2021 SDWD Annual Financial ReportSan Dieguito Water District
Encinitas, California
Basic Financial Statements
For the Year Ended June 30, 2021
San Dieguito Water District
Table of Contents
For the Year Ended June 30, 2021
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 ............................ 40
Schedule of Contributions - Pension ................................................................................................. 42
Schedule of Changes in Net OPEB Liability and Related Ratios ....................................................... 44
Schedule of Contributions - OPEB .................................................................................................... 45
SELECTED STATISTICAL INFORMATION SECTION
Schedule of Water Rates .................................................................................................................. 50
Bi-Monthly Meter Service Availability Charges .................................................................................. 50
Historic Potable Water System Revenues ......................................................................................... 51
Historic Recycled Water System Revenues ...................................................................................... 51
Summary of Water Production by Source ......................................................................................... 52
Summary of Water Deliveries by Source ........................................................................................... 52
Sales by Customer Class .................................................................................................................. 53
Total Service Connections by Category ............................................................................................ 53
Historical Debt Service Coverage ..................................................................................................... 54
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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, 2021, 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 35 percent of total assets and sixteen percent of total expenses as of June 30,
2021. 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 entity’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 entity’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 opinions.
1
Opinion
In our opinion,based on our audit and the report of other auditors, the financial statements
referred to above present fairly, in all material respects, the respective financial information of the
San Dieguito Water District as of June 30, 2021, and the respective changes in financial position
and, where applicable, cash flows thereof for the year then ended in accordance with accounting
principles generally accepted in the United States of America.
Emphasis of Matter
As discussed in Note 1, the financial statements present only the San Dieguito Water District, a
component unit of the City and do not purport to, and do not, present fairly the financial position of
the City as of June 30,2021, the changes in its financial position and cash flows for the fiscal year
then ended in accordance with accounting principles generally accepted in the United States of
America. Our opinion is not modified with respect to this matter.
Report on Summarized Comparative Information
We have previously audited the San Dieguito Water District’s 2020 financial statements, and we
expressed an unmodified opinion on those audited financial statements in our report dated January
12, 2021. In our opinion, the summarized comparative information presented herein as of and for
the year ended June 30, 2020 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 opinions 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 1, 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 solely to describe
the scope of our testing of internal control over financial reporting and compliance and the results
of that testing, and not to provide an opinion on internal control over financial reporting or on
compliance. That report is an integral part of an audit performed in accordance with Government
Auditing Standards in considering San Dieguito Water District’s internal control over financial
reporting and compliance.
Irvine, California
December 1, 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 2020-21. 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 $5.1 million or 9.6 percent, from 2020 to 2021. This is due to a slight
increase in net accounts receivables and cash and investments, along with an increase in the Investment in
Joint Ventures. The District had positive cash flows from operations in 2021, after factoring in debt service
principal and interest payments of $1.4 million and most operating expense categories ended the year under
budget. Rates also had an impact on the net position as a second rate increase approved by the Board on
April 17, 2019, went into effect on June 1, 2020.
(In Millions)
Fiscal
Year 2021
Fiscal
Year 2020
Dollar
Change
Percent
Change
Current assets 24.9$ 24.2$ 0.7$ 2.9%
Investments in joint ventures 25.4 19.9 5.5 27.6%
Capital assets (net)22.1 22.6 (0.5) (2.2%)
Total assets 72.4 66.7 5.7 8.5%
Deferred outflows 1.9 2.6 (0.7) (26.9%)
Current liabilities 3.1 1.6 1.5 93.8%
Current portion of long-term debt 1.2 1.2 - 0.0%
Noncurrent liabilities 0.1 0.1 - 0.0%
Net pension liability 7.1 7.6 (0.5) (6.6%)
Net OPEB liability 0.2 0.2 - 0.0%
Long-term debt 3.5 4.8 (1.3) (27.1%)
Total liabilities 15.2 15.5 (0.3) (1.9%)
Deferred inflows 0.8 0.6 0.2 33.3%
Net Position:
Net investment in capital assets 17.4 16.6 0.8 4.8%
Unrestricted 40.9 36.6 4.3 11.7%
Total Net Position 58.3$ 53.2$ 5.1$ 9.6%
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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 $2.2 million from 2020 to 2021 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 June 1, 2020 also had a positive impact on operating revenues.
Expenses – Operating expenses increased $2.1 million from 2020 to 2021 due to general and facility
operations and maintenance expenses rising. Despite the increase, most operating expense categories
ended the year under budget which contributed to the higher ending net position.
Capital contributions rose slightly from 2020 to 2021 due to an uptick in development activity within the
District.
Fiscal Year
2021
Fiscal Year
2020
Dollar
Change
Percent
Change
Operating revenues 19.1$ 16.9$ 2.2$ 13.0%
Operating expenses:
Source of supply 6.5 5.5 1.0 18.2%
General operations & maintenance 7.0 6.5 0.5 7.7%
Facility operations & maintenance 2.9 2.4 0.5 20.8%
General and administrative 0.1 0.0 0.1 100.0%
Depreciation 0.8 0.8 - 0.0%
Total operating expenses 17.3 15.2 2.1 13.6%
Operating income 1.8 1.7 0.1 7.6%
Nonoperating revenues 3.1 2.0 1.1 55.0%
Nonoperating (expenses)(0.2)(1.3)1.1 (84.6%)
Income before transfers and
capital contributions 4.7 2.4 2.3 95.8%
Capital contributions 0.4 0.3 0.1 33.3%
Change in net position 5.1 2.7 2.4 88.9%
Net position, beginning 53.2 50.5 2.7 5.3%
Net position, ending 58.3$ 53.2$ 5.1$ 9.6%
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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 $3.6 million. This was due to
capital additions of $0.3 million along with a decrease of $3.9 million related to write-offs in distribution
system assets. The District also capitalized approximately $4.7 million of capital improvement costs paid
towards the R.E. Badger Joint Facilities which added to the Investment in Joint Ventures.
The overall budget of the District for capital improvements averages about $3.1 million per year over the
next seven years.
Table 3
Capital Assets, Net of Accumulated Depreciation
(Millions of Dollars)
2021 2020
Land easements 3.4$ 3.4$
Public works facility right-of-use 3.4 3.4
Construction in progress 0.0 0.0
Capacity rights 0.2 0.2
Utility, plant and equipment 15.1 15.6
Total 22.1$ 22.6$
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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 2020-21.
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 16, 2021, the District Board of Directors (Board) approved a two-year operating and capital budget
for FY 2021-22 and FY 2022-23. During the two-year budget cycle, funds are appropriated in the first fiscal
year only and then District staff returns to the Board one year later to present a “second-year revised” budget,
which is revised based on changed assumptions to the originally published figures for the second year.
The FY 2022-23 operating budget anticipates total revenues of $21.5 million, which is an overall increase
of $1.2 million over the FY2021-22 revenue projection. On September 22, 2021, 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 5.5 percent on January 1, 2022, 6 percent on January 1, 2023 and a
final 6.5 percent increase on January 1, 2024. Operating expenses for FY 2022-23 are budgeted at $22
million or approximately $0.7 million higher than FY2021-22. 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 2022-23 also contributed to the increase in operating
expenses.
The capital budget for FY 2022-23 anticipates capital costs at $3.2 million, which is on par with the average
for the next seven years. This includes $1.56 million for District capital improvements and $1.65 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. The District continues to face the issue of 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 $120 million. Per the
Amended Lake Hodges Agreement, the District is required to pay 10.7 percent of the Operating and
Maintenance and Capital costs associated with any repairs to the dam. Other budgeting challenges include
the recently declared statewide drought, uncertainty of the amount of local water supply as it relates to the
drought as well as the Lake Hodges restrictions, and the ever-increasing costs of wholesale water.
CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT
If you have questions about this report or need additional information, please contact the City of Encinitas
Finance Department or the San Dieguito Water District General Manager’s office.
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San Dieguito Water District, 505 S Vulcan Ave., Encinitas, CA. 92024 www.encinitasca.gov
BASIC FINANCIAL
STATEMENTS
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12
San Dieguito Water District
Statement of Net Position
June 30, 2021
(with summarized comparative information for the prior year)
2021 2020
ASSETS
Current assets:
Cash and investments (note 3)21,632,360$ $21,143,272
Restricted cash and investments with fiscal agent - 2,435
Interest receivable 55,159 82,667
Accounts receivables, net 2,946,462 2,794,349
Inventories and prepaid 259,560 233,226
Total current assets 24,893,541 24,255,949
Noncurrent assets:
Investment in joint ventures (note 4)25,375,489 19,892,372
Capital assets, not depreciated (note 5)6,829,244 6,860,350
Capital assets, being depreciated, net (note 5)15,261,360 15,732,361
Total noncurrent assets 47,466,093 42,485,083
Total assets 72,359,634 66,741,032
DEFERRED OUTFLOWS OF RESOURCES
OPEB related items (note 10)60,059 69,930
Pension related items (note 9)1,815,089 2,502,847
Total deferred outflows of resources 1,875,148 2,572,777
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities 2,368,148 959,923
Accrued interest payable 51,103 64,069
Deposits 519,476 504,665
Compensated absences - due within one year (note 6)95,536 76,868
Long-term debt - due within one year (note 7)1,240,000 1,190,000
Total current liabilities 4,274,263 2,795,525
Noncurrent liabilities:
Compensated absences - due more than one year (note 6)96,736 80,332
Long-term debt - due in more than one year (note 7)3,488,115 4,802,486
Net OPEB liability (note 10)213,196 225,019
Net pension liability (note 9)7,093,742 7,577,802
Total noncurrent liabilities 10,891,789 12,685,639
Total liabilities 15,166,052 15,481,164
DEFERRED INFLOWS OF RESOURCES
OPEB related items (note 10)34,381 43,199
Pension related items (note 9)744,071 589,305
Total deferred inflows of resources 778,452 632,504
NET POSITION
Net investment in capital assets 17,362,489 16,600,225
Restricted - 2,435
Unrestricted 40,927,789 36,597,481
Total net position 58,290,278$ 53,200,141$
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, 2021
(with summarized comparative information for the prior year)
2021 2020
OPERATING REVENUES
Charges for services 18,978,184$ 16,783,363$
Interfund revenues 58,930 51,903
Other revenue 42,644 20,340
Total operating revenues 19,079,758 16,855,606
OPERATING EXPENSES
Source of supply 6,557,383 5,495,963
General operations and maintenance 7,043,472 6,494,446
Facility operations and maintenance 2,886,039 2,406,285
Depreciation 757,346 805,350
Insurance and claims 69,482 29,411
Total operating expenses 17,313,722 15,231,455
NET OPERATING INCOME (LOSS)1,766,036 1,624,151
NONOPERATING REVENUES (EXPENSES)
Property taxes 1,227,621 1,159,681
Investment earnings 35,766 742,550
Rental income 123,368 110,176
Nonoperating revenue 377,845 -
Increase (decrease) in investment in joint ventures 1,295,329 (1,025,142)
Amortization of bond premium 74,372 74,372
Interest expense (198,800) (247,063)
Total nonoperating revenues (expenses)2,935,501 814,574
INCOME BEFORE CAPITAL CONTRIBUTIONS 4,701,537 2,438,725
CAPITAL CONTRIBUTIONS
Contributed capital assets 203,800 83,044
Connection fees 184,800 168,300
Total capital contributions 388,600 251,344
CHANGES IN NET POSITION 5,090,137 2,690,069
NET POSITION:
Beginning of year 53,200,141 50,510,072
End of year 58,290,278$ 53,200,141$
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, 2021
(with summarized comparative information for the prior year)
2021 2020
Cash flows from operating activities:
Receipts from users 18,840,882$ 16,312,437$
Receipts from interfund charges 58,930 51,903
Payments to employees (3,633,573) (3,034,505)
Payments to suppliers for goods and services (11,158,146) (11,892,360)
Other operating revenues 42,644 20,340
Net cash provided by operating activities 4,150,737 1,457,815
Cash flows from noncapital financing activities:
Receipts from other income 377,845 -
Receipts from rental income 123,368 -
Receipts from property taxes 1,227,621 1,159,682
Net cash provided by noncapital financing activities 1,728,834 1,159,682
Cash flows from capital and related financing activities:
Acquisition of capital assets (51,439) (50,215)
Capital contributions 184,800 168,300
Principal payments on bonds and note payable (1,190,000) (1,135,000)
Interest payments on bonds and note payable (211,765) (260,119)
Capital related payments to R.E. Badger Filtration Plant (4,187,788) (282,309)
Net cash (used in) capital and related financing activities (5,456,192) (1,559,343)
Cash flows from investing activities:
Investment income received 63,274 659,883
Net cash provided by investing activities 63,274 659,883
Net increase (decrease) in cash and cash equivalents 486,653 1,718,037
Cash and cash equivalents, beginning of year 21,145,707 19,427,670
Cash and cash equivalents, end of year 21,632,360$ 21,145,707$
Reconciliation of cash and cash equivalents to the
Statements of Net Position:
Current assets:
Cash and investments 21,632,360$ 21,143,272$
Restricted cash and investments with fiscal agent - 2,435
Total cash and cash equivalents 21,632,360$ 21,145,707$
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, 2021
(with summarized comparative information for the prior year)
2021 2020
Reconciliation of operating income to net cash provided
by operating activities:
Operating income 1,766,036$ 1,734,327$
Adjustments to reconcile operating income
to net cash provided by operating activities:
Depreciation 757,346 805,350
Changes in operating assets, deferred outflows of resources,
liabilities, and deferred inflows of resources:
Changes in assets – (increase) decrease:
Accounts receivable (152,113) (581,102)
Inventory and prepaid items (26,334) 3,730
Change in deferred outflows of resources – (increase) decrease:
OPEB related deferred outflows of resources 9,871 (2,947)
Pension related deferred outflows of resources 687,758 (1,049,669)
Changes in liabilities – increase (decrease):
Accounts payable and accrued liabilities 1,408,225 (88,935)
Deposits 14,811 (15,318)
Compensated absences 35,072 9,663
Net OPEB liability (11,823) (62,087)
Net pension liability (484,060) 504,751
Change in deferred inflows of resources – increase (decrease):
OPEB-related deferred inflows (8,818) 33,904
Pension-related deferred inflows 154,766 166,148
Net cash provided by operating activities 4,150,737$ 1,457,815$
Noncash capital and related financing activities:
Amortization of original issue premium 74,372$ 74,372$
Donation of capital assets 203,800 83,044
Total noncash capital and related financing activities 278,172$ 157,416$
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, 2021
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 susceptible to accrual and 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, 2021
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
are 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.
18
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2021
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, 2021
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, 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, 2019
Measurement Date June 30, 2020
Measurement Period July 1, 2019 to June 30, 2020
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, 2020
Measurement Period July 1, 2019 to June 30, 2020
20
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2021
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, 2021
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
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, 2021:
Fair Measurement
Value Input
Cash on ha nd 300$ Uncatego rized
City o f Encinitas pooled investments f und 21,632,060 Uncatego rized
Total cash and investments 21,632,360$
Authorized Investments
The District’s investments are managed by the City. All of the District’s cash, except investments held by
fiscal agents, are invested in the City Pool. The District has an equity interest in the City Pool equal to its
proportionate share of invested cash. The District does not have a separate investment policy; its cash is
invested according to the City of Encinitas’adopted investment policy.
The table below identifies the allowable investment types authorized by the California Government Code
(the “Gov’t Code”) and the City’s adopted Investment Policy (the “Investment Policy”). The table also
identifies certain restrictions related to interest rate risk and concentration of credit risk.
The Investment Policy restricts the City Treasurer to investing in only the types of investments listed
herein, which is more restrictive than the Gov’t Code, as the City’s policy does not allow certain
investments to be purchased which are permitted under the Gov’t Code.
22
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2021
Note 3 –Cash and Investments (Continued)
Authorized Investments (Continued)
Authorized Maximum Maximum
by Investment Maximum Percentage of Investment in
Authorized Investment Type Policy Maturity Portfolio One Issuer
Repurchased Agreements-Overnight "Sweep"Yes 1 year 20%No Limit
Local Agency Investment Fund (LAIF)Yes N/A 30%State Law Maximum
Other Governmental Managed Investment Pools Yes N/A 30%10% per pool
Money Market Mutual Funds Yes N/A 20%10%
Certificates of Deposit Yes 5 years 10%5%
Negotiable Certificates of Deposit Yes 5 years 10%5%
Bankers' Acceptances Yes 180 days 10%5%
U.S. Treasury Bills, Notes and Bonds Yes 5 years 50%No Limit
U.S. Government Sponsored Enterprises Yes 5 years 60%25%
Commercial Paper Yes 270 days 25%5%
Commercial Medium-Term Notes Yes 5 years 15%5%
Guaranteed Investment Contracts Yes N/A 10%5%
Demand Deposits - Non-Interest Bearing Yes N/A 2%2%
Demand Deposits - Interest Bearing Yes N/A 20%10%
Asset Backed Securities Yes N/A 10%5%
Supranationals Yes 5 years 20%15%
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 $1.00 and the funds can be withdrawn at any time without prior
notice. Any changes to the fair value of this money market mutual fund are allocated on a monthly basis
to each participant, as a part of their monthly distribution.
Disclosures Relating to Credit Risk
Credit risk is defined as the risk that an issuer of an investment will not fulfill its obligation to the holder of
the investment. This is measured by the assignment of a rating by a nationally recognized statistical
organization. Presented below is the minimum rating required by (where applicable) the Government
Code, the Investment Policy, or the debt agreements, and the actual rating as of year-end for each
investment type.
23
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2021
Note 3 –Cash and Investments (Continued)
Disclosures Relating to Credit Risk (Continued)
Credit ratings as of June 30, 2021 were as follows:
Mini mum
Legal
Investment Type Totals Rating AAA Not Rated
Investment in City Pool 21,632,060$ N/A -$ 21,632,060$
The investment policy contains limitations on the amount that can be invested in any one issuer beyond
those stipulated in the Government Code.
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, 2021,the District had no deposits with financial institutions or any other parties that would
subject the District to custodial credit risk.
Note 4 –Investment in Joint Ventures
At June 30,2021 investment in joint ventures consisted of the following:
R.E. Badger Filtration Plant 24,731,437$
R.E. Badger Water Facilities Financing Authority 644,052
Total investment in other agencies 25,375,489$
24
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2021
Note 4 –Investment in Joint Ventures (Continued)
R.E. Badger Filtration Plant
In 1967, the District entered into an agreement with the Santa Fe Irrigation District (Santa Fe) for the joint
ownership,maintenance, operation, and use of a water treatment plant and various facilities for the
storage and delivery of potable water. During the ensuing years, the parties have added various facilities
and improvements, which are owned in different percentages depending on the type of facility and the
agreements in place.The ownership percentages of the Joint Facilities are described below:
San Dieguito Santa Fe
Facilities Water District Irrigatio n District
Filt ratio n Plant 45%55%
Filt ered Water Reservo ir (13 milli on gallo ns )31%69%
Joint Pipeline (Old Line)39%61%
San Dieguito Reservo ir 42%58%
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, 2021, the District made
capital contributions of $4,667,047 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, 2021 was
$24,731,437.
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, 2021, the District’s share of operations and maintenance costs for the Joint Facilities was
$2,886,039.
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, 2021 was $644,052.
25
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2021
Note 5 –Capital Assets
Summary of changes in capital assets for the year ended June 30, 2021 is as follows:
Balance Balance
June 30, 2020*Additions Deletions Transfers June 30, 2021
Capital assets, not depreciated
Land 3,450,544$ -$ -$ -$ 3,450,544$
Public works facilities right of use 3,378,700 - - - 3,378,700
Construction in progress 31,106 - (31,106) - -
Total capital assets, not depreciated 6,860,350 - (31,106) - 6,829,244
Capital assets, being depreciated
Structures and improvements 11,007 - - - 11,007
Machinery, equipment, and vehicles 2,675,210 82,547 - - 2,757,757
Distribution system 42,583,853 203,800 (3,939,542)- 38,848,111
Capacity rights 323,190 - - - 323,190
Total capital assets, being depreciated 45,593,260 286,347 (3,939,542)- 41,940,065
Less accumulated depreciation
Structures and improvements (8,898) (1,101) - - (9,999)
Machinery and equipment (2,235,798) (130,423) - - (2,366,221)
Distribution system (27,458,380) (619,358) 3,939,542 - (24,138,196)
Capacity rights (157,825) (6,464) - - (164,289)
Total accumulated depreciation (29,860,899) (757,346) 3,939,542 - (26,678,705)
Total capital assets, being depreciated, net 15,732,361 (470,999) - - 15,261,360
Total capital assets, net 22,592,711$ (470,999)$ (31,106)$ -$ 22,090,604$
* Certain reclassifications were made to prior year balances to conform to current year presentation.
Note 6 –Compensated Absences
Summary of changes in compensated absences for the year ended June 30, 2021 is as follows:
Balanc e Balanc e Due within Due In More
June 30, 2020 Ad ditions Deletions June 30, 2021 One Year Than O ne Year
157,200$ 304,932$ (269,860)$ 192,272$ 95,536$ 96,736$
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, 2021.
26
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2021
Note 7 –Long-Term Debt
A summary of changes in long-term debt for the year ended June 30, 2021, is as follows:
Balance Balance Due within Due In More
June 30, 2020 Additions Deletions June 30, 2021 One Year Than One Year
2007 Note Payable to R.E. Badger
Water Facilities Financing Authority 2,855,000$ -$ (525,000)$ 2,330,000$ 545,000$ 1,785,000$
2014 Water Revenue Bond s 2,840,000 - (665,000) 2,175,000 695,000 1,480,000
add: o ri ginal issue premium 297,487 - (74,372) 223,115 - 223,115
Total long-term debt 5,992,486$ -$ (1,264,372)$ 4,728,115$ 1,240,000$ 3,488,115$
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 $620,000. Interest is due and payable semi-annually at rates ranging from 3.5
percent to 4.5 percent. The District accounts for its share of the bonds as a note payable to the Financing
Authority.
Annual debt service requirements for the 2007 Note Payable to the R.E. Badger Water Facilities Financing
Authority outstanding at June 30, 2021 are as follows:
Year End ing
June 30 Principal Interest Total
2022 545,000$ 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 2,330,000$ 210,304$ 2,540,304$
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
$755,000. Interest is due and payable semi-annually at rates ranging from 3.0 percent to 4.0 percent.The
bonds are subject to federal arbitrage requirements.
27
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2021
Note 7 –Long-Term Debt (Continued)
The annual debt service requirements for the 2014 Water Revenue Refunding Bonds outstanding at
June 30, 2021 are as follows:
Ye ar End ing
June 30 Principal Interest Total
2022 695,000$ 73,100$ 768,100$
2023 725,000 44,700 769,700
2024 755,000 15,100 770,100
Total 2,175,000$ 132,900$ 2,307,900$
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 30,2021,principal
and interest paid was $1,401,766 net revenues available for debt service were $4,538,392 resulting in
debt service coverage ratio of 324 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. The self-insured retention level is $10,000.As of June 30, 2021,in the opinion of
the District’s management and general counsel, there were no material claims requiring 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.
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.
28
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2021
Note 9 –Public Employees Retirement System –CalPERS (Continued)
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 30,2020,the following employees were covered by the benefit terms for the
Plan:
Active employees 22
Inactive employees or beneficiaries currently
receiving benefits 33
Inactive employees entitled to, but not yet
receiving 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.
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.
29
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2021
Note 9 –Public Employees Retirement System –CalPERS (Continued)
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, 2021 for Tier 1,Tier 2,and PEPRA employees were 14.194 percent, 8.794 percent,and 7.732
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 30,2021,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
Pe nsion Fiduciary Pe nsion
Liability Ne t Position Liability/(Asse t)
Balanc e at: June 30, 2019 (valuation date)23,722,943$ 16,145,141$ 7,577,802$
Balanc e at: June 30, 2020 (measurem ent date)24,274,921 17,181,179 7,093,742
Net c hanges during 2019-20 551,978$ 1,036,038$ (484,060)$
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, 2020, 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, 2019 rolled forward to June 30, 2020 using standard update procedures. The
District’s proportion of the net pension liability was based on a projection of the District’s long-term share
of contributions to the pension plans relative to the projected contributions of all participating employers,
actuarially determined.
The District’s proportionate share of the net pension liability for each SDWD Plan as of the measurement
date June 30 was as follows:
Proportion June 30, 2020 0.18923%
Proportion June 30, 2021 0.16817%
Change - Inc reas e (Decreas e)-0.02106%
30
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2021
Note 9 –Public Employees Retirement System –CalPERS (Continued)
The June 30, 2020 total pension liabilities were based on the following actuarial methods and
assumptions:
Actuarial Co st M ethod
No. 68
Actuarial Assumpti ons:
Discount Rate 7.15%
Inflatio n
Salary Increases
Mortality Rate Table1
Post Retirement Benef it Increase
Entry A ge No rmal in acco rdance with the requirements o f GA SB
2.50%
Varies by Entry Age and Service
Derived using CalPERS' Membership Data f or all fund s
The le sser of cont ract COLA or 2.50%unt il Purchasing Power
Protectio n Allo wa nc e floor on purchasing po we r applies,2.50%
thereafter
1 The mortality table was developed based on CalPERS-specific data. The table includes 15 years of
mortality improvements using Society of Actuaries 90 percent of Scale MP-2016. For more details on this
table, please refer to the December 2017 CalPERS Experience (based on CalPERS demographic data
from 1997-2015) that can be found on the CalPERS website.
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.
The long-term expected rate of return on pension plan investments was determined using a building-block
method in which expected future real rates of return (expected returns, net of pension plan investment
expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term
and long-term market return expectations as well as the expected pension fund cash flows.Using
historical and forecasted information for all the funds’ asset classes, expected compound
(geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+
years) using a building-block approach. Using the expected nominal returns for both short-term and
long-term, the present value of benefits was calculated for each fund. The expected rate of return
was set by calculating the 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.
31
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2021
Note 9 –Public Employees Retirement System –CalPERS (Continued)
The expected real rates of return by asset class are as follows:
Assumed
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 income is includ ed in Global Debt Securities; Liquidity is includ ed in Short-term investments;
Inflatio n assets are includ ed in both 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 inflation 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:
Discount Rate - 1%Current D is count Discount Rate + 1%
(6.15%)Rate (7.15%)(8.15%)
Net Pension Liability 10,324,142$ 7,093,742$ 4,424,564$
Plan's Net Pension Liabilit y/(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, 2021, the District recognized pension expense of $975,950 for the SDWD
Plan.
32
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2021
Note 9 –Public Employees Retirement System –CalPERS (Continued)
At June 30, 2021,the District reported deferred outflows of resources and deferred inflows of resources
related to pensions from the following sources:
Deferred Deferred
Outflow s Inflow s
of Resources of Resources
Co nt ribution made af ter the measurement date 617,487$ -$
Dif ference between expected and actual
experience 365,562 -
Changes of assumptio ns - (50,595)
Net dif ference between pro jected and actual
earnings o n pensio n plan investments 210,731 -
Dif ference between employer's actual co nt ributions
and propo rtio na te share o f cont ri butio ns 599,448 (62,330)
Adjus tments due to dif ference in pro po rtio ns 21,861 (631,146)
Total 1,815,089$ (744,071)$
The $617,487 reported as deferred outflows of resources related to contributions subsequent to the
measurement date will be recognized as a reduction of the net pension liability in the fiscal year ended
June 30, 2022. Other amounts reported as deferred outflows of resources and deferred inflows of
resources related to pensions will be recognized as pension expense as follows:
Deferred
Fiscal Year Outflow s/(Inflow s)
Ended June 30 of Resources
2022 (1,085)$
2023 193,277
2024 160,267
2025 101,072
2026 -
Thereaf ter -
453,531$
33
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2021
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, 2021
Note 10 –Other Postemployment Benefits (Continued)
Net OPEB Liability
SDWD’s net OPEB liability was measured as of June 30, 2020.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, 2021 was:
Total OPEB Plan Fiduciary Net OPE B
Liabilit y Net Position Liability/(Asset)
(a)(b)(c) = (a) - (b)
Balanc e at June 30, 2020 500,683$ 275,664$ 225,019$
(M easurement Date: June 30, 2019)
Changes Reco gnized f or the M easurement Perio d:
Service cost 21,235 - 21,235
Interest o n the total OPEB liability 35,691 - 35,691
Co nt ributions fro m the employer - 53,542 (53,542)
Net investment income, net of administrative expense - 11,264 (11,264)
Difference between expected and actual experience (4,100) - (4,100)
Changes in assumptio ns - - -
Benef it payments, includ ing ref und s o f employee
cont ri butions (24,514) (24,514) -
Administrative expense - (157) 157
Net Changes 28,312 40,135 (11,823)
Balanc e at June 30, 2021 528,995$ 315,799$ 213,196$
(M easurement Date: June 30, 2020)
Increase (Decrease)
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 Rat e 7.00%
In flation 2.50%
Wage Inflation 2.75% per annum , in aggregate
In ves tm ent R ate of Return
He althc are Trend R ate
Entry Age Nor mal
7.00%, as suming ac tuarially determ ined c ontributions funded into
CERBT Inves tm ent Strategy 1.
Based on ac tual rate for 2021 and decreas ing in 2022 from 6.00% to
5.00% in 2024 and thereafter.
35
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2021
Note 10 –Other Postemployment Benefits (Continued)
Discount Rate
The long-term expected rate of return on OPEB plan investment is assumed to be 7.00%. This was
determined using a building block method in which expected future real rates of return (expected
returns, net of OPEB plan investment expense and inflation) are developed for each major asset class.
These expected future real rates of return are then combined to produce the long-term expected rate
of return by weighting them based on the target asset allocation percentage and adding in expected
inflation (2.75%). The best estimates of arithmetic real rates of return for each major asset class
included in the OPEB Plan’s target asset allocation as of the measurement date June 30, 2020 are
summarized in the following table:
Lo ng -T erm
Target Expected
Asset Class Allo catio n Real Return*
Global equity 59.00%5.50%
Global debt security 25.00%2.35%
Inflatio n assets 5.00%1.50%
Co mmo dities 3.00%1.75%
Real estate investment trusts 8.00%3.65%
100.00%
* Lo ng -term expected rate o f return is 7.00 percent
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate
The following presents the net OPEB liability of SDWD,as well as what SDWD’s net OPEB liability
would be if it were calculated using a discount rate 1-percentage point lower (6.00 percent) or 1-
percentage point higher (8.00 percent) than the current discount rate:
Discount Rate - 1%Current D is count Discount Rate + 1%
(6.00%)Rate (7.00%)(8.00%)
Net OPEB Liability 273,049$ 213,196$ 162,977$
36
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2021
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 or 1-
percentage point higher than the current healthcare cost trend rates:
1% Decrease Current Rate 1% increase
5.00%6.00%7.00%
decreasing to 4.00%decreasing to 5.00%decreasing to 6.00%
Net OPEB Liability 153,171$ 213,196$ 285,905$
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, 2021, SDWD recognized OPEB expense of $29,428 for the SDWD Plan. At June 30, 2021,
SDWD reported deferred outflows of resources and deferred inflows of resources related to OPEB
from the following sources:
De fe rred Defe rre d
Outflows Inflows
of Resource s of Re sour ce s
OPEB c ontribution m ade after the m eas urem ent period 55,006$ -$
Changes of as sumptions 1,317 -
Differenc e betw een expec ted and ac tual experienc e (34,381)
Net differenc e betw een projec ted and ac tual earning on
OPEB plan inves tm ents 3,736 -
Total 60,059$ (34,381)$
The $55,006 reported as deferred outflows of resources related to contributions subsequent to the
measurement date will be recognized as a reduction of the net OPEB liability in the fiscal year ended
June 30, 2022.Other amounts reported as deferred outflows of resources and deferred inflows of
resources related to OPEB will be recognized as OPEB expense as follows:
Me asurement Deferred
Perio d Ended Outflow s (Inflow s)
June 30 of Resources
2022 (7,363)$
2023 (5,598)
2024 (4,600)
2025 (4,691)
2026 (6,492)
Thereaf ter (584)
(29,328)$ 37
San Dieguito Water District
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2021
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 30,2021 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
San Dieguito Water District
Required Supplementary Information
For the Year Ended June 30, 2021
Measurement period 2019-20 2018-19 2017-18
Plan's proportion of the net pension liability 0.16817%0.18923%0.18768%
Plan's proportionate share of the net pension liability 7,093,742$ 7,577,802$ 7,073,051$
Plan's covered payroll 1,901,202$ 1,887,782$ $1,918,865
373.12%401.41%368.61%
Plan's fiduciary net position 17,181,179$ 16,145,141$ 16,099,922$
70.78%68.06%69.48%
1,581,186$ 585,749$ 504,492$
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 seven years of information are
shown.
There were no changes in 2020 and 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.
Plan's proportionate share of aggregate employer
contributions
40
San Dieguito Water District
Required Supplementary Information
For the Year Ended June 30, 2021
Note 1 - Schedule of Proportionate Share of the Net Pension Liability and Related Ratios (Continued)
Measurement period 2016-17 2015-16 2014-15 2013-14
Plan's proportion of the net pension liability 0.18116%0.18103%0.18296%0.06074%
Plan's proportionate share of the net pension liability 7,141,232$ 6,288,631$ 5,019,493$ 3,779,285$
Plan's covered payroll $1,862,975 1,808,714$ 1,756,033$ 1,712,639$
383.32%347.69%285.84%220.67%
Plan's fiduciary net position 15,991,467$ 15,586,708$ 16,358,655$ 18,489,458$
69.13%71.25%76.52%83.03%
472,819$ 356,509$ 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:
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
Last Ten Fiscal Years*
*Fiscal Year 2014-15 was the first year of implementation; therefore, only seven years of information are shown.
There were no changes in 2020 and 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.
Plan's proportionate share of aggregate employer
contributions
41
San Dieguito Water District
Required Supplementary Information
For the Year Ended June 30, 2021
Note 2 - Schedule of Contributions - Pension
Fiscal Year 2020-21 2019-20 2018-19 2017-18
Contractually determined contribution (actuarially
determined) $ 617,487 $ 1,581,186 585,749$ 504,492$
Contributions in relation to the actuarially determined
contributions (617,487) (1,581,186)(585,749) (504,492)
Contribution deficiency (excess)-$ -$ -$ -$
Covered payroll 1,853,964$ 1,901,202$ 1,887,782$ 1,918,865$
Contributions as a percentage of covered
payroll 33.31%83.17%31.03%26.29%
Notes to Schedule
Fiscal Year: June 30, 2021
Valuation Date: June 30, 2018
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 2.50%
Projected salary increases Varies by entry age and service
Payroll growth 2.75%
Discount rate 7.00%
*Fiscal Year 2014-15 was the first year of implementation; therefore, only seven years of information are shown.
Last Ten Fiscal Years*
42
San Dieguito Water District
Required Supplementary Information
For the Year Ended June 30, 2021
Note 2 - Schedule of Contributions - Pension (Continued)
Fiscal Year 2016-17 2015-16 2014-15
Contractually determined contribution (actuarially
determined)472,819$ 356,509$ 271,845$
Contributions in relation to the actuarially determined
contributions (472,819) (356,509) (271,845)
Contribution deficiency (excess)-$ -$ -$
Covered payroll 1,862,975$ 1,808,714$ 1,756,033$
Contributions as a percentage of covered
payroll 25.38%19.71%15.48%
Notes to Schedule
Fiscal Year: June 30, 2021
Valuation Date: June 30, 2018
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 2.50%
Projected salary increases Varies by entry age and service
Payroll growth 2.75%
Discount rate 7.00%
*Fiscal Year 2014-15 was the first year of implementation; therefore, only seven years of information are shown.
Last Ten Fiscal Years*
43
San Dieguito Water District
Required Supplementary Information
For the Year Ended June 30, 2021
Measurement Period 2019-20 2018-19 2017-18 2016-17
Total OPEB liability
Service cost 21,235$ 14,633$ 14,241$ 13,309$
Interest 35,691 36,301 34,637 33,225
Differences between expected and actual experience (4,100) (43,215) - -
Changes of assumptions - 1,843 - -
Benefit payments, including refunds of member contributions (24,514) (25,651) (25,346) (29,268)
Net change in total OPEB liability 28,312 (16,089) 23,532 17,266
Total OPEB liability - beginning 500,683 516,772 493,240 475,974
Total OPEB liability - ending (a)528,995$ 500,683$ 516,772$ 493,240$
OPEB fiduciary net position
Contributions - employer 53,542$ 55,068$ 59,205$ 63,332$
Net investment income 11,264 16,640 18,590 18,770
Benefit payments, including refunds of member contributions (24,514) (25,651) (25,346) (29,268)
Administrative expense (157) (59) (358) (95)
Net change in plan fiduciary net position 40,135 45,998 52,091 52,739
Plan fiduciary net position - beginning 275,664 229,666 177,575 124,836
Plan fiduciary net position - ending (b)315,799 275,664 229,666 177,575
Plan net OPEB liability - ending (a) - (b)213,196$ 225,019$ 287,106$ 315,665$
Plan fiduciary net position as a percentage of the total OPEB liability 59.70%55.06%44.44%36.00%
Covered-employee payroll 2,046,974$ 1,903,385$ 1,978,669$ 1,802,043$
Plan net OPEB liability as a percentage of covered-employee payroll 10.42%11.82%14.51%17.52%
* Fiscal Year 2017-18 was the first year of implementation; therefore, only four years of information are shown.
Note 3 - Schedule of Changes in Net OPEB Liability and Related Ratios
Last Ten Fiscal Years*
44
San Dieguito Water District
Required Supplementary Information
For the Year Ended June 30, 2021
Fiscal Year 2020-21 2019-20 2018-19 2017-18
Actuarially determined contribution (ADC)48,689$ 48,200$ 53,291$ 52,780$
Contributions in relation to the ADC (55,006) (68,350) (66,983) (63,332)
Contribution deficiency (excess)(6,317)$ (20,150)$ (13,692)$ (10,552)$
Covered employee payroll 2,017,862$ 2,046,974$ 1,903,385$ 1,978,669$
Contributions as a percentage of covered
employee payroll 2.73%3.34%3.52%3.20%
Notes to Schedule
Actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year
2020-21 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 7.00% per annum
* Fiscal Year 2017-18 was the first year of implementation; therefore, only four years of information are shown.
Note 4 - Schedule of Contributions - OPEB
Last Ten Fiscal Years*
45
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46
San Dieguito Water District, 505 So. Vulcan Ave., Encinitas, CA. 92024 www.encinitasca.gov
STATISTICAL
SECTION
47
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48
Net Position by Components
Summary of Operational Data
The following tables are being presented as supplementary information based on
requirements for bonds issued by SDWD for continuing bond disclosure certificate.
49
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, 2021
Water 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, 2021
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
50
Meter
Fiscal Potable Percentage Availability Percent
Year Water Sales Change (3)Charge Change (3)
2021 12,667,405$ 15.7%4,352,715$ 4.6%
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%
(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
2021 840,143$ 30.4%104,023$ 6.8%
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
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
51
Fiscal Local Imported Total Recycled Total
Year Water Water Potable Water Production
2021 2,392 3,820 6,212 703 6,916
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
Fiscal Percent Percent
Year Potable Change Recycled Change
2021 5,832 10.5%703 19.8%
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%
distribution system and/or water pumped or used through the fire distribution system.
Source: San Dieguito Water District
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.
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
52
Acre-Feet Percent of
Customer Description Sold Water Sold
Agriculture 197 3.4%
Commercial 471 8.1%
Construction 57 1.0%
Government 20 0.3%
Landscaping 393 6.7%
Multi-Family Residential 1,209 20.7%
Public 105 1.8%
Single-Family Residential 3,379 57.9%
Total Sales 5,832 100.0%
Source: San Dieguito Water District
Fiscal Percent Percent
Years Potable Increase Recycled Increase
2021 12,127 0.3%101 3.1%
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%
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, 2021
Table 8
San Dieguito Water District
53
San Dieguito Water District
Historical Debt Service Coverage
Last Ten Fiscal Years
2021 2020 2019 2018 2017
Revenues:
Operating revenues - including connection fees 19,255,799$ 17,121,648$ 15,961,300$ 17,219,494$ 15,142,544$
Non-operating revenues 1,764,599 1,902,231 2,307,498 1,092,337 1,048,764
Gross Revenues 21,020,398 19,023,879 18,268,798 18,311,831 16,191,308
Total Operating & Non-Operating Expenses 16,142,824 16,429,284 16,541,314 15,198,929 14,263,288
Net Income 4,877,574 2,594,595 1,727,484 3,112,902 1,928,020
Add:
Interest expense 198,800 247,063 292,354 328,050 366,740
Depreciation and amortization expense (1)(537,982) 1,830,493 2,208,775 1,848,913 978,627
Net Revenues Available for Debt Service 4,538,392 4,672,150 4,228,613 5,289,865 3,273,387
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 111,466 133,619 152,919 171,619 191,244
2007 Note Payable to Financing Authority - Principal Payments 525,000 490,000 475,000 455,000 440,000
2014 Water Revenue Refunding Bonds - Interest Charges 100,300 126,500 148,775 167,225 185,075
2014 Water Revenue Refunding Bonds - Principal Payments 665,000 645,000 625,000 605,000 585,000
Total Debt Service 1,401,766$ 1,395,119$ 1,401,694$ 1,398,844$ 1,401,319$
Coverage by Net Revenues Available for Debt Service (2)324%335%302%378%234%
(1) Depreciation and amortization includes the change in Investment in Joint Ventures from other agencies.
San Dieguito Water District
(2) 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
San Dieguito Water District
Historical Debt Service Coverage (Continued)
Last Ten Fiscal Years
2016 2015 2014 2013 2012
Revenues:
Operating revenues - including connection fees 14,852,061$ 15,152,433$ 15,715,575$ 13,789,636$ 13,170,422$
Non-operating revenues 1,013,297 927,526 827,676 869,568 813,610
Gross Revenues 15,865,358 16,079,959 16,543,251 14,659,204 13,984,032
Total Operating & Non-Operating Expenses 13,800,671 15,481,543 14,066,485 12,198,228 12,448,911
Net Income 2,064,687 598,416 2,476,766 2,460,976 1,535,121
Add:
Interest expense 412,108 475,775 622,075 657,963 698,908
Depreciation and amortization expense (1)1,514,716 2,271,907 1,490,806 1,476,044 1,294,904
Net Revenues Available for Debt Service 3,991,511 3,346,098 4,589,647 4,594,983 3,528,933
Less: Debt Service Paid
2004 Water Revenue Refunding Bonds - Interest Charges - 144,720 380,731 408,906 433,950
2004 Water Revenue Refunding Bonds - Principal Payments - 665,000 640,000 615,000 595,000
2007 Note Payable to Financing Authority - Interest Charges 211,144 224,994 241,344 256,744 270,352
2007 Note Payable to Financing Authority - Principal Payments 415,000 405,000 385,000 375,000 365,000
2014 Water Revenue Refunding Bonds - Interest Charges 202,400 106,061 - - -
2014 Water Revenue Refunding Bonds - Principal Payments 570,000 - - - -
Total Debt Service 1,398,544$ 1,545,775$ 1,647,075$ 1,655,650$ 1,664,302$
Coverage by Net Revenues Available for Debt Service (2)285%216%279%278%212%
(1) Depreciation and amortization includes the change in Investment in Joint Ventures from other agencies.
San Dieguito Water District
(2) Debt service coverage requirement is a minimum 115 percent of net revenue including connection fees. The above schedules include connection
fees in operating revenues.
55