HomeMy WebLinkAboutBUDGET AND FINANCE AGENDA 09-30-13Jl Central Contra Costa Sanitary District
SPECIAL MEETING OF THE
CENTRAL CONTRA COSTA
SANITARY DISTRICT
BUDGET AND FINANCE COMMITTEE
Chair McGill
Member Nejedly
Monday, September 30, 2013
3:00 p.m.
Middle Conference Room
1470 Executive Drive, Second Floor
Concord, California
INFORMATION FOR THE PUBLIC
ADDRESSING THE COMMITTEE ON AN ITEM ON THE AGENDA
BOARD OF DIRECTORS:
JAMES A. NEJEDLY
President
DA V7D R. YVILLIAMS
President Pro Tem
PA UL H. CA USEY
MICHAEL R. MCGILL
TAD J. PILECKI
PHONE: (925) 228 -9500
FAX.- (925) 676 -7211
www.centralsan.org
Anyone wishing to address the Committee on an item listed on the agenda will be heard when the
Committee Chair calls for comments from the audience. The Chair may specify the number of minutes
each person will be permitted to speak based on the number of persons wishing to speak and the time
available. After the public has commented, the item is closed to further public comment and brought to the
Committee for discussion. There is no further comment permitted from the audience unless invited by the
Committee.
ADDRESSING THE COMMITTEE ON AN ITEM NOT ON THE AGENDA
In accordance with state law, the Committee is prohibited from discussing items not calendared on the
agenda. You may address the Committee on any items not listed on the agenda, and which are within their
jurisdiction, under PUBLIC COMMENTS. Matters brought up which are not on the agenda may be
referred to staff for action or calendared on a future agenda.
AGENDA REPORTS
Supporting materials on Committee agenda items are available for public review at the Reception Desk,
4849 Imhoff Place, Martinez. Reports or information relating to agenda items distributed within 72 hours
of the meeting to a majority of the Committee are also available for public inspection at the Reception
Desk. During the meeting, information and supporting materials are available in the Conference Room.
AMERICANS WITH DISABILITIES ACT
In accordance with the Americans With Disabilities Act and state law, it is the policy of the Central Contra
Costa Sanitary District to offer its public meetings in a manner that is readily accessible to everyone,
including those with disabilities. If you are disabled and require special accommodations to participate,
please contact the Secretary of the District at least 48 hours in advance of the meeting at (925) 229 -7303.
Budget and Finance Committee
September 30, 2013
Page 2
1. Call Meeting to Order
2. Public Comments
3. Risk Management
*a. Review Loss Control Report and discuss outstanding claims
Staff Recommendation: Review the report, discuss outstanding
claims and provide direction if needed.
*b. Review Legal Expenditure Summary
Staff Recommendation: Review Legal Expenditure Summary.
*4. Review the draft audited financial statements for the fiscal year ended
June 30, 2013 (Vikki Rodriguez of Maze & Associates will be present)
Staff Recommendation: Recommend Board acceptance of the audited
financial statements for the fiscal year ended June 30, 2013, scheduled for
the October 17, 2013 Board meeting.
5. Receive status update on cleanup of unclaimed homeowner and contractor
deposits (Item in 6.a.3) Board Binder)
Staff Recommendation: Receive the update.
*6. Review overhead components and discuss possible revisions to the annual
calculation
Staff Recommendation: Review and provide input to staff.
*7. Review the District's reserves using the current cash reserve practice
Staff Recommendation: Review and provide input to staff.
8. Review August 2013 Financial Statements and Investment Reports (Item 4.c. in
Board Binder)
Staff Recommendation: Review and recommend Board approval.
Budget and Finance Committee
September 30, 2013
Page 3
9. Review Expenditures (Item 4.b. in Board Binder)
Staff Recommendation: Review and recommend Board approval
10. Announcements
11. Suggestions for future agenda items
12. Adjournment
* Attachment
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4.
CENTRAL CONTRA COSTA SANITARY DISTRICT
BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
Review Draft 9/24/13 4:00 PM
CENTRAL CONTRA COSTA SANITARY DISTRICT
BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2013
Table of Contents
INTRODUCTORY SECTION
Tableof Contents ............................................................................................ ...............................
i
FINANCIAL SECTION
INDEPENDENTAUDITOR'S REPORT ............................................................. ...............................
l
MANAGEMENT'S DISCUSSION AND ANALYSIS ........................................ ..............................3
BASIC FINANCIAL STATEMENTS
Statementof Net Position ................................................................................... .............................10
Statement of Revenues, Expenses and Changes in Net Position ..................... .............................11
Statementof Cash Flows .................................................................................... .............................12
NOTES TO BASIC FINANCIAL STATEMENTS ............................................ .............................14
SUPPLEMENTARY INFORMATION
Combining Schedule of Net Position —
EnterpriseSub - Funds ................................................................................ .............................39
Combining Schedule of Revenues,
Expenses and Changes in Net Position — Enterprise Sub -Funds ......... ...............................
40
Schedule of Running Expenses, Comparison of Budget and Actual
Expensesby Department ......................................................................... ...............................
41
Running Expense — Schedule of
Supplemental Net Position Analysis ....................................................... ...............................
42
Review Draft 9/24/13 4:47 PM
i
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Central Contra Costa Sanitary District
Martinez, California
Report on Financial Statements
We have audited the accompanying financial statements of the business -type activities of the Central Contra
Costa Sanitary District (District) as of and for the year ended June 30, 2013, 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 the 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 these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor's judgment, including the assessment
of the risks of material misstatement of the financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control relevant to the District's preparation and fair
presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District's internal
control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of significant accounting estimates made by management,
as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the business -type activities of the Central Contra Costa Sanitary District as
of June 30, 2013, and the respective changes in financial position and, where applicable, cash flows thereof
for the year then ended in conformity with accounting principles generally accepted in the United States of
America.
Review Draft 9/24/13 4:00 PM
Emphasis of a Matter
Management adopted the provisions of Governmental Accounting Standards Board Statement No. 63-
Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position,
which became effective during the year ended June 30, 2013 and required certain title changes to the
Statement of Net Position and Statement of Changes in Net Position. See Note 1L to the financial
statements for relevant disclosures.
The emphasis of this matter does not constitute a modification to our opinion.
Other Matters
Required Supplementaty Information
Accounting principles generally accepted in the United States of America require that Management's
Discussion and Analysis be presented to supplement the basic financial statements. Such information,
although not a part of the basic financial statements, is required by the Governmental Accounting Standards
Board, who considers it to be an essential part of financial reporting for placing the basic financial
statements in an appropriate operational, economic or historical context. We have applied certain limited
procedures to the required supplementary information in accordance with auditing standards generally
accepted in the United States of America, which consisted of inquiries of management about the methods of
preparing the information and comparing the information for consistency with management's responses to
our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic
financial statements. We do not express an opinion or provide any assurance on the information because the
limited procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
Other Information
Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively
comprise the District's financial statements as a whole. The Supplementary Information listed in the Table
of Contents is presented for purposes of additional analysis and is not a required part of the financial
statements.
The Supplementary Information is the responsibility of management and was derived from and relates
directly to the underlying accounting and other records used to prepare the financial statements. The
information has been subjected to the auditing procedures applied in the audit of the financial statements and
certain additional procedures, including comparing and reconciling such information directly to the
underlying accounting and other records used to prepare the financial statements or to the financial
statements themselves, and other additional procedures in accordance with auditing standards generally
accepted in the United States of America. In our opinion, the Supplementary Information is fairly stated in
all material respects in relation to the financial statements as a whole.
Pleasant Hill, California
September 18, 2013
Review Draft 9/24/13 4:00 PM
2
MANAGEMENT'S DISCUSSION AND ANALYSIS
r:
This section of the District's annual financial report presents an analysis of the District's financial
performance during the fiscal year ended June 30, 2013. This information is presented in conjunction
with the audited financial statements, which follow this report.
FINANCIAL HIGHLIGHTS
The District's 2012 -13 financial highlights are listed below. These results are discussed in more detail
later in the report.
® The District's total ending net position increased by $9.1 million or 1.45% in 2012 -13 when
compared to fiscal year 2011 -12; when comparing 2012 -13 to 2010 -11, net position have
increased by $12.9 million or 2.07%. This is mainly due to capital project asset additions.
® Total revenues in 2012 -13 increased by $8.8 million or 11.64% when compared to 2011 -12;
when comparing 2012 -13 to 2010 -11, total revenue has increased by $10.9 million or 14.85 %.
The total Sewer Service Charge (SSC) rate increased by 8.8 %; a larger portion of the internal
SSC allocation was shifted from Capital Contributions to Operating Revenues,
Total 2012 -13 expenses increased by $3.1 million or 3.60% compared to 2011 -12; when
comparing 2012 -13 to 2010 -11, total expenses increased by $9.1 million or 11.23 %. This is
mainly due to higher cost of total labor and technical services.
® Capital Contributions decreased in 2012 -13 compared to 2011 -12 by -$0.4 million or - 2.42 %.
Capital Contributions increased by $6.0 million or 65.78% comparing 2012 -13 to 2010 -11. The
decrease in 2012 -13 was due to the SSC rate increase, with more being allocated to Operations
and Maintenance, and higher connection fees when comparing 2012 -13 to 2011 -12. The volatile
housing and construction markets caused swings in connection fee revenue. (Connection fee
revenue of $6,1 million in 2012 -13, $5.7 million in 2011 -12 and $3.5 million in 2010 -11).
OVERVIEW OF THE FINANCIAL STATEMENTS
This annual report includes the management's discussion and analysis report, the independent auditor's
report and the basic financial statements of the District. The financial statements also include notes that
explain information in the financial statements in more detail. This report also contains other
supplementary information in addition to the basic financial statements.
UIRED FINANCIAL STATEMENTS
The Financial Statements of the District report information utilizing methods similar to those used by
private sector companies. These statements offer short and long -term financial information about its
activities.
Recycled Paper
Statement of Net Position — reports the District's current financial resources (short-term
spendable resources) with capital assets and long -term obligations
Statement of Revenues, expenses and Changes in Net Position — reports the District's
operating and non - operating revenues by major source along with operating and non- operating
expenses and capital contributions
® Statement of Cash Flows — reports the District's cash flows from operating activities, non-
capital financing activities, capital and related financing activities, investing activities, and non-
cash activities
STATEMENT OF NET POSITION
The following table shows the condensed statement of net position of the Central Contra Costa Sariifary
District for the past three years:
Condensed Statement of % Increase
Net Position Fiscal Year Ended June 30 (Decrease)
FY 12 -13 FY 12 -13
VS. vs.
2012 -13 2011 -12 2010 -11 FY 11 -12 10 -11
Current Assets
$ 78 006,233
$ 78,506,812
$ 80,407,120
-0.64%
-2.99%
Capital Assets
603,985,469
597,689,744
593,461,791
1.05%
1.77%
Other Non - current Assets
9,454 886
9,332,364
12 456,011
1.31%
- 24.09%
Total Assets
691,446,588
685,528,920
686 324,922
0,86%
- 0.75%
Current Liabilities
11,704,101
11,128,540
10,682,746
5.17%
9.56%
Non - Current Liabilities
44,027,490
47,797,407
52,844,305
-7.89%
- 16.68%
Total Liabilities
55,731,591
58,925,947
63,527,051
-5.42%
- 12.27%
Invested in Capital Assets,
Net of Related Debt
559,523,642
549,462,506
541,613,208
1.83%
3.31%
Restricted - Debt Service
4,730,837
4,663 601
4,612,103
1.44%
2.57%
Unrestricted
71,460,518
72,476,866
76,572,560
-1.40%
-6.68%
Total Net Position
$ 635,714,997
$ 626,602,973
$ 622,797,871
1.45%
2.07%
The total net position of the District increased from $622.8 million in 2010 -11 to $626.6 million in
2011 -12 and to $635.7 million in 2012 -13. The increase in net position over the 3 -year period totals
$12.9 million and is the result of the combination of net income and capital contributions; comparing
2012 -13 to 2011 -12 net position increases by $9,1 million.
By far the largest portion of the District's net position (88.01% percent) reflects its investment in capital
assets (e.g. land, buildings, machinery, equipment, intangible assets, and sewer line infrastructure), less
any related debt used to acquire those assets that are still outstanding. The District uses these capital
assets to provide services to its ratepayers; consequently, these assets are not available for future
spending, Although the District's investment in its capital assets is reported net of debt, it should be
noted that the funds needed to repay this debt must be provided from other sources, since the capital
assets themselves cannot be used to liquidate these liabilities. There is currently $4.7 million restricted
for debt service. The remaining balance of $71.5 million in unrestricted net position may be used to
meet the District's ongoing obligations to its ratepayers and creditors. The unrestricted net position may
also be used for payment of long -term unfunded liabilities.
4
REVIEW OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
The table below shows the condensed statement of revenues, expenses, and changes in net position for
the Central Contra Costa Sanitary District for the past 3 years:
Condensed Statement of
Revenues, Expenses, and % Increase
Changes in Net Position Fiscal Year Ended June 30 (Decrease)
FY 12 -13 FY 12 -13
vs. vs.
2012 -13 2011 -12 2010 -11 FY 11 -12 10 -11
Sewer Service Charges SSC
$ 67,254 405
$ 59,771,237
$ 58 320,822
12.52 %a
15.32%
Other Service Charges and
Miscellaneous
1,828,281
1,845,402
1,575,738
-0.93%
16.03%
Total Operating Revenue
69,082 686
61,616,639
59,896,560
12.12%
15.34%
Property Tax
13,010,477
12,047,169
12,213,624
8.00%
6.52%
Permit & Inspection Fees
1,169,809
903,810
895,825
29.43%
30.58%
Interest and All Other
1,356,574
1,226,598
673,990
10.60%
101.28%
Total Non - Operating
Revenues
15,536,860
14,177,577
13,783,439
9.59%
12.72%
Total Revenues
84,619,546
75,794,216
73,679,999
11.64%
14.85%
Total Labor and Benefits
49,811,218
45,562,430
41,705,131
9.33%
19.44%
Chemicals & Utilities
5,420,789
6,090,408
5,664,360
- 10.99 %
- 4.30%
Repairs and Maintenance
3,151,127
3,068 604
2,972,395
2.69%
6.01%
Professional, Legal and
Outside Services
2,836,638
4,099,876
2,425,612
- 30.81%
16.95%
Materials & Supplies
1,980,314
2,031,401
1,944,767
-2.51%
1.83%
Hauling and Disposal
1,088,294
1,009,137
944,394
7.84%
15.24%
Self- Insurance Expense
2,380,466
810,849
1,003,115
193.58%
137.31%
All Other
472,630
1,612,482
1,575,905
- 70,69%
- 70.01%
Depreciation Expense
21,596,266
21,190,059
20,580,061
1.92%
4.94%
Total Operating Expenses
88,737,742
85,475,246
78,815,740
3.82%
12.59%
Non - Operating Expense -
Interest Expense
1,802,084
1,919,375
2,585,112
- 6.11%
- 30.29%
Total Expenses
90,539,826
87,394,621
81,400 852
3.60%
11.23%
Income Before Capital
Contributions
5,920,280
11,600,405
7,720,853
- 48.96%
- 23,32%
Customer Contributions SSC
8,001,147
8,888,663
5,018,092
-9.98%
59.45%
Contributed Sewer Lines
939,628
792,011
533,616
18.64%
76.09%
Capital Contributions -
Connection Fees
6,091,529
5,724,833
3,515,804
6.41%
73.26%
Total Capital Contributions
15,032,304
15,405,507
9,067,512
-2.42%
65.78%
Change in Net Position
9,112,024
3,805,102
1,346,659
139.47%
576.64%
Beginning Net Position
626,602,973
622,797,871
621,451,212
0.61%
0,83%
Ending Net Position
$ 635,714,997
$ 626,602,973
$ 622,797,871
1.45%
2.07%
In 2012 -13, operating revenues increased by $7.5 million or 12.12% compared to 2011 -12 and increased
by $9.2 million or 15.34% comparing 2012 -13 to 2010 -11. Total non - operating revenue increased in
2012 -13 compared to 2011 -12 by $1.4 million or 9.59% and increased by $1.8 million or 12.72%
comparing 2012 -13 to 2010 -11. The change in total revenue resulted in an increase of $8.8 million or
11.64% comparing 2012 -13 to 2011 -12 and increased by $10.9 million or 14.85% comparing 2012 -13 to
2010 -11. There was an 8.8% SSC rate increase in 2012 -13, 9.65% SSC rate increase in 2011 -12 and no
increase in SSC for 2010 -11. Property Tax revenue increased in 2012 -13 and basically remained flat
during 2011 -12 and 2010 -2011 due to housing values remaining low.
In 2012 -13, total expenses increased by $3.1 million or 3.60% compared to 2011 -12. Comparing 2012-
13 to 2010 -11, total expenses were $9.1 million or 11.23% higher. Increases are mainly due to higher
labor and benefit costs along with technical services for temporary staff. Labor costs increased due to
employee benefit costs (primarily pension and healthcare costs), cost -of- living adjustments, merit
increases, and filling of vacant positions. Depreciation expense increased due to new capital additions.
Non - Operating Expense is mainly driven by debt service interest expense. Total income before capital
contributions went from -$7.7 million in 2010 -11 to -$11.6 million in 2011 -12 and -$5.9 million in
2012 -13.
Total capital contributions in 2012 -13 were $15.0 million compared to $15.4 million in 2011 -12 and
$9.1 million in 2010 -11. This was mainly due to higher customer contributions (SSC) in 2012 -13 due to
the 8.8% rate increase, shift of the internal SSC revenue allocation, and volatility in connection fees due
to the fluctuation of the housing and construction markets. The total change in net position increased by
$7.8 million or 576.64% when comparing 2012 -13 to 2010 -11.
CAPITAL ASSETS
Capital assets include the District's entire major infrastructure including wastewater treatment facilities,
sewers, land, buildings, pumping stations, vehicles, intangible assets and furniture and equipment
exceeding our capitalization policy limit of $5,000, net of depreciation. As of June 30, 2013, the
District's investment in capital assets totaled $604.0 million, which is an increase of $6.3 million or
1.05% over the capital asset balance of $597.7 million at June 30, 2012, Capital Assets increased by
$10.5 million or 1.77% comparing 2012 -13 to 2010 -11. A comparison of the District's capital assets
over the past 3 fiscal years is presented below:
% Increase
Capital Assets Fiscal Year Ended June 30 (Decrease)
FY 12 -13 FY 12 -13
vs. vs.
2012 -13 2011 -12 2010 -11 11 -12 10 -11
Land
$ 17,262,249
$ 17,114,720
$ 17,114,720
0.86%
0.86%
Sewage Collection System
311,633 989
303,693,519
290 317,724
2.61%
7.34%
Contributed Sewer Lines
150,834,930
149,895,302
149,110,351
0.63%
1.16%
Outfall Sewers
11,338,935
8,518,443
8,518,443
33.11%
33.11%
Sewage Treatment Plant
299,830,466
292,432,883
287,537 513
2.53%
4.28%
Recycled Water Infrastructure
13,515,026
13,335,295
12,300,131
1.35%
9.88%
Pumping Stations
54,412 730
54,412,730
54 412,730
-
-
Buildings
36,120,720
34,477,124
31,317,466
4.77%
15.34%
Intangible Assets
4,596,467
2,463,834
2,058,921
86.56%
123.25%
Furniture & Equipment
15,651,212
14,031,564
13,243,330
11.54%
18.18%
Motor Vehicles
6,558,065
6,010,773
6,038,527
9,11%
8.60%
Construction In Progress
24,533,254
221469,694
22,632,142
9.18%
8.40%
Subtotal
946 288,043
918,855,881
894,601,998
2.99%
5.78%
Less Accumulated Depreciation
342,302,574
321 166,137
301,140,207
6.58%
13.67%
Total Capital Assets
net of depreciation)
$ 603,985,469
$ 597,689,744
$ 593,461,791
1.05%
1.77%
The major reasons for the increase in capital assets, net of depreciation, of $6.3 million from 2011 -12 to
2012 -13 and $10.5 million from 2010 -11 to 2012 -13, are as follows:
® Sewer pipe ongoing renovations, upgrades, expansion, pumping station improvements, and
contributed sewer lines increased by $8.9 million comparing 2012 -13 to 2011 -12 and $23.0
million comparing 2012 -13 to 2010 -11.
® Treatment plant infrastructure renovations, upgrades, equipment, and improvements increased by
$7.4 million comparing 2012 -13 to 2011 -12 and $123 million comparing 2012 -13 to 2010 -11.
® Buildings increased by $1.6 million comparing 2012 -13 to 2011 -12 and $4.8 million comparing
2012 -13 to 2010 -11.
® All other asset categories, including construction in progress, increased by $9.5 million
comparing 2012 -13 to 2011 -12 and increased by $11.5 million comparing 2012 -13 to 2010 -11.
® Capital Asset increases are offset by an increased subtraction of accumulated depreciation of
$21.1 million comparing 2012 -13 to 2011 -12 and $41.2 million comparing 2012 -13 to 2010 -11
due to our increasing capital asset investment and its associated depreciation expense.
See Note 5 in the audited financial statements.
DEBT ADMINISTRATION
The District has the following outstanding debt as of June 30, 2013:
Revenue Bonds $ 43,595,000
Water Reclamation Loan 866,827
$ 44,461,827
See Note 6 in the audited financial statements.
ECONOMIC AND OTHER FACTORS
The Federal and State of California economies continue to slowly recover from the 2008 recession. The
Federal economic challenges have resulted in budget sequestration. The State Budget Act reflects
California's most stable budget in years. With the State's tough spending cuts enacted and new
temporary revenues provided by the passage of Proposition 30, the State's budget is projected to remain
balanced for the foreseeable future. However, substantial risks, uncertainties, and liabilities still remain.
Changes in the state budget have a significant impact on the District. Federal and State economic
challenges will continue into the future and will have a trickle -down effect on local government.
Items impacting the District are:
® Current Employee Memorandum of Understanding contracts end as of December 17, 2017.
® Current and future legislation impacting public employee pensions is in play, also calling for
higher employee contributions and lower pensions by eliminating spiking. A significant number
of anticipated early retirements may occur depending on the legislated changes to public
employee salary and benefits.
® Increased cost of employee benefits, mainly due to pension costs and healthcare.
Housing market is still recovering and continues to impact development and user fees.
® Regulatory requirements becoming more stringent, causing the District to spend more on
compliance, both for operations and maintenance costs and capital projects. This may require
debt financing for large capital projects.
Continued low interest rates negatively impact interest earnings for District temporary
investments as well as OPEB trust and pension plan assets.
In addition to making efforts to reduce spending and improve process efficiencies, the District has the
ability to raise the SSC to meet our long -term commitments. The District has a Standard and Poors
AAA rating, and can obtain bond financing if necessary.
FINANCIAL CONTACT
The financial report is designed to provide our customers and creditors with a general overview of the
District's finances and to demonstrate the District's accountability for the money it receives. If you
have questions about this report or need additional financial information, contact: Finance Manager
Thea Vassallo, Central Contra Costa Sanitary District, 5019 Imhoff Place, Martinez, CA 94553.
This Page Left Intentionally Blank
CENTRAL, CONTRA COSTA SANITARY DISTRICT
STATEMENT OF NET POSITION
JUNE 30, 2013
ASSETS
CURRENT ASSETS
Cash and cash equivalents (Note 2)
$46,714,788
Short term investments (Nate 2)
10,498,624
Accounts receivable, net (Note 3)
16,517,549
Interest receivable
65,321
Parts and supplies
2,005,741
Prepaid expenses
2,204,210
Total current assets
78,006,233
NON - CURRENT ASSETS
Restricted cash and equivalents (Notes I.E. and 2)
100,000
Restricted investments (Note 2)
5,412,500
Assessment Districts receivable (Note 4)
2,089,461
Net OPEB asset (Note 10)
1,537,638
Revenue bonds issuance costs, net of amortization
315,287
Capital assets:
Nondepreciable (Note 5)
41,795,503
Depreciable, net of accumulated depreciation (Note 5)
562,189,966
Total capital assets, net
603,985,469
Total non - current assets
613,440,355
TOTAL ASSETS
691,446,588
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued expenses
5,376,935
Interest payable
718,147
Refunding Water Revenue Bonds - current portion (Note 6)
3,720,000
Water Reclamation Loan Contract - current portion (Note 6)
164,582
Accrued compensated absences - cuff ent portion (Note 1.1.)
383,000
Liability for uninsured claims (Note 7)
1,000,000
Refundable deposits
341,437
Total current liabilities
11,704,101
NON - CURRENT LIABILITIES
Refunding Water Revenue Bonds, noncurrent portion (Note 6)
39,875,000
Water Reclamation Loan Contract, noncurrent portion (Note 6)
702,245
Accrued compensated absences, noncurrent portion (Note 1.1.)
3,450,245
Total non - current liabilities
44,027,490
TOTAL LIABILITIES
55,731,591
NET POSITION (Note 11)
Net investment in capital assets
559,523,642
Restricted for debt service
4,730,837
Unrestricted
71,460,518
TOTAL NET POSITION
$635,714,997
REVIEW DRAFT 9/26/2013 12:21 PM
See accompanying notes to financial statements
10
{ D09A4517- FCB9- 41F6- A531- 64C6CC303B1El.xls SNA
CENTRAL CONTRA COSTA SANITARY DISTRICT
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR THE YEAR ENDED JUNE 30, 2013
OPERATING REVENUES
Sewer service charges (SSC) $56,770,984
Service charges - City of Concord 10,483,421
Other services charges 1,076,401
Miscellaneous charges 751,880
Total operating revenues 69,082,686
OPERATING EXPENSES
Sewage collection and pumping stations
14,327,933
Sewage treatment
23,035,943
Engineering
8,680,934
Administrative and general
21,096,666
Depreciation
21,596,266
Total operating expenses 88,737,742
OPERATING INCOME (LOSS) (19,655,056)
NONOPERATING REVENUES (EXPENSES)
Taxes
13,010,477
Permit and inspection fees
1,169,809
Interest earnings
405,474
Interest expense
(1,802,084)
Other income (expense)
951,100
Total nonoperating revenues (expenses), net 13,734,776
INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS (5,920,280)
CAPITAL CONTRIBUTIONS
City of Concord contributions to capital costs 3,616,771
Customer contributions to capital cost (SSC) 4,384,376
Contributed sewer lines 939,628
Capital contributions - connection fees 6,091,529
Total capital contributions 15,032,304
CHANGE IN NET POSITION 9,112,024
NET POSITION, BEGINNING OF YEAR 626,602,973
NET POSITION, END OF YEAR $635,714,997
See accompanying notes to financial statements
REVIEW DRAFT 9/24/2013 4:18 PM
11
{D09A4517- FCB9 -4l F6- A531- 64C6CC303BIE).xls IS
CENTRAL CONTRA COSTA SANITARY DISTRICT
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers
Payments to employees and related benefits
Net Cash Provided by Operating Activities
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Receipt of taxes
Inspection/permit fees and other non- operating income
Cash Flows from Noncapital Financing Activities
$67,310,423
(36,581,237)
(29,929,031)
800,155
13,010,477
2,120,909
15,131,386
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Capital contributions 8,940,775
Connection fees 6,091,529
Acquisition and construction of capital assets (27,891,991)
Interest paid on long -term debt (1,838,134)
Principal payments on long -term debt (3,448,341)
Cash Flows (used for) Capital and Related Financing Activities (18,146,162)
CASH FLOWS FROM INVESTING ACTIVITIES
Redemption and acquisition of investments, net $6,012,471
Interest received 395,301
Cash Flows from Investing Activities 6,407,772
NET INCREASE (DECREASE) IN CASH 4,193,151
Cash, beginning of year 42,621,637
Cash, end of year $46,814,788
REVIEW DRAFT 9/26/2013 12:22 PM
See accompanying notes to financial statements
12
(Continued)
{ D09A4517- FCB9- 41F6- A531- 64C6CC303B1E).)ds CF
CENTRAL CONTRA COSTA SANITARY DISTRICT
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2013
Reconciliation of operating (loss) to net cash provided by
operating activities:
Operating (loss)
($19,655,056)
Adjustments to reconcile operating loss to cash
flows from operating activities:
Depreciation
21,596,266
Change in assets and liabilities:
Receivables, net
(1,772,263)
Parts and supplies
1,704
Prepaid expenses
296,495
Accounts payable and accrued expenses
472,291
Accrued payroll and related expenses
122,665
Refundable deposits
12,149
Net OPEB asset
(274,096)
Net cash provided by operating activities $800,155
SCHEDULE OF NON CASH ACTIVITY
Developer pipe contributions $713,525
Change in fair value of investments 395,301
Total non cash activity $1,108,826
CASH AND CASH EQUIVALENTS, AS PRESENTED ON
STATEMENT OF NET POSITION:
Unrestricted cash and cash equivalents $46,714,788
Restricted cash and cash equivalents 100,000
Total cash and cash equivalents at end of year $46,814,788
REVIEW DRAFT 9/26/2013 12:22 PM
See accompanying notes to financial statements
13
{D09A4517- FCB9 -4l F6- A531- 64C6CC303BIE }.xls CF
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
NOTE 1— DESCRIPTION OF DISTRICT AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
A. Reporting Entity
The Central Contra Costa Sanitary District (District), a special district and a public entity
established under the Sanitary District Act of 1923, provides sewer service for the incorporated
and unincorporated areas under its jurisdiction. A Board of Directors comprised of five elected
members governs the District.
As required by accounting principles generally accepted in the United States of America, these
basic financial statements present the financial statements of Central Contra Costa Sanitary
District and its component unit. The component unit discussed in the following paragraph is
blended in the District's reporting entity because of the significance of its operational and
financial relationship with the District.
Blended Component Unit - Component units are legally separate organizations for which the
District is financially accountable. Component units may also include organizations that are
fiscally dependent on the District, in that the District approves their budget, the issuance of their
debt or the levying of their taxes. In addition, component units are other legally separate
organizations for which the District is not financially accountable but the nature and significance
of the organization's relationship with the District is such that exclusion would cause the District's
financial statements to be misleading or incomplete. For financial reporting purposes, the
component unit discussed below is reported in the District's financial statements because of the
significance of its relationship with the District. The component unit, although a legally separate
entity, is reported in the financial statements using the blended presentation method as if it were
part of the District's operations because the Governing Board of the component unit is the same
as of Governing Board of the District and because its purpose is to finance facilities to be used for
the direct benefit of the District. The Central Contra Costa Sanitary District Facilities Financing
Authority (Authority) was organized solely for the purpose of providing financial assistance to the
District. The Authority does this by acquiring, constructing, improving and financing various
facilities, land and equipment purchases, and by leasing or selling certain facilities, land and
equipment for the use, benefit and enjoyment of the public served by the District. The Authority
has no members and the Board of Directors of the Authority consists of the same persons who are
serving as the Board of Directors of the District. There are no separate basic financial statements
prepared for the Authority.
B. Basis of Accounting
The District's financial statements are prepared on the accrual basis of accounting. The District
applies all applicable Governmental Accounting Standards Board (GASB) pronouncements for
certain accounting and financial reporting guidance.
Review Draft 9/24/13 4:00 PM
14
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
NOTE 1— DESCRIPTION OF DISTRICT AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
The District is a proprietary entity; it uses an enterprise fund format to report its activities for
financial statement purposes. Enterprise funds are used to account for operations that are
financed and operated in a manner similar to private business enterprises, where the intent of the
governing body is that the cost and expenses, including depreciation, of providing goods or
services to its customers be financed or recovered primarily through user charges; or where the
governing body has decided that periodic determination of revenues earned, expense incurred,
and net income is appropriate for capital maintenance, public policy, management control,
accountability, or other purposes.
Enterprise funds are used to account for activities similar to those in the private sector, where the
proper matching of revenues and costs is important and the full accrual basis of accounting is
required. With this measurement focus, all assets and liabilities of the enterprise are recorded on
its statement of net position, all revenues are recognized when earned and all expenses, including
depreciation, are recognized when incurred.
Enterprise funds distinguish operating revenues and expenses from non - operating items.
Operating revenues and expenses generally result from providing services and producing and
delivering goods in connection with an enterprise fund's principal ongoing operations. The
principal operating revenues of the District are charges to customers for services. Operating
expenses for the District include the costs of sales and services, administrative expenses, and
depreciation on capital assets. All revenues and expenses not meeting this definition are reported
as non - operating revenues and expenses.
For internal operating purposes, the District's Board of Directors has established four separate
sub - funds, each of which includes a separate self - balancing set of accounts and a separate Board
approved budget for revenues and expenses. These sub -funds are combined into the single
enterprise fund presented in the accompanying financial statements. The nature and purpose of
these sub -funds are as follows:
Running Expense - Running Expense accounts for the general operations of the District.
Substantially all operating revenues and expenses are accounted for in this sub -fund.
Sewer Construction - Sewer Construction accounts for non - operating revenues, which are
to be used for acquisition or construction of plant, property and equipment.
Self- husurance - Self - Insurance accounts for interest earnings on cash balances in this
sub -find and cash allocations from other sub - funds, as well as for costs of insurance
premiums and claims not covered by the District's insurance coverage.
Debt Service - Debt Service accounts for activity associated with the payment of the
District's long term bonds and loans.
That portion of the District's net position which is allocable to each of these sub -funds has been
shown separately in the accompanying supplementary information to the financial statements.
The District's Board of Directors adopts annual budgets on a basis consistent with accounting
principles generally accepted in the United States of America.
Review Draft 9/24/13 4:00 PM
15
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
NOTE I — DESCRIPTION OF DISTRICT AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
G Investments
Investments held at June 30, 2013 with original maturities greater than one year, are stated at fair
value. Fair value is estimated based on quoted market prices at year -end. All investments not
required to be reported at fair value are stated at cost or amortized cost.
D. Prepaid Expenses
Certain payments to vendors reflect costs applicable to firture accounting periods and are
recorded as prepaid items in the financial statements.
E. Bank Escrow Deposit
An escrow agreement was formed between the District and the National Park Service for the
right- of -way through the John Muir National Historic Site, in lieu of issuing a performance bond.
The current right -of -way permit is 10 years, but is renewable and must remain in effect so long as
there is sewage running through the area; therefore, it is unlikely that the escrow funds will ever
be released to the District. These funds are listed as restricted cash in the financial statements.
F. Parts and Supplies
Parts and supplies are valued at average cost and are used primarily for internal proposes.
G. Property, Plant, and Equipment
Purchased capital assets are stated at historical cost. Capital assets contributed to the District are
stated at estimated fair value at the time of contribution. The capitalization threshold for capital
assets is $5,000. Expenditures which materially increase the value or life of capital assets are
capitalized and depreciated over the remaining useful life of the asset. The term depreciation
includes amortization of intangible assets.
Depreciation of exhaustible capital assets has been provided using the straight -line method over
the asset's useful life as follows:
Years
Sewage Collection Facilities 75
Intangible Assets 75
Sewage Treatment Plant and Pumping Plants 40
Buildings 50
Furniture and Equipment 5-15
Motor Vehicles 6-15
Review Draft 9/24/13 4:00 PM
16
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
NOTE 1— DESCRIPTION OF DISTRICT AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
H. Property Taxes
Property tax revenue is recognized in the fiscal year for which the tax is levied. The County of
Contra Costa levies, bills and collects property taxes for the District; all material amounts are
collected by June 30.
General County taxes collected are the same as the amount levied since the County participates in
California's alternative method of apportionment called the Teeter Plan. The Teeter Plan as
provided in Section 4701 at seq. of the State of Revenue and Taxation Code establishes a
mechanism for the County to advance the full amount of property tax and other levies to taxing
agencies based on the tax levy, rather than on the basis of actual tax collections. Although this
system is a simpler method to administer, the County assumes the risk of delinquencies. The
County in return retains the penalties and accrued interest thereon.
Secured property tax bills are mailed once a year, during the month of October on the current
secured tax roll, to the owner of the property as of the lien date (January 1). Payments can be
made in two installments, and are due on November 1 and February 1. Delinquent accounts are
assessed a penalty of 10 percent. Accounts which remain unpaid on June 30 are charged an
additional 11/2 percent per month. Unsecured property tax is due on July 1 and becomes
delinquent on August 31. The penalty percentage rates are the same as secured property tax.
L Compensated Absences
The liability for vested vacation, compensatory time, and sick pay is recorded as an expense when
earned. District employees have a vested interest in 100 percent of accrued vacation time and 85
percent of accrued sick time for employees hired before May 1, 1985. Employees hired after May
1, 1985 have a vested interest in up to 40 percent of their sick time, based upon length of
employment with the District.
The changes in compensated absences were as follows for fiscal year ended June 30, 2013:
Beginning Balance
Additions
Payments
Ending Balance
Current Portion
$3,710,580
783,906
(661,241)
$3,833,245
$383,000
The current portion of the liability to be used within the next year is estimated by management to
be approximately 10% of the ending balance.
Review Draft 9/26/13 12:23 PM
17
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
NOTE 1— DESCRIPTION OF DISTRICT AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
J. Statement of Cash Flows
For purposes of the statement of cash flows, all highly liquid investments, including restricted
assets, with maturities of three months or less when purchased, are considered to be cash
equivalents. Included therein are petty cash, bank accounts, and the State of California Local
Agency Investment Fund (LAIF). Restricted assets are debt service amounts maintained by
fiduciaries and not available for general expenses.
IC 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 disclosures of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those estimates.
L. Implementation of Governmental Accounting Standards Board (GASB) Pronouncements
GASB Statement No. 60 — In November 2010, the GASB issued Statement No. 60, Accounting
and Financial Reporting for Service Concession Arrangements. The objective of this Statement
is to improve financial reporting by addressing issues related to service concession arrangements
(SCAB), which are a type of public - private or public - public partnerships. The requirements of
this Statement are effective for financial statements for periods beginning after December 15,
2011, This Statement had no impact on the District's financial statements for fiscal year ending
June 30, 2013.
GASB Statement No. 61 — In November 2010, the GASB issued Statement No. 61, The
Financial Reporting Entity: Omnibus — an amendment of GASB Statements No. 14 and No. 34.
The objective of this Statement is to improve financial reporting for a governmental financial
reporting entity. The provisions of this Statement are effective for financial statements for
periods beginning after June 15, 2012. This Statement did not have a material impact on the
District's financial statements for fiscal year ending June 30, 2013.
GASB Statement No. 62 — In December 2010, the GASB issued Statement No. 62, Codification
of Accounting and Financial Reporting guidance Contained in Pre - November 30, 1989 FASB
and AICPA Pronouncements. The objective of this Statement is to incorporate into the GASB's
authoritative literature certain accounting and financial reporting guidance that is included in the
FASB and AICPA pronouncements, which does not conflict with or contradict GASB
pronouncements. The requirements of this Statement are effective for financial statements for
periods beginning after December 15, 2011. This Statement did not have a material impact on the
District's financial statements for fiscal year ending June 30, 2013.
Review Draft 9/24/13 4:00 PM
18
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
NOTE I – DESCRIPTION OF DISTRICT AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
GASB Statement No. 63 – In June 2011, the GASB issued Statement No. 63, Financial
Reporting of Deferred Ouqflows of Resources, Deferred Inflows of Resources and Net Position.
This Statement provides financial reporting guidance for deferred outflows of resources and
deferred inflows of resources. hi addition to assets, the statement of financial position or balance
sheet will sometimes report a separate section for deferred outflows of resources. This separate
financial statement element, deferred outflows of resources, represents a consumption of net
position or fund balance that applies to a future period(s) and so will not be recognized as an
outflow of resources (expense /expenditure) until then. In addition to liabilities, the statement of
financial position or balance sheet will sometimes report a separate section for deferred inflows of
resources. This separate financial statement element, deferred inflows of resources, represents an
acquisition of net position or fiend balance that applies to a future period(s) and so will not be
recognized as an inflow of resources (revenue) until that time.
The provisions of this Statement are effective for financial statements for periods beginning after
December 15, 2011. This Statement changed certain financial statement titles and nomenclature
on the District's financial statements for fiscal year ending June 30, 2013,
GASB Statement No. 65 – In March 2012, the GASB issued Statement No. 65, Items Previously
Reported as Assets and Liabilities. This Statement establishes accounting and financial reporting
standards that reclassify, as deferred outflows of resources or deferred inflows of resources,
certain items that were previously reported as assets and liabilities and recognizes, as outflows of
resources or inflows of resources, certain items that were previously reported as assets and
liabilities. The provisions of this Statement are effective for financial statements for periods
beginning after December 15, 2012. This Statement will not have a material effect on the
financial statements.
GASB Statement No. 66 – In March 2012, the GASB issued Statement No. 66, Technical
Corrections- 2012 —an amendment of GASB Statements No. 10 and No. 62. The objective of
this Statement is to improve accounting and financial reporting for a governmental financial
reporting entity by resolving conflicting guidance that resulted from the issuance of two
pronouncements, Statements No. 54, Fund Balance Reporting and Governmental Fund Type
Definitions, and No. 62, Codification of Accounting and Financial Reporting Guidance
Contained in Pre - November 30, 1989 FASB and AICPA Pronouncements. The provisions of this
Statement are effective for financial statements for periods beginning after December 15, 2012.
This Statement will not have a material effect on the financial statements.
GASB Statement No. 67 – In June 2012, the GASB issued Statement No. 67, Financial
Reporting for Pension Plans —an amendment of GASB Statement No. 25. The requirements of
this Statement will improve financial reporting primarily through enhanced note disclosures and
schedules of required supplementary information that will be presented by the pension plans that
are within its scope. The provisions of this Statement are effective for financial statements for
periods beginning after June 15, 2013. This Statement will not have a material effect on the
financial statements.
Review Draft 9/24/13 4:00 PM
19
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
NOTE 1– DESCRIPTION OF DISTRICT AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
GASB Statement No. 68 – In June 2012, the GASB issued Statement No. 68, Accounting and
Financial Reporting for Pensions —an amendment of GASB Statement No. 27. The requirements
of this Statement will improve the decision - usefulness of information in employer and
governmental nonemployer contributing entity financial reports and will enhance its value for
assessing accountability and interperiod equity by requiring recognition of the entire net pension
liability and a more comprehensive measure of pension expense. The provisions of this
Statement are effective for financial statements for periods beginning after June 15, 2014,
therefore, the District will implement this Statement in fiscal year ending June 30, 2015. This
Statement will have a material effect on the financial statements.
NOTE 2 – CASH AND INVESTMENTS
A. Summary of Cash and Investments
Investments as of June 30, 2013, are classified in the accompanying financial statements as follows:
Cash and cash equivalents $46,714,788
Short term investments 10,498,624
Restricted cash and cash equivalents 100,000
Restricted investments 5,412,500
Total Cash and Investments $62,725,912
B. Policies and Practices
The District is authorized under California Government Code to make direct investments in local
agency bonds, notes, or warrants within the State: U.S. Treasury instruments, registered State
warrants or treasury notes, securities of the U.S. Governments, or its agencies, commercial paper,
certificates of deposit placed with commercial banks and /or savings with loan companies, and
certificates of participation. State code and the District's investment policy prohibit the District
from investing in investments with a rating of less than A or equivalent.
Review Draft 9/24/13 4:00 PM
20
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
NOTE 2 — CASH AND INVESTMENTS (Continued)
C. General Authorizations
Limitations as they relate to interest rate risk, credit risk, and concentration of credit risk are
indicated in the schedules below:
District
District
California State Limits
Policy
Policy
Maximum
Maximum
Maximum
Maximum
Minimum
Remaining
Percentage
Investment
Percentage
Legal
Authorized Investment Type
Maturity
of Portfolio
In One Issuer
of Portfolio
Quality
U.S. Treasury Obligations
5 years
None
None
100%
N/A
Banker's Acceptances
180
40%
40%
10%
N/A
Commercial Paper (1)
270
25%
10%
10%
Aaa
Collateralized Certificates of Deposit (2)
5 years
30%
None
10%
Aaa
County Pooled Investment Funds
N/A
None
None
100%
N/A
Local Agency Investment Fund (LAIF)
N/A
None
None
100%
N/A
(1) Prime quality; limited to corporations with assets over $500,000,000
(2) Prior approval of the Board of Directors must be obtained to acquire maturities beyond one year, excluding Treasury Notes and LAIF.
D. Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value
of an investment; generally, the longer the maturity of an investment, the greater the sensitivity of
its fair value to changes in market interest rates. It is the District's policy to manage exposure to
interest rate risk by purchasing a combination of shorter term and longer term investments and by
timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to
maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.
District policy is that investment maturities do not exceed one year, with the exception of Treasury
Notes or Local Agency Investment Fund; however, investments can be held longer with Board
approval.
The District's investments at year end with the exception of the U.S. Treasuries and Commercial
Paper below are held in external investment pools which are liquid investments.
Review Draft 9/24/13 4:00 PM
21
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
NOTE 2 — CASH AND INVESTME NTS (Continued)
Information about the sensitivity of the fair values of the District's investments to market interest
rate fluctuation is provided by the following schedule that shows the distribution of the District's
investments by maturity, as of June 30, 2013:
12 Months
Investment Type or less Maturity
Certificates of Deposit $7,000,136 7/26/13
Certificates of Deposit - Debt Reserve 5,412,500 4/30/14
Commercial Paper 3,498,488 7/26/13
California Local Agency Investment Fund 43,011,748 Not applicable
Total Investments 58,922,872
Cash in bank 3,803,040
Total Cash and Investments $62,725,912
E. Credit Risk
Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of
the investment. This is measured by the assignment of a rating by a nationally recognized
statistical rating organization. Presented below is the actual rating as of the June 30, 2013 of each
investment type:
Investment Type
Certificates of Deposit
Commercial Paper
Totals
Not rated.•
California Local Agency Investment Fund
Cash in Bank
Total Cash and Investments
F. Concentration of Credit Risk
Aaa Total
$12,412,636 $12,412,636
3,498,488 3,498,488
$15,911,124 15,911,124
43,011,748
3,803,040
$62,725,912
The District is a voluntary participant in LAW which is regulated by the California Government
Code under the oversight of the Treasurer of the State of California. LAW is not registered with
the Securities and Exchange Commission. The fair value of the District's investment in this pool
is reported in the accompanying financial statements at amounts based upon the District's pro -
rata share of the fair value provided by LAIF for the entire LAW portfolio (in relation to the
amortized cost of that portfolio). The balance available for withdrawal is based on the accounting
records maintained by LAIF, which are recorded on an amortized cost basis. At June 30, 2013
these investments matured in an average of 278 days.
Review Draft 9/26/13 12:24 PM
22
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
NOTE 2 — CASH AND INVESTMENTS (Continued)
Investments in County Treasany — The District is considered to be a voluntary participant in an
external investment pool. The fair value of the District's investment in the pool is reported in the
financial statements in cash and cash equivalents at amounts based upon the District's pro -rata
share of the fair value provided by the County Treasurer for the entire portfolio (in relation to
amortized cost of that portfolio). The balance available for withdrawal is based on the accounting
records maintained by the County Treasurer, which is recorded on the amortized cost basis.
G. Custodial Credit Risk - Investments
Custodial risk for investments is the risk that, in the event of the failure of the counterparty (e.g.
the broker- dealer) to a transaction, a government will not be able to recover the value of its
investment or collateral securities that are in the possession of another party. The California
Government Code does not contain legal or policy requirements that would limit the exposure to
custodial credit risk. The District's policy is to use the services of the Treasurer's Office of the
County of Contra Costa, which will transact the District's investment decisions in compliance
with the requirements of the District's policy. The County Treasurer's Office will execute the
District's investments through such broker- dealers and financial institutions as are approved by
the County Treasurer, and through the State Treasurer's Office for investment in the Local
Agency Investment Fund.
NOTE 3 — ACCOUNTS RECEIVABLE
Accounts receivable are comprised of the following at June 30, 2013:
City of Concord (see Note 8) $14,100,192
Household Hazardous Waste Partners 837,802
All Other 1,579,555
Total Accounts Receivable $16,517,549
NOTE 4 — ASSESSMENT DISTRICTS RECEIVABLE
The District established the Contractual Assessment District (CAD) program to help homeowners
finance the cost of connecting to the District. The construction costs associated with the project
within the program are capitalized and depreciated. Individual homeowners are assessed at an
amount equal to their share of the construction costs and connection fee. The assessments, plus
interest, are generally payable over 10 years. At June 30, 2013, the CAD receivable balance was
$434,396.
The District also established the Alhambra Valley Assessment District (AVAD) to provided
services to residents in the Alhambra Valley in Martinez. Residents have the choice to pay cash
or finance the construction costs and connection fees. At June 30, 2013, the AVAD receivable
balance was $1,655,065.
The total receivable balance at June 30 2013 for CAD and AVAD was $2,089,461, and is shown
as a non- current asset on the Statement of Net Position.
Review Draft 9/24/13 4:00 PM
23
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
NOTE 5 — CAPITAL ASSETS
Property, plant and equipment, and construction in progress are summarized below for the year
ended June 30, 2013:
NOTE 6 — LONG -TERM DEBT
A. 2009 Wastewater Revenue Certificates of Participation
On November 12, 2009 and December 3, 2009 the District issued two Certificates of Participation
(COP).
The 2009 Wastewater Revenue Certificates of Participation, Series A and Series B were issued
for $19,635,000 and $34,490,000, respectively. The Series A COP are federally taxable "Build
America Bonds" which have a direct 35% interest rate subsidy from the Federal Government.
Yields on this series range from 3.45% to 3.78 %, net of the subsidy. The Series B COP are tax
exempt bonds that were used to refund the 1998 and 2002 bond issues and raise an additional $30
million in new proceeds with yields ranging from .40% to 3.79 %.
Review Draft 9/24/13 4:00 PM
24
Balance at
Transfer
Balance at
June 30, 2012
Additions
Retirements
from CIP
June 30, 2013
Capital assets not being depreciated:
Land
$17,114,720
$147,529
$17,262,249
Construction in Progress
22,469,694
$27,185,118
(25,121,558)
24,533,254
Total nondepreciated assets
39,584,414
27,185,118
(24,974,029)
41,795,503
Capital assets being depreciated:
Sewage collection system
303,693,519
7,940,470
311,633,989
Contributed sewer lines
149,895,302
706,873
232,755
150,834,930
Outfall sewers
8,518,443
2,820,492
11,338,935
Sewage treatment plant
292,432,883
($200,000)
7,597,583
299,830,466
Recycled water infrastructure
13,335,295
179,731
13,515,026
Pumping stations
54,412,730
54,412,730
Buildings
34,477,124
1,643,596
36,120,720
Intangibles
2,463,834
2,132,633
4,596,467
Furniture and equipment
14,031,564
(10,001)
1,629,649
15,651,212
Motorvehicles
6,010,773
(249,828)
797,120
6,558,065
Total depreciated assets
879,271,467
706,873
(459,829)
24,974,029
904,492,540
Less accumulated depreciation:
Sewage collection system
48,955,471
4,148,192
53,103,663
Contributed sewer lines
49,I09,345
2,017,935
51,127,280
Outfall sewers
2,880,325
132,156
3,012,481
Sewage treatment plant
170,703,542
10,167,282
(200,000)
180,670,824
Recycled water infrastructure
5,362,386
535,957
5,898,343
Pumping stations
22,167,742
2,175,187
24,342,929
Buildings
7,019,734
1,039,434
8,059,168
Intangibles
88,247
47,069
135,316
Furniture and equipment
10,818,661
1,042,928
(10,001)
11,851,588
Motor vehicles
4,060,684
290,126
(249,828)
4,100,982
Total accumulated depreciation
321,166,137
21,596,266
(459,829)
342,302,574
Total capital assets being
depreciated, net
558,105,330
(20,889,393)
24,974,029
562,189,966
Capital assets, net
$597,689,744
$6,295,725
-
$603,985,469
NOTE 6 — LONG -TERM DEBT
A. 2009 Wastewater Revenue Certificates of Participation
On November 12, 2009 and December 3, 2009 the District issued two Certificates of Participation
(COP).
The 2009 Wastewater Revenue Certificates of Participation, Series A and Series B were issued
for $19,635,000 and $34,490,000, respectively. The Series A COP are federally taxable "Build
America Bonds" which have a direct 35% interest rate subsidy from the Federal Government.
Yields on this series range from 3.45% to 3.78 %, net of the subsidy. The Series B COP are tax
exempt bonds that were used to refund the 1998 and 2002 bond issues and raise an additional $30
million in new proceeds with yields ranging from .40% to 3.79 %.
Review Draft 9/24/13 4:00 PM
24
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
NOTE 6 — LONG -TERM DEBT (Continued)
The two bonds total $54,125,000, and are secured by a pledge of revenue. Principal payments
began annually on September 1, 2010 with semi - annual payments due on September 1 and March
1 of each year. Both bonds will be fully amortized as of September 1, 2029. The refunded
portion of the original bonds will be paid off based on the original amortization schedule.
B. Summary of Activity
The changes in the District's long -term obligations during the year consisted of the following:
The 2009 Revenue COP debt service requirements are as follows:
Fiscal Year
Original
Amount
Issue
Balance
Ending
Balance
due within
Total
Amount
June 30, 2012
Retirements
June 30, 2013
one year
2009 Series A Certificates of Participation
Interest
Principal
Interest
Subsidy
Total
Wastewater Revenue
$1,190,840
$3,720,000
$851,683
$3,720,000
3.45 - 3.78 1/o, due 9/1/2029
$19,635,000
$19,635,000
2015
$19,635,000
-
2009 Series B Certificates of Participation
700,467
3,865,000
1,891,307
(416,794)
5,339,513
Wastewater Revenue
1,190,840
2,210,000
601,033
2,210,000
.40- 3.79 %, due 9/1/2029
34,490,000
27,565,000
$3,605,000
23,960,000
$3,720,000
1999 State Water Resources Control Board
501,300
2,300,000
1,692,140
(416,794)
3,575,346
Water Reclamation Loan
1,190,840
2,405,000
424,175
2,405,000
2.60 %, due 3/31/2018
2,916,872
1,027,238
160,411
866,827
164,582
8,280,000
924,558
13,430,000
6,384,618
Total Long-Term Debt
17,903,597
48,227,238
$3,765,411
44,461,827
$3,884,582
Less current portion
11,100,000
(3,765,411)
(1,026,135)
(3,884,582)
2029 -2030
4,565,000
202,450
$44,461,827
$40,577,245
202,450
(70,858)
4,696,592
C. Debt Service Requirements
$19,635,000
$14,548,526
$23,960,000
$4,013,049
$43,595,000
The 2009 Revenue COP debt service requirements are as follows:
Fiscal Year
Series A
Ending
Series A
Series B
Total
35% Tax
Net
June 30,
Principal
Interest
Principal
Interest
Principal
Interest
Subsidy
Total
2014
$1,190,840
$3,720,000
$851,683
$3,720,000
$2,042,523
($416,794)
$5,345,729
2015
1,190,840
3,865,000
700,467
3,865,000
1,891,307
(416,794)
5,339,513
2016
1,190,840
2,210,000
601,033
2,210,000
1,791,873
(416,794)
3,585,079
2017
1,190,840
2,300,000
501,300
2,300,000
1,692,140
(416,794)
3,575,346
2018
1,190,840
2,405,000
424,175
2,405,000
1,615,015
(416,794)
3,603,221
2019-2023
$5,150,000
5,460,060
8,280,000
924,558
13,430,000
6,384,618
(1,911,021)
17,903,597
2024 -2028
9,920,000
2,931,816
1,180,000
9,833
11,100,000
2,941,649
(1,026,135)
13,015,514
2029 -2030
4,565,000
202,450
4,565,000
202,450
(70,858)
4,696,592
Total
$19,635,000
$14,548,526
$23,960,000
$4,013,049
$43,595,000
$18,561,575
($5,091,984)
$57,064,591
As part of the Federal budget sequestration, the Internal Revenue Service (IRS) has announced
that, as of March 1, 2013, credit payments claimed by issuers of certain tax credit bonds,
including Build America Bonds, may be subject to a reduction of 8.7 %.
Review Draft 9/26/13 12:25 PM
25
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
NOTE 6 — LONG -TERM DEBT (Continued)
D. Water Reclamation Loan Contract
The District entered into a contract with the State of California State Water Resources Control
Board (Board), which advanced the District $2,916,872 for design and construction costs for
projects related to recycled water treatment programs.
The District must repay advances from the Board over a 20 -year period beginning March 31,
1999, with an interest rate of 2.60 %. Debt service requirements are as follows:
Fiscal Year
Ending June 30
Principal
Interest
Total
2014
$164,582
$22,537
$187,119
2015
168,861
18,258
187,119
2016
173,251
13,868
187,119
2017
177,756
9,363
187,119
2018
182,377
4,742
187,119
Total
$866,827
$68,768
$935,595
NOTE 7 — RISK MANAGEMENT
The District is exposed to various risks of loss including torts, theft of, damage to, and destruction
of assets, errors and omissions, injuries to employees, and natural disasters. To manage these risks,
the District joined with other entities to form the California Sanitation Risk Management Authority
( CSRMA), a public entity risk pool currently operating as a common risk management and
insurance program for the member entities. The purpose of CSRMA is to spread the adverse
effects of losses among the member entities and to purchase excess insurance as a group, thereby
reducing its cost. Through CSRMA, the District purchases property insurance and workers'
compensation insurance.
Review Draft 9/26/13 12:26 PM
P
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
NOTE 7 — RISK MANAGEMENT (Continued)
A. Insurance Coverage
The District's insurance coverage is as follows:
Liability:
Errors and Omissions
Insurance Company of the
Self Insured
State of Pennsylvania
15,000,000
Deductible Per
Type of Coverage
Insurer
Limits
Occurrence
All -Risk Property:
Hiscox Insurance Company
1,000,000
35,000
Fire
Public Entity Property
15,000,000
1,000,000
Auto Liability
Insurance Program ( PEPIP)
$556,015,744
$250,000
Boiler and Machinery
PEPIP
100,000,000
250,000
(Shared Limits per Occurrence)
Crime
Travelers
1,000,000
25,000
Liability:
Errors and Omissions
Insurance Company of the
State of Pennsylvania
15,000,000
1,000,000
Employment Practices Liability
Chartis
15,000,000
1,000,000
Employment Practices Liability
Hiscox Insurance Company
1,000,000
35,000
General Liability
Chartis
15,000,000
1,000,000
Auto Liability
Chartis
15,000,000
1,000,000
Pollution (General Aggregate)
Chartis Specialty Insurance Co.
5,000,000
5,000
General Liability (Occurrence)
Pollution (Legal Liability Aggregate)
Chartis Specialty Insurance Co.
10,000,000
50,000
Fiduciary Liability
RLI Insurance Company
1,000,000
0
Workers' Compensation:
CSRMA
750,000
0
Excess Workers' Compensation
Safety National Casualty
Corporation
Statutory
750,000
B. Liability for Uninsured Claims
The Governmental Accounting Standard Board (GASB) requires state and local governments to
record their liability for uninsured claims in their financial statements.
The District's uninsured claims activity and exposure relates primarily to its general and automobile
liability program, The District records its estimated liability for uninsured claims in this area based on
the results of periodic actuarial evaluations. The actuarial evaluations are typically performed every
two years. For intervening years, the liability for uninsured claims is reviewed for adequacy based on
claims activity during the intervening period.
Review Draft 9/24/13 4:00 PM
27
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
NOTE 7 — RISK MANAGEMENT (Continued)
For fiscal years ended June 30, 2013, 2012, and 2011, settlements have not exceeded insurance
coverage. Changes in the District's estimated liability for uninsured claims are summarized as
follows as of June 30:
Beginning balance
Provisions for claims incurred in the current year
and changes in the liability for uninsured -
claims incurred in prior years
Claims paid and /or adjustments
Ending balance
2013 2012 2011
$1,000,000 $1,000,000 $1,000,000
(1,659,291) 72,606 240,844
1,659,291 (72,606) (240,844)
$1,000,000 $1,000,000 $1,000,000
In March 2012, the District had an explosion in its Plant Operations Department Cogeneration
(Cogen) Unit. Expenses for the investigation, recovery, repair, extra energy, and staff time were
tracked by Risk Management and totaled $1,793,221. Of that $250,000 was charged to the District's
self - insurance and the balance was submitted to insurance as claims. After disallowing $179,024 in
claims, the District received $1,364,197 in recovery payments. All expenses and reimbursements
were completed in FY 2012 -13.
NOTE 8 — AGREEMENT WITH THE CITY OF CONCORD
In 1974, the District and the City of Concord (the City) entered into a cost - sharing agreement under
which the District became responsible for providing sewage treatment facilities and services to the
City. Under this agreement, the City pays a service charge for its share of operating, maintenance and
administrative costs and makes a contribution for its share of facilities and makes a contribution for its
share of facilities capital costs expended. Service charges and contributions to capital costs from the
City totaled $10,483,421 and $3,616,771, respectively, for the year ended June 30, 2013, for a total of
$14,100,192.
Review Draft 9/26/13 12:26 PM
28
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
NOTE 9 — PENSION PLANS
A. Contra Costa County Employee's Retirement Association Plan
Plan Description
Substantially all District permanent employees are required to participate in the Contra Costa
County Employees' Retirement Association (CCCERA), a cost - sharing multiple employer public
defined benefit retirement plan (Plan), governed by the County Employee's Retirement Law of
1937, as amended. The latest available actuarial and financial information for the Plan is for the
year ended December 31, 2012, The Contra Costa Employees' Retirement Association issues a
publicly available financial report that includes financial statements and supplemental information
of the Plan. That report is available by writing to Contra Costa County Employees' Retirement
Association, 1355 Willow Way, Suite 221, Concord, CA 94520 -5728 or by calling (925) 521 -3960.
The Plan provides for retirement, disability, and death and survivor benefits. Annual cost of living
(COL) adjustments to retirement allowances can be granted by the Retirement Board as provided
by State statutes. Retirement benefits are based on age, length of service, date of membership and
final average salary.
Subject to vested status, employees can withdraw contributions plus interests credited, or leave
them as a deferred retirement when they terminate, or transfer to a reciprocal retirement system.
Plan Contribution Requirement
The Plan requires employees to pay a portion of the basic retirement benefit and a portion of future
COL costs. However, the District has paid the majority of the employees' basic contributions in
accordance with the Memorandum of Understanding (MOU). Employees must pay the COL
portion of the employee rate. The contribution requirement and payment from the District for the
plan years ended June 30, 2013, 2012 and 2011 was as follows:
The District pension plan covered 251 participants as of June 30, 2013,
Review Draft 9/24/13 4:00 PM
It
2013
2012
2011
Covered Payroll for fiscal years ended June 30
$24,752,463
$24,305,548
$24,709,477
Employer required contributions to pension
14,029,374
10,961,853
8,950,938
Employee (COL) required contributions to pension
1,289,095
922,520
930,648
Total required contributions
$15,318,469
$11,884,373
$9,881,586
Percentage of payroll
62%
49%
40%
The District pension plan covered 251 participants as of June 30, 2013,
Review Draft 9/24/13 4:00 PM
It
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
NOTE 9 — PENSION PLAN (Continued)
CCCERA determines contribution requirements using a modification of the Entry Age Normal
Method. Under this method, the District's total normal benefit cost for each employee from date of
hire to date of retirement is expressed as a level percentage of the related total payroll cost. Normal
benefit cost under this method is the level amount the employer must pay annually to fund an
employee's projected retirement benefit. This level percentage of payroll method is used to amortize
any unfunded actuarial liabilities. The actuarial assumptions used to compute contribution
requirements are also used to compute the actuarially accrued liability. The District uses the
actuarially determined percentages of payroll to calculate and pay contributions to CCCERA. This
results in no net pension obligations or unpaid contributions. Annual Pension Costs, representing
the payment of all actuarially required contributions required by CCCERA, for the last three years
were as follows:
*Please note that CCCERA's fiscal year ends December 31.
The following is a summary of the actuarial assumptions and methods:
Valuation date December 31, 2012
Actuarial cost method Entry Age Normal Cost Method
Amortization method Level percent of payroll for total unfunded liability
(4.00% payroll growth assumed)
Remaining amortization period Remaining balance of December 31, 2007 UAAL is amortized over
a fixed (decreasing or closed) period with 10 years remaining as of
December 31, 2012. Any changes in UAAL after December 31, 2007
will be separately amortized over a fixed 18 -year period effective with
that valuation.
Assets valuation method
Annual
Percentage
Pension Cost
Actual
of APC
Fiscal Year*
(APC)
Contribution
Contributed
12/31/2011
$9,881,586
$9,881,586
100%
12/31/2012
11,884,373
11,884,373
100%
12/31/2013
15,318,469
15, 318,469
100%
*Please note that CCCERA's fiscal year ends December 31.
The following is a summary of the actuarial assumptions and methods:
Valuation date December 31, 2012
Actuarial cost method Entry Age Normal Cost Method
Amortization method Level percent of payroll for total unfunded liability
(4.00% payroll growth assumed)
Remaining amortization period Remaining balance of December 31, 2007 UAAL is amortized over
a fixed (decreasing or closed) period with 10 years remaining as of
December 31, 2012. Any changes in UAAL after December 31, 2007
will be separately amortized over a fixed 18 -year period effective with
that valuation.
Assets valuation method
Market value of assets less unrecognized returns in each of the last
of the last nine semi - annual accounting periods. Unrecognized return
is equal to the difference between the actual market return and the
expected return on the market value, and is recognized semi - annually
over a five -year period. The Actuarial Value of Assets is reduced by
the value of the non - valuation reserves and designations.
Actuarial assumptions:
Investment rate of return
7.75%
Inflation rate
3,25%
Cost -of- living adjustments
3.00%
Review Draft 9/24/13 4:00 PM
30
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEME NTS
FOR THE YEAR ENDED JUNE 30, 2013
NOTE 9 — PENSION PLANS (Continued)
The schedule of funding progress presents multi -year trend information about whether the actuarial
value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability
for benefits. CCCERA's latest actuarial value and funding progress for the pool are shown below:
The CCCERA Board took a depooling action in October, 2009 which yielded 12 separate cost
groups by employer, with the exception of smaller employers (those with less than 50 active
members) who continue to be pooled with the applicable county tier. The depooling action affected
employer rates effective July 1, 2011.
Public Employees' Pension Reform Act (PEPRA)
Assembly Bill 340 (AB 340) created the Public Employees' Pension Reform Act (PEPRA) that
implemented new benefit formulas and final compensation periods, as well as new contribution
requirements for most new employees with a membership date on or after January 1, 2013, who
meet the definition of new member under PEPRA.
The table below provides the details of the new provisions.
Benefit Formula
Final Compensation Period
Employer Contribution Rate
as a percentage payroll
Member Contribution Rate as
a percentage of payroll
2.5% at Age 67
Average of last 3 years
10.19% of Reportable
Compensation
10.25% of Reportable
Compensation
The employer contribution rate listed above is in effect until June 30, 2014. In accordance with the
provisions of AB 340, the member contribution rate shown above was set at 50 percent of expected
total normal cost rate, rounded to the nearest %4 percent, for the benefits that will apply to new
members on January 1, 2013.
Review Draft 9/26/13 9:09 AM
31
Unfunded
Unfunded
(Overfunded)
(Overfunded)
Actuarial Accrued
Actuarial
Liability as a
Entry Age
Accrued
Percentage of
Actuarial
Actuarial Asset
Actuarial Accrued
Liability (B -A),
Funded
Covered
Covered Payroll
Valuation Date
Value (A)
Liability (B)
(C)
Ratio (A/B)
Payroll (D)
(C/D)
12/31/2010
$5,341,821,711
$6,654,036,801
$1,312,215,090
80.28%
$687,443,206
190.88%
12/31/2011
5,426,719,066
6,915,311,649
1,488,592,583
78.47%
666,394,146
223.38%
12/31/2012
5,482,257,062
7,761,315,535
2,279,058,473
70.64%
652,312,180
349.38%
The CCCERA Board took a depooling action in October, 2009 which yielded 12 separate cost
groups by employer, with the exception of smaller employers (those with less than 50 active
members) who continue to be pooled with the applicable county tier. The depooling action affected
employer rates effective July 1, 2011.
Public Employees' Pension Reform Act (PEPRA)
Assembly Bill 340 (AB 340) created the Public Employees' Pension Reform Act (PEPRA) that
implemented new benefit formulas and final compensation periods, as well as new contribution
requirements for most new employees with a membership date on or after January 1, 2013, who
meet the definition of new member under PEPRA.
The table below provides the details of the new provisions.
Benefit Formula
Final Compensation Period
Employer Contribution Rate
as a percentage payroll
Member Contribution Rate as
a percentage of payroll
2.5% at Age 67
Average of last 3 years
10.19% of Reportable
Compensation
10.25% of Reportable
Compensation
The employer contribution rate listed above is in effect until June 30, 2014. In accordance with the
provisions of AB 340, the member contribution rate shown above was set at 50 percent of expected
total normal cost rate, rounded to the nearest %4 percent, for the benefits that will apply to new
members on January 1, 2013.
Review Draft 9/26/13 9:09 AM
31
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
NOTE 9 — PENSION PLANS (Continued)
B. Deferred Compensation Plan
District employees may defer a portion of their compensation under a District sponsored Deferred
Compensation Plan created in accordance with Internal Revenue Code Section 457. Under this
plan, participants are not taxed on the deferred portion of their compensation until it is distributed to
them; distributions may be made only at termination, retirement, death, or in an emergency as
defined by the plan. The District does not make contributions to the plan.
The plan's 457 assets are held in trust for the exclusive benefit of the participants and are not
included in the District's financial statements.
C. 401 (a) Defined Contribution Plan
The District also contributes to a money purchase plan created in accordance with Internal Revenue
Code section 401(a). Contributions to the plan are made in accordance with a memorandum of
understanding stating that in lieu of making payments to Social Security, the District contributes to
the 401(a) Plan an amount equal to that which would have been contributed to Social Security on
behalf of its employees as long as the District is not required to participate in Social Security. The
assets are held in trust and are not recorded on the books of the District. The District contributed
$1,546,318 to the Plan during the year ended June 30, 2013.
NOTE 10 — POST EMPLOYMENT HEALTH CARE BENEFITS
A. Plan Description
The District's defined benefit post employment healthcare plan (DPHP) provides medical benefits
to eligible retired District employees and beneficiaries. DPHP is part of the Public Agency portion
of the Public Agency Retirement System (PARS), an agent multiple - employer plan administered by
PARS, which acts as a common investment and administrative agent for participating public
employees within the State of California. A menu of benefit provisions as well as other
requirements is established by the State statute with the Public Employees' Retirement Law. DPHP
selects optional benefit provisions from the benefit menu by contract with PARS and adopts those
benefits through District resolution. PARS issues a separate Comprehensive Annual Financial
Report. Copies of the PARS annual financial report may be obtained from PARS, 4350 Von
Karman Ave., Suite 100, Newport Beach, CA 92660, by calling 1(800) 540 -6369, or by emailing
info @pars.org.
B. Funding Policy
GASB Statement No. 45 set rules for computing the employer's expense for retiree benefits other
than pension, called OPEB. The expense, called the annual OPEB Cost (AOC), is determined
similarly to pensions. The annual required contribution (ARC) of the employer, represents a level
of funding that, if paid on an ongoing basis, is projected to cover normal annual costs each year and
amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years.
Review Draft 9/24/13 4:00 PM
4%
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
NOTE 10 — POST EMPLOYME NT HEALTH CARE BENEFITS (Continued)
When an agency contributes more than the ARC, there is a net OPEB asset (NOA); when the
contribution is less than the ARC, a net OPEB obligation (NOO) results. The District had a net
OPEB asset of $1,537,638 as of June 30, 2013.
Because of the volatility of the investment market, the District Board voted to make monthly
installments into the OPEB Trust to take advantage of dollar- cost - averaging.
C. Annual OPEB Cost and Net OPEB Asset
For 2013, the District's annual OPEB cost (expense) was equal to the ARC of $8,300,000. The
District contributed $4,823,096 for retiree health care premiums and $3,767,000 to the PARS trust
for a total of $8,590,096. The following table summarizes the changes in the District's net OPEB
(Asset) at June 30, 2013:
Annual Required Contribution (ARC)
$8,300,000
Interest on NOA
(82,000)
Adjustment to ARC
98,000
Annual OPEB Cost (AOC)
8,316,000
Contributions Made:
June 30, 2012
Health care premiums paid
(4,823,096)
Contributions to PARS trust
(3,767,000)
Increase (decrease) in net OPEB obligation
(274,096)
Net OPEB Obligation (Asset) - Beginning of Year
(1,263,542)
Net OPEB Obligation (Asset) - End of Year
($1,537,638)
The District's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and
the OPEB asset for the past three years are presented below:
Review Draft 9/26/13
33
Current Year
Percentage of
Annual OPEB
Actual
Fiscal Year
Cost (AOC)
Contribution
June 30, 2011
$6,976,364
$7,146,169
June 30, 2012
8,300,000
8,646,806
June 30, 2013
8,316,000
8,590,096
Review Draft 9/26/13
33
Current Year
Percentage of
AOC
Net OPEB
AOC
Obligation
Obligation
Contributed
(Asset)
(Asset)
102%
($169,805)
($916,736)
104%
(346,806)
(1,263,542)
103%
(274,096)
(1,537,638)
12:44 PM
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
NOTE 10 — POST EMPLOYMENT HEALTH CARE BENEFITS (Continued)
D. Funded Status and Funding Progress
Per PARS, actuarial assets as of June 30, 2013 and 2012, including trust contributions and interest,
total $29,352,833 and $22,718,524, respectively. Actuarial valuations of an ongoing plan involve
estimates of the value of reported amounts and assumptions about the probability of occurrence of
events far into the future. Examples include assumptions about future employment, mortality, and
the health care cost trend. The funded status of the plan and the annual required contributions of
the employer are subject to continual revision, as actual results are compared with past expectations
and new estimates are made about the future. The schedule of funding progress, presented below
presents multiyear trend information that shows whether the actuarial value of the plan assets is
increasing or decreasing over time, relative to the actuarial liabilities for benefits.
Projections for benefits for financial reporting purposes are based on the substantive plan (the plan
as understood by the employer and plan members) and include the types of benefits provided at the
time of each valuation as well as the historical pattern of sharing benefit costs between the
employer and plan members. The actuarial methods and assumptions used include techniques that
are designed to reduce short -term volatility in actuarial accrued liabilities and actuarial value of
assets, consistent with the long -term perspective of the calculations.
The District's most recent actuarial valuation was prepared as of July 1, 2012 and was finalized on
May 31, 2013. The June 30, 2012 actuarial valuation results will be budgeted in fiscal years 2013-
14 and 2014 -15. The ARC decreased from $8,300,000 to $8,103,000.
Review Draft 9/24/13 4:00 PM
34
Unfunded
Unfunded
(Overfunded)
Cost Method
(Overfunded)
Actuarial
Actuarial
Actuarial
Actuarial
Actuarial
Value of
Accrued
Accrued
Valuation
Assets
Liability
Liability
Date
(A)
(B)
(A — B) UAAL
June 30, 2009
$2,341,251
$68,769,305
($66,428,054)
June 30, 2010
9,404,000
90,337,000
(80,933,000)
July 1, 2012
22,481,000
100,498,000
(78,017,000)
E. Actuarial
Methods and Assumptions
Projections for benefits for financial reporting purposes are based on the substantive plan (the plan
as understood by the employer and plan members) and include the types of benefits provided at the
time of each valuation as well as the historical pattern of sharing benefit costs between the
employer and plan members. The actuarial methods and assumptions used include techniques that
are designed to reduce short -term volatility in actuarial accrued liabilities and actuarial value of
assets, consistent with the long -term perspective of the calculations.
The District's most recent actuarial valuation was prepared as of July 1, 2012 and was finalized on
May 31, 2013. The June 30, 2012 actuarial valuation results will be budgeted in fiscal years 2013-
14 and 2014 -15. The ARC decreased from $8,300,000 to $8,103,000.
Review Draft 9/24/13 4:00 PM
34
Unfunded
(Overfunded)
Actuarial
Covered Payroll
Liability as
Funded
(Active Plan
Percentage of
Ratio
Members)
Covered Payroll
(A/B)
(C)
1(A — B) /CI
3.40%
$25,080,233
265%
10.41%
25,080,233
323%
22.37%
24,305,548
321%
Projections for benefits for financial reporting purposes are based on the substantive plan (the plan
as understood by the employer and plan members) and include the types of benefits provided at the
time of each valuation as well as the historical pattern of sharing benefit costs between the
employer and plan members. The actuarial methods and assumptions used include techniques that
are designed to reduce short -term volatility in actuarial accrued liabilities and actuarial value of
assets, consistent with the long -term perspective of the calculations.
The District's most recent actuarial valuation was prepared as of July 1, 2012 and was finalized on
May 31, 2013. The June 30, 2012 actuarial valuation results will be budgeted in fiscal years 2013-
14 and 2014 -15. The ARC decreased from $8,300,000 to $8,103,000.
Review Draft 9/24/13 4:00 PM
34
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
NOTE 10 — POST EMPLOYMENT HEALTH CARE BENEFITS (Continued)
The following is a summary of the actuarial assumptions and methods:
Valuation Date
Actuarial Cost Method
Amortization Method
Average Remaining Period
Actuarial Assumptions:
Investment Rate of Return
Inflation Rate
NOTE 11— NET POSITION
July 1, 2012
Entry Age Normal Cost Method
Level Dollar /Closed
26 Years fixed
6.25%
3.00%
Medical - 9.4% grading to 5% in 2021 - 22
Medicare Part B - same as medical trend
Dental - 4%
Net Position is the excess of all the District's assets over all its liabilities, regardless of fund. Net
Position is divided into three captions:
Net Investment in Capital Assets describes the portion of Net Position which is represented by the
current net book value of the District's capital assets, less the outstanding balance of any debt
issued to finance these assets.
Restricted describes the portion of Net Position which is restricted as to use by the terms and
conditions of agreements with outside parties, governmental regulations, laws, or other restrictions
which the District cannot unilaterally alter.
Unrestricted describes the portion of Net Position which is not restricted as to use.
NOTE 12 — LEASE COMMITMENTS
The District leases various facilities and equipment under operating leases. Following is a summary
of operating lease commitments as of June 30, 2013:
Fiscal Year
Ending
2014
2015
2016
2017
Thereafter
Total
Office
Eauinment
$249,924
249,924
249,924
$749,772
Facilities
$58,416
60,096
61,827
63,610
33,922
$277,871
Total rental expense for the fiscal year ended June 30, 2013 was $306,708.
Total
$308,340
310,020
311,751
63,610
33,922
$1,027,643
Review Draft 9/26/13 12:29 PM
61
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
NOTE 13 — COMMITMENTS AND CONTINGENCIES
Commitments and contingencies, undeterminable in amount, include normal recurring pending
claims and litigation. In the opinion of management, based upon discussion with legal counsel,
there is no pending litigation which is likely to have a material adverse effect on the financial
position of the District.
Claims and losses are recorded when they are reasonably probable of being incurred and the
amount is estimable. Insurance proceeds and settlements are recorded when received.
The District has a number of purchase commitments for ongoing operating and capital projects that
involve multi -year contracts. Purchase commitments related to these multi -year contracts are
approximately $11,808,184 as of June 30, 2013.
Review Draft 9/24/13 4:00 PM
SUPPLEMENTARY INFORMATION
Review Draft 9/24/13 4:00 PM
This Page Left Intentionally Blank
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Short term investments
Accounts receivable
Interest receivable
Due from other sub -funds
Parts and supplies
Prepaid expenses
Total current assets
NON - CURRENT ASSETS:
Restricted cash and equivalents
Restricted investments
Assessment Districts receivable
Net OPEB asset
Revenue bonds issuance costs, net of amortization
CAPITAL ASSETS
Nondepreciable
Depreciable, net of accumulated depreciation
Total capital assets, net
Total non - current assets
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES:
Accounts payable and accrued expenses
Due to other sub -funds
Interest payable
Refunding Water Revenue Bonds - cursent portion
Water Reclamation Loan Contract - current portion
Accrued compensated absences - current portion
Liability for uninsured claims
Refundable deposits
Total current liabilities
NON - CURRENT LIABILITIES:
Refunding Water Revenue Bonds, noncurrent portion
Water Reclamation Loan Contract, noncurrent portion
Accrued compensated absences, noncurrent portion
Total noncurrent liabilities
TOTAL LIABILITIES
NET POSITION
Net investment in capital assets
Restricted for debt service
Unrestricted
TOTAL NET POSITION
CENTRAL CONTRA COSTA SANITARY DISTRICT
COMBINING SCHEDULE OF NET POSITION
ENTERPRISE SUB -FUNDS
JUNE 30, 2013
Rlmrl ng
Sewer
Self
Debt
5,376,935
Expense
Construction
Insurance
Service
Elimination
Total
$2,970,387
$39,891,572
$3,872,274
($19,445)
$46,714,788
10,498,624
3,720,000
10,498,624
11,789,066
3,760,182
968,301
164,582
16,517,549
383,000
26,488
2,349
36,484
65,321
118,416,830
89,775,752
1,700,940
55,110,409
($265,003,931)
-
2,005,741
158,419
2,005,741
2,204,210
119,942,733
2,861,223
20,277,990
(265,003,931)
2,204,210
137,386,234
143,952,618
6,543,864
55,127,448
(265,003,931)
78,006,233
100,000
2,089,461
1,537,638
41,795,503
562,189,966
603,985,469
5,412,500
315,287
100,000
5,412,500
2;089,461
1,537,638
315,287
41,795,503
562189,966
603,985,469
605,623,107 2,089,461 5,727,787 - 613,440,355
743,009,341 146,042,079 6,543,864 60,855,235 (265,003,931) 691,446,588
2,782,414
2,540,088
54,433
5,376,935
130,277,654
117,244,226
1,806,790
15,675,261
(265,003,931)
-
718,147
718,147
3,720,000
3,720,000
164,582
164,582
383,000
383,000
1,000,000
1,000,000
183,018
158,419
341,437
133,626,086
119,942,733
2,861,223
20,277,990
(265,003,931)
11,704,101
39,875,000
39,875,000
702,245
702,245
3,450,245
3,450,245
3,450,245
-
40,577,245
44,027,490
137,076,331
119,942,733
2,861,223
60,855,235
(265,003,931)
55,731,591
603,985,469
(44,461,827)
559,523,642
4,730,837
4,730,837
1,947,541
26,099,346
3,682,641
39,730,990
71,460,518
$605,933,010
$26,099,346
$3,682,641
$635,714,997
REVIEW DRAFT' 9/26/201312:54 PM 39 (D09A4517- FCB94lF6- A531- 64C6CC303B1E)sls Supplcm my SNA
CENTRAL CONTRA COSTA SANITARY DISTRICT
COMBINING SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
ENTERPRISE SUB -FUNDS
FOR THE YEAR ENDING JUNE 30, 2013
REVIEW DRAFT 9/26/2013 12;46 PM 40 ( D09A4517- FCB9- 4lF6- A531- 64C6CC303BIE }.ads SupplementarylS
Running
Sewer
Self
Debt
Expense
Construction
Insurance
Service
Elimination Total
OPERATING REVENUES
Sewer service charges (SSC)
$56,770,984
$56,770,984
Service charges - City of Concord
10,483,421
10,483,421
Other services charges
1,076,401
1,076,401
Miscellaneous charges
751,880
751,880
Total operating revenues
69,082,686
69,082,686
OPERATING EXPENSES
Sewage collection and pumping stations
14,327,933
14,327,933
Sewage treatment
23,035,943
23,035,943
Engineering
8,680,934
8,680,934
Administrative and general
20,936,705
$2,380,466
($2,220,505) 21,096,666
Depreciation
21,596,266
21,596,266
Total operating expenses
88,577,781
2,380,466
(2,220,505) 88,737,742
OPERATING INCOME (LOSS)
(19,495,095)
(2,380,466)
2,220,505 (19,655,056)
NONOPERATING REVENUES (EXPENSES)
Taxes
$7,471,518
$5,538,959
13,010,477
Permit and inspection fees
967,576
202,233
1,169,809
Interest earnings
131,614
230,054
15,269
28,537
405,474
Interest expense
(1,802,084)
(1,802,084)
Other income (expense)
665,939
285,161
2,220,505
(2,220,505) 951,100
Total nonoperating revenues
1,765,129
8,188,966
2,235,774
3,765,412
(2,220,505) 13,734,776
NET INCOME (LOSS) BEFORE CAPITAL
(17,729,966)
8,188,966
(144,692)
3,765,412
(5,920,280)
CONTRIBUTIONS AND TRANSFERS
CAPITAL CONTRIBUTIONS AND TRANSFERS
City of Concord contributions to capital costs
3,616,771
3,616,771
Customer contributions to capital cost (SSC)
4,384,376
4,384,376
Contributed sewer lines
939,628
939,628
Capital contributions - connection fees
6,091,529
6,091,529
Transfers In (Out)
27,185,118
(23,419,706)
(3,765,412)
Total capital contributions and transfers
28,124,746
(9,327,030)
(3,765,412)
15,032,304
CHANGE IN NET POSITION
10,394,780
(1,138,064)
(144,692)
9,112,024
NET POSITION, BEGINNING OF YEAR
595,538,230
27,237,410
3,827,333
626,602,973
NET POSITION, END OF YEAR
$605,933,010
$26,099,346
$3,682,641
$635,714,997
REVIEW DRAFT 9/26/2013 12;46 PM 40 ( D09A4517- FCB9- 4lF6- A531- 64C6CC303BIE }.ads SupplementarylS
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CENTRAL CONTRA COSTA SANITARY DISTRICT
RUNNING EXPENSE
SCHEDULE OF SUPPLEMENTAL NET POSITION ANALYSIS
FOR THE FISCAL YEAR ENDED JUNE 30, 2013
Prior Year Balance $8,706,410
2012 -2013 Revenue $70,847,815
2012- 2013 Expense (88,577,781)
Add Back Depreciation Expense 21,596,266 3,866,300
Net Position Attributed to General Operations
Net Position Attributed to All Other
Running Expense Net Position
12,572,710
593,360,300
$605,933,010
Review Draft 9/4,(2013 4:33 PM
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Central Contra Costa Sanitary District
Administrative Overhead Summary
For the 2013 -14 Budget - Calculated using 2011 -2012 Audited Financial Statements
Benefits
alive Overhead
Hours
mpacts By Item:
)PEB Contribution - Retirees
)PEB Contribution - Active
Retiree Premiums
2013 -2014 As
Calculated w/o
3 -year
smoothing
117%
18%
2013 -14 With
Change to
Methodology
85%
77%
18%
Spread to Other Departments as Direct
Spread to Other Departments as Direct
Spread to Other Departments as Direct
I Pension and Retiree Related Changes
Compensated Absence Spread to Other Departments as Direct
G Building Depreciation Eliminate from Indirect
E and Vehicle Depreciation Eliminate from Indirect
tal Depreciation Related
Combined Impact of Ch
Decrease
0.0%
40.0%
0.0%
40.0%
-110/1
-6°/
-18°/
-3501
-1 °i
ccb 9/26/2013 3:58 PM N:\AC000NTING \GMTEMP1\Admin Overhead \potential change of method 03- 2013\Admin
Overhead Matrix and potential changes.xls Revised Summary
Central Contra Costa Sanitary District
Illustration of Potential Changes to Administrative Overhead Calculation Method
Depreciation: New - Eliminate
HOB Building Depreciation
$ 479,740
2.3% $ -
Indirect
Indirect
F &E and Vehicle Depreciation
435,249
2.1% -
0.0%
Portion if
Portion if
$ 914,989
4.4% $ -
Original
Original
Spread to All
Spread to All
45.0% $ 991,026
New Method: Spread to All
Calculation
Calculation
Departments
Departments
Reduction to
Departments
Dollars
Percentage
Dollars
Dollars
Admin OH %
OPEB Contribution - Retirees
$ 2,551,986
12.2%
$ 231,124
1.1%
-11.1%
OPEB Contribution - Active
1,608,408
7.7%
344,298
1.6%
-6.0%
Retiree Premiums
4,139,606
19.8%
374,909
1.8%
-18.0%
Retiree Premiums
$ 8,300,000
39.6%
$ 950,331
4.5%
-35.1%
Accrued Compensated Absence
$ 213,907
1.02%
$ 40,695
0.2%
-0.8%
Depreciation: New - Eliminate
HOB Building Depreciation
$ 479,740
2.3% $ -
0.0%
-2.3%
F &E and Vehicle Depreciation
435,249
2.1% -
0.0%
-2.1%
Indirect
$ 914,989
4.4% $ -
0.0%
-4.4%
Total Combined Impact of Changes
$ 9,428,896
45.0% $ 991,026
4.7%
- 40.3%
Salaries Used (Actual that was lower than normal) $ 20,949,444
Accrued Compensated Absence $ 213,907 0.96% $ 40,695 0.2% -0.8%
Depreciation: New - Eliminate
HOB Building Depreciation $ 479,740 2.2% $ - 0.0% -2.2%
F &E and Vehicle Depreciation 435,249 2.0% - 0.0% -2.0%
$ 914,989 4.1% $ - 0.0% -4.1%
Total Combined Impact of Changes $ 9,428,896 42.5% $ 991,026 4.5% -38.0%
Salaries Used (Increased by 6% for Anomaly above) $ 22,206,411
ccb 9/26/2013 5:26 PM N:\ACCOUNTING \GMTEMPI\Admin Overhead \potential change of method 03- 2013\Admin
Overhead Matrix and potential changes New Method Impact Tables
Indirect
Indirect
Portion if
Portion if
Original
Original
Spread to All
Spread to All
New Method: Spread to All
Calculation
Calculation
Departments
Departments
Reduction to
Departments
Dollars
Percentage
Dollars
Dollars
Admin OH %
OPEB Contribution - Retirees
$ 2,551,986
11.5%
$ 231,124
1.0%
-10.5%
OPEB Contribution - Active
1,608,408
7.2%
344,298
1.6%
-5.7%
Retiree Premiums
4,139,606
18.6%
374,909
1.7%
- 17.0%
$ 8,300,000
37.4%
$ 950,331
4.3%
-33.1%
Accrued Compensated Absence $ 213,907 0.96% $ 40,695 0.2% -0.8%
Depreciation: New - Eliminate
HOB Building Depreciation $ 479,740 2.2% $ - 0.0% -2.2%
F &E and Vehicle Depreciation 435,249 2.0% - 0.0% -2.0%
$ 914,989 4.1% $ - 0.0% -4.1%
Total Combined Impact of Changes $ 9,428,896 42.5% $ 991,026 4.5% -38.0%
Salaries Used (Increased by 6% for Anomaly above) $ 22,206,411
ccb 9/26/2013 5:26 PM N:\ACCOUNTING \GMTEMPI\Admin Overhead \potential change of method 03- 2013\Admin
Overhead Matrix and potential changes New Method Impact Tables
CENTRAL CONTRA COSTA SANITARY DISTRICT
History of Overhead
Fiscal Year
09/10 10/11 11/12 12/13 13/14
Admin O/H
98
98
93
105
117
Non -Work Hours
19
19
19
18
18
Employee Benefits
61
61
61
71
85
Total Overhead %
1.17
178
178
173
194
220
07/08 audit
08/09 audit
09/10 audit
10/11 audit
11/12 audit'
Indirect Costs 19,122,692
20,554,231
19,991,441
22,176,335
24,548,295
Salaries 19,502,722
21,020,359
21,544,549
21,201,139
20,949,444
= Admin O/H % 0.98
0.98
0.93
1.05
1.17
3 Yr
5 Yr
Average
Average
105.0
102.2
18.3
18.6
72.3
67.8
195.7
188.6
Recommend
'Note - Salaries are the denominator. Salaries were lower due to several retirements and unfilled positions.
(Higher denominator results in lower OH %, Lower denominator results in higher OH %)
Retirement
Healthcare
= Employee Benefit Increase
2,578,521
11.6%
1,155,621
5.6%
3,734,142
14.0%
N:\ADMINSUP\ADMIN \FINANCE MANAGER \Budget and Finance Committee \Overhead \Overhead summary 3 -4-
13 9/26/2013
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Administrative Overhead - Direct/Indirect Matrix
FOR ILLUSTRATION - POTENTIAL CHANGES IN METHODOLOGY
Consider Spreading OPEB Trust Payment, Retiree Premiums and Accrued Comp Absence to all Departments
Discuss if Depreciation Costs are Appropriate
Administrative Engineerinq CSO POD PS Total
Salaries & Wages
Mgmt - All in Admin; Directors only in all other
Non- Management
Comp Abs
Overtime
Secretarial
Indirect
Direct
Indirect
Direct
Indirect
Direct
Indirect
Direct
Indirect
$ -
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Direct
Direct
Direct
-
Indirect
Direct
Direct
Direct
Direct
-
Indirect
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Indirect
Direct
Indirect
Direct
Indirect
Direct
Indirect
-
Included Above
-
Benefits:
Benefits for Directors/Secretaiies
Charged thru payroll
OPEB Contribution - Retirees
OPEB Contribution - Active
Retiree Premiums
State Unemployment Ins.
Accrued Comp. Absence
Included below
Indirect
Indirect
Indirect
Indirect
-
Indirect
Direct
Direct
Direct
Direct
-
Indirect
Direct
Direct
Direct
Direct
-
Indirect
Direct
Direct
I Direct
I Direct
Indirect
Direct
Direct
Direct
Direct
-
Indirect
WA
N/A
WA
WA
-
Indirect
Direct
Direct
I Direct
Direct
Capitalized Admin Overhead
WA
Direct Direct Direct Direct
-
Directors Fees and Expenses
Indirect
N/A
WA
N/A
WA
-
Lime
N/A
N/A
N/A
Direct
WA
Polymer
WA
WA
N/A
Direct
WA
-
Boiler Chemicals
N/A
WA
WA
Direct
N/A
-
Other Chemicals
WA
N/A
N/A
Direct
Direct
-
Hypochlorite
WA
N/A
N/A
Direct
N/A
-
Electrical
Indirect
Indirect
Direct
Direct
Direct
Natural Gas
Indirect
Indirect
Direct
Direct
N/A
-
Water
Indirect
Indirect
Direct
Direct
Direct
Telephone
Indirect
Indirect
Direct
Direct
Direct
-
Outside Veh/Equip Repair
WA
WA
Direct
N/A
WA
-
Vehicle/Equip Repair Maint
N/A
WA
Direct
WA
WA
-
General Repairs & Maint
Indirect
WA
Direct
Direct
Direct
-
Outside Repairs and Maint
Indirect
Indirect
Direct
Direct
Direct
Computer Repairs & Maint
Indirect
Indirect
N/A
Direct
WA
-
Real Property Repairs
Indirect
WA
N/A
WA
N/A
-
Ash Removal
N/A
WA
WA
Direct
N/A
-
Sludge Removal
N/A
N/A
N/A
Direct
N/A
-
Grit Removal
WA
WA
WA
Direct
N/A
-
Janitorial & Refuse Removal
N/A
Indirect
Direct
Direct
Direct
Spoils Removal
WA
N/A
Direct
N/A
WA
-
Hazardous Waste Disposal
N/A
Direct
N/A
Direct
N/A
-
Professional Services
Indirect
WA
WA
N/A
WA
Legal Services - Board
Indirect
N/A
N/A
N/A
WA
Legal Services - Staff
Indirect
Indirect
Direct
Direct
N/A
-
Outside Safety Services
Indirect
WA
Direct
Direct
Direct
-
Technical Services
Indirect
Indirect
Direct
Direct
Direct
Data Processing Services
Indirect
WA
WA
N/A
WA
-
Other Public Agency Services
Indirect
Indirect
WA
Direct
N/A
-
Reprographic Services
Indirect
Indirect
Direct
Direct
N/A
-
Recruitment
Indirect
N/A
N/A
N/A
WA
-
Self- Insurance Expense
Indirect
N/A
N/A
N/A
N/A
-
Office Equipment/Supplies
Indirect
Indirect
Direct
Direct
WA
-
Gasoline, Oil & Fuel
N/A
WA
Direct
N/A
WA
Operating Supplies
Indirect
Indirect
Direct
Direct
Direct
Operating Fuel
WA
N/A
WA
Direct
Direct
-
Laboratory Supplies
WA
WA
N/A
Direct
WA
-
Safety Supplies
Indirect
Indirect
Direct
Direct
Direct
-
Inventory Over/Short
Indirect
N/A
N/A
N/A
N/A
-
Rents & Leases
Indirect
Indirect
Direct
Direct
Direct
-
Public Agency Fees
Indirect
Indirect
Direct
Direct
Direct
-
Public Information 50%
Indirect
Indirect
N/A
N/A
WA
-
Tuition Reimbursement
Indirect
Indirect
Direct
Direct
Direct
-
Tech Training, Conf. & Meetings
Indirect
Indirect
Direct
Direct
Direct
-
Certification and Licenses
Indirect
Indirect
Direct
Direct
Direct
-
Claims
Indirect
N/A
Direct
WA
N/A
-
Subscri tions/Publications
Indirect
Indirect
Direct
Direct
Direct
-
Mileage Reimbursements
Indirect
Indirect
Direct
Direct
Direct
-
Public Notices
Indirect
Indirect
N/A
WA
N/A
Outside Organization Fees
Indirect
Indirect
WA
Direct
N/A
Employee Memberships
Indirect
Indirect
Direct
Direct
N/A
-
Miscellaneous
Indirect
Indirect
Direct
Direct
Direct
-
Election Expense
Indirect
N/A
WA
N/A
N/A
-
Manager Prof Exp Reimb
Indirect
Indirect
Direct
Direct
Direct
-
Gross Department Total Indirect
-
-
-
-
-
-
Other Adjustments:
Subtract Pollution Prevention
Indirect
Direct Above
N/A
N/A
WA
-
Subtract Clean water Program
N/A
Direct Above
N/A
WA
WA
-
Subtract Recycled Water
WA
Indirect
N/A
N/A
WA
-
Subtract Source contra non -labor
Indirect
WA
N/A
WA
-
Pool vehicle Cost - Admin
Indirect
WA
Direct Above
N/A
WA
-
Pool vehicle costs -Eng
N/A
Indirect
Direct Above
N/A
N/A
Reallocate HOB Maintenance
Indirect
N/A
WA
Direct Above
WA
-
Add: SeU- Insurance cost less Revenue
Indirect
WA
WA
WA
WA
-
Hoe _ Build" DeprecMan
Indirect
WA
WA
WA
N/A
-
FK Depreciation
Indirect
WA
WA
N/A
N/A
-
Pod Vehtas Delwaclation
Indirect
Ind rect
WA
N/A
WA
-
Total Adjustments
-
-
-
-
-
-
Total Adjusted Indirect Costs
$ - $ - $ - $ - $ - $ -
O &M Salaries
WA
Total Salary
Total Salary
Total Salary
Total Salary
-
Capital Salaries
WA
Total Salary
Total Salary
Total Salary
Total Salary
-
Total Adjusted Salaries to Apply OH
Total Administrative Overhead % (Total Adjusted Indirect Costsrrotai Adjusted Salaries to Apply OH) wwwanalary x
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ccb 9/26/2013 3:55 PM N:WCCOUNTINGIGMTEMP1\Admin Overhead\potential change of method 03- 2013\Admin Overhead Matrix and potential changes.xls Matrix-
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