIAL STATEMENTS The annual financial report consists of three parts: Management’s Discussion and Analysis, Financial Statements, and Supplementary Information. The Financial Statements section also includes notes that discuss information in the financial statements with more detail. This discussion and analysis is intended to serve as an introduction to the Authority’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. 4 88 SWEETWATER AUTHORITY MANAGEMENT’S DISCUSSION AND ANALYSIS OVERVIEW OF THE FINANCIAL STATEMENTS (continued) The Statement of Net Position presents information on all of the Authority’s assets, deferred outflows of resources, liabilities and deferred inflows of resources, and with the difference between the four reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Authority has improved or weakened. The Statement of Revenues, Expenses and Changes in Net Position presents information that shows how the Authority’s net position changed in the most recent fiscal year. All changes in net position are reported as soon as the underlying event for 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. The Statement of Cash Flows presents information on cash receipts and payments for the fiscal year. The Notes to the Financial Statements provide additional information that is essential to a full understanding of the data supplied in each of the specific financial statements listed above. FINANCIAL ANALYSIS Condensed Statement of Net Position (In Millions of Dollars) 2018 2017 Assets Current and Other Assets $ 63.0 $ 36.9 Capital Assets 202.3 202.6 Total Assets $ 265.3 $ 239.5 Deferred Outflows of Resources $ 10.2 $ 7.3 Liabilities Non-current Liabilities $ 80.6 $ 52.8 Current Liabilities 10.2 14.6 Total Liabilities $ 90.8 $ 67.4 Deferred Inflows of Resources $ 0.7 $ 1.4 Net Position Net investment in Capital Assets $ 187.6 $ 186.4 Unrestricted (3.6) (8.4) Total Net Position $ 184.0 $ 178.0 Overall, Net Position increased by 3.4 percent or $6 million in fiscal year 2017-18. The change to Net Position is due to a significant increase in Current and Other Assets and was offset by a significant increase in Non-Current Liabilities. The Authority issued the Water Revenue Bond Series 2017A in the amount of $21.8 million in fiscal year 2017-18. The proceeds from the bond issue were invested in the Local Agency Investment Fund and were the major factor that contributed to the $26 million increase in Current and Other Assets. In addition, receipt of grant funds for the fiscal year also affected the increase in Current and Other Assets by approximately $4 million. The issuance of the Water Revenue Bond Series 2017A was also the major factor for the increase in Non-Current Liabilities of $27.8 million. However, this increase in Non-Current Liabilities was offset by a decrease in Current Liabilities of $4.4 million. This decrease in Current 5 89 SWEETWATER AUTHORITY MANAGEMENT’S DISCUSSION AND ANALYSIS Liabilities was largely due to a decrease in accounts payable balances at the end of the year compared to the prior year’s accounts payable balance. FINANCIAL ANALYSIS (continued) Condensed Statements of Revenues, Expenses, and Changes in Net Position (In Millions of Dollars) 2018 2017 Operating Revenues $ 53.5 $ 50.4 Non-operating Revenues 2.2 1.5 Total Revenues $ 55.7 $ 51.9 Depreciation Expense $ 8.5 $ 6.3 Other Operating Expense 41.0 46.1 Non-operating Expense 1.2 0.2 Total Expense $ 50.7 $ 52.6 Income(Loss) Before Capital Contributions $ 5.0 $ (0.7) Capital Contributions 0.9 17.9 Change in Net Position 5.9 17.2 Beginning Net Position 178.1 160.7 Ending Net Position $ 184.0 $ 178.0 While the Statement of Net Position shows the change in financial status, the Statement of Revenues, Expenses and Changes in Net Position provides answers to the nature and source of changes in the financial status. Income Before Capital Contributions of $5.0 million and Capital Contributions of $0.9 million were the two sources for the Change in Net Position of $5.9 million in fiscal year 2017-18. Operating Revenues for the Authority were $53.5 million and is $3.1 million more than the previous year’s $50.4 million or a 6.2 percent increase. The increase in revenues corresponds to an increase in customer water use, as the economy has improved and the State of California conservation advertisements over the prior years have decreased and customers have started to use more water. Additionally, Other Operating Expenses decreased from $46.1 million to $41.0 million in fiscal year 2017-18. This decrease of $5.1 million is due to lower reliance on higher cost purchase wholesale water and the higher available volume of lower cost local surface water used in production. However, local available surface water supplies were fully utilized and stored water was at drought levels at the end of the fiscal year. Finally, Capital Contributions decreased by $17 million due to the completion of a grant funded major project in the prior fiscal year to expand the Authority’s desalination Richard A. Reynolds Desalination Facility. CAPITAL ASSETS Capital Assets (In Millions of Dollars) 2018 2017 Land $ 9.2 $ 8.5 Source of Supply Plant 99.9 55.8 Pumping Plant 4.9 3.8 Water Treatment Plant 47.9 45.7 Transmission & Distribution Plant 126.5 122.2 Meters and Services Plant 14.6 14.6 General Plant 23.5 24.8 Construction-in-Progress 3.4 48.5 Subtotal $ 329.9 $ 323.9 6 90 SWEETWATER AUTHORITY MANAGEMENT’S DISCUSSION AND ANALYSIS Less Accumulated Depreciation 127.6 121.3 Net Capital Assets $ 202.3 $ 202.6 CAPITAL ASSETS (continued) Net Capital Assets changed moderately in fiscal year 2017-18. Capital Assets Before Depreciation increased by $6.0 million or 1.9 percent in fiscal year 2017-18. The increase is due to the acquisition of new assets in the current fiscal year related to construction and equipment purchases. Note 3 to the Financial Statements provides additional information on the capital asset transactions that occurred in the fiscal year. The major additions of capital assets were as follows: • $1.1 million Distribution Pump Station Motor Control Centers Replacements • $2.3 million Fluoridation Facilities (funded by County of San Diego / First Five) • $4.5 million for replacement of metallic mains and master plan improvements LONG TERM DEBT At June 30, 2018, the Authority had $50.0 million in outstanding debt and interest due and is composed of the Water Revenue Bond Series 2016A and newly issued Water Revenue Bond Series 2017A. The Series 2017A bond was issued in the amount of $21.8 million to fund the design and construction of certain segments of the Authority’s secondary mains; the design and construction of certain segments of a 36-inch transmission main; the replacement of a stairway at the Loveland Dam; the design and replacement of the Central-Wheeler Tank; and the construction of improvements to the Sweetwater Dam. Note 4 to the Financial Statements provide additional information on the long term debt transactions that occurred in the fiscal year. Other than the Water Revenue Bond Series 2017A, the Authority did not issue any additional debt in the fiscal year 2017-18. ECONOMIC FACTORS AFFECTING CURRENT FINANCIAL POSITION Management continues to address the impact of statewide water supply issues especially in light of the depletion of the Authority’s usable local surface water supply at the end of fiscal year 2017-18. The local winter rains in San Diego County produced local rainfall in an amount that was near the driest year ever recorded for the area. Fiscal year 2017-18 saw 7.5 inches of local rain at Loveland Reservoir and 5.0 inches of local rain at Sweetwater Reservoir compared to the annual averages of 15.3 and 11.3 inches respectively. The Authority continues to encourage customers to maintain water conservation practices, however, due to the continued reduction in state sponsored conservation messages through fiscal year 2017-18, water sales increased by 5.2 percent from the prior fiscal year. In November 2017, Standard & Poor’s Ratings Services (S&P) affirmed the Authority’s Water Revenue Bonds Series 2016A bond rating at AA with a stable outlook and issued a bond rating of AA with a stable outlook for the newly issued Water Revenue Bond Series 2017A. The bond ratings remain unchanged as of June 30, 2018. The S&P rating review considered the fact that the Authority’s water rates are generally adjusted annually based on inflation and wholesale water cost increases which support the strong coverage of annual debt service. CONTACTING THE AUTHORITY’S FINANCIAL MANAGEMENT This financial report is designed to provide a general overview of the Sweetwater Authority’s finances for the Board of Directors, ratepayers, creditors, and other interested parties. Questions or concerns for any of the information provided in the report or requests for additional information should be addressed to the Authority’s Finance Department, 505 Garrett Avenue, Chula Vista, CA 91910 or (619) 420-1413. 7 91 SWEETWATER AUTHORITY COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 CHULA VISTA, CALIFORNIA 92 SWEETWATER AUTHORITY STATEMENT OF NET POSITION June 30, 2018 (with prior year data for comparison only) 2018 2017 ASSETS Current Assets: Cash and cash equivalents (note 2) $ 21,153,740 $ 8,417,424 Restricted cash and cash equivalents (note 2): For bond reserves 473 144 For deposits and advances on construction 380,892 343,222 For bond projects 21,531,354 - Investments 9,568,498 7,628,928 Accounts receivable 8,056,108 7,897,515 Accrued interest receivable 219,452 37,788 Other receivables 314,498 1,140,351 Grant receivables 586,805 10,363,158 Materials and supplies inventory 972,766 843,316 Prepaid expenses 209,942 194,741 Total Current Assets 62,994,528 36,866,587 Non-Current Assets: Net OPEB asset - 83,133 Capital assets (note 3): Capital assets, nondepreciable 12,598,870 57,023,983 Capital assets, depreciable/amortizable 317,360,984 266,773,606 Less accumulated depreciation (127,639,676) (121,288,508) Total Non-Current Assets 202,320,178 202,592,214 Total Assets 265,314,706 239,458,801 DEFERRED OUTFLOWS OF RESOURCES Deferred outflow - pension related (note 5) 9,865,886 7,308,112 Deferred outflow - OPEB related (note 8) 324,199 - Total Deferred Outflows of Resources 10,190,085 7,308,112 See accompanying notes to basic financial statements. 8 93 SWEETWATER AUTHORITY STATEMENT OF NET POSITION (Continued) June 30, 2018 (with prior year data for comparison only) 2018 2017 LIABILITIES Current Liabilities: Accounts payable 5,405,508 9,938,641 Accrued wages and payroll taxes 339,360 328,569 Accrued interest 339,645 161,738 Unearned revenue - 9,600 Current portion of revenue bonds payable 2,916,082 2,758,061 Current portion of compensated absences 801,179 973,114 Current portion of capital lease payable 86,452 107,595 Liabilities Payable from Restricted Assets: Current portion of revenue bonds payable 473 144 Deposits and advances on construction 380,892 343,222 Total Current Liabilities 10,269,591 14,620,684 Non-Current Liabilities: Net pension liability (note 5) 44,301,068 38,701,442 Net OPEB liability (note 8) 2,221,530 - Revenue bonds payable (note 4) 33,238,913 13,147,879 Compensated absences (note 4) 739,549 807,326 Capital lease payable (note 4) 49,074 135,526 Total Non-Current Liabilities 80,550,134 52,792,173 Total Liabilities 90,819,725 67,412,857 DEFERRED INFLOWS OF RESOURCES Deferred inflow - pension related (note 5) 690,620 1,381,243 Total Deferred Inflows of Resources 690,620 1,381,243 NET POSITION Net investment in capital assets 187,560,538 186,359,876 Unrestricted (3,566,092) (8,387,063) Total Net Position $ 183,994,446 $ 177,972,813 See accompanying notes to basic financial statements. 9 94 SWEETWATER AUTHORITY STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION For the year ended June 30, 2018 (with prior year data for comparison only) 2018 2017 OPERATING REVENUES Water sales $ 52,487,098 $ 49,562,829 Other operating revenue 1,003,906 878,726 Total Operating Revenues 53,491,004 50,441,555 OPERATING EXPENSES Cost of water sales and services 22,730,821 29,573,773 General and administrative expenses 18,250,968 16,535,442 Depreciation 8,461,511 6,351,523 Total Operating Expenses 49,443,300 52,460,738 Operating Income (Loss) 4,047,704 (2,019,183) NON-OPERATING REVENUES (EXPENSES) Capacity fees 593,458 643,977 Interest income 558,527 188,761 Net increase (decrease) in fair value of investments (143,946) (120,697) Interest expense (1,067,638) (130,514) Gain (loss) on disposal of assets 64,656 75,052 Other non-operating revenues (expenses) 1,002,458 624,861 Total Non-Operating Revenues (Expenses) 1,007,515 1,281,440 Income (loss) before capital contributions 5,055,219 (737,743) CAPITAL CONTRIBUTIONS 859,576 17,936,054 Change in Net Position 5,914,795 17,198,311 NET POSITION AT BEGINNING OF YEAR, AS RESTATED (note 12) 178,079,651 160,774,502 NET POSITION AT END OF YEAR $ 183,994,446 $ 177,972,813 See accompanying notes to basic financial statements. 10 95 SWEETWATER AUTHORITY STATEMENT OF CASH FLOWS For the year ended June 30, 2018 (with prior year data for comparison only) 2018 2017 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 55,055,538 $ 50,846,647 Cash payments to suppliers for goods and services (35,661,031) (29,887,246) Cash payments to employees for services and benefits (8,021,861) (19,339,663) Net Cash and Cash Equivalents Provided (Used) by Operating Activities 11,372,646 1,619,738 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from developer contributions 2,826,387 643,977 Proceeds from capital grants 10,731,513 18,015,796 Proceeds from the sale of capital assets 64,840 75,052 Proceeds from bond issuance 21,830,000 16,755,000 Proceeds from bond premiums 1,192,089 1,969,229 Principal payments on long-term debt (2,537,595) (2,251,901) Payments to bond escrow agent - (22,860,695) Interest payments on long-term debt (1,232,436) (1,091,334) Acquisition and construction of capital assets (8,272,792) (25,280,118) Proceeds from construction related advances and deposits 37,670 18,127 Net Cash and Cash Equivalents Provided (Used) by Capital and Related Financing Activities 24,639,676 (14,006,867) CASH FLOWS FROM INVESTING ACTIVITIES Interest received on investments 180,885 110,656 Proceeds from sale and maturities of investments - 2,590,930 Purchase of investments (1,887,538) (1,995,000) Net Cash and Cash Equivalents Provided (Used) by Investing Activities (1,706,653) 706,586 Net Increase (Decrease) in Cash and Cash Equivalents 34,305,669 (11,680,543) Cash and Cash Equivalents, Beginning of Year 8,760,790 20,441,333 Cash and Cash Equivalents, End of Year $ 43,066,459 $ 8,760,790 See accompanying notes to basic financial statements. 11 96 SWEETWATER AUTHORITY STATEMENT OF CASH FLOWS (Continued) For the year ended June 30, 2018 (with prior year data for comparison only) 2018 2017 Reconciliation of operating income (loss) to net cash flows provided (used) by operating activities: Operating Income (loss) $ 4,047,704 $ (2,019,183) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation 8,461,511 6,351,523 Other non-operating income 1,002,458 624,861 (Increase) decrease in accounts receivable (158,593) (363,571) (Increase) decrease in other receivables 730,269 138,869 (Increase) decrease in prepaid expenses 67,932 34,481 (Increase) decrease in materials and supplies - inventory (129,450) (73,820) (Increase) decrease in deferred outflows (2,881,973) (4,414,644) Increase (decrease) in accounts payable (4,533,133) (3,095,075) Increase (decrease) in accrued wages and payroll taxes 10,791 (532,265) Increase (decrease) in compensated absences (239,712) (18,203) Increase (decrease) in unearned revenue (9,600) 4,933 Increase (decrease) in deferred inflows (690,623) (1,260,553) Increase (decrease) in net pension liability 5,599,626 6,242,385 Increase (decrease) in net OPEB liability 95,439 - Net Cash and Cash Equivalents Provided (Used) by Operating Activities $ 11,372,646 $ 1,619,738 Schedule of Cash and Cash Equivalents Current Assets: Cash and cash equivalents $ 21,153,740 $ 8,417,424 Restricted cash and cash equivalents For bond reserves 473 144 For deposits and advances on construction 380,892 343,222 For bond projects 21,531,354 - Total Cash and Cash Equivalents $ 43,066,459 $ 8,760,790 Noncash Investing, Capital and Financing Activities: There were no noncash investing capital and financing activites during the years ended June 30, 2018 or 2017. See accompanying notes to basic financial statements. 12 97 SWEETWATER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS Note 1. Description of Organization and Significant Accounting Policies Nature of Organization Sweetwater Authority (Authority) is a special district created by a Joint Powers Agreement between South Bay Irrigation District (District) and the City of National City. The Authority's Governing Board is composed of the five members of the District's Board and two members appointed by the Mayor of the City of National City and confirmed by the City Council of National City. The Authority was formed for the purpose of owning, operating, managing, maintaining and improving the water system serving the City of National City, the City of Chula Vista and certain adjacent unincorporated portions of San Diego County. Reporting Entity The Authority has defined its reporting entity in accordance with the Governmental Accounting Standards Board's Codification of Governmental Accounting and Financial Reporting Standards. These standards provide guidance for determining which governmental activities, organizations and functions should be included in the reporting entity and how information about them should be presented. The basic criterion for inclusion of a governmental unit in a governmental reporting entity are: (1) financial interdependency, (2) selection of governing authority, (3) designation of management, (4) ability to significantly influence operations, and (5) accountability for fiscal matters. The scope of this report extends exclusively to the financial information of Sweetwater Authority. The Governing Board of the Authority has no oversight responsibility over any other governmental unit or agency. As such, the Board's governing authority, designation of management, ability to significantly influence operation, and accountability for fiscal matters extend only to the affairs of the Authority. Measurement Focus, Basis of Accounting, and Financial Statement Presentation Measurement focus is a term used to describe “which” transactions are recorded within the various financial statements. Basis of accounting refers to “when” transactions are recorded regardless of the measurement focus applied. The accompanying financial statements are reported using the economic resources measurement focus, and the accrual basis of accounting. Under the economic measurement focus all assets and liabilities (whether current or noncurrent) associated with these activities are included on the Statement of Net Position. The Statement of Revenues, Expenses and Changes in Net Position present increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. The Authority 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 Authority is that the costs (including depreciation) of providing goods and services to the general public on a continuing basis be financed or recovered primarily through user charges. The basic financial statements of the Authority 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. 13 98 SWEETWATER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS Note 1. Description of Organization and Significant Accounting Policies (continued) The net position of the Authority 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 asset, 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 net investment in capital assets. Restricted Net Position This component of net position consists of constraints placed on net position use through external constraints imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments or constraints imposed by law through constitutional provisions or enabling legislation. Unrestricted Net Position This component of net position consists of net position that does not meet the definition of “net investment in capital assets” or “restricted net position”. The Authority distinguishes operating revenues and expenses from non-operating items. Operating revenues are those revenues that are generated by water services while operating expenses pertain directly to the furnishing of those services. Non-operating revenues and expenses are those revenues and expenses generated that are not directly associated with the normal business of supplying water. When both restricted and unrestricted resources are available for use, it is the Authority’s practice to use restricted resources first, then unrestricted resources as they are needed. Deferred Outflows/Inflows of Resources In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to future periods and so will not be recognized as an outflow of resources (expense/expenditure) until that time. The Authority has two items that qualify for reporting in this category, deferred outflows related to pensions and OPEB. In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to future periods and will not be recognized as an inflow of resources (revenue) until that time. The Authority has one item that qualifies for reporting in this category, deferred inflow related to pensions. Statement of Cash Flows For purposes of the Statement of Cash Flows, the Authority considers all highly liquid investments (including restricted assets) with a maturity period, at purchase, of three months or less to be cash equivalents. 14 99 SWEETWATER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS Note 1. Description of Organization and Significant Accounting Policies (continued) Investments Investments are stated at their fair value which represents the quoted or stated market value. Investments that are not traded on a market, such as investments in external pools, are valued based on the stated fair value as represented by the external pool. Fair Value Measurements The Authority categorizes its fair value measurement within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the relative inputs used to measure the fair value of the investments. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described as follows: Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Authority has the ability to access. Level 2: Inputs to the valuation methodology include: • Quoted prices for similar assets or liabilities in active markets; • Quoted prices for identical or similar assets or liabilities in inactive markets; • Inputs other than quoted prices that are observable for the asset or liability; • Inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Unobservable inputs reflect the Authority’s own assumptions about the inputs market participants would use in pricing the asset or liability (including assumptions about risk). Unobservable inputs are developed based on the best information available in the circumstances and may include the Authority’s own data. Capital Assets The cost of purchased and self-constructed additions to utility plant and major replacements of property are capitalized at cost. The Authority capitalizes all assets with a historical cost of at least $10,000 and a useful life of more than two years. Cost includes materials, direct labor, transportation, and such indirect items as engineering, supervision, employee fringe benefits, and interest incurred during the construction period. Repairs, maintenance, and minor replacements of property are charged to expense. Contributed assets are capitalized at the estimated acquisition value on the date contributed. Depreciation and Amortization Depreciation and amortization are charged as an expense against operations and computed by the straight-line method over the estimated useful lives of the respective assets. See below for range of estimated useful lives of depreciable assets. 15 100 SWEETWATER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS Note 1. Description of Organization and Significant Accounting Policies (continued) Useful Life Source of supply 10-33 years Pumping facilities 10-25 years Water treatment plant 12-50 years Transmission & distribution pipelines 32-75 years Meters and services 12-30 years General facilities 15-75 years Inventories and Prepaids Inventory consists primarily of materials used in the construction and maintenance of the water system and is valued at weighted average cost. Both inventory and prepaids use the consumption method whereby they are reported as an asset and expensed as they are consumed. Accounts Receivable and Allowance for Doubtful Accounts The Authority grants credit to its customers, substantially all of whom are residents and businesses in National City, Bonita, and portions of Chula Vista, California. The Authority charges doubtful accounts arising from water receivables to bad debt expense when it is probable that the accounts will be uncollectible. Management estimates all receivables at June 30, 2018 to be collectable, as any receivables deemed uncollectable have been written off. Bond Premiums Bond premiums, net of accumulated amortization, were $2,560,468 as of June 30, 2018, and have been reported as an addition to bonds payable. Compensated Absences It is the Authority’s policy to record the cost of paid time off as it is earned. Paid time off is payable to employees at the time it is taken or upon termination of employment. As of June 30, 2018, total accrued paid time off was $1,540,728. Restricted Assets and Liabilities Certain current liabilities have been classified as current liabilities payable from restricted assets as they will be funded from restricted assets. Pensions For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Authority’s California Public Employees’ Retirement System (CalPERS) plans (Plans) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. GASB 68 requires that the reported results must pertain to liability and asset information within certain defined timeframes. 16 101 SWEETWATER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS Note 1. Description of Organization and Significant Accounting Policies (continued) For this report, the following timeframes are used: Valuation Date June 30, 2016 Measurement Date June 30, 2017 Measurement Period July 1, 2016 to June 30, 2017 Other Postemployment Benefits (OPEB) For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the Authority’s plan (OPEB Plan), the assets of which are held by the California Employers’ Retiree Benefit Trust (CERBT), and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined by an independent actuary. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. Generally accepted accounting principles require that the reported results must pertain to liability and fiduciary net position information within certain defined timeframes. For this report, the following timeframes are used: Valuation Date June 30, 2017 Measurement Date June 30, 2017 Measurement Period July 1, 2016 to June 30, 2017 Use of Estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities 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. Comparative Financial Statements 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 selected financial data was derived. The Authority has reclassified certain prior year information to conform with current year presentations. 17 102 SWEETWATER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS Note 2. Cash and Investments Cash and investments are classified in the accompanying financial statements at June 30, 2018: Statement of Net Position: Current Assets Unrestricted: Cash and cash equivalents $ 21,153,740 Restricted cash and cash equivalents: For bond reserves 473 For deposits and advances on construction 380,892 For bond projects 21,531,354 Investments 9,568,498 Total cash and investments $ 52,634,957 Cash and investments as of June 30, 2018 consist of the following: Cash on hand $ 7,050 Deposits with financial institutions 601,433 Investments 52,026,474 Total cash and investments $ 52,634,957 Investments Authorized by the Authority’s Investment Policy The table below identifies the investment types that are authorized by the Authority’s investment policy. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the Authority, rather than the general provisions of the Authority's investment policy. Maximum Maximum Authorized Maximum Percentage Investment Investment Type Maturity of Portfolio in One Issuer U.S. Local Agency Securities 5 years 70% None U.S. Treasury Obligations 5 years None None Banker's Acceptances 180 days 20% None Commercial Paper 270 days 25% 10% Negotiable Certificates of Deposit 5 years 30% None Bank Demands N/A 5% None Repurchase Agreements 1 year 20% None Money Market Mutual Funds N/A 20% None Local Agency Investment Fund (LAIF) N/A None None Managed Pools N/A None 20% Placement Service Certificates of Deposits 5 years 30% None 18 103 SWEETWATER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS Note 2. Cash and Investments (continued) 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 Authority's investment policy. The table below identifies the investment types that are authorized for investments held by bond trustee. Maximum Maximum Authorized Maximum Percentage Investment Investment Type Maturity of Portfolio in One Issuer U.S. Treasury Obligations None None None U.S. Agency Securities None None None Banker's Acceptances 360 days None None Commercial Paper 270 days None None Money Market Mutual Funds N/A None None Investment Contracts None None None 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 Authority manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer-term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. Information about the sensitivity of the fair values of the Authority’s investments to market interest rate fluctuations are provided by the following table that shows the distribution of the Authority’s investments by maturity as of June 30, 2018. As of June 30, 2018, the Authority had the following investments: Remaining Maturity (in Months) 12 Months 13 to 24 25 to 60 Investment Type Total or Less Months Months Local Agency Investment Fund (LAIF)$ 42,457,503 $ 42,457,503 $ - $ - U.S. Government Sponsored Entities 6,397,268 4,405,528 1,991,740 - Treasury Securities 1,950,320 - 1,950,320 - Money Market Funds 473 473 - - Non-negotiable Certificate of Deposits 1,220,910 - 1,220,910 - Total $ 52,026,474 $ 46,863,504 5,162,970$ $ - 19 104 SWEETWATER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS Note 2. Cash and Investments (continued) Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code or the Authority’s Investment Policy, or debt agreements, and the S&P ratings as of June 30, 2018 for each investment type. The Authority's actual rating as of the year ended June 30, 2018 for each investment type are as follows: Rating as of Year End Minimum Legal Exempt Investment Type Total Rating AAA AA Not Rated From Rating Local Agency Investment Fund (LAIF) $ 42,457,503 N/A $ - $ - $ 42,457,503 $ - U.S. Government Sponsored Entities 6,397,268 N/A - 6,397,268 - - Treasury Securities 1,950,320 N/A - - - 1,950,320 Money Market Funds 473 AAA 473 - - - Certificate of Deposits 1,220,910 N/A - - 1,220,910 - Total $ 52,026,474 473$ $ 6,397,268 $ 43,678,413 1,950,320$ Custodial Credit Risk Deposits are exposed to custodial credit risk if they are uninsured and uncollateralized. Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, the Authority 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. Investment securities are exposed to custodial credit risk if the securities are uninsured, are not registered in the name of the Authority and are held by either the counter-party or the counter-party’s trust department or agent but not in the Authority’s name. All cash and certificates of deposit are entirely insured or collateralized. The California Government Code requires California banks and savings and loans associations to secure Authority’s deposits by pledging government securities, which equal at least 110% of the Authority's deposits. California law also permits financial institutions to secure Authority's deposits by the pledging of first trust deed mortgage notes in excess of 150% of the Authority's deposits. The Authority may waive collateral requirements for deposits that are fully insured by the Federal Deposit Insurance Corporation (FDIC) to $250,000. As of June 30, 2018, $1,572,343 of the Authority’s deposits with financial institutions in excess of federal depository insurance limits were held in collateralized accounts. 20 105 SWEETWATER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS Note 2. Cash and Investments (continued) Investment in State Investment Pool The Authority is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the Authority's investment in this pool is reported in the accompanying financial statements at amounts based upon the Authority’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. Fair Value Measurements The Authority categorizes certain assets within the fair value hierarchy established by generally accepted accounting principles. The Authority has the following recurring fair value measurements as of June 30, 2018: Fair Value Hierarchy Level 1 Level 2 Level 3 Total U.S. Government Sponsored Entities $ - $ 6,397,268 $ - $ 6,397,268 Treasury Securities - 1,950,320 - 1,950,320 Total assets reported at fair value $ - $ 8,347,588 $ - $ 8,347,588 Note 3. Capital Assets Capital assets are as follows for the year ended June 30, 2018: Balance Balance June 30, 2017 Additions Disposals June 30, 2018 Capital assets, nondepreciable Land $ 8,450,016 $ 744,747 $ - $ 9,194,763 Construction in progress 48,573,967 6,234,693 (51,404,553) 3,404,107 Total capital assets, nondepreciable 57,023,983 6,979,440 (51,404,553) 12,598,870 Capital assets, depreciable Source of supply 55,787,338 44,119,228 - 99,906,566 Pumping facilities 3,768,757 1,127,455 - 4,896,212 Water treatment plant 45,666,157 2,278,310 - 47,944,467 Transmission & distribution pipelines 122,228,501 4,458,765 (141,020) 126,546,246 Meters and services plant 14,557,024 - - 14,557,024 General facilities 24,765,829 714,149 (1,969,509) 23,510,469 Total capital assets, depreciable 266,773,606 52,697,907 (2,110,529) 317,360,984 21 106 SWEETWATER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS Note 3. Capital Assets (continued) Balance Balance June 30, 2017 Additions Disposals June 30, 2018 Less accumulated depreciation Source of supply (36,345,806) (3,361,743) - (39,707,549) Pumping facilities (2,792,902) (139,074) - (2,931,976) Water treatment plant (14,827,696) (1,391,440) - (16,219,136) Transmission & distribution pipelines (38,332,792) (2,189,404) 141,020 (40,381,176) Meters and services plant (12,101,840) (392,921) - (12,494,761) General facilities (16,887,472) (986,929) 1,969,323 (15,905,078) Total accumulated depreciation (121,288,508) (8,461,511) 2,110,343 (127,639,676) Total capital assets, depreciated 145,485,098 44,236,396 (186) 189,721,308 Net capital assets $ 202,509,081 $ 51,215,836 $ (51,404,739) $ 202,320,178 Note 4. Long Term Debt Changes in long-term debt for the year ending June 30, 2018 consist of the following: Balance Balance Due Within June 30, 2017 Additions Deletions June 30, 2018 One Year 2016 Water Revenue Bonds$ 14,195,000 - (2,430,000) 11,765,000 2,555,000 Unamortized Premium 1,711,084 - (321,853) 1,389,231 321,852 2017 Water Revenue Bonds - 21,830,000 - 21,830,000 - Unamortized Premium - 1,192,089 (20,852) 1,171,237 39,703 Capital Leases 243,121 - (107,595) 135,526 86,452 Compensated Absences 1,780,440 693,107 (932,819) 1,540,728 801,179 Total $ 17,929,645 23,715,196 (3,813,119) 37,831,722 3,804,186 2016 Water Revenue Bonds Water Revenue Bonds were issued on July 28, 2016 in the amount of $16,755,000 with interest rates ranging from 4.00% to 5.00%. The 2016 Bonds were issued for the purpose of refunding the Authority’s entire outstanding principal amount of Series 2005 Water Revenue Bonds. Principal payments are payable on April 1 of each year, commencing on April 1, 2017, with the final installment payment due on April 1, 2022. Interest is payable semi-annually on April 1 and October 1 of each year. The 2016 Water Revenue Bonds contain various covenants and restrictions, principally that the Authority fix, prescribe, revise and collect rates, fees and charges for the Water System which will be at least sufficient to yield, during each fiscal year net revenues (as described in the installment agreement) equal to one hundred twenty-five percent (125%) of the debt service for such fiscal year. The Authority was in compliance with these rate covenants for the fiscal year ended June 30, 2018. 22 107 SWEETWATER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS Note 4. Long Term Debt (continued) The water revenue bond obligation principal and interest payments are payable from net revenue received by the Authority from all sources including amounts held in fund accounts established by the bond indenture. Future principal and interest maturities are as follows for the Water Revenue Bonds: For the Year Ended June 30 Principal Interest Total 2019 $ 2,555,000 $ 525,450 $ 3,080,450 2020 2,930,000 397,700 3,327,700 2021 3,080,000 251,200 3,331,200 2022 3,200,000 128,000 3,328,000 $ 11,765,000 $ 1,302,350 $ 13,067,350 2017 Water Revenue Bonds Water Revenue Bonds were issued on December 12, 2017 in the amount of $21,830,000 with interest rates ranging from 3.125% to 5.000%. The 2017 Bonds were issued to finance the cost of certain water system improvements. Principal payments are payable on April 1 of each year, commencing on April 1, 2023, with the final installment payment due on April 1, 2040. Interest is payable semi-annually on April 1 and October 1 of each year. The 2017 Water Revenue Bonds contain various covenants and restrictions, principally that the Authority fix, prescribe, revise and collect rates, fees and charges for the Water System which will be at least sufficient to yield, during each fiscal year net revenues (as described in the installment agreement) equal to one hundred twenty-five percent (125%) of the debt service for such fiscal year. The Authority was in compliance with these rate covenants for the fiscal year ended June 30, 2018. The water revenue bond obligation principal and interest payments are payable from net revenue received by the Authority from all sources including amounts held in fund accounts established by the bond indenture. Future principal and interest maturities are as follows for the Water Revenue Bonds: For the Year Ended June 30 Principal Interest Total 2019 -$ $ 833,131 $ 833,131 2020 - 833,131 833,131 2021 - 833,131 833,131 2022 - 833,131 833,131 2023 510,000 833,131 1,343,131 Thereafter 21,320,000 10,950,956 32,270,956 $ 21,830,000 $ 15,116,611 $ 36,946,611 23 108 SWEETWATER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS Note 4. Long Term Debt (continued) Capital Leases The Authority entered into a five-year contract with Enterprise Fleet Management (Enterprise) on August 13, 2014 to lease instead of purchase a majority of the vehicles used in the Authority’s day-to-day operations. Each vehicle lease will be for a contracted five-year period with an option to purchase the vehicle at the end of each lease. As each existing vehicle the Authority owns and operates surpasses a determined useful life, a new vehicle will be evaluated for lease through the agreement with Enterprise. The Authority leased seven vehicles under the agreement. The Authority entered into a five-year contract with Sharp Business System on August 12, 2014 to lease a copy machine in the amount of $44,388 used in the Authority’s day-to-day operations. The copier lease will be for a contracted five-year period with an option to purchase at the end of the lease. Future minimum lease payments are as follows for the Capital Leases: For the Year Ended June 30 Total 2019 86,452$ 2020 38,648 2021 10,426 135,526$ 135,526$ Note 5. Pension Plan (PERS) Plan Descriptions All qualified permanent and probationary employees are eligible to participate in the Authority’s Miscellaneous Plan, an agent multiple-employer defined benefit pension plan 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 Plan are established by State statute and Authority resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website. Benefits Provided CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law. The Plan’s provisions and benefits in effect at June 30, 2018, are summarized as follows: 24 109 SWEETWATER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS Note 5. Pension Plan (PERS) (continued) Miscellaneous Prior to On or After Hire date January 1, 2013 January 1, 2013 Benefit formula 2.5% at 55 2.0% at 62 Benefit vesting schedule 5 years of service 5 years of 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 2.5% 1.0% to 2.5% Required employee contribution rates 8.00% 5.50% Required employer contribution rates 8.077% 8.077% Employees Covered The following employees were covered by the benefit terms for the Plan: Miscellaneous Inactive employees or beneficiaries currently receiving benefits 125 Inactive employees entitled to but not yet receiving benefits 54 Active employees 127 Total 306 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 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. The Authority is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. The Authority contribution rates may change if plan contracts are amended. Payments made by the Authority to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions. Net Pension Liability The Authority’s net pension liability for the Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the Plan is measured as of June 30, 2017, using an annual actuarial valuation as of June 30, 2016 rolled forward to June 30, 2017 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown below. 25 110 SWEETWATER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS Note 5. Pension Plan (PERS) (continued) Actuarial Assumptions The total pension liabilities in the June 30, 2016 actuarial valuations were determined using the following actuarial assumptions: Miscellaneous Actuarial Cost Method Entry Age Normal in accordance with requirements of GASB 68 Actuarial Assumptions Discount Rate 7.15% Inflation 2.75% Salary Increases Varies by Entry Age and Service 1 Mortality Rate Table Derived using CalPERS' Membership Data for all Funds Post Retirement Benefit Increase Contract COLA up to 2.75% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 2.75% thereafter 1 The mortality table used was developed based on CalPERS' specific data. The table includes 20 years of mortality improvements using Society of Actuaries Scale BB. For more details on this table, please refer to the 2014 experience study report. Discount Rate The discount rate used to measure the total pension liability was 7.15% for the Plan. To determine whether the municipal bond rate should be used in the calculation of a discount rate for each plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. The tests revealed the assets would not run out. Therefore, the current 7.15% discount rate is adequate and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate of 7.15% will be applied to all plans in the Public Employees Retirement Fund (PERF). The stress test results are presented in a detailed report called “GASB Crossover Testing Report” that can be obtained from the CalPERS website. The long-term expected rate of return on pension plan investments was determined using a building- block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound returns were calculated over the short-term (first 10 years) and the long-term (11-60 years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent. 26 111 SWEETWATER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS Note 5. Pension Plan (PERS) (continued) The table below reflects the long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. The target allocation shown was adopted by the CalPERS Board effective on July 1, 2014. Current Target Real Return Real Return Asset Class Allocation Years 1-10¹ Years 11+² Global Equity 47.0% 4.90% 5.38% Global Fixed Income 19.0% 0.80% 2.27% Inflation Sensitive 6.0% 0.60% 1.39% Private Equity 12.0% 6.60% 6.63% Real Estate 11.0% 2.80% 5.21% Infrastructure and Forestland 3.0% 3.90% 5.36% Liquidity 2.0% -0.40% -0.90% ¹An expected inflation of 2.5% used for this period ²An expected inflaiton of 3.0% used for this period Change of Assumptions In 2017, the accounting discount rate reduced from 7.65% to 7.15%. Subsequent Events In February 2018, the CalPERS Board approved the reduction of the amortization period from 30 years to 20 years effective June 30, 2019. Changes in Net Pension Liability The changes in the net pension liability for the Miscellaneous Plan is as follows: Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability Balance at June 30, 2017 $ 107,066,622 $ 68,365,180 $ 38,701,442 Changes for the year: Service cost 2,099,567 - 2,099,567 Interest on total pension liability 8,046,871 - 8,046,871 Changes of assumptions 6,685,468 - 6,685,468 Differences between expected and actual experience 170,344 - 170,344 Contributions-employer - 2,977,686 (2,977,686) Contributions-employee - 907,768 (907,768) Net investment income - 7,618,107 (7,618,107) Benefit payments, including refunds of employee contributions (4,857,146) (4,857,146) - Administrative expense - (100,937) 100,937 Net changes 12,145,104 6,545,478 5,599,626 Balance at June 30, 2018 $ 119,211,726 $ 74,910,658 $ 44,301,068 27 112 SWEETWATER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS Note 5. Pension Plan (PERS) (continued) Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the Authority, calculated using the discount rate for the Plan, as well as what the Authority’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: Miscellaneous 1% Decrease 6.15% Net Pension Liability $ 60,440,408 Current Discount Rate 7.15% Net Pension Liability $ 44,301,068 1% Increase 8.15% Net Pension Liability $ 30,919,236 Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pension For the year ended June 30, 2018, the Authority recognized pension expense of $5,793,696. At June 30, 2018, the Authority reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Pension contributions subsequent to measurement date $ 3,441,624 $ - Differences between actual and expected experience 570,363 (240,330) Change of Assumptions 4,926,134 (450,290) Net differences between projected and actual earnings on plan investments 927,765 - $ 9,865,886 $ (690,620) $3,441,624 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2019. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows: Year Ending June 30, Amount 2019 $ 1,296,077 2020 3,129,415 2021 1,863,374 2022 (555,224) Thereafter - 28 113 SWEETWATER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS Note 6. Supplementary Retirement Plan (PARS) Effective December 1, 2000, pursuant to sections 401(a) and 501(a) of the Internal Revenue Code, the Authority adopted a tax-qualified governmental retirement plan, the Sweetwater Authority Public Agency Retirement System (PARS) Supplementary Retirement Plan (the Benefit Plan). The Benefit Plan is administered by the Authority and was established to provide all regular employees employed on December 1, 2000, supplemental retirement benefits in addition to the benefits employees will receive from the Public Employee’s Retirement System (PERS). Copies of PARS’ annual financial report may be obtained from its executive office at 4350 Von Karman Ave. Suite 100, Newport Beach, California 92660. The Authority is required to contribute a lump sum amount calculated on the date of the employee’s termination from employment if the amount is greater than $5,000. The lump sum amount is equal to the difference of the employee’s frozen accumulated hours of sick leave on January 1, 2001 less frozen hours taken by employee for qualified compensated absences, multiplied by the employees’ final pay rate. The liability for this lump sum amount using current pay rates is included in accrued employee paid time off. The employee is fully vested at time of termination of employment. When all of the employees who had frozen accumulated sick hours as of January 1, 2001 retire or otherwise terminate employment, the plan will be terminated. The Authority contributed $131,587 for fiscal year ended June 30, 2018. Note 7. Defined Contribution Plan On January 1, 2001, pursuant to sections 401(a) and 501(a) of the Internal Revenue Code, the Authority adopted a single employer defined contribution retirement plan, the Sweetwater Authority Public Agency Retirement System (PARS) Retirement Enhancement Plan (the Contribution Plan). Copies of PARS’ annual financial report may be obtained from its executive office at 4350 Von Karman Ave. Suite 100, Newport Beach, California 92660. The Contribution Plan is administered by the Authority and covers all regular employees employed on or after January 1, 2001. The Authority is required to contribute an amount equivalent to the employees pay rate times twenty-four (24) hours for each eligible employee on the plan’s anniversary date of July 1. Employees are not permitted to make contributions to the plan and the employee is fully vested at the time the Authority’s contribution is made. In addition to the required contribution, the Authority will contribute the value of an employee’s accrued PTO when the accrued amount exceeds two times the annual allocation of PTO; the value of an employee’s PTO balance at the time an employee retires or terminates employment if the value of the PTO balance is greater than $5,000 and an amount equal to the employee’s contribution to their section 457 plan, not to exceed $1,300 for employees covered under the Sweetwater Authority Employee’s committee memo of understanding and $1,500 for Management employees, Department Head employees, and employees covered under the Middle Management and Confidential group memorandums of understandings. The Authority’s contribution to the Contribution Plan was $621,400 for the year ended June 30, 2018. 29 114 SWEETWATER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS Note 8. Post-Retirement Health Care Benefits Plan Description The Authority provides post-retirement health care benefits under a defined benefit retiree healthcare plan (Plan). The Plan 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 (PERS), which acts as a common investment and administrative agent for participating public employers within the State of California. Benefit provisions and all other requirements are established by state statute and the Board. Copies of PERS’ annual financial report may be obtained from their Executive Office, 400 P Street, Sacramento, CA 95814. Funding Policy Under the Plan, retired employees, between the ages 55 and 65, with at least ten years of service receive up to $700 per month toward the cost of health insurance for the retiree and spouse. If a retiree dies between ages 55 and 65, the surviving spouse will receive up to $225 per month for payment of healthcare insurance until age 65 or for a maximum of 10 years, whichever occurs first. The contribution requirements of plan members and the Authority are established and may be amended by the Board of Directors. Employees Covered As of the June 30, 2017 measurement date, the following current and former employees were covered by the benefit terms under the Plan: Active employees 122 Inactive employees or beneficiaries currently receiving benefits 23 Inactive employees entitled to, but not yet receiving benefits - Total 145 Contributions The Plan and its contribution requirements are established by Memoranda of Understanding with the applicable employee bargaining units and may be amended by agreements between the Authority and the bargaining units. The annual contribution is based on the actuarially determined contribution. For the fiscal year ended June 30, 2018, the Authority’s cash contributions were $305,571 in payments to the trust and the estimated implied subsidy was $74,802 resulting in total payments of $324,199. Net OPEB Liability The Authority’s net OPEB liability was measured as of June 30, 2017 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2017 that was used to determine the June 30, 2017 total OPEB liability, based on the following actuarial methods and assumptions: 30 115 SWEETWATER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS Note 8. Post-Retirement Health Care Benefits (continued) Methods and assumptions used to determine contributions: Actuarial Cost Method Entry age actuarial cost method Amortization Method/Period Level percent of payroll over a closed rolling 15-year period Asset Valuation Method Market value Inflation 2.75% Payroll Growth 2.75% per annum, in aggregate Investment Rate of Return 7.00% per annum. Assumes investing in California Employers' Retiree Benefit Trust asset allocation Strategy 1. Healthcare cost-trend rates 4.00% per annum. Retirement Age Tier 1 employees - 2.5% @55 and Tier 2 employees - 2.0% @62 The probabilities of Retirement are based on the 2014 CalPERS Experience Study for the period from 1997 to 2011. Mortality Pre-retirement mortality probability based on 2014 CalPERS 1997-2011 Experience Study covering CalPERS participants. Post-retirement mortality probability based on CalPERS Experience Study 2007-2011 covering participants in CalPERS. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which 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. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: STRATEGY 1 Assumed Asset Class Percentage of Portfolio Gross Return US Large Cap 43.00% 7.795% US Small Cap 23.00% 7.795% Long-Term Corporate Bonds 12.00% 5.295% Long-Term Government Bonds 6.00% 4.500% Treasury Inflation Protected Securities (TIPS) 5.00% 7.795% US Real Estate 8.00% 7.795% All Commodities 3.00% 7.795% Total 100.00% Discount Rate The discount rate used to measure the total OPEB liability was 7.00%. 31 116 SWEETWATER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS Note 8. Post-Retirement Health Care Benefits (continued) It is assumed that the contributions would be sufficient to fully fund the obligation over a period not to exceed 30 years. Additionally, the historic 30-year real rates of return for each asset class along with the assumed long-term inflation was used. Based on those assumptions, net investment income represents realized and unrealized gains and losses based on the fair value of investments, interest, and dividends, net of investment expenses. Investment income/loss is allocated to each employer based on the employer’s percentage of ownership in the respective investment strategies using the daily investment gain/loss provided by the custodian bank. The recognition of investment income/loss is also affected by the timing of the OPEB contributions and reimbursements. Changes in OPEB Liability The changes in the net OPEB liability for the Plan are as follow: Increase (Decrease) Total OPEB Plan Fiduciary Net OPEB Liability Net position Liability/(Asset) (a) (b) (c) = (a) - (b) Balance at June 30, 2017 $ 4,046,449 $ 1,734,273 $ 2,312,176 Changes recognized for the measurement period Service cost 84,777 - 84,777 Interest 277,507 - 277,507 Contributions - employer - 269,218 (269,218) Net investment income - 184,652 (184,652) Administrative expense - (940) 940 Benefit payments (246,586) (246,586) - Net changes 115,698 206,344 (90,646) Balance at June 30, 2018 $ 4,162,147 $ 1,940,617 $ 2,221,530 Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following presents the net OPEB liability of the Authority if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2017: Current 1% Decrease Discount Rate 1% Increase (6%) (7%) (8%) Net OPEB Liability$ 2,496,614 $ 2,221,530 $ 1,971,830 32 117 SWEETWATER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS Note 8. Post-Retirement Health Care Benefits (continued) Sensitivity of the Net OPEB Liability to Changes in the Health Care Cost Trend Rates Current Healthcare Cost 1% Decrease Trend Rate 1% Increase (3%) (4%) (5%) Net OPEB Liability$ 1,833,943 $ 2,221,530 $ 2,667,162 OPEB Plan Fiduciary Net Position PERS issues a publicly available financial report that may be obtained from the CalPERS’ website. 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 5 years actual earnings on OPEB plan investments All other amounts Expected average remaining service lifetime (EARSL) OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2018, the Authority recognized OPEB expense of $178,572. As of fiscal year ended June 30, 2018, the Authority reported deferred outflows of resources related to OPEB from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources OPEB contributions subsequent to measurement date $ 324,199 $ - The $324,199 reported as deferred outflows of resources related to contributions subsequent to the June 30, 2017 measurement date will be recognized as a reduction of net OPEB liability during the fiscal year ending June 30, 2019. 33 118 SWEETWATER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS Note 9. Services Provided to Governmental Agencies Sweetwater Authority is the successor to a series of investor-owned water companies. The original predecessor water company acquired easements and other property rights pertaining to land now lying within the boundaries of the City of National City and the City of Chula Vista and within certain unincorporated areas of the County of San Diego. When a city or county requests a relocation of water lines to facilitate road and drainage improvements, water companies normally do the work without charge. Such an arrangement exists with the City of National City, whose easements and property rights predate those of Sweetwater Authority. Since the Authority's easements and property rights are senior to those of the City of Chula Vista and the County of San Diego, one of the predecessor water companies negotiated agreements with these agencies, whereby they reimburse a portion of certain costs incurred by the water company in relocating water lines to facilitate road and drainage improvements initiated by them. All other services, including water service provided by Sweetwater Authority to the City of National City and the City of Chula Vista, the County of San Diego and other governmental agencies are billed at normal rates. Note 10. Commitments and Contingencies Construction Contracts At June 30, 2018, the Authority had capital projects under construction with an estimated cost to complete of approximately $2,932,400. Litigation The Authority has claims filed against it for a variety of claimed damages. The claims are either for insignificant amounts or are being defended by the Authority’s insurance carrier. None of the claims are significant enough to warrant disclosure as having material financial impact upon the Authority. Note 11. Risk Management The Authority is exposed to various risks of loss related to torts, theft of, damage to, and destruction of assets, errors and omissions, injuries to employees, and natural disaster. The Authority participates in the Association of California Water Agencies Joint Powers Insurance Authority (Association), which arranges for and provides general liability, property damage, and dam failure liability insurance to its member agencies. Sweetwater Authority pays a premium commensurate with the level of coverage requested. The Association is governed by a board consisting of elected representatives of member agencies. This governing board controls the operation of the Association independent of any influence by Sweetwater Authority beyond any elected Sweetwater Authority representation on the Association governing board. The Association is independently accountable for its fiscal matters and maintains its own accounting records. Association budgets are not subject to any approval other than by its governing board. Member agencies share surpluses and deficits proportionately to their participation in the Association. The relationship between the Sweetwater Authority and the Association is such that the Association is not a component unit of the Sweetwater Authority for financial reporting purposes. Separate financial statements of the Association may be obtained at ACWA/JPIA – Finance department 2100 Professional Drive, Roseville, CA 95661-3700. 34 119 SWEETWATER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS Note 11. Risk Management (continued) Real and Personal Property: For Real and Personal Property maximum replacement no more than 100% of value shown in Statement of Value. Limits of insurance vary from $25,000 per occurrence to $50,000 per occurrence, with varying deductibles between $1,000 and $2,500 other than for boiler and machinery and business interruptions. Boiler and machinery deductibles vary from $0 to $50,000 and for business interruptions for turbines and associated equipment deductibles range from 1 times 100% Average Daily Value to 30 times 100% average daily value. Public Officials Liability: Includes Errors and Omissions with coverage limits of $20,000,000. Crime: Includes Public Employee Dishonesty, Forgery or Alteration, Computer Fraud, and ERISA with coverage limits of $1,000,000. Auto Liability: Includes Owned Automobiles, Non-owned automobiles, and Hired Automobiles with coverage limits of $60,000,000, with $1,000. General Liability: Includes Commercial, Contractual, Products/Completed Operations and Personal Injury with coverage limits of $20,000,000. Workers’ Compensation Coverage and Employer’s Liability: Statutory limits per occurrence for Workers’ Compensation and $2 Million for Employer’s Liability Coverage, subject to the terms, conditions and exclusions as provided in the Certificate of Coverage. Dam Failure Liability: Includes Bodily Injury and Property Damage with coverage limits of $5,000,000, with a $50,000 deductible. During the past three fiscal (claims) years none of the above programs of protection have had settlements or judgments that exceeded pooled or insured coverage. There have been no significant reductions in pooled or insured liability coverage from coverage in the prior year. Note 12. Prior Period Adjustment The accompanying financial statements reflect the implementation of GASBs No. 75 and No. 89. GASB 75 contains requirements for measuring OPEB liability and expense, with enhancements to financial statement note disclosures and the presentation of required supplementary information. GASB 89 eliminated the accounting of capitalized interest. As a result of the implementation of GASB Statement No.75, the beginning net position was restated by a decrease of $2,126,091. Prior year information was not restated because the necessary actuarial information was not available. During prior fiscal years the Authority had received funding from the County of San Diego for the construction of a fluoridation plant which were not previously recognized in the financial statements as a capital asset. Beginning net position was increased by $2,232,929 to reflect the capital contribution. 35 120 SWEETWATER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS Note 12. Prior Period Adjustment (continued) The summary of changes in the net position as of June 30, 2017 is as follows: Net position as of June 30, 2017, as previously reported $177,972,813 Implementation of GASB 75 (2,126,091) Increase in Capital Assets 2,232,929 Net position as of June 30, 2017, as restated $ 178,079,651 36 121 SWEETWATER AUTHORITY REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS Last Ten Years* Measurement Date 06/30/17 06/30/16 06/30/15 06/30/14 Total Pension Liability Service Cost $ 2,099,567 $ 1,940,088 $ 1,831,777 $ 1,873,366 Interest on total pension liability 8,046,871 7,695,722 7,254,385 6,936,499 Differences between expected and actual experience 170,344 868,510 (961,326) - Changes in assumptions 6,685,468 - (1,801,163) - Changes in benefits - - - - Benefit payments, including refunds of employee contributions (4,857,146) (4,393,628) (4,085,823) (3,283,535) Net Change in Total Pension Liability 12,145,104 6,110,692 2,237,850 5,526,330 Total Pension liability - Beginning of year 107,066,622 100,955,930 98,718,080 93,191,750 Total Pension liability - End of year (a) $ 119,211,726 $ 107,066,622 $ 100,955,930 $ 98,718,080 Plan Fiduciary Net Position: Contributions - employer $ 2,977,686 $ 2,893,468 $ 2,673,238 $ 2,479,354 Contributions - employee 907,768 972,745 950,534 956,722 Net investment income 7,618,107 437,467 1,556,346 10,005,775 Administrative expense (100,937) (41,745) (77,108) - Benefit payments (4,857,146) (4,393,628) (4,085,823) (3,283,535) Net Change in Plan Fiduciary Net Position 6,545,478 (131,693) 1,017,187 10,158,316 Plan Fiduciary Net Position - Beginning of Year 68,365,180 68,496,873 67,479,686 57,321,370 Plan Fiduciary Net Position - End of Year (b) $ 74,910,658 $ 68,365,180 $ 68,496,873 $ 67,479,686 Net Pension Liability - Ending (a)-(b) $ 44,301,068 $ 38,701,442 $ 32,459,057 $ 31,238,394 Plan fiduciary net position as a percentage of the total pension liability 62.84% 63.85% 67.85% 68.36% Covered payroll $ 11,363,016 $ 12,075,744 $ 11,865,375 $ 11,681,521 Net pension liability as percentage of covered payroll 389.87% 320.49% 273.56% 267.42% Notes to Schedule: Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 20, 2016 valuation date. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a Golden Handshakes). Changes in Assumptions: In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense.) *Fiscal year 2015 was the first year of implementation, therefore only four years are shown. 37122 SWEETWATER AUTHORITY REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CONTRIBUTIONS - DEFINED BENEFIT PENSION PLAN Last Ten Years* Fiscal year ended 6/30/2018 6/30/2017 6/30/2016 6/30/2015 Actuarially determined contribution $ 3,441,624 $ 2,977,686 $ 2,893,468 $ 2,673,238 Contributions in relation to the actuarially determined contribution (3,441,624) (2,977,686) (2,893,468) (2,673,238) Contribution deficiency (excess) $ - $ - $ - $ - Covered Payroll $ 12,039,791 $ 11,363,016 $ 12,075,744 $ 11,865,375 Contributions as a Percentage of Covered Payroll 28.59% 26.21% 23.96% 22.53% Notes to Schedule: Valuation Date: June 30, 2015 for fiscal year ended June 30, 2018 contributions Methods and Assumptions Used to Determine Contribution Rates: Actuarial funding method Entry age normal Amortization method Level percent of payroll Asset valuation method Market value Inflation 2.75% Salary increases 3.30% to 14.20% depending on age, service and type of employment Investment rate of return 7.5% (net of pension plan investment and administrative expenses; includes inflation Payroll growth 3% Individual salary growth A merit scale varying by duration of employment coupled with an assumption of annual Retirement age 50 years (2% at 55 and 2% at 62), 52 years (2% at 62) Mortality CalPERS' membership data for all funds *Fiscal year 2015 was the first year of implementation, therefore only four years are shown. 38123 SWEETWATER AUTHORITY REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET OPEB LIABILITY AND RELATED RATIOS Last Ten Years* Measurement Date June 30, 2017 Total OPEB Liability Service cost $ 84,777 Interest on the total OPEB liability 277,507 Benefit payments (246,586) Net change in total OPEB liability 115,698 Total OPEB liability - beginning 4,046,449 Total OPEB liability - ending (a) $ 4,162,147 Plan Fiduciary Net Position Contribution - employer $ 269,218 Net investment income 184,652 Benefit payments (246,586) Administrative expense (940) Net change in plan fiduciary net position 206,344 Plan fiduciary net position - beginning 1,734,273 Plan fiduciary net position - ending (b) $ 1,940,617 Net OPEB liability - ending (a)-(b) $ 2,221,530 Plan fiduciary net position as a percentage of the total OPEB liability 46.63% Covered-employee payroll $ 12,364,096 Net OPEB liability as a percentage of covered-employee payroll 17.97% Notes to Schedule: 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. 39124 SWEETWATER AUTHORITY REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CONTRIBUTIONS - OPEB Last Ten Fiscal Years* Fiscal Year Ended June 30 2018 Actuarially Determined Contribution (ADC) $ 324,199 Contributions in relation to the ADC (324,199) Contribution deficiency (excess) $ - Covered-employee payroll $ 11,969,155 ContributionsContributions as as a percentagea percentage of ofcovere covered-employeed-employee payroll payroll 2.71% Notes to Schedule: Actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2018 were from the January 1, 2017 actuarial valuation. Methods and assumptions used to determine contributions: Actuarial Cost Method Entry age actuarial cost method Amortization Method/Period Level percent of payroll over a closed rolling 15-year period Asset Valuation Method Market value Inflation 2.75% Payroll Growth 2.75% per annum, in aggregate 7.00% per annum. Assumes investing in California Employers' Investment Rate of Return Retiree Benefit Trust asset allocation Strategy 1. Healthcare cost-trend rates 4.00% per annum. Retirement Age Tier 1 employees - 2.5% @55 and Tier 2 employees - 2.0% @62 The probabilities of Retirement are based on the 2014 CalPERS Experience Study for the period from 1997 to 2011. Mortality Pre-retirement mortality probability based on 2014 CalPERS 1997- 2011 Experience Study covering CalPERS participants. Post-retirement mortality probability based on CalPERS Experience Study 2007-2011 covering participants in CalPERS. *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. 40125 STATISTICAL SECTION This part of Sweetwater Authority’s comprehensive annual financial report presents detailed information as a context for understanding what the information says about the Authority’s overall financial health. Contents Financial Trends: These schedules contain trend information to help the reader understand how the Authority’s financial performance and well-being have changed over time. Revenue Capacity: These schedules contain information to help the reader assess the Authority’s primary revenue source, water sales. Debt Capacity: These schedules present information to help the reader assess the affordability of the Authority’s current levels of outstanding debt and the Authority’s ability to issue additional debt in the future. Demographic and Economic Information: These schedules offer demographic and economic indicators to help the reader understand the environment within which the Authority’s financial activities take place. Operating Information: These schedules contain service data to help the reader understand how the information in the Authority's financial report relates to the services the Authority provides and the activates it performs. 126 Net Position by Component Sweetwater Authority Last Ten Fiscal Years FY 2017-18 CAFR Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Net Investment in $111,538,292 $121,996,367 $124,915,249 $128,817,275 $130,965,942 $136,472,433 $141,871,117 $162,345,286 $186,359,876 $187,560,538 Capital Assets Restricted 7,449,190 7,355,200 7,205,263 7,371,960 7,349,100 7,857,234 8,094,718 8,117,885 0 0 Unrestricted 35,124,417 27,547,575 22,411,701 24,903,166 33,433,409 35,377,877 (1,049,857) (8,368,619) (8,387,063) (3,566,092) Total Net Position $154,111,899 $156,899,142 $154,532,213 $161,092,401 $171,748,451 $179,707,544 $148,915,978 $162,094,552 $177,972,813 $183,994,446 $300,000,000 $250,000,000 $200,000,000 $150,000,000 $100,000,000 $50,000,000 $0 Unrestricted Restricted Net Investment in Capital Assets ►The restricted assets for the Authority are comprised of legally required fund balances per debt covenants. In 2016 the Authority refunded its 2005 Water Revenue Bonds and in place issue Water Revenue Bond Series 2016A and in December 2017 issued the Water Revenue Bond Series 2017A. The 2016 and 2017 bond covenant do not require that the Authority maintain any reserve balances and thus Restricted Assets are zero for FY 2018. ►The Authority's assets consist primarily of water treatment and distribution facilities. ►For Fiscal Year ending June 30, 2015, the decrease in Total Net Position is primarily due to the implementation of Governmental Accounting Standards Board (GASB) Statements No. 68 "Accounting and Financial Reporting for Pensions-an amendment of GASB Statement No. 27" and No. 71 "Pension Transitions for Contributions Made Subsequent to the Measurement Date-an amendment of GASB No. 68". Source: Sweetwater Authority Audited Financial Statements 41 127 Sweetwater Authority Changes in Net Position FY 2017-18 CAFR Last Ten Fiscal Years Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Operating Revenues Water Sales $38,025,074 $42,098,515 $43,247,362 $46,238,292 $51,123,048 $54,288,697 $49,845,837 $47,107,842 $49,562,829 $52,487,098 Other 762,758 726,250 764,992 750,254 757,588 841,205 856,138 815,760 878,726 1,003,906 Total Op. Revenues 38,787,832 42,824,765 44,012,354 46,988,546 51,880,636 55,129,902 50,701,975 47,923,602 50,441,555 53,491,004 Non-Op. Revenues Capacity Fees 323,668 44,942 18,220 48,241 180,366 121,915 384,629 407,243 643,977 593,458 Interest 1,428,679 563,111 431,068 32,576 113,885 133,097 208,436 190,123 68,064 414,581 Other 97,196 395,353 227,999 211,265 567,258 618,721 305,714 18,209 699,913 1,067,114 Total Non-Op. Revenues 1,849,543 1,003,406 677,287 292,082 861,509 873,733 898,779 615,575 1,411,954 2,075,153 Total Revenues $40,637,375 $43,828,171 $44,689,641 $47,280,628 $52,742,145 $56,003,635 $51,600,754 $48,539,177 $51,853,509 $55,566,157 Operating Expenses Cost of water sales and $20,065,322 $21,219,512 $18,733,005 $18,949,380 $18,667,039 $27,310,030 $28,365,076 $27,449,185 $29,573,773 $22,832,024 services General and 13,024,538 13,392,942 14,604,582 14,999,498 15,183,901 16,273,748 15,228,051 15,019,229 16,535,442 18,149,765 administrative expenses Depreciation 6,100,198 6,170,849 6,059,997 6,353,444 6,674,363 6,280,535 6,331,917 6,468,160 6,351,523 8,461,511 Total Op. Expenses 39,190,058 40,783,303 39,397,584 40,302,322 40,525,303 49,864,313 49,925,044 48,936,574 52,460,738 49,443,300 Non-Operating Expenses Interest 1,839,126 1,286,972 1,407,397 944,618 1,080,225 945,319 722,271 179,820 130,514 1,067,638 Other 0 0 0 0 208,344 163,736 0 277,463 0 0 Total Non-Op. Expenses 1,839,126 1,286,972 1,407,397 944,618 1,288,569 1,109,055 722,271 457,283 130,514 1,067,638 Total Expenses $41,029,184 $42,070,275 $40,804,981 $41,246,940 $41,813,872 $50,973,368 $50,647,315 $49,393,857 $52,591,252 $50,510,938 Source: Sweetwater Authority Audited Financial Statements 42 128 Sweetwater Authority FY 2017-18 CAFR Changes in Net Position (continued) Last Ten Fiscal Years Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Change in Net Position Net Revenues/(Expenses) ($391,809) $1,757,896 $3,884,660 $6,033,688 $10,928,273 $5,030,267 $953,439 ($854,680) ($737,743) $5,055,219 Contributions 1,493,949 1,029,347 833,889 526,500 88,482 2,928,826 1,646,021 14,033,254 17,936,054 859,576 Total Change in Net $1,102,140 $2,787,243 $4,718,549 $6,560,188 $11,016,755 $7,959,093 $2,599,460 $13,178,574 $17,198,311 $5,914,795 Position Change in Net Position - REVENUES $60,000,000 ►Water Sales are the Authority's largest source of $50,000,000 revenues. Water sales can fluctuate depending on local $40,000,000 drought conditions and customer responses to those conditions. Fiscal year 2015-16 represents a year where $30,000,000 water sales were low due to an increase customer $20,000,000 conservation in water use. Recent easing of conservation restrictions have led to a slight increase in water use $10,000,000 through fiscal year 2017-18. $0 Water Sales Interest Capacity Fees Other Change in Net Position - EXPENSES ► The local climate also plays a significant part in the $60,000,000 Authority's operating expenses. The Authority is required $50,000,000 to purchase more costly wholesale water in drought years and a corresponding increase in expenses occurs. The $40,000,000 years that there is more local rainfall are years where $30,000,000 water purchases expenditures will be lower. The drought that began in 2014 created an increase in water $20,000,000 purchases for that same fiscal year. $10,000,000 $0 Interest Depreciation General and administrative expenses Cost of water sales and services Source: Sweetwater Authority Audited Financial Statements 43 129 Sweetwater Authority Water Sold by Type of Customer FY 2017-18 CAFR Last Ten Fiscal Years Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Single-family $16,669,291 $18,388,700 $17,310,837 $18,507,308 $20,340,324 $21,622,037 $19,563,551 $17,752,960 $18,727,864 $20,188,767 Multi-family 10,150,146 11,347,591 12,477,399 13,568,251 14,747,565 15,628,659 15,751,069 15,603,585 16,008,874 16,289,985 Commercial 7,040,264 7,817,757 7,961,832 8,712,342 9,558,338 10,072,965 10,120,444 9,883,610 10,312,689 11,017,854 Industrial 541,065 520,528 377,798 318,318 346,693 318,068 350,001 306,274 242,582 246,119 Public Authority 3,169,760 3,542,309 4,686,018 4,698,795 5,706,637 6,248,712 3,644,873 3,088,255 3,797,404 4,239,851 Other 454,548 481,630 433,478 433,278 423,491 398,256 415,899 473,158 473,416 504,522 Total Water Sales $38,025,074 $42,098,515 $43,247,362 $46,238,292 $51,123,048 $54,288,697 $49,845,837 $47,107,842 $49,562,829 $52,487,098 Water Sold Hundred Cubic Feet 9,542,304 9,298,750 8,549,973 8,457,560 8,749,187 8,848,421 8,042,780 7,086,416 7,270,466 7,641,032 (HCF) Direct Rate Per HCF $3.98 $4.53 $5.06 $5.47 $5.84 $6.14 $6.20 $6.65 $6.82 $6.87 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $0 Single-family Multi-family Commercial Industrial Public Authorities Other(Other, Irrigation, Five) ►The Authority's primary revenue source is retail water sales. The proportion of customer types that make up the revenue base has remained relatively unchanged for the time frame presented. Single-family and multi-family residential water customers make up the largest section of the revenue base. ►Although revenue by customer type is not presented separately on the face of the financial statements, these revenues are recorded separately in the Authority's general ledger for tracking purposes. Source: Sweetwater Authority Audited Financial Statements 44 130 Customers by Revenue Type Sweetwater Authority Last Ten Fiscal Years FY 2017-18 CAFR Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Single-family 25,819 25,819 25,877 25,969 25,931 26,030 26,133 26,163 26,204 26,219 26,220 Residential Multi-family 3,500 3,500 3,508 3,521 3,515 3,529 3,543 3,547 3,560 3,584 3,611 Residential Commercial 2,652 3,266 3,196 3,052 3,008 2,759 2,777 2,775 2,759 2,776 Industrial 38 29 31 41 41 37 32 32 32 32 Public Authorities 551 459 503 554 553 502 526 548 537 534 Total Customers 32,560 33,139 33,220 33,093 33,161 32,974 33,045 33,119 33,131 33,173 35,000 30,000 25,000 20,000 15,000 10,000 5,000 - 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Single-family Residential Multi-family Residential Commercial Industrial Public Authorities ►Sweetwater Authority is an established, mostly built-out water agency which is reflected in the relatively small increases in meter services over this ten year period. Source: Sweetwater Authority Accounts Receivable Records 45 131 Water Rates Sweetwater Authority Last Ten Fiscal Years FY 2017-18 CAFR Commodity Charges - billed in Hundred Cubic Feet units (HCF) Single-family Fiscal Mult- Public 0-10 11-16 17-27 27+ Year family Commercial Authority Units Units Units Units 2018 5.93$ 6.08$ 6.58$ 3.86$ 4.75$ 6.39$ 6.90$ 2017 5.93 6.08 6.58 3.86 4.75 6.39 6.90 2016 5.93 6.58 6.08 3.86 4.75 6.39 6.90 Single-family 0-16 17-27 27+ Uniform* 0-10 Units* Units Units Units 2015 5.85$ 2.80$ 4.10$ 6.17$ 8.24$ 2014 5.60 1.40 4.02 6.05 8.08 2013 5.31 0.70 3.84 5.77 7.69 2012 4.99 0.35 3.61 5.42 7.22 2011 4.99 0.35 3.61 5.42 7.22 Single-family 0-10 11-20 21-30 31-40 41-50 50+ Uniform* 0-10 Units* Units Units Units Units Units Units 2010 3.72 0.30 2.00 3.50 3.80 4.10 4.20 4.70 2009 3.15 0.30 1.70 3.00 3.25 3.45 3.55 4.00 Readiness-to-Charge Fee Fiscal Year 5/8" 1" 1.5" 2" 2.5" 4" 6" 8" & 10" 2018 21.80$ 30.68$ 46.86$ 64.62$ 118.88$ 196.88$ 381.98$ 619.74$ 2017 21.80 30.68 46.86 64.62 118.88 196.88 381.98 619.74 2016 21.80 30.68 46.86 64.62 118.88 196.88 381.98 619.74 2015 17.20 20.50 27.20 34.00 53.00 79.70 127.00 186.10 2014 16.50 19.60 26.00 32.50 50.70 76.30 121.50 178.10 2013 15.70 18.60 24.70 30.80 48.10 72.40 115.30 169.00 2012 14.70 17.50 23.20 28.90 45.20 68.00 108.30 158.70 2011 14.70 17.50 23.20 28.90 45.20 68.00 108.30 158.70 2010 39.50 90.50 175.50 277.50 515.50 855.50 1,705.50 2,725.50 2009 33.50 76.25 147.50 233.00 432.50 717.50 1,430.00 2,285.00 * This tier of water rate only applies to customers that use less than 10 HCF of water in total. ►10 years of commodity rates are presented; however, the structure of the commodity rates was modified in 2001 and then again in 2016. Water rates have remained unchanged for the prior three fiscal years. ►Water rates are based on the amount of revenue needed for operations and is collected through a readiness-to-serve charge for each meter and a commodity charge for the volume of water used by each customer. The allocation of revenue to the base charge and commodity charge is determined by the proportion of fixed costs and variable costs needed to produce the water supply. ►During fiscal year 2015, the Authority worked with an outside consultant to complete a cost of service study. The intent of the study was to independently assess and perform a comprehensive review of the Authority’s existing water rates and charges. The broad objective of the study was to ensure that the Authority’s rate structure adequately covered revenue requirements in compliance with industry best practices, legal parameters, debt service rate covenants and policies. Source: Sweetwater Authority Rates and Rules 46 132 Sweetwater Authority FY 2017-18 CAFR Ten Largest Customers Current and Nine Years Prior Fiscal Year 2017-18 Fiscal Year 2008-09 HCF* % of HCF % of Customer Delivered Total Customer Delivered Total City of Chula Vista 145,889 1.9% Navy Public Works Center Code 11 149,701 2.0% SUHSD Accounting Department 110,909 1.5% City of Chula Vista 128,891 1.7% San Diego Country Club 96,971 1.3% SUHSD Accounting Department 122,310 1.6% Chula Vista Elementary School District 90,863 1.2% Cal-Trans 112,072 1.5% City of National City 60,352 0.8% San Diego Country Club 107,247 1.4% SD County Building Trades Council 58,381 0.8% LSP Southbay LLC 94,113 1.2% Westfield Shoppingtown Plaza Bonita 52,201 0.7% Chula Vista Elementary School District 88,441 1.2% Navy Public Works Center Code 11 46,771 0.6% SD County Building Trades Council 71,867 0.9% Rohr Inc. 39,606 0.5% San Diego Unified Port District 69,742 0.9% County of San Diego 36,838 0.5% City of National City 68,418 0.9% Total Ten Largest Customers 738,781 9.8% Total Ten Largest Customers 1,012,802 13.3% All Other Customers 6,902,251 90.2% All Other Customers 8,795,037 86.7% Total Water Delivers in HCF 7,641,032 100.0% Total Water Delivers in HCF 9,807,839 100.0% * 1 Unit of Water = one hundred cubic Feet (HCF) or 748 gallons Fiscal Year 2017-18 Total Ten Total Ten Largest Fiscal Year 2008-09 Largest Customers Customers 9.8% 13.3% 90.2% 86.7% ►The Authority’s service area has been established for many years, and with a relatively stable local economy, it has seen few changes to its customer base. This stability is reflected in the similarities between the current list of the largest government and public education water customers and the list from ten years prior. Source: Sweetwater Authority Accounts Receivable Records 47 133 Sweetwater Authority Ratios of Outstanding Debt FY 2017-18 CAFR Last Ten Fiscal Years Fiscal Outstanding Number of Debt Per Debt per Year Debt Meters Meter Population Capita 2018$ 36,290,994 33,173 $ 1,093.99 196,061 $ 185.10 2017$ 16,149,205 33,131 $ 487.43 19,680 $ 820.59 2016$ 23,368,534 33,119 $ 705.59 188,886 $ 123.72 2015$ 26,177,326 33,045 $ 792.17 186,865 $ 140.09 2014$ 28,753,730 32,974 $ 872.01 186,865 $ 153.87 2013$ 31,303,755 33,161 $ 943.99 186,865 $ 167.52 2012$ 32,955,999 33,093 $ 995.86 183,760 $ 179.34 2011$ 35,332,822 33,220 $ 1,063.60 183,760 $ 192.28 2010$ 39,829,921 33,139 $ 1,201.90 183,760 $ 216.75 2009$ 38,219,645 32,560 $ 1,173.82 182,785 $ 209.10 Outstanding Debt $40,000,000 $30,000,000 $20,000,000 $10,000,000 $0 ►Sweetwater Authority only has Business-type activities and only two debt issue outstanding. ►In 2016, $16,755,000 Water Revenue Bonds Series 2016A were issued to refund the 2005 Water Revenue Bonds in the amount of $22,445,000, the difference was refunded with reserve funds. In 2018 the Authority issued Water Revenue Series 2017A bonds in the amount of $21,800,000. ►Outstanding debt includes a small amount of vehicle leases, and the bond portion of the debt is net of related premiums, discounts, and adjustments. See Note 4 to the financial statements for more information on debt the components. ►The Authority does not currently have any General Obligation Bonds. ►The Authority does not currently have any overlapping debt-only direct debt as displayed above. ►Population figures are estimated by SANDAG for all local governments and special districts in San Diego County. Source: Sweetwater Authority Financial Statements and Accounts Receivables Records 48 134 Sweetwater Authority Debt Coverage Ratio FY 2017-18 CAFR Last Ten Fiscal Years Net Revenue Debt Service Requirements Debt Fiscal Total Total Available for Coverage Year Revenues Expenses* Debt Service Principal Interest Total Ratio 2018$ 55,566,157 $ 40,981,789 $ 14,584,368 $ 2,430,000 $ 899,204 $ 3,329,204 4.38 2017$ 51,853,509 $ 46,109,215 $ 5,744,294 $ 2,560,000 $ 523,091 $ 3,083,091 1.86 2016$ 48,539,177 $ 42,745,877 $ 5,793,300 $ 2,825,000 $ 1,165,075 $ 3,990,075 1.45 2015$ 51,600,754 $ 43,593,127 $ 8,007,627 $ 2,685,000 $ 1,259,050 $ 3,944,050 2.03 2014$ 56,003,635 $ 43,747,514 $ 12,256,121 $ 2,585,000 $ 1,367,181 $ 3,952,181 3.10 2013$ 52,742,145 $ 34,059,284 $ 18,682,861 $ 2,505,000 $ 1,454,128 $ 3,959,128 4.72 2012$ 47,280,628 $ 33,948,878 $ 13,331,750 $ 2,415,000 $ 1,546,547 $ 3,961,547 3.37 2011$ 44,689,641 $ 33,337,587 $ 11,352,054 $ 2,315,000 $ 1,640,348 $ 3,955,348 2.87 2010$ 43,828,171 $ 34,612,454 $ 9,215,717 $ 2,925,000 $ 1,841,689 $ 4,766,689 1.93 2009$ 40,637,375 $ 33,089,860 $ 7,547,515 $ 2,780,000 $ 1,987,641 $ 4,767,641 1.58 *Less Depreciation $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 Net Revenue Available for Debt Service Debt Service Requirements ►The current debt covenant requires a debt coverage ratio greater than 1.25. Source: Sweetwater Authority Audited Financial Statements 49 135 Sweetwater Authority Demographic and Economic Statistics FY 2017-18 CAFR Last Ten Fiscal Years City of Chula Vista Total Per Capita Fiscal Personal Personal Unemployment Population Year Income Income Rate 2016 264,911 $12,302,415 1) $46,308 5.9% 2015 263,028 $11,639,304 $44,251 6.5% 2014 260,416 $11,011,936 $42,286 8.1% 2013 256,366 $10,452,158 $40,770 9.8% 2012 250,774 $10,263,266 $40,926 12.4% 2011 246,475 $10,535,629 $42,745 12.8% 2010 243,916 $10,429,312 $42,758 13.3% 2009 239,369 $9,264,738 $38,705 11.0% 2008 235,767 $9,976,700 $42,316 7.7% 2007 231,597 $9,437,814 $42,046 5.4% Notes: Dollar values are inflation-adjusted to 2015 dollars. 1)Projected estimate. City of National City Total Per Capita Fiscal Personal Personal Unemployment Population Year Income Income Rate 2017 61,210 1,048,669 17,132 5.9% 2016 6,078 1,020,729 16,797 6.6% 2015 59,235 977,614 16,504 8.1% 2014 59,381 982,043 16,538 11.9% 2013 58,838 963,708 16,379 13.6% 2012 58,967 933,389 15,829 18.9% 2011 57,799 851,321 14,729 19.9% 2010 56,730 787,399 13,880 18.5% 2009 56,320 800,319 14,210 11.8% 2008 56,063 790,759 14,105 9.1% Note: Dollar values are inflated-adjustment to 2009 values. ►Demographics on Personal Income, Per Capita Personal Income and Unemployment Rates: The Authority is unable to obtain demographic and economic statistics for the service area. The Authority’s boundaries include parts of several different cities and unincorporated areas of San Diego County, California. The demographic and economic data that approximates the Authority's service area is for the City of National City and the City of Chula Vista and is presented. ►The most recently available information is provided. Source: Chula Vista and National City Fiscal Year 2016-17 CAFR. 50 136 Sweetwater Authority Local Area Employment Profile FY 2017-18 CAFR For the Years 2016 and 2010 City of Chula Vista City of National City 2016 2010 2016 2010 % of % of % of % of Industry Employees Total Employees Total Employees Total Employees Total Total employed civilians age 16+ 113,651 100% 100,528 100% 24,479 100% 23,409 100% Agriculture, forestry, mining 227 0% 294 0% 147 1% 145 1% Construction 5,796 5% 6,669 7% 2,056 8% 1,955 8% Manufacturing 9,547 8% 8,458 8% 2,399 10% 2,295 10% Wholesale trade 3,410 3% 3,131 3% 318 1% 310 1% Retail trade 13,752 12% 12,746 13% 3,109 13% 2,983 13% Transportation, warehousing and utilities 6,478 6% 5,158 5% 1,346 6% 1,279 5% Information 2,046 2% 2,395 2% 245 1% 244 1% Finance, insurance, and real estate related 6,819 6% 7,079 7% 979 4% 945 4% Professional, scientific, and management 11,820 10% 9,272 9% 2,521 10% 2,416 10% Educational, social, and health services 26,708 24% 22,705 23% 4,896 20% 4,661 20% Art, entertainment, rec., accommodations, food 11,138 10% 8,782 9% 3,721 15% 3,557 15% Other services 5,683 5% 5,006 5% 1,689 7% 1,604 7% Public administration 10,229 9% 8,833 9% 1,053 4% 1,015 4% ►The Authority's service area includes, but is not limited to, the portions of the following; City of Chula Vista, City of National City, Bonita, and other unincorporated areas of San Diego County. The City of Chula Vista and National City while not an exact representation of the service area, is used to obtain the employment profile data shown above. The employment data available for evaluation for the area comes from the American Community Survey in the U.S. Census Bureau website. Data prior to 2010 is not available at this time and currently only 2016 data and 2010 data are show for comparative purposes. Source: United States Census Bureau American Community Survey 51 137 Sweetwater Authority Active Meters by Size FY 2017-18 CAFR Last Ten Fiscal Years Fiscal Total Year 5/8" 1" 1.5"-2" 3"-8" Total Change 2018 27,591 3,333 2,188 61 33,173 0.1% 2017 27,595 3,307 2,177 52 33,131 0.0% 2016 27,640 3,267 2,158 54 33,119 0.2% 2015 27,624 3,222 2,143 56 33,045 0.2% 2014 27,588 3,195 2,131 60 32,974 0.6% 2013 27,802 3,192 2,115 52 33,161 0.2% 2012 27,833 3,142 2,064 54 33,093 -0.4% 2011 27,897 3,157 2,119 47 33,220 0.2% 2010 27,855 3,137 2,104 43 33,139 1.8% 2009 27,171 3,198 2,149 42 32,560 0.1% 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 3"-8" 1.5"-2" 1" 5/8" Source: Sweetwater Authority Accounts Receivable Records 52 138 Sweetwater Authority Employee Count FY 2017-18 CAFR Last Ten Fiscal Years Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Administration 9 9 10 10 10 9 9 9 10 9 Administrative 15 15 12 15 15 15 15 15 15 15 15 Services Finance 25 28 28 26 31 35 34 30 30 25 Water Quality 39 38 39 38 19 18 19 17 17 19 Engineering 19 19 14 13 28 28 28 25 25 29 Distribution 35 35 35 33 32 33 32 31 30 31 Total Employees 142 141 141 135 135 138 137 127 127 128 140 120 100 80 60 40 20 - 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Administration Finance Water Quality Engineering Distribution ►Sweetwater Authority is an established, mostly built-out water agency which is reflected in the relatively small changes in employment levels over this ten year period. In fiscal year 2015-16 the reduction in employees was due to cost reductions in response to a state-wide drought. Source: Sweetwater Authority Payroll Records 53 139 Sweetwater Authority Capital Indicators FY 2017-18 CAFR Last Ten Fiscal Years Water Distribution Sources Water Production Service Raw Water Brackish Fresh Fiscal Area Treatment Desalination Water Water Maximum Average Year (sq. miles) Plant Plant Wells* Wells Day MGD Day MGD 2018 32 1 1 11 3 22.1 15.7 2017 32 1 1 6 3 20.6 15.2 2016 32 1 1 6 3 20.6 15.2 2015 32 1 1 6 3 25.4 19.0 2014 32 1 1 6 3 25.6 18.2 2013 32 1 1 6 3 24.6 19.8 2012 32 1 1 6 3 n/a n/a 2011 32 1 1 6 3 n/a n/a 2010 32 1 1 6 3 n/a n/a 2009 32 1 1 6 3 n/a n/a Water Distribution Surface Surface Enclosed Enclosed Fiscal Fire Pipelines Pump Water Water Storage Storage Year Hydrants Miles Stations Reservoir Capacity Tanks Capacity 2018 2,590 397 17 2 53,466 AF 25 132 AF 2017 2,571 388 17 2 53,466 AF 25 132 AF 2016 2,558 388 17 2 53,466 AF 25 132 AF 2015 2,562 388 17 2 53,466 AF 25 132 AF 2014 2,560 387 17 2 53,466 AF 25 132 AF 2013 2,540 387 17 2 53,466 AF 25 132 AF 2012 n/a 387 17 2 53,466 AF 25 132 AF 2011 n/a 386 17 2 53,466 AF 25 132 AF 2010 n/a 386 17 2 53,466 AF 25 132 AF 2009 n/a 386 17 2 53,466 AF 25 132 AF MGD - million gallons per day n/a - not available AF - acre feet Source: Public Information Section 54 140 Sweetwater Authority Key Operational Indicators FY 2017-18 CAFR Last Ten Fiscal Years Rainfall (inches) Non- San Diego Consumer SDCWA Sweetwater Loveland Revenue Price Index Wholesale Water Reservoir Reservoir Water as a Urban Rate Fiscal Ave. = Ave. = % of water Wage Fuels & $/Acre Annual Year 11.3 15.3 produced Earners Utilities Foot Increase 2018 5.0 7.5 6.3% 3.0% 8.2% $1,009 4.6% 2017 16.3 22.4 6.7% 3.3% 3.3% $965 9.0% 2016 12.5 17.3 5.0% 2.0% 2.7% $885 2.3% 2015 7.7 10.2 4.7% 0.8% 1.7% $865 4.3% 2014 5.0 7.1 5.1% 2.4% 14.0% $829 2.7% 2013 8.3 9.7 4.8% 0.9% 4.9% $807 11.6% 2012 10.6 15.0 5.1% 1.7% -5.6% $723 7.6% 2011 18.1 22.0 5.7% 3.4% 4.5% $672 12.2% 2010 14.0 18.6 3.9% 1.4% 0.1% $599 13.7% 2009 9.2 13.2 3.5% -0.6% 16.6% $527 17.1% Surface Water Reservoirs Fiscal Gallons per Capita per Day Meter Storage (acre-feet) Year Population Total Residential Employees Connections Sweetwater Loveland 2018 196,061 80 64 128 33,173 5,157 13,931 2017 19,680 757 63 127 33,131 13,954 14,329 2016 188,886 77 64 127 33,119 3,204 7,398 2015 186,865 88 64 137 33,045 3,473 7,514 2014 186,865 102 77 138 32,974 3,776 8,218 2013 186,865 101 82 135 33,161 7,647 8,931 2012 183,760 99 n/a 135 33,093 13,647 18,080 2011 183,760 101 n/a 141 33,220 14,794 25,421 2010 183,760 101 n/a 142 33,139 12,219 14,706 2009 97,196 111 n/a 142 32,560 5,230 11,502 n/a - not available Source of Water Fiscal Desalination National Sweetwater Year Facility City Wells Reservoir SDCWA 2018 5,713 1,733 6,828 3,298 2017 568 1,781 1,675 13,668 2016 2,897 1,854 - 12,257 2015 3,247 2,031 - 13,956 2014 3,023 1,999 3,961 12,297 2013 3,363 2,103 12,927 2,699 2012 2,907 1,799 10,252 5,516 2011 3,514 2,113 7,239 7,955 2010 3,600 2,160 2,426 14,814 2009 3,454 1,945 4,428 12,864 Source: Sweetwater Authority Management Reports 55 141 This page intentionally left blank. 142 Davis Farr LLP 2301 Dupont Drive I Suite 200 I Irvine, CA 926'12 Moin: 949.474.2020 I Fax: 949.263.5520 To the Board of Directors Sweetwater Authority Chula Vista, CA We have audited the financial statements of the Sweetwater Authority (the Authority) for the year ended June 30, 2018. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated May 29, 2018. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the Authority are described in Note 1 to the financial statements. As described in Note 12 to the financial statements, the Authority implemented Governmental Accounting Standards Board (GASB) Statement No. 75 related to Other Post Employment Benefit (OPEB) obligations and GASB Statement No. 89 that eliminated the practice of capitalizing interest. The cumulative effect of the Implementation of GASB Statement No. 75 as of the beginning of the year is described further in Note 12 to the financial statements. We noted no transactions entered into by the Authority during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management's 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 significantly from those expected. The most sensitive estimates affecting the Authority's financial statements were: Management's estimate of the 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. There were no particularly sensitive note disclosures affecting the financial statements. 143 Board of Directors Sweetwater Authority Page 2 The financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. None of the misstatement detected during the audit process were material, either individually or in the aggregate, to the financial statements taken as a whole. Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated October 2, 2018. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the Authority's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as Authority's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. other Matters We applied certain limited procedures to Management's Discussion & Analysis, Schedule of Changes in the Net Pension Liability & Related Ratios, Schedule of Contributions - Defined Benefit Pension Plan, Schedule of Changes in Net OPEB Liability and Related Ratios, Schedule of Changes in Net OPEB Liability and Related Ratios, and Schedule of OPEB Contributions, which are required supplementary information (RSI) that supplements the financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the financial statements, and other knowledge we obtained during our audit of the financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI. We were not engaged to report on the introductory section and statistical section, which accompany the financial statements but are not RSI. We did not audit or perform other procedures on this other information and we do not express an opinion or provide any assurance on it. 144 Board of Directors Sweetwater Authority Page 3 Restriction on Use This information is intended solely for the use of the Board of Directors and management of the Authority and is not intended to be, and should not be, used by anyone other than these specified parties. Irvine, California October 2, 2018 145 This page intentionally left blank. 146 Davis Farr LLP 2301 Dupont Drive I Suite 200 I Irvine, CA 92612 Main: 949.474.2020 I Fax: 949.263.5520 To the Board of Directors Sweetwater Authority Chula Vista, California 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 Independent Auditors' 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 Sweetwater Authority (the Authority), as of and for the year ended June 30, 2018, and the related notes to the basic financial statements, which collectively comprise the Authority's basic financial statements, and have issued our report thereon dated October 2, 2018. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements of the Authority we considered the Authority'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 opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Authority's internal control. Accordingly, we do not express an opinion on the effectiveness of the Authority'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 Authority'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. We did not identify any deficiencies in internal control that we consider to be material weaknesses. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Authority'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 determination of financial statement amounts. 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. 147 To the Board of Directors Sweetwater Authority Page 2 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 Authority'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 Authority's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Irvine, California October 2, 2018 148 OPERATIONS COMMITTEE MINUTES DATE: Wednesday, October 17, 2018 1. CALL MEETING TO ORDER AND ROLL CALL The meeting was called to order at 10:02 a.m. Present were Chair Jess Van Deventer and Director Jose F. Cerda, with Director Jose Preciado absent. Staff members present: General Manager Tish Berge, Assistant General Manager Jennifer Sabine, and Director of Engineering Ron Mosher. 2. ITEMS TO BE ADDED, WITHDRAWN, OR REORDERED IN THE AGENDA (Government Code Section 54956.5) There were none. 3. OPPORTUNITY FOR PUBLIC COMMENT (Government Code Section 54954.3) There were no comments from the public. 4. ACTION AGENDA A. Consideration to Reject a Nonresponsive Bid and Award a Contract for Construction of the O.D. Arnold Fire Flow Pump Station to the Second Low Bidder: Director of Engineering Mosher provided a brief description of the project, its purpose, and the results of the bidding activities. Seven bids were received, with the two lowest bids being very close in terms of cost. Mr. Mosher explained that NEWest Construction Company, Inc. (NEWest), the apparent low bidder, submitted a bid that indicated the contractor's license had expired on September 30, 2018. Since the bid opening was held October 4, 2018, staff determined, and legal counsel confirmed, that the bid from NEWest was nonresponsive. As such, the recommendation to the Operations Committee was to reject the bid of NEWest as nonresponsive and award the project to the second low bidder (SCW Contracting Corporation). However, just prior to the start of the Operations Committee, NEWest submitted a request for reconsideration of the award of the contract based on additional information related to the contractor's licensing status at the time of bid. The Operations Committee determined it would be prudent to allow staff and legal counsel to review the request from NEWest and to present it as an action item at the October 24, 2018 Governing Board meeting. The Operations Committee defers to the Governing Board for decision pending additional information from staff and legal counsel. B. Announcement of Purchase of 10.5 Acres along Sequan Truck Trail in the Loveland Watershed: Director of Engineering Mosher summarized the results of the property acquisition activities for the 10.5 acre parcel located north of Loveland Reservoir along Sequan Truck Trail. Close of escrow for the transaction occurred on October 5, 2018. Director Cerda inquired as to the payment of broker fees and staff replied that this information would be provided. (Note: After the meeting, staff confirmed that a three percent broker fee was paid to 149 Operations Committee Minutes October 17, 2018 Page 2 of 2 Coldwell Banker and no broker fee was paid to Best Best & Krieger; this information was provided to the Operations Committee via email). No action is required by the Governing Board. 5. CLOSED SESSION There was none. 6. NEXT MEETING The next regularly scheduled Operations Committee meeting will be held on Wednesday, November 7, 2018 at 10:00 a.m. 7. ADJOURNMENT The meeting adjourned at 10:20 a.m. 150 FINANCE AND PERSONNEL COMMITTEE MINUTES DATE: Wednesday, October 17, 2018 1. CALL MEETING TO ORDER AND ROLL CALL The meeting was called to order at 1 :35 p.m. Present were Chair Ron Morrison, Director Josie Calderon-Scott, and Director Steve Castaneda. Staff members present: General Manager Tish Berge, Assistant General Manager Jennifer Sabine, Director of Engineering Ron Mosher, Director of Finance Rich Stevenson, and Director of Administrative Services Dina Yorba. Others present: Jennifer Farr of Davis Farr LLP. 2. ITEMS TO BE ADDED, WITHDRAWN, OR REORDERED ON THE AGENDA (Government Code Section 54956.5) There were none. 3. OPPORTUNITY FOR PUBLIC COMMENT (Government Code Section 54954.3) There were no members from the public present. 4. ACTION AGENDA A Consideration to Accept the Fiscal Year 2017-18 Comprehensive Annual Financial Report: Director of Finance Stevenson provided an overview of this agenda item. Jennifer Farr of Davis Farr LLP provided a review of the Fiscal Year 2017-18 Comprehensive Annual Financial Report audit Ms. Farr reported that the Authority received a clean audit, including passing tests specifically designed to detect fraud. The Committee commended staff on the write-ups provided in the report and commented that it is a great resource for members of the public to learn more about Authority operations. The same presentation will be provided to the Board at its October 24, 2018 meeting. The Finance and Personnel Committee recommends that the Governing Board accept the completed Fiscal Year 2017-18 Comprehensive Annual Financial Report. B. Quarterly Report of One-time Water Bill Adjustments for July through September 2018 (Information Item): No action is required by the Governing Board. C. Consideration to Award a Contract for Preparation of Inundation Maps for Sweetwater and Loveland Dams: Director of Engineering Mosher provided an overview of this agenda item. Director Castaneda asked if the methodology to develop the maps has changed significantly since the prior maps were prepared. Mr. Mosher replied that the methodology has remained relatively unchanged; however, an electronic version of the maps is now mandated to comply with the requirements of the California Governor's Office of Emergency Services. Mr. Mosher also informed the Board that this was a sole-source procurement of services in compliance with the Authority's Procurement Policy, due to GEi's specialized expertise of the Authority's dams and floodplain data. 151 Finance and Personnel Committee Meeting Minutes October 17, 2018 Page 2 of 2 The Finance and Personnel Committee recommends that the Governing Board award a contract in an amount not to exceed $89,500 to GEi Consultants, Inc., Carlsbad, CA, (the Authority's on-call dam consultant) for the preparation of inundation maps for. 5. CLOSED SESSION There was none. 6. NEXT MEETING The next regularly scheduled meeting of the Finance and Personnel Committee will be held on Wednesday, November 7, 2018 at 1:30 p.m. 7. ADJOURNMENT The meeting adjourned at 2:00 p.m. 152 98 = has 1.877% Value 7,0S0.00 679,76S.68 111,45S.43 246,647.50 246,647.50 263,200.05 242,195.00 S24,720.77 2,73S,141.77 1,224,630.00 1,996,220.00 1,973,980.00 1,946,400.00 1,984,800.00 3,920,380.00 6,381,020.00 2,400,000.00 Maturity Authority 19,077,271.47 21, SS,661,43S.12 Yield= Market to Days Weighted Sweetwater Value 7,0S0.00 679,76S.68 416,565.63 416,565.63 250,000.00 250,000.00 250,000.00 247,047.50 242,092.50 S24,720.77 263,200.05 524,720.77 524,720.77 that limits. Average 2,73S,141.77 1,2SO,OOO.OO 2,000,000.00 4,000,000.00 2,000,000.00 2,000,000.00 Book 21,103,S20.9S 55,770,300.68 Average Policy Weighted 128.09 documentation Basis 7,0S0.00 103,S20.9S 263,200.05 679,765.68 416,565.63 250,000.00 250,000.00 250,000.00 250,000.00 250,000.00 250,000.00 250,000.00 524,720.77 524,720.77 Investment 3,029,189.18 1,2SO,OOO.OO 1,985,000.00 1,995,000.00 2,004,820.00 2,026,240.00 2,409,720.00 2,000,000.00 2,400,000.00 3,980,000.00 6,440,780.00 6,400,000.00 Cost 19,070,101.S1 19,070,101.S1 21, S6,08S, from provides report Limit n/a n/a 20% 30% 15% 70% $SOM $SOM Policy excluded Limits No This are Total 0% 5% 2018 34% 38% 1.2% 2.2% Policy. 0.9% 7.1% 100% Portfolio 11.5% Percent of 30, Covenant 2.06% 2.06% 1.32% 1.27% 1.26% 1.34% 1.29% 1.88% 0.85% 2.15% Yield Bond Current Investment Investment of the September to Authority and of 0.00% 0.00% 0.00% 0.00% 1.86% 1.86% 1.86% 1.86% 2.06% 2.06% 1.30% 1.88% 1.03% 1.03% 1.46% 1.41% 1.25% 1.25% 1.25% 1.30% 2.45% 2.47% 2.51% 0.85% with Market as Deposit Deposit Yield Maturity Portfolio Agencies Securities of of Statement Deposits Money Report Sweetwater Total accordance Annual Treasury Total in Investment Demand Certificates Certificates and Name Total Treasurer's Fund Fund Bank Cash, Total invested 2017A Authority's Service Trust Trust Trust Trust Trust Trust Trust Trust Trust Trust Service Service Account Deposits Funds Bond Commerce Debt Debt Placement Sweetwater Demand nvestment Investment Investment Investment Investment Investment Investment Investment Investment Investment l Pacific 2016 2017 Revenue with obligations. Total Total cash !0/1?/ti? -Water 10/01/18 09/16/19 09/30/18 Maturity 09/16/19 09/23/20 09/23/20 07/09/20 09/28/20 02/19/19 08/31/20 08/31/20 09/16/19 09/30/18 days De~osit accordance (LAIF) (LAIF) of in Checking 180 - -~ next Fund Fund ·- Assn made the Deposit #60 #60 Trust been Bank Certificates Banks Inst Inst meet America and Mortgage Treasurer have De~osit to Investment Issuer Investment Loan Note Note Credit Demand of Bank Service North T-Fund T-Fund USA Securities funds National Farm Home Market Bank Agency Agency Cash Bank Town Stevenson, Bank Treasurey Treasurey investments Union Federal Federal Federal US US Rich Petty Local Local Money BMW Placement Blackrock Everbank Enerbank Blackrock West Treasun,: sufficient Certificates CDARS Ally Agencies All ~K-f~---~~-- ~~-~- 153 Sweetwater Authority Treasurer's Report as of September 30, 2018 Accounting of Receipts, Disbursements and Fund Balances General Fund Investments Total Beginning Cash Balance $ 1,687,618.43 $ 52,714,231.21 $ 54,401,849.64 Water Receipts 5,350,447.71 5,350,447.71 Customer Deposits 9,193.00 9,193.00 Ca pa city Fees 228,571.00 228,571.00 Fishing Revenue 875.29 875.29 Investments 3,330,000.00 3,330,000.00 Interest 29,554.45 3,664,657.70 3,694,212.15 Grant Reimbursement Other Receivables 84,148.84 84,148.84 Miscellaneous Receipts 488,199.98 488,199.98 Total Receipts $ 9,520,990.27 $ 3,664,657.70 $ 13,185,647.97 Vendor Warrants $ (1,563,173.64) $ (1,563,173.64) Payroll (1,546,217.24) (1,546,217.24) Water Purchase (1,397,983.59) (1,397,983.59) Bond Payments (679,290.63) (679,290.63) Investments (2,985,704.42) (3,330,000.00) (6,315,704.42) Total Disbursements $ (8,172,369.52) $ (3,330,000.00) $ (11,502,369.52) Ending Cash Balance $ 3,036,239.18 $ 53,048,888.91 $ 56,085,128.09 Outstanding Items Deposits $ 21,628.19 $ $ 21,628.19 Vendor Warrants (315,675.60) (315,675.60) Adjusted Ending Fund Balances $ 2,742,191.77 $ 53,048,888.91 $ 55,791,080.68 Reserve Fund Balances Prior Year Ending Year - to - Date Year - to - Date June 30, 2018 Adjustments September 30, 2018 Water Revenue Bond 2017A $ 21,531,354.13 $ (530,000.00) $ 21,001,354.13 Special Reserves Set By Board Vista Del Lago $ 182,200.00 $ $ 182,200.00 Debt Service 1,198,771.09 1,198,771.09 Sweetwater Dam PMF Project 8,181,071.58 (18,259.57) 8,162,812.01 Rate Stabilization Reserve 1,000,000.00 1,000,000.00 Construction Fund ( carryover) 2,256,600.00 (163,801.08) 2,092,798.92 Construction Fund (bond funds) 786,734.40 (104,059.04) 682,675.36 Total Speacial Reserves $ 13,605,377.07 $ (286,119.69) $ 13,319,257.38 Operating Fund $ 17,693,730.44 $ 3,776,738.73 $ 21,470,469.17 Total Reserve Balance $ 52,830,461.64 $ 2,960,619.04 $ 55,791,080.68 154 % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % 73.92 56.18 76.07 73.29 75.59 71.99 75.43 36.63 68.82 43.27 72.49 76.33 68.02 75.63 74.69 74.71 74.01 78.38 81.19 80.59 73.99 94.77 96.14 86.76 93.98 93.98 100.00 100.00 100.00 100.00 Remaining 56,802 194,696 164,817 200,142 287,230 307,815 365,820 843,317 129,115 336,484 Amount 2,956,416 7,960,537 1,512,291 1,496,892 1,240,482 9,976,307 3,372,917 1,518,013 3,913,600 6,704,030 Remaining 28,047,204 12,971,480 41,384,796 37,274,398 18,381,713 20,365,325 101,100 263,100 380,000 420,000 450,000 450,000 485,000 174,500 350,000 Budget 1,239,800 1,843,700 1,539,300 4,296,100 2,024,100 1,749,700 3,913,600 8,975,400 4,303,300 Adjusted 11,057,500 37,943,900 13,069,200 17,527,000 57,086,500 19,396,800 49,282,000 21,671,000 21,671,000 20,365,325 - 22,000 22,000 74,500 146,500 322,000 146,500 (250,000) Contingency 101,100 263,100 380,000 450,000 420,000 485,000 450,000 100,000 250,000 350,000 Budget Annual 1,843,700 1,239,800 1,539,300 4,296,100 2,024,100 1,749,700 4,303,300 3,913,600 8,975,400 2018 11,057,500 37,943,900 13,069,200 17,505,000 57,086,500 19,074,800 49,260,000 21,524,500 21,524,500 % % % % % % % % % % 3.13 6.84 8.63 September (5.08)% (1.71)% (2.35)% (7.06)% (4.63)% (6.64)% (8.53)% 10.51 21.11 67.87 27.92 2018-19 YTD% Authority (10.73)% (49.70)% (25.20)% (18.05)% 153.50 126.94 100.00 of Over/Under as Year 26,389 95,006 66,326 Fiscal YTD 112,500 105,000 121,256 112,500 309,956 689,536 399,469 Sweetwater Budget Summary 1,106,183 2,802,307 9,596,356 1,135,270 4,879,564 2,483,231 3,327,694 13,451,396 Budget 44,298 92,770 62,958 13,516 45,385 112,185 119,180 YTD 255,304 285,183 298,818 346,808 396,483 930,383 511,809 536,632 231,687 Actual 1,339,684 3,096,963 9,896,696 1,015,087 2,271,370 3,092,893 1,305,675 1,305,675 4,555,520 15,701,704 14,453,779 12,007,602 441 18,137 19,482 26,677 29,935 36,050 39,813 12 62,448 45,385 127,870 108,668 156,360 445,205 228,571 231,777 281,936 964,629 753,170 567,474 704,434 Month 753,170 Actual Current 1,068,755 3,267,818 1,170,120 3,448,594 5,412,220 Prat Fire Investments Authorities General Expenses & Services Services Reimbursements Fees Capital Investments Systems Systems Service Fees Leases Contingency Quality Sales-Miscellaneous Sales-Public Sales-Private Sales-Industrial Sales-Commercial Sales-Residential Quality Revenues Service Revenues Operating Capital Sub-total Capital-Grant Distribution Debt Reconnecton Property Engineering Engineering Distribution Water Water Water Water Information Interest Capacity Other Information Capital Customer Administration Water Water Water Water Administrative Administrative 155 % % % % % % % % % % % % % % % % % % % % % % % % % % % % 72.02 73.09 75.13 62.51 73.86 73.59 75.20 76.55 72.54 73.03 75.32 68.35 69.25 75.17 75.69 76.87 69.96 74.60 74.97 76.00 69.46 82.92 85.31 85.98 75.63 100.00 - 122,665 357,847 578,581 75.17 572,952 531,575 489,865 284,777 314,401 765,228 Amount 7,304,576 3,991,372 1,973,459 1,210,756 1,564,465 2,527,408 2,046,896 2,442,182 2,978,154 2,876,356 7,750,491 9,425,140 9,915,005 Remaining Remaining 11,295,949 37,274,398 169,100 572,500 590,800 769,700 784,500 623,100 449,400 410,000 Budget 1,437,500 1,082,745 2,956,000 5,312,700 1,610,100 1,011,000 2,681,800 2,043,600 3,306,500 3,697,600 3,962,000 3,742,000 7,298,500 6,275,411 Adjusted 10,142,000 15,454,700 12,633,700 13,224,500 10,197,500 49,282,000 - - 22,000 22,000 Contingency - 169,100 769,700 784,500 590,800 572,500 449,400 623,100 410,000 Budget Annual 1,610,100 1,437,500 2,956,000 5,312,700 1,011,000 2,043,600 2,681,800 3,306,500 3,697,600 3,742,000 3,962,000 7,276,500 2018 10,142,000 15,454,700 12,633,700 13,224,500 10,197,500 49,260,000 % % % % % % % % % 2.52 3.63 5.49 1.18 0.24 7.22 September (6.74)% (7.69)% (2.83)% (7.80)% (8.26)% (3.68)% (9.68)% (5.59)% (6.97)% (7.47)% (1.81)% {8.472% (2.74)% (3.98)% 24.98 13.32 YID% 2018-19 (12.84)% Authority (10.73)% (36.49)% (50.76)% 100.00 of Over/Under as Year - 50,730 85,364 Fiscal 171,750 549,729 YTD 133,422 158,922 110,500 433,114 207,048 272,100 211,034 721,401 886,800 935,503 Sweetwater Budget Summary 1,275,048 3,042,600 1,109,280 1,011,571 2,548,460 2,077,550 3,398,458 13,451,396 Budget 46,435 91,525 191,119 100,935 214,653 909,104 YTD 134,999 125,223 479,135 245,772 211,548 399,344 983,846 354,755 386,683 708,341 864,318 889,449 865,644 Actual 1,321,328 1,170,192 2,837,424 1,023,089 4,158,751 4,317,648 2,447,009 3,208,560 3,309,495 3,557,380 12,007,602 4,690 14,841 54,227 51,066 80,739 29,852 68,415 61,782 44,355 113,643 136,237 100,066 198,275 278,263 620,560 440,443 246,924 768,372 373,844 911,155 962,221 315,860 305,201 334,221 Month Actual Current 1,061,002 3,448,594 Insurance Fuel Pumpback & Life Insurance Benefits & URDS Expenses - General Other Expenses Salaries Dental & & Services Salaries Chemicals Systems Purchase Water Water Service Compensation Salaries Operating Charges Health Vision, Taxes Quality Total 401A Power, Benefits Operating Operating CIP Water Fuel PARS Purchased Health, Payroll Power Purchased Engineering Distribution Retiree Information CalPERS Customer General Chemicals SDCWA Administration Water Administrative Workers 156 Water Use Budget vs Actual Fiscal Year 2018-19 Total YTD Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Budget 4,789 AF Actual 4,823 AF Variance: 0.7% 11 Budget • Actual Water Use by Customer Class in Acre Feet Fiscal Year-to-date September 30, 2018 Customer Class Budget Actual Over (Under) Budget Residential 1,834 1,924 90 4.9% ------·-··-·- Multi-family 1,587 1,421 (166) (10.4%) -- Commercial 990 1,022 32 3.2% I ____ ,,_,,_ Industrial 24 21 (3) (10.8%) -----·-·· -·· .. Construction Meters 4 9 5 128.1% ------·-- Public Authority 350 426 76 21.6% Total Water Sales AF 4,789 4;823 34 0.7°/o 157 This page intentionally left blank. 158 I $0.00 so.oo Mileage 19.35 11.95 22.10 $53.40 !53.40 Meals 4.00 2.00 299.01 $305.01 !305.01 Other 625.00 $625.00 !625.00 Reg.Fee 101.20 602.35 $703.55 Travel 2018-19) (FY 190.85 190.85 $381.70 $703.55 !381.70 Lodging Quarter 1st Diem - 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 $2.250.00 _g,250.00 Per Report 9/30/2018 AUTHORITY 1 to Page Expense 7/1/18 and From Diem SWEETWATER Per Hearing) Utah Utah Utah Public City, City, City, 2018) Directors Meetina 218 Park Park Park Totals Meetings - (Prop Festival Dav Meetina Meetina Quarterly Committee Seminar Seminar- Seminar- Lemon Meeting Cumulative Heritaqe (July-September Water Water Water Committee Committee Board Villaae Auto Personnel MeetinQ Totals Meetino Meeting Meetina Meetinq HarborFest Benefits City and Trails Trails Western Western Western Vista Board Board Board Board Board Special Avenue Quarter Hoc Hoc NWRA SWA SWA Chula NWRA NWRA National Finance Third Quarterly SWA SWA SWA SWA 1st Ad Ad 8/1/2018 8/2/2018 8/3/2018 8/5/2018 8/6/2018 8/8/2018 Date 9/30/2018 7/25/2018 9/12/2018 9/19/2018 9/24/2018 9/26/2018 9/30/2018 8/11/2018 8/18/2018 8/20/2018 8/22/2018 Morrison Director Ron 159 This page intentionally left blank. 160 ! 6.00 15.64 $21.64 $21.64 Mileage $0.00 10.00 Meals 185.57 $185.57 }185.57 Other $0.00 10.00 Reg.Fee 10.00 Travel 2018-19) (FY $0.00 $0.00 10.00 Lodging Quarter 1st Diem - 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 $2,250.00 $2,250.00 Per I Report 9/30/2018 AUTHORITY to Page2 Expense 7/1/18 and From Diem SWEETWATER Per Hearina) Public Facility Directors 2018) 218 Manai:iement Management Management Management ManaQement Manaaement Totals Meetings Desai - (Prop Festival with with with with with with Quarterly House evnenses expenses Lemon Meeting MeetinQ Meetino Meeting Meetina Meetina Meetinq Cumulative (July-September Open other other Prep Prep Pren Prep Pren Prep Board Villaae Meeting Meetina Meetinq Totals MeetinQ Meeting Meetina Benefits mileaae, mileage, AQenda Agenda Aaenda Agenda Aaenda Aoenda Board Board Board Special Community Board Board Board Avenue Quarter Board Board Board Board SWA SWA SWA SWA SWA SWA Monthlv Board Board 1st Third SWA SWA Quarterlv Monthly 8/5/2018 8/8/2018 8/9/2018 9/4/2018 7/2/2018 Date 7/11/2018 8/13/2018 8/20/2018 8/22/2018 8/31/2018 9/12/2018 9/18/2018 9/26/2018 9/30/2018 9/30/2018 7/17/2018 7/25/2018 7/30/2018 9/30/2018 Thomas Director Terry 161 This page intentionally left blank. 162 I $0.00 $0.00 Mileage $0.00 10.00 Meals 185.57 $185.57 !185.57 Other 30.00 $30.00 !JO.OD Reg.Fee 10.00 Travel 2018-19) (FY $0.00 $0.00 10.00 Lodging Quarter Diem 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 500.00 $1 $1,500.00 Per Report-1st 9/30/2018 AUTHORITY to Pages Expense 7/1/18 and From Diem SWEETWATER Per Hearing) Public Facility Chapter Directors 2018) 218 Totals Meetings Desai Diego - (Prop San Meetina - Quarterly House Meetina Meetinq Meeting Cumulative (July-September Ooen Meetino Committee Board Meeting Totals Meetina Meeting Meetina Committee Committee Benefits Trails Quarterly Board Board Board Special Communitv Board Quarter Hoc SWA SWA SWA SWA SWA SWA Ooerations Operations Quarterly CSDA 1st Ad 8/6/2018 8/8/2018 8/9/2018 Date 7/11/2018 7/25/2018 9/12/2018 9/19/2018 8/15/2018 8/16/2018 8/20/2018 9/30/2018 9/30/2018 Preciado Director Jose 163 This page intentionally left blank. 164 ! 8.72 31.83 20.71 $61.26 $61.26 Mileage $0.00 10.00 Meals 205.31 $205.31 !205.31 Other 30.00 45.00 $75.00 !75.00 Reg.Fee 10.00 Travel 2018-19) (FY $0.00 $0.00 10.00 Lodging Quarter 1st Diem - 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 $2.250.00 $2,250.00 Per I Report 9/30/2018 AUTHORITY 4 to Pege Expense 7/1/18 and From Diem SWEETWATER Per HearinQ) Public Facility Chapter Directors 2018) 218 Totals Meetings Desai Dieqo - (Prop Festival Day San Meetina - Quarterly House expenses expenses expenses Meetina Meetina Lemon Meetino Cumulative Heritaae IJulv-September Open other other other Utilities Meetinq Board VitlaQe Auto Meetina Meetino Meeting Totals MeetinQ Meetinq Meetina HarborFest Committee Committee Water Benefits Citv mileage, mileaqe, mileage, of Quarterly Vista Board Board Board Special Community Board Board Board Avenue Quarter Council Monthlv National SWA SWA SWA SWA SWA SWA Ooerations CSDA Chula Bonitafest Monthly Third Quarterlv SWA SWA Ooerations Monthly 1st 8/5/2018 8/8/2018 8/9/2018 Date 7/11/2018 7/17/2018 7/25/2018 7/31/2018 9/12/2018 9/19/2018 9/22/2018 9/26/2018 8/11/2018 8/15/2018 8/16/2018 8/18/2018 8/20/2018 8/22/2018 8/31/2018 9/30/2018 9/30/2018 9/30/2018 Deventer Director Van 165 Jess This page intentionally left blank. 166 I 46.87 27.58 52.43 $126.88 $126.88 Mileage $0.00 10.00 Meals 55676 $556.76 !556.76 Other 45.00 45.00 $90.00 }90.00 Reg.Fee $0.00 10.00 Travel 2018-19) (FY $0.00 10.00 Lodging Quarter 1st Diem - 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 550.00 $2 $2,550.00 Per j Report 9/30/2018 AUTHORITY 5 to Page Expense 7/1/18 and Hueso From Ben Diem SWEETWATER Per Hearina) Senator Meetinq Public Facilitv State 2018) Directors MeetinQ Meetina Meetina 218 Board Totals Meetings Desai - (Proo Festival JPA Dav Meetino MeetinQ Quarterly House Committee Committee Committee exoenses exoenses exoenses Lemon Garden Meetina Roundtable with Cumulative Heritaoe (Julv-Seotember Ooen other other other Utilities Utilities Villaae Board Auto Personnel Personnel Personnel Meetin<:1 Meetina Meetina Meeting Totals MeetinQ Water Water Benefits LeQislative Citv and and and mileaae, mileaae, mileaae, of of Conservation Board Board Soecial Communitv Board Board Board Avenue Quarter Finance SWA SWA SDCWA SWA SWA SWA SWA Council Council Bonitafest Monthlv National Monthlv Finance Finance Water Third Quarterlv SWA Monthlv 1st 8/1/2018 8/5/2018 8/9/2018 Date 7/11/2018 7/17/2018 7/18/2018 7/25/2018 7/31/2018 9/12/2018 9/18/2018 9/19/2018 9/22/2018 9/26/2018 9/30/2018 9/30/2018 8/11/2018 8/13/2018 8/15/2018 8/20/2018 8/22/2018 8/31/2018 9/30/2018 Castaneda Director Steve 167 This page intentionally left blank. 168 I $0.00 $0.00 Mileage 12.80 16.00 22.10 32.00 $82.90 182.90 Meals 1.99 4.00 2767 27.67 27.67 008.09 Other 2.919.10 $3 30.00 45.00 45.00 625.00 600.00 345.00 $1,345.00 $3,008.09 $1 Reg.Fee 40.00 111.09 284.73 235.00 1670.82 Travel 2018-19) (FY 190.85 199.70 199.70 199.70 $980.79 $670.82 1980.79 Lodging Quarter 0.00 0.00 1st Diem - 150.00 150.00 150.00 150.00 150.00 150.00 150.00 190.85 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 000.00 $3 $3,000.00 Per I Report 9/30/2018 AUTHORITY to Page6 Expense 7/1/18 and From Diem SWEETWATER Per Hearinni Utah Utah Utah CA CA CA CA Public Citv, Citv, Citv, Facilitv Chaoter Directors 2018) 218 Wells, Wells, Wells, Wells, Park Park Park Totals Meetings Desai - - - Dieao - (Proo Festival Indian Indian Indian Indian Dav San - - - - Meetina - Meetina Quarterly House Seminar Seminar Seminar Meetina Meetina Lemon Meetina Cumulative Heritaae (July-September Open Utilities Utilities Meetinq Water Water Water Conference Conference Conference Conference Villaae Board Auto Meetina MeetinQ Meetina Meetinq Meeting Totals Harborfest Committee Committee Water Water Benefits Citv of of Western Western Western Quarterly Annual Annual Annual Annual Vista Board Board Community Board Board Board Soecial Avenue Quarter NWRA NWRA NWRA SWA SWA SWA SWA SWA Council Ooerations CSDA Chula Bonitafest National Third Quarterly SWA SWA Council Ooerations CSDA CSDA CSDA CSDA 1st 8/1/2018 8/2/2018 8/3/2018 8/5/2018 8/8/2018 8/9/2018 Date 7/11/2018 7/17/2018 7/25/2018 9/12/2018 9/18/2018 9/19/2018 8/11/2018 8/15/2018 8/16/2018 8/18/2018 8/20/2018 8/22/2018 9/30/2018 9/22/2018 9/24/2018 9/25/2018 9/26/2018 9/27/2018 9/30/2018 Cerda Director Jose 169 This page intentionally left blank. 170 ! 14.44 64.37 52.92 $131.73 $131.73 Mileage $0.00 10.00 Meals 202.31 Other 2,202.31 $2 $2,202.31 45.00 30.00 45.00 $120.00 1120.00 Reg.Fee $0.00 !0,00 Travel 2018-19) (FY $0.00 10.00 Lodging Quarter 0.00 1st Diem - 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 $2.850.00 $2,850.00 Per Report 9/30/2018 AUTHORITY 7 to Page Expense 7/1/18 and Hueso From Ben Diem SWEETWATER Per Hearina) Senator Public Facilitv Chaoter State Directors 2018) Meetina Meetinq Meetina 218 Totals Meetings Desai with Dieao - (Prop Festival Dav San Meetina Meetina MeetinQ - Meeting Quarterly House Committee Committee Committee expenses exoenses expenses Lemon Meetinq Roundtable Cumulative Heritaae (Julv-Seotember Ooen other other other Utilities Utilities Meetina Committee Committee Villaae Board Auto Personnel Personnel Personnel Meetina Meetina MeetinQ Meetina Totals MeetinQ Meetina HarborFest Water Water Benefits Leaislative Citv and and and mileaqe, mileaae, mileaae, of Trails of Trails Quarterlv Vista Board Board Communitv Board Board Board Special Board Avenue Quarter Hoc Hoc SWA Council Monthlv Finance SWA SDCWA SWA SWA SWA CSDA Chula Monthlv Bonitafest National Finance Finance Ad Third SWA SWA SWA Council Monthlv 1st Quarterlv Ad 8/1/2018 8/5/2018 8/6/2018 8/8/2018 8/9/2018 Date 7/11/2018 7/17/2018 7/18/2018 7/25/2018 7/31/2018 9/12/2018 9/18/2018 9/19/2018 8/11/2018 8/15/2018 8/16/2018 8/18/2018 8/20/2018 8/22/2018 8/31/2018 9/30/2018 9/22/2018 9/24/2018 9/26/2018 9/30/2018 9/30/2018 Director Calderon-Scott 171 Josie This page intentionally left blank. 172 $341.50 $341.50 Mileage $0.00 $0.00 $0.00 $0.00 $136.29 $136.29 Meals $0.00 $0.00 $0.00 $0.00 other $0.00 $0.00 $0.00 $0.00 $2,285.00 $6,648.62 $2,285.00 $6,648.62 Reg.Fee $0.00 Travel 2018-19) (FY $0.00 $0.00 Lodging $1,362.49 $1,374.37 $1,362.49 $1,374.37 Quarter 1st $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Diem - Per $16,650.00 $16,650.00 Report 9/30/2018 AUTHORITY 8 to Page Expense 7/1/18 and From Directors) Diem SWEETWATER (All Directors\ Directors) Directors) Directors} Per lAII Total (All (All {All Total Total Total Total Grand Directors Meetings Grand Grand Grand Grand Quarterly Cumulative Quarter Quarter Quarter Quarter 1st 4th 3rd 2nd 2018-19 FY Date Director 173 This page intentionally left blank. 174 ~\W@@~©l1b@rf ~M1b[h)@[f0~ ~1brf©l1b@~o~ lP~©Jrru @.(\j]@~@lf'~W ~@Ip)@~ ~@\Yl@lf' ~llil@@~ October 24, 2018 Quarterly Performance Measurement Report (Reporting for FY 2019 Ql-Ju/y 1, 2018 through September 30, 2018} This report provides quarterly data on the performance measures identified on page 17 ofthe Strategic Plan. 175 Water Quality TREATMENT PLANT WATER QUALITY DISTRIBUTION SYSTEM WATER QUALITY Chlorine and Turbidity (WQ Objective 1.003) CHLORINE - % of Samples within Goal % of Samples within Authority WQ Goal FY2018 FY2018 FY2018 FY2019 FY2018 FY2018 FY2018 FY2019 Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql SWA Goal 88% 99% 97% 98% Chlorine 78% 85% 75% 68% DDW Req. 100% 100% 100% 100% SWA Goal is between 2.0 mg/Land 4.0 mg/L % of Samples within DDW WQ Goal DDW Requirement is greater than 0.2 mg/L FY2018 FY2018 FY2018 FY2019 Q2 Q3 Q4 Ql TURBIDITY - % of Samples within Goal Chlorine 99% 100% 97% 98% FY2018 FY2018 FY2018 FY2019 Q2 Q3 Q4 Ql SWA Goal is between 1.5 mg/Land 3.4 mg/L SWA Goal 94% 91% 82% 84% DDW Goal is between 0.2 mg/Land 4.0 mg/L DDW Goal 100% 100% 100% 100% SWA Goal is< 0.1 NTU Note: FY2019 Ql SWA goal of 68% is a result of the DDW Goal is< 0.3 NTU distribution system nitrification issues. The Authority i Note: All samples are in compliance with DDW regulations. has switched to imported water to address the nitrification. ' I I . . . TASTE AND ODOR COMPLAINTS PUBLIC HEALTH NOTIFICATIONS (WQ Objective 1.001) # of AF of Complaints Benchmark Complaints Water Sold per TAF* Met? FY2018 Q2 5 4561 1.1 YES FY2018 Q2 0 FY2018 Q3 1 3792 0.3 YES FY2018 Q3 0 FY2018 Q4 7 4332 1.6 YES FY2018 Q4 0 FY2019 Ql 4 4823 0.8 YES FY2019 Ql 0 TOTAL 17 17,508 1.0 YES - -- - I Note: ' ' ' ' Public Health Notifications are issued when a public health advisory is required by the State Water Resources Board * TAF = Thousand Acre-feet Division of Drinking Water. SWA strives to achieve zero The Authority's goal is to minimize taste and odor events public notifications. to less than 3.5 customer complaints per 1,000 acre-feet of water sold. - 176 System Reliability INFRASTRUCTURE INTEGRITY INFRASTRUCTURE INTEGRITY MAIN LEAKS SERVICE LEAKS FY2018 FY2018 FY2018 FY2019 FY2018 FY2018 FY2018 FY2019 Cause Q2 Q3 Q4 Ql Size Q2 Q3 Q4 Ql lC SC lC 4C Natural Pipe Aging 1 1 0 0 3/4" OP OP 1 p 1 p 3C 4C 7C 2C Hit by Contractor 0 1 0 1 1" 3 p 0 p 5 p 10 P oc OC OC OC Tree Root/Trench Settlement 1 0 2 2 1-1/2" 3 p OP OP 3P Flanges, rubber gaskets, cast- OC oc oc OC iron fittings, etc. 1 0 0 0 2" OP OP 2 p OP TOTAL 3 2 2 3 TOTAL 10 12 16 20 Copper/ Steel AC Pipe PVC TOTAL Copper Plastic TOTAL FY2019 Q1 0 3 0 3 FY2019 Ql 7 13 20 Oct 1 2017-Sept 30 2018 2 8 0 10 Oct l 2017-Sept 30 2018 31 26 57 Oct 1 2016-Sept 30 2017 3 19 1 23 Oct 1 2016-Sept 30 2017 61 29 90 ADEQUATE PRESSURE UNDER FIREFLOW CONDITIONS SYSTEM UP TIME (as measured by Disruption Rate) As reported by the Fire Departments of the City of Chula Vista, the City of National City, and Bonita-Sunnyside Fire Protection 34,100 services out of 34,628 services uninterrupted District FY2018 FY2018 FY2018 FY2019 Adequate Q2 Q3 Q4 Ql Pressure % of services Date Location of Fire/Training and Flow? uninterrupted 98.91 99.27 98.97 98.48 7/21/2018 Plaza Bonita Rd & Equitation Ln YES Disruption Occurrences (see analysis below) Planned 9 17 15 12 Unplanned 3 3 3 10 Analysis: l------+------+------1 Planned water outages: 12 planned water outages affecting 368 services for a total of 80 hours. Each Adequate Pressure Under Fireflow Conditions: Captain Carl outage averaged approximately 7 hours in order to McAllister of the Bonita-Sunnyside Fire Protection District perform maintenance and construction activities on the reported approx. 1,000 gal. used from a hydrant at Plaza distribution system. All customers were notified a Bonita Rd and Equitation Ln for a vegetation fire at approx. minimum of 48 hours in advance. 1600 hrs on 7/21/18. The Chula Vista Fire Department reported no fires and the National City Fire Department did not respond to the request for fire flow information. Unplanned water outages: 10 unplanned water outages affecting 160 services. When possible, all customers were notified a minimum of one hour in advance. Standard: 20 PSI under emergency conditions (e.g., fire) 177 Customer Service ------CUSTOMER CONTACT CUSTOMER PAYMENTS FY 2018 FY 2019 FY 2019 3year FY 2018 FY 2019 FY 2019 3year Q4 Ql YTD Avg.YTD Q4 Ql YTD Avg.YTD Walk-in Assists Walk-in I 545 565 565 2,106 8,336 ' 8,983 8,983 40,395 (non-payment) Transactions ! ------i Mail Phone Calls 8,597 8,898 8,898 34,466 13,985 13,639 13,639 60,605 Transactions i ------Account Status Online 1,572 1,504 1,504 5,529 28,985 29,971 29,971 106,022 (close, open, etc.) Transactions ------Payment 2,250 2,695 2,695 9,812 Cash 4% ' Extensions 4% 4% 4% Water Efficiency I 8 I 15 15 56 Checks Site Visits 56% 55% 55% 60% ~ - High Bill 98 92 92 282 Electronic Checks 22% Investigations 22% 22% 19% - - - Customer Repair 568 510 510 1,524 Credit Cards 18% 19% 19% 17% Requests ! Meter ' Accounts Shut-off 351 i 471 471 1,756 613 574 574 Maintenance for Delinquency 2,473 -- - Meter Written off as 435 385 385 1,336 $24,966 $20,602 Replacements $20,602 $130,794 i I Bad Debt BILLING ANALYSIS/FUTURE ACTIONS Billing Accuracy Rate: Beginning in October of 2018, using Paymentus, text SWA Benchmark messages and automated phone calls will be sent/made Top 1.4 Adjustments per to customers notifying them of their past due payment. 2.9 Median 10.8 10,000 Bills Bottom 33.8 -PayNear Me, the new payment option, was implemented December 2017 and allows customers to make cash payments at 7-Eleven and CVS stores. The following are participation numbers: PayNearMe Payments by month in 2018 January 66 February 75 March 127 April 132 May 90 June 136 July 135 August 141 September 143 178 Fina ncia I Via bi Iity (reported on an annual basis) BALANCED BUDGET RESERVE FUNDS FY 2018-19 Operating and Capital - $74,698,100 24.0 ~------Power, 22.0 +---~=------20.0 +-1:r.s1- Chemicals l8.0 & Fuel .,, 16.0 5% § 14.0 = 12.0 = 10.0 :!E 8.0 6.0 4.0 2.0 0.0 ~ 2 Months Operating Reserves Target FY 2018-19 Revenue & Other Funds - $74,698,100 Water Sales 72% Other Non-water Revenue 4% Reserve Transfers 24% SWEETWATER'S BOND RATING NONREVENUE WATER LOSS STANDARD FY2014 FY2015 FY2016 FY2017 FY2018 &POOR'S AA Nonrevenue Water as % of Water Supplied 5.1% 4.7% 5.0% 6.7% 4.0% (rating reaffirmed November 2017) Infrastructure Leakage Index What the ratings mean 1.29 1.01 0.94 1.47 0.66 Measure the likelihood that a company will default on its debt obligations (bonds) Investment-grade Moody's S&P Infrastructure Leakage Index is the ratio of the real Highest quality Aaa AAA losses to the unavoidable real losses (the low limit of High Aa AA leakage that could be achieved if all of today's best Upper A A technology could be successfully applied). Medium Baa BBB Strengths: -Water Loss Indicators for the FY2017 were validated by Stable, primarily residential, and diverse customer base the California Water Loss Technical Assistance Program Diverse and affordable water supply portfolio following newly standardized Level 1 validation criteria. Strong liquidity and operational management -The process to validate FY2018 indicators is expected to Challenges: be completed by November 2018. Rate increases to maintain pace with imported water costs -Prior year indicators reflect a review by an independent increases and fluctuation in revenues and water purchase third party. costs affected by drought conditions. 179 Staff Development ------CERTIFICATIONS ACCIDENT/INJURY RATE As measured by incidents presented to the Safety Committee 100% Compliance with Minimum TOTAL for Quarter= 29 Historic Annual Average= 59 ' Certification Requirements Professional Certifications Currently Held Backflow Prevention Assembly Tester 6 Certification in Public Information 2 Certified Construction Manager 1 Certified I.S. Security Professional 2 Certified Occupational Safety Specialist 1 Collection System Maintenance 2 Cross-Connection Control Specialist 7 Type Environmental Health Specialist 1 • Injuries • Property ea All Other Land Surveyor 1 Landscape Irrigation Auditor 1 • Chargeable il'l Non Chargeable Native Endangered & Threatened Species 1 Notary Public 3 Pesticide Qualified Applicator 8 21% Pesticide Qualified Applicator - Licensed Professional Engineer - Chemical 1 Professional Engineer - Civil 5 Professional Engineer - Control System 1 Qualified Stormwater Developer/Practitioner 2 Special District Administrator 1 80 ~------·------Water Audit Validator 1 70 +------ail!!------,"' Water Distribution Operator 73 Water Treatment Operator 38 60 ~~-- Water Use Efficiency Practitioner 3 50 1 Watershed Wise Landscape Professional 40 TRAINING 30 Training Hours (Quarterly) 20 FY2018 FY2018 FY2018 FY2019 10 Q2 Q3 Q4 Ql 983.6 1117.3 866 1182.0 0 Average Hours of Training per Employee FY2018 FY2018 FY2018 FY2019 ra1 Injuries • Property rn All Other Reports Q2 Q3 Q4 Ql 8 9.1 6.8 9.2 Reported by Calendar Year /Aligns with OSHA reporting period} Injuries to SWA employees Training Hours represents all recorded training activities. Property damage from SWA actions Monthly status reports may not include sessions from All Other includes near misses & informational reports the last week of the month due to data entry lag. Third party claims tracking added in 2017 180 -- Administrative Effectiveness IMPLEMENTATION OF STRATEGIC PLAN STAFFING EFFICIENCY No. of Employees (Full Time 88% on Target Equivalents) As of June 30, 2018, 88% of the objectives were on target. The 150 remaining projects were delayed or on l hold for various reasons as was +-·~, -·,,-·~,~~,-·-,r·--.,- .....,,-·--.,-·,,-·--., -~.,---.~~-~ presented to the Board on August 22 in ~~ I ' 00 ' rl rl the FY2018-19 Detailed Work Plan Status 0" 0 N N Report. The next Status Report will be >-u. >-u. presented to the Board in January 2019. Water Sold (AF} per Employee 180.0 .,,.,.-·------~::~ ·~: := ~ ._ --- - t- L_ L_ L_ I- ,_ 1- ,_ I- 120.0 ,_ ~ ...... ,__ .__ 100.0 ORGANIZATIONAL BEST PRACTICES KEY DATES This metric summarizes the integration of 13 specific utility management practices including strategic planning and implementation, long term financial planning, risk management planning, performance measurement, succession planning, asset management, customer Next Quarterly Performance Report involvment, government transparency and accountability, January 23, 2019 drought response and source water protection. Next Work Plan Status Report Update SWA Benchmark January 23, 2019 Organizational Top Quartile 83.50% Best 84.60% Median 75.40% Strategic Plan Workshop Practices Bottom Quartile 67.60% February 11, 2019 181 --~--~ Environmental Stewardship ------~------TRIPLE BOTIOM LINE (TBL) WATER EFFICIENCY INCENTIVE REBATES AWWA indicator of a utility's sustainability efforts Devices Rebated/Applications Processed FY2018 FY2018 FY2018 FY2019 SWA Benchmark SoCal WaterSmart Q2 Q3 Q4 Ql Triple Top Quartile 75% HE Clothes Washers 6/6 5/5 1 13 Bottom Line 85% Median 60% HE Toilets 2/1 0 0 0 Index Bottom Quartile 45% Rotating Nozzles 0 0 0 0 Irrigation Controllers 0 0 2 2 The TBL framework represents a balanced view of Soil Sensors 0 0 0 0 environmental, social, and economic considerations Rain Barrels 0 3 1 4 and is expressed as a percentage. SLP Applications 0 0 0 0 SWA Managed Envlronmental Greywater Retrofits 0 0 0 0 Free Sprinkler Nozzles 50/2 25/10 0 0 Rain Sensors 0 0 0 0 Leak Week rebates 0 17 0 0 Car Washes 16 9 6 7 STEP-WEEP Grants 0 1 1 0 RESOURCE USAGE WASTE REDUCTION AND MANAGEMENT Energy Use (KWh): FY2018 FY2018 FY2018 FY2019 Ql FY2019 FY2018 Q2 Q3 Q4 Ql Manifested waste: Recycled Non-Recycle Cumulative Desalination 1,178,548 1,352,828 1,962,708 3,053,303 Asbestos (lbs) 0 105 105 206 Perdue Plant 727,491 655,962 727,113 392,267 Batteries (lbs) 158 0 158 467 Operations Center 35,737 34,125 35,102 59,207 Ink Cartridges (lbs) 0 0 0 50 Bonita Valley Res 8,650 8,798 9,159 10,295 Light Bulbs (lbs) 61 0 61 52 NC Wells 258,014 284,153 225,770 341,303 Oil (gal) 120 0 120 140 O.D. Arnold 4,706 5,214 5,017 4,912 Paint (lbs) 89 0 89 163 Administration 57,332 37,062 42,393 70,075 Tires (ea) 0 0 0 65 All other 870718 587,675 613,471 467164 Other (lbs) 133 0 133 336 Total 3,141,196 2,965,817 3,620,733 4,398,526 Regulatory Compliance: FY2018 FY2018 FY2018 FY2019 Desalination Facility plant process restarted in Q4 . I - -- '----- Q2 Q3 Q4 Ql Water Use (HCF): FY2018 FY2018 FY2018 FY2019 Inspections 4 5 12 6 Q2 Q3 Q4 Ql Citations/Violations 2 0 0 0 Desalination 16 77 123 139 Administration 220 155 197 267 Operations Yard 92 84 97 109 Notes: ACWA/JPIA conducted annual property program and Perdue Landscape 55 11 30 44 risk audit visit in FY2018 Q3. Pump & Tank Sites 699 529 607 553 182 MANAGEMENT MONTHLY REPORT ORGANIZATIONAL PERFORMANCE DASHBOARD (FOR THE MONTH ENDING SEPTEMBER 30, 2018) Loveland Reservoir Watershed Runoff Loveland Reservoir Capacity: Sweetwater Reservoir (Loveland) 25,387 AF Capacity: 28,079 AF Rainfall: 0" FYTD: 0" 0 AF Annual Average: 15.28" September 2017: 0 AF Sweetwater Reservoir Watershed Runoff (Sweetwater) Rainfall: 0" 0 AF FYTD: 0" Below Average Last Month: 54% Full Annual Average: 11.33" September 2017: 0 AF Last Month: 16% Full Cost to Treat Water per AF Total Monthly Production Perdue Plant Daily Production MGD (Variable Costs) 1,546.1 AF September 2017 $73 $266 $111 No. of Funded No. of Vacancies Positions 11 133 No. of No. of Positions Recruitments Main Leaks Filled Cause Incidents/Type FYTD 6 122 Natural Pipe Aging 0 0 Hit by Contractor 0 1 No. of Website Visitors: Hours of Training: Tree Root/Settlement 0 0 10,107 No. of Safety 335 Achievements Issued: Fittings, Gaskets, etc. 0 0 Total Attendees: Trench Settlement 1 2 FYTD: 32,306 12 223 Expenditures Prior Month FYTD Fiscal Year‐to‐Date Water Sales (millions) FYTD Operating Capital Delinquent Accounts 198 495 642 FYTD Actual Credit Card Transactions 6,491 19,290 17,152 Feet $12.0 $1.3 Acre High Bill Investigations 42 92 81 4,823 4,878 Total Budget Actual Budget $40.0 $12.1 Walk‐in Customer Assistance 3,148 9,959 9,654 Percent Remaining Water Efficiency Outreach6 15 23 70% 89% (millions) Taste and Odor Complaints2 4 7 $ $14.4 $14.3 Actual Budget New Accounts 352 1,241 1,288 183 This page intentionally left blank. 184 Plan number. 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A. NORTHERN CALIFORNIA WATER TOUR October 10-12, 2018 Report by Director Jose F. Cerda Day 1, Wednesday, October 10 Our first stop after getting acquainted at Sacramento International Airport was a 30-minute drive to Yolo County and the Yolo Farm Bureau. There we were greeted by David Guy and Christopher Williams, and Carson Jeffres, President of Northern California Water Association (NCWA), Senior Engineer for California Department of Water Resources, and a field and lab director for the UC Davis Center for Watershed Sciences, respectively. The first topic of discussion centered with a broad dialog of Northern California aqua-geography. The comprehensive overview of the riparian system and tributaries of the region. The major rivers of the region include Feather, Mccloud, Feather, Yuba and Northern Yuba, Stony Creek, Butte Creek, Cottonwood, and Trinity. The major lakes of the area include: Trinity, Shasta, Clear, Whiskeytown, and Oroville. Other topics included water supply, quality, and efficiency concerns of Northern California. The major issues included a broad conversation of water management for regional sustainability in Sacramento Valley with ranching, farming, native tribes, and environmental concerns for fish and fowl. Government requirements of Sustainable Ground Water Management Act (SGMA) and the multiple benefits of floodplains. Other minor topics included Central Valley flood plains and Central Valley Flood Protection Plan and its update. The ecological context of the floodplains was also discussed. Ninety-minutes later, we drove to Wallace Weir Fish Rescue Facility at Knights Landing, California. At the weir, (a weir is a low dam built across a river to raise the level of water upstream or regulate its flow). In this case, it regulates water for salmon to move across a body of land via a set of gates that can be opened or closed. The objective of California environmental regulation is to protect salmon from being extinct. Thus, a series of political, economic, and regulatory mechanisms are designed to keep them alive considering farming, fishing, and water infrastructure management. Lewis Bair, General Manager, spoke of the Wallace Weir Fish Rescue project and how they work together with farming interest and government. Carson Jeffres spoke of the salmon restoration and how salmon live on flooded Sacramento Valley rice fields, code name The Nigiri Project, after sushi meal of salmon atop sticky white rice. Yuba Water Agency was our next stop where we had lunch and heard General Manager Curt Aikens speak about a multitude of topics. The discussion began with the Lower Yuba River Accord and Yuba Feather Supplemental Flood Control Project, Forecast Coordinated Operations, water transfers, new Colgate Powerhouse and the Blue Forest Watershed Project. Lake Oroville was our next tour stop. There we met Curtis Anderson, where he spoke about State Water Project, DWR operations in spillway emergencies, and Federal Emergency Regulatory Commission (FERC) and the relicensing for Oroville Dam. We were greeted by Jana Frazier of Department of Water Resources and her discussion of Oroville history with maps, slides, and videos. We drove to Larrabee Duck Club where we had dinner and met Daniel Robinson, a rancher, Ted 187 Agenda Item No. 17. A. Trimble, GM, Western Canal Water District where we ate some delicious barbecue and heard conversation and saw a video of the history ofWCWD and Butte Creek County Salmon Project history. After a long day we made our way to Feather Falls Lodge and turned in. Day 2, Thursday, October 11 Kelly Peterson, a water resources scientist with Department of Water Resources Conservation from Butte County, discussed her work with land use demands and ground water, conditions in ground water for Butte County, and SGMA implementation and results. We were off to a tour of Lundberg Farms in Richvale where they process rice into rice products like cereals, snacks, and cakes. Bryce Lundberg, VP of Agriculture explained the vertically integrated family farm and the role of water in Northern Sacramento Valley. We got a tour of how rice cakes are mixed and formed. We were shown the types of rice and products that are derived from water and ducks and rice fields. The Lundeberg's told us that their method of flooding fields for migrating birds helps with nitrogen depletion and fertilization and ducks and geese help in the process and allow fowl a place for respite from long-distance flights. Our next stop in the tours was Tehama-Colusa Canal Authority where GM Jeff Sutton, greeted us. He spoke of the history and background of the Red Bluff Diversion Dam and how salmon and other fish are aided with channeling their upstream swims. We saw a series gates and pumps that are designed to open and close to let fish move upstream. Curtis Anderson, spoke of the Elder Creek Flood Control projects and channel maintenance and how they manage the nonstructural flood control mechanisms and methods. In addition, regional perspectives in SGMA and future storage projects were discussed. Shasta Dam was out next sop for the day where we head an extensive tour of the facility. Don Bader of the Bureau of Reclamation discussed the Central Valley Project water operations, the raising of Shasta Dam, temperature control and a cold-water pond for salmon runs, and the fisheries issues and the drought. From this point on we were on a house boat on Shasta lake where we arrived at a Centimudi Boat Launch on the Whiskeytown-Shasta-Trinity National Recreation Area. At the Bridgebay Dock we hear Caleen Sisk of the Winemem-Wintu Tribe where she discussed her controversy and her tribe's non-conformance and century grievances with the damming of their Mccloud and Feather River lands. The tribe has fished and made a living from the salmon stock for centuries and now they are being blocked by additional regulation from Shasta Dam being raised 20- additional feet. We had dinner and a presentation in Redding from Mark Oliver that spoke of hydrology, flow releases in Trinity River. And spoke at length of the Trinity River Restoration Project. After another long day we turned in at a local hotel in Redding. Day 3, Friday October 12 We departed to South Bonnyview Fishing Access on Sacramento River where GM Roger Cornwell of River Garden Farms spoke at length about Salmon Habitat Restoration Project and the Fish Food Project. We toured the Centerville Clear Creek Gorge Overlook to witness Chinook and Steelhead salmon spawning in river. Matt Brown, program manager for US Fish and Wildlife went over some of the issues facing salmon and the Carr Fire and how it decimated the region and set back work to restore 188 Agenda Item No. 17. A. salmon for years. Glen-Colusa Irrigation District GM, Thad Bettner gave us a tour of the largest fish screen history of water rights, 2018 Sacramento River Operations and diversions, SGMA and Sites Reservoir integration. From GCID we traveled to see migratory fowl and birds at Sacramento National Wildlife Refuge where we learned of riparian ecosystems and habitats and agricultural lands. There at SNWR, Steve Emmons with US Fish and Wildlife, toured wetlands, and showed us the migratory Pacific Flyways. At Wells Ranch and Sites Reservoir future site, we heard Mary Well, a rancher, that spoke about her lands being used to form the new Site Reservoir. Rob Thompson an environmental planner spoke of the planning and permitting process and the North-of-the-Delta Offstream Storage Investigation. Overall, the tour was interesting and held many truths about California water: the government, ranchers and farmers, native tribes, and fish and fowl have for years lived in contention and water is the reason. Competing groups seek more and better access to water. Government be a mediating actor that has its own nature and logic. Farmer and ranchers want the most water for their crops and animals but must balance out the needs of environmentalists and government and of course the fish and fowl are co existing as well as possible considering diminished fly-zones and spawning sites. 189