HomeMy WebLinkAbout04.c. Review draft Position Paper to accept (1) the audited comparative Comprehensive Annual Financial Report (CAFR) for the fiscal years ended June 30, 2020 and 2019 performed by Maze & Associates, and (2) the independent auditors' memorandum on interna Page 1 of 112
Item 4.c.
BOARD OF DIRECTORS
20L POSITION PAPER
MEETING DATE: DECEMBER 15, 2020
SUBJECT: REVIEW DRAFT POSITION PAPER TO ACCEPT (1) THE AUDITED
COMPARATIVE COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR)
FOR THE FISCAL YEARS ENDED JUNE 30, 2020 AND 2019 PERFORMED
BY MAZE &ASSOCIATES,AND (2) THE INDEPENDENT AUDITORS'
MEMORANDUM ON INTERNAL CONTROL AND REQUIRED
COMMUNICATIONS FOR THE FISCAL YEAR ENDED JUNE 30, 2020
SUBMITTED BY: INITIATING DEPARTMENT:
KEVIN MIZUNO, FINANCE MANAGER ADMINISTRATION-FINANCE
REVIEWED BY: PHILIP LEIBER, DIRECTOR OF FINANCE AND ADMINISTRATION
ISSUE
The comparative audited CAFR of the District for the fiscal years ended June 30, 2020 and 2019, and the
independent auditors' memorandum on internal control and required communications for the year ended
June 30, 2020 are being submitted to the Board.
BACKGROUND
Independent Audit Results
The independent audit firm of Maze &Associates has completed their seventh consecutive audit
of Central San's annual financial statements for the fiscal years ended June 30, 2020, and 2019, and has
issued their audit opinion thereon. The objective of this annually required independent audit is the
expression of an opinion as to whether the basic financial statements are fairly presented, in all material
respects, in conformity with United States generally accepted accounting principles (GAAP) and to report
on the fairness of the supplementary information in relation to the financial statements taken as a whole.
The audit is conducted in accordance with auditing standards generally accepted in the United States
(GAAS). GAAS require the independent auditor to plan and perform the audit to obtain reasonable, but
not absolute, assurance about whether the financial statements are free from material misstatement.
Procedures performed necessary to gather sufficient audit evidence supporting their opinion are based on
a comprehensive assessment of Central San's financial risks, and incorporate an element of both internal
control risks and inherent business risks. Management is pleased to announce Central San's independent
auditor's report for the fiscal years ending June 30, 2020 and 2019 expresses an unmodified (clean)
opinion. As always, the I ndependent Auditors' Report including the audit opinion is included on page 1 of
the attached financial statements (Attachment 1).
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In accordance with California Government Code Section 53891, information from the audit is also used
to prepare an annual report filed with the State Controller's Office (SCO). This report is referred to as the
Financial Transactions Report(FTR), and is prepared following strict reporting guidelines published by
the SCO annually. Now that the annual independent audit has been completed, the FTR for the FY ended
June 30, 2020 will be remitted electronically by the January 31, 2021 reporting deadline. The audited
financial statements will also be sent to the Contra Costa County County Auditor-Controllers Office, the
Contra Costa County Board of Supervisors, the Bond Rating Agencies, and posted to the Electronic
Municipal Market Access (EMMA)website as required by the 2018 bond's continuing disclosure
requirements.
I n accordance with GAAS, in the performance of their audit of the annual financial statements, the
independent auditors evaluated Central San's internal controls over financial reporting. Based on their
observations during the course of the audit, the independent auditors advise management of any
significant deficiencies or material misstatements and any recommendations to improve the system of
internal accounting controls. The independent auditors are required to communicate certain matters to
those charged with governance at the conclusion of the audit, which is addressed by their"Memorandum
on Internal Control and Required Communications" (Attachment 3). In addition to the clean audit opinion,
Management is also pleased to report there were no significant deficiencies or material misstatements
identified by the auditors as part of this year's audit.
Financial Summary
Pursuant to GAAP, as a stand-alone business-type governmental entity, the District uses an enterprise
fund format to report its activities for financial statement purposes. Under this enterprise fund format, all
non-fiduciary sub-funds of the District (i.e. Running Expense, Sewer Construction, Self-Insurance, Debt
Service) are consolidated into a single reporting unit and reported in a Statement of Net Position;
Statement of Revenues, Expenses and Changes in Net Position; and a Statement of Cash Flows. This
consolidated reporting unit is considered an "opinion unit" and is what District's independent auditors have
rendered their(clean)opinion on. Accordingly, the emphasis of the annual audited financial statements is
at the District-wide level pursuant to GAAP, and not at the sub-fund level.
Overall, at the audited entity-wide level, the District's net position improved considerably, increasing by
$63.6 million (9.0%)to a total of$767.8 million as of June 30, 2020. By far the largest portion of the
District's net position (90.1%) reflects its investment in capital assets (i.e. land, buildings, machinery,
equipment, infrastructure, etc.), which are critical in the collection, treatment, disposal, and recycling of
wastewater helping to achieve its mission to protect public health and the environment. Of this total net
position, $75.6 million (9.9%)was reported as unrestricted, which represents a noteworthy increase of
$9.8 million over the prior year's unrestricted net position of$48.8 million. This increase in unrestricted net
position resulted primarily from significant reductions to the net OPEB liability following the District's
transition to CaIPERS Healthcare for active and retired participants effective July 1, 2019 as well as
favorable expenditure and revenue budgetary results for the fiscal year ended June 30, 2020. A more
detailed analysis of the financial statements is included in the Management's Discussion and Analysis
beginning on page 3 of the CAFR.
Previously, the Finance Committee has inquired about Central San's accrued employee compensated
absences liability, specifically asking for additional information of the portion of the liability attributable to
employee sick leave accruals earned and compensable upon termination. The total balance of
compensated absences payable reflected on the CAFR as of the fiscal year ended June 30, 2020 is
$5.35 million, of which $1.20 million (22.3%) pertains to employee sick leave accruals. This $1.20 million
accrual attributable to sick leave reflects employee sick time vested and payable upon termination as of
June 30, 2020. Sick time may be used by employees while employed for eligible leave or be applied
towards pension service time and/or cashed out upon retirement as permitted in labor agreements
currently in place. As disclosed in the CAF R's compensated absences footnote, employees hired prior to
December 15, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 85 of 200
Page 3 of 112
May 1, 1985 have a vested interest 85% of accrued sick time, and only one employee hired prior to this
date remains on the plan. Employees hired on or after May 1, 1985 have a vested interest in up to 40% of
their sick time, based upon length of employment with the District
The payout of long-term compensated absences is a cash-only transaction with the expense being
accrued and recognized in Central San's financials as earned pursuant to GAAP. Absent significant
turnover or significant changes to payout caps, this obligation generally grows with payroll (i.e. employee
step increases, promotions, inflationary cost of living adjustments, etc.). Attachment 2 provides a historical
trend of the sick leave compensated absences liability for the current year's CAFR being presented today
(Fiscal Year 2019-20) and the five fiscal years prior to this. The chart illustrates that while the
compensated absences liability has gradually grown as expected, the portion attributable to sick leave
accruals has decreased.
GFOA Award Program
The Government Finance Officers Association (GFOA) is a professional association of state/provincial
and local finance officers in the United States and Canada, and has served the public finance profession
since 1906. The GFOA established the Certificate of Achievement for Excellence in Financial Reporting
Program in 1945 to encourage and assist state and local governments to go beyond the minimum
requirements of generally accepted accounting principles (GAAP) issued by the Government Accounting
Standards Board (GASB) and to prepare CAFR that provide transparency and full disclosure, and then
recognize individual governments that succeed in achieving that goal.
On August 27, 2020, the Central San was awarded a Certificate of Achievement for Excellence in
Financial Reporting by the GFOA for the report submitted for the fiscal year ended June 30, 2019,
representing the 20th consecutive year Central San has received the award. The Certificate of
Achievement is the highest form of recognition for excellence in state and local government financial
reporting. In order to be awarded a Certificate of Achievement, a government agency must publish an
easily readable report in a prescribed format report that complies with GAAP as well as GFOA program
requirements. The CAFR includes ten years of District historical, financial, and statistical data. The
CAFR provides a concise document for internal management use, as well as external use with other
agencies, and is posted on the District's website for the general public. A Certificate of Achievement is
valid for a period of one year.
The Finance Division has prepared the District's CAFR as of June 30, 2020. Management is confident
that the current CAFR continues to meet the Certificate of Achievement for Excellence in Financial
Reporting Program requirements and intends to submit it to the GFOA to determine its eligibility for
another certificate.
ALTERNATIVES/CONSIDERATIONS
The Board could direct staff not to pursue the GFOA award for the CAFR. However, pursuing the award
is advised, a best practice, and consistent with Central San's strategic plan to goal to provide exceptional
customer service and maintain an excellent reputation in the community.
FINANCIAL IMPACTS
The acceptance of the audited CAFR for the comparative fiscal years ending June 30, 2020 and 2019
does not have direct fiscal impact on the District. Staff intends to submit the attached CAFR to the GFOA
for the Certificate ofAchievement for Excellence in Financial Reporting program, for which there is an
application fee for submission of a CAFR for review based on total revenues of the entity applying.
Based on this sliding fee schedule, the District's fee is expected to be $560. Funding necessary to cover
this cost was included in the adopted budget for the current fiscal year ending June 30, 2021.
December 15, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 86 of 200
Page 4 of 112
COMMITTEE RECOMMENDATION
The Finance Committee reviewed this matter at its meeting on December 15, 2020 and recommended
RECOMMENDED BOARD ACTION
Accept the audited CAFR for the fiscal years ended June 30, 2020 and 2019, and the auditors'
memorandum on internal control and required communications for the fiscal year ended June 30, 2020.
Strateguc Plan Tie-In
GOAL ONE: Customer and Community
Strategy 2—Maintain a positive reputation
GOAL THREE:Fiscal Responsibility
Strategy 1—Maintain financial stability and sustainability, Strategy 2—Ensure integrity and transparency in financial
management
ATTACHMENTS:
1. Comprehensive Annual Financial Report for Fiscal Years Ended June 30, 2020 and 2019
2. Sick Leave Accrual Trend Graph
3. Memorandum on Internal Control and Required Communications
December 15, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 87 of 200
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Page 6 of 112
CENTRAL CONTRA COSTA SANITARY
DISTRICT
MARTINEZ, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEARS ENDED JUNE 30, 2020 AND 2019
Prepared By:
Finance Division
December 15, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 89 of 200
Page 7 of 112
CENTRAL CONTRA COSTA SANITARY DISTRICT
Comprehensive Annual Financial Report
Table of Contents
For the Years Ended June 30, 2020 and 2019
INTRODUCTORY SECTION:
Letterof Transmittal............................................................................................... i
Board of Directors...............................................................................................viii
MissionStatement................................................................................................ix
OrganizationChart ............................................................................................... x
Mapof Service Area .............................................................................................A
Certificate of Achievement...................................................................................xii
FINANCIAL SECTION:
Independent Auditors' Report............................................................................... 1
Management's Discussion and Analysis .............................................................. 3
Basic Financial Statements
Statements of Net Position ................................................................. 10-11
Statements of Revenues, Expenses and Changes in Net Position.......... 13
Statements of Cash Flows.................................................................. 14-15
Statements of Fiduciary Net Position — Fiduciary Fund ........................... 16
Statements of Changes in Fiduciary Net Position - Fiduciary Fund ......... 17
Notes to Financial Statements - The accompanying notes are an
integral part of the basic financial statements.................................... 19-48
Required Supplementary Information
Cost-Sharing Multiple Employer Defined Benefit Retirement Plan -
Schedule of Proportionate Share of Net Pension Liability..................... 50
Schedule of Contributions ..................................................................... 51
Post-Retirement Health Care Defined Benefit Plan —
Schedule of Changes in the Net OPEB Liability and Related Ratios .... 52
Schedule of Investment Return Rate .................................................... 52
Schedule of Contributions ..................................................................... 53
Supplementary Information
Combining Schedule of Statement of Net Position .................................. 56
Combining Schedule of Statement of Revenues, Expenses and
Changes in Net Position - Enterprise Sub-Funds .................................. 57
STATISTICAL SECTION (Unaudited):
Changes in Net Position and Statement of Net Position -
Last Ten Fiscal Years.....................................................................................S-1
Revenue by Type - Last Ten Fiscal Years.........................................................S-2
Operating Expenses by Type - Last Ten Fiscal Years.......................................S-3
Major Revenue Base and Rates - Historical and Current Fees -
Last Ten Fiscal Years.....................................................................................S-4
December 15, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 90 of 200
Page 8 of 112
Assessed and Estimated Actual Valuation of Taxable Property -
Last Ten Fiscal Years.....................................................................................S-5
Property Tax and Sewer Service Charge Fees Levied and Collected -
Last Ten Fiscal Years.....................................................................................S-5
Sewer Service Charge - List of Ten Largest Customers -
Last Ten Fiscal Years.....................................................................................S-6
Payments Under the Concord Agreement -
LastTen Fiscal Years.....................................................................................S-7
Active Service Accounts and Fiscal Year Billings -
Sewer Service Charges..................................................................................S-7
Summary of Debt Service - Type, Debt Service Coverage, Debt Ratio -
Last Ten Fiscal Years.....................................................................................S-8
Demographic and Economic Data - Population Served -
Last Ten Calendar Years................................................................................S-9
List of Nine Largest Employers in Contra Costa County -
Last Year and Eight Years Ago ......................................................................S-9
Demographic and Economic Statistics - Contra Costa County -
Last Ten Fiscal Years...................................................................................S-10
Full-time Equivalent Positions Filled by Department -
LastTen Fiscal Years...................................................................................S-11
Number of Retirees and Surviving Spouses —
LastTen Fiscal Years...................................................................................S-11
Capital Asset and Operating Statistics —
Last Ten Calendar or Fiscal Years ...............................................................S-12
Miscellaneous Statistics ..................................................................................S-12
December 15, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 91 of 200
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,0tTC1 CENTRAL SAN
CENTRAL CONTRA COSTA SANITARY DISTRICT 5019 IMHOFF PLACE, MARTINEZ, CA 9,4553-A392
December 15, 2020
Central Contra Costa Sanitary District Customers and
The Honorable Board of Directors,
Martinez, California:
State law requires that every general-purpose local government publish within six months
of the close of each fiscal year a complete set of audited financial statements. This report
is published to fulfill that requirement for the fiscal year ended June 30, 2020.
Management of Central Contra Costa Sanitary District (the District) assumes full
responsibility for the completeness and reliability of the information in these financial
statements, based upon a comprehensive system of internal controls that is established
for this purpose. Because the cost of internal control should not exceed anticipated
benefits, the objective is to provide reasonable, rather than absolute, assurance that the
financial statements are free of any material misstatements.
Maze & Associates has issued an unmodified ("clean") opinion on the District's financial
statements for the year ended June 30, 2020. The independent auditors' report is located
at the front of the financial section of this report.
Management's Discussion and Analysis report (MD&A) immediately follows the
independent auditors' report and provides a narrative introduction, overview, and analysis
of the basic financial statements. The MD&A complements this letter of transmittal and
should be read in conjunction with it.
PROFILE OF THE GOVERNMENT
History and Services Provided
The District was established in 1946 under the Sanitary District Act of 1923 and is located
approximately 30 miles east of San Francisco. The District builds, operates and maintains
the facilities required to collect and clean wastewater for approximately 342,000 residents
of Danville, Lafayette, Martinez, Moraga, Orinda, Pleasant Hill, San Ramon, Walnut
Creek and some of the unincorporated communities within central Contra Costa County.
The District also treats wastewater for approximately 141,000 residents of the Cities of
Concord and Clayton under a 1974 (and as subsequently amended) contract with the City
of Concord.
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Page 11 of 112
The District is committed to protecting the public health and preserving the environment
at responsible rates, through conducting long-range financial planning and managing
costs. The District has approximately 1,500 miles of sewer pipeline, ranging in size from
4 inches to 102 inches in diameter, and 19 sewage-pumping stations (three of which are
privately owned) in the District's sewage collection system. The District is the sole
provider of wastewater service within the District limits (see map of service area). The
residential segment makes up the largest segment of the District's customer base
representing approximately 81% of the Sewer Service Charge operating revenue. The
District's treatment capacity has grown tremendously from a modest 4.5 million gallons
per day (mgd) in 1948 to 53.8 mgd currently. Bonds, state grants, federal grants, and
pay-as-you-go resources of the District have currently financed capital expenditures and
capacity expansions, although in recent years, pay-as-you go resources have been the
primary financing mechanism for the District's capital program.
The District also operates an expanding Recycled Water Program that provides high-
quality recycled water for non-drinking purposes such as landscape irrigation at schools,
parks, playgrounds, median strips and playing fields, as well as dust control and industrial
process uses. Due to strong customer demand the District maintained operation of its
residential recycled water fill station, which allows residential customers to obtain a
maximum of 300 gallons of recycled water per trip for use in hand watering lawns,
landscaping, and gardens. The District also actively pursues new recycled water
expansion opportunities to take advantage of the potential water supply that highly-
treated wastewater represents, particularly given California's limited water supply. Goals
of this program include expanding recycled water availability to District customers, and
potentially, putting our valuable recycled water resource to beneficial use outside of the
District's service territory through water exchanges. The District continues to
enthusiastically promote this program with the position that recycling water is good for the
environment and provides an economic benefit to the community by ensuring a reliable,
drought-proof water supply for local businesses and parks.
In addition to its responsibility to collect and treat wastewater, the District also undertakes
pollution prevention initiatives through the operation and maintenance of a permanent
Household Hazardous Waste (HHW) Collection Facility in partnership with Mt. View
Sanitary District and other local governments. The HHW Collection Facility is located
adjacent to the District's wastewater treatment plant and seeks to keep pollutants out of
the sewer system, making this facility a vital part of our overall Pollution Prevention
Program. Having completed its 23rd year of operation, the HHW Facility currently serves
over 27,000 residential and small business customers annually, from which over two
million pounds of hazardous waste is collected and properly disposed of each year. In
conjunction with its HHW facility, the District's Pharmaceutical Collection Program
encourages pollution prevention having collected over nine thousand pounds of expired
or unwanted medications between its thirteen collection sites.
Organization, Accounting and Budgetary Controls
A five-member Board of Directors governs the District. Board members are elected at
large by voters of the District on a non-partisan basis and serve four-year staggered
terms. The Board appoints the General Manager, who in accordance with policies
ii
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Page 12 of 112
established by the Board of Directors, manages District affairs. The District employed
274 employees at year end, and has authorized 291 permanent regular full-time
employees organized in three departments steered by an Executive Governance unit.
Department Directors oversee and are responsible for the budgets and expenses of each
department and their underlying divisions. The three departments are: Administration,
Engineering and Technical Services, and Operations.
The District, by law, uses an enterprise fund structure to account for its operations and is
run in a manner similar to private industry. The District currently has one enterprise fund
which is comprised of four internal sub-funds:
■ Running Expense - accounts for the general operations of the District. Substantially
all operating revenues and expenses are accounted for in this fund (also referred to
as Operations & Maintenance or O&M).
■ Sewer Construction - accounts for non-operating revenues that are to be used for
acquisition or construction of plant, property, and equipment (also referred to as the
Capital Fund).
■ Self-Insurance - accounts for interest earnings on cash balances in this sub-fund and
cash allocations from other funds, as well as costs of insurance premiums and claims
not covered by the District's insurance policies.
■ Debt Service — accounts for activity associated with the payment of the District's long
term bonds and loans.
Each year, the Board adopts the following four budgets: Operations and Maintenance,
Capital Improvement and Sewer Construction, Self-Insurance, and Debt-Service. The
Board Finance Committee reviews disbursements prior to each regular Board meeting,
and disbursements are then approved by the full Board. Monthly financial statements are
issued to management and the Board. District management is accountable for variances
and adhering to overall budget constraints. The Board has delegated various contracting
and spending authority to the General Manager, as specified by an adopted Board policy.
Additional limited contracting and spending authority is further delegated to certain staff
classifications as specified by internal signature limits - the District also has several
documented financial policies (including debt management, investments, and fiscal
reserves) that are reviewed and updated in accordance with best practices as well as
changes in laws and regulations.
ASSESSING THE DISTRICT'S ECONOMIC CONDITION
Local Economy and Outlook
After abruptly grinding the state economy to a halt in the springtime to slow the spread of
the coronavirus disease (COVID -19), the current economic recovery from the pandemic
has been quicker than expected, but uneven. Many low-income Californians remain out
of work, while most high-income workers have been spared. According to the State of
California's Legislative Analyst's Office (LAO), the state will have an estimated $26 billion
windfall to begin fiscal year 2021-22 which can be used to make up for future budget
deficits. Based on this outlook, the LAO expects the state to allocate about half of the
iii
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windfall to address one-time pandemic response needs to hopefully continue rapid
economic growth and recovery. According to the California Employment Development
Department (EDD), the Contra Costa County workforce decreased by approximately
3.37% from November 2019 to November 2020. During this same timeframe,
unemployment in Contra Costa County increased significantly from 2.7% to 7.9%, as of
October 31, 2020, remaining slightly below California as a whole, which increased from
3.7% to 9.0%. Although negative news, this is well below the spike of 16% from
springtime this year, and fortunately did not reach the projected rate of 25%. Most high
wage jobs remain intact, especially in the technology sector, which lead to the state's
three main taxes (personal income, corporation, and sales) to be $11 billion ahead of
earlier projections. Since the initial shelter-in-place order from March 2020, there has
been a growing trend of employees working remotely. The ability to work from home
combined with historically low mortgage rates has caused increased demand for homes
in the state's suburban areas, such as the District's service area. There is still a significant
amount of uncertainty about the state's economic future, largely dependent upon the
ability to defeat the coronavirus.
Long-Term Financial Planning
The District has an excellent reputation in all areas of public service, which include
finance, collection, treatment, training, safety, technology, capital improvements and
replacements, innovative use of technology, and customer service. This positive
reputation and long-term outlook has served the District well, most recently evidenced by
the significant customer support and unanimous Board of Directors approval of a four-
year sewer service charge rate increase. Following the public noticing process and a
public hearing stipulated by Proposition 218, the sewer service charge rates approved in
April 2019 will be effective from July 2019 through June 2023. The four-year sewer
service charge rate increases range from 5.25% to 4.75% and are a critical component
of implementing the treatment plant and collection system capital improvement projects
specified in the District's 20-year master plan adopted in 2017. Due to the financial
hardships brought on by the COVID-19 pandemic and related lock downs earlier this year,
the Board took action and passed customer relief measures to prevent further burdens
on its customers. Specific measures taken included postponement of the rate increase
scheduled for FY 2020-21 and refunding schools' sewer service charges to reflect a drop
in water use while schools were forced to close.
In conjunction with the approved sewer service charge rates, the District's most recently
adopted long-term financial plan anticipated two debt issuances totaling approximately
$173 million to finance its treatment plant and collection system capital improvement
program through the fiscal year ending June 30, 2024. The current and primary strategy
is to pursue low interest and federally subsidized State Revolving Fund loan financing
through the California Water Board.
District management analyzes and updates a strategic plan every two years, with the
seven current goals being: (1) provide exceptional service and maintain an excellent
reputation; (2) meet regulatory requirements and promote sustainability; (3) manage
finances wisely and prudently; (4) recruit, empower, and engage a highly trained and safe
workforce; (5) maintain facilities and equipment to be dependable, resilient, and long
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lasting; (6) explore new technologies for continuous improvement; and (7) preserve
business continuity during pandemic events or major natural disasters. Strategies to
achieve each of these seven goals are developed, as well as metrics to evaluate success.
Performance on achievement of the goals in the plan is reported quarterly to the Board
of Directors. The District updates a 10-year financial plan each year shortly before the
budget process begins. The main economic factors considered in this long-term
forecasting exercise are: the impact of state legislation and mandates, regulatory
compliance, Governmental Accounting Standards Board (GASB) requirements,
negotiated labor contract terms (including projected changes in retirement and health
care costs), energy costs and interpreting the energy market, housing growth, and
infrastructure renewal and replacement needs. The unfunded actuarial accrued liabilities
for the District's pension OPEB plans are also considered in the financial planning
process. The District currently has a relatively strong fiduciary net position of
approximately 85.1% and 87.1% for its pension and OPEB plans respectively. A Section
115 Pension Prefunding Trust also has additional resources available to be used towards
pension liabilities.
The District anticipates that it will continue to meet its mission and goals, continue to
provide excellent customer service and responsible rates to its customers, and meet
compliance requirements and other goals as specified in its strategic plan for the coming
years.
Relevant Financial Policies
Investment Policy: The investment policies for District assets, the GASB 45 (OPEB)
Trust, and the Pension Prefunding Trust are reviewed and approved annually by the
Board of Directors. During fiscal year 2019-20 the District contributed an additional
$1,250,000 to both trusts as a mechanism to hedge against potential future employer
pension contribution rate volatility. Section 53646 of the California Government Code
governs our investment practices, and is reviewed annually by staff, legal counsel and
the Board. The Board receives quarterly financial statements that include District
investment performance. The GASB 45 Trust and the Section 115 Pension Prefunding
Trusts are governed by separate investment policies. Since 2008, the GASB 45 Trust
funds have been invested with a moderate investment strategy, reflecting the relatively
long-term horizon for use of the funds. The Section 115 Pension Prefunding trust funds
are invested using a moderately conservative strategy, reflecting the relatively shorter
term need for the funds. These two irrevocable trusts are managed by an outside
investment advisor subject to investment policies adopted by the Board. The Board
Finance Committee reviews GASB 45 Trust and Section 115 Pension Trust quarterly
financial reports to monitor the District's investment performance.
Major Initiatives
The District's vision is to be a high-performance organization that provides exceptional
customer service and regulatory compliance at responsible rates. Regulatory compliance
is provided through utilizing best management practices in our operation of our collection
system and treatment facilities, as well as through continued investment in our
infrastructure.
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The District has received the Platinum award from the National Association of Clean
Water Agencies (NACWA) for 23 straight years in recognition of 100% compliance with
our National Pollutant Discharge Elimination System (NPDES) permit. It has also
reduced the number of sanitary sewer overflows by more than 60% in the past 16 years
by improved sewer cleaning and a robust sewer rehabilitation program.
During FY 2019-20, the District approved a two-year Strategic Plan for FY 2020-21 and
FY 2021-22. As noted previously, the Strategic Plan establishes policy direction and
identifies seven goals with key performance indicators that provide a roadmap for
achieving increased effectiveness and efficiencies. The District continues to analyze
current and future rates, costs, and cash flows to ensure they remain consistent with the
cost of service study initially completed in FY 2014-15 and updated in April 2019.
In order to effectively manage assets to meet future state and federal regulatory
requirements, the District initiated an Asset Management Program and the preparation of
a Comprehensive Wastewater Master Plan to evaluate options for addressing future
regulatory requirements. The Master Plan was completed in FY 2016-17 and has been
used as a roadmap for the capital improvements for the next 20 years. Individual projects
are proposed in an annual capital improvement budget, and brought to the Board for
approval above specified limits. Furthermore, in May 2018, the Board approved the
adoption of the Uniform Construction Cost Accounting Act, which provides for a
streamlined contracting and approval process for smaller capital projects.
AWARDS AND ACKNOWLEDGEMENTS
The Government Finance Officers Association of the United States and Canada (GFOA)
awarded a Certificate of Achievement for Excellence in Financial Reporting to the Central
Contra Costa Sanitary District for its comprehensive annual financial report for the fiscal
year ended June 30, 2019. This was the twentieth consecutive year that the District has
achieved this prestigious award. In order to be awarded a Certificate of Achievement, a
government must publish an easily readable and efficiently organized comprehensive
annual financial report. This report must satisfy both generally accepted accounting
principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our
current comprehensive annual financial report continues to meet the program's
requirements and we are submitting it to the GFOA to determine its eligibility for another
certificate.
This report could not have been accomplished without the dedication and commitment
provided by District staff. We would like to express our appreciation to the following
employees who assisted in its preparation:
■ The Finance Division who compiled the information contained in this document with a
special thanks to Chris Thomas, Finance Administrator, Diana Diaz, Accountant, and
Amal Lyon, Accountant.
Vi
December 15, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 98 of 200
Page 16 of 112
■ The Reproduction and Graphics Team who creatively and professionally prepared this
finished document.
■ Engineering &Technical Services Department as well as Operations Department staff
who provided much of the statistical information included in this document.
■ The District's Board of Directors and Management Team for their support in preparing
this document as well as their day-to-day support in conducting the financial
operations of the District in a prudent and responsible manner.
Respectfully submitted,
Philip Leiber, CPA T. Kevin Mizuno, CPA
Director of Finance & Administration Finance Manager
Vii
December 15, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 99 of 200
Page 17 of 112
CENTRAL CONTRA COSTA SANITARY DISTRICT
BOARD OF DIRECTORS
June 30, 2020
Michael R. McGill..............................................President
Tad J. Pilecki .....................................President Pro-Tem
Paul H. Causey ..................................................Member
James A. Nejedly................................................Member
David R. Williams ...............................................Member
Viii
December 15, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 100 of 200
Page : .
2 SO CENTRAL SAN
CENTRAL CONTRA COSTA SANITARY DISTRICT
VISION7 MISSIU
VA U S
OUR MISSION
To protect public health and the environment
OUR VISION
To be an industry-leading organization known for environmental stewardship,
innovation, and delivering exceptional customer service at responsible rates
OUR VALUES
PEOPLE COMMUNITY PRINCIPLES LEADERSHIPAND
Respect customers Collaborate with • Be truthful and COMMITMENT
and employees water sector honest Promote a passionate
•Work effectively partners Be fair, kind, and and empowered
and efficiently as a Foster community friendly workforce
team relationships Take ownership and Encourage continuous
Celebrate our Be open, transparent, responsibility growth and
successes and and accessible development
learn from our Understand service Inspire dedication and
challenges level expectations top-quality results
Provide a safe and
healthful environment
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Central Contra Costa Sanitary District Service Area
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2. Fairview 12. Bates Blvd. -Orinda
Wastewater collection and treatment and 3. Maltby 13. Orinda Crossroads
HHW collection for 342,149 people 4. Clyde 14. Moraga
Wastewater treatment and HHW collection 5. Concord Industrial 15. San Ramon
for 141,480 residents in Concord and Clayton 6. Buchanan Field North 16. Wagner Ranch
by contract 7. Buchanan Field South 17. Lower Wilder
8. Sleepy Hollow 18. Upper Wilder
HHW disposal services only 9. Acacia
10. Flush Kleen
A
December 15, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 103 of 200
Page 21 of 112
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
Central Contra Costa Sanitary District
California
For its Comprehensive Annual
Financial Report
For the Fiscal Year Ended
June 30, 2019
P.
Executive Director/CEO
XII
December 15, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 104 of 200
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FINANCIALS
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Page 23 of 112
Fl. MAZE
INDEPENDENT AUDITORS'REPORT
To the Board of Directors
Central Contra Costa Sanitary District
Martinez,California
We have audited the accompanying financial statements of the business-type activities and the fiduciary
funds, of the Central Contra Costa Sanitary District(District), California, as of and for the years ended June
30, 2020 and 2019, and the related notes to the financial statements, which collectively comprise the
District's basic financial statements as listed in the Table of Contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of the financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audits. We conducted
our audits in accordance with auditing standards generally accepted in the United States of America. Those
standards require that we plan and perform the audits 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.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial positions of the business-type activities and the fiduciary fund of the Central Contra
Costa Sanitary District as of June 30, 2020 and 2019, and the respective changes in financial positions and
cash flows, where applicable, for the years then ended in accordance with accounting principles generally
accepted in the United States of America.
T 925.930.0902
Accountancy Corporation F 925.930.0135
3478 Buskirk Avenue,Suite 215 e maze9mazeassociates.com
Pleasant Hill,CA 94523 1 w mazeassociates.com
December 15, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 106 of 200
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Report on Summarized Comparative Information
We have previously audited the District's June 30,2019 financial statements, and we expressed unmodified
audit opinions on those audited financial statements in our report dated December 9, 2019. In our opinion,
the summarized comparative information presented herein as of and for the year ended June 30, 2019 is
consistent,in all material respects,with the audited financial statements from which it has been derived.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that Management's
Discussion and Analysis and other Required Supplementary Information, as listed in the table of contents,
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
December 3,2020
2
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Page 25 of 112
Central Contra Costa Sanitary District
Protecting public 5019 Imhoff Place,Martinez, CA 94553-43
MANAGEMENT'S DISCUSSION AND ANALYSIS
This section of the Central Contra Costa Sanitary District's (District) annual financial report presents an
analysis of the District's financial performance during the fiscal year ended June 30,2020(2019-20). This
information is presented in conjunction with the audited financial statements,which follow this report.
FINANCIAL HIGHLIGHTS
The District's 2019-20 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 $63.6 million or 9.04% in 2019-20. This
increase is primarily a result of the negative Other Post Employment Benefits (OPEB) expense
adjustment recognized as a result of the transition to CalPERS Healthcare in July 2019, reducing
medical premium rates for current and retired participants, as well as increases in capital
contributions.
• Total revenues in 2019-20 increased by $1.30 million or 1.18%. The total annual sewer service
charge(SSC)rate increased for single family homes by 5.47%to $598 and 3.10%for multi-family
homes to $566. Increased property values in the service area led to an increase in property taxes
of$0.63 million or 3.42%.
• Total 2019-20 expenses increased by $27.0 million or 36.36%. 2019 expenses were lower due to
one-time issues including a negative OPEB expense adjustment that was recognized as a result of
the District transitioning to CAPERS healthcare administration significantly reducing current and
retiree medical premiums as well as interest savings arising from the 2018 debt refinancing.
• Capital Contributions increased in 2019-20 by $6.18 million or 13.18%. The increase is mainly
due to an increase in contributions from the City of Concord for its share of treatment plant and
other eligible capital project costs and a higher allocation of SSC to finance the capital program.
This reflects the continued increase in Sewer Construction Fund capital expenditures year over
year.
OVERVIEW OF THE FINANCIAL STATEMENTS
The District operates as a utility enterprise and presents its financial statements using the economic
resources measurement focus and the full accrual basis of accounting. As an enterprise fund,the District's
basic financial statements are comprised of two components:financial statements and notes to the financial
statements. This report also contains other supplementary information in addition to the basic financial
statements themselves.
In accordance with the GASB Codification of Governmental Accounting and Financial Reporting
Standards, the District's annual financial balances and transactions are summarized and reported in the
following financial statements:
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Page 26 of 112
• Statement of Net Position-reports the District's current financial resources (short-term
spendable resources) with capital assets, deferred outflows of resources, long-term obligations,
and deferred inflows of resources.
• 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 Sanitary
District for the past three fiscal years:
Table 1 - Condensed Statement of Net Position
Year Ending June 30 2020 vs.2019 2020 vs.2018
$Increase %Increase $Increase %Increase
2020 2019 2018 (Decrease) (Decrease) (Decrease) (Decrease)
Assets
Current assets $164,102,632 $138,987,589 $119,043,984 $25,115,043 18.07% $45,058,648 37.85%
Capital assets,net 711,564,564 677,392,935 652,402,342 34,171,629 5.04% 59,162,222 9.07%
Other non-current assets 11,478,481 9,752,616 11,462,838 1,725,865 17.70% 15,643 0.14%
Total assets 887,145,677 826,133,140 782,909,164 61,012,537 7.39% 104,236,513 13.31%
Deferred outflows
Pension related 26,670,166 46,715,613 21,503,021 (20,045,447) -42.91% 5,167,145 24.03%
OPEB related 2,176,533 2,836,089 30,400 (659,556) -23.26% 2,146,133 0.00%
Total deferred outflows 28,846,699 49,551,702 21,533,421 (20,705,003) -41.78% 7,313,278 33.96%
Liabilitie s
Current liabilities 15,854,317 14,404,545 14,441,630 1,449,772 10.06% 1,412,687 9.78%
Long-term liabilities 97,013,922 126,547,399 140,952,831 (29,533,477) -23.34% (43,938,909) -31.17%
Total liabilities 112,868,239 140,951,944 155,394,461 (28,083,705) -19.92% (42,526,222) -27.37%
Deferred inflows
Pension related 30,761,867 23,736,976 28,076,634 7,024,891 29.59% 2,685,233 9.56%
OPEB related 4,601,542 6,864,360 - (2,262,818) 100.00% 4,601,542 0.00%
Total deferred inflows 35,363,409 30,601,336 28,076,634 4,762,073 15.56% 7,286,775 25.95%
Net position
Net investment in capital assets 692,117,172 655,586,304 623,307,342 36,530,868 5.57% 68,809,830 11.04%
Restricted 2,639 (271,370) 4,421,504 274,009 -100.97% (4,418,865) -99.94%
Unrestricted 75,640,917 48,816,628 (6,757,356) 26,824,289 54.95% 82,398,273 -1219.39%
Total net position $767,760,728 $704,131,562 $620,971,490 $63,629,166 9.04% $146,789,238 23.64%
The total net position of the District increased from $621.0 million in 2017-18 to $704.1 million in 2018-
19 and increased to $767.8 million in 2019-20. The District's total assets have increased by$61.0 million
or 7.39% compared to 2018-19, and $104.2 million or 13.31% compared to 2017-18. Total liabilities
decreased $28.1 million or 19.9% compared to 2018-19 and decreased $42.5 million or 27.4% compared
to 2017-18. The increase in net position over the three-year period totals $146.8 million, or 23.64%,
resulting primarily from the District's transition to CalPERS for healthcare insurance, creating short and
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long-term savings through more affordable health premiums for active and retired employee participants,
(2) a significant increase in capital contributions, and(3)the 2018 bond refunding.
By far the largest portion of the District's net position(90.2%)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 is 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 related 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 discharge these liabilities. The balance of$75.6 million in unrestricted net position increased
by $26.8 million from 2018-19 and increased by $82.4 million from 2017-18. As noted previously, this
increase was primarily a result of the District transitioning to a more economical provider for healthcare
insurance, reducing current healthcare premiums for active and retired employee participants as well as
resulting in significant reductions to the net OPEB liability.
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
District for the past three fiscal years:
Table 2 - Condensed Statement of Revenues, Expenses, and Changes in Net Position
Year Ending June 30 2020 vs.2019 2020 vs.2018
$Increase %Increase $Increase %Increase
2020 2019 2018 (Decrease) (Decrease) (Decrease) (Decrease)
Revenues:
Operating revenues
Sewer service charges $ 85,332,494 $ 83,862,200 $ 91,876,438 $ 1,470,294 1.75% $ (6,543,944) -7.12%
Other 1,890,285 1,815,966 619,997 74,319 4.09% 1,270,288 204.89%
Total operating revenue 87,222,779 85,678,166 92,496,435 1,544,613 1.80% (5,273,656) -5.70%
Non-operating revenues
Property taxes 18,876,886 18,251,794 17,650,741 625,092 3.42% 1,226,145 6.95%
Permit and inspection fees 2,251,245 2,648,708 2,592,137 (397,463) -15.01% (340,892) -13.15%
Investment earnings 2,310,269 2,573,964 1,223,649 (263,695) -10.24% 1,086,620 88.80%
Other 1219,811 1,424,520 1,075,838 (204,709) -14.37% 143,973 13.38%
Total non-operating revenue 24,658,211 24,898,986 22,542,365 (240,775) -0.97% 2,115,846 9.39%
Total revenues 111,880,990 110,577,152 115,038,800 1,303,838 1.18% (3,157,810) -2.74%
Expenses
Operating expense other than depreciation 79,462,379 52,295,571 88,119,374 27,166,808 51.95% (8,656,995) -9.82%
Depreciation 21,253,062 20,983,353 21,561,704 269,709 1.29% (308,642) -1.43%
Non-operating expenses 604,851 1,025,006 1,230,680 (420,155) -40.99% (625,829) -50.85%
Total expenses 101,320,292 74,303,930 110,911,758 27,016,362 36.36% (9,591,466) -8.65%
Income before capital contributions 10,560,698 36,273,222 4,127,042 (25,712,524) -70.89% 6,433,656 155.89%
Capital contributions 53,068,468 46,886,850 31,760,548 6,181,618 13.18% 21,307,920 67.09%
Increase in net position 63,629,166 83,160,072 35,887,590 (19,530,906) -23.49% 27,741,576 77.30%
Beginning net position,as restated 704,131,562 620,971,490 585,084,200 * 83,160,072 13.39% 119,047,362 20.35%
Ending net position $767,760,728 5704,131,562 $620,971,790 $63,629,166 9.04% 5146,788,938 23.64%
*Net position as of June 30,2018 was restated due to the implementation of Governmental Accounting Standards Board(GASB)Statement No.75.
5
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Revenue
Total operating revenues decreased from $92.5 million in 2017-18 to $85.7 million in 2018-19 and
increased to $87.2 million in 2019-20. Operating revenues increased by $1.5 million or 1.80% compared
to 2018-19, and decreased by $5.3 million or 5.70% comparing 2019-20 to 2017-18. The reduction in
operating revenues is largely attributable to a sizable and planned increase in the proportion of sewer
service charges allocated to the capital improvement program, which is reported as non-operating capital
contributions.
Total non-operating revenue increased from $22.5 million in 2017-18 to $24.9 million in 2018-19 and
decreased to $24.7 million in 2019-20. Total non-operating revenues in 2019-20 decreased compared to
2018-19 by $0.2 million or 0.97% and increased by $2.1 million or 9.39% comparing 2019-20 to 2017-
18.
Total revenues decreased from $115.0 million in 2017-18 to $110.6 million in 2018-19 and increased to
$111.9 million in 2019-20. The change in total revenue represented an increase of$1.3 million or 1.18%
comparing 2019-20 to 2018-19 and a decrease of$3.2 million or 2.74% comparing 2019-20 to 2017-18.
There was a 5.47%rate increase for single family homes and a 3.10%rate increase for multi-family homes
in 2019-20, a 6.98% rate increase for single family homes and a 7.02% rate increase for multi-family
homes in 2018-19, and a 5.37%rate increase for single family homes and a 5.34%rate increase for multi-
family homes in 2017-18. The sewer service charge allocation to cover capital costs increased to 31.80%
in 2019-20 from 29.40% in 2018-19 and 15.60% in 2017-18. Property tax revenue increased by $0.6
million or 3.42% from 2018-19 to 2019-20, and $1.2 million or 6.95% comparing 2019-20 to 2017-2018
due to the continued increase in assessed property values, a healthy real estate market, and development
of residential and commercial real estate in the region.
Expenses
Total expenses decreased from $110.9 million in 2017-18 to $74.3 million in 2018-19 and increased to
$101.3 million in 2019-20. In 2019-20,total expenses increased by$27.0 million or 36.36%compared to
2018-19. Comparing 2019-20 to 2017-18,total expenses were$9.6 million or 8.65%lower. The decrease
from 2017-18 to 2019-20 is mainly attributable to the negative OPEB expense adjustment recognized as
a result of the District transitioning to Ca1PERS Healthcare, reducing medical premium rates for active
and retired employee participants. Non-operating expenses are mainly driven by interest expense.
Total income before capital contributions went from $4.1 million in 2017-18, to $36.3 million in 2018-
19, then reducing to $10.6 million in 2019-20. The 2018-19 amount benefited from the healthcare
transition noted previously.
Total capital contributions in 2019-20 were$53.1 million compared to$46.9 million in 2018-19 and$31.8
million in 2017-18. This increase was mainly derived from three factors: (1) a shift of the internal sewer
service charge revenue allocation from operating to capital, (2) a 5.25% increase in the sewer service
charge rate, and (3) more connection fee revenue arising from robust housing and construction
development markets.
CAPITAL ASSETS
Net capital assets for fiscal years 2019-20, 2018-19 and 2017-18 totaled $711.6 million, $677.4 million,
and $652.4 million, respectively. Net 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, less depreciation.
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As of June 30,2020,the District's investment in capital assets totaled$711.6 million, an increase of$34.2
million or 65.2% over the net capital asset balance of$677.4 million at June 30, 2019. Net capital assets
increased by$59.2 million or 9.1%comparing 2019-20 to 2017-18. A comparison of the District's capital
assets,net of depreciation, over the past three fiscal years is presented below:
Table 3 — Net Capital Assets
Year Ending June 30 2020 vs.2019 2020 vs.2018
$Increase %Increase $Increase %Increase
2020 2019 2018 (Decrease) Decrease (Decrease) (Decrease)
Structures,buildings,and
equipment $613,794,504 $609,205,177 $594,311,630 $ 4,589,327 0.8% $19,482,874 3.3%
Land and rights of way 22,290,077 22,270,077 22270,077 20,000 0.1% 20,000 0.1%
Construction in progress 75,479,983 45,917,681 35,820,635 29,562,302 64.4% 39,659,348 110.7%
Total 711,564,564 677,392,935 652,402,342 34,171,629 65.2% 59,162,222 9.1%
The increase in capital assets, net of depreciation, of$34.2 million from 2018-19 to 2019-20 and $59.2
million from 2017-18 to 2019-20 is a result of an expanding capital improvement program over these
years, where spending has exceeded annual depreciation. This year's major addition to construction-in-
progress includes the following:
Project Description Capital Outlay
Mechanical and concrete renovations (735 1) $ 8,711,371
Plant operations building seismic upgrades (7362) 3,868,266
Solids handling facility improvements (7348) 3,724,284
Filter plant improvements (7361) 3,412,048
South Orinda sewer renovations (8454) 3,263,678
Moraga/Crossroads pump station project(8436) 3,032,667
Emergency slugde loadout facility(7376) 2,864,063
Lafayette sewer renovation phase 13(8452) 2,726,663
ERP Replacement(8250) 2,449,455
Total $ 34,052,495
Refer to Note 5 in the audited financial statements for additional details on the District's capital assets.
DEBT ADMINISTRATION
The total debt obligations, excluding liabilities related to pension, OPEB and compensated absences
liabilities, for fiscal years 2019-20, 2018-19 and 2017-18 totaled $19.4 million, $21.8 million, and $29.1
million, respectively. As of June 30, 2020, the District's outstanding debt totaled $19.4 million, which is
a decrease of $2.6 million or 10.82% over the debt balance of $21.8 million at June 30, 2019. Debt
decreased by $9.6 million or 33.16% comparing 2019-20 to 2017-18. The reduction in debt obligations
is due to the refinancing of the 2009 certificates of participation during 2018-19, see Note 6 for detailed
information. The source of funds primarily securing repayment of debt issued for capital improvement
purposes is secured ad valorem property taxes.
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ECONOMIC FACTORS,NEXT YEAR'S BUDGET, AND RATES
The District operates as an enterprise fund primarily funded by fees charged to external customers for
services. The District charges rates and fees to customers to cover the costs of operation and maintenance
of the sewage collection and treatment system as well as costs associated with its capital improvement
program. External factors that may affect the District's financial position include, but are not limited to
the following:
• Regulatory requirements becoming more stringent, causing the District to spend more
on compliance, both for operations and maintenance costs as well as capital
improvement and replacement projects.
• The economic cycle, creating volatility with capacity/connection fee revenues as new
development projects are highly sensitive to the economic cycle.
• Interest rate and/or investment return, which directly impacts investment earnings,
borrowing costs,and which has an adverse relationship to employer pension and OPEB
contribution requirements.
• The consumer price index (CPI), which is a measure of inflation. The CPI for the San
Francisco-Oakland-Hayward area directly impacts the cost of living adjustments
provided in the employee MOUS. Various cost pressures also affect spending for
contracted services as well as materials and supplies.
• Changes in assessed property values, which affect the District's non-operating ad
valorem property tax revenue. When the housing market improves, overall assessed
property values increase, thereby increasing the District's property tax receipts.
Conversely, any decline in the housing market will decrease property values and
correspondingly decrease ad valorem property tax receipts for the District.
These factors, to the extent known, were considered in preparing the District's budget. In June 2019, the
District's Board of Directors adopted an operating and maintenance budget of$87.6 million and sewer
construction capital budget of $66.2 million for the year ending June 30, 2020. Following customer
outreach,public noticing, and a Public Hearing stipulated by Proposition 218, in April 2019 the District's
Board of Directors approved new sewer service charges for the four-year timeframe spanning July 1,2019
to June 30, 2023 with the condition that each year the District shall re-assess whether the increase is still
justified and necessary.
The sewer service charges for the year ending June 30, 2020 incorporates an average rate increase of
5.25%, essential to help address an expanded capital improvement program. Over the next four fiscal
years the District is planning for continued growth in the capital improvement program to modernize the
District's ageing infrastructure, address regulatory requirements regarding the protection of public health
and the environment and to ensure the sustainability of infrastructure. To help finance these expanded
capital improvement and replacement initiatives, the District anticipates the use of debt financing of$170
—$200 million.
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FINANCIAL CONTACT
The financial report is designed to provide the District's customers and creditors with a general overview
of District finances and to demonstrate the accountability and transparency for the rate and tax payer
money it receives. If you have questions about this report or need additional financial information,
contact: Kevin Mizuno, Finance Manager, Central Contra Costa Sanitary District, 5019 Imhoff Place,
Martinez, CA 94553.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
STATEMENTS OF NET POSITION
JUNE 30,2020 AND 2019
ASSETS 2020 2019
CURRENT ASSETS
Cash and cash equivalents(Note 2) $111,856,324 $57,648,783
Short term investments(Note 2) 20,000,000 53,000,000
Accounts receivable,net(Note 3) 27,985,589 24,736,062
Employee computer loans receivable(Note 3) 12,893 15,736
Interest receivable 256,559
Parts and supplies 2,295,555 2,185,998
Prepaid expenses 1,695,712 1,401,010
Total current assets 164,102,632 138,987,589
NON-CURRENT ASSETS
Restricted cash and cash equivalents(Notes I.F. and 2) 10,422,954 8,537,951
Assessment Districts receivable(Note 4) 1,055,527 1,214,665
Capital assets:
Nondepreciable(Note 5) 97,770,060 68,187,758
Depreciable,net of accumulated depreciation(Note 5) 613,794,504 609,205,177
Total capital assets,net 711,564,564 677,392,935
Total non-current assets 723,043,045 687,145,551
TOTAL ASSETS 887,145,677 826,133,140
DEFERRED OUTFLOWS OF RESOURCES
Pension related(Note 9) 26,670,166 46,715,613
OPEB related(Note 10) 2,176,533 2,836,089
Total deferred outflows of resources 28,846,699 49,551,702
(Continued)
See accompanying notes to financial statements
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CENTRAL CONTRA COSTA SANITARY DISTRICT
STATEMENTS OF NET POSITION
JUNE 30,2020 AND 2019
LIABILITIES 2020 2019
CURRENT LIABILITIES
Accounts payable and accrued expenses $11,785,558 $9,956,746
Interest payable 269,772 288,505
Refunding Water Revenue Bonds-current portion(Note 6) 1,740,000 2,145,000
Accrued compensated absences-current portion(Note LJ.) 535,200 504,700
Provision for uninsured claims(Note 7) 1,221,293 1,157,797
Refundable deposits 302,494 351,797
Total current liabilities 15,854,317 14,404,545
NON-CURRENT LIABILITIES
Refunding Water Revenue Bonds,noncurrent portion(Note 6) 17,707,392 19,661,631
Accrued compensated absences,noncurrent portion(Note 1.J.) 4,817,572 4,542,903
Net pension liability(Note 9) 64,117,450 90,430,104
Net OPEB liability(Note 10) 10,371,508 11,912,761
Total non-current liabilities 97,013,922 126,547,399
TOTAL LIABILITIES 112,868,239 140,951,944
DEFERRED INFLOWS OF RESOURCES
Pension related(Note 9) 30,761,867 23,736,976
OPEB related(Note 10) 4,601,542 6,864,360
Total deferred inflows of resources 35,363,409 30,601,336
NET POSITION(Note 11)
Net investment in capital assets 692,117,172 655,586,304
Restricted for debt service 2,639
Unrestricted 75,640,917 48,545,258
TOTAL NET POSITION $767,760,728 $704,131,562
See accompanying notes to financial statements
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CENTRAL CONTRA COSTA SANITARY DISTRICT
STATEMENTS OF REVENUES,EXPENSES AND CHANGES IN NET POSITION
FOR THE YEARS ENDED JUNE 30,2020 AND 2019
2020 2019
OPERATING REVENUES
Sewer service charges(SSC) $70,408,903 $68,656,908
Service charges-City of Concord(Note 8) 14,923,591 15,205,292
Other services charges 1,176,242 1,126,239
Miscellaneous charges 714,043 689,727
Total operating revenues 87,222,779 85,678,166
OPERATING EXPENSES
Sewage collection and pumping stations 16,671,998 17,213,848
Sewage treatment 26,998,492 26,342,221
Engineering 15,564,466 16,334,241
Recycled water 1,205,526 1,189,921
Administrative and general 21,408,746 24,522,508
Pension expense adjustments(Note 9) 757,666 (2,928,146)
OPEB expense adjustments(Note 10) (3,144,515) (30,379,022)
Depreciation(Note 5) 21,253,062 20,983,353
Total operating expenses 100,715,441 73,278,924
OPERATING(LOSSES) (13,492,662) 12,399,242
NONOPERATING REVENUES(EXPENSES)
Taxes 18,876,886 18,251,794
Permit and inspection fees 2,251,245 2,648,708
Interest earnings 2,310,269 2,573,964
Interest expense (604,851) (1,025,006)
Other income(expense),net 1,219,811 1,424,520
Total nonoperating revenues(expenses),net 24,053,360 23,873,980
INCOME BEFORE CAPITAL CONTRIBUTIONS 10,560,698 36,273,222
CAPITAL CONTRIBUTIONS
City of Concord contributions to capital costs(Note 8) 11,393,000 7,973,516
Customer contributions to capital cost(SSC) 32,829,958 28,588,625
Contributed sewer lines 1,761,808 2,179,641
Connection fees 7,083,702 8,145,068
Total capital contributions 53,068,468 46,886,850
CHANGE IN NET POSITION 63,629,166 83,160,072
NET POSITION,BEGINNING OF YEAR 704,131,562 620,971,490
NET POSITION,END OF YEAR $767,760,728 $704,131,562
See accompanying notes to financial statements
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CENTRAL CONTRA COSTA SANITARY DISTRICT
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30,2020 AND 2019
2020 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $84,135,233 $83,782,738
Payments to suppliers (43,500,766) (43,260,212)
Payments to employees and related benefits (36,604,529) (40,179,456)
Net cash provided by operating activities 4,029,938 343,070
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Receipt of taxes 18,876,886 18,251,794
Inspection/permit fees and other non-operating income 3,471,056 4,073,228
Net cash provided by noncapital financing activities 22,347,942 22,325,022
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Capital contributions 44,222,958 36,562,141
Connection fees 7,083,702 8,145,068
Acquisition and construction of capital assets (53,662,883) (43,794,305)
Interest paid on long-term debt (623,584) (1,270,831)
Principal payments on long-term debt (2,359,239) (7,288,369)
Net cash used for capital and related financing activities (5,339,046) (7,646,296)
CASH FLOWS FROM INVESTING ACTIVITIES
Redemption of investments 100,000,000 98,856,450
Acquisition of investments (67,000,000) (113,000,000)
Interest received 2,053,710 2,673,348
Net csh provided by investing activities 35,053,710 (11,470,202)
NET INCREASE(DECREASE)IN CASH 56,092,544 3,551,594
Cash,beginning of year 66,186,734 62,635,140
Cash,end of year $122,279,278 $66,186,734
(Continued)
See accompanying notes to financial statements
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CENTRAL CONTRA COSTA SANITARY DISTRICT
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30,2020 AND 2019
2020 2019
Reconciliation of operating(loss)to net cash provided by
operating activities:
Operating income(losses) ($13,492,662) $12,399,242
Adjustments to reconcile operating losses to cash
flows from operating activities:
Depreciation 21,253,062 20,983,353
Changes in assets and liabilities:
Receivables,net (3,087,546) (1,895,428)
Parts and supplies (109,557) 59,057
Prepaid expenses (294,702) 1,198,748
Net OPEB asset - -
Accounts payable and accrued expenses 1,828,812 292,008
Accrued payroll and related expenses 305,169 401,726
Refundable deposits (49,303) (64,035)
Claims 63,496 275,567
Net pension liability 757,684 (2,928,146)
Net OPEB liability (3,144,515) (30,379,022)
Net cash provided(used)by operating activities $4,029,938 $343,070
SCHEDULE OF NON CASH ACTIVITY
Change in fair value of investments $2,053,710 $2,673,348
Capital asset donations 1,761,808 2,179,641
Total non cash activity $3,815,518 $4,852,989
CASH AND CASH EQUIVALENTS,AS PRESENTED ON
STATEMENT OF NET POSITION:
Unrestricted cash and cash equivalents $111,856,324 $57,648,783
Restricted cash and cash equivalents 10,422,954 8,537,951
Total cash and cash equivalents at end of year $122,279,278 $66,186,734
See accompanying notes to financial statements
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CENTRAL CONTRA COUNTY SANITARY DISTRICT
STATEMENTS OF FIDUCIARY NET POSITION
FIDUCIARY FUND
OTHER POST-EMPLOYMENT BENEFIT TRUST FUND
JUNE 30,2020 AND 2019
2020 2019
ASSETS
Investments with Trustees:
Cash equivalents(Note 2) $2,101,825 $1,570,229
Equity securities 19,941,007 17,716,355
Equity mutual funds 47,806,548 46,639,520
Total investments 69,849,380 65,926,104
Total Assets $69,849,380 $65,926,104
NET POSITION RESTRICTED FOR OPEB
Net position held in trust for OPEB benefits $69,849,380 $65,926,104
See accompanying notes to basic financial statements
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CENTRAL CONTRA COUNTY SANITARY DISTRICT
STATEMENTS OF CHANGES IN FIDUCIARY NET POSITION
FIDUCIARY FUND
OTHER POST-EMPLOYMENT BENEFIT TRUST FUND
FOR THE YEARS ENDED JUNE 30,2020 AND 2019
2020 2019
ADDITIONS
Contributions:
District $1,250,000 $1,582,800
Total contributions 1,250,000 1,582,800
Investment income:
Net appreciation in fair value of investments 2,994,909 4,920,923
Interest,dividends and other (138,800) -
Less:investment expenses (182,833) (174,298)
Total net investment income 2,673,276 4,746,625
Total additions 3,923,276 6,329,425
Change in net position 3,923,276 6,329,425
NET POSITION RESTRICTED FOR OPEB
Beginning of year 65,926,104 59,596,679
End of year $69,849,380 $65,926,104
See accompanying notes to basic financial statements
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
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 employees 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
accounting and financial reporting guidance.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
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-Insurance — Self-Insurance accounts for interest earnings on cash balances in this
sub-fund 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.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
NOTE 1 —DESCRIPTION OF DISTRICT AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
The District reports its Other Post-Employment Benefit Trust Fund as a fiduciary fund. The
Fund consists of the Public Agencies Post-Retirement Health Care Plan,which was established in
2005, amended and restated in 2007. The fundamental purpose of the trust is to fund post-
employment benefits (other than pension benefits), such as medical, dental, vision, life insurance,
long-term care and similar benefits.
C. Investments
Investments held at June 30, 2020 and 2019 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. Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date. The
District categorizes its fair value measurements within the fair value hierarchy established by
generally accepted accounting principles. The fair value hierarchy categorizes the inputs to
valuation techniques used to measure fair value into three levels based on the extent to which
inputs used in measuring fair value are observable in the market.
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or
liabilities.
Level 2 inputs are inputs — other than quoted prices included within level 1 — that are
observable for an asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for an asset or liability.
If the fair value of an asset or liability is measured using inputs from more than one level of the
fair value hierarchy, the measurement is considered to be based on the lowest priority level input
that is significant to the entire measurement.
E. Prepaid Expenses
Certain payments to vendors reflect costs applicable to future accounting periods and are
recorded as prepaid items in the financial statements.
F. 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.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
NOTE 1 —DESCRIPTION OF DISTRICT AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
G. Parts and Supplies
Parts and supplies are valued at average cost and are used primarily for internal purposes.
H. Property,Plant, and Equipment
Purchased capital assets are stated at historical cost. Capital assets contributed to the District are
reported at acquisition value. 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.
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 7- 15
L 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 1'/z 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.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
NOTE 1 —DESCRIPTION OF DISTRICT AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
J. 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 (one employee hired prior
to this date remains on the plan). 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 time
may be applied towards pension service time and/or cashed out upon retirement.
The changes in compensated absences were as follows for fiscal years ended June 30:
2020 2019
Beginning Balance $5,047,603 $4,645,877
Additions 755,277 661,215
Payments (450,108) (259,489)
Ending Balance $5,352,772 $5,047,603
Current Portion $535,200 $504,700
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.
K. 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.
L. 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.
M. Implementation of Governmental Accounting Standards Board(GASB)Pronouncements
GASB 95 — Postponement of the Effective Dates of Certain Authoritative Guidance — This
Statement extended the implantation dates for 15 GASB Statements and Implementation Guides
by 1 year or more. Of course,many of the Statement could be early- implemented, as applicable.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
NOTE 1—DESCRIPTION OF DISTRICT AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
N. Prior-Period Comparative Statements
The basic financial statements include certain prior-year summarized comparative information in
total, but not at the level of detail required for a presentation in accordance with generally
accepted accounting principles. Accordingly, such information should be read in conjunction
with the District's financial statements for the year ended June 30, 2019, from which the
summarized information was derived.
NOTE 2—CASH AND INVESTMENTS
A. Summary of Cash and Investments
Cash and investments as of June 30, are classified in the accompanying financial statements as
follows:
2020 2019
Cash and cash equivalents $111,856,324 $57,648,783
Short term investments 20,000,000 53,000,000
Restricted cash and cash equivalents 100,000 117,135
Total District Cash and Investments 131,956,324 110,765,918
Restricted Cash and investments 10,322,954 8,420,816
Cash and investments held with OPEB trust 69,849,380 65,926,104
Total Cash and Investments $212,128,658 $185,112,838
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.
Investments purchases and sales are coordinated by the District's Treasurer, Contra Costa
County, at the request of the District.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
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 Percentage Minimum
Remaining Percentage Investment of Portfolio Credit
Authorized Investment Type Maturity of Portfolio In One Issuer (Per Issuer) Quality
U.S.Treasury Obligations 5 years None None 100% N/A
U.S.Government Agency Issues 5 years None None 100% N/A
Money Market Funds N/A 20% 10% 10% A
Negotiable Certificates of Deposit 5 years 30% 30% 30% AA
Banker's Acceptances 180 40% 40% 5% N/A
Commercial Paper(1) 270 25% 10% 5% A-1
Medium Term Notes 5 years 30% 5% 5% AA
Collateralized Certificates of Deposit(2) 5 years 30% None 30% Aaa
Supranationals 5 years 30% 5% 5% AA
County Pooled Investment Funds N/A None None 100% N/A
Local Agency Investment Fund(LAIF) N/A None $75 million 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.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
NOTE 2—CASH AND INVESTMENTS(Continued)
D. Fair Value Hierarchy
The District categorizes its fair value measurements within the fair value hierarchy established by
generally accepted accounting principles. The hierarchy is based on the valuation inputs used to
measure fair value of the assets. Level 1 inputs are quoted prices in an active market for identical
assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant
unobservable inputs.
The following is a summary of the fair value hierarchy of the fair value of investments of the
District as of June 30:
2020
Investment Type Level 2 Total
Investments Reported at Fair Value:
U.S.Federal Agency Securities-FHLB $20,000,000 $20,000,000
Total Investments $20,000,000 20,000,000
Investments Exempt from Fair Value Hierarchy:
California Local Agency Investment Fund 75,000,000
Total Investments 95,000,000
Restricted Cash and investments 10,322,954
Cash and investments held with OPEB trust 69,849,380
Cash in bank 36,956,324
Total Cash and Investments $212,128,658
U.S. Federal Agency Securities totaling $20 million classified in Level 2 of the fair value
hierarchy, is valued using matrix pricing techniques maintained by various pricing vendors.
Matrix pricing is used to value securities based on the securities' relationship to benchmark
quoted prices.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
NOTE 2—CASH AND INVESTMENTS(Continued)
The following is a summary of the fair value hierarchy of the fair value of investments of the
District as of June 30:
2019
Investment Type Level 1 Level 2 Total
Investments Reported at Fair Value:
U.S.TresuryBill $13,000,000 $13,000,000
U.S.Federal Agency Securities-FHLB $30,000,000 30,000,000
U.S.Federal Agency Securities-FHLMC 10,000,000 10,000,000
Total Investments $13,000,000 $40,000,000 53,000,000
Investments Exempt from Fair Value Hierarchy:
California Local Agency Investment Fund 43,200,000
Total Investments 96,200,000
Restricted Cash and investments 8,420,816
Cash and investments held with OPEB trust 65,926,104
Cash in bank 14,565,918
Total Cash and Investments $185,112,838
U.S. Treasury Notes totaling $13 million, classified in Level 1 of the fair value hierarchy are
valued using a quoted price in an active market for an identical asset. U.S. Federal Agency
Securities totaling $40 million classified in Level 2 of the fair value hierarchy, is valued using
matrix pricing techniques maintained by various pricing vendors. Matrix pricing is used to value
securities based on the securities' relationship to benchmark quoted prices.
E. 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.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
NOTE 2—CASH AND INVESTMENTS(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:
2020
12 Months
Investment Type or less Maturity
U.S Federal Agency Securities-FHLB $20,000,000 9/25/20
California Local Agency Investment Fund 75,000,000
Total Investments 95,000,000
Restricted Cash and investments 10,322,954
Cash and investments held with OPEB trust 69,849,380
Cash in bank 36,956,324
Total Cash and Investments $212,128,658
2019
12 Months More than
Investment Type or less 12 Months
United States Treasury Bill $8,000,000 8/29/19
United States Treasury Bill 5,000,000 9/19/19
U.S Federal Agency Securities-FHLB 5,000,000 7/22/19
U.S Federal Agency Securities-FHLB 10,000,000 7/23/19
U.S Federal Agency Securities-FHLB 5,000,000 10/1/19
U.S Federal Agency Securities-FHLB 5,000,000 11/18/19
U.S Federal Agency Securities-FHLB 5,000,000 12/11/19
U.S.Federal Agency Securities-FHLMC 5,000,000 7/23/19
U.S.Federal Agency Securities-FHLMC 5,000,000 11/12/19
California Local Agency hivestment Fund 43,200,000
Total Investments 96,200,000
Restricted Cash and investments 8,420,816
Cash and investments held with OPEB trust 65,926,104
Cash in bank 14,565,918
Total Cash andlnvestments $185,112,838
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
NOTE 2—CASH AND INVESTMENTS(Continued)
Investment in LAIF — The District is a voluntary participant in LAIF which is regulated by the
California Government Code under the oversight of the Treasurer of the State of California. LAIF 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 LAIF 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,
2020 and 2019,these investments matured in an average of 191 and 173 days,respectively.
Investments in County Treasury — 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 mounts 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
F. 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 June 30, of each
investment type as provided by Moody's investment rating system, of which a P -1 rating is the
top rating for short term investments.
Totals
Investment Type 2020 2019
Rated P-1:
U.S.Federal Agency Securities-FHLB $20,000,000 $30,000,000
U.S.Federal Agency Securities-FHLMC 10,000,000
Total Rated Investments 20,000,000 40,000,000
Not rated:
California Local Agency Investment Fund 75,000,000 43,200,000
U.S.Treasury Notes 13,000,000
Restricted Cash and investments 10,322,954 8,420,816
Cash and investments held with OPEB trust 69,849,380 65,926,104
Cash in Bank 36,956,324 14,565,918
Total Cash and Investments $212,128,658 $185,112,838
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
NOTE 2—CASH AND INVESTMENTS (Continued)
G. Concentration of Credit Risk
Included in the table below are the following significant investments in the securities of issuers
other than U.S. Treasury Securities, mutual funds, and external investment pools in any
organization that represent in excess of 5%of the District's total investments as of June 30,2020:
Investment Reported
Issuer Type Amount
Federal Home Loan Bank U.S.Agency Securities $20,000,000
H. 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 for the years ended June 30 are comprised of the following:
2020 2019
City of Concord(see Note 8) $26,362,258 $23,178,808
Household Hazardous Waste Partners 832,005 831,653
All Other 791,326 725,601
Total Accounts Receivable $27,985,589 $24,736,062
Employee Computer Loans Receivable:
The District provides loans to its employees for the purchase of personal computers. These loans
are payable through payroll deductions of $100 until the loan is paid off. The interest rate
associated with the loan is based of the most current Local Agency Investment Fund(LAIF) rate.
The maximum amount each employee may borrow is$2,000. The loans receivable balances were
as follows as of June 30:
2020 2019
Employee Computer Loans $15,736 $10,614
Additions 11,640 18,141
Payments (14,483) (13,019)
Long-term Portion $12,893 $15,736
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
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. The CAD receivable balance at June 30, 2020 and
2019 was $339,613 and$394,662,respectively.
The District also established the Alhambra Valley Assessment District (AVAD) to provide
services to residents in the Alhambra Valley in Martinez. Residents have the choice to pay cash
or finance the construction costs and connection fees. The AVAD receivable balance at June 30,
2020 and 2019 was$715,914 and$820,003,respectively.
The total receivable balance at June 30, 2020 and 2019 for CAD and AVAD was $1,055,527 and
$1,214,665,respectively, and is shown as a non-current asset on the Statement of Net Position.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
NOTE 5—CAPITAL ASSETS
Property, plant and equipment, and construction in progress are summarized below for the year
ended June 30,2020:
Balance at Transfers& Balance at
June 30,2019 Additions Retirements Adjustments June 30,2020
Capital assets not being depreciated:
Land $17,320,570 $17,320,570
Easements(intangible) 4,949,507 $20,000 4,969,507
Construction in Progress 45,917,681 $53,662,883 (24,100,581) 75,479,983
Total nondepreciated assets 68,187,758 53,662,883 (24,080,581) 97,770,060
Capital assets being depreciated:
Sewage collection system 394,084,852 ($3,000) 17,920,623 412,002,475
Contributed sewer limes 162,344,781 1,761,808 (35,836) 22,468 164,093,221
Outfall sewers 11,371,574 11,371,574
Sewage treatment plant 354,976,293 3,488,619 358,464,912
Recycled water infrastructure 20,292,366 159,525 20,451,891
Pumping stations 57,327,020 57,327,020
Buildings 44,379,479 59,800 44,439,279
Furniture and equipment 14,579,938 (40,750) 736,975 15,276,163
Motor vehicles 7,490,960 (472,290) 1,692,571 8,711,241
Enterprise software 3,365,658 3,365,658
Total depreciated assets 1,070,212,921 1,761,808 (551,876) 24,080,581 1,095,503,434
Less accumulated depreciation:
Sewage collection system 78,758,161 5,451,745 (2,999) 84,206,907
Contributed sewer lines 63,652,332 2,189,734 (35,837) 65,806,229
Outfall sewers 3,919,770 151,395 4,071,165
Sewage treatment plant 235,704,155 7,827,846 243,532,001
Recycled water infrastructure 10,355,662 544,216 10,899,878
Pumping stations 37,309,198 1,861,935 39,171,133
Buildings 15,427,731 1,277,192 16,704,923
Furniture and equipment 10,415,521 1,146,011 (40,750) 11,520,782
Motor vehicles 5,296,931 466,422 (472,290) 5,291,063
Enterprise software 168,283 336,566 504,849
Total accumulated depreciation 461,007,744 21,253,062 (551,876) 481,708,930
Total capital assets being
depreciated,net 609,205,177 (19,491,254) 24,080,581 613,794,504
Capital assets,net $677,392,935 $34,171,629 $711,564,564
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
NOTE 5—CAPITAL ASSETS(Continued)
Property, plant and equipment, and construction in progress are summarized below for the year
ended June 30,2019:
Balance at Transfers& Balance at
June 30,2018 Additions Retirements Adjustments June 30,2019
Capital assets not being depreciated:
Land $17,320,570 $17,320,570
Easements(intangible) 4,949,507 4,949,507
Construction in Progress 35,820,635 $43,794,305 ($33,697,259) 45,917,681
Total nondepreciated assets 58,090,712 43,794,305 (33,697,259) 68,187,758
Capital assets being depreciated:
Sewage collection system 379,247,498 ($1,000) 14,838,354 394,084,852
Contributed sewer lines 159,795,333 2,179,641 369,807 162,344,781
Outfall sewers 11,371,574 11,371,574
Sewage treatment plant 341,675,108 (775,000) 14,076,185 354,976,293
Recycled water infrastructure 20,292,366 20,292,366
Pumping stations 57,327,020 57,327,020
Buildings 44,238,508 140,971 44,379,479
Furniture and equipment 13,841,424 (49,736) 788,250 14,579,938
Motor vehicles 7,695,424 (322,498) 118,034 7,490,960
Enterprise software 3,365,658 3,365,658
Total depreciated assets 1,035,484,255 2,179,641 (1,148,234) 33,697,259 1,070,212,921
Less accumulated depreciation:
Sewage collection system 73,525,809 5,233,352 (1,000) 78,758,161
Contributed sewer lines 61,491,489 2,160,843 63,652,332
Outfall sewers 3,768,376 151,394 3,919,770
Sewage treatment plant 228,809,775 7,669,380 (775,000) 235,704,155
Recycled water infrastructure 9,680,325 675,337 10,355,662
Pumping stations 35,288,443 2,020,755 37,309,198
Buildings 14,154,661 1,273,070 15,427,731
Furniture and equipment 9,236,015 1,229,242 (49,736) 10,415,521
Motor vehicles 5,217,732 401,697 (322,498) 5,296,931
Enterprise software 168,283 168,283
Total accumulated depreciation 441,172,625 20,983,353 (1,148,234) 461,007,744
Total capital assets being
depreciated,net 594,311,630 (18,803,712) 33,697,259 609,205,177
Capital assets,net $652,402,342 $24,990,593 $677,392,935
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
NOTE 6—LONG-TERM DEBT
A. Summary of Activity
The changes in the District's long-term obligations during the year ended June 30,2020 consisted
of the following:
Original Amount
Issue Balance Balance due within
Amount June 30,2019 Retirements June 30,2020_ one year
2018 Series A Wastewater Revenue
Refunding Bonds
1.39-2.34%,due 9/1/2029 $15,135,000 $15,135,000 $15,135,000 $1,225,000
2018 Series B Wastewater Revenue
Refunding Bonds
2.62-3.12%,due 9/1/2023 4,315,000 4,315,000 $2,145,000 2,170,000 515,000
Total long-term debt 19,450,000 2,145,000 17,305,000 $1,740,000
Add:Unamortizedpremium
Wastewater Revneue Bonds 2,356,631 214,239 2,142,392
Total Long-Term Debt,net 21,806,631 $2,359,239 19,447,392 $1,740,000
Less Current Portion (2,145,000) (1,740,000)
Long Term Portion $19,661,631 $17,707,392
The changes in the District's long-term obligations during the year ended June 30, 2019 consisted
of the following:
Original Amount
Issue Balance Balance due within
Amount June 30,2018 Additions Retirements June 30,2019 one year
2018 Series A Wastewater Revenue
Refunding Bonds
1.39-2.34%,due 9/1/2029 $15,135,000 $15,135,000 $15,135,000
2018 Series B Wastewater Revenue
Refunding Bonds
2.62-3.12%,due 9/1/2029 4,315,000 4,315,000 4,315,000 $2,145,000
2009 Series A Certificates of Participation
Wastewater Revenue
3.45-3.78%,due 9/1/2029 19,635,000 $19,635,000 $19,635,000
2009 Series B Certificates of Participation
Wastewater Revenue
.40-3.791/o,due 9/1/2029 34,490,000 9,460,000 9,460,000
Total long-term debt 29,095,000 19,450,000 29,095,000 19,450,000 $2,145,000
Add:Unamortizedpremium
Wastewater Revneue Bonds 2,777,190 420,559 2,356,631
Total Long-Term Debt,net 29,095,000 $22,227,190 $29,515,559 21,806,631 $2,145,000
Less Current Portion (2,480,000) (2,145,000)
Long Term Portion $26,615,000 $19,661,631
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
NOTE 6—LONG-TERM DEBT (Continued)
B. Debt Service Requirements
The 2018 Wastewater Revenue Refunding debt service requirements are as follows:
Fiscal Year
Ending Series A Series B Total
June 30, Principal Interest Principal Interest Principal Interest
2021 $1,225,000 $720,000 $515,000 $57,605 $1,740,000 $777,605
2022 1,270,000 663,750 535,000 42,477 1,805,000 706,227
2023 1,335,000 598,625 550,000 26,172 1,885,000 624,797
2024 1,395,000 530,375 570,000 8,892 1,965,000 539,267
2025 1,465,000 458,875 1,465,000 458,875
2026-2030 8,445,000 1,094,875 8,445,000 1,094,875
Total $15,135,000 $4,066,500 $2,170,000 $135,146 $17,305,000 $4,201,646
C. 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 were federally taxable "Build
America Bonds" which had 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 were 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%.
The two bonds totalled $54,125,000 and were secured by a pledge of tax and net revenues of the
wastewater system. Principal payments began annually on September 1, 2010 with semi-annual
payments due on September 1 and March 1 of each year. Both bonds were to have been fully
amortized by September 1, 2029. In fiscal year 2019, the outstanding amount of$29,095,000 in
principal and $9,528,717 of interest was fully refunded by the 2018 Wastewater Revenue
Refunding Bonds, Series A&B.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
NOTE 6—LONG-TERM DEBT (Continued)
D. 2018 Series A and B Wastewater Revenue Refunding Bonds
On September 13, 2018 the District issued two Wastewater Revenue Refunding Bonds (Bonds).
The 2018 Wastewater Revenue Refunding Bonds, Series A (tax-exempt) and B (federally
taxable) were issued for $15,135,000 and $4,315,000, respectively. The Bonds were issued to
defease and refund all of the District's outstanding obligations with respect to the $19,635,000
original principal amount of 2009 Wastewater Revenue Certificates of Participation, Series A and
all of the District's outstanding obligations with respect to the $34,490,000 original principal
amount of 2009 Wastewater Revenue Certificates of Participation, Series B, and pay costs issuing
the Bonds. The refunding resulted in an overall debt service savings of $7,455,312. The net
present value of the debt service savings is called an economic gain and amounted to $2,603,897.
The two bonds total $19,450,000 and are secured by a pledge of tax and net revenues of the
wastewater system. The outstanding bonds from direct borrowings related to business-type
activities of$19,450,000 contain a provision that in an event of default, the U.S. Bank National
Association (Trustee) has the right to accelerate the total unpaid principal amounts of the bonds.
The official statement contains an event of default clause that changes the timing of the
repayments of outstanding amounts to become immediately due if the District is unbale to make
payment. Principal payments begin annually on September 1, 2020 and 2021 for the Series B and
A Bonds, respectively, with semi-annual interest payments due on September 1 and March 1 of
each year. Yields range from 1.39% to 2.34% and 2.62% to 3.12% for the Series A and Series B
Bonds,respectively. The outstanding balance at June 30,2020 amounted to $21,506,646.
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. The District also commenced an Enterprise
Risk Management program during 2019,20, where the primary risks facing the agency are
identified,monitored and reported on to the Board.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
NOTE 7—RISK MANAGEMENT (Continued)
A. Insurance Coverage
The District's insurance coverage is as follows:
Self Insured
Deductible Pex
Type of Coverage Insurer Limits Occurrence
All-Risk Property:
Special Form Property Alliant Property Insurance Program $602,045,193 $250,000
Crime National Union Fire Ins.Company 1,000,000 2,500
Liability:
Fiduciary Liability Insurance Hudson Insurance Company 1,000,000 -
Pollution-General Liability Aspen Specialty Ins.Company 10,000,000 50,000
Commercial Environment Excess Aspen Specialty Ins.Company 1,000,000 5,000
Special Excess Liability Coverage-ANML Argonaut Insurance Company 10,000,000 500,000
Excess Following Form Liability Policy Allied World Assurance Company(U.S),Inc. 5,000,000 10,000,000
Employment Practice Liability Indian Harbor Insurance Company 500,000 35,000
Workers'Compensation:
Excess Workers'Compensation Safety National Casualty Corporation Statutory -
B. Provision 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 policy is to
maintain a reserve for claims of$1,500,000 which is equivalent to three claims at $500,000 per
occurrence. The District's actuary has calculated its potential liability as of June 30, 2020 to be
$1,221,293.
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 latest report was dated November 13, 2018. For intervening
years, the liability for uninsured claims is reviewed for adequacy based on claims activity during
the intervening period.
For fiscal years ended June 30, 2020, 2019, and 2018, settlements have not exceeded insurance
coverage. Changes in the District's estimated liability for retained losses are summarized as
follows as of June 30:
2020 2019 2018
Beginning balance $1,157,797 $882,230 $807,079
Provisions for claims incurred in the current year
and changes in the liability for retained-
losses incurred in prior years 257,075 275,567 243,897
Claims paid and/or adjustments (193,579) (168,746)
Ending balance 1,221,293 $1,157,797 $882,230
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
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 capital costs expended. Service charges and contributions to capital costs from the City
totaled$14,969,258 and$11,393,000 respectively, for the year ended June 30, 2020, for a total of
$26,362,258. Service charges and contributions to capital costs from the City totaled$15,205,292
and$7,973,516 ,respectively, for the year ended June 30,2019, for a total of$23,178,808.
NOTE 9—PENSION PLANS
A. Contra Costa County Employees'Retirement Association Pension Plan
Plan Descriptions— 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, and the California Public Employees' Pension Reform Act
of 2013 (PEPRA). The latest available actuarial and financial information for the Plan is for the
year ended December 31, 2018. CCCERA 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 on their website at www.cccera.org.
Benefits Provided—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.
The Plans' provisions and benefits in effect at June 30,2020,are summarized as follows:
Miscellaneous
Membership date Prior to January 1,2013 On or after January 1,2013
Benefit vesting schedule 10 years service 5 years service
Benefit payments monthly for life monthly for life
Leave cash out pensionable? Yes No
Benefit%per year of service 2% 2%
Final pensionable salary formula Highest 12 consecutive months Annual average of highest 36
consecutive months
Annual benefit cap Hired before 1/1/1996-None $151,549
Hired 1/1/1996-12/31/2012-
,�275.000
Minimum Retirement age(with benefit reductions) 50 52
Required employee contribution rates 11.97% 11.20%
Required employer contribution rates 56.46% 45.67%
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
NOTE 9—PENSION PLANS(Continued)
Contributions—The Plan requires employees to pay a portion of the basic retirement benefit and
a portion of future COL costs. For the year ended June 30, 2020, the District's contributions to
the Plan were $17,605,893.
Pension Liabilities,Pension Expenses and Deferred Outflows/Inflows of Resources Related to
Pensions-The District reported net pension liabilities for its proportionate share of the net
pension liability of the Plan as follows as of June 30:
Proportionate Share of Net Pension Liability
2020 2019
Miscellaneous $64,117,450 $90,430,104
Total Net Pension Liability $64,117,450 $90,430,104
The District's net pension liability for the Plan is measured as the proportionate share of the net
pension liability. The net pension liability of the Plan is measured as of December 31, 2019, and
the total pension liability for the Plan used to calculate the net pension liability was determined by
an actuarial valuation as of December 31, 2018 rolled forward to December 31, 2019 using
standard update procedures. The District's proportion of the net pension liability was based on a
projection of the District's long-term share of contributions to the pension plan relative to the
projected contributions of all participating employers, actuarially determined. The District's
proportionate share of the net pension liability for the Plan as of December 31, 2018, 2019, and
2020 were as follows:
Proportionate share of the Net Plan Fiduciary Net
Reporting Date for Proportion of the Pension Liability as a Pension as a percentage
Employer under GASB 68 Net Pension Proportionate share of Covered percentage of its covered of the Total Pension
as of December 31 Liability Net Pension Liability Payroll payroll Liability
2018 7.863% $63,806,000 $33,306,938 191.57% 83.58%
2019 6.332% 90,430,104 33,793,159 267.60% 77.86%
2020 7.420% 64,117,450 36,087,017 177.67% 85.05%
For the year ended June 30, 2020, the District recognized pension expense of$18,935,674. At
June 30, 2020, the District reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date $8,971,970
Differences between expected and actual experience 9,160,932 $956,369
Changes of assumptions or other inputs 3,889,681
Change in proportion and differences between employer
contributions and proportionate share of contributions 8,537,264 11,042,919
Net difference between projected and actual earnings
on pension plan investments 14,872,898
Total $26,670,166 $30,761,867
39
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
NOTE 9—PENSION PLANS(Continued)
The $8,971,970 reported as deferred outflows of resources related to contributions subsequent to
the measurement date will be recognized as a reduction of the net pension liability in the year
ended June 30,2021.
Other amounts reported as deferred outflows of resources and deferred inflows of resources
related to pensions will be recognized as pension expense as follows:
Year Ended Annual
June 30 Amortization
2021 ($3,928,236)
2022 (4,783,965)
2023 2,984,195
2024 (7,335,665)
Total ($13,063,671)
At June 30, 2019, the District reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date $8,840,759
Differences between expected and actual experience 2,612,669 $1,965,766
Changes of assumptions or other inputs 530,124 4,606,404
Change in proportion and differences between employer
contributions and proportionate share of contributions 7,636,777 17,164,806
Net difference between projected and actual earnings
on pension plan investments 27,095,284
Total $46,715,613 $23,736,976
40
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
NOTE 9—PENSION PLANS(Continued)
Actuarial Assumptions — The total pension liabilities in the December 31, 2019 actuarial
valuations were determined using the following actuarial assumptions:
Miscellaneous
Valuation Date December 31,2019
Measurement Date December 31,2019
Actuarial Cost Method Entry Age Actuarial Cost Method
Amortization Method Level percent of payroll
Actuarial Assumptions:
Discount Rate 7.00%
Inflation Rate 2.75%
Payroll Growth 2.75%(1)
Projected Salary Increase 3.25%- 12.00%
Cost of Living Adjustments 2.75%
Investment Rate of Return 7.00%
Mortality Pub-2010 General Healthy Retiree Amount-Weighted
Above-Median Mortality Table
(1) Plus"across the board"real salary increases of 0.5%per year
Discount Rate—The discount rate used to measure the Total Pension Liability (TPL) was 7.00%
as of December 31, 2019 and December 31, 2018. The projection of cash flows used to determine
the discount rate assumed employer and employee contributions will be made at rates equal to the
actuarially determined contribution rates. For this purpose, only employer and employee
contributions that are intended to fund benefits for current plan members and their beneficiaries
are included. Projected employer contributions that are intended to fund the service costs for
future plan members and their beneficiaries, as well as projected contributions from future plan
members, are not included. Based on those assumptions, the Plan Fiduciary Net Position was
projected to be available to make all projected future benefit payments for current plan members.
Therefore, the long-term expected rate of return on pension plan investments was applied to all
periods of projected benefit payments to determine the TPL as of both December 31, 2019 and
December 31,2018.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
NOTE 9—PENSION PLANS(Continued)
The long-term expected rate of return on pension plan investments was determined in 2020 using
a building-block method in which expected future real rates of return (expected returns, net of
inflation) are developed for each major asset class. The target allocation and projected arithmetic
real rates of return for each major asset class, after deducting inflation, but before investment
expenses, used in the derivation of the long-term expected investment rate of return assumption
are summarized in the following table:
Long-Term
Target Expected Real
Asset Class Allocation Rate of Return
Large Cap U.S.Equity 5% 5.44%
Developed International Equity 13% 6.54%
Emerging Markets Equity 11% 8.73%
Short-Term Govt/Credit 23% 0.84%
U.S.Treasury 3% 1.05%
Private Equity 8% 9.27%
Risk Diversifying 7% 3.53%
Global Infrastructure 3% 7.90%
Private Credit 12% 5.80%
REIT 1% 6.80%
Value Add Real Estate 5% 8.80%
Opportunistic Real Estate 4% 12.00%
Risk Parity 5% 5.80%
Total 100%
A change in the discount rate would affect the measurement of the Total Pension Liability(TPL).
A lower discount rate results in a higher TPL and higher discount rates results in a lower TPL.
Because the discount rate does not affect the measurement of assets, the percentage change in the
Net Pension Liability (NPL) can be very significant for a relatively small change in the discount
rate.The table below shows the sensitivity of the NPL to a one percent decrease and a one percent
increase in the discount rate:
Miscellaneous
1%Decrease 6.00%
Net Pension Liability $121,416,887
Current Discount Rate 7.00%
Net Pension Liability $64,117,450
1%Increase 8.000/0
Net Pension Liability $17,159,957
42
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
NOTE 9—PENSION PLANS(Continued)
B. 457(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 (b). The plan
was established by the District's Board of Directors and any amendments to the plan must be
authorized by the Board of Directors. 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 (b) assets are held in trust with ICMA Retirement Corporation 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). The plan was established by the District's Board of Directors and
any amendments to the plan must be authorized by the Board. 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 District contributed $2,222,449 and $2,123,939 to
the Plan during the years ended June 30, 2020 and 2019,respectively.
The 401(a) money purchase plan assets are held in trust with ICMA Retirement Corporation for
the exclusive benefit of the participants and are not included in the District's financial statements.
NOTE 10—POST EMPLOYMENT HEALTH CARE BENEFITS
A. General Information about the District's Other Post Employment Benefit(OPER)Plan
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 through PARS, which acts as a common investment agent for participating public
employees within the State of California. The District is the plan administrator. 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.
43
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
NOTE 10—POST EMPLOYMENT HEALTH CARE BENEFITS (Continued)
Benefit Terms — Post-employment healthcare and similar benefit allowances are provided to
eligible employees who retire from the District or to their surviving spouses.
Employees Covered by Benefit Terms—Membership in the plan consisted of the following at the
measurement date of June 30,2020:
Active employees 274
Inactive employees or beneficiaries currently
receiving benefit payments 269
Inactive employees entitled to but not yet
receiving benefit payments
Total 543
B. Net OPEB Liability
Actuarial Methods and Assumptions—The District's net OPEB liability was measured as of June
30,2020 and the total OPEB liability used to calculate the net OPEB liability was determined by an
actuarial valuation dated July 1, 2019 that was rolled forward using standard update procedures to
determine the $80,359,688 total OPEB liability as of June 30, 2020, based on the following
actuarial methods and assumptions:
Actuarial Assumptions
Valuation Date July 1,2018
Measurement Date June 30,2020
Actuarial Cost Method Entry Age Normal,Level Percent of Pay
Actuarial Assumptions:
Contribution and Funding Policy District contributes full ADC less benefit payments to PARS trust
Benefits payments paid outside the trust
PARS portfolio:Moderate
Long-Term Expected Rate of 5.75%at June 30,2019
Discount Rate 5.75%at June 30,2020
General Inflation 2.75%Annually
Mortality,Disability,Termination, CCCERA 2012-2014 Experience Study
Mortality Improvement Mortality improvement projected generationally with Scale MP-2015
Medical Trend Non-Medicare-7.5%for 2019/20,decreasing to 4.0%for 2075/76 and later
Medicare-6.5%for 2019/20,decreasing to 4.0%for 2075/76
Dental Trend 3.75%annually
Healthcare Participation Currently Covered: 100%
for future Retirees Currently Waived Coverage:95%
Self-Pay Board Members:50%
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
NOTE 10—POST EMPLOYMENT HEALTH CARE BENEFITS (Continued)
The underlying mortality assumptions were based on the mortality improvement projected
generationally with Scale MP-15 and all other actuarial assumptions used in the July 1, 2019
valuation were based on the results of a July 1, 2019 actuarial experience study for the period of
July 1,2019 to June 30, 2020.
The long-term expected rate of return on OPEB plan investments was determined using a building-
block method in which expected future real rates of return (expected returns, net of OPEB plan
investment expense and inflation) are developed for each major asset class. These ranges are
combined to produce the long-term expected rate of return by weighting the expected future real
rates of return by the target asset allocation percentage and by adding expected inflation. The target
allocation and best estimates of arithmetic real rates of return for each major asset class are
summarized in the following table:
Long-Term
Target Expected Real
Asset Class Component Allocation Rate of Return
Global Equity 48.0% 4.82%
Fixed Income 45.0% 1.47%
REIT 2.0% 3.76%
Cash 5.0% 0.06%
Total 100.0%
Discount Rate — The discount rate used to measure the total OPEB liability was 5.75%. The
projection of cash flows used to determine the discount rate assumed that District contributions will
be made at rates equal to the actuarially determined contribution rates. Based on those assumptions,
the OPEB plan's fiduciary net position was projected to be available to make all projected OPEB
payments for current active and inactive employees and beneficiaries. Therefore, the long-term
expected rate of return on OPEB plan investments was applied to all periods of projected benefit
payments to determine the total OPEB liability.
45
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
NOTE 10—POST EMPLOYMENT HEALTH CARE BENEFITS (Continued)
C. Changes in Net OPEB Liability
The changes in the net OPEB liability follows:
Increase(Decrease)
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability/(Asset)
(a) (b) (a)-(b)
Balance at June 30,2019 $77,838,865 $65,926,104 $11,912,761
Changes Recognized for the Measurement Period:
Service Cost 2,184,331 2,184,331
Interest on the total OPEB liability 4,482,146 4,482,146
Changes in benefit terms
Differences between expected and actual experience
Changes of assumptions
Contributions from the employer 5,395,654 (5,395,654)
Contributions from the employee
Net investment income 2,994,909 (2,994,909)
Benefit payments (4,145,654) (4,145,654)
Administrative expenses (182,833) 182,833
Net changes 2,520,823 4,062,076 (1,541,253)
Balance at June 30,2020 $80,359,688 $69,988,180 $10,371,508
D. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate and Healthcare Cost
Trend Rates
The following presents the net OPEB liability of the District at June 30, 2020, as well as what the
District's net OPEB liability would be if it were calculated using a discount rate that is 1-
percentage-point lower(4.75%)or 1-percentage-point higher(6.75%)than the current discount rate:
Net OPEB Liability/(Asset)
Discount Rate-1% Discount Rate Discount Rate+1%
(4.75%) (5.75%) (6.75%)
$20,619,626 $10,371,508 $1,932,835
The following presents the net OPEB liability of the District, as well as what the District's net
OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-
point lower or 1-percentage-point higher than the current healthcare cost trend rates:
Net OPEB Liability/(Asset)
Current Healthcare Cost
1%Decrease Trend Rates 1%Increase
$75,142 $10,371,508 $23,063,126
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
NOTE 10—POST EMPLOYMENT HEALTH CARE BENEFITS (Continued)
E. OPEB Expense and Deferred OutflowsJnflows of Resources Related to OPEB
For the year ended June 30, 2020, the District recognized negative OPEB expense of$2,251,139.
At June 30, 2020, the District reported deferred outflows and inflows of resources related to OPEB
from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Employer contributions made subsequent to the measurement date
Differences between actual and expected experience ($4,574,507)
Changes of assumptions $2,176,533
Net differences between projected and actual earnings on
plan investments (27,035)
Total $2,176,533 ($4,601,542)
Amounts reported as deferred outflows and (inflows) of resources related to OPEB will be
recognized as part of OPEB expense as follows:
Year Annual
Ended June 30 Amortization
2021 ($787,520)
2022 (787,520)
2023 (795,119)
2024 (54,850)
Total ($2,425,009)
OPEB Liabilities, OPEB Expenses and Deferred Outflows/Inflows of Resources Related to
OPEB — For purposes of measuring the net OPEB liability, deferred outflows of resources and
deferred inflows of resources related to OPEB, and OPEB expense, information about the
fiduciary net position of the District's OPEB Plan and additions to/deductions from the OPEB
Plan's fiduciary net position have been determined on the same basis as they are reported by the
District's defined benefit post employment healthcare plan (DPHP). For this purpose, benefit
payments are recognized when currently due and payable in accordance with the benefit terms.
Investments are reported at fair value.
F. Annual Money-Weighted Rate of Return on Investments
For the years ended June 30, 2020 and 2019, the annual money-weighted rate of return on
investments,net of investment expense,were 4.49%and 7.20%. The money-weighted rate of return
expresses investment performance net of investment expense, adjusted for the changing amounts
actually invested.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Years Ended June 30,2020 and 2019
NOTE 11—NET POSITION
Net Position
Net Position is the excess of all the District's assets and deferred outflows of resources over all its
liabilities and deferred inflows of resources,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:
Fis cal Year Office
Ending June 30, Equipment Facilities Total
2021 $252,360 $67,982 $320,342
Total $252,360 $67,982 $320,342
Total rental expense for both the fiscal years ended June 30, 2020 and 2019 was $320,342.
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$49,817,490 and$29,402,558 as of June 30,2020 and 2019,respectively.
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REQUIRED SUPPLEMENTARY INFORMATION
December 15, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 154 of 200
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CENTRAL CONTRA COSTA SANITARY DISTRICT
Cost-Sharing Multiple Employer Defined Benefit Retirement Plan
As of fiscal year ending June 30,2020
PROPORTIONATE SHARE OF NET PENSION LIABILITY
Last 10 Fiscal Years
December 31,
Measurement date 2019 2018 2017 2016 2015 2014
Proportion of the net pension
liability 7.42% 6.33% 7.86% 6.27% 6.09% 7.49%
Proportionate share of the net
pension liability $64,117,450 $90,430,104 $63,806,000 $87,847,116 $91,746,888 $89,535,510
Covered Payrolf $39,445,629 $37,088,954 $36,405,155 $33,825,261 $31,149,979 $29,647,993
Proportionate share of the net
pension liability as a percentage
of covered payroll 162.55% 243.82% 175.27% 259.71% 294.53% 302.00%
Fiduciary net position as a
percentage of the total pension
liability 85.05% 77.86% 83.58% 76.44% 74.14% 73.86%
1 The fiscal year ending June 30,2015 was the first year of implementation.
2 Covered payroll represents compensation earnable and pensionable compensation for the measurement period ended December 31st.
Only compensation earnable and pensionable compensation that would possibly go into the determination of retirement benefits are
included.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
Cost-Sharing Multiple Employer Defined Benefit Retirement Plan
As of fiscal year ending June 30,2020
SCHEDULE OF CONTRIBUTIONS
Last 10 Years*
2020 2019 2018 2017 2016 2015
Actuarially detemvned contribution $ 18,046,778 $ 17,520,615 $ 17,880,152 $ 18,043,391 $ 22,752,611 $ 24,451,234
Contributions in relation to the actuarially determined
contributions 18,046,778 17,520,615 17,880,152 18,043,391 22,752,611 24,451,234
Contribution deficiency(excess) - - - - - -
Covered payroll $ 40,356,579 $ 38,479,260 $ 36,638,935 $ 35,178,106 $ 32,675,243 $ 30,093,339
Contributions as apercentage ofcovered-employee
payroll 44.72% 45.53% 48.80% 51.29% 69.63% 81.25%
Notes to Schedule
Measurement Date: 12/31/2018,12/31/2019
Methods and assumptions used to detemvne contribution rates:
Actuarial cost method Entry age
Amortization method Level percentage ofpayroll,closed
Remaining amortization period 5 years**
Asset valuation method 5-yearsemi-annually
Inflation 2.75%
Salary increases 3.25%-12.00%
Investment rate ofretum 7.0%,net ofpension plan investment expense,including inflation
Retirement age 50 years Classic,52 years PEPRA
Mortality RP-2014 Healthy Annuitant Mortality Table
with setbacks and forwards
*Fiscal year 2015 was the lstyear ofimplementation.
**Remaining balance of December 31,2007 UAAL is amortized over a fixed(decreasing or closed)period
with 5 years remaining as of December 31,2017.Any changes in UAAL after December 31,2007 will be
separately amortized over a fixed 18-year period effective with that valuation.Any changes in UAAL due
to plan amendments will be amortized over a 10-year fixed period effective with that valuation.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
POST-RETIREMENT HEALTH CARE DEFINED BENEFIT PLAN
SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS
Single Employer
Last 10 fiscal years*
Measurement Date June 30,2020 June 30,2019 June 30,2018 June 30,2017
Total OPEB Liability
Service Cost $2,184,331 $2,447,310 $2,370,276 $2,295,667
Interest 4,482,146 6,596,612 6,396,063 6,203,230
Changes in benefit terms (27,603,524)
Differences between expected and actual experience (7,346,935)
Changes of assumptions 3,495,645
Benefit payments (4,145,654) (5,697,440) (5,571,750) (5,404,627)
Net change in total OPEB liability 2,520,823 (28,108,332) 3,194,589 3,094,270
TotalOPEBliability-beginning 77,838,865 105,947,197 102,752,608 99,658,338
Total OPEB liability-ending(a) $80,359,688 $77,838,865 $105,947,197 $102,752,608
Plan fiduciary net position
Contributions-employer $5,395,654 $7,280,240 $9,649,750 $10,433,327
Contributions-employee
Net investment income 2,994,909 4,920,923 3,354,822 4,735,576
Administrative expense (182,833) (174,362) (164,446) (5,404,627)
Benefit payments (4,145,654) (5,697,440) (5,571,750) (139,063)
Net change in plan fiduciary net position 4,062,076 6,329,361 7,268,376 9,625,213
Plan fiduciary net position-beginning 65,926,104 59,596,743 52,328,367 42,703,154
Plan fiduciary net position-ending(b) $69,988,180 $65,926,104 $59,596,743 $52,328,367
Net OPEB liability-ending(a)-(b) $10,371,508 $11,912,761 $46,350,454 $50,424,241
Plan fiduciary net position as a percentage of the total OPEB liability 87.09% 84.70% 56.25% 50.93%
Covered payroll $40,356,579 $38,479,260 $36,638,935 $35,178,106
Net OPEB liability as a percentage of covered-employee payroll 25.70% 30.96% 126.51% 143.34%
Notes to schedule:
*Fiscal year 2017 was the first year of implementation.
CENTRAL CONTRA COSTA SANITARY DISTRICT
POST-RETIREMENT HEALTH CARE DEFINED BENEFIT PLAN
SCHEDULE OF INVESTMENT RETURN RATE
2020 2019 2018
Annual money weighted rate of return,
net of investment expense 4.49% 7.20% 5.96%
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CENTRAL CONTRA COSTA SANITARY DISTRICT
POST-RETIREMENT HEALTH CARE DEFINED BENEFIT PLAN
SCHEDULE OF CONTRIBUTIONS
Single Employer
Last 10 fiscal years*
Fiscal Year Ended June 30, 2020 2019 2018 2017
Actuarially determined contribution $3,906,000 $7,524,000 $7,866,000 $7,866,000
Contributions in relation to the
actuarially determined contribution 5,395,654 7,280,240 10,433,327 $10,433,327
Contribution deficiency(excess) ($1,489,654) $243,760 ($2,567,327) ($2,567,327)
Covered payroll $40,356,579 $38,479,260 $36,638,935 $35,178,106
Contributions as a percentage of
covered payroll 13.37% 18.92% 28.48% 29.66%
Notes to Schedule
Methods and assumptions used to determine contribution rates:
Valuation Date 7/1/2018
Actuarial Cost Method: Entry Age Normal,Level Dollar
Amortization Method: Level dollar
Asset Valuation Method: Investment gains and losses spread over 5-year rolling period
Actuarial Assumptions:
Discount Rate 5.75%
General Inflation 2.75%
Medical Trend Non-Medicare-7.5%for 2019/20,decreasing to
an ultimate rate of 4.0%in 2075/76
Medicare-6.5%for 2019/20,decreasing to an
Dental Trend 3.75%
Mortality Rate CCCERA 2012-2014 Experience Study
Mortality Improvement Mortality improvement projected generationally with Scale MP-2015
*Fiscal year 2017 was the first year of implementation.
53
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SUPPLEMENTARY INFORMATION
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CENTRAL CONTRA COSTA SANITARY DISTRICT
COMBINING SCHEDULE OF NET POSITION
ENTERPRISE SUB-FUNDS
.TUNE 30,2020
Running Sewer Self Debt
Expense Construction Insurance Service Elimination Total
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $52,995,333 $51,130,118 $7,728,234 $2,639 $111,856,324
Short term investments 20,000,000 20,000,000
Accounts receivable 16,529,148 11,456,441 27,985,589
Employee computer loans receivable 12,893 12,893
Interest receivable 117,226 114,242 25,091 256,559
Parts and supplies 2,295,555 2,295,555
Prepaid expenses 1,695,712 1,695,712
Total current assets 73,645,867 82,700,801 7,753,325 2,639 164,102,632
NON-CURRENT ASSETS:
Restricted cash and equivalents 10,422,954 10,422,954
Assessment Districts receivable 1,055,527 1,055,527
CAPITAL ASSETS
Nondepreciable 97,770,060 97,770,060
Depreciable,net of accumulated depreciation 613,794,504 613,794,504
Total capital assets,net 711,564,564 711,564,564
Total non-current assets 721,987,518 1,055,527 723,043,045
TOTAL ASSETS 795,633,385 83,756,328 7,753,325 2,639 887,145,677
DEFERRED OUTFLOWS OF RESOURCES
Pension related 26,670,166 26,670,166
OPEB related 2,176,533 2,176,533
Total deferred outflows 28,846,699 28,846,699
LIABILITIES
CURRENT LIABILITIES:
Accounts payable and accrued expenses 3,822,372 7,905,054 58,132 11,785,558
Interest payable 269,772 269,772
Refunding Water Revenue Bonds-current portion 1,740,000 1,740,000
Accrued compensated absences-current portion 535,200 535,200
Liability for uninsured claims 1,221,293 1,221,293
Refundable deposits 183,011 119,483 302,494
Total current liabilities 4,540,583 8,024,537 1,279,425 2,009,772 15,854,317
NON-CURRENT LIABILITIES:
Refunding Water Revenue Bonds,noncurrent portion 17,707,392 17,707,392
Accrued compensated absences,noncurrent portion 4,817,572 4,817,572
Net pension liability 64,117,450 64,117,450
Net OPEB liability 10,371,508 10,371,508
Total noncurrent liabilities 79,306,530 17,707,392 97,013,922
TOTAL LIABILITIES 83,847,113 8,024,537 1,279,425 19,717,164 112,868,239
DEFERRED INFLOWS OF RESOURCES
Pension related 30,761,867 30,761,867
OPEB related 4,601,542 4,601,542
Total deferred inflows 35,363,409 35,363,409
NET POSITION
Net investment in capital assets 711,564,564 (19,447,392) 692,117,172
Restricted for debt service 2,639 2,639
Unrestricted (6,295,002) 75,731,791 6,473,900 (269,772) 75,640,917
TOTAL NET POSITION $705,269,562 $75,731,791 $6,473,900 ($19,714,525) $767,760,728
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CENTRAL CONTRA COSTA SANITARY DISTRICT
COMBINING SCHEDULE OF REVENUES,EXPENSES,AND CHANGES IN NET POSITION
ENTERPRISE SUB-FUNDS
FOR THE YEAR ENDING JUNE 30,2020
Running Sewer Self Debt
Expense Construction Insurance Service Elimination Total
OPERATING REVENUES
Sewer service charges(SSC) $70,408,903 $70,408,903
Service charges-City of Concord 14,923,591 14,923,591
Other services charges 1,176,242 1,176,242
Miscellaneous charges 714,043 714,043
Total operating revenues 87,222,779 87,222,779
OPERATING EXPENSES
Sewage collection and pumping stations 16,671,998 16,671,998
Sewage treatment 26,998,492 26,998,492
Engineering 15,564,466 15,564,466
Recycled water 1,205,526 1,205,526
Administrative and general 21,122,948 $1,152,447 ($866,649) 21,408,746
Pension expense 757,666 757,666
OPEB expense (3,144,515) (3,144,515)
Depreciation 21,253,062 21,253,062
Total Operating expenses 100,429,643 1,152,447 (866,649) 100,715,441
OPERATING INCOME(LOSS) (13,206,864) (1,152,447) 866,649 (13,492,662)
NONOPERATING REVENUES(EXPENSES)
Taxes $16,127,444 $2,749,442 18,876,886
Permit and inspection fees 1,981,684 269,561 2,251,245
Interest earnings 1,172,489 996,041 141,739 2,310,269
Interest expense (604,851) (604,851)
Other income(expense),net 1,129,598 90,213 866,649 (866,649) 1,219,811
Total nonoperating revenues 4,283,771 17,483,259 1,008,388 2,144,591 (866,649) 24,053,360
NET INCOME(LOSS)BEFORE CAPITAL (8,923,093) 17,483,259 (144,059) 2,144,591 10,560,698
CONTRIBUTIONS AND TRANSFERS
CAPITAL CONTRIBUTIONS AND TRANSFERS
City of Concord contributions to capital costs 11,393,000 11,393,000
Customer contributions to capital cost(SSC) 32,829,958 32,829,958
Contributed sewer lines 1,761,808 1,761,808
Capital contributions-connection fees 7,083,702 7,083,702
Transfers In(Out) 50,815,214 (51,473,036) 438,937 218,885
Total capital contributions and transfers 52,577,022 (166,376) 438,937 218,885 53,068,468
CHANGE IN NET POSITION 43,653,929 17,316,883 294,878 2,363,476 63,629,166
NET POSITION,BEGINNING OF YEAR 661,615,633 58,414,908 6,179,022 (22,078,001) 704,131,562
NET POSITION,END OF YEAR $705,269,562 $75,731,791 $6,473,900 ($19,714,525) $767,760,728
57
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Central Contra Costa Sanitary District
Statistical Section
Table of Contents
Financial Trends
These schedules contain trend information to help the reader understand how the
District's financial performance has changed over time.
Changes in Net Position and Statement of Net Position -
LastTen Fiscal Years......................................................................................S-1
Revenue by Type - Last Ten Fiscal Years.........................................................S-2
Operating Expenses by Type - Last Ten Fiscal Years ......................................S-3
Revenue Capacity
These schedules contain information to help the reader assess the District's most
significant revenue sources.
Major Revenue Base and Rates - Historical and Current Fees -
LastTen Fiscal Years......................................................................................S-4
Assessed and Estimated Actual Valuation of Taxable Property -
LastTen Fiscal Years......................................................................................S-5
Property Tax and Sewer Service Charge Fees Levied and Collected -
LastTen Fiscal Years......................................................................................S-5
Sewer Service Charge - Ten Largest Customers -
LastTen Fiscal Years......................................................................................S-6
Payments under the Concord Agreement— Last Ten Fiscal Years...................S-7
Active Service Accounts and Fiscal Year Billings — Sewer Service Charges ....S-7
Debt Capacity
This schedule contains information to help the reader assess the affordability of the
District's current levels of outstanding debt and the District's ability to issue additional
debt in the future.
Summary of Debt Service - Type, Debt Service Coverage, Debt Ratio -
Last Ten Fiscal Years......................................................................................S-8
Demographic and Economic Information
This schedule offers demographic and economic indicators to help the reader
understand the environment within which the District's financial activities take place.
Demographic and Economic Data - Population Served -
Last Ten Calendar Years ................................................................................S-9
List of Ten Largest Employers in Contra Costa County -
Last Year and Eight Years Ago ......................................................................S-9
Demographic and Economic Statistics - Contra Costa County -
Last Ten Fiscal Years....................................................................................S-10
Operating Information
These schedules contain service and infrastructure data to help the reader understand
how the information in the District's financial report relates to the services the District
provides and the activities it performs.
Full-time Equivalent Positions Filled by Department - Last Ten Fiscal Years..S-11
Number of Retirees and Surviving Spouses - Last Ten Fiscal Years ..............S-11
Capital Asset and Operating Statistics - Last Ten Calendar or Fiscal Years...S-12
Miscellaneous Statistics ..................................................................................S-12
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual
D mbt!re0rt2@2QFF "WwrFF"hNCE Committee Meeting Agenda Packet- Page 164 of 200
Central Contra Costa Sanitary District
Changes in Net Position and Statement of Net Position
Last Ten Fiscal Years
Changes in Net Position 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020
Operating Revenues:
Sewer Service Charges(SSC) $49,095,870 $49,123,848 $56,770,984 $60,796,421 $70,023,512 $72,233,903 $73,138,235 $75,824,221 $68,656,908 $70,408,903
City of Concord 9,224,952 10,647,389 10,483,421 11,625,864 12,892,945 13,913,960 13,851,253 14,973,623 15,205,292 14,923,591
Other Service Charges 913,017 915,485 1,076,401 1,035,134 1,006,197 963,014 1,029,500 1,078,594 1,126,239 1,176,242
Miscellaneous Charges 662,721 929,917 751,880 544,589 593,780 623,659 606,453 619,997 689,727 714,043
Total Operating Revenue 59,896,560 61,616,639 69,082,686 74,002,008 84,516,434 87,734,536 88,625,441 92,496,435 85,678,166 87,222,779
Operating Expenses:
Salaries&Benefits 41,705,131 45,562,430 49,811,218 58,954,452 66,104,630 63,988,158 62,342,392 68,862,484 65,071,382 62,672,096
Chemicals,Utilities&Supplies 7,609,127 8,121,809 7,401,103 8,063,309 7,466,490 7,304,619 8,115,004 7,477,602 8,093,144 8,088,750
Professional&Outside Services 2,425,615 4,099,876 2,836,638 3,995,860 3,322,881 4,196,302 3,891,224 2,988,280 3,276,763 2,684,034
Hauling,Disposal,Repairs&Maintenance 3,916,789 4,077,741 4,239,421 4,041,355 4,758,260 5,780,533 5,662,086 5,461,011 5,755,590 5,435,406
Self-Insurance(net of transfers) 119,051 (65,688) 159,961 214,290 496,381 72,486 (300,108) (332,483) 1,039,444 1,110,798
Pension/OPEB Expense - - - - (3,012,757) (9,778,389) (4,080,558) 1,104,358 (33,307,168) (2,386,849)
Depreciation 20,580,061 21,190,059 21,596,266 21,892,545 22,740,942 22,885,030 22,892,153 21,561,704 20,983,353 21,253,062
All Other 2,459,966 2,489,019 2,693,135 2,346,583 2,473,963 3,343,778 2,942,592 2,558,122 2,366,416 1,858,144
Total Operating Expenses 78,815,740 85,475,246 88,737,742 99,508,394 104,350,790 97,792,517 101,464,785 109,681,078 73,278,924 100,715,441
Operating Loss (18,919,180) (23,858,607) (19,655,056) (25,506,386) (19,834,356) (10,057,981) (12,839,344) (17,184,643) 12,399,242 (13,492,662)
Non-Operating Revenues(Expenses):
Property Taxes 12,213,624 12,047,169 13,010,477 13,093,841 14,083,331 14,835,167 16,318,874 17,650,741 18,251,794 18,876,886
Connection&Other Fees 895,825 903,810 1,169,809 1,575,251 1,843,942 2,546,723 2,600,888 2,592,137 2,648,708 2,251,245
Interest Income 673,990 294,938 405,474 359,288 318,475 562,308 761,838 1,223,349 2,573,964 2,310,269
Interest Expense (2,061,903) (1,919,375) (1,802,084) (1,996,689) (1,523,127) (1,427,641) (1,313,398) (1,230,680) (1,025,006) (604,851)
All Other` (523,209) 931,660 951,100 932,464 1,828,530 1,195,095 966,244 1,075,838 1,424,520 1,219,811
Total Non-Operating 11,198,327 12,258,202 13,734,776 13,964,155 16,551,151 17,711,652 19,334,446 21,311,385 23,873,980 24,053,360
Income Before Contributions and Transfers (7,720,853) (11,600,405) (5,920,280) (11,542,231) (3,283,205) 7,653,671 6,495,102 4,126,742 36,273,222 10,560,698
Customer Contributions' 5,018,092 8,888,663 8,001,147 10,486,067 6,769,623 11,991,752 16,628,105 20,425,514 36,562,141 44,222,958
Contributed Sewer Lines 533,616 792,011 939,628 1,462,316 794,218 1,774,168 2,899,042 2,003,614 2,179,641 1,761,808
Capital Contributions-Connection Fees 3,515,804 5,724,833 6,091,529 8,224,517 6,673,298 8,543,758 7,044,340 9,331,420 8,145,068 7,083,702
CHANGE IN NET POSITION 1,346,659 3,805,102 9,112,024 8,630,669 10,953,934 29,963,349 33,066,589 35,887,290 83,160,072 63,629,166
Total Net Position-Beginning 621,451,212 622,797,871 626,602,973 635,714,997 644,345,666 563,607,078 593,570,427 626,637,016 620,971,490 704,131,562
Prior Period Adjustment-GASB 68 and 71 - - - - (91,692,522) - - - - -
Prior Period Adjustment-GASB 75 (41,552,816)
Total Net Position-Ending $622,797,871 $626,602,973 $635,714,997 $644,345,666 $563,607,078 $593,570,427 $626,637,016 $620,971,490 $704,131,562 $767,760,728
Statement of Net Position 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020
Net Investment in Capital Assets $541,613,208 $549,462,506 $559,523,642 $568,006,023 $573,175,094 $581,844,903 $600,770,254 $623,307,342 $655,586,304 $692,117,172
Restricted 4,612,103 4,663,601 4,730,837 4,809,248 4,288,008 4,363,251 4,449,437 4,421,504 (271,370) 2,639
Unrestricted 76,572,560 72,476,866 71,460,518 71,530,395 (13,856,024) 7,362,273 21,417,325 (6,757,356) 48,816,628 75,640,917
Total Net Position $622,797,871 $626,602,973 $635,714,997 $644,345,666 $563,607,078 $593,570,427 $626,637,016 $620,971,490 $704,131,562 $767,760,728
'Classification reclessed 2010-11,prior years reclassed for consistency.Previously included in Non-Operating.Includes capital cost contributions from the City of Concord and customer contributions(SSC).
Source:Central Contra Costa Sanitary District Aud Red Financial Statements
S-1
December 15, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 165 of 200
Central Contra Costa Sanitary District
Revenue By Type
Last Ten Fiscal Years
$180,000,000
$160,000,000
$140,000,000
$120,000,000
10
$100,000,000
p $80,000,000
D
$60,000,000
$40,000,000
$20,000,000
$-
2010-2011 2011-2012 2012.2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020
Fiscal Year
■Operating Revenue oNon-Operating Revenue
Operating Revenue
Fiscal Sewer Service City of Other Service Miscellaneous Total
Year Charges* Concord Charges Charges Operating
2010-2011 $49,095,870 $9,224,952 $913,017 $662,721 $59,896,560
2011-2012 49,123,848 10,647,389 915,485 929,917 61,616,639
2012-2013 56,770,984 10,483,421 1,076,401 751,880 69,082,686
2013-2014 60,796,421 11,625,864 1,035,134 544,589 74,002,008
2014-2015 70,023,512 12,892,945 1,006,197 593,780 84,516,434
2015-2016 72,233,903 13,913,960 963,014 623,659 87,734,536
2016-2017 73,138,235 13,851,253 1,029,500 606,453 88,625,441
2017-2018 75,824,221 14,973,623 1,078,594 619,997 92,496,435
2018-2019 68,656,908 15,205,292 1,126,239 689,727 85,678,166
2019-2020 70,408,903 14,923,591 1,176,242 714,043 87,222,779
Non-Operating Revenue
Fiscal Property Customer Connections All Total Non-Operating
Year Taxes Contributions*1 &Other Fees*2 Interest Other &Contributions
2010-2011 $12,213,624 $5,551,708 $4,411,629 $673,990 - $22,850,951
2011-2012 12,047,169 9,680,674 6,628,643 294,938 $931,660 29,583,084
2012-2013 13,010,477 8,940,775 7,261,338 405,474 951,100 30,569,164
2013-2014 13,093,841 11,948,383 9,799,768 359,288 932,464 36,133,744
2014-2015 14,083,331 7,563,841 8,517,240 318,475 1,828,530 32,311,417
2015-2016 14,835,167 13,765,920 11,090,481 562,308 1,195,095 41,448,971
2016-2017 16,318,874 19,527,147 9,645,228 761,838 966,244 47,219,331
2017-2018 17,650,741 22,429,128 11,923,557 1,223,349 1,075,838 54,302,613
2018-2019 18,251,794 38,741,782 10,793,776 2,573,964 1,424,520 71,785,836
2019-2020 18,876,886 45,984,766 9,334,947 2,310,269 1,219,811 77,726,679
* Sewer Service Charge(SSC)represents the Running Expense Fund portion of SSC County collections along with District direct billings and counter collections.
*1 Customer Contributions include the portion of SSC that is allocated to Sewer Construction Fund,City of Concord reimbursement of capital costs,and
developer contributed sewer lines beginning in 2000-2001,due to changes in GASB 33 reporting requirements.
*2 Includes connection fees,non-operating permit,inspection,and other fees.
Source:Central Contra Costa Sanitary District Audited Financial Statements
S-2
December 15, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 166 of 200
Central Contra Costa Sanitary District
Operating Expenses by Type
Last Ten Fiscal Years
$110,000,000
$100,000,000
$90,000,000
$80,000,000
$70,000,000
$60,000,000
w $50,000,000
$40,000,000
o $30,000,000
o $20,000,000
$10,000,000
$-
$(10,000,000)
$(20,000,000)
$(30,000,000)
$(40,000,000)
$(50,000,000)
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020
Fiscal Year
❑Salaries and Benefits []Chemicals,Utilities&Supplies ❑Professional&Outside Services ❑Hauling,Disposal,Repairs&Maintenance
❑Self-Insurance El Depreciation ❑Pension/OPEB Expense* ❑AII Other
OPERATING EXPENSES
Fiscal Salaries Chemicals,Utilities Professional& Hauling,Disposal, Self-Insurance Depreciation Pension/OPEB All Total Operating Non-Operating
Year and Benefits &Supplies Outside Services Repairs&Maintenance Expense* Other Expenses Expenses
2010-2011 $41,705,131 $7,609,127 $2,425,615 $3,916,789 $1,003,115 $20,580,061 $1,575,902 $78,815,740 $2,585,112
2011-2012 45,562,430 8,121,809 4,099,876 4,077,741 810,849 21,190,059 1,612,482 85,475,246 1,919,375
2012-2013 49,811,218 7,401,103 2,836,638 4,239,421 2,380,466 21,596,266 472,630 88,737,742 1,802,084
2013-2014 58,954,453 8,063,310 3,995,861 4,041,356 858,738 21,892,545 1,702,131 99,508,394 1,996,689
2014-2015 66,104,630 7,466,490 3,322,881 4,758,260 1,146,381 22,740,942 ($3,012,757) 1,823,963 104,350,790 1,523,127
2015-2016 63,988,158 7,304,619 4,196,302 5,780,533 1,572,486 22,885,030 (9,778,389) 1,843,778 97,792,517 1,427,641
2016-2017 62,342,392 8,115,004 3,891,224 5,662,086 619,892 22,892,153 (4,080,558) 2,022,592 101,464,785 1,313,398
2017-2018 68,862,484 7,477,602 2,988,280 5,461,011 252,517 21,561,704 1,104,358 1,973,122 109,681,078 1,230,680
2018-2019 65,071,382 8,093,144 3,276,763 5,755,590 1,039,444 20,983,353 (33,307,168) 2,366,416 73,278,924 1,025,006
2019-2020 62,672,096 8,088,750 2,684,034 5,435,406 1,110,798 21,253,062 (2,386,849) 1,858,144 100,715,441 604,851
Informational-not graphed
Source:Central Contra Costa Sanitary District Audited Financial Statements
*Reflects pension/OPEB adjuestment at year-end to comply with the provisions of GASB Statements No.68 and 75. Budgeted pension/OPEB emloyer contributions made during
the year are reported under"Salaries and Benefits".
December 15, 2020 Regular FINANCE Committee Meeting Agenda Pack&a Page 167 of 200
Central Contra Costa Sanitary District
Major Revenue Base and Rates
Historical and Current Fees
Last Ten Fiscal Years
Single Family Annual Sewer Service Charge (SSC)'1 Facility
Fiscal Year Operations Capital Total Capacity Fee*2
2010-2011 $300 $11 $311 $5,451
2011-2012 302 39 341 5,465
2012-2013 344 27 371 5,797
2013-2014 365 40 405 5,930
2014-2015 416 23 439 5,995
2015-2016 422 49 471 6,005
2016-2017 432 71 503 5,948
2017-2018 447 83 530 6,300
2018-2019 400 167 567 6,700
2019-2020 $408 $190 $598 $6,589
Multi-Family Annual Sewer Service Charge (SSC)`1 Pump
Fiscal Year Operations Capital Total Zone Fee`3
2010-2011 $300 $11 $311 $1,641
2011-2012 302 39 341 1,606
2012-2013 344 27 371 1,625
2013-2014 365 40 405 1,587
2014-2015 416 23 439 1,585
2015-2016 415 48 463 1,650
2016-2017 418 69 487 1,608
2017-2018 432 81 513 1,639
2018-2019 388 161 549 1,636
2019-2020 $386 $180 $566 $1,586
'1 All residential accounts paid a flat annual sewer service charge shown above per household through 2014-2015. In 2015-2016,as a result of a cost of service study,the District
changed to a two tier single family and multi family rate structure. The charge for commercial users consists of an annual rate based on a measured volume of water
usage per 100 cubic feet(HCF).
*2 New users who are connected to the Wastewater System are charged Capital Improvement Fees called Facility Capacity Fees.Fee is per connection.
'3 New customers in areas where wastewater pumping stations are needed to reach the District's gravity fed sewers are charged a Pump Zone Fee.
Fee is per connection.
Source: Central Contra Costa Sanitary District Environmental Services Division
S-4
December 15, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 168 of 200
Central Contra Costa Sanitary District
Assessed and Estimated Actual Valuation of Taxable Property
Last Ten Fiscal Years
Fiscal Year Local Secured Unsecured Total % Change
2010-2011 $67,889,370,916 $1,647,537,385 $69,536,908,301 -1.2%
2011-2012 67,486,938,247 1,591,574,852 69,078,513,099 -0.7%
2012-2013 67,538,246,870 1,604,518,295 69,142,765,165 0.1%
2013-2014 74,400,356,922 1,742,364,655 76,142,721,577 10.1%
2014-2015 80,431,132,956 1,739,342,301 82,170,475,257 7.9%
2015-2016 86,701,930,276 1,645,712,628 88,347,642,904 7.5%
2016-2017 92,006,863,080 1,704,263,642 93,711,126,722 6.1%
2017-2018 97,298,029,346 1,722,229,970 99,020,259,316 5.7%
2018-2019 102,984,718,407 1,801,374,862 104,786,093,269 5.8%
2019-2020 114,104,132,647 1,958,523,355 116,062,656,002 10.8%
Property Tax and Sewer Service Charge Fees Levied and Collected
Last Ten Fiscal Years
Property Tax* Collection Sewer Service Charges* Collection
Fiscal Year Levied & Collected Percentage % Change Levied &Collected Percentage % Change
2010-2011 $12,171,725 100% 8.2% $50,196,629 100% -1.4%
2011-2012 12,032,525 100% -1.1% 54,586,208 100% 8.7%
2012-2013 13,185,988 ** 100% 9.6% 60,068,807 100% 10.0%
2013-2014 13,108,176 100% -0.6% 66,604,323 100% 10.9%
2014-2015 14,195,300 100% 8.3% 72,622,738 100% 9.0%
2015-2016 15,323,818 100% 7.9% 78,930,977 100% 8.7%
2016-2017 16,428,089 100% 7.2% 83,601,971 100% 5.9%
2017-2018 17,300,475 100% 5.3% 87,944,554 100% 5.2%
2018-2019 18,352,620 100% 6.1% 95,298,869 100% 8.4%
2019-2020 19,348,103 100% 5.4% 100,863,356 100% 5.8%
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 et seq.of the State 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.
"Includes repayment of Prop 1A loan in June,2013. The repayment amount includes$985,916 of principal and $65,545 of interest
for a total of$1,051,461.
Source: Contra Costa County Auditor-Controller's Office
December 15, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 169 of 200
Central Contra Costa Sanitary District
Sewer Service Charge
Ten Largest Customers
Last Ten Fiscal Years
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
Percentage of Percentage of Percentage of Percentage of Percentage of
Operating Operating Operating Operating Operating Operating Operating Operating Operating Operating
Customer Revenue Rank Revenue Revenue Rank Revenue Revenue Rank Revenue Revenue Rank Revenue Revenue Rank Revenue
City of Concord 1. $9,224,952 1 15.40% $10,647,389 1 17.28% $10,483,421 1 15.18% $11,625,864 1 15.71% $12,892,945 1 15.25%
Contra Costa County General Services 2. 301,430 2 0.50% 292,384 4 0.47% 321,803 4 0.47% 384,750 3 0.52% 451,567 2 0.53%
First Walnut Creek Mutual 295,450 3 0.49% 323,950 2 0.53% 352,450 2 0.51% 361,260 4 0.49% 417,050 3 0.49%
Park Regency Apartments 277,412 4 0.46% 304,172 3 0.49% 330,932 3 0.48% 303,750 5 0.41% 391,588 4 0.46%
Second Walnut Creek Mutual Apts 233,250 5 0.39% 255,750 5 0.42% 278,250 5 0.40% 211,866 6 0.29% 329,250 5 0.39%
Sun Valley Mall 193,957 6 0.32% 203,037 6 0.33% 174,038 7 0.25% 148,374 8 0.20% 299,697 6 0.35%
Chevron Offices&Office Park - - - - - - 419,590 2 0.57% -
Kaiser Foundation Hospital 2. - - - - - - - - 158,848 8 0.19%
Branch Creek Vista Apartments 124,400 7 0.21% 136,400 7 0.22% 148,400 9 0.21% 162,000 7 0.22% 175,600 7 0.21%
Bay Landing Apartments 111,960 8 0.19% 122,760 8 0.20% 133,560 10 0.19% 145,800 9 0.20% 158,040 9 0.19%
St.Marys College Contract - - 119,407 9 0.19% 158,480 8 0.23% - - - -
John Muir Health 2. - - - - 176,381 6 0.26% 145,091 10 0.20% - -
Archstone Apartments 108,850 9-10 0.18% 119,350 10 0.19% - - - - 153,650 10 0.18%
Muirland @ Windemere Apartments 108,850 9-10 0.18% 119,350 10 0.19% - - 153,650 10 0.18%
Total $10,980,511 18.33% $12,643,949 20.52% $12,557,715 18.18% $13,908,345 18.79%
15,581,885 18.44%
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020
Percentage of Percentage of Percentage of Percentage of Percentage of
Operating Operating Operating Operating Operating Operating Operating Operating Operating Operating
Customer Revenue Rank Revenue Revenue Rank Revenue Revenue Rank Revenue Revenue Rank Revenue Revenue Rank Revenue
City of Concord 1. $13,913,960 1 15.86% $13,851,253 1 15.63% $14,973,623 1 16.19% $15,205,292 1 16.44%
14,923,591 1 16.13%
Contra Costa County General Services 2. 638,608 2 0.73% 547,943 2 0.62% 556,782 2 0.60% - - 733,416 2 0.79%
First Walnut Creek Mutual 439,850 3 0.50% 462,650 3 0.52% 487,350 3 0.53% 521,550 2 0.56% 537,700 3 0.58%
Park Regency Apartments 412,996 4 0.47% 434,404 4 0.49% 457,596 4 0.49% 489,708 3 0.53% 504,872 4 0.55%
Second Walnut Creek Mutual Apts 347,250 5 0.40% 365,250 5 0.41% 387,750 5 0.42% 411,750 6 0.45% 424,500 5 0.46%
John Muir Health 2. 218,919 7 0.25% 322,601 6 0.36% 278,589 7 0.30% 413,900 5 0.45% 391,245 6 0.42%
Sun Valley Mall 283,613 6 0.32% 298,005 7 0.34% 354,208 6 0.38% 453,512 4 0.49% 373,171 7 0.40%
Bishop Ranch City Center - - - - - - 315,106 7 0.34% 335,017 8 0.36%
San Ramon Unified School District 215,044 8 0.25% 225,339 8 0.25% 247,766 8 0.27% 266,550 8 0.29% 283,631 9 0.31%
Branch Creek Vista Apartments - - 194,800 9 0.22% 205,200 9 0.22% 219,600 10 0.24% 226,400 10 0.24%
Kaiser Foundation Hospital 2. 186,232 10 0.21% 186,281 10 0.21% - - 244,180 9 0.26% - -
Willows Shopping Center 2. 206,210 9 0.24% - - 188,828 10 0.20% - - -
Total $16,862,681 19.22% $16,888,526 19.06% $18,137,692 19.61% $18,541,148 20.05% °
18,733,543 20.25/0
1. Contract with the City of Concord to treat and dispose of wastewater for the cities of Concord and Clayton. The City of Clayton contracts with the City of Concord for the maintenance,operation,and capital replacement/improvement
of its sewage collection system,which runs through the City of Concord.
2. Kaiser,John Muir Health,Willows Shopping Center,and County hospital are permitted industries.
Source: Central Contra Costa Sanitary District Environmental Services Division
S-6
December 15, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 170 of 200
Central Contra Costa Sanitary District
Payments Under the Concord Agreement
Last 10 Fiscal Years
Fiscal Year Discharge Volume (mg) Service Charges Capital Contributions Total
2010-11 4,507 9,224,952 3,216,190 12,441,142
2011-12 4,279 10,647,389 2,541,688 13,189,077
2012-13 4,213 10,483,421 3,616,771 14,100,192
2013-14 3,914 11,625,864 3,820,858 15,446,722
2014-15 3,826 12,892,945 2,897,491 15,790,436
2015-16 3,878 13,913,960 3,671,892 17,585,852
2016-17 4,800 13,851,253 4,476,961 18,328,214
2017-18 4,265 14,973,623 6,364,725 21,338,348
2018-19 4,512 15,205,292 7,973,516 23,178,808
2019-20 4,383 14,923,591 11,393,000 26,316,591
Central Contra Costa Sanitary District
Active Service Accounts and Fiscal Year Billings
Sewer Service Charges
Fiscal Year 2019-2020
2019-2020 Sewer Percentage of
User Group No.of Accounts Service Charge Billings Residential Unit Equivalents Total
Residential 114,993 $82,615,906 138,154 81%
Mixed Use 426 6,610,852 11,055 6%
Office 712 2,852,440 4,770 3%
Hotel/Motel 23 1,410,709 2,359 1%
Food Service 165 1,188,731 1,988 1%
Government 190 1,121,289 1,875 1%
Schools 173 1,010,889 1,690 1%
Recreation/Entertainment 138 843,247 1,410 1%
Businesses 383 808,415 1,352 1%
Automotive/Car Wash 244 737,895 1,234 1%
Market/Supermarket 39 567,290 949 1%
Industrial Permitted 11 497,443 832 1%
All Other User Groups 491 2,630,906 4,041 2%
Subtotal 117,988 $102,896,012 171,709 100%
Partial Year Charges(Counter) $347,497
Prior Year Adjustments (4,648)
Total FY 2018-2019 Sewer Service Charge Revenue $103,238,861
S-7
December 15, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 171 of 200
Summary Of Debt Service
Last Ten Fiscal Years
Debt Service Paid Each Fiscal Year Outstanding Debt Each Fiscal Year
$7,000,000 $60,000,000 In 2019,the District issued refunding Bonds for$19,450,000 which defeased the
outstanding 2009 Bonds.
$6,000,000
$5,000,000 $45,000,000 -
$4,000,000
a
p $3,000,000 c $30,000,000 - -
$2,000,000
$15,000,000 -
$1,000,000
$0 $0
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Summary By Type Of Debt
Revenue Bonds 2018&2009 Total Debt Service Annual Expense • = •
Fiscal Interest& Total Interest& Total Interest& Total Revenue • -
YearPrinci al Amortization Debt Service Principal Amortization Debt Service Principal Amortization Debt Service Bonds •- •
2010-2011 $3,460,000 $2,027,168 $5,487,168 $152,385 $34,734 $187,119 $3,612,385 $2,061,903 $5,674,288 $50,665,000 $1,183,583 $51,848,583
2011-2012 3,465,000 1,888,601 5,353,601 156,346 30,773 187,119 3,621,346 1,919,375 5,540,721 47,200,000 1,027,237 48,227,237
2012-2013 3,605,000 1,775,376 5,380,376 160,411 26,708 187,119 3,765,411 1,802,084 5,567,495 43,595,000 866,826 44,461,826
2013-2014 3,720,000 1,974,151 5,694,151 164,581 22,537 187,118 3,884,581 1,996,688 5,881,269 39,875,000 702,245 40,577,245
2014-2015 3,865,000 1,504,939 5,369,939 168,860 18,258 187,118 4,033,860 1,523,197 5,557,057 36,010,000 533,385 36,543,385
2015-2016 2,210,000 1,413,772 3,623,772 173,251 13,868 187,119 2,383,251 1,427,640 3,810,891 33,800,000 360,134 34,160,134
2016-2017 2,300,000 1,304,036 3,604,036 177,757 9,362 187,119 2,477,757 1,313,398 3,791,155 31,500,000 182,377 31,682,377
2017-2018 2,405,000 1,225,938 3,630,938 182,377 4,742 187,119 2,587,377 1,230,680 3,818,057 29,095,000 - 29,095,000
2018-2019 - 1,025,006 1,025,006 - - - - 1,025,006 1,025,006 21,806,631 21,806,631
2019-2020 2,145,000 604,851 2,749,851 2,145,000 604,851 2,749,851 19,447,392 19,447,392
Debt Service Coverage Summar Debt Ratios
Total Total Operating Non-Operating Debt Service Capital Debt Service Annual Debt Annual Debt Total Debt
Fiscal Debt Operating Expenses less Revenue& Net Coverage Improvement Adjusted Net Coverage Service to Service per Outstanding
Year Service Revenue Depreciation*1 Contributions Revenue*2 (Net Revenue)*3 Fees/Concord Revenue*4 (Adj.Net Revenue)*5 Operating Exp. Customer Per Customer
2010-2011 $5,674,288 $59,896,560 $58,235,679 $22,850,951 $24,511,832 4.32 $6,731,994 $17,779,838 3.13 9.74% $34.67 $316.81
2011-2012 5,540,721 61,616,639 64,285,187 29,583,084 26,914,536 4.86 8,266,521 18,648,015 3.37 8.62% 34.06 296.47
2012-2013 5,567,495 69,082,686 67,141,476 30,569,164 32,510,374 5.84 9,708,300 22,802,074 4.10 8.29% 33.78 269.73
2013-2014 5,881,269 74,002,008 77,615,849 36,133,744 32,519,903 5.53 12,045,375 20,474,528 3.48 7.58% 35.31 243.60
2014-2015 5,557,057 84,516,434 81,609,848 32,311,417 35,218,003 6.34 9,570,789 25,647,214 4.62 6.81% 33.01 217.10
2015-2016 3,810,891 87,734,536 74,907,487 41,448,971 54,276,020 14.24 12,215,650 42,060,370 11.04 5.09% 22.28 199.74
2016-2017 3,791,155 88,625,441 78,572,632 47,219,331 57,272,140 15.11 11,521,301 45,750,839 12.07 4.83% 22.36 186.85
2017-2018 3,818,057 92,496,435 88,119,374 51,841,253 56,218,314 14.72 15,696,145 40,522,169 10.61 4.33% 22.51 171.56
2018-2019 1,025,006 85,678,166 52,295,571 70,760,830 104,143,425 101.60 16,118,584 88,024,841 85.88 1.96% 5.98 127.15
2019-2020 1 2,749,851 1 87,222,779 1 79,462,379 1 77,121,828 1 84,882,228 1 30.87 18,476,702 63,795,526 23.20 3.46% 15.93 112.65
Note: Details regarding the District's outstanding debt can be found in the notes to the financial statements.
<a>GASB Statement No.65 required that bond issuance costs of$315,287,previously being amoritized annually,be expensed in FY 2013-2014. Debt Restrictions:
*1 2014-2015 includes implementaion of pension expense reporting changes for GASB 68&71. Revenue Pledge&Covenant: The District pledges
*2 Net Revenue=Operating Revenue,less Total Operating Expenses less Depreciation,plus Non-Operating Revenue&Contributions. Property Tax Revenue along with its ability to raise Sewer
*3 This ratio must be above 1.00 to meet the Debt Rate Covenant(Net Revenue/Total Debt Service). Service Charge(SSC)rates. Debt Coverage requirements
*4 Adjusted Net Revenue=Net Revenue less Capital Improvement Fees(Connection Fees)and City of Concord Capital Charges.In FY 2019-20 the Board, are discussed in the footnotes to the left.
by Resolution,adopted rate stabilization fund reserve accounts for the O&M and Sewer Construction funds,contributing initial seed monies of$2.61 million.
*5 This ratio
rattiioo mhusstrbe above(1.25 to meeet�the
'Debt Rate
�Covenant
t((Adjusted Net R}evveenue/Total Debt Service).
SoU�C eCen4.go P C2ta?�nita�ry[TiS ITAutl Itll'ir Ncfi5tat8r�ienrtsan YnTeFna ��� !C�r `�r�nda Packet- Page 172 of 200
S-8
Central Contra Costa Sanitary District
Demographic and Economic Data
Population Served
Last Ten Calendar Years
Inside District Concord/ Total %
As Of January 1 Boundaries Clayton Served Change
2011 321,800 133,600 455,400 -1.4%
2012 326,900 134,200 461,100 1.3%
2013 332,600 134,900 467,500 1.4%
2014 335,009 135,856 470,865 0.7%
2015 339,029 137,357 476,386 1.2%
2016 340,667 140,916 481,583 1.1%
2017 344,591 139,654 484,245 0.6%
2018 348,333 140,590 488,923 1.0%
2019 352,733 141,542 494,275 1.1%
2020 342,149 141,480 483,629 -2.2%
Source: Central Contra Costa Sanitary District Environmental Services Division
List of Ten Largest Employers in Contra Costa County
Last Year and Eight Years Ago*
2019' 2011'
Estimated %of Total County Estimated %of Total County
Employers Employees Rank Employment Employees Rank Employment
Chevron Corporation 10,000+ 1 1.84% 4,115 1 0.89%
Bay Alarm Co. 1,000-4,999 T-2 0.56%
St. Mary's College 1,000-4,999 T-2 0.55%
Bio-Rad Laboratories 1,000-4,999 T-2 0.55% 1,705 4 0.37%
Job Connections 1,000-4,999 T-2 0.55%
John Muir Medical Center 1,000-4,999 T-2 0.55% 3,891 2 0.84%
Kaiser Permanente 1,000-4,999 T-2 0.55% 3,852 3 0.83%
La Raza Market 1,000-4,999 T-2 0.55%
Martinez Medical Offices 1,000-4,999 T-2 0.55%
USS-POSCO Industries 1,000-4,999 T-2 0.55% 750 9 0.16%
Doctors Medical Center - - 937 7 0.20%
Contra Costa Newspaper, Inc. - - 1,222 5 0.26%
All Others 506,800 93.20% 446,428 96.45%
Total 543,800 100.0% 462,900 100.0%
Source: ` County of Contra Costa,California,Comprehensive Annual Financial Report for June 30,2019,Statistical Section,principal employers excludes government employers.
S-9
December 15, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 173 of 200
Central Contra Costa Sanitary District
Demographic and Economic Statistics
Contra Costa County
Last Ten Fiscal Years
Fiscal Year Per Capita Average Annual
Ended Personal Personal Unemployment
June 30 Population* Income* Income* Rate**
2010 1,052,799 56,882,501,000 54,030 11.3%
2011 1,066,182 61,498,902,000 57,681 10.4%
2012 1,079,093 66,772,041,000 61,878 9.0%
2013 1,095,310 67,290,115,000 61,435 7.4%
2014 1,110,971 71,164,468,000 64,056 6.2%
2015 1,126,027 77,914,957,000 69,195 5.0%
2016 1,138,645 82,204,425,000 72,195 4.4%
2017 1,147,439 87,810,279,000 76,527 3.8%
2018 1,150,215 94,900,003,000 82,506 2.7%
2019 1,153,526 98,423,318,000 85,324 7.9%
U.S.Department of Commerce,Bureau of Economic Analysis. Estimates for 2017-2019 reflect county population estimates available as of March 2019.
State of California,Employment Development Department(EDD),annual calendar figure.
S-10
December 15, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 174 of 200
Central Contra Costa Sanitary District
Full-time Equivalent Positions Filled by Department
Last Ten Fiscal Years
Full-time Equivalent Positions Filled as of June 30
Department 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Administration 44 39 39 44 46 49 43 43 41 44
Engineering 75 71 75 73 72 88 88 89 90 89
Operations
Collection Systems 44 47 56 55 56 55 55 54 54 53
Plant 74 71 76 81 88 79 83 81 77 81
Pumping Station 8 7 8 8 8 7 7 7 12 7
Operations Total 126 125 140 144 152 141 145 142 143 141
District Total 245 235 254 261 270 278 276 274 274 274
Number of Retirees and Surviving Spouses as of June 30
Last Ten Fiscal Years
District Total 215 237 244 243 244 249 259 278 268 269
Source: Central Contra Costa Sanitary District Finance and Human Resources Divisions
S-11
December 15, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 175 of 200
Central Contra Costa Sanitary District
Capital Asset and Operating Statistics
Last Ten Calendar or Fiscal Years
Millions of Gallons per Day(mgd)
Treatment Plant Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Treatment Plant Permitted Capacity Calendar 53.8 53.8 53.8 53.8 53.8 53.8 53.8 53.8 53.8 53.8
Average Dry Weather Flow(ADWF) Calendar 38.9 37.2 33.2 33.8 30.4 29.1 30.8 33.3 31.8 34.1
Wastewater Treated per day Calendar 40.6 41.9 39.8 36.8 35.6 31.8 35.4 43.2 36.0 41.2
Tons per Year
Sludge to Furnace(Dry)•1 Fiscal 15,056 15,790 15,097 14,590 16,789 16,623 17,031 16,279 16,498 16,056
Ash to Reuse Site(Wet)*2 Fiscal 3,814 3,850 3,667 3,618 3,811 3,651 4,230 3,475 3,577 3,450
`1 In the multi-hearth furnace,the wet sludge is converted to dry ash. Water is added to the dry ash as it is loaded into trucks(ratio of 60 percent ash to 40 percent water)to prevent the ash from blowing out of the truck during transport.
`2 Wet sludge,which at 19 to 27 percent solids,is pumped to the multiple-hearth furnace for incineration. The table above shows the dry tons per year of sludge to the furnace,excluding the 73 to 81 percent water in the wet sludge.
Collection Systems/Pumping Stations/Outfall Sewers Other Data
Pipeline Miles Calendar 1,500 1,500 1,526 1,526 1,519 1,519 1,519 1,535 1,535 1,535
Number of pumping stations(owned) Calendar 16 16 16 16 16 16 16 15 15 15
Recycled Water
Recycled Water Distribution Pipeline(miles) Calendar 11.7 11.7 11.7 14.3 14.3 14.6 14.6 14.6 14.6 14.6
Average Recycled Water Produced(million gallons per day) Calendar 2 1.8 1.7 1.7 1.6 1.7 1.5 1.6 1.6 1.6
Number of Recycled Water Customers Sites Calendar 28 29 29 29 29 43 47 47 49 50
Commercial Truck Fill Use(million gallons per year) Calendar <0.1 <0.1 <0.1 <0.1 0.3 4.4 0.4 0.6 0.6 4.6
Commercial Truck Fill Customers Calendar 4 3 2 1 11 37 26 14 13 12
Estimated Residential Fill Station Use(million gallons per year) Calendar N/A N/A N/A N/A N/A 11.8 6.5 2.5 2.3 1.3
Residential Fill Station Customer Visits Calendar N/A N/A N/A N/A N/A 55,552 28,598 11,633 9,780 5,671
Household Hazardous Waste(HHW)-Inception 1997/1998
Program Participation(Number of cars) Fiscal 29,441 29,112 29,119 30,379 31,779 33,468 33,037 35,640 36,108 27,818
Percentage of Households in Service Area Fiscal 15.6% 15.4% 15.4% 15.9% 16.6% 16.8% 16.7% 18.1% 18.4% 14.0%
Operating Cost per Car Fiscal $82 $87 $93 $83 $78 $72 $80 $77 $78 $100
Pounds of HHW per Car Fiscal 68 67 68 66 63 64 65 64 61 61
Pharmaceutical Collection Program-Inception 2009
Number of Collection Sites Calendar 10 10 10 12 13 13 13 13 13 12
Pounds of Expired or Unwanted medications Collected Calendar 8,960 9,434 12,240 12,428 14,041 15,366 16,485 17,337 17,178 9,918
Miscellaneous Statistics
Governing Body: 5-Member Board of Directors elected at large
Governmental Structure: Established in 1946 under the Sanitary District Act of 1923
Staff: 274 full-time equivalent employees(290 budgeted/authorized)
Authority: California Health and Safety Code Section 4700 et.Seq.
Services: Wastewater collection,treatment,and disposal
Household Hazardous Waste(HHW)Facility
Recycled Water
Residential and Truck Recycled Water Fill Station
Pharmaceutical Collection Program(13-Collection Sites)
Retail HHW Collection Program
Type Of Treatment: Discharge-Secondary;Reclamation-Tertiary
Service Area: 144 square miles
Total Population Served: 494,275(HHW service area 530,383)
Sewer Service Charge: $567 for single family homes and$549 for multi-family homes.
Source: Central Contra Costa Sanitary District records S-12
December 15, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 176 of 200
Page 94 of 112
Attachment 2
Compensale Sick Leave Accrual Trend
$6,000,000 3{1.096
S5.35NI
$5,000,000 25.0%
54,000,000 20.0%
22.3%
53,000,000 15.0%
$2,000,000 $1.20M 10.0%
51,000,000 , ' , ' ' � 5.096
5 0.0%
2015 2016 2017 2018 2019 2020
Fiscal Year Ended lune 30th
rr Accrued Sick Leave LiabIity(IBft ac ts}
Taal Compensated Abgen cesAccrued LiabIity(Lft axis)
Sick Leave Share of Total(r0ht axis)
December 15, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 177 of 200
Page 95 of 112
Attachment 3
CENTRAL CONTRA COSTA SANITARY DISTRICT
MEMORANDUM ON INTERNAL CONTROL
AND
REQUIRED COMMUNICATIONS
FOR THE YEAR ENDED
JUNE 30,2020
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CENTRAL CONTRA COSTA SANITARY DISTRICT
MEMORANDUM ON INTERNAL CONTROL
AND
REQUIRED COMMUNICATIONS
For the Year Ended June 30,2020
Table of Contents
Page
Memorandum on Internal Control...................................................................................................l
Scheduleof Other Matters.......................................................................................................3
RequiredCommunications.............................................................................................................1 1
Significant Audit Findings........................................................................................................l l
AccountingPolicies..............................................................................................................11
Unusual Transactions, Controversial or Emerging Areas...................................................l l
AccountingEstimates...........................................................................................................11
Disclosures............................................................................................................................12
Difficulties Encountered in Performing the Audit..............................................................12
Corrected and Uncorrected Misstatements..........................................................................12
Disagreements with Management........................................................................................12
Management Representations...............................................................................................12
Management Consultations with Other Independent Accountants....................................12
Other Audit Findings or Issues.............................................................................................12
Other Information Accompanying the Financial Statements..............................................13
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[\/Ak M ADZ E
MEMORANDUM ON INTERNAL CONTROL
To the Board of Directors
Central Contra Costa Sanitary District
Martinez, California
In planning and performing our audit of the basic financial statements of the Central Contra Costa Sanitary
District (District) as of and for the year ended June 30, 2020, in accordance with auditing standards generally
accepted in the United States of America, we considered the District's internal control over financial reporting
(internal control) as a basis for designing our auditing procedures that are appropriate in the circumstances for
the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an
opinion on the effectiveness of the District's internal control. Accordingly,we do not express an opinion on the
effectiveness of the District's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent, or detect and correct
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in
internal control, such that there is a reasonable possibility that a material misstatement of the District's financial
statements will not be prevented, or detected and corrected, on a timely basis.
Our consideration of internal control was for the limited purpose described in the first paragraph and was not
designed to identify all deficiencies in internal control that might be material weaknesses. In addition, because
of inherent limitations in internal control, including the possibility of management override of controls,
misstatements due to error or fraud may occur and not be detected by such controls. Given these limitations,
during our audit we did not identify any deficiencies in internal control that we consider to be material
weaknesses. However,material weaknesses may exist that have not been identified.
Included in the Schedule of Other Matters are recommendations not meeting the above definitions that we
believe to be of potential benefit to the District.
This communication is intended solely for the information and use of management, Board of Directors, others
within the organization, and agencies and pass-through entities and is not intended to be and should not be used
by anyone other than these specified parties.
Pleasant Hill, California
December 3,2020
T 925.930.0902
Accountancy Corporation F 925.934.0135
3478 Buskirk Avenue,Suite 215 a maze@mazeassociates.com
Pleasant Hill,CA 94523 w mazeassociates.com
1
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CENTRAL CONTRA COSTA SANITARY DISTRICT
SCHEDULE OF OTHER MATTERS
FOR THE YEAR ENDED JUNE 30,2020
2020-01 New GASB Pronouncements Not Yet Effective
The following comment represents new pronouncements taking effect in the next few years. We have cited
them here to keep you abreast of developments:
EFFECTIVE FISCAL YEAR 2020/21:
GASB 84—Fiduciary Activities
The objective of this Statement is to improve guidance regarding the identification of fiduciary activities
for accounting and financial reporting purposes and how those activities should be reported.
This Statement establishes criteria for identifying fiduciary activities of all state and local governments.
The focus of the criteria generally is on (1) whether a government is controlling the assets of the
fiduciary activity and (2) the beneficiaries with whom a fiduciary relationship exists. Separate criteria
are included to identify fiduciary component units and postemployment benefit arrangements that are
fiduciary activities.
An activity meeting the criteria should be reported in a fiduciary fund in the basic financial statements.
Governments with activities meeting the criteria should present a statement of fiduciary net position and
a statement of changes in fiduciary net position. An exception to that requirement is provided for a
business-type activity that normally expects to hold custodial assets for three months or less.
This Statement describes four fiduciary funds that should be reported, if applicable: (1) pension (and
other employee benefit) trust funds, (2) investment trust funds, (3) private-purpose trust funds, and (4)
custodial funds. Custodial funds generally should report fiduciary activities that are not held in a trust or
equivalent arrangement that meets specific criteria.
A fiduciary component unit, when reported in the fiduciary fund financial statements of a primary
government, should combine its information with its component units that are fiduciary component units
and aggregate that combined information with the primary government's fiduciary funds.
This Statement also provides for recognition of a liability to the beneficiaries in a fiduciary fund when
an event has occurred that compels the government to disburse fiduciary resources. Events that compel a
government to disburse fiduciary resources occur when a demand for the resources has been made or
when no further action, approval, or condition is required to be taken or met by the beneficiary to
release the assets.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
SCHEDULE OF OTHER MATTERS
FOR THE YEAR ENDED JUNE 30,2020
EFFECTIVE FISCAL YEAR 2021/22:
GASB 87—Leases
The objective of this Statement is to better meet the information needs of financial statement users by
improving accounting and financial reporting for leases by governments. This Statement increases the
usefulness of governments' financial statements by requiring recognition of certain lease assets and
liabilities for leases that previously were classified as operating leases and recognized as inflows of
resources or outflows of resources based on the payment provisions of the contract. It establishes a
single model for lease accounting based on the foundational principle that leases are financings of the
right to use an underlying asset. Under this Statement, a lessee is required to recognize a lease liability
and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a
deferred inflow of resources, thereby enhancing the relevance and consistency of information about
governments' leasing activities.
A lease is defined as a contract that conveys control of the right to use another entity's nonfinancial
asset(the underlying asset) as specified in the contract for a period of time in an exchange or exchange-
like transaction. Examples of nonfinancial assets include buildings, land, vehicles, and equipment. Any
contract that meets this definition should be accounted for under the leases guidance,unless specifically
excluded in this Statement.
GASB 89—Accounting for Interest Cost Incurred before the End of a Construction Period
The objectives of this Statement are (1) to enhance the relevance and comparability of information
about capital assets and the cost of borrowing for a reporting period and (2) to simplify accounting for
interest cost incurred before the end of a construction period.
This Statement establishes accounting requirements for interest cost incurred before the end of a
construction period. Such interest cost includes all interest that previously was accounted for in
accordance with the requirements of paragraphs 5-22 of Statement No. 62, Codification of Accounting
and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA
Pronouncements, which are superseded by this Statement. This Statement requires that interest cost
incurred before the end of a construction period be recognized as an expense in the period in which the
cost is incurred for financial statements prepared using the economic resources measurement focus.As a
result, interest cost incurred before the end of a construction period will not be included in the historical
cost of a capital asset reported in a business-type activity or enterprise fund.
This Statement also reiterates that in financial statements prepared using the current financial resources
measurement focus, interest cost incurred before the end of a construction period should be recognized
as an expenditure on a basis consistent with governmental fund accounting principles.
Potential Impact on the District: Interest should not be capitalized for upcoming water and
sewer projects. If any balances are already included in capital assets, those can remain, but no
additional balances should be capitalized.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
SCHEDULE OF OTHER MATTERS
FOR THE YEAR ENDED JUNE 30,2020
GASB 92–Omnibus 2020
The objectives of this Statement are to enhance comparability in accounting and financial reporting and
to improve the consistency of authoritative literature by addressing practice issues that have been
identified during implementation and application of certain GASB Statements. This Statement
addresses a variety of topics and includes specific provisions about the following:
• The effective date of Statement No. 87, Leases, and Implementation Guide No. 2019-3, Leases, for
interim financial reports
• Reporting of intra-entity transfers of assets between a primary government employer and a
component unit defined benefit pension plan or defined benefit other postemployment benefit
(OPEB)plan
• The applicability of Statements No. 73, Accounting and Financial Reporting for Pensions and
Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain
Provisions of GASB Statements 67 and 68, as amended, and No. 74, Financial Reporting for
Postemployment Benefit Plans Other Than Pension Plans, as amended, to reporting assets
accumulated for postemployment benefits
• The applicability of certain requirements of Statement No. 84, Fiduciary Activities, to
postemployment benefit arrangements
• Measurement of liabilities (and assets, if any) related to asset retirement obligations (AROs) in a
government acquisition
• Reporting by public entity risk pools for amounts that are recoverable from reinsurers or excess
insurers
• Reference to nonrecurring fair value measurements of assets or liabilities in authoritative literature
• Terminology used to refer to derivative instruments
Potential Impact on the District: The District should review the provisions of the Statement to
ensure that disclosures are updated or added to include the required components.
GASB 93–Replacement oflnterbank Offered Rates
Some governments have entered into agreements in which variable payments made or received depend
on an interbank offered rate (IBOR)—most notably, the London Interbank Offered Rate (LIBOR). As a
result of global reference rate reform, LIBOR is expected to cease to exist in its current form at the end
of 2021, prompting governments to amend or replace financial instruments for the purpose of replacing
LIBOR with other reference rates, by either changing the reference rate or adding or changing fallback
provisions related to the reference rate.
Statement No. 53,Accounting and Financial Reporting for Derivative Instruments, as amended,requires
a government to terminate hedge accounting when it renegotiates or amends a critical term of a hedging
derivative instrument, such as the reference rate of a hedging derivative instrument's variable payment.
In addition, in accordance with Statement No. 87, Leases, as amended, replacement of the rate on which
variable payments depend in a lease contract would require a government to apply the provisions for
lease modifications, including remeasurement of the lease liability or lease receivable.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
SCHEDULE OF OTHER MATTERS
FOR THE YEAR ENDED JUNE 30,2020
GASB 93—Replacement oflnterbank Offered Rates (Continued)
The objective of this Statement is to address those and other accounting and financial reporting
implications that result from the replacement of an IBOR. This Statement achieves that objective by:
• Providing exceptions for certain hedging derivative instruments to the hedge accounting termination
provisions when an IBOR is replaced as the reference rate of the hedging derivative instrument's
variable payment
• Clarifying the hedge accounting termination provisions when a hedged item is amended to replace
the reference rate
• Clarifying that the uncertainty related to the continued availability of IBORs does not, by itself,
affect the assessment of whether the occurrence of a hedged expected transaction is probable
• Removing LIBOR as an appropriate benchmark interest rate for the qualitative evaluation of the
effectiveness of an interest rate swap
• Identifying a Secured Overnight Financing Rate and the Effective Federal Funds Rate as appropriate
benchmark interest rates for the qualitative evaluation of the effectiveness of an interest rate swap
• Clarifying the definition of reference rate, as it is used in Statement 53, as amended
Providing an exception to the lease modifications guidance in Statement 87, as amended, for certain
lease contracts that are amended solely to replace an IBOR as the rate upon which variable payments
depend.
Potential Impact on the District: If the District is involved in such transactions in the future, the
provisions of the Statement should be reviewed to ensure that disclosures are updated or added to
include the required components.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
SCHEDULE OF OTHER MATTERS
FOR THE YEAR ENDED JUNE 30,2020
EFFECTIVE FISCAL YEAR 2022/23:
GASB 91 –Conduit Debt Oblikations
The primary objectives of this Statement are to provide a single method of reporting conduit debt
obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by
issuers, (2) arrangements associated with conduit debt obligations, and(3)related note disclosures. This
Statement achieves those objectives by clarifying the existing definition of a conduit debt obligation;
establishing that a conduit debt obligation is not a liability of the issuer; establishing standards for
accounting and financial reporting of additional commitments and voluntary commitments extended by
issuers and arrangements associated with conduit debt obligations; and improving required note
disclosures.
A conduit debt obligation is defined as a debt instrument having all of the following characteristics:
• There are at least three parties involved:
(1) an issuer
(2) a third-party obligor, and
(3) a debt holder or a debt trustee.
• The issuer and the third-party obligor are not within the same financial reporting entity.
• The debt obligation is not a parity bond of the issuer,nor is it cross-collateralized with other debt of
the issuer.
• The third-party obligor or its agent, not the issuer, ultimately receives the proceeds from the debt
issuance.
• The third-party obligor, not the issuer, is primarily obligated for the payment of all amounts
associated with the debt obligation(debt service payments).
All conduit debt obligations involve the issuer making a limited commitment. Some issuers extend
additional commitments or voluntary commitments to support debt service in the event the third party is,
or will be,unable to do so.
An issuer should not recognize a conduit debt obligation as a liability. However, an issuer should
recognize a liability associated with an additional commitment or a voluntary commitment to support
debt service if certain recognition criteria are met. As long as a conduit debt obligation is outstanding,
an issuer that has made an additional commitment should evaluate at least annually whether those
criteria are met. An issuer that has made only a limited commitment should evaluate whether those
criteria are met when an event occurs that causes the issuer to reevaluate its willingness or ability to
support the obligor's debt service through a voluntary commitment.
This Statement also addresses arrangements—often characterized as leases—that are associated with
conduit debt obligations. In those arrangements, capital assets are constructed or acquired with the
proceeds of a conduit debt obligation and used by third-party obligors in the course of their activities.
Payments from third-party obligors are intended to cover and coincide with debt service payments.
During those arrangements, issuers retain the titles to the capital assets. Those titles may or may not
pass to the obligors at the end of the arrangements.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
SCHEDULE OF OTHER MATTERS
FOR THE YEAR ENDED JUNE 30,2020
GASB 91 —Conduit Debt Obligations(Continued)
Issuers should not report those arrangements as leases, nor should they recognize a liability for the
related conduit debt obligations or a receivable for the payments related to those arrangements. In
addition,the following provisions apply:
• If the title passes to the third-party obligor at the end of the arrangement, an issuer should not
recognize a capital asset.
• If the title does not pass to the third-party obligor and the third party has exclusive use of the entire
capital asset during the arrangement, the issuer should not recognize a capital asset until the
arrangement ends.
• If the title does not pass to the third-party obligor and the third party has exclusive use of only
portions of the capital asset during the arrangement, the issuer, at the inception of the arrangement,
should recognize the entire capital asset and a deferred inflow of resources. The deferred inflow of
resources should be reduced, and an inflow recognized, in a systematic and rational manner over the
term of the arrangement.
This Statement requires issuers to disclose general information about their conduit debt obligations,
organized by type of commitment, including the aggregate outstanding principal amount of the issuers'
conduit debt obligations and a description of each type of commitment. Issuers that recognize liabilities
related to supporting the debt service of conduit debt obligations also should disclose information about
the amount recognized and how the liabilities changed during the reporting period.
HOW THE CHANGES IN THIS STATEMENT WILL IMPROVE FINANCIAL REPORTING
The requirements of this Statement will improve financial reporting by eliminating the existing option
for issuers to report conduit debt obligations as their own liabilities, thereby ending significant diversity
in practice. The clarified definition will resolve stakeholders' uncertainty as to whether a given
financing is, in fact, a conduit debt obligation. Requiring issuers to recognize liabilities associated with
additional commitments extended by issuers and to recognize assets and deferred inflows of resources
related to certain arrangements associated with conduit debt obligations also will eliminate diversity,
thereby improving comparability in reporting by issuers. Revised disclosure requirements will provide
financial statement users with better information regarding the commitments issuers extend and the
likelihood that they will fulfill those commitments. That information will inform users of the potential
impact of such commitments on the financial resources of issuers and help users assess issuers' roles in
conduit debt obligations.
Potential Impact on the District: If the District has outstanding conduit debt obligations or is
involved in such debt issues in the future, the provisions of the Statement should be reviewed to
ensure that disclosures are updated or added to include the required components.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
SCHEDULE OF OTHER MATTERS
FOR THE YEAR ENDED JUNE 30,2020
GASB 94—Public-Private and Public-Public Partnerships and Availability Payment Arran'-ements
The primary objective of this Statement is to improve financial reporting by addressing issues related to
public-private and public-public partnership arrangements(PPPs). As used in this Statement, a PPP is an
arrangement in which a government (the transferor) contracts with an operator (a governmental or
nongovernmental entity) to provide public services by conveying control of the right to operate or use a
nonfinancial asset, such as infrastructure or other capital asset(the underlying PPP asset), for a period of
time in an exchange or exchange-like transaction. Some PPPs meet the definition of a service
concession arrangement (SCA), which the Board defines in this Statement as a PPP in which (1) the
operator collects and is compensated by fees from third parties; (2) the transferor determines or has the
ability to modify or approve which services the operator is required to provide, to whom the operator is
required to provide the services, and the prices or rates that can be charged for the services; and (3) the
transferor is entitled to significant residual interest in the service utility of the underlying PPP asset at
the end of the arrangement.
This Statement also provides guidance for accounting and financial reporting for availability payment
arrangements (APAs). As defined in this Statement, an APA is an arrangement in which a government
compensates an operator for services that may include designing, constructing, financing, maintaining,
or operating an underlying nonfinancial asset for a period of time in an exchange or exchange-like
transaction.
PPPs — This Statement requires that PPPs that meet the definition of a lease apply the guidance in
Statement No. 87, Leases, as amended, if existing assets of the transferor that are not required to be
improved by the operator as part of the PPP arrangement are the only underlying PPP assets and the PPP
does not meet the definition of an SCA. This Statement provides accounting and financial reporting
requirements for all other PPPs: those that either(1) meet the definition of an SCA or(2) are not within
the scope of Statement 87, as amended (as clarified by this Statement). The PPP term is defined as the
period during which an operator has a noncancellable right to use an underlying PPP asset, plus, if
applicable, certain periods if it is reasonably certain, based on all relevant factors, that the transferor or
the operator either will exercise an option to extend the PPP or will not exercise an option to terminate
the PPP.
A transferor generally should recognize an underlying PPP asset as an asset in financial statements
prepared using the economic resources measurement focus. However, in the case of an underlying PPP
asset that is not owned by the transferor or is not the underlying asset of an SCA, a transferor should
recognize a receivable measured based on the operator's estimated carrying value of the underlying PPP
asset as of the expected date of the transfer in ownership. In addition, a transferor should recognize a
receivable for installment payments, if any, to be received from the operator in relation to the PPP.
Measurement of a receivable for installment payments should be at the present value of the payments
expected to be received during the PPP term. A transferor also should recognize a deferred inflow of
resources for the consideration received or to be received by the transferor as part of the PPP. Revenue
should be recognized by a transferor in a systematic and rational manner over the PPP term.
This Statement requires a transferor to recognize a receivable for installment payments and a deferred
inflow of resources to account for a PPP in financial statements prepared using the current financial
resources measurement focus. Governmental fund revenue would be recognized in a systematic and
rational manner over the PPP term.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
SCHEDULE OF OTHER MATTERS
FOR THE YEAR ENDED JUNE 30,2020
GASB 94 -Public-Private and Public-Public Partnerships and Availability Payment Arran,-ements,
(Continued)
This Statement also provides specific guidance in financial statements prepared using the economic
resources measurement focus for a government that is an operator in a PPP that either (1) meets the
definition of an SCA or (2) is not within the scope of Statement 87, as amended (as clarified in this
Statement). An operator should report an intangible right-to-use asset related to an underlying PPP asset
that either is owned by the transferor or is the underlying asset of an SCA. Measurement of the right-to-
use asset should be the amount of consideration to be provided to the transferor, plus any payments
made to the transferor at or before the commencement of the PPP term, and certain direct costs. For an
underlying PPP asset that is not owned by the transferor and is not the underlying asset of an SCA, an
operator should recognize a liability measured based on the estimated carrying value of the underlying
PPP asset as of the expected date of the transfer in ownership. In addition, an operator should recognize
a liability for installment payments, if any, to be made to the transferor in relation to the PPP.
Measurement of a liability for installment payments should be at the present value of the payments
expected to be made during the PPP term. An operator also should recognize a deferred outflow of
resources for the consideration provided or to be provided to the transferor as part of the PPP. Expense
should be recognized by an operator in a systematic and rational manner over the PPP term.
This Statement also requires a government to account for PPP and non-PPP components of a PPP as
separate contracts. If a PPP involves multiple underlying assets, a transferor and an operator in certain
cases should account for each underlying PPP asset as a separate PPP. To allocate the contract price to
different components, a transferor and an operator should use contract prices for individual components
as long as they do not appear to be unreasonable based on professional judgment or use professional
judgment to determine their best estimate if there are no stated prices or if stated prices appear to be
unreasonable. If determining the best estimate is not practicable, multiple components in a PPP should
be accounted for as a single PPP.
This Statement also requires an amendment to a PPP to be considered a PPP modification, unless the
operator's right to use the underlying PPP asset decreases, in which case it should be considered a
partial or full PPP termination. A PPP termination should be accounted for by a transferor by reducing,
as applicable, any receivable for installment payments or any receivable related to the transfer of
ownership of the underlying PPP asset and by reducing the related deferred inflow of resources. An
operator should account for a termination by reducing the carrying value of the right-to-use asset and, as
applicable, any liability for installment payments or liability to transfer ownership of the underlying PPP
asset. A PPP modification that does not qualify as a separate PPP should be accounted for by
remeasuring PPP assets and liabilities.
APAs-An APA that is related to designing, constructing, and financing a nonfinancial asset in which
ownership of the asset transfers by the end of the contract should be accounted for by a government as a
financed purchase of the underlying nonfinancial asset. This Statement requires a government that
engaged in an APA that contains multiple components to recognize each component as a separate
arrangement. An APA that is related to operating or maintaining a nonfinancial asset should be reported
by a government as an outflow of resources in the period to which payments relate.
Potential Impact on the District: If the District is involved in such transactions in the future, the
provisions of the Statement should be reviewed to ensure that disclosures are updated or added to
include the required components.
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Fl. M ACZTE
REQUIRED COMMUNICATIONS
To the Board of Directors
Central Contra Costa Sanitary District
Martinez, California
We have audited the basic financial statements of the Central Contra Costa Sanitary District (District) for the
year ended June 30, 2020. Professional standards require that we communicate to you the following information
related to our audit under generally accepted auditing standards.
Significant Audit Findings
Accounting Policies
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by the District are described in Note 1 to the financial statements. No new accounting
policies were adopted and the application of existing policies was not changed during the year.
Unusual Transactions, Controversial or Emerging Areas
We noted no transactions entered into by District during the year for which there is a lack of authoritative
guidance or consensus. All significant transactions have been recognized in the financial statements in the
proper period.
Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management and are based on
management's current judgments. Those judgments are normally based on knowledge and experience about past
and current events and assumptions about future events. Certain accounting estimates are particularly sensitive
because of their significance to the financial statements and because of the possibility that future events
affecting them may differ significantly from those expected. The most sensitive estimates affecting the District's
financial statements are depreciation, claims liability and actuarial estimates for net pension liability and net
other post-employment benefits liability.
The value of the assets, liability and assumptions used to determine annual required contributions for other post-
employment benefits is determined by an actuary study provided to the District as of June 30, 2020. The value
of the District's net pension liability was obtained from an actuarial valuation provided by CCCERA.
Management's estimate of depreciation is based on the estimated useful lives of the capital assets, and its
estimate of claims is based on the District Attorney's estimates of current and potential litigation, as well as
actuary studies provided for the District as of June 30,2020. We evaluated the key factors and assumptions used
to develop the depreciation expense and claims liability and reviewed the current actuary study and determined
that they are reasonable in relation to the basic financial statements taken as a whole.
T 925.930.0902
Accountancy Corporation F 925.930.0135
3478 Buskirk Avenue,Suite 215 a maze@mazeassociates.com
Pleasant Hill,CA 94523 w mazeassociates.com
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Disclosures
The financial statement disclosures are neutral,consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit,
other than those that are clearly trivial, and communicate them to the appropriate level of management. We did
not propose any audit adjustments that, in our judgement, could have a significant effect, either individually or
in the aggregate, on the District's financial reporting process.
Professional standards require us to accumulate all known and likely uncorrected misstatements identified
during the audit, other than those that are trivial, and communicate them to the appropriate level of management.
We have no such misstatements to report to the Board of Directors.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing
matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the
auditor's report. We are pleased to report that no such disagreements arose during the course of our audit.
Management Representations
We have requested certain representations from management that are included in a management representation
letter dated December 3, 2020.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting
matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an
accounting principle to the governmental unit's financial statements or a determination of the type of auditor's
opinion that may be expressed on those statements, our professional standards require the consulting accountant
to check with us to determine that the consultant has all the relevant facts. To our knowledge,there were no such
consultations with other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing
standards, with management each year prior to retention as the District's auditors. However, these discussions
occurred in the normal course of our professional relationship and our responses were not a condition to our
retention.
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Other Information Accompanying the Financial Statements
We applied certain limited procedures to the required supplementary information that accompanies and
supplements the basic financial statements. Our procedures consisted of inquiries of management regarding 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 did not audit the required supplementary information and do not express an
opinion or provide any assurance on the required supplementary information.
We were engaged to report on the supplementary information,which accompany the financial statements but are
not required supplementary information. With respect to this supplemental information, we made certain
inquiries of management and evaluated the form, content, and methods of preparing the information to
determine that the information complies with accounting principles generally accepted in the United States of
America, the method of preparing it has not changed from the prior period, and the information is appropriate
and complete in relation to our audit of the financial statements. We compared and reconciled the supplemental
information to the underlying accounting records used to prepare the financial statements or to the financial
statements themselves.
This information is intended solely for the use of the Board of Directors and management and is not intended to
be, and should not be,used by anyone other than these specified parties.
Pleasant Hill, California
December 3,2020
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