2020 SDWD Annual Financial ReportSan Dieguito Water District
Annual Financial Report
For the Year Ended June 30, 2020
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, 2020
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 .................................................................................................43
Schedule of Changes in Net OPEB Liability and Related Ratios .......................................................45
Schedule of Contributions -OPEB ....................................................................................................46
SELECTED STATISTICAL INFORMATION SECTION
Schedule of Water Rates...................................................................................................................49
Bi-Monthly Meter Service Availability Charges ..................................................................................49
Historic Potable Water System Revenues .........................................................................................50
Historic Recycled Water System Revenues ......................................................................................50
Summary of Water Production by Source..........................................................................................51
Summary of Water Deliveries by Source ...........................................................................................51
Sales by Customer Class ..................................................................................................................52
Total Service Connections by Category.............................................................................................52
Historical Debt Service Coverage ......................................................................................................53
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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, 2020, 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 30 percent of total assets and seven percent of total expenses as of June 30,
2020.Those statements were audited by other auditors whose report has been furnished to us,
and our opinion,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.
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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, 2020, 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
We have previously audited the San Dieguito Water District’s 2019 financial statements, and we
expressed an unmodified opinion on those audited financial statements in our report dated
December 9, 2019. In our opinion, the summarized comparative information presented herein as
of and for the year ended June 30, 2019 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 -Pension, 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 21, 2020January 12, 2021 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
January 12, 2021
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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 2019-20. 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 $2.7 million or 5.3 percent, from 2019 to 2020. The majority of the
increase is due to an increase in net accounts receivables, cash and investments and all operating expense
categories ending the year under budget.The District had positive cash flows from operations in 2020, after
factoring in debt service principal and interest payments of $1.4 million. Rates also had an impact on the
net position as a rate increase went into effect May 1, 2019 after approval by the Board on April 17, 2019.
A second rate increase went into effect on June 1, 2020.
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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 increased $1.1 million from 2019 to 2020 due to increased charges for
services.These included potable meter service charges, recycled water meter service charges, as well as
pass through charges.The rate increase on May 1, 2019 also had a positive impact on operating revenues.
Expenses –Operating expenses increased $0.3 million from 2019 to 2020 due to general and facility
operations and maintenance expenses rising. Despite the increase, all operating expense categories ended
the year under budget which contributed to the higher ending net position.
Capital contributions remained flat from 2019 to 2020 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, decreased approximately $0.7 million. The District also
capitalized approximately $0.4 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 2019-20.
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 19, 2019, the District Board of Directors (Board) approved a two-year operating and capital budget
for FY 2019-20 and FY 2020-21. 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 24, 2020, the Board approved the FY 2020-21 operating and capital “second-year revised” budget.
The operating budget anticipates total revenues of $21.1 million, which is an overall increase of $1.3 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. Due to the
COVID-19 pandemic, the second rate increase was delayed a month and was implemented on June 1,
2020. Another water rate study is currently in progress, which may result in new water rate and charge
increases in 2021 and 2022.Operating expenses for FY 2020-21 are budgeted at $16.9 million or
approximately $0.6 million higher than the prior year. This is largely due to the increased cost of water tied
to the upcoming short-term repairs to Lake Hodges.The Board’s approval of a modest two percent increase
in salaries and benefits in Fiscal Year 2020-21 also contributed to the increase in operating expenses.
The capital budget anticipates capital costs at $3.3 million, which is on par with the average for the next
seven years. This includes $1.4 million for District capital improvements and $1.9 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. A major issue soon to face the District is how to finance the longer-term improvements to the
Lake Hodges Dam as required by the California Department of the Safety of Dams (DSOD). An extensive
structural assessment of the dam identified repair costs ranging from $74 million to $120 million. Per the
Amended Lake Hodges Agreement, the District is required to pay 10.7 percent of the Operating and
Maintenance and Capital costs associated with any repairs to the dam. Other budgeting challenges include
the effects of the COVID-19 pandemic, uncertainty of the amount of local water supply and the ever-
increasing costs of wholesale water.
CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT
If you have questions about this report or need additional information, please contact the City of Encinitas
Finance Department or the San Dieguito Water District General Manager’s office.
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San Dieguito Water District, 505 S Vulcan Ave., Encinitas, CA. 92024 www.encinitasca.gov
BASIC FINANCIAL
STATEMENTS
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San Dieguito Water District
Statement of Net Position
June 30, 2020
(with summarized comparative information for the prior year)
2020 2019
ASSETS
Current assets:
Cash and investments (note 3)21,143,272$ $19,427,472
Restricted cash and investments with fiscal agent (note 3)2,435 198
Interest receivable 82,667 -
Accounts receivables, net 2,794,349 2,213,247
Inventories and prepaid 233,226 236,956
Total current assets 24,255,949 21,877,873
Noncurrent assets:
Investment in joint ventures (note 4)19,892,372 20,635,205
Capital assets, net (note 5)22,592,711 23,264,801
Total noncurrent assets 42,485,083 43,900,006
Total assets 66,741,032 65,777,879
DEFERRED OUTFLOWS OF RESOURCES
OPEB related items (note 10)69,930 66,983
Pension related items (note 9)2,502,847 1,453,178
Total deferred outflows of resources 2,572,777 1,520,161
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities 959,923 1,048,858
Accrued interest payable 64,069 77,125
Deposits 504,665 519,981
Compensated absences - due within one year (note 6)76,868 81,046
Long-term debt - due within one year (note 7)1,190,000 1,135,000
Total current liabilities 2,795,525 2,862,010
Noncurrent liabilities:
Compensated absences - due more than one year (note 6)80,332 66,491
Long-term debt - due in more than one year (note 7)4,802,486 6,066,858
Net OPEB liability (note 10)225,019 287,106
Net pension liability (note 9)7,577,802 7,073,051
Total noncurrent liabilities 12,685,639 13,493,506
Total liabilities 15,481,164 16,355,516
DEFERRED INFLOWS OF RESOURCES
OPEB related items (note 10)43,199 9,295
Pension related items (note 9)589,305 423,157
Total deferred inflows of resources 632,504 432,452
NET POSITION
Net investment in capital assets 16,600,225 16,062,943
Restricted 2,435 198
Unrestricted 36,597,481 34,446,931
Total net position 53,200,141$ 50,510,072$
See accompanying Notes to the Financial Statements
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San Dieguito Water District
Statement of Revenues, Expenses, and Changes in Net Position
For the Year Ended June 30, 2020
(with summarized comparative information for the prior year)
2020 2019
OPERATING REVENUES
Charges for services 16,783,363$ 15,662,658$
Rental income 110,176 112,108
Interfund revenues 51,903 64,932
Other revenue 20,340 16,002
Total operating revenues 16,965,782 15,855,700
OPERATING EXPENSES
Source of supply 5,495,963 5,900,120
General operations and maintenance 6,494,446 5,927,103
Facility operations and maintenance 2,406,285 2,239,714
Depreciation 805,350 831,957
Insurance and claims 29,411 47,620
Total operating expenses 15,231,455 14,946,514
NET OPERATING INCOME (LOSS)1,734,327 909,186
NONOPERATING REVENUES (EXPENSES)
Property taxes 1,159,681 1,110,248
Investment earnings 742,550 582,926
Gain on sale of capital assets -614,324
Increase (decrease) in investment in joint ventures (1,025,142) (1,376,819)
Amortization of bond premium 74,372 74,373
Interest expense (247,063) (292,354)
Total nonoperating revenues (expenses)704,398 712,698
INCOME BEFORE CAPITAL CONTRIBUTIONS 2,438,725 1,621,884
CAPITAL CONTRIBUTIONS
Contribution of capital assets:
Donations 83,044 188,659
Connection fees 168,300 105,600
Total capital contributions 251,344 294,259
CHANGES IN NET POSITION 2,690,069 1,916,143
NET POSITION:
Beginning of year 50,510,072 48,593,929
End of year 53,200,141$ 50,510,072$
See accompanying Notes to the Financial Statements
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San Dieguito Water District
Statement of Cash Flows
For the Year Ended June 30, 2020
(with summarized comparative information for the prior year)
2020 2019
Cash flows from operating activities:
Receipts from users 16,312,437$15,870,117$
Receipts from interfund charges 51,903 64,932
Payments to employees (3,034,505) (1,983,301)
Payments to suppliers for goods and services (11,892,360) (11,233,551)
Other operating revenues 20,340 16,002
Net cash provided by operating activities 1,457,815 2,734,199
Cash flows from noncapital financing activities:
Receipts from property taxes 1,159,682 1,110,248
Net cash provided by noncapital financing activities 1,159,682 1,110,248
Cash flows from capital and related financing activities:
Acquisition of capital assets (50,215) (220,145)
Capital contributions 168,300 105,600
Principal payments on bonds and note payable (1,135,000) (1,100,000)
Interest payments on bonds and note payable (260,119) (301,694)
Capital related payments to R.E. Badger Filtration Plant (282,309) (201,064)
Proceeds from sale of capital assets -614,324
Net cash (used in) capital and related financing activities (1,559,343)(1,102,979)
Cash flows from investing activities:
Investment income received 742,550 582,926
Net cash provided by investing activities 742,550 582,926
Net increase (decrease) in cash and cash equivalents 1,800,704 3,324,394
Cash and cash equivalents, beginning of year 19,427,670 16,103,276
Cash and cash equivalents, end of year 21,228,374$19,427,670$
Reconciliation of cash and cash equivalents to the
Statements of Net Position:
Current assets:
Cash and investments 21,143,272$19,427,472$
Restricted cash and investments with fiscal agent 2,435 198
Total cash and cash equivalents 21,145,707$19,427,670$
See accompanying Notes to the Financial Statements.
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San Dieguito Water District
Statement of Cash Flows (Continued)
For the Year Ended June 30, 2020
(with summarized comparative information for the prior year)
2020 2019
Reconciliation of operating income to net cash provided
by operating activities:
Operating income 1,734,327$ 909,186$
Adjustments to reconcile operating income
to net cash provided by operating activities:
Depreciation 805,350 831,957
Changes in operating assets, deferred outflows of resources,
liabilities, and deferred inflows of resources:
Changes in assets – (increase) decrease:
Accounts receivable (581,102)95,351
Inventory and prepaid items 3,730 835
Change in deferred outflows of resources – (increase) decrease:
OPEB related deferred outflows of resources (2,947) (13,692)
Pension related deferred outflows of resources (1,049,669)694,928
Changes in liabilities – increase (decrease):
Accounts payable and accrued liabilities (88,935) 197,737
Deposits (15,318) 117,681
Compensated absences 9,663 19,494
Net OPEB liability (62,087) (28,559)
Net pension liability 504,751 (68,181)
Change in deferred inflows of resources – increase (decrease):
OPEB-related deferred inflows 33,904 2,221
Pension-related deferred inflows 166,148 (24,759)
Net cash provided by operating activities 1,457,815$ 2,734,199$
Noncash capital and related financing activities:
Amortization of original issue premium 74,372$ 74,373$
Donation of capital assets 83,044 188,659
Total noncash capital and related financing activities 157,416$ 263,032$
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, 2020
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, 2020
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, 2020
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.
19
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 2 –Summary of Significant Accounting Policies (Continued)
Compensated Absences
The District’s policy permits its employees to accumulate no 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, 2020, 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 plan’s 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:
Valuation Date June 30, 2018
Measurement Date June 30, 2019
Measurement Period July 1, 2018 to June 30, 2019
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 (Note 10). 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:
Valuation Date June 30, 2019
Measurement Date June 30, 2019
Measurement Period July 1, 2018 to June 30, 2019
20
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2020
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 1st and are payable in two installments: November 1st and February 1st
of each year. Property taxes become delinquent on December 10th and April 10th, for the first and second
installments, respectively. The lien date is March 1st. 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, 2020
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, 2020,cash and investments are reported in the accompanying statement of net position as
follows:
Cash and investments 21,143,272$
Cash and investments with f iscal agent 2,435
Total cash and investments 21,145,707$
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, 2020:
Fair Measurement
Value Input
Cash on hand 300$Uncatego rized
City of Encinitas pooled investments f und 21,142,972 Uncatego rized
Money market mutual f und s 2,435 Uncatego rized
Total cash and investments 21,145,707$
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.
22
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 3 –Cash and Investments (Continued)
Authorized Investments (Continued)
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.
Authorized Maxi mum Maxi mum
by Investment Maximum Percentage o f Investment in
Authorized Investment Type Policy Maturity Portf olio One Issuer
Repurchased Agreements-Overnight "S weep"Yes 1 year 20%No Limit
Lo cal Agency Investment Fund (LAIF)Yes N/A 30%State Law Maximum
Other Go vernmental M anaged Investment Po ols Yes N/A 30%10% per po ol
Money Marke t M ut ua l Fund s Yes N/A 20%10%
Certif icates o f Depo sit Yes 5 years 10%5%
Nego tiable Certif icates o f Depo sit Yes 5 years 10%5%
Banke rs' A cceptances Yes 180 days 10%5%
U.S. Treasury Bills, No tes and Bond s Yes 5 years 50%No Limit
U.S. Government Spo ns ored Enterprises Yes 5 years 60%25%
Commercial Paper Yes 270 days 25%5%
Commercial Medium-T erm No tes Yes 5 years 15%5%
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 $1.00 and the funds can be withdrawn at any time without prior
notice. Any changes to the fair value of this money market mutual fund are allocated on a monthly basis
to each participant, as a part of their monthly distribution.
Disclosures Relating to Credit Risk
Credit risk is defined as the risk that an issuer of an investment will not fulfill its obligation to the holder of
the investment. This is measured by the assignment of a rating by a nationally recognized statistical
organization. Presented below is the minimum rating required by (where applicable) the Government
Code, the Investment Policy, or the debt agreements, and the actual rating as of year-end for each
investment type.
23
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 3 –Cash and Investments (Continued)
Disclosures Relating to Credit Risk (Continued)
Credit ratings as of June 30, 2020 were as follows:
Mini mum
Legal
Investment T ype Totals Rating AAA Not Rated
Investment in City Pool 21,142,972$ N/A -$ 21,142,972$
Held by Fiscal Agent:
Money M arket M ut ua l Fund s 2,435 AAA 2,435 -
Total inv estments 21,145,407$ 2,435$ 21,142,972$
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, 2020,the District had no deposits with financial institutions or any other parties that would
subject the District to custodial credit risk.
24
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2020
San Dieguito Santa Fe
Fac ilities Water Dis tric t Ir rigation Dis tric t
Filtration Plant 45%55%
Filtered Water Res ervoir (13 m illion gallons )31%69%
Joint Pipeline (O ld Line)39%61%
San Dieguito R es ervoir 42%58%
Note 4 –Investment in Joint Ventures
At June 30,2020 investment in joint ventures consisted of the following:
R.E. Badger Filtratio n Plant 19,245,731$
R.E. Badger Water Facilities Financing Authority 646,641
Total inv estment in other agencies 19,892,372$
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, 2020, the District made
capital contributions of $356,685 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, 2020 was
$19,245,731.
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, 2020, the District’s share of operations and maintenance costs for the Joint Facilities was
$2,406,285.
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, 2020 was $646,641.
25
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 5 –Capital Assets
Summary of changes in capital assets for the year ended June 30, 2020 is as follows:
Balanc e Balanc e
July 1, 2019 Ad ditions Deletions Tr ans fers June 30, 2020
Capital asse ts, not de pre ciate d
Land 3,413,320$ 37,224$ -$ -$3,450,544$
Public works fac ilities right of us e 3,378,700 ---3,378,700
Cons truc tion in progres s 184,303 96,036 (99,637) (149,596) 31,106
Total capital asse ts, not de pre ciate d 6,976,323 133,260 (99,637) (149,596) 6,860,350
Capital asse ts, be ing de pre ciate d
Structures and improvem ents 11,007 ---11,007
Ma chinery, equipm ent, and vehic les 2,621,393 53,817 --2,675,210
Distribution sys tem 42,388,437 45,820 -149,596 42,583,853
Capac ity rights 323,190 ---323,190
Total capital asse ts, be ing de pre ciate d 45,344,027 99,637 -149,596 45,593,260
Le ss accumulated depreciation
Structures and improvem ents (7,797) (1,101) --(8,898)
Ma chinery and equipm ent (2,418,985) (187,162) --(2,606,147)
Distribution sys tem (26,477,406) (610,623) --(27,088,029)
Capac ity rights (151,361) (6,464) --(157,825)
Total accumulate d de preciation (29,055,549) (805,350) --(29,860,899)
Total capital asse ts, be ing de pre ciate d, ne t 16,288,478 (705,713) -149,596 15,732,361
Total capital asse ts, ne t 23,264,801$ (572,453)$ (99,637)$ -$22,592,711$
Note 6 –Compensated Absences
Summary of changes in compensated absences for the year ended June 30, 2020 is as follows:
Balanc e Balanc e Due w ithin Due In More
July 1, 2019 Ad ditions Deletions June 30, 2020 One Year Than O ne Year
147,537$ 147,294$ (137,631)$ 157,200$ 76,868$ 80,332$
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, 2020.
26
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 7 –Long-Term Debt
A summary of changes in long-term debt for the year ended June 30, 2020, is as follows:
Balanc e Balanc e Due within Due In Mor e
July 1, 2019 Additions Deletions Ju ne 30, 2020 One Year Than O ne Year
2007 Note Payable to R.E. Badger
Water Facilities Financ ing Authority 3,345,000$ -$(490,000)$ 2,855,000$ 525,000$ 2,330,000$
2014 W ater Revenue Bonds 3,485,000 -(645,000)2,840,000 665,000 2,175,000
add: original is sue prem ium 371,858 -(74,372)297,486 -297,486
Total long-te rm obligation 7,201,858$ -$(1,209,372)$ 5,992,486$ 1,190,000$ 4,802,486$
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 $620,000. Interest is due and payable semi-annually at rates ranging from 3.5
percent to 4.5 percent. The District accounts for its share of the bonds as a note payable to the Financing
Authority.
Annual debt service requirements for the 2007 Note Payable to the R.E. Badger Water Facilities Financing
Authority outstanding at June 30, 2020 are as follows:
Ye ar Ending
June 30 Princ ipal In teres t Total
2021 525,000$ 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 2,855,000$ 321,769$ 3,176,769$
27
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2020
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
$755,000. Interest is due and payable semi-annually at rates ranging from 3.0 percent to 4.0 percent. The
bonds are subject to federal arbitrage requirements.
The annual debt service requirements for the 2014 Water Revenue Refunding Bonds outstanding at
June 30, 2020 are as follows:
Year Ending
June 30 Principal Interest Total
2021 665,000$ 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 2,840,000$ 233,200$ 3,073,200$
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, 2020,principal
and interest paid was $1,395,119 net revenues available for debt service were $4,672,150 resulting in
debt service coverage ratio of 335 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, 2020,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, 2020
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, 2019,the following employees were covered by the benefit terms for the
Plan:
Ac tive em ployees 22
In ac tive em ployees or benefic iaries c urrently rec eiving benefits 33
In ac tive em ployees entitled to, but not yet rec eiving benefits 13
Total 68
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 1st 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.Employer contribution
rates may change if plan contracts are amended.
29
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 9 –Public Employees Retirement System –CalPERS (Continued)
Contributions (Continued)
Payments made by employer to satisfy contribution requirements that are identified by the pension plan
terms as plan member contribution requirements are classified as plan member contributions.
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, 2020 for Tier 1,Tier 2,and PEPRA employees were 13.182 percent, 8.081 percent,and 6.985
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 30,2020,the District reported net pension liabilities for its proportionate share of the net
pension liability of the SDWD Plan as follows:
Plan T otal Plan Plan Net
Pension Fiduciary Pension
Liability Net Position Liability/(Asset)
Balance at: June 30, 2018 (valua tio n date)23,172,973$ 16,099,922$ 7,073,051$
Balance at: June 30, 2019 (measurement date)23,722,943 16,145,141 7,577,802
Net changes during 2018-19 549,970$ 45,219$ 504,751$
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, 2019, 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, 2018 rolled forward to June 30, 2019 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.
30
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 9 –Public Employees Retirement System –CalPERS (Continued)
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to
Pensions (Continued)
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, 2019 0.18768%
Proportion June 30, 2020 0.18923%
Change - Inc reas e (D ec reas e)0.00155%
The June 30, 2019 total pension liabilities were based on the following actuarial methods and
assumptions:
Ac tuarial Cos t Method
No. 68
Ac tuarial Assumptions :
Discount Rate 7.15%
In flation
Salary Inc reases
Mo rtality Rate Table
Pos t Retirem ent Benefit Inc rease
Entry Age Norm al in ac cordanc e with the requirem ents of
2.50%
Var ies by Entry Age and Servic e
Derived us ing CalPERS' Mem bership Data for all funds
Contrac t cost of living adjus tm ent (COLA)up to 2.50%
until Purchas ing Power Protec tion Allowanc e Floor on
Purchas ing Power applies , 2.50% thereafter.
1 The mortality table was developed based on CalPERS-specific data. The probabilities of mortality are
based on the 2017 CalPERS Experience Study for the period from 1997 to 2015 Pre-retirement and Post-
retirement mortality rates include 15 years of projected mortality improvement using 90 percent of Scale
MP-2016 published by the Society of Actuaries. For more details on this table, please refer to the
CalPERS Experience Study and Review of Actuarial Assumptions report from December 2017 that can be
found on the CalPERS website.
All other actuarial assumptions used in the June 30, 2018 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. The projection of cash
flows used to determine the discount rate assumed that contributions from plan members will be made at
the current member contribution rates and that contributions from employers will be made at statutorily
required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was
projected to be available to make all projected future benefit payments of current plan members.
Therefore, the long-term expected rate of return on plan investments was applied to all periods of
projected benefit payments to determine the total pension liability.
31
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 9 –Public Employees Retirement System –CalPERS (Continued)
Discount Rate (Continued)
The long-term expected rate of return on pension plan investments was determined using a building-block
method in which expected future real rates of return (expected returns, net of pension plan investment
expense and inflation) are developed for each major asset class. In determining the long-term expected
market return expectations as well as the expected pension fund cash flows. Using historical returns of all
of the funds’assets 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 rounded 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 equal to the single equivalent rate
calculated above and adjusted to account for assumed administrative expenses.
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, 2019 was as follows:
As sumed
Asset
Real Return
Years Real Return Y ears
Asset Class 1 Allocation 1 - 10 2 11 + 3
Global equity 50.00%4.80%5.98%
Fixed inco me 28.00%1.00%2.62%
Inflatio n 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 CalPERS CAFR, Fixed inco me is includ ed in Global Debt Securities; Liquidity is includ ed in Short-term investments;
Inflatio n assets are includ ed in bo th Global Equity Securities and Global Debt Securities.
2 An expected inflation of 2.00 percent was used f or this perio d.
3 An expected inflatio n of 2.92 percent was used f or this perio d.
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:
32
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 9 –Public Employees Retirement System –CalPERS (Continued)
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate
(Continued)
Discount Rate - 1%Current Discount Discount Rate + 1%
(6.15%)Rate (7.15%)(8.15%)
Net Pension Liability 10,768,610$7,577,802$ 4,944,015$
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, 2020, the District recognized pension expense of $206,981 for the SDWD
Plan.
At June 30, 2020,the District reported deferred outflows of resources and deferred inflows of resources
related to pensions from the following sources:
Defe rred O utflows Deferred Inflows
of Resource s of Resource s
Contribution m ade after the m eas urem ent date 1,581,186$-$
Differenc e betw een expec ted and actual
experienc e 526,310 (40,778)
Changes of as sumptions 361,345 (128,094)
Ne t differenc e betw een projec ted and actual
earnings on pens ion plan inves tm ents -(132,483)
Differenc e betw een em ployer's ac tual c ontributions
and proportionate s hare of c ontributions -(140,699)
Ad jus tm ents due to differenc e in proportions 34,006 (147,251)
Total 2,502,847$(589,305)$
The $1,581,186 reported as deferred outflows of resources related to contributions subsequent to the
measurement date will be recognized as a reduction of the net pension liability in the fiscal year ended
June 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of
resources related to pensions will be recognized as pension expense as follows:
33
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 9 –Public Employees Retirement System –CalPERS (Continued)
Pension Plan Fiduciary Net Position (Continued)
Measurement Period De fe rred Outflows
Ende d June 30 (Inflows) of Resource s
2020 403,827$
2021 (153,176)
2022 54,934
2023 26,771
2024 -
Thereafter -
332,356$
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.
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, 2019,the date of the latest
actuarial valuation:
Active employees 24
Retired employees and beneficiaries 21
45
34
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 10 – Other Postemployment Benefits (Continued)
Net OPEB Liability
SDWD’s net OPEB liability was measured as of June 30, 2019. The total OPEB liability used to
calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2019. The net
OPEB liability at June 30, 2020 was:
Total O PEB Plan Fiduciary Net Net O PEB
Liability Position Liability/(Asse t)
(a)(b)(c) = (a) - (b)
Balanc e at June 30, 2019 516,772$229,666$287,106$
(Meas urem ent D ate: June 30, 2018)
Changes Rec ogniz ed for the Meas urem ent Period:
Servic e c os t 14,633 -14,633
In teres t on the total O PEB liability 36,301 -36,301
Contributions from the em ployer -55,068 (55,068)
Net inves tm ent inc om e, net of adm inis trative expens e -16,640 (16,640)
Differenc e between expec ted and ac tual experienc e (43,215)-(43,215)
Changes in as sumptions 1,843 -1,843
Benefit paym ents , inc luding refunds of em ployee
contributions (25,651)(25,651)-
Adminis trative expens e -(59)59
Net Changes (16,089)45,998 (62,087)
Balanc e at June 30, 2020 500,683$275,664$225,019$
(Meas urem ent D ate: June 30, 2019)
Incre ase (De crease )
Actuarial Assumptions
The net OPEB liability in the June 30, 2019 actuarial valuation was determined using the following
actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:
Ac tuarial Cos t Method:
Ac tuarial Assumptions :
Discount Rate 7.00%
In flation 2.50%
Wage Inflation 2.75% per annum , in aggregate
In ves tm ent R ate of Return
Mo rtality R ate 1
Pre-retirem ent Turnover 1
He althc are Trend R ate
Derived us ing C alPERS' 2017 experienc e s tudy for the C alPERS
pens ion plan
Derived us ing C alPERS' 2017 experienc e s tudy for the C alPERS
pens ion plan
Entry Age Norm al
7.00%, as suming ac tuarially determ ined c ontributions funded into
CERBT Inves tm ent Strategy 1.
Bas ed on rec ent prem ium exper ienc e as suming 1%-2% inc reas e
due to m arket trends then reduc ed to a rate r eflec ting m edic al pric e
inflation.
35
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 10 – Other Postemployment Benefits (Continued)
Actuarial Assumptions (Continued)
1 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 actuarially determined contribution rates. Based on those assumptions, the OPEB plan’s
fiduciary net position was projected to be available to make all projected OPEB payments for current
active and inactive employees and beneficiaries. Therefore, the long-term expected rate of return on
OPEB plan investments was applied to all periods of 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.
As se t Class T ar ge t Allocation
Long-te rm
Expe cte d Real
Rate of R eturn*
Global equity 59.00%5.00%
Global fixed income 25.00%3.00%
In flation s ens itive 5.00%2.00%
Private equity 3.00%3.00%
Real es tate 8.00%5.00%
*Long-term expec ted rate of return is 7.00 perc ent
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 R ate - 1%Curre nt Discount Discount Rate + 1%
(6.00%)Rate (7.00%)(8.00%)
Ne t O PEB Liability 282,813$225,019$176,556$
36
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 10 – Other Postemployment Benefits (Continued)
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
(5.5%HMO/5.5%PPO decreasing to 4.0%HMO/4.0%PPO)or 1-percentage point higher
(7.5%HMO/7.5%PPO decreasing to 6.0%HMO/6.0%PPO)than the current healthcare cost trend rates:
(5.50% H MO/5.50%PPO (6.50% H MO/6.50%PPO (7.50% H MO/7.50%PPO
de cr easing to de cr easing to de cr easi ng to
4.00% HMO/4.00% PPO )5.00% HMO/5.00% PPO)6.00% HMO/6.00% PPO )
Ne t O PEB Liability 171,707$225,019$289,357$
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, 2020, SDWD recognized OPEB expense of $23,938 for the SDWD Plan. At June 30, 2020,
SDWD reported deferred outflows of resources and deferred inflows of resources related to OPEB
from the following sources:
De ferre d O utflows De fe rre d Inflows
of Re sour ce s of Re source s
OPEB c ontribution m ade after the m eas urem ent period 68,350$ -$
Changes of as sumptions 1,580 -
Net differenc e between projec ted and ac tual earning on
OPEB plan inves tm ents -(43,199)
Total 69,930$ (43,199)$
The $68,350 reported as deferred outflows of resources related to contributions subsequent to the
measurement date will be recognized as a reduction of the net OPEB liability in the fiscal year ended
June 30, 2021.Other amounts reported as deferred outflows of resources and deferred inflows of
resources related to OPEB will be recognized as OPEB expense as follows:
Me asurement Deferred
Period Ended Outflow s (Inflow s)
June 30 of Resources
2020 (8,584)$
2021 (8,584)
2022 (6,817)
2023 (5,819)
2024 (5,911)
Thereaf ter (5,904)
(41,619)$
37
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2020
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 two outstanding claims as of
June 30, 2020 and did not pay any claims during the fiscal year.
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, 2020
Measurement period 2018-19 2017-18 2016-17
Plan's proportion of the net pension liability 0.18923%0.18768%0.18116%
Plan's proportionate share of the net pension liability 7,577,802$ 7,073,051$ 7,141,232$
Plan's covered payroll 1,887,782$ $1,918,865 $1,862,975
401.41%368.61%383.32%
Plan's fiduciary net position 16,145,141$ 16,099,922$ 15,991,467$
68.06%69.48%69.13%
Plan's proportionate share of
aggregate employer contributions 585,749$ 504,492$ 472,819$
Notes to Schedule:
Benefit changes: There were no changes to benefit terms that applied to all members of the Public
Agency Pool.
Changes in assumptions:
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
Note 1 - Schedule of Proportionate Share of the Net Pension Liability and Related Ratios
Last Ten Fiscal Years*
*Fiscal Year 2014-15 was the first year of implementation; therefore, only six years of information are
shown.
There were no changes in 2019.In 2018,demographic assumptions and inflation rate were changed in
accordance to the CalPERS Experience Study and Review of Assumptions.There were no changes in
the discount rate.In 2017,the discount rate was reduced from 7.65 percent to 7.15 percent In 2016,
there were no changes.In 2015,amounts reported reflect an adjustment of the discount rate from 7.5
percent (net of administrative expense)to 7.65 percent (without a reduction for pension plan
administrative expense). In 2014, amounts were based on 7.5 percent discount rate.
41
San Dieguito Water District
Required Supplementary Information
For the Year Ended June 30, 2020
Note 1 - Schedule of Proportionate Share of the Net Pension Liability and Related Ratios (Continued)
Measurement period 2015-16 2014-15 2013-14
Plan's proportion of the net pension liability 0.18103%0.18296%0.06074%
Plan's proportionate share of the net pension liability 6,288,631$ 5,019,493$ 3,779,285$
Plan's covered payroll 1,808,714$ 1,756,033$ 1,712,639$
347.69%285.84%220.67%
Plan's fiduciary net position 15,586,708$ 16,358,655$ 18,489,458$
71.25%76.52%83.03%
Plan's proportionate share of aggregate employer contributions356,509$ 271,845$ 241,133$
Notes to Schedule:
Benefit changes: There were no changes to benefit terms that applied to all members of the Public
Agency Pool.
Changes in assumptions:
*Fiscal Year 2014-15 was the first year of implementation; therefore, only six years of information are
shown.
There were no changes in 2019.In 2018,demographic assumptions and inflation rate were changed
in accordance to the CalPERS Experience Study and Review of Assumptions.There were no
changes in the discount rate.In 2017,the discount rate was reduced from 7.65 percent to 7.15
percent In 2016,there were no changes.In 2015,amounts reported reflect an adjustment of the
discount rate from 7.5 percent (net of administrative expense)to 7.65 percent (without a reduction for
pension plan administrative expense). In 2014, amounts were based on 7.5 percent discount rate.
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
42
San Dieguito Water District
Required Supplementary Information
For the Year Ended June 30, 2020
Note 2 - Schedule of Contributions - Pension
Fiscal Year 2019-20 2018-19 2017-18 2016-17
Contractually determined contribution (actuarially
determined) $1,581,186 585,749$ 504,492$ 472,819$
Contributions in relation to the actuarially determined
contributions (1,581,186)(585,749)(504,492) (472,819)
Contribution deficiency (excess)-$-$-$-$
Covered payroll 1,901,202$1,887,782$ 1,918,865$ 1,862,975$
Contributions as a percentage of covered
payroll 83.17% 31.03% 26.29% 25.38%
Notes to Schedule
Fiscal Year: June 30, 2020
Valuation Date: June 30, 2017
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry Age Normal
Amortization method/period Level percent of payroll
Asset valuation method Fair Value of Assets
Inflation 2.625%
Projected salary increases Varies by entry age and service
Payroll growth 2.88%
Discount rate 7.250%
*Fiscal Year 2014-15 was the first year of implementation; therefore, only six years of information are shown.
Last Ten Fiscal Years*
43
San Dieguito Water District
Required Supplementary Information
For the Year Ended June 30, 2020
Note 2 - Schedule of Contributions - Pension (Continued)
Fiscal Year 2015-16 2014-15
Contractually determined contribution (actuarially
determined)356,509$ 271,845$
Contributions in relation to the actuarially determined
contributions (356,509) (271,845)
Contribution deficiency (excess)-$-$
Covered payroll 1,808,714$1,756,033$
Contributions as a percentage of covered
payroll 19.71% 15.48%
Notes to Schedule
Fiscal Year: June 30, 2020
Valuation Date: June 30, 2017
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry Age Normal
Amortization method/period Level percent of payroll
Asset valuation method Fair Value of Assets
Inflation 2.625%
Projected salary increases Varies by entry age and service
Payroll growth 2.88%
Discount rate 7.250%
*Fiscal Year 2014-15 was the first year of implementation; therefore, only six years of information are shown.
Last Ten Fiscal Years*
44
San Dieguito Water District
Required Supplementary Information
For the Year Ended June 30, 2020
Measurement Period 2018-19 2017-18 2016-17
Total OPEB liability
Service cost 14,633$ 14,241$ 13,309$
Interest 36,301 34,637 33,225
Differences between expected and actual experience (43,215) --
Changes of assumptions 1,843 --
Benefit payments, including refunds of member contributions (25,651) (25,346) (29,268)
Net change in total OPEB liability (16,089) 23,532 17,266
Total OPEB liability - beginning 516,772 493,240 475,974
Total OPEB liability - ending (a)500,683$ 516,772$ 493,240$
OPEB fiduciary net position
Contributions - employer 55,068$ 59,205$ 63,332$
Net investment income 16,640 18,590 18,770
Benefit payments, including refunds of member contributions (25,651) (25,346) (29,268)
Administrative expense (59)(358)(95)
Net change in plan fiduciary net position 45,998 52,091 52,739
Plan fiduciary net position - beginning 229,666 177,575 124,836
Plan fiduciary net position - ending (b)275,664 229,666 177,575
Plan net OPEB liability - ending (a) - (b)225,019$ 287,106$ 315,665$
Plan fiduciary net position as a percentage of the total OPEB liability 55.06% 44.44% 36.00%
Covered-employee payroll 1,903,385$ 1,978,669$ 1,802,043$
Plan net OPEB liability as a percentage of covered-employee payroll 11.82% 14.51% 17.52%
* Fiscal Year 2017-18 was the first year of implementation; therefore, only three years of information are shown.
Note 3 - Schedule of Changes in Net OPEB Liability and Related Ratios
Last Ten Fiscal Years*
45
San Dieguito Water District
Required Supplementary Information
For the Year Ended June 30, 2020
Fiscal Year 2019-20 2018-19 2017-18
Actuarially determined contribution (ADC)48,200$ 53,291$ 52,780$
Contributions in relation to the ADC (68,350) (66,983) (63,332)
Contribution deficiency (excess)(20,150)$ (13,692)$ (10,552)$
Covered employee payroll 2,046,974$ 1,903,385$ 1,978,669$
Contributions as a percentage of covered
employee payroll 3.34% 3.52% 3.20%
Notes to Schedule
Actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year
2019-20 were from the June 30, 2019 actuarial valuation report.
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 2.50% per annum
Salary increases 2.75% per annum
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 2017 experience study
for the CalPERS pension plan.
Mortality According to the retirement rates under the 2017 experience study
for the CalPERS pension plan.
* Fiscal Year 2017-18 was the first year of implementation; therefore, only three years of information are shown.
Note 4 - Schedule of Contributions - OPEB
Last Ten Fiscal Years*
46
San Dieguito Water District, 505 So. Vulcan Ave., Encinitas, CA. 92024 www.encinitasca.gov
STATISTICAL
SECTION
47
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48
Customer Class Residential Rate Tier Potable Recycled
Single-family residential 0-12 units 3.19$ -$
13-20 units 5.06 -
21-40 units 6.25 -
41+ units 7.12 -
Multi-family residential (per dwelling)0-8 units 3.19 -
9-12 units 5.06 -
13-16 units 6.25 -
17+ units 7.12 -
Agriculture Uniform 5.42 4.34
Commercial Uniform 5.42 4.34
Government Uniform 5.93 4.74
Public Uniform 5.93 4.74
Landscaping Uniform 6.25 5.00
Construction Uniform 6.36 5.09
(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, 2020
W ater Meter Service Infrastructure Fire Meter Service
Availability Access Availability
Meter Size Charge Charge Charge
5/8" & 3/4"45.16$ 7.32$ 9.61$
1"66.50 11.72 9.61
1-1/2"119.37 21.96 10.83
2"183.06 38.06 18.88
3"331.78 70.28 47.77
4"544.21 120.04 97.59
6"1,074.78 219.60 276.40
8"1,711.73 380.64 584.82
Source: San Dieguito Water District
As of June 30, 2020
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
49
Meter
Fiscal Potable Percentage Availability Percent
Year Water Sales Change (3)Charge Change (3)
2020 10,944,746$ 7.3%4,162,249$ 8.4%
2019 10,203,984 (9.1%)3,839,847 1.8%
2018 11,222,736 18.5%3,772,759 6.4%
2017 9,467,085 (0.4%)3,544,758 1.2%
2016 9,503,108 (2.3%)3,503,933 2.6%
2015 9,728,434 (8.6%)3,415,227 5.8%
2014 10,649,157 15.3%3,227,823 4.5%
2013 9,236,462 8.3%3,087,794 (3.4%)
2012 8,528,418 3.9%3,196,605 6.3%
2011 8,205,876 14.8%3,007,127 20.2%
(3)Due to the varying number of billing cycles in a fiscal year, changes year-over-year may not be
comparable.
Source: San Dieguito Water District
Meter
Fiscal Recycled Percent Availability Percent
Year Water Sales Change Charges (4)Change
2020 644,436$ 9.7%97,431$ 12.2%
2019 587,272 (31.2%)86,801 0.8%
2018 853,052 19.0%86,098 9.4%
2017 716,826 2.1%78,732 (7.5%)
2016 702,301 8.3%85,149 5.7%
2015 648,398 40.8%80,585 34.2%
2014 460,383 15.0%60,048 N/A
2013 400,244 (5.4%)- N/A
2012 422,925 (19.2%)- N/A
2011 523,397 (2.7%)- N/A
Source: San Dieguito Water District
(4)The District first implemented a meter availability charge for recycled customers on September
1, 2013.
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
50
Fiscal Local Imported Total Recycled Total
Year W ater W ater Potable W ater Production
2020 2,555 3,127 5,682 587 6,269
2019 2,173 3,407 5,580 550 6,130
2018 3,450 2,660 6,110 714 6,824
2017 1,446 3,984 5,430 654 6,084
2016 1,400 3,839 5,239 628 5,867
2015 603 5,726 6,329 736 7,065
2014 1,136 5,598 6,734 692 7,426
2013 4,200 2,395 6,595 678 (6)7,273
2012 3,719 2,663 6,382 578 (6)6,960
2011 4,434 1,901 6,335 511 6,846
Fiscal Percent Percent
Year Potable Change Recycled Change
2020 5,277 (2.2%)587 6.7%
2019 5,397 (7.6%)550 (23.0%)
2018 5,838 10.4%714 9.2%
2017 5,287 3.4%654 4.1%
2016 5,112 (16.7%)628 (14.7%)
2015 6,134 (4.9%)736 6.4%
2014 6,449 2.6%692 2.1%
2013 6,284 5.5%678 (6)17.3%
2012 5,957 9.8%578 (6)13.1%
2011 5,425 (4.0%)511 2.6%
distribution system and/or water pumped or used through the fire distribution system.
Source: San Dieguito Water District
Note: The differences between potable water production and deliveries represents water loss in
San Dieguito Water District
Summary of Water Production by Source
Last Ten Fiscal Years
Potable Production (in acre-feet)(5)
Table 6
San Dieguito Water District
(5) Potable water production is defined as water either produced locally or purchased from
imported sources.
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.
51
Acre-Feet Percent of
Customer Description Sold Water Sold
Agriculture 186 3.5%
Commercial 501 9.5%
Construction 40 0.8%
Government 21 0.4%
Landscaping 328 6.2%
Multi-Family Residential 1,102 20.9%
Public 106 2.0%
Single-Family Residential 2,993 56.7%
Total Sales 5,277 100.0%
Source: San Dieguito Water District
Fiscal Percent Percent
Years Potable Increase Recycled Increase
2020 12,086 1.9%98 5.4%
2019 11,861 0.6%93 9.4%
2018 11,790 0.4%85 (2.3%)
2017 11,740 0.2%87 6.1%
2016 11,721 0.7%82 1.2%
2015 11,644 0.3%81 5.2%
2014 11,610 0.9%77 0.0%
2013 11,502 0.2%77 4.1%
2012 11,476 0.7%74 2.8%
2011 11,397 0.1%72 (1.4%)
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, 2020
Table 8
San Dieguito Water District
52
San Dieguito Water District
Historical Debt Service Coverage (Continued)
Last Ten Fiscal Years
2020 2019 2018 2017 2016
Revenues:
Operating revenues - including connection fees 17,121,648$ 15,961,300$ 17,219,494$ 15,142,544$ 14,852,061$
Non-operating revenues 1,902,231 2,307,498 1,092,337 1,048,764 1,013,297
Gross Revenues 19,023,879 18,268,798 18,311,831 16,191,308 15,865,358
Total Operating & Non-Operating Expenses 16,429,284 16,541,314 15,198,929 14,263,288 13,800,671
Net Income 2,594,595 1,727,484 3,112,902 1,928,020 2,064,687
Add:
Interest expense 247,063 292,354 328,050 366,740 412,108
Depreciation and amortization expense 1,830,493 2,208,775 1,848,913 978,627 1,514,716
Net Revenues Available for Debt Service 4,672,150 4,228,613 5,289,865 3,273,387 3,991,511
Less: Debt Service Paid
2004 Water Revenue Refunding Bonds - Interest Charges - - - - -
2004 Water Revenue Refunding Bonds - Principal Payments - - - - -
2007 Note Payable to Financing Authority - Interest Charges 133,619 152,919 171,619 191,244 211,144
2007 Note Payable to Financing Authority - Principal Payments 490,000 475,000 455,000 440,000 415,000
2014 Water Revenue Refunding Bonds - Interest Charges 126,500 148,775 167,225 185,075 202,400
2014 Water Revenue Refunding Bonds - Principal Payments 645,000 625,000 605,000 585,000 570,000
Total Debt Service 1,395,119$ 1,401,694$ 1,398,844$ 1,401,319$ 1,398,544$
Coverage by Net Revenues Available for Debt Service 335%302%378%234%285%
San Dieguito Water District
Debt service coverage requirement is a minimum 115 percent of net revenue including connection fees. The above schedules include connection fees
in operating revenues.
53
San Dieguito Water District
Historical Debt Service Coverage (Continued)
Last Ten Fiscal Years
2015 2014 2013 2012 2011
Revenues:
Operating revenues - including connection fees 15,152,433$ 15,715,575$ 13,789,636$ 13,170,422$ 12,574,450$
Non-operating revenues 927,526 827,676 869,568 813,610 817,872
Gross Revenues 16,079,959 16,543,251 14,659,204 13,984,032 13,392,322
Total Operating & Non-Operating Expenses 15,481,543 14,066,485 12,198,228 12,448,911 11,614,631
Net Income 598,416 2,476,766 2,460,976 1,535,121 1,777,691
Add:
Interest expense 475,775 622,075 657,963 698,908 725,936
Depreciation and amortization expense 2,271,907 1,490,806 1,476,044 1,294,904 1,196,007
Net Revenues Available for Debt Service 3,346,098 4,589,647 4,594,983 3,528,933 3,699,634
Less: Debt Service Paid
2004 Water Revenue Refunding Bonds - Interest Charges 144,720 380,731 408,906 433,950 452,244
2004 Water Revenue Refunding Bonds - Principal Payments 665,000 640,000 615,000 595,000 575,000
2007 Note Payable to Financing Authority - Interest Charges 224,994 241,344 256,744 270,352 281,494
2007 Note Payable to Financing Authority - Principal Payments 405,000 385,000 375,000 365,000 350,000
2014 Water Revenue Refunding Bonds - Interest Charges 106,061 - - - -
2014 Water Revenue Refunding Bonds - Principal Payments - - - - -
Total Debt Service 1,545,775$ 1,647,075$ 1,655,650$ 1,664,302$ 1,658,738$
Coverage by Net Revenues Available for Debt Service 216%279%278%212%223%
San Dieguito Water District
Debt service coverage requirement is a minimum 115 percent of net revenue including connection fees. The above schedules include connection fees
in operating revenues.
54