2019 SDWD Annual Financial ReportSan Dieguito Water District
Annual Financial Report
For the Year Ended June 30, 2019
San Dieguito Water District
A Component Unit of the City of Encinitas
San Dieguito Water District
Table of Contents
For the Year Ended June 30, 2019
Page
FINANCIAL SECTION
Independent Auditor’s Report ................................................................................................................. 1
Management’s Discussion and Analysis (Required Supplementary Information) .............................. 5
Basic Financial Statements:
Statement of Net Position ....................................................................................................................... 13
Statement of Revenues, Expenses, and Changes in Net Position .......................................................... 14
Statement of Cash Flows......................................................................................................................... 15
Notes to the Financial Statements ........................................................................................................... 17
Required Supplementary Information:
Schedule of Proportionate Share of the Net Pension Liability and Related Ratios ............................ 41
Schedule of Contributions - Pension ................................................................................................. 42
Schedule of Changes in Net OPEB Liability and Related Ratios ....................................................... 43
Schedule of Contributions - OPEB .................................................................................................... 44
SELECTED STATISTICAL INFORMATION SECTION
Schedule of Water Rates .................................................................................................................. 48
Bi-Monthly Meter Service Availability Charges .................................................................................. 48
Historic Potable Water System Revenues ......................................................................................... 49
Historic Recycled Water System Revenues ...................................................................................... 49
Summary of Water Production by Source ......................................................................................... 50
Summary of Water Deliveries by Source ........................................................................................... 50
Sales by Customer Class .................................................................................................................. 51
Total Service Connections by Category ............................................................................................ 51
Historical Debt Service Coverage ..................................................................................................... 52
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San Dieguito Water District, 505 S Vulcan Ave., Encinitas, CA. 92024 www.encinitasca.gov
FINANCIAL
SECTION
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Independent Auditor’s Report
Board of Directors
San Dieguito Water District
Encinitas, California
Report on the Financial Statements
We have audited the accompanying financial statements of San Dieguito Water District (the
“District”, as of and for the year ended June 30, 2019, and the related notes to the financial
statements, which collectively comprise the District’s basic financial statements as listed in the
table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements
in accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial statements based on our audit. We did
not audit the financial statements of the Santa Fe Irrigation District, investment in joint venture,
which represents 31 percent of total assets and nine percent of total expenses as of June 30, 2019.
Those statements were audited by other auditors whose report has been furnished to us, and our
opinion, insofar as it relates to the amounts included for that investment in joint venture, is based
solely on the report of the other auditors. 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 auditor’s judgment,
including the assessment of the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the District’s preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we express
no such opinion. An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of significant accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
1
Opinion
In our opinion, based on our audit and the report of other auditors, the financial statements
referred to above present fairly, in all material respects, the respective financial information of the
San Dieguito Water District as of June 30, 2019, and the respective changes in financial position
and cash flows thereof for the year then ended in accordance with accounting principles generally
accepted in the United States of America.
Report on Summarized Comparative Information
The financial statements of San Dieguito Water District for the year ended June 30, 2018 were
previously audited by other auditors whose report is dated December 27, 2018, in which they
expressed an unmodified opinion on those financial statements. In our opinion, the summarized
comparative information presented herein as of and for the year ended June 30, 2018 is consistent,
in all material respects, with the audited financial statements from which it has been derived.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis, Schedule of Proportionate Share of the Net Pension Liability
and Related Ratios, Schedule of Contributions, 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 an opinion on the financial statements that
collectively comprise San Dieguito Water District’s basic financial statements. The statistical section
is presented for purposes of additional analysis and is not a required part of the basic financial
statements. The statistical section has 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 them.
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Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
December 9, 2019 on our consideration of the San Dieguito Water District’s internal control over
financial reporting and on our tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements and other matters. The purpose of that report is to describe the
scope of our testing of internal control over financial reporting and compliance and the results of
that testing, and not to provide an opinion on internal control over financial reporting or on
compliance. That report is an integral part of an audit performed in accordance with Government
Auditing Standards in considering San Dieguito Water District’s internal control over financial
reporting and compliance.
Irvine, California
December 9, 2019
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San Dieguito Water District
Management’s Discussion & Analysis
(Unaudited)
This section of the San Dieguito Water District (the “District”) Annual Financial Report presents
Management’s Discussion and Analysis of the District’s financial position and performance for Fiscal
Year 2018-19. Please read it in conjunction with the District’s Basic Financial Statements, which include
explanatory footnotes and required supplementary information.
FINANCIAL HIGHLIGHTS
Table 1
Summarized Statement of Net Position
(Millions of Dollars)
The District’s net position increased $1.9 million, 3.9 percent, from 2018 to 2019. The majority of the
increase is due to an increase in cash and investments. The District had positive cash flows from
operations in 2019, after factoring in debt service principal and interest payments of $1.4 million. Rates
had minor impact on the net position as the latest rate increase went into effect May 1, 2019 after approval
by the Board on April 17, 2019. There was no rate increase in 2018.
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San Dieguito Water District
Management’s Discussion & Analysis (Continued)
(Unaudited)
Changes in Net Position are affected by revenues and operating expenses as summarized in Table 2.
Table 2
Summarized Statement of Revenues, Expenses and Changes in Net Position
(Millions of Dollars)
Revenues – Operating revenues decreased $1.1 million from 2018 to 2019 due to lower potable water and
recycled water sales. Non-operating revenues increased $1.2 million from 2018 to 2019 mainly due to the
sale of the Cambridge Yard property and higher than anticipated investment earnings from recording an
unrealized gain on investments.
Expenses – Operating expenses increased $1.1 million from 2018 to 2019 mainly due to an increase in
source of supplies.
Capital contributions remained flat from 2018 to 2019 due to low levels of development activity within the
District.
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San Dieguito Water District
Management’s Discussion & Analysis (Continued)
(Unaudited)
CAPITAL ASSETS AND CAPITAL IMPROVEMENT PROGRAMS
The District has an ongoing capital improvement program and publishes a capital budget every year. The
capital budget includes funding for both infrastructure and various large consulting projects, such as
capital master plans and water rate studies. The District generally capitalizes infrastructure and expenses
consulting studies in the accompanying Basic Financial Statements.
Capital expenses for infrastructure are accounted for in the accompanying financial statements either as:
(1) additions to Capital Assets, or (2) additions to Investments in Joint Ventures.
Additions to Capital Assets which is primarily the replacement or improvements to the water distribution
system and purchases of vehicles and equipment, increased approximately $0.4 million. The District also
capitalized approximately $ 0.2 million of capital improvement costs paid towards the R.E. Badger Joint
Facilities.
The overall budget of the District for capital improvements averages about $3.1 million per year over the
next seven years.
Table 3
Capital Assets, Net of Accumulated Depreciation
(Millions of Dollars)
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San Dieguito Water District
Management’s Discussion & Analysis (Continued)
(Unaudited)
DEBT ADMINISTRATION
Table 4
Long-Term Debt
The District’s total long-term debt outstanding at June 30 consisted of:
On September 18, 2014, the District issued $5,870,000 of Water Revenue Refunding Bonds, Series 2014.
The Series 2014 bonds redeemed all of the District’s outstanding 2004 Water Revenue Refunding Bonds
remaining of $8,110,000, which were themselves a refunding of the District’s original 1993 Water Revenue
Bonds. The 2014 refunding resulted in saving the District approximately $250,000 annually in debt service
costs, due to lower market interest rates and the elimination of a reserve previously required on the 2004
bonds. Interest is due and payable semi-annually at rates ranging from three percent to four percent.
On November 20, 2007, the Authority issued $20,685,000 of 2007 Water Refunding Bonds while
concurrently redeeming all of its outstanding 1999 Water Revenue Bonds, on behalf of its member
agencies, the Santa Fe Irrigation District and the San Dieguito Water District. The transaction was a
current refunding intended to save the member agencies future interest costs due to lower market interest
rates. No new funds were raised by either agency. New Installation Purchase Agreements were executed,
which saves the District approximately $60,000 per year on debt service.
The debt service payments on these two obligations will total approximately $1.4 million annually. The
District has covenanted to maintain debt service coverage of at least 115 percent of net revenues
available for debt service each fiscal year. The District was in compliance with its debt service coverage
requirement for the FY 2018-19.
The District does not currently have plans to issue additional debt.
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San Dieguito Water District
Management’s Discussion & Analysis (Continued)
(Unaudited)
ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES
On June 28, 2017, the District Board of Directors (Board) approved a two-year operating and capital
budget for FY 2017-18 and FY 2018-19. During the two-year budget cycle, funds are appropriated in the
first fiscal year only and then the District returns to the Board one year later to present its “second-year
revised” budget, which is revised based on changed assumptions to the originally published figures for the
second year.
On June 20, 2018, the Board approved the FY 2018-19 operating and capital “second-year revised”
budget. The operating budget anticipates total revenues of $18.6 million, which is an overall increase of
$0.4 million over the prior year. On April 17, 2019, the Board approved modifying the District’s water rates
and meter service charges. This action approved an overall revenue increase from rates and charges of
6.5 percent on May 1, 2019 and another 6.5 percent overall rate and charge increase on May 1, 2020.
Another water rate study is scheduled to occur in 2021, which may result in new water rate and charge
increases in 2021. Operating expenses for FY 2019-20 are budgeted at $16.3 million or approximately
$1.4 million higher than the prior year. The increase is largely due to the increased cost of water. The
Board also approved a modest two percent increase in salaries and benefits in Fiscal Year 2019-20.
The capital budget anticipates capital costs at $2.7 million, which is on par with the average for the next
seven years. This includes $980,000 for District capital improvements and $1.75 million for capital
contributions to the R.E. Badger Joint Facilities.
Like many other water agencies, the District faces numerous challenges during the budget cycle. These
include continued commitments to capital improvements to both District and Joint Facilities, and the
sizeable short- and long-term investments to ensure system reliability and the safety of the water served to
customers. Other budgeting challenges include the uncertainty of the amount local supply and the ever-
increasing costs of wholesale water. These, as well as other factors impact the water purchase budget,
which is the single largest expense category for the District.
CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT
If you have questions about this report or need additional information, please contact the City of Encinitas
Finance Department or the San Dieguito Water District General Manager’s office.
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San Dieguito Water District, 505 S Vulcan Ave., Encinitas, CA. 92024 www.encinitasca.gov
BASIC FINANCIAL
STATEMENTS
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2019 2018
ASSETS
Current assets:
Cash and investments (note 3)19,427,472$ 16,103,120$
Restricted cash and investments with fiscal agent (note 3)198 156
Accounts receivables, net 2,213,247 2,308,598
Inventories and prepaid 236,956 237,791
Total current assets 21,877,873 18,649,665
Noncurrent assets:
Investments in joint ventures (note 4)20,635,205 21,810,960
Capital assets, net (note 5)23,264,801 23,687,954
Total noncurrent assets 43,900,006 45,498,914
Total assets 65,777,879 64,148,579
DEFERRED OUTFLOWS OF RESOURCES
OPEB related items (note 10)66,983 53,291
Pension related items (note 9)1,453,178 2,148,106
Total deferred outflows of resources 1,520,161 2,201,397
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities 1,048,858 851,121
Accrued interest payable 77,125 86,465
Deposits 519,981 402,300
Compensated absences - due within one year (note 6)81,046 73,807
Long-term debt - due within one year (note 7)1,135,000 1,100,000
Total current liabilities 2,862,010 2,513,693
Noncurrent liabilities:
Compensated absences - due more than one year (note 6)66,491 54,236
Long-term debt - due in more than one year (note 7)6,066,858 7,276,231
Net OPEB liability (note 10)287,106 315,665
Net pension liability (note 9)7,073,051 7,141,232
Total noncurrent liabilities 13,493,506 14,787,364
Total liabilities 16,355,516 17,301,057
DEFERRED INFLOWS OF RESOURCES
OPEB related items (note 10)9,295 7,074
Pension related items (note 9)423,157 447,916
Total deferred inflows of resources 432,452 454,990
NET POSITION
Net investment in capital assets 16,062,943 15,311,723
Restricted 198 156
Unrestricted 34,446,931 33,282,050
Total net position 50,510,072$ 48,593,929$
(with summarized comparative information for the prior year)
Statement of Net Position
San Dieguito Water District
June 30, 2019
See accompanying Notes to the Financial Statements
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2019 2018
OPERATING REVENUES
Charges for services 15,662,658$ 16,791,403$
Rental income 112,108 109,229
Interfund revenues 64,932 61,329
Other revenue 16,002 63,493
Total operating revenues 15,855,700 17,025,454
OPERATING EXPENSES
Source of supply 5,900,120 5,029,043
General operations and maintenance 5,322,770 5,208,840
Facility operations and maintenance 2,239,714 2,266,216
General and administrative 604,333 527,197
Depreciation 831,957 703,955
Insurance and claims 47,620 65,037
Total operating expenses 14,946,514 13,800,288
NET OPERATING INCOME (LOSS)909,186 3,225,166
NONOPERATING REVENUES (EXPENSES)
Property taxes 1,110,248 1,030,168
Investment earnings 582,926 53,880
Gain on sale of capital assets 614,324 8,285
Increase (decrease) in investment in joint ventures (1,376,819) (1,144,958)
Amortization of bond premium 74,373 74,372
Interest expense (292,354) (328,051)
Total nonoperating revenues (expenses)712,698 (306,304)
INCOME BEFORE CAPITAL CONTRIBUTIONS 1,621,884 2,918,862
CAPITAL CONTRIBUTIONS
Contribution of capital assets:
Donations 188,659 -
Easements - 38,253
Connection fees 105,600 194,040
Total capital contributions 294,259 232,293
CHANGES IN NET POSITION 1,916,143 3,151,155
NET POSITION:
Beginning of year 48,593,929 45,442,774
End of year 50,510,072$ 48,593,929$
San Dieguito Water District
Statement of Revenues, Expenses, and Changes in Net Position
(with summarized comparative information for the prior year)
For the Year Ended June 30, 2019
See accompanying Notes to the Financial Statements
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2019 2018
Cash flows from operating activities:
Receipts from users 15,870,117$ 16,835,193$
Receipts from interfund charges 64,932 61,329
Payments to employees (1,983,301) (2,521,763)
Payments to suppliers for goods and services (11,233,551) (10,354,446)
Other operating revenues 16,002 63,493
Net cash provided by operating activities 2,734,199 4,083,806
Cash flows from noncapital financing activities:
Receipts from property taxes 1,110,248 1,030,168
Net cash provided by noncapital financing activities 1,110,248 1,030,168
Cash flows from capital and related financing activities:
Acquisition of capital assets (220,145) (1,169,352)
Capital contributions 105,600 232,293
Principal payments on bonds and note payable (1,100,000) (1,060,000)
Interest payments on bonds and note payable (301,694) (338,843)
Capital related payments to R.E. Badger Filtration Plant (201,064) (408,672)
Proceeds from sale of capital assets 614,324 8,285
Net cash (used in) capital and related financing activities (1,102,979) (2,736,289)
Cash flows from investing activities:
Investment income received 582,926 53,880
Net cash provided by investing activities 582,926 53,880
Net increase (decrease) in cash and cash equivalents 3,324,394 2,431,565
Cash and cash equivalents, beginning of year 16,103,276 13,671,711
Cash and cash equivalents, end of year 19,427,670$ 16,103,276$
Reconciliation of cash and cash equivalents to the
Statements of Net Position:
Current assets:
Cash and investments 19,427,472$ 16,103,120$
Restricted cash and investments with fiscal agent 198 156
Total cash and cash equivalents 19,427,670$ 16,103,276$
San Dieguito Water District
Statement of Cash Flows
(with summarized comparative information for the prior year)
For the Year Ended June 30, 2019
See accompanying Notes to the Financial Statements
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2019 2018
Reconciliation of operating income to net cash provided
by operating activities:
Operating income 909,186$ 3,225,166$
Adjustments to reconcile operating income
to net cash provided by operating activities:
Depreciation 831,957 703,955
Changes in operating assets, deferred outflows of resources,
liabilities, and deferred inflows of resources:
Accounts receivable 95,351 (65,439)
Inventory and prepaid items 835 (16,403)
OPEB related deferred outflows of resources (13,692) 10,037
Pension related deferred outflows of resources 694,928 (608,060)
Accounts payable and accrued liabilities 197,737 (338,499)
Deposits 117,681 104,105
Compensated absences 19,494 (34,802)
Net OPEB liability (28,559) (35,473)
Net pension liability (68,181) 852,601
OPEB-related deferred inflows 2,221 7,074
Pension-related deferred inflows (24,759) 279,544
Net cash provided by operating activities 2,734,199$ 4,083,806$
Noncash capital and related financing activities:
Amortization of original issue premium 74,373$ 74,372$
Donation of capital assets 188,659 38,253
Total noncash capital and related financing activities 263,032$ 112,625$
(with summarized comparative information for the prior year)
Statement of Cash Flows (Continued)
San Dieguito Water District
See accompanying Notes to the Financial Statements
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San Dieguito Water District
Notes to the Financial Statements
For the Year Ended June 30, 2019
Note 1 – Reporting Entity
San Dieguito Water District (the “District”) was formed in 1922 under the laws of the State of California to
supply irrigation and potable water services to the central western portion of San Diego County. The
District became a subsidiary district of the City of Encinitas, California (the “City”) on October 1, 1986,
pursuant to an election approving the San Dieguito Reorganization and the incorporation of the City. The
District is considered a component unit of the City, based on the provisions of Governmental Accounting
Standards Board (“GASB”) Statement No. 61, The Financial Reporting Entity: Omnibus - An Amendment
of GASB Statement No. 14 and No. 34.
Note 2 – Summary of Significant Accounting Policies
Basis of Presentation
Financial statement presentation follows the recommendations promulgated by the Governmental
Accounting Standards Board (“GASB”) commonly referred to as accounting principles generally accepted
in the United States of America (“U.S. GAAP”). GASB is the accepted standard-setting body for
establishing governmental accounting and financial reporting standards.
Measurement Focus, Basis of Accounting and Financial Statements Presentation
The Financial Statements (i.e., the statement of net position, the statement of revenues, expenses and
changes in net position, and statement of cash flows) report information on all of the activities of the
District.
The Financial Statements are reported using the “economic resources” measurement focus and 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. Interest associated with the current
fiscal period is considered to be susceptible to accrual and so has been recognized as revenue of the
current fiscal period.
The Statement of Net Position reports separate sections for Deferred Outflows of Resources, and
Deferred Inflows of Resources, when applicable.
Deferred Outflows of Resources represent outflows of resources (consumption of net position) that
apply to future periods and that, therefore, will not be recognized as an expense until that time. The
District reports deferred outflows related to pensions and OPEB in this category.
Deferred Inflows of Resources represent inflows of resources (acquisition of net position) that apply to
future periods and that, therefore, are not recognized as revenue until that time. The District reports
deferred inflows related to pensions and OPEB in this category.
Operating revenues are those revenues that are generated from the primary operations of the District. The
District reports a measure of operations by presenting the change in net position from operations as
"operating income" in the statement of revenues, expenses, and changes in net position. Operating
activities are defined by the District as all activities other than financing and investing activities (interest
expense and investment income), and other infrequently occurring transactions of a non-operating nature.
Operating expenses are those expenses that are essential to the primary operations of the District. All
other expenses are reported as non-operating expenses.
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San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2019
Note 2 – Summary of Significant Accounting Policies (Continued)
Cash and Investments
Cash and cash equivalents include all highly liquid investments with original maturities of 90 days or less
and are carried at cost, which approximates fair value. The majority of the District’s cash and investments
is invested in the City’s pooled investment fund (the “City Pool”). The District does not own any specifically
identifiable securities or investments in the City Pool. As a participant in the City Pool, the District has
rights to its ratable share of the pooled cash and investments in the City Pool, on a dollar-for-dollar basis.
The District’s ratable share of investment income from the City Pool is calculated and distributed on a
monthly basis. Investment income is reported as non-operating revenue in the Statement of Revenues,
Expenses, and Changes in Net Position. Since all amounts invested in the City Pool are available upon
demand, the District considers all amounts invested in the City Pool to be cash equivalents.
Restricted Cash and Investments
Cash and investments with fiscal agents are restricted due to limitations on their use by bond covenants or
donor limitations. Fiscal agents acting on behalf of the District hold investment funds arising from the
proceeds of long-term debt issuances. The funds may be used for specific capital outlays or for the
payment of certain bonds and have been invested only as permitted by specific State statutes or
applicable District ordinance, resolution or bond indenture.
Fair Value Measurement
U.S. GAAP defines fair value, establishes a framework for measuring fair value and establishes
disclosures about fair value measurement. Investments, unless otherwise specified, recorded at fair value
in the Statements of Net Position, are categorized based upon the level of judgment associated with the
inputs used to measure their fair value. Levels of inputs are as follows:
Level 1 – Inputs are unadjusted, quoted prices for identical assets and liabilities in active markets at the
measurement date.
Level 2 – Inputs, other than quoted prices included in Level 1, which are observable for the asset or
liability through corroboration with market data at the measurement date.
Level 3 – Unobservable inputs that reflect management’s best estimate of what market participants would
use in pricing the asset or liability at the measurement date.
Receivables and Unbilled Revenues
Customer accounts receivable consist of amounts owed by private individuals and organizations for
services rendered in the regular course of business operations. Receivables are shown net of allowances
for doubtful accounts, if any. The District also accrues an estimated amount for services that have been
provided, but not yet billed. Federal and State grants accrued as revenue when all eligibility requirements
have been met. Amounts earned but outstanding at year end are reported as accounts receivable.
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San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2019
Note 2 – Summary of Significant Accounting Policies (Continued)
Inventory of Materials
Inventories consist primarily of materials used in the construction and repair of the District’s plant and
equipment and on-site supplies such as water meters. Inventory is stated at cost using average-cost
basis.
Investment in R.E. Badger Filtration Plant (the “Joint Facilities”)
The District’s investment in the Joint Facilities is accounted for using the equity method of accounting.
The District makes periodic contributions to cover its share of capital and operating costs. Contributions
for capital are accounted for as an increase in the District’s investment account. Contributions for
operations are accounted for as operating expenses under the classification: facility operations and
maintenance. Depreciation expense on plant operations that is charged to the District is accounted for as
an operating expense.
Investment in R.E. Badger Water Facilities Financing Authority (the “Financing Authority”)
The District’s investment in the Financing Authority is accounted for using the equity method of
accounting. The equity interest is comprised primarily of bond reserve funds held by a fiscal agent and
unamortized bond discounts. Changes in the investment account result primarily from interest revenues
on reserve funds and amortization expense on the bond discounts. These items are classified as non-
operating revenues and expenses in the accompanying Statement of Revenues, Expenses, and Changes
in Net Position.
Capital Assets
Capital assets consist of land easements, the perpetual right-of-use of the City’s Public Works facility,
structure and improvements, machinery and equipment, distribution system, and capacity rights. Capital
assets are valued at historical cost, or estimated historical cost, if actual historical cost was not available.
Donated capital assets are valued at acquisition value. The District policy has set the capitalization
threshold for reporting capital assets at $5,000 for non-infrastructure assets and $100,000 for
infrastructure assets, all of which must have an estimated useful life in excess of one year. Depreciation is
recorded on a straight-line basis over estimated useful lives of the assets as follows:
Structures and improvements 20-45 years
Equipment, machinery and vehicles 5-20 years
Collection and distribution system 50 years
Capacity rights 50 years
Major outlays for capital assets are capitalized as projects, once constructed, and repairs and
maintenance costs are expensed.
Deposits
Deposits consist of cash amounts that the District has collected from customers related to on-going
construction work being performed by the applicant. It can be a “job deposit,” which is an amount
collected to cover the expected costs to the District related to the project, or a “security deposit” meant to
help guarantee that the work required of the applicant will be completed to the satisfaction of the District.
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San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2019
Note 2 – Summary of Significant Accounting Policies (Continued)
Compensated Absences
The District’s policy permits its employees to accumulate not more than two times their current annual
vacation. The District participates in the City's short-term disability income protection plan (IPP) Program
which provides employees with protection against loss of income due to illness or disability. Employees
do not earn any number of hours of sick leave and thus, no provision has been made for sick leave liability
under the account for compensated absences. The unused vacation pay will be paid to the employee or
his/her beneficiary upon leaving the District’s employment. The amount due will be determined using
salary/wage rate in effect at the time of separation.
Long-Term Debt
Debt premiums and discounts are deferred and amortized over the life of the debt using the straight-line
method. Long-term debt is reported net of the applicable bond premium or discount. Debt issuance costs
are expensed when incurred.
Pensions
For purposes of measuring the net pension liability at June 30, 2019, deferred outflows of resources and
deferred inflows of resources related to pensions, and pension expense, information about the fiduciary
net position of the plans and additions to/deductions from the plans’ fiduciary net position have been
determined on the same basis as they are reported by the plans (Note 9). For this purpose, benefit
payments (including refunds of employee contributions) are recognized when due and payable in
accordance with benefit terms. Investments are reported at fair value.
The following timeframes are used for pension reporting:
For the Year Ended June 30, 2019
Valuation Date June 30, 2017
Measurement Date June 30, 2018
Measurement Period July 1, 2017 to June 30, 2018
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 District
Retiree Benefits Plan (“OPEB Plan”) and additions to/deductions from OPEB Plan's fiduciary net position
have been determined on the same basis as they are reported by the OPEB Plan. For this purpose, the
OPEB Plan recognizes benefit payments when due and payable in accordance with the benefit terms.
Investments are reported at fair value, except for money market investments, which are reported at
amortized cost.
The following timeframes are used for OPEB reporting:
For the Year Ended June 30, 2019
Valuation Date June 30, 2017
Measurement Date June 30, 2018
Measurement Period July 1, 2017 to June 30, 2018
20
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2019
Note 2 – Summary of Significant Accounting Policies (Continued)
Net Position
Net position represents the difference between all other elements in the statement of net position and
should be displayed in the following three components:
Net Investment in Capital Assets – This component of net position consists of capital assets, net of
accumulated depreciation, reduced by the outstanding balances of debt that are attributable to the
acquisition, construction, or improvement of those assets.
Restricted – This component of net position consists of restricted assets reduced by liabilities and
deferred inflows of resources related to those assets.
Unrestricted – This component of net position is the amount of the assets, deferred outflows of
resources, liabilities, and deferred inflows of resources that are not included in the determination of
net investment in capital assets or the restricted component of net position.
Property Taxes
Property taxes are levied on March 1 and are payable in two installments: November 1 and February 1 of
each year. Property taxes become delinquent on December 10 and April 10, for the first and second
installments, respectively. The lien date is March 1. The County of San Diego, California (“County”) bills
and collects property taxes and remits them to the District according to a payment schedule established by
the County.
The County is permitted by State law to levy on properties at one percent of full market value (at time of
purchase). The District receives the current year’s taxes through periodic apportionments.
Property taxes are recognized in the fiscal year for which the taxes have been levied.
Use of Restricted/Unrestricted Assets
When both restricted and unrestricted resources are available for use, it is the District’s policy to use
restricted resources first, then unrestricted resources as they are needed.
Use of Estimates
The preparation of 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 the contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
21
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2019
Note 2 – Summary of Significant Accounting Policies (Continued)
Prior Year Summarized Comparative Information
Selected information regarding the prior year has been included in the accompanying financial statements.
This information has been included for comparison purposes only and does not represent a complete
presentation in accordance with generally accepted accounting principles. Accordingly, such information
should be read in conjunction with the government’s prior year financial statement, from which this
selected financial data was derived.
Note 3 – Cash and Investments
At June 30, 2019, cash and investments are reported in the accompanying statement of net position as
follows:
Cash and investments 19,427,472$
Cash and investments with fiscal agent 198
Total cash and investments 19,427,670$
At June 30, 2019, cash and investments are reported at fair value based on quoted market prices. The
following table presents the fair value measurements of investments recognized in the accompanying
statement of net position measured at fair value on a recurring basis and the level within the fair value
hierarchy in which the fair value measurements fall at June 30, 2019:
Fair Measurement
Value Input
Cash on hand 300$ Uncategorized
City of Encinitas pooled investments fund 19,427,172 Uncategorized
Money market mutual funds 198 Uncategorized
Total cash and investments 19,427,670$
Authorized Investments
The District’s investments are managed by the City. All of the District’s cash, except investments held by
fiscal agents, are invested in the City Pool. The District has an equity interest in the City Pool equal to its
proportionate share of invested cash. The District does not have a separate investment policy; its cash is
invested according to the City of Encinitas’ adopted investment policy.
The table below identifies the allowable investment types authorized by the California Government Code
(the “Gov’t Code”) and the City’s adopted Investment Policy (the “Investment Policy”). The table also
identifies certain restrictions related to interest rate risk and concentration of credit risk. The Investment
Policy restricts the City Treasurer to investing in only the types of investments listed herein, which is more
restrictive than the Gov’t Code, as the City’s policy does not allow certain investments to be purchased
which are permitted under the Gov’t Code.
22
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2019
Note 3 – Cash and Investments
Authorized Investments (Continued)
Authorized Maximum Maximum
by Investment Maximum Percentage of Investment in
Authorized Investment Type Policy Maturity Portfolio One Issuer
Repurchased Agreements-Overnight "Sweep"Yes 1 year 20%No Limit
Local Agency Investment Fund (LAIF)Yes N/A 30%State Law Maximum
Other Governmental Managed Investment Pools Yes N/A 30%10% per pool
Money Market Mutual Funds Yes N/A 20%10%
Certificates of Deposit Yes 1 year 10%5%
Negotiable Certificates of Deposit Yes 5 years 10%5%
Bankers' Acceptances Yes 180 days 10%5%
U.S. Treasury Bills, Notes and Bonds Yes 5 years 50%No Limit
U.S. Government Sponsored Enterprises Yes 5 years 60%25%
Commercial Paper Yes 270 days 25%5%
Commercial Medium-Term Notes Yes 5 years 15%5%
Investments Authorized and Utilized under Debt Agreements
The investment of the proceeds of debt issues is governed by the provisions of the 2004 Bond Indenture.
Although there are several authorized investment instruments, the District’s reserve fund is currently
invested 100 percent in a Money Market Mutual Fund.
Disclosures Related to Interest Rate Risk
The District invests all of its excess cash in the City Pool. As a participant, the District has immediate
access to its funds on a dollar-for-dollar basis. The allocation of investment income is made to the District
based on the book value of its investment (which approximates fair market value). As a result, the District
is not exposed to interest rate risk, as it would be if it owned direct securities for its own account.
The District’s investment with fiscal agents consists of an institutional money market mutual fund. This
Fund has a stable net asset value of $1.00 and the funds can be withdrawn at any time without prior
notice. Any changes to the fair value of this money market mutual fund are allocated on a monthly basis
to each participant, as a part of their monthly distribution.
Disclosures Relating to Credit Risk
Credit risk is defined as the risk that an issuer of an investment will not fulfill its obligation to the holder of
the investment. This is measured by the assignment of a rating by a nationally recognized statistical
organization. Presented below is the minimum rating required by (where applicable) the Government
Code, the Investment Policy, or the debt agreements, and the actual rating as of year-end for each
investment type.
23
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2019
Note 3 – Cash and Investments (Continued)
Disclosures Relating to Credit Risk (Continued)
Credit ratings as of June 30, 2019 were as follows:
Minimum
Legal
Investment Type Totals Rating AAA Not Rated
Investment in City Pool 19,427,172$ N/A -$ 19,427,172$
Held by Fiscal Agent:
Money Market Mutual Funds 198 AAA 198 -
Total investments 19,427,370$ 198$ 19,427,172$
The investment policy contains limitations on the amount that can be invested in any one issuer beyond
those stipulated in the Government Code. GASB Statement No. 40 requires disclosure by amount and
issuer, of investments in any one issuer that represent five percent or more of total investments.
Disclosures Relating to Custodial Credit Risk
The District is exposed to custodial credit risk indirectly via its investment in the City Pool. Custodial credit
risk is the risk that, in the event of the failure of a depository financial institution, an entity may not be able
to recover its deposits or will not be able to recover collateral securities that are in the possession of an
outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the
counterparty (e.g. broker-dealer) to a transaction, an entity may not be able to recover the value of its
investment or collateral securities that are in the possession of another party. The Government Code and
the Investment Policy do not contain legal or policy requirements that would limit the exposure to custodial
credit risk for deposits or investments, other than the following provisions for deposits: The Government
Code requires that a financial institution secure deposits made by state or local governmental units by
pledging qualifying securities in an undivided collateral pool held by a depository regulated under State
Law. The market value of the qualifying pledged securities must equal at least 110 percent of the total
amount deposited by the public agencies. California law also allows financial institutions to secure
deposits by pledging first trust deed mortgage notes having a value of 150 percent of the secured public
deposits.
At June 30, 2019, the District had no deposits with financial institutions or any other parties that would
subject the District to custodial credit risk.
Note 4 – Investment in Joint Ventures
At June 30, 2019 investment in joint ventures consisted of the following:
R.E. Badger Filtration Plant 19,976,172$
R.E. Badger Water Facilities Financing Authority 659,033
Total investment in other agencies 20,635,205$
24
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2019
San Dieguito Santa Fe
Facilities Water District Irrigation District
Filtration Plant 45%55%
Filtered Water Reservoir (13 million gallons)31%69%
Joint Pipeline (Old Line)39%61%
San Dieguito Reservoir 42%58%
Note 4 – Investment in Joint Ventures (Continued)
R.E. Badger Filtration Plant
In 1967, the District entered into an agreement with the Santa Fe Irrigation District (Santa Fe) for the joint
ownership, maintenance, operation, and use of a water treatment plant and various facilities for the
storage and delivery of potable water. During the ensuing years, the parties have added various facilities
and improvements, which are owned in different percentages depending on the type of facility and the
agreements in place. The ownership percentages of the Joint Facilities are described below:
Santa Fe is responsible for the operations, maintenance, and construction of capital improvements of the
Joint Facilities, as well as the related administration. For the year ended June 30, 2019, the District made
capital contributions of $204,862 and recorded its share of depreciation and other allocated charges, as
well as a true-up charge affecting the prior fiscal year. The investment balance at June 30, 2019 was
$19,976,172.
Operations and maintenance costs are allocated monthly on the basis of the water used by each district,
and administrative costs are allocated based on an agreed-upon cost allocation plan. For the year ended
June 30, 2019, the District’s share of operations and maintenance costs for the Joint Facilities was
$2,239,714.
R.E Badger Water Facilities Financing Authority
In 1999, the District and Santa Fe entered into a joint exercise of powers agreement and formed the
Financing Authority, to provide financing for the acquisition and construction of capital improvements
related to the Joint Facilities. The Financing Authority subsequently issued revenue bonds for the purpose
of funding those capital improvements. Each district is obligated under an Installment Purchase
Agreement to repay their proportionate share of the costs of the long-term financing. The investment in
the Financing Authority consists primarily of a share of the debt reserve funds held by a fiscal agent and
unamortized bond discounts. The investment balance at June 30, 2019 was $659,033.
25
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2019
Note 5 – Capital Assets
Summary of changes in capital assets for the year ended June 30, 2019 is as follows:
Balance Balance
July 1, 2018 Additions Deletions Transfers June 30, 2019
Capital assets, not depreciated
Land 3,300,931$ 112,389$ -$ -$ 3,413,320$
Public works facilities right of use 3,378,700 - - - 3,378,700
Construction in progress 790,685 220,145 - (826,527) 184,303
Total capital assets, not depreciated 7,470,316 332,534 - (826,527) 6,976,323
Capital assets, being depreciated
Structures and improvements 11,007 - - - 11,007
Machinery, equipment, and vehicles 2,476,086 - - 145,307 2,621,393
Distribution system 41,630,947 76,270 - 681,220 42,388,437
Capacity rights 323,190 - - - 323,190
Total capital assets, being depreciated 44,441,230 76,270 - 826,527 45,344,027
Less accumulated depreciation
Structures and improvements (6,696) (1,101) - - (7,797)
Machinery and equipment (1,821,614) (597,371) - - (2,418,985)
Distribution system (26,250,385) (227,021) - - (26,477,406)
Capacity rights (144,897) (6,464) - - (151,361)
Total accumulated depreciation (28,223,592) (831,957) - - (29,055,549)
Total capital assets, being depreciated, net 16,217,638 (755,687) - 826,527 16,288,478
Total capital assets, net 23,687,954$ (423,153)$ -$ -$ 23,264,801$
Note 6 – Compensated Absences
Summary of changes in compensated absences for the year ended June 30, 2019 is as follows:
Beginning Ending Due within
Balance Additions Deletions Balance One Year
128,043$ 142,134$ (122,640)$ 147,537$ 81,046$
Compensated absences represent the dollar value of employee vacation leave earned (up to the specified
maximum number of hours) but unused as of June 30, 2019.
26
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2019
Note 7 – Long-Term Debt
A summary of changes in long-term debt for the year ended June 30, 2019, is as follows:
Balance Balance Due within Due In More
July 1, 2018 Additions Deletions June 30, 2019 One Year Than One Year
2007 Note Payable to R.E. Badger
Water Facilities Financing Authority 3,820,000$ -$ (475,000)$ 3,345,000$ 490,000$ 2,855,000$
2014 Water Revenue Bonds 4,110,000 - (625,000) 3,485,000 645,000 2,840,000
add: original issue premium 446,231 - (74,373) 371,858 - 371,858
Total long-term obligation 8,376,231$ -$ (1,174,373)$ 7,201,858$ 1,135,000$ 6,066,858$
2007 Note Payable to the R.E. Badger Water Facilities Financing Authority
On November 20, 2007, the R.E. Badger Water Facilities Financing Authority issued $20,685,000 of 2007
Water Revenue Refunding Bonds while concurrently redeeming all of its outstanding 1999 Water Revenue
bonds, on behalf of its member agencies, the Santa Fe Irrigation District and the San Dieguito Water
District. The transaction was a current refunding intended to save the member agencies future interest
costs due to lower market interest rates. New Installment Purchase Agreements were executed. The
overall bond issue consists of $20,685,000 of serial bonds maturing from 2008 through 2024. The
District’s portion of the refinancing totaled $7,705,000. Principal is due and payable annually in amounts
ranging from $335,000 to $620,000. Interest is due and payable semi-annually at rates ranging from 3.5
percent to 4.5 percent. The District accounts for its share of the bonds as a note payable to the Financing
Authority.
Annual debt service requirements for the 2007 Note Payable to the R.E. Badger Water Facilities Financing
Authority outstanding at June 30, 2019 are as follows:
Year Ending
June 30 Principal Interest Total
2020 490,000$ 133,619$ 623,619$
2021 525,000 111,465 636,465
2022 545,000 89,396 634,396
2023 570,000 66,043 636,043
2024 595,000 40,915 635,915
2025 620,000 13,950 633,950
Total 3,345,000$ 455,388$ 3,800,388$
27
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2019
Note 7 – Long-Term Debt (Continued)
2014 Water Revenue Refunding Bonds
On September 18, 2014, the District issued $5,870,000 of Water Revenue Refunding Bonds, Series 2014,
to defease and refund on a current basis, all of the outstanding 2004 Water Revenue Refunding Bonds.
The bonds consist of serial bonds maturing from 2016 through 2024 in annual installments of $570,000 to
$755,000. Interest is due and payable semi-annually at rates ranging from 3.0 percent to 4.0 percent. The
bonds are subject to federal arbitrage requirements.
The annual debt service requirements for the 2014 Water Revenue Refunding Bonds outstanding at
June 30, 2019 are as follows:
Year Ending
June 30 Principal Interest Total
2020 645,000$ 126,500$ 771,500$
2021 665,000 100,300 765,300
2022 695,000 73,100 768,100
2023 725,000 44,700 769,700
2024 755,000 15,100 770,100
Total 3,485,000$ 359,700$ 3,844,700$
Pledged Revenues
The District has pledged its net revenues (as defined) to pay the annual debt service on the bonds and
note described above. The District has covenanted to set rates and charges in order to produce net
revenues of at least 115 percent of annual debt service. During the year ended June 30, 2019, principal
and interest paid was $1,401,694 net revenues available for debt service were $4,228,613 resulting in
debt service coverage ratio of 302 percent.
Note 8 – Risk Management
Risk management programs and support for the District are provided by the City risk management
department. The District is a member of the Association of California Water Agencies - Joint Powers
Insurance Authority (JPIA), which provides coverage for general liability, property and casualty, and
workers’ compensation. Self-insured retention level $10,000. As of June 30, 2019, in the opinion of the
District’s management and general counsel, there were no material claims which would require accrual in
the accompanying financial statements. Management has determined, based on modest self-insurance
retention levels and favorable claims experience, that no self-insurance reserve is required.
28
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2019
Note 9 – Public Employees Retirement System – CalPERS
Plan Description
The SDWD Plan (the Plan) is a cost-sharing multiple employer defined benefit plan that provides
retirement and disability benefits, annual cost-of-living adjustments, and death benefits to members and
beneficiaries, in which the District participates with other public agencies that each have fewer than 100
active members and share the same benefit formula. The Plan is 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 statutes
within the Public Employee’s Retirement Law. CalPERS issues publicly available reports that include a
full description of the pension plans regarding benefit provisions, assumptions and membership
information that can be found on the CalPERS website. Copies of the CalPERS annual financial report
may be obtained from the CalPERS Executive Office – 400 P Street, Sacramento, California 95814.
Benefits Provided
The SDWD Plan provides employees hired before October 13, 2012 with a Tier 1 benefit equal to 2.7
percent at 55 years of age, calculated based on the single highest year of qualifying compensation. As of
October 13, 2012, the Board of Directors imposed new terms and conditions which created a new benefit
formula for employees hired after the effective date of the change (the "Tier 2 Plan"). Employees hired
under the Tier 2 Plan receive a lower benefit formula, referred to as the 2 percent at 60 years of age
formula. In addition, California Public Employees’ Pension Reform Act (PEPRA) created yet another
benefit formula for new hires with no experience or prior service credit with CalPERS. In the case of the
District, this will constitute a "Tier 3 Plan" which provides a retirement benefit, referred to as the 2 percent
at 62 years of age formula. The actual retirement benefit for Tier 2 and Tier 3 employees will be calculated
using the average of the highest 36 consecutive months of qualifying compensation.
Employees Covered by Benefit Terms
At measurement date June 30, 2018 the following employees were covered by the benefit terms for the
Plan:
Active employees 22
Inactive employees or beneficiaries currently receiving benefits 32
Inactive employees entitled to, but not yet receiving benefits 8
Total 62
Contributions
Section 20841(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer
contribution rates for all public employers be determined on an annual basis by the actuary and shall be
effective on July 1 following notice of a change of the rate. The total plan contributions are determined
through CalPERS’ annual actuarial valuation process. The public agency cost-sharing plans covered by
the miscellaneous risk pools, the Plan’s actuarially determined rate is based on the estimated amount
necessary to pay the Plan’s allocated share of the risk pool’s costs of benefits earned by employees
during the year, and any unfunded accrued liability. The employer is required to contribute the difference
between the actuarially determined rate and the contribution rate of employees.
29
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2019
Note 9 – Public Employees Retirement System – CalPERS (Continued)
Active members in the Tier 1 Plan are required to contribute eight percent of their annual covered salary
(the "employee contribution"). Effective October 13, 2012, all Tier 1 members contribute the full eight
percent, which is credited to their individual accounts. Members receiving the Tier 2 or Tier 3 benefits are
required to contribute seven percent, and 6.25 percent of their annual covered salary, respectively. The
employee contribution requirements are established by State statute.
SDWD is required to contribute the actuarially determined remaining amounts necessary to fund the
benefits for its members (the "employer contributions"). The employer contribution rates for the year ended
June 30, 2018 for Tier 1, Tier 2, and PEPRA employees were 11.675 percent, 7.200 percent, and 6.533
percent, respectively. The employer contribution rates are calculated and established annually by
CalPERS, based on the actuarial methods and assumptions as adopted by the CalPERS Board of
Administration.
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to
Pensions
As of June 30, 2019, the District reported net pension liabilities for its proportionate share of the net
pension liability of the SDWD Plan as follows:
Plan Total Plan Plan Net
Pension Fiduciary Pension
Liability Net Position Liability/(Asset)
Balance at: June 30, 2017 23,132,699$ 15,991,467$ 7,141,232$
Balance at: June 30, 2018 23,172,973 16,099,922 7,073,051
Net changes during 2017-2018 40,274$ 108,455$ (68,181)$
The District’s net pension liability for the SDWD Plan is measured as the proportionate share of the net
pension liability. The net pension liability of the Plan is measured as of June 30, 2018, and the total
pension liability for the Plan used to calculate the net pension liability was determined by an actuarial
valuation as of June 30, 2017 rolled forward to June 30, 2018 using standard update procedures. The
District’s proportion of the net pension liability was based on a projection of the District’s long-term share
of contributions to the pension plans relative to the projected contributions of all participating employers,
actuarially determined.
The District’s proportionate share of the net pension liability for each SDWD Plan as of the measurement
date June 30 was as follows:
Proportion June 30, 2017 0.1811600%
Proportion June 30, 2018 0.1876780%
Change - Increase (Decrease)0.0065180%
30
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2019
Note 9 – Public Employees Retirement System – CalPERS (Continued)
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to
Pensions (Continued)
The June 30, 2018 total pension liabilities were based on the following actuarial methods and
assumptions:
Actuarial Cost Method
No. 68
Actuarial Assumptions:
Discount Rate 7.15%
Inflation
Salary Increases
Mortality Rate Table
Post Retirement Benefit Increase
Entry Age Normal in accordance with the requirements of
2.50%
Varies by Entry Age and Service
Derived using CalPERS' Membership Data for all funds
Contract cost of living adjustment (COLA)up to 2.50%
until Purchasing Power Protection Allowance Floor on
Purchasing Power applies, 2.50% thereafter.
All other actuarial assumptions used in the June 30, 2017 valuation was based on the results of an
actuarial experience study for the period from 1997 to 2011, including updates to salary increase, mortality
and retirement rates. The Experience Study report can be obtained at CalPERS’ website under “Forms
and Publications.”
Discount Rate
The discount rate used to measure the total pension liability was 7.15 percent. To determine whether the
municipal bond rate should be used in the calculation of a discount rate for each plan, CalPERS stress
tested plans that would most likely result in a discount rate that would be different from the actuarially
assumed discount rate. Based on the testing, none of the tested plans run out of assets. Therefore, the
current 7.15 percent 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 percent is applied to all plans in the Public
Employees Retirement Fund. The stress test results are presented in a detailed report called “GASB
Crossover Testing Report” that can be obtained at CalPERS’ website under the GASB No. 68 section.
The long-term expected rate of return on pension plan investments was determined using a building-block
method in which best-estimate ranges of expected future real rates of return (expected returns, net of
pension plan investment expense and inflation) are developed for each major asset class. In determining
the long-term expected rate of return, CalPERS took into account both short-term and long-term market
return expectations as well as the expected pension fund cash flows. Such cash flows were developed
assuming that both members and employers will make their required contributions on time and as
scheduled in all future years. Using historical returns of all the funds’ asset classes, expected compound
(geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ 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.
31
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2019
Note 9 – Public Employees Retirement System – CalPERS (Continued)
Discount Rate (Continued)
The table below reflects 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 July 1, 2018.
The long-term expected real rate of return by asset class for the measurement period ended
June 30, 2018 was as follows:
New Strategic Real Return
Years
Real Return
Years
Asset Class 1 Allocation 1 - 10 2 11 + 3
Global equity 50.00%4.80%5.98%
Fixed income 28.00%1.00%2.62%
Inflation assets 0.00%0.77%1.81%
Private equity 8.00%6.30%7.23%
Real assets 13.00%3.75%4.93%
Liquidity 1.00%-(0.92%)
1 In the CalPER's CAFR, Fixed income is included in Global Debt Securities; Liquidity is included in Short-term investments;
Inflation assets are included in both Global Equity Securities and Global Debt Securities.
2 An expected inflation of 2.00 percent was used for this period.
3 An expected inflation of 2.92 percent was used for this period.
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate
The following presents the District’s proportionate share of the net pension liability for each SDWD Plan,
calculated using the discount rate for each SDWD Plan, as well as what the District’s proportionate share
of the net pension liability would be if it were calculated using a discount rate that is one percentage point
lower or one percentage point higher than the current rate:
Discount Rate - 1%Current Discount Discount Rate + 1%
(6.15%)Rate (7.15%)(8.15%)
Net Pension Liability $10,207,687 7,073,051$ 4,485,461$
Plan's Net Pension Liability/(Asset)
Pension Plan Fiduciary Net Position
Detailed information about the plan’s fiduciary net position is available in the separately issued CalPERS
financial report and can be obtained from CalPERS website under Forms and Publications.
For the year ended June 30, 2019, the District recognized pension expense of $717,436 for the SDWD
Plan.
At June 30, 2019 the District reported deferred outflows of resources and deferred inflows of resources
related to pensions from the following sources:
32
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2019
Note 9 – Public Employees Retirement System – CalPERS (Continued)
Deferred outflows Deferred inflows
of Resources of Resources
Contribution made after the measurement date 585,749$ -$
Difference between expected and actual
experience 179,031 -
Changes of assumptions 608,728 -
Net difference between projected and actual
earnings on pension plan investments 34,967 -
Difference between employer's actual contributions
and proportionate share of contributions - (185,152)
Adjustments due to difference in proportions 44,703 (238,005)
Total 1,453,178$ (423,157)$
The $585,749 reported as deferred outflows of resources related to contributions subsequent to the
measurement date will be recognized as a reduction of the net pension liability in the year ended June 30,
2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources related
to pensions will be recognized as pension expense as follows:
Measurement Period
Ended June 30
2019 543,137$
2020 258,339
2021 (293,584)
2022 (63,620)
2023 -
Thereafter -
444,272$
Note 10 – Other Postemployment Benefits
A. San Dieguito Water District – Retiree Health Plan
Plan Description
SDWD provides postretirement health care benefits through the Public Employees Medical and
Hospital Care Act (PEMHCA), which is a health benefit plan administered by CalPERS, to eligible
employees who retire directly from SDWD. Retirees receive the PEMHCA minimum benefit, as
determined by CalPERS. SDWD does not provide a retiree contribution for dental, vision, or life
insurance benefits. SDWD's OPEB plan does not issue a separate stand-alone report.
33
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2019
Note 10 – Other Postemployment Benefits (Continued)
SDWD has elected to join the California Employers' Retiree Benefit Trust (the "Trust") in accordance
with GASB Statement No. 75, which provides a means to fund the annual OPEB costs, referred to as
the Actuarially Determined Contribution (ADC). The ADC includes the normal cost (current accrual for
benefits being earned) plus an amortization of the unfunded accrued liability or net OPEB liability over
15 years on a level-percentage of pay basis. SDWD’s funding policy is to pre-fund the ADC through
the trust.
Eligibility
Employees of SDWD are eligible for retiree health benefits if they retire from SDWD and commence
pension benefits under PERS (typically on or after age 50 with at least five years of PERS eligible
service). Membership in the plan consisted of the following at June 30, 2017, the date of the latest
actuarial valuation:
Active employees 22
Retired employees and beneficiaries 13
35
Net OPEB Liability
SDWD’s net OPEB liability was measured as of June 30, 2018. The total OPEB liability used to
calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2017. The net
OPEB liability at June 30, 2019 was:
Total OPEB Plan Fiduciary Net Net OPEB
Liability Position Liability/(Asset)
(a)(b)(c) = (a) - (b)
Balance at June 30, 2018 493,240$ 177,575$ 315,665$
(Measurement Date: June 30, 2017)
Changes Recognized for the Measurement Period:
Service cost 14,241 - 14,241
Interest on the total OPEB liability 34,637 - 34,637
Contributions from the employer - 59,205 (59,205)
Contributions from employees - - -
Net investment income, net of administrative expense - 18,590 (18,590)
Benefit payments, including refunds of employee
contributions (25,346) (25,346) -
Administrative expense - (123) 123
Other expenses - (235) 235
Net Changes 23,532 52,091 (28,559)
Balance at June 30, 2019 516,772$ 229,666$ 287,106$
(Measurement Date: June 30, 2018)
Increase (Decrease)
34
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2019
Note 10 – Other Postemployment Benefits (Continued)
Actuarial Assumptions
The net OPEB liability in the June 30, 2017 actuarial valuation was determined using the following
actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate 7.00%
Inflation 2.75%
Wage Inflation 3% per annum, in aggregate
Investment Rate of Return
Mortality Rate 1
Pre-retirement Turnover 2
Healthcare Trend Rate
Derived using CalPERS' Membership Data for all funds
Entry Age Normal
Derived using CalPERS' Membership Data for all funds
7.00%, assuming actuarially determined contributions funded into
CERBT Investment Strategy 1.
Based on recent premium experience assuming 1%-2% increase
due to market trends then reduced to a rate reflecting medical price
1 Pre-retirement mortality information was derived from data collected during 1997 to 2011 CalPERS
Experience Study dated January 2014 and post-retirement mortality information was derived from the
2007-2011 CalPERS Experience Study. The Experience Study Reports may be accessed on the
CalPERS website www.calpers.ca.gov under Forms and Publications.
2 The pre-retirement turnover information was developed based on CalPERS' specific data. For more
details, please refer to the 2007 to 2011 Experience Study Report. The Experience Study Reports may
be accessed on the CalPERS website www.calpers.ca.gov under Forms and Publications.
Discount Rate
The discount rate used to measure the net OPEB liability was 7.00 percent. The projection of cash
flows used to determine the discount rate assumed that District contributions will be made at rates
equal to the actuarily determined contribution rates. Based on those assumptions, the OPEB plan’s
fiduciary net position was projected to be available to make all projected OPEB payments for current
active and inactive employees and beneficiaries. Therefore, the long-term expected rate of return on
OPEB plan investments was applied to all periods of projected benefit payments to determine the total
OPEB liability.
The table below reflects long-term expected real rate of return by asset class. The rate of return was
calculated using the capital market assumptions applied to determine the discount rate and asset
allocation. These geometric rates of return are net of administrative expenses.
35
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2019
Note 10 – Other Postemployment Benefits (Continued)
Target
Asset Class Allocation Real Return*
Global equity 57.00%5.50%
Global debt security 27.00%2.35%
Inflation assets 5.00%1.50%
Commodities 3.00%1.75%
Real estate investment trusts 8.00%3.65%
100.00%
* Long-term expected rate of return is 7.00 percent
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate
The following presents the net OPEB liability of SDWD, as well as what SDWD’s net OPEB liability
would be if it were calculated using a discount rate 1-percentage point lower (6.00 percent) or 1-
percentage point higher (8.00 percent) than the current discount rate:
Discount Rate - 1%Current Discount Discount Rate + 1%
(6.00%)Rate (7.00%)(8.00%)
Net OPEB Liability 348,716$ 287,106$ 235,672$
Sensitivity of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rates
The following presents the net OPEB liability of SDWD, as well as what SDWD’s net OPEB liability
would be if it were calculated using healthcare cost trend rates 1-percentage point lower
(5.0%HMO/5.5%PPO decreasing to 4.0%HMO/4.0%PPO) or 1-percentage point higher
(7.0%HMO/7.5%PPO decreasing to 6.0%HMO/6.0%PPO than the current healthcare cost trend rates:
(5.00% HMO/5.50%PPO (6.00% HMO/6.50%PPO (7.00% HMO/7.50%PPO
decreasing to decreasing to decreasing to
4.00% HMO/4.00% PPO)5.00% HMO/5.00% PPO)6.00% HMO/6.00% PPO)
Net OPEB Liability 227,040$ 287,106$ 360,014$
Contributions, OPEB Liabilities, OPEB Expense and Deferred Outflows/Inflows of Resources to
OPEB
SDWD’s policy is to fund the ADC, which includes the normal cost (current accrual for benefits being
earned) plus an amortization of the net (unfunded accrued) OPEB liability. For the year ended
June 30, 2019, SDWD recognized OPEB expense of $32,867 for the SDWD Plan. At June 30, 2019,
SDWD reported deferred outflows of resources and deferred inflows of resources related to OPEB
from the following sources:
36
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2019
Note 10 – Other Postemployment Benefits (Continued)
`Deferred outflows Deferred inflows
of Resources of Resources
OPEB contribution made after the measurement period 66,983$ -$
Net difference between projected and actual earning on
OPEB plan investments - (9,295)
Total 66,983$ (9,295)$
The $66,983 reported as deferred outflows of resources related to contributions subsequent to the
measurement date will be recognized as a reduction of the net OPEB liability in the year ended
June 30, 2020. Other amounts reported as deferred outflows of resources and deferred inflows of
resources related to OPEB will be recognized as OPEB expense as follows:
Measurement Period
Ended June 30
2019 (2,766)$
2020 (2,766)
2021 (2,764)
2022 (999)
2023 -
Thereafter -
(9,295)$
Note 11 – Commitments and Contingencies
Risk management programs and support for the District are provided by the City of Encinitas Risk
Management Department, for which the District pays the City an annual fee (charge for those services.)
Management has determined, based on modest self-insurance retention levels and favorable claims
experience, that no liability accruals were necessary. The District has no outstanding claims as of
June 30, 2019 and did not pay any claims during the fiscal year.
37
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38
San Dieguito Water District, 505 So. Vulcan Ave., Encinitas, CA. 92024 www.encinitasca.gov
REQUIRED
SUPPLEMENTARY
INFORMATION
39
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40
San Dieguito Water District
Required Supplementary Information
For the Year Ended June 30, 3019
2017-18 2016-17 2015-16 2014-15 2013-14
Plan's proportion of the net pension liability 0.18768%0.18116%0.18103%0.18296%0.06074%
Plan's proportionate share of the net pension liability 7,073,051$ 7,141,232$ 6,288,631$ 5,019,493$ 3,779,285$
Plan's covered payroll $1,918,865 $1,862,975 1,808,714$ 1,756,033$ 1,712,639$
368.61%383.32%347.69%285.84%220.67%
Plan's fiduciary net position 16,099,922$ 15,991,467$ 15,586,708$ 16,358,655$ 18,489,458$
69.48%69.13%71.25%76.52%83.03%
Plan's proportionate share of
aggregate employer contributions 504,492$ 472,819$ 356,509$ 271,845$ 241,133$
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 30, 2017
valuation date.
*Fiscal Year 2014-15 was the first year of implementation; therefore, only five years of information are shown.
Changes in assumptions
In 2018, demographic assumptions and the inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial
On December 21, 2016, the CalPERS Board of Administration lowered the discount rate from 7.50 percent to 7.00 percent using a three year phase-in
Note 1 - Schedule of the Proportionate Share of the Net Pension Liability
Last Ten Fiscal Years*
Plan's proportionate share of the net pension
liability as a percentage of covered payroll
Plan's fiduciary net position as a percentage of the
total pension liability
Measurement period
41
Note 2 - Schedule of Contributions - Pension
Fiscal Year 2018-19 2017-18 2016-17 2015-16 2014-15
Contractually determined contribution
(actuarially determined)585,749 504,492$ 472,819$ 356,509$ 271,845$
Contributions in relation to the actuarially
determined contributions (585,749) (504,492) (472,819) (356,509) (271,845)
Contribution deficiency (excess)-$ -$ -$ -$ -$
Covered payroll 1,887,782$ 1,918,865$ 1,862,975$ 1,808,714$ 1,756,033$
Contributions as a percentage of covered
payroll 31.03%26.29%25.38%19.71%15.48%
Notes to Schedule
Fiscal Year: June 30, 2019
Valuation Date: June 30, 2016
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry Age Normal
Amortization method/period Level percent of payroll
Asset valuation method
Market
Value
Inflation 2.50%
Projected salary increases 3.30% to 14.20% depending on age, service, and type of employment
Payroll growth 3.00%
Discount rate 7.375%
Individual Salary Growth
*Fiscal Year 2014-15 was the first year of implementation; therefore, only five years of information are shown.
A merit scale varying by duration of employment
coupled with an assumed annual inflation growth of
San Dieguito Water District
Required Supplementary Information
For the Year Ended June 30, 2019
Last Ten Fiscal Years*
42
Measurement Period 2017-18 2016-17
Total OPEB liability
Service cost 14,241$ 13,309$
Interest 34,637 33,225
Changes of benefit terms - -
Differences between expected and actual experience - -
Changes of assumptions - -
Benefit payments, including refunds of member contributions (25,346) (29,268)
Net change in total OPEB liability 23,532 17,266
Total OPEB liability - beginning 493,240 475,974
Total OPEB liability - ending (a)516,772$ 493,240$
OPEB fiduciary net position
Contributions - employer 59,205$ 63,332$
Net investment income 18,590 18,770
Benefit payments, including refunds of member contributions (25,346) (29,268)
Administrative expense (358) (95)
Net change in plan fiduciary net position 52,091 52,739
Plan fiduciary net position - beginning 177,575 124,836
Plan fiduciary net position - ending (b)229,666 177,575
Plan net OPEB liability - ending (a) - (b)287,106$ 315,665$
Plan fiduciary net position as a percentage of the total OPEB liability 44.44%36.00%
Covered-employee payroll 1,978,669$ 1,802,043$
Plan net OPEB liability as a percentage of covered-employee payroll 14.51%17.52%
* Fiscal Year 2017-18 was the first year of implementation; therefore, only two years of information are shown.
Note 3 - Schedule of Changes in Net OPEB Liability and Related Ratios
Last Ten Fiscal Years*
San Dieguito Water District
Required Supplementary Information
For the Year Ended June 30, 2019
43
San Dieguito Water District
Required Supplementary Information
For the Year Ended June 30, 2019
Fiscal Year 2018-19 2017-18
Actuarialy determined contribution (ADC)53,291$ 52,780$
Contributions in relation to the ADC (66,983) (63,332)
Contribution deficiency (excess)(13,692)$ (10,552)$
Covered employee payroll 1,903,385$ 1,978,669$
Contributions as a percentage of covered
employee payroll 3.52%3.20%
Notes to Schedule
Actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year
2018-19 were from the June 30, 2017 actuarial valuation.
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry Age Normal
Amortization method/period Level percentage of payroll over a closed rolling
15-year period
Asset valuation method Market value
Inflation 2.75% per annum
Payroll growth 3% per annum, in aggregate
Investment rate of return 7% per annum. Assumes investing in California Employers' Retirees
Benefit Trust asset allocation Strategy 1.
Retirement age According to the retirement rates under the most recent CalPERS pension plan
experience study.
Mortality Pre-retirement mortality probability based on the 2014 CalPERS 1997-2011
Experience Study covering CalPERS participants. Post-retirement
mortality probability based on CalPERS Experience Study 2007-2011
covering participants in CalPERS.
* Fiscal Year 2017-18 was the first year of implementation; therefore, only two years of information are shown.
Note 4 - Schedule of Contributions - OPEB
Last Ten Fiscal Years*
44
San Dieguito Water District, 505 So. Vulcan Ave., Encinitas, CA. 92024 www.encinitasca.gov
STATISTICAL
SECTION
45
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46
Summary of Operational Data
The following tables are being presented as supplementary information based on
requirements for bonds issued by SDWD for continuing bond disclosure certificate.
47
San Diequito Water District
Customer Class Residential Rate Tier Potable Recycled
Single-family residential 0-12 units 2.99$ -$
13-20 units 4.75 -
21-40 units 5.87 -
41+ units 6.69 -
Multi-family residential (per dwelling)0-8 units 2.99 -
9-12 units 4.75 -
13-16 units 5.87 -
17+ units 6.69 -
Agriculture Uniform 5.09 4.07
Commercial Uniform 5.09 4.07
Government Uniform 5.57 4.46
Public Uniform 5.57 4.46
Landscaping Uniform 5.87 4.70
Construction Uniform 5.97 4.78
(1) Per Unit (one hundred cubic feet or 748 gallons)
Source: San Dieguito Water District
Bi-Monthly Meter Service Availability Charges (2)
As of June 30, 2019
W ater Meter Service Infrastructure Fire Meter Service
Availability Access Availability
Meter Size Charge Charge Charge
5/8" & 3/4"42.41$ 6.02$ 9.02$
1"62.44 9.63 9.02
1-1/2"112.08 18.06 10.17
2"171.89 31.90 17.73
3"311.53 57.79 44.66
4"511.00 98.73 91.63
6"1,009.18 180.60 259.53
8"1,607.26 313.04 549.12
Source: San Dieguito Water District
As of June 30, 2019
Rate (1)
Table 2
San Dieguito Water District
(2)San Dieguito Water District charges a bi-monthly service availability charge,which covers the costs for the
maintenance of meters,water lines,and storage facilities,to ensure that water is available upon demand.
This charge also covers customer service costs for meter reading and billing.The Infrastructure Access
Charge is levied by the San Diego County Water Authority and is collected from the customer by the District.
Table 1
San Dieguito Water District
Schedule of Water Rates
48
Meter
Fiscal Potable Percentage Availability Percent
Year Water Sales Change (3)Charge Change (3)
2010 7,146,854$ (5.0%)2,501,264$ 2.0%
2011 8,205,876 14.8%3,007,127 20.2%
2012 8,528,418 3.9%3,196,605 6.3%
2013 9,236,462 8.3%3,087,794 (3.4%)
2014 10,649,157 15.3%3,227,823 4.5%
2015 9,728,434 (8.6%)3,415,227 5.8%
2016 9,503,108 (2.3%)3,503,933 2.6%
2017 9,467,085 (0.4%)3,544,758 1.2%
2018 11,222,736 18.5%3,772,759 6.4%
2019 10,203,984 (9.1%)3,839,847 1.8%
(3) Due to the varying number of billing cycles in a fiscal year, changes year-over-year may not be exactly
comparable.
Source: San Dieguito Water District
Meter
Fiscal Recycled Percent Availability Percent
Year Water Sales Change Charges (4)Change
2010 537,654$ (18.9%)-$ N/A
2011 523,397 (2.7%)- N/A
2012 422,925 (19.2%)- N/A
2013 400,244 (5.4%)- N/A
2014 460,383 15.0%60,048 N/A
2015 648,398 40.8%80,585 34.2%
2016 702,301 8.3%85,149 5.7%
2017 716,826 2.1%78,732 (7.5%)
2018 853,052 19.0%86,098 9.4%
2019 587,272 (31.2%)86,801 0.8%
(4) The District first implemented a meter availability charge for recycled customers on September 1, 2013.
Source: San Dieguito Water District
Historic Recycled Water System Revenues
Last Ten Fiscal Years
Table 3
San Dieguito Water District
Historic Potable Water System Revenues
Last Ten Fiscal Years
Table 4
San Dieguito Water District
49
Fiscal Local Imported Total Recycled Total
Year Water Water Potable Water Production
2010 4,399 2,156 6,555 498 7,053
2011 4,434 1,901 6,335 511 6,846
2012 3,719 2,663 6,382 578 (6)6,960
2013 4,200 2,395 6,595 678 (6)7,273
2014 1,136 5,598 6,734 692 7,426
2015 603 5,726 6,329 736 7,065
2016 1,400 3,839 5,239 628 5,867
2017 1,446 3,984 5,430 654 6,084
2018 3,450 2,660 6,110 714 6,824
2019 2,173 3,407 5,580 550 6,130
(5) Potable water production is defined as water either produced locally or purchased from imported sources.
Fiscal Percent Percent
Year Potable Change Recycled Change
2010 5,649 (12.6%)498 (28.2%)
2011 5,425 (4.0%)511 2.6%
2012 5,957 9.8%578 (6)13.1%
2013 6,284 5.5%678 (6)17.3%
2014 6,449 2.6%692 2.1%
2015 6,134 (4.9%)736 6.4%
2016 5,112 (16.7%)628 (14.7%)
2017 5,287 3.4%654 4.1%
2018 5,838 10.4%714 9.2%
2019 5,397 (7.6%)550 (23.0%)
distribution system and/or water pumped or used through the fire distribution system.
Source: San Dieguito Water District
Table 6
San Dieguito Water District
Table 5
Summary of Water Deliveries by Source
Last Ten Fiscal Years
(6)Since FY 2011-12,Recycled Water Production and Delivery figures are revised to include water
provided to the Encinitas Ranch Golf Authority (ERGA).Beginning in FY 2011-12,the San Elijo Joint
Powers Authority (SEJPA)began directly providing recycled water to ERGA.The recycled water provided
to ERGA credits towards the District's production and delivery water to ERGA and the District ceased
selling recycled water as ERGA falls within the District's sphere of influence.
Note: The differences between potable water production and deliveries represents water loss in the
San Dieguito Water District
Summary of Water Production by Source
Last Ten Fiscal Years
Potable Production (in acre-feet)(5)
50
Acre-Feet Percent of
Customer Description Sold Water Sold
Agriculture 184 3.4%
Commercial 532 9.9%
Construction 31 0.6%
Government 22 0.4%
Landscaping 385 7.1%
Multi-Family Residential 1,122 20.8%
Public 124 2.3%
Single-Family Residential 2,997 55.5%
Total Sales 5,397 100.0%
Source: San Dieguito Water District
Fiscal Percent Percent
Years Potable Increase Recycled Increase
2010 11,388 0.1%73 7.4%
2011 11,397 0.1%72 (1.4%)
2012 11,476 0.7%74 2.8%
2013 11,502 0.2%77 4.1%
2014 11,610 0.9%77 0.0%
2015 11,644 0.3%81 5.2%
2016 11,721 0.7%82 1.2%
2017 11,740 0.2%87 6.1%
2018 11,790 0.4%85 (2.3%)
2019 11,861 0.6%93 9.4%
Source: San Dieguito Water District
Total Service Connections by Category
Last Ten Fiscal Years
Table 7
San Dieguito Water District
Sales by Customer Class
As of June 30, 2019
Table 8
San Dieguito Water District
51
2010 2011 2012 2013 2014
Revenues:
Operating revenues - including connection fees 11,267,684$ 12,574,450$ 13,170,422$ 13,789,636$ 15,715,575$
Non-operating revenues 879,477 817,872 813,610 869,568 827,676
Gross Revenues 12,147,161 13,392,322 13,984,032 14,659,204 16,543,251
Total Operating & Non-Operating Expenses 11,634,347 11,614,631 12,448,911 12,198,228 14,066,485
Net Income 512,814 1,777,691 1,535,121 2,460,976 2,476,766
Add:
Interest expense 749,704 725,936 698,908 657,963 622,075
Depreciation and amortization expense 1,213,640 1,196,007 1,294,904 1,476,044 1,490,806
Net Revenues Available for Debt Service 2,476,158 3,699,634 3,528,933 4,594,983 4,589,647
Less: Debt Service Paid
2004 Water Revenue Refunding Bonds - Interest Charges 469,269 452,244 433,950 408,906 380,731
2004 Water Revenue Refunding Bonds - Principal Payments 560,000 575,000 595,000 615,000 640,000
2007 Note Payable to Financing Authority - Interest Charges 265,157 281,494 270,352 256,744 241,344
2007 Note Payable to Financing Authority - Principal Payments 335,000 350,000 365,000 375,000 385,000
2014 Water Revenue Refunding Bonds - Interest Charges - - - - -
2014 Water Revenue Refunding Bonds - Principal Payments - - - - -
Total Debt Service 1,629,426$ 1,658,738$ 1,664,302$ 1,655,650$ 1,647,075$
Coverage by Net Revenues Available for Debt Service 152%223%212%278%279%
Debt service coverage requirement is a minimum 115 percent of net revenue including connection fees. The above schedules include connection
fees in operating revenues.
Historical Debt Service Coverage
Last Ten Fiscal Years
San Dieguito Water District
52
2015 2016 2017 2018 2019
Revenues:
Operating revenues - including connection fees 15,152,433$ 14,852,061$ 15,142,544$ 17,219,494$ 15,961,300$
Non-operating revenues 927,526 1,013,297 1,048,764 1,092,337 2,307,498
Gross Revenues 16,079,959 15,865,358 16,191,308 18,311,831 18,268,798
Total Operating & Non-Operating Expenses 15,481,543 13,800,671 14,263,288 15,198,929 16,541,314
Net Income 598,416 2,064,687 1,928,020 3,112,902 1,727,484
Add:
Interest expense 475,775 412,108 366,740 328,050 292,354
Depreciation and amortization expense 2,271,907 1,514,716 978,627 1,848,913 2,208,775
Net Revenues Available for Debt Service 3,346,098 3,991,511 3,273,387 5,289,865 4,228,613
Less: Debt Service Paid
2004 Water Revenue Refunding Bonds - Interest Charges 144,720 - - - -
2004 Water Revenue Refunding Bonds - Principal Payments 665,000 - - - -
2007 Note Payable to Financing Authority - Interest Charges 224,994 211,144 191,244 171,619 152,919
2007 Note Payable to Financing Authority - Principal Payments 405,000 415,000 440,000 455,000 475,000
2014 Water Revenue Refunding Bonds - Interest Charges 106,061 202,400 185,075 167,225 148,775
2014 Water Revenue Refunding Bonds - Principal Payments - 570,000 585,000 605,000 625,000
Total Debt Service 1,545,775$ 1,398,544$ 1,401,319$ 1,398,844$ 1,401,694$
Coverage by Net Revenues Available for Debt Service 216%285%234%378%302%
(Continued)
Debt service coverage requirement is a minimum 115 percent of net revenue including connection fees. The above schedules include connection
fees in operating revenues.
San Dieguito Water District
Historical Debt Service Coverage
Last Ten Fiscal Years
53