HomeMy WebLinkAboutWest Valley Water District - Public Financial ReportKYLE CROWTHERVice President, District 1 DR. MICHAEL TAYLORDirector, District 2 DR. CLIFFORD O. YOUNG SR.Director, District 3CHANNING HAWKINSPresident, District 4 GREG YOUNGDirector, District 5
POPULAR ANNUALFINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
RIALTO, CALIFORNIA
TABLE OF CONTENTS
POPULAR ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
LETTER FROM THE GENERAL MANAGER ...........................................................................................................1
ABOUT THE DISTRICT ........................................................................................................................................2
DISTRICT WIDE PRIORITIES ...............................................................................................................................3
STRUCTURE OF THE DISTRICT ..........................................................................................................................4
COMMUNITY OUTREACH ....................................................................................................................................5
CAPITAL IMPROVEMENT PROJECTS .................................................................................................................6
FINANCIAL PERFORMANCE ...............................................................................................................................7
SOURCES OF REVENUE ......................................................................................................................................7
OPERATING EXPENSES......................................................................................................................................8
LONG TERM DEBT ..............................................................................................................................................10
NET POSITION ....................................................................................................................................................11
On behalf of the Board of Directors and staff of West Valley Water District it is
my pleasure to present to you our first Popular Annual Financial Report (PAFR)
for fiscal year ending June 30, 2021. The PAFR is published to provide readers
with easy-to-understand information on the Water Districts’ organization,
as well as its finances, water services, and other pertinent information.
The Government Finance Officers Association (GFOA) encourages and
assist state and local governments to utilize information from their annual
comprehensive financial report and compile a high quality Popular Annual
Financial Report (PAFR). This PAFR, represents West Valley Water District’s
ongoing commitment to transparency in its operations and governance.
The information within this report draws directly from the Water District’s audited financial statements and
provides an overview of the Water District’s financial activities and position.
The PAFR is based on the 2021 Annual Comprehensive Financial Report which is prepared in conformity with
generally accepted accounting principles and audited by The Pun Group, LLP. The Water District received an
unmodified audit opinion that the financial statements present, fairly, in all material respects, the financial
position of the Water District.
I hope the Popular Annual Financial Report assists you in understanding the Water District’s financial picture
and future commitments. Both the Annual Comprehensive Financial Report for the fiscal year ended June 30,
2021, and Budget Fiscal Year 2021- 2022, can be found online www.wvwd.org/about/transparency/. Should
you have any questions or comments, please feel free to contact the Water District’s Finance Department.
Respectfully Submitted,
Shamindra "Rickey" Manbahal
- General Manager
1
West Valley Water District serves approximately 88,000 people, spanning two counties in Southern California in a 29.5 square-mile area, including portions of the communities of Bloomington, Colton, Fontana, Rialto, San Bernardino, and Jurupa Valley.
MISSION STATEMENT
West Valley Water District provides our customers with safe, high quality and reliable water service at a reasonable rate and in a sustainable manner.
VISION STATEMENT
West Valley Water District will continue to be a national model in the water industry for innovation, fiscal responsibility, sound conservation practices, and a relentless commitment to our employees and the communities we serve.
ABOUT THE DISTRICT
DISTRICT AREA
32 SQUARE MILES
MILES OF PIPELINE
401 MILES
STORAGE TANKS
26
STORAGE CAPACITY (MG)
73.6
GROUNDWATER WELLS
17
WELL CAPACITY (MGD)
35
FIRE HYDRANTS
3,560
2
The District’s Board of Directors is aware of the need to ensure the District’s stability and continuation. District-wide goals are established by the Board of Directors in order to identify priority programs and projects that effectively meet the District’s anticipated future needs.
1. Continue to deliver safe, reliable, high-quality water at an affordable price.
2. Nurture a culture that values our employees, customer service, innovation,
integrity, excellence, transparency, and conservation.
3. Implement technologies that increase efficiency and enhance safety.
4. Plan and be prepared for anticipated significant housing growth in the District.
5. Further refine procedures to ensure the District safeguards ratepayer funds,
operates efficiently, enhances transparency, and protects employees and
District assets.
DISTRICT WIDE PRIORITIES
3
BOARD
ADMINISTRATION
DEPARTMENTS
DIVISION
FINANCE PURCHASING CUSTOMER SERVICE
HUMAN RESOURCES/ RISK MANAGEMENT
GENERAL MANAGER
CHIEF FINANCIAL ADMINISTRATIVE OFFICER
BOARD OF DIRECTORS
TREASURER BOARD SECRETARY LEGAL COUNSEL
ASSISTANT GENERAL MANAGER-OPERATIONS
PUBLIC
PUBLIC AFFAIRS ENGINEERINGGENERAL SERVICES OPERATIONS
ACCOUNTING PURCHASING CUSTOMER SERVICE HUMAN RESOURCES PUBLIC AFFAIRS ENGINEERING -DEVELOPEMENT
BUSINESSSYSYEMS / I.T.PRODUCTION
BILLING ENGINEERING -C.I.P.
GEOGRAPHICINFORMATIONSYSTEMS
WATER
TREATMENT
METERING WATERQUALITY
DISTRIBUTION
MAINTENANCE
STRUCTURE OF THE DISTRICT
GOVERNING BOARD OF DIRECTORS
DISTRICT MANAGEMENT
CHANNING HAWKINSPresident, District 4 KYLE CROWTHERVice President, District 1 DR. MICHAEL TAYLORDirector, District 2
SHAMINDRA “RICKEY” MANBAHALGeneral Manager
HAYDEE SAINZDirector of Human Resources & Risk Management
JON STEPHENSONDirector of General Services
VAN JEWAssistant General Manager
NASEEM FAROOQIDirector of Government & Legislative Affairs
JOANNE CHANDirector of Operations
JOSE VELASQUEZDirector of Finance
LINDA JADESKIDirector of Engineering
PEGGY ASCHEBoard Secretary
DR. CLIFFORD O. YOUNG, SR.Director, District 3 GREG YOUNGDirector, District 5
4
COMMUNITY OUTREACH
The Water District participates in various community events throughout the year including
conservation classes. The Water District is committed to enhancing the community’s quality of
life by educating residents on the water treatment process.
PARTNERSHIPS FOR CAREER ADVANCEMENT
The Water District partnered with IEWorks to offer an internship program for ten (10) weeks.
IEWorks collaborates with San Bernardino Valley College (SBVC) in identifying students that are
currently enrolled in their water technology industry courses. Interns will rotate through various
departments to gain a better understanding of each of the responsibilities necessary to operate
and maintain them.
The Harbor Freight Fellowship Intern program is through RVUSD. They both partner to identify high school students interested in the water industry and the District allows the students to participate in the rotation program established for IEWorks; however, they complete the program in 120 hours and receive a stipend from Harbor Freight for $1000 at the end of their completed internship.
GIVING BACK TO THE COMMUNITY
With the desire of making a difference in the community it serves, West Valley Water District employees participated in the Angel Tree Gifting charity drive. The Children’s Fund of San Bernardino and the WVWD also partnered to supply personal protection equipment to local nonprofits and charitable organizations. In October 2020, the District hosted its annual children’s Halloween event for annual conservation contest.
WATER CONSERVATION
In Fiscal Year 2020-2021, WVWD focused on enhancing water conservation efforts by partnering with community stakeholders. WVWD formalized an agreement that led to multiple water education and conservation classes which were held virtually for ratepayers. To ensure all safety measures were followed, WVWD staff coordinated specific times to pick up all course materials prior to the courses. Residents throughout the Water District participated in the programs.
5
RELOCATION OF WELL 41 ION EXCHANGE VESSELS
This project was part of the Emergency Week Optimization project. The ion exchange vessels at Well 41 are used for perchlorate removal. The ion exchange vessels were transferred from Zone 2-3 ion exchange system to Well 41. The project also included the purchase of resin for Well 41. The two vessels had resin fill service done during the project.
BLOOMINGTON ALLEY WAY MAIN REPLACEMENT PHASE 3A
Distribution mains, services, and valves serving a portion of the community of Bloomington are located within the rear alleyways of the homes. The District’s ability to read meters, locate, shut off valves and perform regular and emergency maintenance is limited. This project relocated 144 service laterals and installed fire hydrants, meter boxes, and meters.
As part of the annual budget process, the Engineering and Operation Managers compile and
submit a list of capital improvement projects for consideration. The projects are prioritized on
the needs of the District based off of the Water Master Plan and staff’s knowledge. The two
projects below are the highlights of Fiscal Year 2021.
CAPITAL IMPROVEMENT PROJECTS
$191,307
$1,848,964
6
FINANCIAL PERFORMANCE
Based on Annual Comprehensive Financial Report
Water Consumption Sales
Volumetric revenue based on
consumption of potable water.
Water Service Charges
Basic service charge based on
number of connected meters.
Other Operating Revenue
Construction meters, customer
service charges/fees, backflow
charges, engineering/developer fees,
and meter fees.
Non-Operating Revenue
Includes investment income and
property taxes.
Operating Revenues: $31,962,156 | Non-Operating Revenues: $2,799,483
$20.4
Total
Revenues
$34,761,639
$
8
.
0
$2 .8
$3.5
SOURCES OF REVENUE
The District uses revenue to fund daily operations, repay loans, bonds and interest. Remaining
revenue is invested back into capital improvement projects to help maintain and improve the
District’s system longevity and stability.
West Valley Water District receives 92 percent of its revenue from user rates and fees. Rates and fees are reviewed and are adjusted as necessary to cover the costs of providing services to ratepayers.
58.8%
23.0%
10.1%
8.1%
7
Operating expenses are necessary to provide reliable water to protect public health and the environment with financial integrity and superior customer service. Despite the severity of the recent drought, the District has put forth significant effort to overcome the challenges of maintaining fiscal transparency and operational sustainability.
The expense types and allocation for every dollar the District spends on operations and maintenance are:
FY 2019 FY 2020 FY 2021
OPERATING REVENUES:
Water consumption sales $17,163,673 $17,698,440 $20,428,413
Water service charges $7,350,127 $7,506,847 $7,978,760
Other operating revenue $7,596,238 $3,615,547 $ 3,554,983
Total operating revenues $32,110,038 $28,820,834 $31,962,156
NON-OPERATING REVENUES:
Property taxes $2,305,151 $2,376,463 $ 2,761,167
Interest and investment earnings $1,795,521 $1,910,670 $38,316
Total non-operating revenues $4,100,672 $4,287,133 $2,799,483
Total revenues $36,210,710 $33,107,967 $34,761,639
THREE YEAR COMPARATIVE REVENUES
OPERATING EXPENSES
CUSTOMER ACCOUNTS
Expenses related to customer relationships.
These include postage, telephone, printing and
publishing, and billing services.
SOURCE OF SUPPLY
Expenses related to the extraction of
groundwater, and for procuring water from
State Water Project.
DEPRECIATION
Expenses related to the use of capital assets over
time. It’s a non-cash expenditure. Amortization
for water participation rights is included.
WATER TREATMENT
Expenses related to the treatment of water.
GENERAL & ADMINISTRATIVEExpenses related to the administration of the District operations. For example, employee compensation, benefits, conservation rebates, office supplies, materials and supplies, insurance claims, legal services, and printing.
PUMPING
Expenses related to moving water throughout
the District’s water distribution system.
PUBLIC AFFAIRS
Expenses related to water education,
community outreach, and legislative affairs.
TRANSMISSION & DISTRIBUTION
Expenses for transmitting water to treatment plants and storage reservoirs for distribution to commercial and residential customers.
EXPLANATIONOFEXPENSES
8
FY 2019 FY 2020 FY 2021
OPERATING EXPENSES:
Source of supply $1,740,717 $1,676,085 $1,588,731
Pumping $3,189,444 $3,416,731 $4,077,298
Water treatment $4,101,693 $3,966,298 $4,067,045
Tranmission and distribution $1,966,357 $3,448,753 $2,204,080
Customer accounts $2,456,429 $2,425,709 $2,600,902
Public affairs $1,520,168 $1,740,136 $890,242
General and administrative $8,313,067 $10,260,591 $9,824,619
Depreciation expense $6,022,835 $6,150,232 $6,199,141
Amortization of water participation rights $321,529 $321,529 $321,529
Total operating expenses $29,632,239 $33,406,064 $31,773,587
THREE YEAR COMPARATIVE EXPENSES
The cent amount identifies how every dollar spent is allocated to covering expenses.
8¢31¢3¢
20¢13¢5¢7¢
13¢CustomerAccounts General &Administrative Public Affairs
Depreciation Transmission & DistributionWaterTreatmentSource of Supply
Pumping
9
FY 2021 FY 2020 % Change
Net Revenues $34,761,639 $33,107,967 4.99%
Total operating revenues $25,252,917 $26,934,303 -6.24%
Net Earnings $9,508,722 $6,173,664 54.02%
Bond Debt Service $2,000,907 $2,010,053 -0.46%
Debt Coverage Ratio 4.75 3.07 54.72%
DEBT SERVICE COVERAGE
LONG TERM DEBT
The District adopted a Debt Management Policy to clearly state that long-term debt can only be
used for capital improvement projects that cannot be funded from current revenues. A public
agency has a bond rating used by investors to determine risk (similar to personal credit scores).
The District maintains an AA- rating from Standard & Poor’s for the refunding revenue bonds.
The rating was issued on December 14, 2016 and is considered a high quality. Current bond
covenants require that the debt coverage ratio equal to 1.2 or 120% of annual debt service. The
debt coverage ratio for FY 2020-21 was 4.75.
BOND SERIES 2016A
This bond was issued to
provide funds: (i) to prepay all
amounts payable under the
Series 2006D-2 Bonds; and (ii)
pay costs of issuance of the
2016A Bonds.
HYDROELECTRIC PLANT
Agreement with San
Bernardino Valley Municipal
Water District to finance
and construct Roemer
Hydroelectric Station.
LONG TERM DEBT
BEGINNING: $ 31,105,585 | ENDING: $ 29,997,339
WATER PARTICIPATION RIGHTS CONTRACT
The District acquired water
participation rights from
San Bernardino Valley Water
District. These rights entitle
the District to purchase
water from the Baseline
Feeder system.
BALANCE:$21.2 MILLION- 70.9% -
BALANCE:$2.3 MILLION- 7.7% -
BALANCE:$6.4 MILLION- 21.4% -
10
NET POSITION
As an infrastructure-based organization, the District is heavily invested in capital investments to
maintain and improve its water systems. Net position offers perspective of the District’s assets,
liabilities, and equity. The information presented below applies to fiscal years ended June 30, 2021.
Current AssetsCash and cash equivalents, customer utility receivables, inventory, prepaid expenses, and other liquid assets that can be readily converted to cash.
Other AssetsRedevelopment Pass Through receivable from certain property owners for system improvements that benefit only their properties.
Capital AssetsIncludes land, buildings, equipment, vehicles, inventory, treatment plants, pipeline and water distribution systems.
Deferred Outflow of ResourcesRepresents outflow of resources that apply to future periods, therefore, will not be recognized as an expense until that time.
Current Liabilities
Present obligations and payments due including,
payments to vendors, payroll, and employee benefits.
Non-Current Liabilities
Long-term financial obligations including payments for
loans, bonds, and employee retirement benefits.
Deferred Inflow of Resources
Receipt of net assets attributed to future reporting periods,
such as deferred revenue and advance collections.
Equity (Net Position)
Represents the District’s fiscal position after assets, liabilities, deferred outflow, and deferred inflow have been balanced.
$
1
3
3
.
6
Total Assets
$213.6 Million $74.
5
$0.3$5.2
$45.
7Liabilities
& Equity
$213.6 Million$
1
5
3
.
0
$5.9$9.0
ASSETS & DEFERRED OUTFLOW
LIABILITIES & EQUITY
34.9%
4.2%
0.1%
21.4%
62.6%
2.8%
2.4%
71.6%
11
THREE YEAR COMPARATIVE NET POSITION
Net position may gradually serve over time as a useful indicator of an agency’s financial position. Net position of the District was $152,966,122 and $145,181,637 for the years ended June 30, 2021 and June 30, 2020, respectively. This means that the District’s overall financial position is better off by $7,784,485 over the prior year. In the case of the District, net position has been increasing when comparing Fiscal Year 2019 to 2021.
CONDENSED STATEMENT OF NET POSITION
FY 2019 FY 2020 FY 2021
ASSETS:
Current $67,084,478 $66,846,297 $74,489,238
Noncurrent 369,734 328,652 287,571
Capital Assets 132,766,649 133,386,934 133,595,875
Total assets $ 200,220,861 $200,561,883 $208,372,684
Deferred outflows of resources 5,412,906 5,419,225 5,256,110
LIABILITES:
Current liabilities 9,721,627 7,837,906 9,022,530
Noncurrent liabilities 48,228,234 47,640,328 45,713,602
Total liabilities $57,949,861 $55,478,234 $54,736,132
Deferred inflows of resources 6,179,207 5,321,237 5,926,540
NET POSITION:
Net investment in capital assets 100,736,605 102,459,965 103,770,537
Restricted 10,699,965 13,462,143 13,938,052
Unrestricted 30,068,129 29,259,529 35,257,533
Total net position $141,504,699 $145,181,637 $152,966,122
12
OUR MISSION IS TO PROVIDE OUR
CUSTOMERS WITH SAFE, HIGH QUALITY
AND RELIABLE WATER SERVICE
AT A REASONABLE RATE AND IN A
SUSTAINABLE MANNER.
www.wvwd.org
(909) 875-1804 • 855 W. Baseline Rd., Rialto, CA 92376
@MyWVWD