HomeMy WebLinkAbout04.c. Review Draft Position Paper to Accept (1) Audited Annual Compreshensive Financial Report (ACFR) for the Fiscal Year Ended June 30, 2022 and the Independent Auditors' Memorandum on Internal Control for Fiscal Year Ended June 30, 2022Page 1 of 114
Item 4.c.
BOARD OF DIRECTORS
POSITION PAPER
MEETING DATE: DECEMBER 19, 2022
SUBJECT: REVI EW DRAFT POSITION PAPER TO ACCEPT (1) THE AUDITED
ANNUAL COMPREHENSIVE FINANCIAL REPORT (ACFR) FOR THE
FISCAL YEAR ENDED JUNE 30, 2022, PERFORMED BY MAZE &
ASSOCIATES, AND (2)THE INDEPENDENT AUDITORS' MEMORANDUM
ON INTERNAL CONTROL AND REQUIRED COMMUNICATIONS FOR THE
FISCAL YEAR ENDED JUNE 30, 2022
SUBMITTED BY:
INITIATING DEPARTMENT:
KEVIN MIZUNO, FINANCE MANAGER ADMINISTRATION -FINANCE
REVIEWED BY: PHILIPLEIBER, DIRECTOR OF FINANCE AND ADMINISTRATION
ISSUE
The audited ACFR of Central San for the fiscal year ended June 30, 2022, and the independent auditors'
memorandum on internal control and required communications for the year ended June 30, 2022, are
being submitted to the Board for acceptance.
BACKGROUND
Independent Audit Results
The independent audit firm of Maze & Associates has completed their ninth consecutive audit of Central
San's annual financial statements for the fiscal year ended June 30, 2022, 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 Generally Accepted Auditing Standards in the United States (GAAS). GAAS requires
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 year ended June 30, 2022 expresses an unmodified (clean) opinion. The I ndependent
Auditors' Report including the audit opinion is included on Page 1 of the attached ACFR (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 the reporting guidelines published by the
SCO annually. Now that the annual independent audit has been completed, the FTR for the fiscal year
ended June 30, 2022, will be remitted electronically by the January 31, 2023, reporting deadline. The
audited financial statements will also be sent to the Contra Costa County Auditor -Controller's 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 continuing disclosure requirements for Central
San's bond and certificate debt issuances.
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 notify 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 2). In addition to the clean audit opinion,
management is 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, Central San 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 Central San (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 Central San'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.
Central San's total ending net position increased by $64.8 million or 7.84% in 2021-22. This increase is
primarily due to the District's prior year actuarily determined net pension liability of $48.9 million
transforming into a net pension asset of $53.5 million. This is attributable to the District paying off the
actuarially -determined Unfunded Actuarily Accrued Liability (UAAL) of $70.8 million in June 2021 in
addition to higher than actuarially projected market returns on pension plan assets for the year ended
December 31, 2021, which is the measurement date used for the FY 2021-22 GAS B 68 valuation.
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 an ACFR that provides transparency and full
disclosure, and then recognize individual governments that succeed in achieving that goal.
On October 18, 2022, Central San was awarded a Certificate ofAchievement for Excellence in
Financial Reporting by the GFOA for the report submitted for the fiscal year ended June 30, 2021,
representing the 22nd 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
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easily readable report in a prescribed format report that complies with GAAP, as well as the GFOA
program requirements. The ACFR includes ten years of Central San's historical, financial, and statistical
data. The ACFR provides a concise document for internal management use, as well as external use with
other agencies, and is posted on Central San's website for the general public. A Certificate of
Achievement is valid for a period of one year.
The Finance Division has prepared the Central San's ACFR as of June 30, 2022. Management is
confident that the current ACFR 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
Acceptance of the audited Annual Comprehensive Financial Report and the independent auditors'
memorandum on internal control and required communications for the fiscal year ended June 30, 2022, is
required.
The Board could direct staff not to pursue the GFOA award for the ACFR. However, pursuing the award
is advised, a best practice, and consistent with Central San's strategic plan and goals to provide
exceptional customer service and maintain an excellent reputation in the community.
FINANCIAL IMPACTS
The acceptance of the audited ACFR for the comparative fiscal year ended June 30, 2022, does not have
direct fiscal impact on Central San.
Staff intends to submit the attached ACFR to the GFOA for the Certificate ofAchievement for
Excellence in Financial Reporting program, for which there is an application fee for submission of an
ACFR for review based on total revenues of the entity applying. Based on this sliding fee schedule,
Central San'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, 2023.
COMMITTEE RECOMMENDATION
The Finance Committee reviewed this matter at its meeting on December 19, 2022 and recommended
RECOMMENDED BOARD ACTION
Accept the draft audited ACFR forthe fiscal year ended June 30, 2022, and the auditors' memorandum
on internal control and required communications for the fiscal year ended June 30, 2022.
Strategic Plan re -In
GOAL FOUR: Governance and Fiscal Responsibility
Strategy 3 - Maintain financial stability and sustainability
ATTACHMENTS:
1. Annual Comprehensive Financial Report for fiscal year ended June 30, 2022
2. Auditors Memo on Internal Control
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CENTRAL CONTRA COSTA SANITARY DISTRICT
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CENTRAL CONTRA COSTA SANITARY
DISTRICT
MARTI N EZ, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2022
Prepared By:
Finance Division
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CENTRAL CONTRA COSTA SANITARY DISTRICT
Annual Comprehensive Financial Report
Table of Contents
For the Year Ended June 30, 2022
INTRODUCTORY SECTION:
Letterof Transmittal............................................................................................... i
Board of Directors.................................................................................................ix
MissionStatement................................................................................................ x
OrganizationChart...............................................................................................A
Mapof Service Area............................................................................................xii
Certificate of Achievement.................................................................................. xiii
FINANCIAL SECTION:
Independent Auditors' Report............................................................................... 1
Management's Discussion and Analysis..............................................................
5
Basic Financial Statements
Statement of Net Position...................................................................
12-13
Statement of Revenues, Expenses and Changes in Net Position ...........
15
Statement of Cash Flows....................................................................
16-17
Notes to Financial Statements - The accompanying notes are an
integral part of the basic financial statements ....................................
19-45
Required Supplementary Information
Cost -Sharing Multiple Employer Defined Benefit Retirement Plan -
Schedule of Proportionate Share of Net Pension Liability (Asset).........
48
Schedule of Contributions.....................................................................
49
Post -Retirement Health Care Defined Benefit Plan —
Schedule of Changes in the Net OPEB Liability and Related Ratios
.... 50
Schedule of Contributions.....................................................................
51
Supplementary Information
Combining Schedule of Net Position.......................................................
54
Combining Schedule of Revenues, Expenses and
Changes in Net Position - Enterprise Sub -Funds ..................................
55
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
Assessed and Estimated Actual Valuation of Taxable Property -
Last Ten Fiscal Years..................................................................................... S-5
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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 -
Last Ten 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 -
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
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)ICENTRAL SAN
December 8, 2022
Central Contra Costa Sanitary District Customers and
The Honorable Board of Directors,
Martinez, California:
California Government Code section 26909 requires an audit to be completed and filed
with the California State Controller's Office within twelve months after the close of the
fiscal year. This report is published to fulfill that requirement for the fiscal year ended
June 30, 2022 (FY 2021-22).
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.
The District's independent auditors, Maze & Associates, has issued an unmodified
("clean") opinion on the District's financial statements for the year ended June 30, 2022.
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.
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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
353,000 residents of Danville, Lafayette, Martinez, Moraga, Orinda, Pleasant Hill, San
Ramon, Walnut Creek and some of the unincorporated communities within its District
boundaries. The District also treats wastewater for approximately 135,000 residents of
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the Cities of Concord and Clayton under a 1974 (and as subsequently amended)
contract with the City of Concord.
The District is committed to protecting 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 collection and treatment 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 84% of the Sewer Service
Charge operating revenue. The District's treatment capacity has grown significantly
from a modest 4.5 million gallons per day (mgd) in 1948 to 53.8 mgd currently. Bonds,
certificates of participation, state/federal grants, and pay-as-you-go local revenue
sources of the District have traditionally financed capital expenditures and capacity
expansions. While pay -as -you go local revenue sources have been the primary
financing mechanism for the District's capital program over the past decade, debt
financing is expected to gradually increase. This is demonstrated by the issuance of
$50.6 million in certificates of participation in June 2021 and up to $98.5 million in
approved California Water Board State Revolving Fund loan proceeds over the next few
years (from an approved loan of $173 million). In addition to these approved debt
issuances, the District's long-range financial plan also anticipates the use of additional
debt financing for UV disinfection upgrades, solids handling, and nutrient removal
infrastructure needs.
The District also operates a Recycled Water Program, in collaboration with Contra
Costa Water District, that provides high -quality recycled water for 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. The District has been collaborating with public water agency partners to jointly
invest in a project that will enable the District to comply with future nutrient discharge
regulations while producing a new water supply to help ease the region's water
shortage. The District recently executed a Memorandum of Understanding with East
Bay Municipal Utility District (EBMUD) that will evaluate several potential recycled water
projects together, including an option for potable reuse — introducing highly -treated
recycled water into EBMUD's drinking water supply. The District continues to actively
promote water recycling, with the position that it is good for the environment and
provides an economic benefit to the District and the region.
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
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Mountain 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 25t" year of operation, the HHW
Facility served over 33,000 residential and small business customers. On average, over
two million pounds of hazardous waste is collected and properly disposed of annually,
collecting nearly 2.2 million pounds of waste in FY 2021-22. In conjunction with its
HHW program, the District's Pharmaceutical Collection Program further encourages
pollution prevention having approximately 5,400 pounds of expired or unwanted
medications between its seven collection sites in FY 2021-22. Although this is a decline
from the prior year's 5,600 pounds collected, the number of non -District collection sites
has increased to over 40 sites, which improves access to proper pharmaceutical
disposal in the District's service area.
Organization, Accounting and Budgetary Controls
A five -member Board of Directors (the Board) governs the District. Board members
each serve a different electoral district and are elected by voters from their electoral
district on a non -partisan basis serving four-year staggered terms. The Board appoints
the General Manager, who in accordance with policies established by the Board,
manages District affairs. The District employed 278 permanent regular full-time
employees at fiscal year-end out of 291 authorized permanent regular full-time positions
for that fiscal year. These employees are organized into 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 charges fees to external users for providing sewer collection and treatment
services, and these fees comprise the primary revenue source. Accordingly, pursuant
to generally accepted accounting principles issued by the Governmental Accounting
Standards Board (GASB), the District uses full accrual enterprise fund accounting to
account for its operations, which is similar, though not identical, to private industry. The
District currently has one enterprise fund for financial reporting purposes, which is
comprised of the following four internal sub -funds for internal accounting purposes:
■ 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 the Operations & Maintenance or "O&M" Fund).
■ 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.
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Each year, the Board adopts the following four budgets: Operations and Maintenance,
Capital Improvement (i.e. Sewer Construction), Self -Insurance, and Debt -Service. The
Board and Finance Committee review interim financial reports on a quarterly basis for
fiduciary purposes, with management receiving more detailed monthly budget -to -actual
results for budget monitoring purposes. District management is accountable for
monitoring 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 (i.e., debt
management, investments, fiscal reserves, pension and OPEB funding, etc.) that are
periodically reviewed and updated to ensure their consistency with best practices as
well as changes in laws and regulations.
ASSESSING THE DISTRICT'S ECONOMIC CONDITION
Local Economy and Outlook
According to the State of California's Legislative Analyst's Office (LAO), despite the
strong rebound from the global pandemic observed in the prior year, significant rate
hikes by the Federal Reserve to curb growing inflation in calendar year 2022 have led to
weaknesses in certain parts of the State's economy, particularly housing and financial
markets. Many economists expect this weakness to continue over the next year and
have downgraded their outlook for the economy. State tax collections in recent months
have been weaker than estimated by the State's FY 2021-22 budget. Estimated income
tax payments for 2022 so far have been notably weaker than 2021, likely due to falling
stock prices, and reduced capital gains taxes. The LAO's FY 2023-24 fiscal outlook
anticipates a $25 billion budget deficit mainly attributable to lower revenue estimates
from FY 2021-22 through FY 2023-24 by $41 billion, offset by reductions in spending.
Their outlook projects annual deficits declining from $17 billion to $8 billion over the next
several years. These estimates incorporate a risk of recession but do not reflect a
recession scenario, which if it does occur, could lead to revenues coming in $30 to $50
billion below the outlook projections. The State currently has roughly enough in
reserves ($23 million) to cover the budget deficit, but not if a recession occurs. The
LAO is recommending a pause in budget allocations to one-time and temporary
programs to reduce spending. A key assumption in the multiyear outlook is that
estimated revenues are expected to decline in the short-term, then stabilize and remain
largely flat between FY 2023-2024 and FY 2024-25, and then grow again in FY 2025-26
through 2026-27 after the effects of inflation and corresponding Federal Reserve rate
hikes subside.
According to the California Employment Development Department (EDD), the Contra
Costa County workforce increased by approximately 1.33% from October 2021 to
October 2022. During this same timeframe, unemployment in Contra Costa County
decreased from 5.1 % to 3.2%, remaining slightly below California as a whole, which
decreased from 6.1 % to 4.0%. Though this downward trend is positive news, as
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mentioned above, the economic effects from inflation could lead to an increase in job
loss and unemployment.
Long -Term Financial Planning
The District has an excellent reputation in providing public service, which includes
transparent and accessible governance, financial reporting and management, sewage
collection and treatment, workforce safety, capital improvements and replacements,
innovative use of technology, and customer service. This positive reputation and long-
term outlook has served the District well. The Board of Directors approved a four-year
sewer service charge rate adjustment schedule in April 2019 spanning July 2019
through June 2023. The four-year sewer service charge rate increases ranged from
4.75% to 5.25% annually, subject to a Board review for continued necessity prior to the
start of each fiscal year. The planned increases 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.
As noted previously, in conjunction with the approved sewer service charge rates, the
District's latest 10-year financial plan anticipates some use of additional debt financing
to address major capital spending projects including upgrades to the UV disinfection
system, solids handling, and nutrient removal infrastructure needs. Despite this long-
term ramping up in projected capital financing needs, the FY 2022-23 capital budget is
decreasing by approximately $17.0 million (15.7%) from the prior year's adopted
budget, largely attributable to project construction delays related to pandemic related
global materials supply chains. In total, capital budget carryovers (unused spending
authority carried forward to a subsequent year) into FY 2022-23 are approximately
$67.0 million, which Management and the Board are taking into consideration while
forecasting sewer service charge revenue needs for FY 2023-24 and beyond. Staff
anticipates the completion of a revised 10-year Capital Improvement Program
incorporating these significant effects in time for the upcoming Financial Planning
workshop anticipated to occur in January 2023.
District management analyzes and updates a strategic plan every two years, with the
seven goals in effect during FY 2021-22 being:
1. Customer and Community - Provide exceptional customer service and maintain
an excellent reputation,
2. Environmental Stewardship - Meet regulatory requirements and promote
sustainability,
3. Fiscal Responsibility - Manage finances wisely and prudently,
4. Workforce Development - Recruit, empower, and engage a highly trained and
safe workforce,
5. Infrastructure Reliability - Maintain facilities and equipment to be dependable,
resilient, and long-lasting,
6. Innovation and Optimization - Explore new technologies for continuous
improvement, and
7. Agility and Adaptability - Preserve business continuity during pandemic events
or major natural disasters.
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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. The District updates a 10-year financial plan each year prior to
the completion, presentation, and adoption of the annual budget. The main economic
factors considered in this long-term forecasting exercise are: the impact of state
legislation and mandates, regulatory compliance, GASB reporting requirements,
negotiated labor contract terms (including projected changes in retirement and health
care costs), energy costs and interpreting the energy market, interest rates, housing
growth, and infrastructure renewal and replacement needs. The unfunded actuarial
accrued liabilities (UAAL) for the District's pension and other post -employment benefit
(OPEB) plans are also considered in the financial planning process. Pursuant to the
most recently issued independent actuarial reports, the District had a strong fiduciary
net position in both plans of approximately 111.3% for its pension plan as of the
December 31, 2021 measurement date and 85.4% for its OPEB plan as of the June 30,
2022 measurement date. Due to a significant recent downturn in the markets since the
December 31, 2021 measurement date, the District assumes the funded status of the
pension plan is likely to fall below 100% in the next actuarial, which will also be taken
into account when developing future sewer service charge rates for FY 2023-24 and
beyond.
The District anticipates that it will continue to meet its mission and goals, continue to
provide excellent customer service at responsible rates to its customers, and meet
compliance requirements and other goals as specified in its strategic plan for the
foreseeable future.
Relevant Financial Policies
Investment policies for the District's assets, the OPEB Trust, and the Pension
Prefunding Trust are reviewed and approved annually by the Board. During FY 2021-
22 the District Board directed an additional $1,250,000 be contributed to the OPEB
Trust as a mechanism to hedge against potential future employer OPEB contribution
rate volatility. The Pension Prefunding Trust was utilized in June 2021 to pay off the
balance of the pension plan's UAAL. Section 53646 of the California Government Code
governs the District's investment practices, with changes in legislation being considered
in the Board's annual review of District investment policies. Additionally, the Board
receives quarterly financial statements that include District investment portfolio reports.
The OPEB Trust and the Section 115 Pension Prefunding Trusts are governed by
separate investment policies. Since 2008, the OPEB Trust has 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 its relatively shorter -term needs. These two irrevocable
trusts are managed by an outside investment advisor subject to investment policies
adopted by the Board. The Board Finance Committee reviews the OPEB Trust and
Section 115 Pension Trust performance on a quarterly basis.
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Major Initiatives
The District's vision statement in effect during FY 2021-22 was to be an innovative
industry leader in environmental stewardship and sustainability, while delivering
exceptional service at responsible rates. The Board and Management strives to
achieve this vision through the establishment of a Strategic Plan that establishes seven
overarching goals (as outlined previously), each with their own specific underlying
strategies, initiatives, and key success measures.
The District has received the Platinum award from the National Association of Clean
Water Agencies (NACWA) for 25 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 85% in the past 19 years
by improved sewer cleaning and a robust sewer rehabilitation program.
As described previously, the District reviews and adopts a Strategic Plan every two
years. In FY 2021-22, the District Board and Management developed a new Strategic
Plan for FY 2022-23 and FY 2023-24, which was completed and adopted by the Board
in the Spring of 2022, immediately prior to the adoption of the FY 2022-23 budget. The
District continues to analyze current and future rates, costs, and cash flows to ensure
consistency with cost of service studies (initially adopted in FY 2014-15 and then
updated in FY 2018-19 for the four-year rate plan extending through FY 2022-23).
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 latest Master Plan was completed in FY 2016-17 and is
intended to be used as a roadmap for capital improvements over the next two decades.
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 (UPCCA),
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 District for its annual comprehensive financial report (ACFR) for the fiscal year
ended June 30, 2021. This was the 22nd consecutive year that the District has achieved
this prestigious award. In order to receive the award, a government must publish an
easily readable and efficiently organized ACFR. This report must satisfy both generally
accepted accounting principles and applicable legal requirements.
A Certificate of Achievement for Excellence in Financial Reporting is valid for a period
of one year only. Management is confident the current ACFR continues to meet the
vn
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Page 16 of 114
program's requirements and intends to submit 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. Management would like to express sincere 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: Christopher Thomas, Accounting Supervisor; Olivia Ruiz,
Accounting Supervisor; Amal Lyon, Accountant; and Diana Diaz, Accountant.
■ The Reproduction and Graphics Team of the Communications & Intergovernmental
Affairs Division who creatively and professionally edited this the ACFR for
publication.
■ 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 overseeing 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
vill
December 19, 2022 Special FINANCE Committee Meeting Agenda Packet - Page 75 of 194
Page 17 of 114
CENTRAL CONTRA COSTA SANITARY DISTRICT
BOARD OF DIRECTORS
June 30, 2022
David R. Williams .............................................. President
Barbara D. Hockett ............................ President Pro-Tem
Mariah N. Lauritzen ............................................ Member
Michael R. McGill................................................Member
Tad J. Pilecki...................................................... Member
ix
December 19, 2022 Special FINANCE Committee Meeting Agenda Packet - Page 76 of 194
-6D CENTRAL SAN
CENTRAL CONTRA COSTA SANITARY DISTRICT
MISSION, VISION,
& VALUES
OUR MISSION
To protect public health and the environment
OUR VISION
To be an innovative industry leader in environmental
stewardship and sustainability, while delivering exceptional
service at responsible rates
OUR VALUES
Our core values guide our daily decisions and how we fulfill
our mission, vision, and goals
• CUSTOMER SERVICE
We are responsive to our customers, and we
deliver on our commitment to provide safe,
reliable, and cost-efficient services.
EMPLOYEES
We empower our employees to do their best
work.
V7WN1TY
We hold ourselves accountable to a
high standard of honesty, reliability, and
transparency.
• INNOVATION
We continuously improve and optimize our
operations.
ENVIRONMENTAL SUSTAINABILITY
We conduct our business to safeguard and
improve our planet.
I
all backgrounds,
Actives, and we are
-inciples of equity and
Page 19 of 114
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December 19, 2022 Special FINANCE Committee Meeting Agenda Packet - Page 78 of 194
Page 20 of 114
Central Contra Costa Sanitary District Service Area
June 30, 2022 Date:11/16/2022
Benicia
San Suisun Ba
Pablo
Bay
Hercules
4
M'artinel • j
O
Pleasant Hill
Concord
Walnut Creek
Lafayette
Berkeley r O Orinda
n Alamo
Moraga w
O
Danville
V d
Legend
Central San's Headquarter, Treatment Plant,
and HHW Collection Facility
Central San's Collection System Operations
Department (sewer maintenance) Building
Wastewater collection and treatment and
HHW collection for 352,832 people
Wastewater treatment and HHW collection
for 134,497 residents in Concord and Clayton
by contract
HHW disposal services only
ow
ti
San Ramon
O�
W
PumD and Lift Stations
1. Martinez
2. Fairview
3. Maltby
4. Clyde
5. Concord Industrial
6. Buchanan Field North
7. Buchanan Field South
8. Sleepy Hollow
9. Acacia
Pittsburg
10. Flush Kleen
11. Lower Orinda
12. Bates Blvd. - Orinda
13. Orinda Crossroads
14. Moraga
15. San Ramon
16. Wagner Ranch
17. Lower Wilder
18. Upper Wilder
O Pump or Lift Station 0
O'
Privately Owned Pump Station
Antioch
2 4 A
� II
Miles ^'
XII
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Page 21 of 114
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
Central Contra Costa Sanitary District
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2021
Executive Director/CEO
xiii
December 19, 2022 Special FINANCE Committee Meeting Agenda Packet - Page 80 of 194
w.
l7£ .�
4 _
Page 22 of 114
�i
I 1
GINEERING '
December 19, 2022 Special FINANCE Committee Meeting Agenda PacWet - PMe 81 of 194
Page 23 of 114
Fl. MAZE
&ASSOCIATES
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Central Contra Costa Sanitary District
Martinez, California
Opinions
We have audited the accompanying financial statements of the business -type activities of the Central Contra Costa
Sanitary District (District), California, as of and for the year ended June 30, 2022, and the related notes to the
financial statements, which collectively comprise the District's basic financial statements as listed in the Table of
Contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the business -type activities of the District as of June 30, 2022, and the change in financial
position and, cash flows thereof for the year then ended in accordance with accounting principles generally accepted
in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America.
Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the
Financial Statements section of our report. We are required to be independent of the District and to meet our other
ethical responsibilities, in accordance with the relevant ethical requirement relating to our audit. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions
Responsibilities of Management's 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; and for the design, implementation, and
maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events,
considered in the aggregate, that raise substantial doubt about the District's ability to continue as a going concern for
twelve months beyond the financial statement date, including any currently known information that may raise
substantial doubt shortly thereafter.
Accountancy Corporation
3478 Buskirk Avenue, Suite 215
Pleasant Hill, CA 94523
r 925.930.0902
F 925.930.0135
e maze@mazeassociates.com
w mazeassociates.com
December 19, 2022 Special FINANCE Committee Meeting Agenda Packet - Page 82 of 194
Page 24 of 114
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that
an audit conducted in accordance with generally accepted auditing standards will always detect a material
misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control. Misstatements are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, and design and perform audit procedures responsive to those risks. Such procedures include
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit 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, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the financial
statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that
raise substantial doubt about the District's ability to continue as a going concern for a reasonable period
of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit, significant audit findings, and certain internal control -related matters that we
identified during the audit.
Change in Accounting Principles
Management adopted the provisions of Governmental Accounting Standards Board Statement No. 87 — Leases,
which became effective during the year ended June 30, 2022. See Note 12 to the financial statements.
The emphasis of this matter does not constitute a modification to our opinions.
December 19, 2022 Special FINANCE Committee Meeting Agenda Packet - Page 83 of 194
Page 25 of 114
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 is the responsibility of management and, 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.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise
the District's basic financial statements. The accompanying Supplementary Information, as listed in the Table of
Contents, is presented for purposes of additional analysis and is not a required part of the basic financial statements.
Such information is the responsibility of management and was derived from and relates directly to the underlying
accounting and other records used to prepare the basic financial statements. The information has been subjected to
the auditing procedures applied in the audit of the basic financial statements and certain additional procedures,
including comparing and reconciling such information directly to the underlying accounting and other records used
to prepare the basic financial statements or to the basic 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 basic financial
statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other information comprises
the Introductory Section and Statistical Section listed in the Table of Contents, but does not include the basic
financial statements and our auditor's report thereon. Our opinions on the basic financial statements do not cover
the other information, and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other information and
consider whether a material inconsistency exists between the other information and the basic financial statements, or
the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude
that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.
Pleasant Hill, California
December 8, 2022
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This Page Left Intentionally Blank
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11 Central Contra Costa Sanitary District
Protecting public health and the environment' 1W 5019 Imhoff Place, Martinez, CA 94553-439
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, 2022 (2021-22). This
information is presented in conjunction with the audited financial statements, which follow this report.
FINANCIAL HIGHLIGHTS
The District's 2021-22 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 $64.8 million or 7.8% in 2021-22. This
increase is primarily due to the District's prior year actuarily determined net pension liability of
$48.9 million transforming into a net pension asset of $53.5 million. This is attributable to the
District paying off the actuarially -determined Unfunded Actuarily Accrued Liability (UAAL) of
$70.8 million in June 2021 in addition to higher than actuarially projected market returns on
pension plan assets for the year ended December 31, 2021, which is the measurement date used
for the GASB 68 valuation.
Total revenues, excluding capital contributions, increased by $28.2 million or 24.1% in 2021-22.
This increase is directly attributable to the portion of sewer service charges revenue allocated to
operations increasing from 44.0% in prior year to 66.9% in 2021-22, an increase of $29.4 million.
The change in allocation was directed by the Board after 2021 Wastewater Certificates of
Participation (2021 COPs) were issued generating $58.0 million in proceeds to help fund capital
projects in lieu of sewer service charges. Another factor contributing to revenue growth from
sewer service charges and property taxes was new development in the District's service territory
increasing its customer base. Lastly, growth in residential and commercial property values in the
service area drove an increase in property taxes of $722,594 or 3.5%.
Total 2021-22 expenses decreased by $1.3 million or 1.2%. This decrease is largely attributable
to a reduction in pension related expenses following the payoff of the UAAL balance in June 2021.
Capital Contributions decreased in 2021-22 by $22.5 million or 48.2%. The decrease is mainly
due to a reduced allocation of sewer service charges allocated to finance capital projects by the
Board following the issuance of the 2021 Wastewater Certificates of Participation 2021 COPS in
June 2021, as noted previously. To a lesser extent, the reduction was also caused by a decrease in
contributions from the City of Concord for its flow -based proportionate share of treatment plant
and other eligible capital project costs.
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Page 28 of 114
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:
• 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:
6
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Page 29 of 114
Table 1 - Condensed Statement of Net Position
Year Ending June 30
2022 vs. 2021
2022 vs. 2020
$ Increase
% Increase
$ Increase
% Increase
2022
2021
2020
(Decrease)
(Decrease)
(Decrease)
(Decrease)
Assets
Current assets
$174,679,739
$136,391,239
$164,102,632
$ 38,288,500
28.1%
$ 10,577,107
6.4%
Capital assets, net
812,744,909
760,567,573
711,564,564
52,177,336
6.9%
101,180,345
14.2%
Other non -current assets
59,093,444
36,572,236
11,478,481
22,521,208
61.6%
47,614,963
414.8%
Total assets
1,046,518,092
933,531,048
887,145,677
112,987,044
12.1%
159,372,415
18.00/0
Deferred outflows
Pension related
122,427,550
95,805,386
26,670,166
26,622,164
27.8%
95,757,384
359.0%
OPEB related
8,302,309
4,117,730
2,176,533
4,184,579
101.6%
6,125,776
281.4%
Total deferred outflows
130,729,859
99,923,116
28,846,699
30,806,743
30.8%
101,883,160
353.2%
Liabilitie s
Current liabilities
27,956,046
28,102,111
15,854,317
(146,065)
-0.5%
12,101,729
76.3%
Long-term liabilities
72,665,537
119,474,622
97,013,922
(46,809,085)
-39.2%
(24,348,385)
-25.1%
Total liabilities
100,621,583
147,576,733
112,868,239
(46,955,150)
-31.8%
(12,246,656)
-10.9%
Deferred inflows
Pension related
179,778,943
48,100,435
30,761,867
131,678,508
273.8%
149,017,076
484.4%
OPEB related
2,087,946
12,287,769
4,601,542
(10,199,823)
-83.0%
(2,513,596)
-54.6%
Lease related
4,514,638
-
-
4,514,638
100.0%
4,514,638
100.00/0
Total deferred inflows
186,381,527
60,388,204
35,363,409
125,993,323
208.6%
151,018,118
427.0%
Net position
Net investment in capital assets
747,646,783
684,834,242
692,117,172
62,812,541
9.2%
55,529,611
8.0%
Restricted
14
34,929,105
2,639
(34,929,091)
-100.00/0
(2,625)
-99.5%
Unrestricted
142,598,044
105,725,880
75,640,917
36,872,164
34.9%
66,957,127
-88.5%
Total net position
$890,244,841
$825,489,227
$767,760,728
$ 64,755,614
7.8%
$122,484,113
16.0%
The total net position of the District increased from $767.8 million in 2019-20 to $825.5 million in 2020-
21 and increased to $890.2 million in 2021-22. The District's total assets have increased by $112.1 million
or 12.0% compared to 2020-21, and $159.4 million or 18.0% compared to 2019-20. Total liabilities
decreased $47.0 million or 31.8% compared to 2020-21 and decreased $12.2 million or 10.9% compared
to 2019-20. The increase in net position over the three-year period totals $122.5 million, or 16.0%,
resulting largely from, as mentioned earlier, the prior year actuarily determined net pension liability of
$48.9 million flipping to a net pension asset of $53.5 million.
As a public utility relying heavily on a complex infrastructure network, unsurprisingly, the largest portion
of the District's net position by far (84.0%) 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 wastewater
treatment, collection, and other services to its customers; 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 generally be used to discharge these liabilities. The balance of $142.4
million in unrestricted net position increased by $36.9 million from 2020-21 and increased by $67.0
million from 2019-20. As noted previously, this increase was primarily a result of the District fully
funding its pension UAAL in June 2021 along with higher than actuarially projected investment returns
on pension assets during the measurement period, resulting in a net pension asset for the current year.
7
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Page 30 of 114
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
Revenues:
Operating revenues
Sewer service charges
Other
Total operating revenue
Non -operating revenues
Property taxes
Permit and inspection fees
Investment earnings
Other
Total non -operating revenue
Total revenues
Expenses
Operating expense other than depreciation
Depreciation
Non -operating expenses
Total expenses
Income before capital contributions
Capital contributions
Increase in net position
Beginning net position
Ending net position
Year Ending June 30
2022 vs. 2021
2022 vs. 2020
$ Increase
% Increase
$Increase
% Increase
2022
2021
2020
(Decrease)
(Decrease)
(Decrease)
(Decrease)
$116,767,447
$ 87,327,907
$ 85,332,494
$ 29,439,540
33.7%
$ 31,434,953
36.8%
2,164,237
1,914,654
1,890,285
249,583
13.0%
273,952
14.5%
118,931,684
89,242,561
87222,779
29,689,123
33.3%
31,708,905
36.4%
21,239,420
20,516,826
18,876,886
722,594
3.5%
2,362,534
12.5%
2,308,395
2,440,187
2,251,245
(131,792)
-5.4%
57,150
2.5%
772,909
1,678,028
2,310,269
(905,119)
-53.9%
(1,537,360)
-66.5%
2,053,331
3,193,569
1219,811
(1,140,238)
-35.7%
833,520
68.3%
26,374,055
27,828,610
24,658,211
(1,454,555)
-5.2%
1,715,844
7.0%
145,305,739
117,071,171
111,880,990
28234,568
24.1%
33,424,749
29.9%
79,894,599
83,913,477
79,462,379
(4,018,878)
-4.8%
432220
0.5%
22,853,140
21,531,302
21,253,062
1,321,838
6.1%
1,600,078
7.5%
1,950,841
542,226
604,851
1,408,615
259.8%
1,345,990
222.5%
104,698,580
105,987,005
101,320292
(1,288,425)
-1.2%
3,378,288
3.3%
40,607,159
11,084,166
10,560,698
29,522,993
266.4%
30,046,461
284.5%
24,148,455
46,644,333
53,068,468
(22,495,878)
-48.2%
(28,920,013)
-54.5%
64,755,614
57,728,499
63,629,166
7,027,115
12.2%
1,126,448
1.8%
825,489,227
767,760,728
704,131,562
57,728,499
7.5%
121,357,665
17.2%
$890,244,841
$825,489,227
$767,760,728
$ 64,755,614
7.8%
$122,484,113
16.0%
Revenue
Total operating revenues increased from $87.2 million in 2019-20 to $89.2 million in 2020-21 and
increased to $118.9 million in 2021-22. Operating revenues increased by $29.7 million or 33.3%
compared to 2020-21 and increased by $31.7 million or 36.4% comparing 2021-22 to 2019-20. This
increase in operating revenues is primarily attributable to a large increase in the proportion of sewer
service charges allocated by the Board to fund operating and maintenance costs in conjunction with the
issuance of the 2021 COPS to finance the bulk of 2021-22 capital project expenditures.
Total non -operating revenue increased from $24.7 million in 2019-20 to $27.8 million in 2020-21 and
decreased to $26.4 million in 2021-22. Total non -operating revenues in 2021-22 decreased compared to
2020-21 by $1.5 million or 5.2% and increased by $1.7 million or 7.0% comparing 2021-22 to 2019-20.
Total revenues increased from $111.9 million in 2019-20 to $117.1 million in 2020-21 and increased to
$145.3 million in 2021-22. The change in total revenue represented an increase of $28.2 million or 24.1%
comparing 2021-22 to 2020-21 and an increase of $33.4 million or 29.9% comparing 2021-22 to 2019-
20. As described previously, revenue attributable to sewer service charges and secured property taxes
grew over the prior year due to continued property value growth and development increasing the District's
8
December 19, 2022 Special FINANCE Committee Meeting Agenda Packet - Page 89 of 194
Page 31 of 114
regional customer base. Total approved annual sewer service charge rate increased by 4.9% (to $660) for
single family homes and 4.9% (to $625) for multi -family homes. Property tax revenue increased by
$722,594 or 3.5% from 2020-21 to 2021-22, and $2.4 million or 12.5% comparing 2021-22 to 2019-20
due to an increase in assessed property values, a healthy real estate market, and development of residential
and commercial real estate in the District's service territory.
Expenses
Total expenses increased from $101.3 million in 2019-20 to $106.0 million in 2020-21 and decreased to
$104.7 million in 2021-22. In 2021-22, total expenses decreased by $1.3 million or 1.2% compared to
2020-21. Comparing 2021-22 to 2019-20, total expenses were $3.4 million or 3.3% higher. As noted
previously, this decrease from prior year is largely attributable to savings arising from the payoff of the
outstanding pension UAAL balance in June 2021. This was made possible through the issuance of the
2021 COPS to finance the bulk of capital project outlays in 2021-22, which unencumbered sewer service
charges to be utilized for operational purposes such as the UAAL payoff. The pension UAAL payoff was
executed in June 2021, which ultimately resulted in the replacement of mandatory pension UAAL
contributions to the District's pension administrator with low -interest (0.38% true interest rate) COPS debt
service.
Total income before capital contributions went from $10.6 million in 2019-20, to $11.1 million in 2020-
21, and increased to $40.4 million in 2021-22. The significant increase from 2020-21 to 2021-22 is
attributable to a larger portion of the sewer service charges being allocated to operations, as mentioned
previously.
Total capital contributions in 2021-22 were $24.1 million compared to $46.6 million in 2020-21 and $53.1
million in 2019-20. As mentioned previously, this decrease was mainly derived from a decrease in the
allocation of sewer service charges to the capital program following the issuance of the 2021 COPS and
payoff of the pension UAAL in June 2021.
CAPITAL ASSETS
Net capital assets for fiscal years 2021-22, 2020-21 and 2019-20 totaled $812.7 million, $760.6 million,
and $711.6 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 the District's capitalization policy limit of $5,000, less
depreciation. As of June 30, 2022, the District's investment in capital assets totaled $812.7 million, an
increase of $52.2 million or 6.9% over the net capital asset balance of $760.6 million at June 30, 2021.
Net capital assets increased by $100.2 million or 14.2% comparing 2021-22 to 2019-20. 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
2022 vs. 2021
2022 vs. 2020
$ Increase
% Increase
$ Increase
% Increase
2022
2021
2020
(Decrease)
(Decrease)
(Decrease)
(Decrease)
Structures, buildings, and
equipment
$ 694,343,750
$ 631,932,004
$ 613,794,504
$62,411,746
9.9%
$80,549,246
13.1%
Land and rights of way
22,582,507
22,290,077
22,290,077
292,430
1.3%
292,430
1.3%
Construction in progress
95,818,652
106,345,492
75,479,983
(10,526,840)
-9.9%
20,338,669
26.9%
Total
812,744,909
760,567,573
711,564,564
52,177,336
6.9%
101,180,345
14.2%
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The increase in capital assets, net of depreciation, of $52.2 million from 2020-21 to 2021-22 and $101.2
million from 2019-20 to 2021-22 is a result of an expanding capital improvement program over these
years to address expanded capacity to meet increased development, address more stringent regulations
regarding PFAS and other issues, improve the sustainability of operations and technology, and reduce the
District's environmental footprint. In this timeframe, spending has exceeded annual depreciation and
being largely financed by pay-as-you-go resources (i.e., new revenue and reserves) rather than debt. This
year's major addition to construction -in -progress includes the following:
Project Description
Capital Outlay
Filter Plant & Clearwell Improvements Ph. lA (7361)
$ 15,563,494
Moraga/Crossroads Pump Station Project (8436)
13,820,107
Influent Pump Electrical Improvements (7328)
5,077,346
Electric Blower Improvements (100015)
4,979,230
Contractor Staging Improvements (7375)
3,851,630
Walnut Creek Sewer Renovation Ph. 15 (8465)
3,594,771
No. Orinda Sewer Renovation Ph. 8 (8463)
3,453,302
So. Orinda Sewer Renovation Ph. 8 (8461)
3,195,000
Solids Handling Facility Improvements (7348)
2,747,846
Danville Sewer Renovation Ph. 4 (8466)
1,374,509
Total
$ 57,657,235
Refer to Note 5 in the audited financial statements for additional details on the District's capital assets.
DEBT ADMINISTRATION
Total debt obligations, excluding liabilities related to pension, OPEB and compensated absences
liabilities, for fiscal years 2021-22, 2020-21 and 2019-20 totaled $64.1 million, $75.7 million, and $19.4
million, respectively. As of June 30, 2022, the District's outstanding debt totaled $64.1 million, which is
a decrease of $11.6 million or 15.3% over the debt balance of $75.7 million at June 30, 2021. Debt
increased by $44.7 million or 229.7% comparing 2021-22 to 2019-20. The increase in debt obligations is
due to the issuance of the 2021 COPS with a par value of $50.57 million, generating $58.0 million in
proceeds. The primary source of funds pledged to and securing the repayment of debt issuances for the
capital improvement program is property taxes. Refer to Note 6 for additional information on the
District's outstanding debt obligations.
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.
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• 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.
• Inflation, as measured using the consumer price index (CPI). The CPI for the San Francisco -Oakland -
Hayward area directly impacts the cost of living adjustments provided in the employee MOUs. Higher
than anticipated inflation may also adversely impact spending for contracted services, energy,
chemicals, and other materials/supplies necessary for wastewater collection and treatment services.
• Changes in assessed property values, which affect the District's non -operating ad valorem secured
property tax revenue. When the housing market grows, overall assessed property values increase,
thereby increasing the District's property tax revenues. 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 2021, the
District's Board of Directors adopted an operating and maintenance budget of $91.0 million and sewer
construction capital improvement budget of $108.0 million for the fiscal year ending June 30,
2022. 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. With the expiration of this 4-year rate schedule,
any subsequent sewer service charges rate increases will undergo public hearings, customer outreach, a
cost -of -service study, and Board approval as specified by California Proposition 218.
While the Board -approved customer relief measures effectively froze sewer service charge rates in the
fiscal year ended June 30, 2021, sewer service charge rates for the fiscal year ending June 30, 2022
returned back to the rates previously adopted by the Board in 2019. Accordingly, next fiscal year sewer
service charges will include the 4.54% rate increase previously approved and scheduled for 2022-23.
While forgone for one year due to unprecedented challenges faced during the pandemic, these approved
rate increases are critical to meet the needs of a significantly expanded capital improvement program in
the next few years. As designed in the District's financial model, steady but controlled sewer service
charge rate increases help prevent spikes in revenue needs from customers in future years when annual
capital spending is expected to significantly, but temporarily, outpace annual revenues. This pay-as-you-
go approach, paired with necessary debt financing, is designed with the intent of achieving rate stability
and avoid volatility, benefiting both the District and its customers. Primary drivers for the expansion of
the capital improvement program include the need to enhance and modernize the District's ageing
infrastructure to meet new regulatory requirements and ensure the sustainability of its infrastructure as the
region's population grows driving an increased demand for service capacity.
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
STATEMENT OF NET POSITION
JUNE 30, 2022
ASSETS
CURRENT ASSETS
Cash and cash equivalents (Note 2)
$19,368,680
Restricted cash and cash equivalents (Notes 1F and 2)
41,968
Short term investments (Note 2)
123,540,000
Accounts receivable, net (Note 3)
26,137,486
Employee computer loans receivable (Note 3)
10,212
Interest receivable
289,240
Current portion of lease receivable (Note 12)
502,430
Supplies & material inventory
4,127,524
Prepaid expenses
662,199
Total current assets
174,679,739
NON -CURRENT ASSETS
Assessment District receivable (Note 4)
1,416,297
Non -current portion of lease receivable (Note 12)
4,133,358
Net Pension Asset (Note 9)
53,543,789
Capital assets:
Nondepreciable (Note 5)
118,401,159
Depreciable, net of accumulated depreciation (Note 5)
694,343,750
Total capital assets, net
812,744,909
Total non -current assets
871,838,353
TOTAL ASSETS
1,046,518,092
DEFERRED OUTFLOWS OF RESOURCES
Pension related (Note 9) 122,427,550
OPEB related (Note 10) 8,302,309
Total deferred outflows of resources 130,729,859
See accompanying notes to financial statements
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CENTRAL CONTRA COSTA SANITARY DISTRICT
STATEMENT OF NET POSITION
JUNE 30, 2022
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued expenses $10,952,960
Salaries & benefits payable 2,179,678
Interest payable 1,327,197
Current portion of lease payable (Note 12) 179,721
Current portion of long-term obligations (Note 6) 10,750,000
Accrued compensated absences - current portion (Note 1J) 627,288
Provision for uninsured claims (Note 7) 1,504,476
Refundable deposits 434,726
Total current liabilities 27,956,046
NON -CURRENT LIABILITIES
Non -current portion of long-term obligations (Note 6) 53,360,320
Accrued compensated absences, noncurrent portion (Note 1J) 5,645,587
Non -current portion of lease payable (Note 12) 808,085
Net OPEB liability (Note 10) 12,851,545
Total non -current liabilities 72,665,537
TOTAL LIABILITIES 100,621,583
DEFERRED INFLOWS OF RESOURCES
Pension related (Note 9)
179,778,943
OPEB related (Note 10)
2,087,946
Lease receivable (Note 12)
4,514,638
Total deferred inflows of resources
186,381,527
NET POSITION (Note 11)
Net investment in capital assets 747,646,783
Restricted for debt service 14
Unrestricted 142,598,044
TOTAL NET POSITION $890,244,841
See accompanying notes to financial statements
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CENTRAL CONTRA COSTA SANITARY DISTRICT
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR THE YEAR ENDED JUKE 30, 2022
OPERATING REVENUES
Sewer service charges (SSC) $100,680,646
Service charges - City of Concord (Note 8) 16,086,801
Miscellaneous charges 2,164,237
Total operating revenues 118,931,684
OPERATING EXPENSES
Salaries & benefits
55,911,207
Contracted services
9,623,004
Utilities & fuel
6,524,066
Chemicals
1,820,344
General supplies
2,627,899
Other operating expenses
2,257,107
Loss (gain) on sale of asset
939,343
Depreciation expense
22,516,574
Amortization expense
528,195
Total operating expenses 102,747,739
OPERATING (LOSSES) 16,183,945
NONOPERATING REVENUES (EXPENSES)
Property taxes 21,239,420
Permit and inspection fees 2,308,395
Grants 996,177
Interest earnings 772,909
Interest expense (1,950,841)
Other income (expense), net 1,057,154
Total nonoperating revenues (expenses), net 24,423,214
INCOME BEFORE CAPITAL CONTRIBUTIONS 40,607,159
CAPITAL CONTRIBUTIONS
Other government revenue - Concord (Note 8) 7,799,702
Customer contributions to capital 10,267,767
Capital contributions - connection fees 4,584,973
Non -exchange capital contributions/donations 1,496,013
Total capital contributions 24,148,455
CHANGE IN NET POSITION 64,755,614
NET POSITION, BEGINNING OF YEAR 825,489,227
NET POSITION, END OF YEAR $890,244,841
See accompanying notes to financial statements
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CENTRAL CONTRA COSTA SANITARY DISTRICT
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED JUKE 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers
Payments to employees and related benefits
Net cash provided by operating activities
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Receipt of taxes
Inspection/permit fees and other non -operating income
Net cash provided by noncapital financing activities
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Capital contributions
Connection fees
Acquisition and construction of capital assets
Interest paid on long-term debt
Principal payments on long-term debt
Net cash used for capital and related financing activities
CASH FLOWS FROM INVESTING ACTIVITIES
Redemption of investments
Acquisition of investments
Interest received
Net cash provided by investing activities
NET INCREASE (DECREASE) IN CASH
Cash, beginning of year
Cash, end of year
See accompanying notes to financial statements
$118,944,502
(25,220,586)
(53,523,454)
40,200,462
21,239,420
3,365,549
24,604,969
19,563,482
4,584,973
(75,132,106)
(864,539)
(11,623,011)
(63,471,201)
30,000,000
(97,000,000)
973,100
(66,026,900)
(64,692,670)
84,103,318
$19,410,648
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CENTRAL CONTRA COSTA SANITARY DISTRICT
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED JUKE 30, 2022
Reconciliation of operating (loss) to net cash provided by
operating activities:
Operating income (losses)
Adjustments to reconcile operating losses to cash
flows from operating activities:
Depreciation
Amortization
Changes in assets and liabilities:
Receivables, net
Parts and supplies
Prepaid expenses
Accounts payable and accrued expenses
Accrued payroll and related expenses
Refundable deposits
Claims
Net pension liability
Net OPEB liability
Lease related
Net cash provided (used) by operating activities
SCHEDULE OF NON CASH ACTIVITY
Change in fair value of investments
Capital contributions
Total non cash activity
CASH AND CASH EQUIVALENTS, AS PRESENTED ON
STATEMENT OF NET POSITION:
Unrestricted cash and cash equivalents
Restricted cash and cash equivalents
Total cash and cash equivalents at end of year
See accompanying notes to financial statements
$16,183,945
22,516,574
528,195
952,161
(1,041,330)
1,857,836
(4,208,797)
1,178,783
157,469
49,411
3,412,120
(2,252,561)
866,656
$40,200,462
$973,100
24,148,455
$25,121,555
$19,368,680
41,968
$19,410,648
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2022
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 Year Ended June 30, 2022
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.
Rate Stabilization Accounts (RSA) have been stablished by the Board and consist of book
accounting in Running Expense and Serwer Construction Funds. Deposits and withdrawals
to/from RSA require Board approval.
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 Year Ended June 30, 2022
NOTE 1— DESCRIPTION OF DISTRICT AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
C. Investments
Investments held at June 30, 2022, 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.
G. Parts and Supplies
Parts and supplies are valued at average cost and are used primarily for internal purposes.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2022
NOTE 1— DESCRIPTION OF DISTRICT AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
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 Year Ended June 30, 2022
NOTE 1— DESCRIPTION OF DISTRICT AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
J. Statement of Cash Flows
For purposes of the statement of cash flows, all highly liquid investments, including restricted
assets, with maturities of three months or less when purchased, are considered to be cash
equivalents. Included therein are petty cash, bank accounts, and the State of California Local
Agency Investment Fund (LAIF). Restricted assets are debt service amounts maintained by
fiduciaries and not available for general expenses.
K. Use of Estimates
The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those estimates.
L. Lease
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.
M. New Governmental Accounting Standards Board Statement Pronouncement
GASB Statement No. 87 — In June 2017, GASB issued Statement No. 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 requires
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. The Statement is effective for the reporting periods beginning after June 15, 2021, or
fiscal year 2021-22. As part of the implementation of this Statement, the District has accounted
for both lessor and lessee transactions. See Note 12 for more information.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2022
NOTE 2 — CASH AND INVESTMENTS
A.
Summary of Cash and Investments
Cash and investments as of June 30, 2022, is classified in the accompanying financial statements as
follows:
Cash and cash equivalents
Short term investments
Restricted cash and cash equivalents
Total District Cash and Investments
Cash and Investments held with Pension Trust
Total Cash and Investments
Policies and Practices
$19,368,680
123,540,000
14
142,908,694
41,954
$142,950,648
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.
24
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Page 47 of 114
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2022
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:
Maximum
Maximum
Maximum
Percentage
Minimum
Remaining
Percentage
of Portfolio
Credit
Authorized Investment Type
Maturity
of Portfolio
(Per Issuer)
Quality
U.S. Treasury Obligations
5 years
None
100%
N/A
U.S. Government Agency Issues
5 years
None
100%
N/A
Money Market Funds
N/A
20%
10%
A
Negotiable Certificates of Deposit
5 years
30%
5%
AA
Banker's Acceptances
180
40%
5%
N/A
Commercial Paper (1)
270
25%
10%
A-1
Medium Term Notes
5 years
30%
10%
AA
Collateralized Certificates of Deposit (2)
5 years
None
20%
Aaa
Supranationals
5 years
30%
5%
AA
County Pooled Investment Funds
N/A
None
100%
N/A
Local Agency Investment Fund (LAIF)
N/A
None
$75 million
N/A
Government Investment Pools (CAMP, CalTrust, etc)
N/A
None
None
N/A
Municipal Investments
5 years
None
5%
AA
(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 LAIR
25
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Page 48 of 114
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2022
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, 2022:
Investment Type
Investments Reported at Fair Value:
U.S. Treasury Obligations
U.S. Federal Agency Securities - FHLB
Total
External Investment Pool (Exempt):
California Local Agency Investment Fund
Investments Exempt from Fair Value Hierarchy:
Restricted Cash
Cash and Investments held with Pension Trust
Cash in bank and On Hand
Total Cash and Investments
Level 2
Total
$48,500,000 $48,500,000
18,500,000 18,500,000
$67,000,000 67,000,000
64,000,000
14
41,954
11,908,680
$142,950,648
U.S. Treasury Obligations totaling $48.5 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.
U.S. Federal Agency Securities totaling $18.5 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.
26
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Page 49 of 114
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2022
NOTE 2 — CASH AND INVESTMENTS (Continued)
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 may not exceed five years, with the exception of
Treasury Notes or Local Agency Investment Fund; however, investments can be held longer with
Board approval.
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, 2022:
12 Months
13 to 24
25 to 36
Investment Type
or less
Months
Months
Total
U.S Treasury Obligations
$42,000,000
$4,000,000
$2,500,000
$48,500,000
U.S. Federal Agency Securities - FHLB
18,500,000
18,500,000
California Local Agency Investment Fund
64,000,000
64,000,000
Total
124,500,000
4,000,000
2,500,000
131,000,000
Restricted Cash
14
Restricted Cash and Investments held with Pension Trust
41,954
Cash in bank
11,908,680
Total Cash and Investments
$142,950,648
Investment in LAIF — The District is a voluntary participant in LAW which is regulated by the
California Government Code under the oversight of the Treasurer of the State of California. 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 LAW portfolio (in
relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the
accounting records maintained by LAIF, which are recorded on an amortized cost basis. At June 30,
2022, these investments had weighted average maturity of 311 days.
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.
27
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Page 50 of 114
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2022
NOTE 2 — CASH AND INVESTMENTS (Continued)
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, 2022, 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.
Investment Type
Rated P-1:
U.S. Federal Agency Securities - FHLB $18,500,000
AAA Rated:
U.S. Treasury Obligations 48,500,000
Total Rated Investments 67,000,000
Not rated:
California Local Agency Investment Fund 64,000,000
Restricted Cash and Cash Equivalents 14
Cash and Investments held with Pension Trust 41,954
Cash in Bank 11,908,680
Total Cash and Investments $142,950,648
G. Concentration of Credit Risk
There are no covered investments that represent in excess of 5% of the District's total
investments as of June 30, 2022.
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. As a voluntary pool participant, the County Treasurer's office transacts 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.
28
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Page 51 of 114
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2022
NOTE 3 — ACCOUNTS RECEIVABLE
Accounts receivable for the year ended June 30, 2022, are comprised of the following:
City of Concord (see Note 8)
Household Hazardous Waste Partners
All Other
Total Accounts Receivable
Employee Computer Loans Receivable:
$23,934,463
877,608
1,325,415
$26,137,486
The District provides loans to its employees for the purchase of personal computers. These loans
are payable through payroll deductions of $100 per month until the loan is paid off. The interest
rate associated with the loan is based on the most current Local Agency Investment Fund (LAIF)
rate in effect at the time of loan execution. The maximum amount each employee may borrow is
$2,000. The loans receivable balance is as follows as of June 30, 2022:
Employee Computer Loans $10,684
Additions 12,990
Payments (13,462)
Total Loan Receivable $10,212
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, 2022, was $738,052.
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, 2022, was $429,201.
The District also established Septic to Sewer Financing (S2S) to provide low-cost financing to help
homeowners connect to the public sewer system and properly abandon their septic tank. The program is
open to residential property owners with private septic systems located near existing sewer mains within
Central San's Service area. The S2S receivable balance at June 30, 2022, was $249,044.
The total receivable balance at June 30, 2022, for CAD, AVAD and S2S was $1,416,297, and is shown as
a non -current asset on the Statement of Net Position.
29
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Page 52 of 114
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2022
NOTE 5 — CAPITAL ASSETS
Property, plant and equipment, and construction in progress are summarized below for the year ended
June 30, 2022:
Balance at
Transfers &
Balance at
6/30/2021 (restated)
Additions
Retirements
Adjustments
June 30, 2022
Capital assets not being depreciated:
Land
$17,320,570
$17,320,570
Easements (intangible)
4,969,507
$292,430
5,261,937
Construction in Progress
106,345,492
$73,636,093
(84,162,933)
95,818,652
Total nondepreciated assets
128,635,569
73,636,093
(83,870,503)
118,401,159
Capital assets being depreciated:
Sewage collection system
415,550,130
($151,800)
27,864,610
443,262,940
Contributed sewer lines
166,020,500
1,496,013
229,916
167,746,429
Outfall sewers
11,371,574
5,501,140
16,872,714
Sewage treatment plant
379,337,450
(930,600)
13,760,344
392,167,194
Recycled water infrastructure
27,372,848
1,811,025
29,183,873
Pumping stations
57,529,109
(3,050,000)
33,330,393
87,809,502
Buildings
44,738,877
80,940
44,819,817
Furniture and equipment
16,344,229
(95,662)
355,614
16,604,181
Motor vehicles
9,470,782
(553,214)
619,377
9,536,945
Enterprise software
3,365,658
317,144
3,682,802
Intangible right -to -use lease asset
1,165,199
1,165,199
Total depreciated assets
1,132,266,356
1,496,013
(4,781,276)
83,870,503
1,212,851,596
Less accumulated depreciation:
Sewage collection system
88,208,487
5,809,516
880,437
94,898,440
Contributed sewer lines
67,885,601
2,196,000
31,514
70,113,115
Outfall sewers
4,221,718
187,227
4,408,945
Sewage treatment plant
246,686,019
8,369,194
(931,195)
254,124,018
Recycled water infrastructure
14,278,072
787,754
15,065,826
Pumping stations
41,033,139
2,421,213
(3,050,000)
40,404,352
Buildings
17,989,591
1,292,650
19,282,241
Furniture and equipment
12,517,312
872,673
($95,662)
13,294,323
Motor vehicles
5,507,799
564,490
(541,170)
5,531,119
Enterprise software
841,415
352,423
1,193,838
Intangible right -to -use lease asset
191,629
191,629
Total accumulated depreciation
499,169,153
23,044,769
(3,706,076)
518,507,846
Total capital assets being
depreciated, net
633,097,203
(21,548,756)
(1,075,200)
83,870,503
694,343,750
Capital assets, net
$761,732,772
$52,087,337
($1,075,200)
$812,744,909
30
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Page 53 of 114
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2022
NOTE 6 — LONG-TERM DEBT
A. Summary of Activity
The changes in the District's long-term obligations during the year ended June 30, 2022 consisted
of the following:
2018 Series A Wastewater Revenue
Refunding Bonds
1.39-2.34%, due 9/l/2029
2018 Series B Wastewater Revenue
Refunding Bonds
2.62-3.12%, due 9/l/2023
2021 Wastewater Revenue Certificates
of Participation
0.05% - 0.62% due 9/1/2028
Total long-term debt
Add: Unamortized premium
Revenue Bonds/Certificates
Total Long -Term Debt, net
Less Current Portion
Long Term Portion
B. Debt Service Requirements
Original Amount
Issue Balance Balance due within
Amount June 30, 2021 Retirements June 30, 2022 one year
$15,135,000 $13,910,000 $1,270,000
4,315,000 1,655,000 535,000
$12,640,000 $1,335,000
1,120,000 550,000
50,570,000 50,570,000 8,645,000 41,925,000 8,865,000
66,135,000 10,450,000 55,685,000 10,750,000
The debt service requirements are as follows:
9,598,331 1,173,011
75,733,331 $11,623,011
(10,450,000)
$65,283,331
8,425,320
64,110,320 $10,750,000
(10,750,000)
$53,360,320
Fiscal Year
2018 Wastewater Revenue Refuding
2021 Wastewater Revenue
Ending
Series A
Series B
Certificates of Participation
Total
June 30,
Principal
Interest
Principal Interest
Principal
Interest
Principal
Interest
2023
$1,335,000
$598,625
$550,000 $26,172
$8,865,000
$1,874,625
$10,750,000
$2,499,422
2024
1,395,000
530,375
570,000 8,892
5,125,000
1,524,875
7,090,000
2,064,142
2025
1,465,000
458,875
- -
5,630,000
1,256,000
7,095,000
1,714,875
2026
1,535,000
383,875
6,165,000
961,125
7,700,000
1,345,000
2027
1,610,000
305,250
6,740,000
638,500
8,350,000
943,750
2028 - 2031
5,300,000
405,750
-
9,400,000
359,750
14,700,000
765,500
Total
$12,640,000
$2,682,750
$1,120,000 $35,064
$41,925,000
$6,614,875
$55,685,000
$9,332,689
31
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Page 54 of 114
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2022
NOTE 6 — LONG-TERM DEBT (Continued)
C. 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, 2022 amounted to $13,760,000.
D. 2021 Wastewater Revenue Certificates of Participation
On June 1, 2021, the District issued new Wastewater Revenue Certificates of Participation. The
2021 Wastewater Revenue Certificates of Participation was issued for $50,570,000. The
Certificates were issued to finance certain improvements to the Wastewater System which is
owned and operated by the District. The repayment of the Certificates will come from the
revenues derived from operation of the Wastewater System, tax revenues, consisting of the ad
valorem property taxes received by the District. The first principal payment is due on March 1,
2022 and then September 1 of each year thereafter. Yield ranges from 0.05% to 0.62% for the
Certificates. The outstanding balance at June 30, 2022 amounted to $41,925,000.
E. Compensated Absences
The liability for vested vacation, compensatory time, and sick pay is recorded as an expense when
earned. 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.
32
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Page 55 of 114
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2022
NOTE 6 — LONG-TERM DEBT (Continued)
The changes in compensated absences were as follows for fiscal year ended June 30, 2022:
Beginning Balance
$5,094,092
Additions
1,364,591
Payments
(185,808)
Ending Balance
$6,272,875
Current Portion
$627,288
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.
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 the fiscal year ended June 30, 2021, where the primary risks facing the agency
are identified, monitored and reported on to the Board.
A. Insurance Coverage
The District's insurance coverage as of June 30, 2022 is as follows:
Type of Coverage
All -Risk Property:
Special Form Property
Crime
Liability:
Fiduciary Liability Insurance
Pollution- General Liability
Commercial Environment Excess
Excess Liability
Excess Following Form Liability Policy
Excess Following Form Liability Policy
Employment Practice Liability
Workers' Compensation:
Excess Workers' Compensation
Self Insured
Deductible Per
Insurer Limits Occurrence
Alliant Property Insurance Program
$647,243,248
$250,000
National Union Fire Ins. Company
1,000,000
2,500
Hudson Insurance Company
1,000,000
-
Aspen Specialty Ins. Company
1,000,000
5,000 - 50,000
Aspen Specialty Ins. Company
1,000,000
5,000 - 50,000
Safety National Casualty Company
10,000,000
500,000
Allied World Assurance Company (U.S.), Inc.
5,000,000
-
Hallmark Speialty
5,000,000
-
Indian Harbor Insurance Company
500,000
35,000
Safety National Casualty Corporation
Statutory
33
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Page 56 of 114
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2022
NOTE 7 — RISK MANAGEMENT (Continued)
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, 2022 to be
$1,504,476.
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 December 23, 2020. 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, 2022, 2021, and 2020, settlements have not exceeded insurance
coverage. Changes in the District's estimated liability for retained losses are summarized as
follows as of June 30:
Beginning balance
Provisions for claims incurred in the current
year and changes in the liability for
retained -losses incurred in prior years
Claims paid and/or adjustments
Ending balance
2022 2021 2020
$1,455,065 $1,221,293 $1,157,797
202,162 596,645 257,075
(152,751) (362,873) (193,579)
$1,504,476 $1,455,065 $1,221,293
The District's Self Insurance fund also maintains a reserve of $7.5 million for catastrophic losses.
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 $16,086,801 and $7,799,702 respectively, for the year ended June 30, 2022, for a total of
$23,934,463.
34
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Page 57 of 114
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2022
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, 2021. 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, 1200 Concord Ave.,
Suite 300, Concord, CA 94523 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, 2022, are summarized as follows:
Membership date
Benefit vesting schedule
Benefit payments
Leave cash out pensionable?
Benefit % per year of service
Final pensionable salary formula
Annual benefit cap
Miscellaneous
Prior to January 1, 2013 On or after January 1, 2013
10 years service 5 years service
monthly for life monthly for life
Yes No
2% 2%
Highest 12 consecutive months Annual average of highest 36
consecutive months
Hired before 1/1/1996 -None $153,671
Hired 1/1/1996 - 12/31/2012 -
$290,000
Minimum Retirement age (with benefit reductions) 50 52
Normal retirement age (unreduced benefits) 55 62
Required employee contribution rates 8.47%-15.98% 11.52%
Required employer contribution rates 17.12% 11.40%
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, 2022, the District's contributions to
the Plan were $7,001,200.
Net Pension Asset, Pension Expenses and Deferred Outflows/Inflows of Resources Related to
Pensions - The District reported net pension asset for its proportionate share of the net pension
asset of the Plan in the amount of $53,543,789 for the year ended June 30, 2022.
35
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Page 58 of 114
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2022
NOTE 9 — PENSION PLANS (Continued)
The District's net pension asset for the Plan is measured as the proportionate share of the net
pension liability. The net pension asset of the Plan is measured as of December 31, 2021, and the
total pension liability for the Plan used to calculate the net pension asset was determined by an
actuarial valuation as of December 31, 2020 rolled forward to December 31, 2021 using standard
update procedures. The District's proportion of the net pension asset 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,
2020, 2021 and 2022 were as follows:
Proportionate share of the
Plan Fiduciary Net
Reporting Date for Proportion of the Proportionate share of
Net Pension Liability as a
Pension as a percentage
Employer under GASB 68 Net Pension Net Pension
Covered
percentage of its
of the
as of June 30 Liability (Asset) Liability (Asset)
Payroll
covered payroll
Total Pension Liability
2020 7.420% $64,117,450
$36,087,017
177.67%
85.05%
2021 10.594% 48,886,895
37,131,965
131.66%
89.10%
2022 (22.039%) (53,543,789)
37,667,972
(142.15%)
111.27%
For the year ended June 30, 2022, the District recognized pension expense of $17,732,375. At
June 30, 2022, the District reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
Pension contributions subsequent to measurement date
Differences between expected and actual experience
Changes of assumptions or other inputs
Change in proportion and differences between employer
contributions and proportionate share of contributions
Net difference between projected and actual earnings
Deferred Outflows Deferred Inflows
of Resources of Resources
$2,879,688
11,308,988 ($1,212,926)
37, 852,446 (4,649,486)
70,3 86,428 (2,449,209)
on pension plan investments (171,467,322)
Total $122,427,550 ($179,778,943)
The $2,879,688 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, 2023.
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
2023
2024
2025
2026
Total
$878,508
(32,884,877)
(11,371,838)
(16,852,874)
($60,231,081)
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2022
NOTE 9 — PENSION PLANS (Continued)
Actuarial Assumptions — The total pension liability in the December 31, 2021 actuarial
valuations were determined using the following actuarial assumptions:
Valuation Date
Measurement Date
Actuarial Cost Method
Amortization Method
Actuarial Assumptions:
Discount Rate
Inflation Rate
Payroll Growth
Projected Salary Increase
Cost of Living Adjustments
Investment Rate of Return
Mortality
Miscellaneous
December 31, 2020
December 31, 2021
Entry Age Actuarial Cost Method
Level percent of payroll
6.75%
2.50%
2.75% (1)
3.50% - 14.00%
2.75%
6.75%
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 6.75%
as of December 31, 2021. 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 December 31, 2021.
37
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Page 60 of 114
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2022
NOTE 9 — PENSION PLANS (Continued)
The long-term expected rate of return on pension plan investments was determined in 2022 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
10%
5.40%
Small Cap U.S. Equity
3%
6.17%
Developed International Equity
10%
6.13%
Emerging Markets Equity
9%
8.17%
Core Fixed
4%
0.39%
Short -Term Credit
14%
-0.14%
Cash and Equivalents
3%
-0.73%
Private Equity
15%
10.83%
Private Credit
13%
5.93%
Infrastructure
3%
6.30%
Value Add Real Estate
5%
7.20%
Opportunistic Real Estate
5%
8.50%
Risk Parity
3%
3.80%
Hedge Funds
3%
2.40%
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 Asset (NPA) can be very significant for a relatively small change in the discount
rate. The table below shows the sensitivity of the NPA to a one percent decrease and a one
percent increase in the discount rate at June 30, 2022:
Miscellaneous
1% Decrease 5.75%
Net Pension Liability (Asset) $10,374,707
Current Discount Rate 6.75%
Net Pension Liability (Asset) ($53,543,789)
1% Increase 7.75%
Net Pension Liability (Asset) ($105,897,202)
38
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Page 61 of 114
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2022
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 Mission Square Retirement (formerly ICMA-RC)
for the exclusive benefit of the participants and are not included in the District's financial
statements.
C. 401 (a) Money Purchase 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 $2,675,230 to the Plan during
the years ended June 30, 2022. In addition to contributions made by the District as described
previously, commencing this fiscal year, unrepresented employees elected to make mandatory
irrevocable contributions to the plan.
The 401(a) money purchase plan assets are held in trust with Mission Square Retirement
(formerly ICMA-RC) 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 (OPEB) 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.
39
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Page 62 of 114
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2022
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, 2022:
Active employees
Inactive employees or beneficiaries currently
receiving benefit payments
Inactive employees entitled to but not yet
receiving benefit payments
Total
B. Net OPEB Liability
267
275
0
542
Actuarial Methods and Assumptions — The District's net OPEB liability was measured as of June
30, 2022 and the total OPEB liability used to calculate the net OPEB liability was determined by an
actuarial valuation dated July 1, 2020 that was rolled forward using standard update procedures to
determine the $87,991,154 total OPEB liability as of June 30, 2022, based on the following
actuarial methods and assumptions:
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:
Contribution and Funding Policy
Long -Term Expected Rate ofRetum on
Investments
Discount Rate
General Inflation
Mortality, Disability, Termination,
Retirement
Mortality Improvement
Medical Trend
Dental Trend
Healthcare Participation
for future Retirees
Actuarial
July 1, 2020
June 30, 2022
Entry Age Normal, Level Percent of Pay
District contributes full ADC less benefit payments to PARS trust
Benefits payments paid outside the trust
PARS portfolio: Moderate
5.50% at June 30, 2021
5.50% at June 30, 2022
2.75% Annually
CCCERA 2015-17 Experience Study
Mortality improvement projected generationally with Scale MP-2018
Non -Medicare - 7% for 2022, decreasing to an ultimate rate of 4% in 2076
Medicare (Non -Kaiser) - 6.1% for 2022, decreasing to an ultimate rate of 4% in 2076
Medicare (Kaiser) - 5% for 2022, decreasing to an ultimate rate of 41/o in 2076
3.75% annually
Currently Covered: 100"/u
Currently Waived Coverage: 95%
Self -Pay Board Members: 50%
Changes of assumptions Discount rate was updated based on recent capital market assumptions
Medical trend rate was decreased for Kaiser Senior Advantage plans
Mortality, retirement, disability, and termination rates updated based on
new experience study
Mortality improvement scale was updated to Scale MP-2018
40
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Page 63 of 114
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2022
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, 2020
valuation were based on the results of a July 1, 2020 actuarial experience study for the period of
July 1, 2020 to June 30, 2021.
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:
Asset Class Component
Global Equity
Fixed Income
Real Estate Investment Trust
Cash
Long -Term
Target Expected Real
Allocation Rate of Return
48.0%
4.56%
45.0%
0.78%
2.0%
4.06%
5.0%
-0.50%
Total 100.0%
Discount Rate — The discount rate used to measure the total OPEB liability was 5.50%. 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.
41
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Page 64 of 114
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2022
NOTE 10 — POST EMPLOYMENT HEALTH CARE BENEFITS (Continued)
C.
W
Changes in Net OPEB Liability
The changes in the net OPEB liability follows:
Balance at June 30, 2021
Changes Recognized for the Measurement Period:
Service Cost
Interest on the total OPEB liability
Increase (Decrease)
Total OPEB
Plan Fiduciary
Net OPEB
Liability
Net Position
Liability/(Asset)
(a)
(b)
(a) - (b)
$85,326,987
$84,607,283
$719,704
2,150,741
4,696,247
Changes in benefit terms
Differences between expected and actual experience
Changes of assumptions
Contributions from the employer
5,168,000
Contributions from the employee
Net investment income
(10,230,951)
Benefit payments (4,182,821)
(4,182,821)
Administrative expenses
(221,902)
Net changes 2,664,167
(9,467,674)
Balance at June 30, 2022 $87,991,154
$75,139,609
2,150,741
4,696,247
(5,168,000)
10,230,951
221,902
12,131,841
$12,851,545
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, 2022, 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 (4.50%) or 1-percentage-point higher (6.50%) than the current discount rate:
Net OPEB Liability/(Asset)
Discount Rate -1% Discount Rate Discount Rate +1%
(4.50 %) (5.50%) (6.50%)
$24,846,072 $12,851,545 $3,075,161
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
$1,279,082 $12,851,545 $27,261,199
42
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2022
NOTE 10 — POST EMPLOYMENT HEALTH CARE BENEFITS (Continued)
E. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB
For the year ended June 30, 2022, the District recognized OPEB expense of $2,915,439. At June
30, 2022, the District reported deferred outflows and inflows of resources related to OPEB from the
following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between actual and expected experience $1,981,526 ($1,802,079)
Changes of assumptions 857,421 (285,867)
Net differences between projected and actual earnings on
plan investments 5,463,362
Total $8,302,309 ($2,087,946)
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
2023
$529,562
2024
1,269,831
2025
1,324,679
2026
3,090,291
Total
$6,214,363
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.
43
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Page 66 of 114
CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2022
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 —LEASES
The provisions of GASB Statement 87 were implemented during fiscal year 2022. As part of the
implementation, the District has accounted for certain lessor and lessee transactions that required
the restatement of the beginning balances. As of July 1, 2021, leases receivable and deferred
inflows were restated and increased by $5,092,905 to account for the lessor transactions.
Beginning balances for capital assets and lease liabilities were also increased by $1,165,199 for
lessee transactions. The net effect for the above restatements is zero.
A. Lease Receivable
The District has entered into 10 multi -year leases agreements as the lessor for various parcels of
land. The terms of these leases are between one and ten years and the District will receive
monthly payments from each lessee. The District recognized $578,266 in lease revenue and
$238,843 in interest revenue during the current fiscal year related to these leases. As of June 30,
2022, the District receivable for lease payments was $4,635,788. Also, the District has a deferred
inflow of resources associated with this lease that will be recognized as revenue over the lease
term. As of June 30, 2022, the balance of the deferred inflow of resources was $4,514,638.
Leases Receivable
Land
Balance
June 30, 2021
(as restated)
$5,092,905
Additions Retirements
$457,117
Balance
June 30, 2022
$4,635,788
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2022
NOTE 12 — LEASES (Continued)
B. Lease Payable
A summary of lease transactions for the fiscal year ended June 30, 2022, are as follows:
Leases Payable
Land
Equipment
Total
Balance
June 30, 2021
(as restated)
$827,341
337,858
$1,165,199
Additions
Balance
Retirements
June 30, 2022
$64,784
$762,557
112,609
225,249
$177,393
$987,806
The District has entered into three multi -year lease agreements as lessee for the use of land and
office equipment. An initial lease liability was recorded in the amount of $1,165,199 during the
current fiscal year. As of June 30, 2022, the value of the lease liability was $987,806. The District
is required to make monthly principal and interest payments of $15,347. The leases have a
weighted average interest rate of 0.83%. The value of the right -to -use asset as of the end of the
current fiscal year was $1,165,199 and had accumulated amortization of $191,629.
The future principal and interest lease payments as of June 30, 2022, were as follows:
For the Year
Ended June 30
Principal
Interest
2023
$179,721
$7,666
2024
182,246
6,719
2025
72,805
5,869
2026
75,900
5,134
2027
79,097
4,368
2028-2032
398,037
9,295
$987,806
$39,051
NOTE 13 — COMMITMENTS AND CONTINGENCIES
Total
$187,387
188,965
78,674
81,035
83,466
407,330
$1,026,857
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 $42,848,558 as of June 30, 2022.
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REQUIRED SUPPLEMENTARY INFORMATION
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CENTRAL CONTRA COSTA SANITARY DISTRICT
Cost -Sharing Multiple Employer Defined Benefit Retirement Plan
As of fiscal year ending June 30, 2022
PROPORTIONATE SHARE OF NET PENSION LIABILITY (ASSET)
Last 10 Fiscal Years'
December 31,
Measurement date
2021
2020 2019 2018 2017
2016
2015
2014
Proportion of the net pension
liability
22.04%
10.59 % 7.42 % 6.33 % 7.86 %
6.27 %
6.09 %
7.49 %
Proportionate share of the net
pension liability(asset)
($53,543,789)
$48,886,895 $64,117,450 $90,430,104 $63,806,000
$87,847,116
$91,746,888
$89,535,510
Covered Payrollz
$37,667,972
$37,131,965 $36,087,019 $33,793,159 $33,306,738
$31,584,169
$29,061,743
$29,647,993
Proportionate share of the net
pension liability as a percentage
of covered payroll
-142.15%
131.66% 177.67% 267.60% 191.57%
278.14%
315.70%
302.00%
Fiduciary net position as a
percentage of the total pension
liability
111.27%
89.10% 85.05% 77.86% 83.58%
76.44%
74.14%
73.86%
' The fiscal year ending June 30, 2015 was the first year of implementation
Y Covered payroll represents compensation earnable and pensionable compensation for the measurement period ended December 31 st. Only compensation eamable 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, 2022
SCHEDULE OF CONTRIBUTIONS
Last 10 Years*
2022 2021 2020 2019 2018 2017
2016
2015
Actuarially determined contribution
$7,001,200 $70,944,418 $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
7,001,200 70,9",418 18,046,778 17,520,615 17,880,152 18,043,391
22,752,611
24,451,234
Contribution deficiency (excess)
Covered payroll
$40,916,867 $41,625,151 $40,356,579 $38,479,260 $36,638,935 $35,178,106
$32,675,243
$30,093,339
Contributions as a percentage ofcovered-employee payroll
17.11% 170.43 %*** 44.72% 45.53% 48.80% 51.29%
69.63%
81.25%
Notes to Schedule
Measurement Date:
12/31/2021
Methods and assumptions used to determine contribution rates:
Actuarial cost method
Entry age
Amortization method
Level percentage of payroll, closed
Remaining amortization period
5 years **
Asset valuation method
5-year semi-annually
Inflation
2.75%
Salary increases
3.50%- 14.00%
Investment rate of return
6.75%, net of pension plan investment expense, including inflation
Retirement age
50 years Classic, 52 years PEPRA
Mortality
Pub-2010 General Healthy Retiree Amount -Weighted
Above -Median Mortality Table
* Fiscal year 2015 was the Ist year of implementation.
** Remaining balance of December 31, 2007 UAAL is amortized
over a fixed (decreasing or closed) period with 4 years remaining as of December 31, 2018 and 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. Effective
December 31, 2013, any changes in UAAL due to plan amendments (with the exception of a change due to retirement incentives) will be amortized over a 10-year fixed
period effective with that valuation.
*** Includes one-time payment of $70.8 million to CCCERA to pay down the pension UAAL
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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
Total OPEB Liability
Service Cost
Interest
Changes in benefit terms
Differences between expected and actual experience
Changes of assumptions
Benefit payments
Net change in total OPEB liability
Total OPEB liability - beginning
Total OPEB liability - ending (a)
Plan fiduciary net position
Contributions - employer
Contributions - employee
Adjustment to Beginning Balance
Net investment income
Administrative expense
Benefit payments
Net change in plan fiduciary net position
Plan fiduciary net position - beginning
Plan fiduciary net position - ending (b)
Net OPEB liability - ending (a)-(b)
Plan fiduciary net position as a percentage of
the total OPEB liability
Covered payroll
Net OPEB liability as a percentage
of covered -employee payroll
June 30, 2022
June 30, 2021
June 30, 2020
June 30, 2019
June 30, 2018
June 30, 2017
$2,150,741
$2,249,861
$2,184,331
$2,447,310
$2,370,276
$2,295,667
4,696,247
4,616,239
4,482,146
6,596,612
6,396,063
6,203,230
(27,603,524)
3,219,980
(7,346,935)
(464,535)
3,495,645
(4,182,821)
(4,654,246)
(4,145,654)
(5,697,440)
(5,571,750)
(5,404,627)
2,664,167
4,967,299
2,520,823
(28,108,332)
3,194,589
3,094,270
85,326,997
80,359,689
77,938,865
105,947,197
102,752,608
99,658,339
$87,991,154
$85,326,987
$80,359,688
$77,838,865
$105,947,197
$102,752,608
$5,168,000
$4,654,246
$5,395,654
$7,280,240
$9,649,750
$10,433,327
(138,800)
(10,230,951)
14,958,207
2,994,909
4,920,923
3,354,822
4,735,576
(221,902)
(200,304)
(182,833)
(174,362)
(164,446)
(5,404,627)
(4,182,821)
(4,654,246)
(4,145,654)
(5,697,440)
(5,571,750)
(139,063)
(9,467,674)
14,619,103
4,062,076
6,329,361
7,268,376
9,625,213
84,607,283
69,988,180
65,926,104
59,596,743
52,328,367
42,703,154
$75,139,609
$84,607,283
$69,988,180
$65,926,104
$59,596,743
$52,328,367
$12,851,545
$719,704
$10,371,508
$11,912,761
$46,350,454
$50,424,241
85.39%
99.16%
87.09%
84.70%
56.25%
50.93%
$40,961,867
$41,625,151
$40,356,579
$38,479,260
$36,638,935
$35,178,106
Notes to schedule:
* Fiscal year 2017 was the first year of implementation.
31.37% 1.73 % 25.70% 30.96% 126.51% 143.34%
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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,
2022 2021 2020 2019
2018 2017
Actuarially determined contribution
$3,324,000 $3,917,000 $3,906,000 $7,524,000
$7,866,000 $7,866,000
Contributions in relation to the
actuarially determined contribution
5,168,000 4,654,246 5,395,654 7,280,240
10,433,327 10,433,327
Contribution deficiency (excess)
($1,844,000) ($737,246) ($1,489,654) $243,760
($2,567,327) ($2,567,327)
Covered payroll
$40,961,867 $41,625,151 $40,356,579 $38,479,260
$36,638,935 $35,178,106
Contributions as a percentage of
covered payroll
12.62% 11.18% 13.37% 18.92%
28.48% 29.66%
Notes to Schedule
Methods and assumptions used to determine contribution rates:
Valuation Date
July 1, 2020
Actuarial Cost Method:
Entry Age Normal, Level Percent of Pay
Amortization Method:
Level dollar
Asset Valuation Method:
Investment gains and losses spread over 5-year rolling period
Actuarial Assumptions:
Discount Rate
5.50% at June 30, 2022
General Inflation
2.75% Annually
Medical Trend
Non -Medicare - 7% for 2022, decreasing to an ultimate rate of 4% in 2076
Medicare (Non -Kaiser) - 6.1% for 2022, decreasing to an ultimate rate of 4% in 2076
Medicare (Kaiser) - 5% for 2022, decreasing to an ultimate rate of 4% in 2076
Dental Trend
3.75% annually
Mortality Rate
CCCERA 2012-2014 Experience Study
Mortality Improvement
Mortality improvement projected generationally with Scale MP-2018
* Fiscal year 2017 was the first year of
implementation.
51
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SUPPLEMENTARY INFORMATION
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ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Restricted cash and equivalents
Short term investments
Accounts receivable
Employee computer loans receivable
Interest receivable
Current portion of lease receivable
Due from other funds
Supplies & material inventory
Prepaid expenses
Total current assets
NON -CURRENT ASSETS:
Assessment Districts receivable
Non -current portion of lease receivable
Net Pension Asset
CAPITAL ASSETS
Nondepreciable
Depreciable, net of accumulated depreciation
Total capital assets, net
Total non -current assets
TOTAL ASSETS
DEFERRED OUTFLOWS OF RESOURCES
Pension related
OPEB related
Total deferred outflows
LIABILITIES
CURRENT LIABILITIES:
Accounts payable and accrued expenses
Salaries & benefits payable
Interest payable
Current portion of lease payabale
Current portion of long-term obligations
Accrued compensated absences - current portion
Liability for uninsured claims
Refundable deposits
Due to other funds
Total current liabilities
NON -CURRENT LIABILITIES:
Non -current portion of long-term obligations
Accrued compensated absences, noncurrent portion
Non -current portion of lease payable
Net OPEB liability
Total noncurrent liabilities
TOTAL LIABILITIES
DEFERRED INFLOWS OF RESOURCES
Pension related
OPEB related
Lease related
Total deferred inflows
NET POSITION
Net investment in capital assets
Restricted for debt service
Unrestricted
TOTAL NET POSITION
CENTRAL CONTRA COSTA SANITARY DISTRICT
COMBINING SCHEDULE OF NET POSITION
ENTERPRISE SUB -FUNDS
JUNE 30, 2022
Running Sewer Self Debt
Expense Construction Insurance Service Elimination Total
$13,364,433
$6,004,247
$19,368,680
41,954
$14
41,968
31,940,000
80,500,000
$11,100,000
123,540,000
18,267,149
7,870,337
26,137,486
10,212
10,212
118,739
151,677
18,824
289,240
502,430
502,430
466,883
($466,883)
4,127,524
4,127,524
655,357
6,842
662,199
69,494,681
94,533,103
11,118,824
14
174,679,739
1,416,297
1,416,297
4,133,358
4,133,358
53,543,789
53,543,789
118,401,159
118,401,159
694,343,750
694,343,750
812,744,909
812,744,909
870,422,056
1,416,297
871,838,353
939,916,737
95,949,400
11,118,824
14
1,046,518,092
122,427,550
122,427,550
8,302,309
8,302,309
130,729,859
130,729,859
1,932,222
9,018,821
1,917
10,952,960
2,119,705
59,973
2,179,678
61,344
344,917
920,936
1,327,197
179,721
179,721
10,750,000
10,750,000
627,288
627,288
1,504,476
1,504,476
271,681
163,045
434,726
466,883
(466,883)
5,191,961
9,586,756
1,973,276
11,670,936
27,956,046
53,360,320
53,360,320
5,645,587
5,645,587
808,085
808,085
12,851,545
12,851,545
19,305,217
53,360,320
72,665,537
24,497,178
9,586,756
1,973,276
65,031,256
100,621,583
179,778,943
2,087,946
4,514,638
186,381,527
179,778,943
2,087,946
4,514,638
186,381,527
811,757,103 (64,110,320) 747,646,783
14 14
48,010,788 86,362,644 9,145,548 (920,936) 142,598,044
$859,767,891 $86,362,644 $9,145,548 ($65,031,242) $890,244,841
54
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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, 2022
OPERATING REVENUES
Sewer service charges (SSC)
Service charges - City of Concord
Miscellaneous charges
Total operating revenues
OPERATING EXPENSES
Salaries & benefits
Contracted services
Utilities & fuel
Chemicals
General supplies
Other operating expenses
Loss (gain) on sale of asset
Depreciation expense
Amortization expense
Total operating expenses
OPERATING INCOME (LOSS)
NONOPERATING REVENUES (EXPENSES)
Property taxes
Permit and inspection fees
Grants
Interest earnings
Interest expense
Other income (expense), net
Total nonoperating revenues
NET INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS
CAPITAL CONTRIBUTIONS AND TRANSFERS
Other government revenue - Concord
Customer contributions to capital
Capital contributions - connection fees
Non -exchange capital contributions/donations
Total capital contributions
Transfers In (Out)
CHANGE IN NET POSITION
NET POSITION, BEGINNING OF YEAR
NET POSITION, END OF YEAR
Running Sewer Self Debt
Expense Construction Insurance Service Elimination Total
$99,104,227 $1,576,419
$100,680,646
16,086,801
16,086,801
2,164,237
2,164,237
117,355,265 1,576,419
118,931,684
55,911,207
55,911,207
9,186,464
434,339
$2,201
9,623,004
6,524,066
6,524,066
1,820,344
1,820,344
2,627,899
2,627,899
1,064,709
1,205,964
9,183 ($22,749)
2,257,107
1,075,200 ($135,857)
939,343
22,516,574
22,516,574
528,195
528,195
101,254,658 (135,857)
1,640,303
11,384 (22,749)
102,747,739
16,100,607 135,857
(63,884)
(11,384) 22,749
16,183,945
8,856,057
12,383,363
21,239,420
2,048,087
260,308
2,308,395
996,177
996,177
376,720
342,006
33,830
20,353
772,909
(8,508)
(1,942,333)
(1,950,841)
824,264
232,890
22,749
(22,749)
1,057,154
4,236,740
9,691,261
56,579
10,461,383 (22,749)
24,423,214
20,337,347
9,827,118
(7,305)
10,449,999
40,607,159
7,799,702
7,799,702
10,267,767
10,267,767
4,584,973
4,584,973
1,496,013
1,496,013
1,496,013
22,652,442
24,148,455
70,936,093
(39,207,710)
2,700,000
(34,428,383)
92,769,453
(6,728,150)
2,692,695
(23,978,384)
64,755,614
766,998,438
93,090,794
6,452,853
(41,052,858)
825,489,227
$859,767,891
$86,362,644
$9,145,548
($65,031,242)
$890,244,841
55
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December 19, 2022 Special FINANCE Committee Meeting Agenda Packet - P37 f 19
Central Contra Costa Sanitary District
Changes in Net Position and Statement of Net Position
Last Ten Fiscal Years
Changes in Net Position
2012-2013
2013-2014
2014-2015
2015-2016
2016.2017
2017-2018
2018-2019
2019-2020
2020-2021
2021-2022
Operating Revenues:
Sewer Service Charges(SSC)
$56,770,984
$60,796,421
$70,023,512
$72,233,903
$73,138,235
$75,824,221
$68,656,908
$70,408,903
$72,325,340
$100,680,646
City of Concord
10,483,421
11,625,864
12,892,945
13,913,960
13,851,253
14,973,623
15,205,292
14,923,591
15,002,567
16,086,801
Other Service Charges
1,076,401
1,035,134
1,006,197
963,014
1,029,500
1,078,594
1,126,239
1,176,242
1,171,378
-
Miscellaneous Charges
751,880
544,589
593,780
623,659
606,453
619,997
689,727
714,043
743,276
2,164,237
Total Operating Revenue
69,082,686
74,002,008
84,516,434
87,734,536
88,625,441
92,496,435
85,678,166
87,222,779
89,242,561
118,931,684
Operating Expenses:
Salaries & Benefits
49,811,218
58,954,452
66,104,630
63,988,158
62,342,392
68,862,484
65,071,382
62,672,096
134,187,829
55,538,097
Chemicals, Utilities & Supplies
7,401,103
8,063,309
7,466,490
7,304,619
8,115,004
7,477,602
8,093,144
8,088,750
8,738,404
10,972,308
Professional & Outside Services
2,836,638
3,995,860
3,322,881
4,196,302
3,891,224
2,988,280
3,276,763
2,684,034
4,160,807
5,404,618
Hauling, Disposal, Repairs & Maintenance
4,239,421
4,041,355
4,758,260
5,780,533
5,662,086
5,461,011
5,755,590
5,435,406
5,751,355
3,781,839
Self-insurance (net of transfers)
159,961
214,290
496,381
72,486
(300,108)
(332,483)
1,039,444
1,110,798
550,000
1,640,304
Pension/OPEB Expense
-
-
(3,012,757)
(9,778,389)
(4,080,558)
1,104,358
(33,307,168)
(2,386,849)
(70,933,999)
373,099
Depreciation
21,596,266
21,892,545
22,740,942
22,885,030
22,892,153
21,561,704
20,983,353
21,253,062
21,531,302
23,044,768
All Other
2,693,135
2,346,583
2,473,963
3,343,778
2,942,592
2,558,122
2,366,416
1,858,144
1,459,081
1,992,706
Total Operating Expenses
88,737,742
99,508,394
104,350,790
97,792,517
101,464,785
109,681,078
73,278,924
100,715,441
105,444,779
102,747,739
Operating Loss
(19,655,056)
(25,506,386)
(19,834,356)
(10,057,981)
(12,839,344)
(17,184,643)
12,399,242
(13,492,662)
(16,202,218)
16,183,945
Non -Operating Revenues (Expenses):
Property Taxes
13,010,477
13,093,841
14,083,331
14,835,167
16,318,874
17,650,741
18,251,794
18,876,886
20,516,826
21,239,420
Connection & Other Fees
1,169,809
1,575,251
1,843,942
2,546,723
2,600,888
2,592,137
2,648,708
2,251,245
2,440,187
2,308,395
Interest Income
405,474
359,288
318,475
562,308
761,838
1,223,349
2,573,964
2,310,269
1,678,028
772,909
Interest Expense
(1,802,084)
(1,996,689)
(1,523,127)
(1,427,641)
(1,313,398)
(1,230,680)
(1,025,006)
(604,851)
(542,226)
(1,950,841)
All Other*
951,100
932,464
1,828,530
1,195,095
966,244
1,075,838
1,424,520
1,219,811
3,193,569
2,053,331
Total Non -Operating
13,734,776
13,964,155
16,551,151
17,711,652
19,334,446
21,311,385
23,873,980
24,053,360
27,286,384
24,423,214
Income Before Contributions and Transfers
(5,920,280)
(11,542,231)
(3,283,205)
7,653,671
6,495,102
4,126,742
36,273,222
10,560,698
11,084,166
40,607,159
Customer Contributions*
8,001,147
10,486,067
6,769,623
11,991,752
16,628,105
20,425,514
36,562,141
44,222,958
40,220,549
18,067,469
Contributed Sewer Lines
939,628
1,462,316
794,218
1,774,168
2,899,042
2,003,614
2,179,641
1,761,808
923,468
1,496,013
Capital Contributions - ConnectionFees
6,091,529
8,224,517
6,673,298
8,543,758
7,044,340
9,331,420
8,145,068
7,083,702
5,500,316
4,584,973
CHANGE IN NET POSITION
9,112,024
8,630,669
10,953,934
29,963,349
33,066,589
35,887,290
83,160,072
63,629,166
57,728,499
64,755,614
Total Net Position - Beginning
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
825,489,227
Prior Period Adjustment - GASB 68 and 71
-
-
(91,692,522)
-
-
-
-
-
-
-
Prior Period Adjustment - GASB 75
(41,552,816)
Total Net Position - Ending
$635,714,997
$644,345,666
$563,607,078
$593,570,427
$626,637,016
$620,971,490
$704,131,562
$767,760,728
$825,489,227
$890,244,841
Statement of Net Position
2012-2013
2013.2014
2014.2015
2015-2016
2016.2017
2017-2018
2018-2019
2019-2020
2020-2021
2021-2022
Net Investment in Capital Assets
$559,523,642
$568,006,023
$573,175,094
$581,844,903
$600,770,254
$623,307,342
$655,586,304
$692,117,172
$684,834,242
$747,646,783
Restricted
4,730,837
4,809,248
4,288,008
4,363,251
4,449,437
4,421,504
(271,370)
2,639
34,929,105
14
Unrestricted
71,460,518
71,530,395
(13,856,024)
7,362,273
21,417,325
(6,757,356)
48,816,628
75,640,917
105,725,880
142,598,044
Total Net Position
$635,714,997
$644,345,666
$563,607,078
$593,570,427
$626,637,016
$620,971,490
$704,131,562
$767,760,728
$825,489,227
$890,244,841
Source: Central Contra Costa Sanitary District Audited Financial Statements
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December 19, 2022 Special FINANCE Committee Meeting Agenda Packet - Page 138 of 194
$180,000,000
$160,000,000
$140,000,000
$120,000,000
$100,000,000
$80,000,000
$60,000,000
$40,000,000
$20,000,000
Central Contra Costa Sanitary District
Revenue By Type
Last Ten Fiscal Years
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
Fiscal Year
■Operating Revenue
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022
Oneratina Revenue
allon-Operating Revenue
Fiscal
Year
Sewer Service
Charges*
City of
Concord
Other Service
Charges
Miscellaneous
Charges
Total
Operating
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
2020-2021
72,325,340
15,002,567
1,171,378
743,276
89,242,561
2021-2022
100,680,646
16,086,801
-
2,164,237
118,931,684
Non-Oneratina Revenue
Fiscal
Year
Property
Taxes
Customer
Contributions *1
Connections
& Other Fees *2
Interest
All
Other
Total Non -Operating
& Contributions
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
2020-2021
20,516,826
41,144,017
7,940,503
1,678,028
3,193,569
74,472,943
2021-2022
21,239,420
19,563,482
6,893,368
772,909
2,053,331
50,522,510
* 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 19, 2022 Special FINANCE Committee Meeting Agenda Packet - Page 139 of 194
$179,000,000
$129,000,000
$79,000,000
�a
0
a $29,000,000
$(21,000,000)
$(71,000,000)
Central Contra Costa Sanitary District
Operating Expenses by Type
Last Ten Fiscal Years
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022
Fiscal Year
El Salaries and Benefits []Chemicals, Utilities & Supplies El Professional & Outside Services ❑Hauling, Disposal, Repairs & Maintenance
❑Self -Insurance Li Depreciation ■Pension/OPEB Expense* ❑AII Other
OPERATING EXPENSES
Fiscal
Year
Salaries
and Benefits
Chemicals, Utilities
& Supplies
Professional &
Outside Services
Hauling, Disposal,
Repairs & Maintenance
Self -Insurance
Depreciation
PensionlOPEB
Expense*
All
Other
Total Operating
Expenses
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
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
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
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
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
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
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
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
2020-2021
134,187,829
8,738,404
4,160,807
5,751,355
550,000
21,531,302
(70,933,999)
1,459,081
105,444,779
2021-2022
55,911,196
10,972,308
5,031,519
3,781,839
1,640,304
23,044,768
373,099
1,992,706
102,747,739
Non -Operating
$1,802,084
1,996,689
1,523,127
1,427,641
1,313,398
1,230,680
1,025,006
604,851
542,226
1,950,841
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 19, 2022 Special FINANCE Committee Meeting Agenda PackER 3 Page 140 of 194
Fiscal Year
2012-2013
2013-2014
2014-2015
2015-2016
2016-2017
2017-2018
2018-2019
2019-2020
2020-2021
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
Operations
Capital Self -Insurance
Total
$344
$27 -
$371
365
40 -
405
416
23 -
439
422
49 -
471
432
71 -
503
447
83 -
530
400
167 -
567
408
190 -
598
277
352 -
629
2021-2022 1 $442 $209 $10 $660
Fiscal Year
2012-2013
2013-2014
2014-2015
2015-2016
2016-2017
2017-2018
2018-2019
2019-2020
2020-2021
Multi -Family Annual Sewer Service Charge (SSC) *1
Operations
Capital Self -Insurance
Total
$344
$27 -
$371
365
40 -
405
416
23 -
439
415
48 -
463
418
69 -
487
432
81 -
513
388
161 -
549
386
180 -
566
262
334 -
596
2021-2022 1 $418 $198 $9 $625
Facility
Capacity Fee `2
$5,797
5,930
5,995
6,005
5,948
6,300
6,700
6,589
6,803
$6,803
Pump
Zone Fee *3
`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
$1,625
1,587
1,585
1,650
1,608
1,639
1,636
1,586
1,585
$1,585
S-4
December 19, 2022 Special FINANCE Committee Meeting Agenda Packet - Page 141 of 194
Fiscal Year
Central Contra Costa Sanitary District
Assessed and Estimated Actual Valuation of Taxable Property
Last Ten Fiscal Years
Fiscal Year
Local Secured
Unsecured
Total
% Change
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
108,704,671,836
1,863,018,759
110,567,690,595
5.5%
2020-2021
110,795,231,142
1,848,644,910
112,643,876,052
1.9%
2021-2022
115,098,221,080
1,974,850,316
117,073,071,396
3.9%
Property Tax and Sewer Service Charge Fees Levied and Collected
Last Ten Fiscal Years
Property Tax*
Levied & Collected
Collection
Percentage % Change
Sewer Service Charges*
Levied & Collected
Collection
Percentage % Change
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%
2020-2021
20,233,423
100%
4.6%
100,603,114
100%
-0.3%
2021-2022
22,323,425
100%
10.3%
108,725,443
100%
8.1 %
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 19, 2022 Special FINANCE Committee Meeting Agenda Packet-- Page 142 of 194
Customer
City of Concord 1.
First Walnut Creek Mutual
Park Regency Apartments
Contra Costa County General Services 2.
Second Walnut Creek Mutual Apts
John Muir Health 2.
Sun Valley Mall
St. Marys College Contract
Branch Creek Vista Apartments
Bay Landing Apartments
Chevron Offices & Office Park
Kaiser Foundation Hospital 2.
Archstone Apartments
Muirland @ Windemere Apartments
Willows Shopping Center 2.
San Ramon Unified School District
Total
Customer
City of Concord 1.
First Walnut Creek Mutual
Park Regency Apartments
Second Walnut Creek Mutual Apts
John Muir Health 2.
Branch Creek Vista Apartments
Bay Landing Apartments
Kaiser Foundation Hospital 2.
Muirland @ Windemere Apartments
Archstone Apartments
Contra Costa County General Services 2.
Sun Valley Mall
St. Marys College Contract
San Ramon Unified School District
Bishop Ranch City Center
Willows Shopping Center 2.
Total
Central Contra Costa Sanitary District
Sewer Service Charge
Ten Largest Customers
Last Ten Fiscal Years
2012-2013
2013-2014
2014-2015
2015-2016
2016-2017
Sewer Service
Percentage of
Sewer Service
Percentage of
Sewer Service
Percentage of
Sewer Service
Percentage of
Sewer Service
Percentage of
Charges
Total Sewer
Charges
Total Sewer
Charges
Total Sewer
Charges
Total Sewer
Charges
Total Sewer
Collected
Rank
Service Charges
Collected
Rank
Service Charges
Collected
Rank
Service Charges
Collected
Rank
Service Charges
Collected
Rank
Service Charges
$10,483,421
1
13.93%
$11,625,864
1
14.02%
$12,892,945
1
14.38%
$13,913,960
1
14.18%
$13,851,253
1
13.37%
352,450
2
0.47%
361,260
4
0.44%
417,050
3
0.47%
439,850
3
0.45%
462,650
3
0.45%
330,932
3
0.44%
303,750
5
0.37%
391,588
4
0.44%
412,996
4
0.42%
434,404
4
0.42%
321,803
4
0.43%
384,750
3
0.46%
451,567
2
0.50%
638,608
2
0.65%
547,943
2
0.53%
278,250
5
0.37%
211,866
6
0.26%
329,250
5
0.37%
347,250
5
0.35%
365,250
5
0.35%
176,381
6
0.23%
145,091
10
0.18%
-
-
218,919
7
0.22%
322,601
6
0.31%
174,038
7
0.23%
148,374
8
0.18%
299,697
6
0.33%
283,613
6
0.29%
298,005
7
0.29%
158,480
8
0.21%
-
-
-
-
-
-
-
-
148,400
9
0.20%
162,000
7
0.20%
175,600
7
0.20%
194,800
9
0.19%
133,560
10
0.18%
145,800
9
0.18%
158,040
9
0.18%
-
-
-
-
419,590
2
0.51%
-
-
-
-
-
-
-
-
158,848
8
0.18%
186,232
10
0.19%
186,281
10
0.18%
153,650
10
0.17%
-
-
-
-
153,650
10
0.17%
-
-
-
-
206,210
9
0.21%
-
-
215,044
8
0.22%
225,339
8
0.22%
$12,557,715
16.69%
$13,908,345
16.78%
$15,581,885
17.37%
$16,862,681
17.18%
$16,888,526
16.30%
2017-2018
2018-2019
2019-2020
2020-2021
2021-2022
Sewer Service
Percentage of
Sewer Service
Percentage of
Sewer Service
Percentage of
Sewer Service
Percentage of
Sewer Service
Percentage of
Charges
Total Sewer
Charges
Total Sewer
Charges
Total Sewer
Charges
Total Sewer
Charges
Total Sewer
Collected
Rank
Service Charges
Collected
Rank
Service Charges
Collected
Rank
Service Charges
Collected
Rank
Service Charges
Collected
Rank
Service Charges
$14,973,623
1
13.46%
$15,205,292
1
12.63%
$14,923,591
1
11.52%
$15,048,782
1
11.80%
$16,134,761
1
11.97%
487,350
3
0.44%
521,550
2
0.43%
537,700
3
0.42%
537,700
3
0.42%
593,750
2
0.44%
457,596
4
0.41%
489,708
3
0.41%
504,872
4
0.39%
504,872
4
0.40%
557,500
3
0.41%
387,750
5
0.35%
411,750
6
0.34%
424,500
5
0.33%
424,500
5
0.33%
468,750
4
0.35%
278,589
7
0.25%
413,900
5
0.34%
391,245
6
0.30%
362,718
6
0.28%
404,989
5
0.30%
205,200
9
0.18%
219,600
10
0.18%
226,400
10
0.17%
226,400
9
0.18%
250,000
6
0.19%
-
-
-
-
-
-
-
-
225,000
7
0.17%
244,180
9
0.20%
222,277
8
0.16%
-
-
218,750
9
0.16%
-
-
-
-
-
-
198,876
10
0.15%
556,782
2
0.50%
-
-
733,416
2
0.57%
740,223
2
0.58%
-
-
354,208
6
0.32%
453,512
4
0.38%
373,171
7
0.29%
339,061
7
0.27%
-
-
-
-
-
-
242,777
8
0.19%
247,766
8
0.22%
266,550
8
0.22%
283,631
9
0.22%
215,229
10
0.17%
-
-
315,106
7
0.26 %
335,017
8
0.26 %
-
-
188,828
10
0.17%
-
$18,137,692
16.31%
$18,541,148
15.40%
$18,733,543
14.46%
$18,642,262
14.62%
$19,274,654
14.30%
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 19, 2022 Special FINANCE Committee Meeting Agenda Packet - Page 143 of 194
Central Contra Costa Sanitary District
Payments Under the Concord Agreement
Last 10 Fiscal Years
Fiscal Year
Discharge Volume (mg)
Service Charges
Capital Contributions
Total
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
2020-21
3,922
15,048,782
10,064,155
25,112,937
2021-22
3,973
16,134,761
7,799,702
23,934,463
Central Contra Costa Sanitary District
Active Service Accounts and Fiscal Year Billings
Sewer Service Charges
Fiscal Year 2021-2022
2021-2022 Sewer
Percentage of
User Group
No. of Parcels
Service Charge Billings
Residential Unit Equivalents
Total
Residential
115,512
$93,180,965
141,183
84%
Office
1,076
2,978,664
4,513
3%
Mixed Use
232
2,420,806
3,668
2%
Food Service
259
2,248,513
3,407
2%
Hotel/Motel
23
1,063,997
1,612
1 %
Market/Supermarket
53
1,042,407
1,579
1 %
Businesses
414
1,014,399
1,537
1 %
Industrial Permitted
14
902,026
1,367
1%
Automotive/Car Wash
252
780,511
1,183
1%
Schools
160
735,915
1,115
1 %
Skilled Nursing
44
673,628
1,021
1%
Recreation/Entertainment
211
653,335
990
1%
All Other User Groups
532
2,580,047
3,909
2%
Subtotal
118,782
$110, 275, 211
167,084
100%
Partial Year Charges (Counter)
$421,920
Prior Year Adjustments
251,282
Total FY 2021-2022 Sewer Service Charge Revenue
$110,948,413
S-7
December 19, 2022 Special FINANCE Committee Meeting Agenda Packet - Page 144 of 194
Debt Service Paid Each Fiscal Year
$14,000,000
$12,000,000
$10,000,000
$8,000,000
a
o° $6,000,000
$4,000,000
$2,000,000
$0
Summary Of Debt Service
Last Ten Fiscal Years
0
Outstanding Debt Each Fiscal Year
In 2021, the District issued COP's for $58.OM, see Note 6
$75,000,000
$60,000,000
m $45,000,000
0
$30,000,000
$15,000,000
$0
0 0^ o 0 0^ o ory oti oti
ry„L
ryo ,yo ,�o ,�o ,yo ,yo do ryo ,yo 4
Summary By Type Of Debt
Revenue Bonds 2018 & 2009 & COF
Total Debt Service Annual Expense
• =
•
Fiscal
Interest & Total
Interest &
Total
Interest & Total
Rev. Bonds
• -
Year
Principal Amortization Debt Service
Principal
Amortization
Debt Service
Principal Amortization Debt Service
& COP'S
• -
•
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 <a>
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
2020-2021
1,740,000
542,226
2,282,226
1,740,000
542,226
2,282,226
75,733,331
75,733,331
2021-2022
10,450,000
2,125,376
12,575,376
10,450,000
2,125,376
12,575,376
64,110,319
64,110,319
Fiscal
Year
Total
Debt
Service
Operating
Revenue
Total Operating
Expenses less
Depreciation *1
Debt Service Coverage Summar
Non -Operating Debt Service
Revenue & Net Coverage
Contributions Revenue *2 (Net Revenue) *3
Capital
Improvement
Fees/Concord
Adjusted Net
Revenue *4
Debt Service
Coverage
(Adj. Net Revenue) *5
Debt Ratios
Annual Debt Annual Debt Total Debt
Service to Service per Outstanding
Operating Exp. Customer Per Customer
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
2,749,851
87,222,779
79,462,379
77,121,828
84,882,228
30.87
18,476,702
63,795,526
23.20
3.46%
15.93
112.65
2020-2021
2,282,226
89,242,561
83,913,477
73,930,717
79,259,801
34.73
15,564,471
63,695,330
27.91
2.72%
13.32
441.92
2021-2022
1 12,575,376
1 118,931,684
80,231,165
1 50,522,510
1 89,223,029
7.10
12,384,675
1 76,838,354
6.11
15.67%
73.38
374.10
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.
*1 2014-2015 includes implementaion of pension expense reporting changes for GASB 68 & 71.
*2 Net Revenue = Operating Revenue, less Total Operating Expenses less Depreciation, plus Non -Operating Revenue & Contributions.
*3 This ratio must be above 1.00 to meet the Debt Rate Covenant (Net Revenue/Total Debt Service).
*4 Adjusted Net Revenue = Net Revenue less Capital Improvement Fees (Connection Fees) and City of Concord Capital Charges. In FY 2019-20 the Board,
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
must be above (1.25 to meet the Debt RateCovenant(Adjusted Net Revenue/Total Debt Service).
�uToB:eCeniFaTCo �t?a'C�ia�a1nif r fsTr!oTA life-QFinNcfalStaTe7.M a n��t�m����o�!n� ����lda Packet -Page 145 of 194
S-8
Debt Restrictions:
Revenue Pledge & Covenant: The District pledges
Property Tax Revenue along with its ability to raise Sewer
Service Charge (SSC) rates. Debt Coverage requirements
are discussed in the footnotes to the left.
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
2012
326,900
134,200
461,100
2013
332,600
134,900
467,500
2014
335,009
135,856
470,865
2015
339,029
137,357
476,386
2016
340,667
140,916
481,583
2017
344,591
139,654
484,245
2018
348,333
140,590
488,923
2019
352,733
141,542
494,275
2020
342,149
141,480
483,629
2021
352,832
134,497
487,329
Source: Central Contra Costa Sanitary District Environmental Services Division
Employers
Chevron Corporation
Kaiser Permanente
Bio-Rad Laboratories
John Muir Medical Center
La Raza Market
USS-POSCO Industries
Target Corporation
Walmart Stores, Inc.
Doctors Medical Center
Contra Costa Newspaper, Inc.
Shell/Martinez Refinery
Texaco Inc.
All Others
Total
List of Ten Largest Employers in Contra Costa County
Last Year and Nine Years Ago*
2021*
Estimated
% of Total County
Employees
Rank
Employment
10,000+
T-1
2.01 %
10,000+
T-1
2.01 %
1,000-4,999
T-2
0.60%
1,000-4,999
T-2
0.60%
1,000-4,999
T-2
0.60%
1,000-4,999
T-2
0.60%
466,700
498,700
93.58%
2012*
Change
Estimated
% of Total County
Employees
Rank
Employment
1,329
3
0.28%
2,000
2
0.42%
900
9
0.19%
2,200
1
0.46%
1,262
4
0.26%
1,150
5
0.24%
937
7
0.19%
1,140
6
0.24%
900
8
0.19%
800
10
0.17%
465,281
97.36%
100.0% 477,899 100.0%
Source: ` County of Contra Costa, California, Annual Comprehensive Financial Report for June 30, 2021, Statistical Section, principal employers excludes government employers.
S-9
December 19, 2022 Special FINANCE Committee Meeting Agenda Packet - Page 146 of 194
Fiscal Year
Ended
June 30
2U11
2013
2014
2015
2016
2017
2018
2019
2020
2021
Central Contra Costa Sanitary District
Demographic and Economic Statistics
Contra Costa County
Population*
1,079,093
1,095,310
1,110,971
1,126,027
1,138,645
1,147,439
1,150,215
1,153,526
1,152,333
1,161,413
Last Ten Fiscal Years
Personal
Income*
$66,772,041,000
67,290,115,000
71,164,468,000
77,914,957,000
82,204,425,000
87,810,279,000
94,900,003,000
98,423,318,000
106,318,748,000
115,342,618,000
Per Capita
Personal
Income*
$61,878
61,435
64,056
69,195
72,195
76,527
82,506
85,324
92,264
99,312
Average Annual
Unemployment
Rate**
9.0%
7.4%
6.2%
5.0%
4.4%
3.8%
2.7%
7.9%
5.3%
6.4%
U.S. Department of Commerce, Bureau of Economic Analysis. Estimates for 2020-2021 reflect county population estimates available as of November 2022.
— State of California, Employment Development Department (EDD), annual calendar figure.
S-10
December 19, 2022 Special FINANCE Committee Meeting Agenda Packet - Page 147 of 194
Department
Administration
Engineering
Operations
Collection Systems
Plant
Pumping Station
Operations Total
District Total
District Total
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
2013
2014 2015 2016 2017 2018
2019
2020
2021
2022
39
44 46 49 43 43
41
44
51
50
75
73 72 88 88 89
90
89
90
92
56
55 56 55 55 54
54
53
55
55
76
81 88 79 83 81
77
81
75
73
8
8 8 7 7 7
12
7
7
6
140
144 152 141 145 142
143
141
137
134
254
261 270 278 276 274
274
274
278
276
Number of Retirees and Surviving Spouses as of June 30
Last Ten Fiscal Years
244 243 244 249 259 278 268 269 261 275
Source: Central Contra Costa Sanitary District Finance and Human Resources Divisions
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December 19, 2022 Special FINANCE Committee Meeting Agenda Packet - Page 148 of 194
Central Contra Costa Sanitary District
Capital Asset and Operating Statistics
Last Ten Calendar or Fiscal Years
Treatment Plant
Treatment Plant Permitted Capacity
Average Dry Weather Flow (ADWF)
Wastewater Treated per day
Year
2012
2013
Millions of Gallons per Day (mgd)
2014 2015 2016 2017
2018
2019
2020
2021
Calendar
53.8
53.8
53.8 53.8 53.8 53.8
53.8
53.8
53.8
53.8
Calendar
33.2
33.8
30.4 29.1 30.8 33.3
31.8
34.1
33.2
29.5
Calendar
39.8
36.8
35.6 31.8 35.4 43.2
36.0
41.2
35.3
34.6
Tons per Year
Sludge to Furnace (Dry)*1
Fiscal 15,097 14,590 16,789
16,623
17,031
16,279
16,498
16,056
Ash to Reuse Site (Wet)•2
Fiscal 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 1,526 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
15
15
15
Recycled Water
Recycled Water Distribution Pipeline (miles)*3
Calendar 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 1.7 1.7 1.6
1.7
1.5
1.6
1.6
1.6
Number of Recycled Water Customers Sites
Calendar 29 29 29
43
47
47
49
50
Commercial Truck Fill Use (million gallons per year)
Calendar <0.1 <0.1 0.3
4.4
0.4
0.6
0.6
4.6
Commercial Truck Fill Customers
Calendar 2 1 11
37
26
14
13
12
Estimated Residential Fill Station Use (million gallons per year)
Calendar 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
55,552
28,598
11,633
9,780
5,671
'3 In 2021, pipeline miles only include active pressurized recycled water mains and laterals.
Household Hazardous Waste (HHW) - Inception 1997/1998
Program Participation (Number of cars)
Fiscal 29,119 30,379 31,779
33,468
33,037
35,640
36,108
27,818
Percentage of Households in Service Area
Fiscal 15.4% 15.9% 16.6%
16.8%
16.7%
18.1%
18.4%
14.0%
Operating Cost per Car
Fiscal $93 $83 $78
$72
$80
$77
$78
$100
Pounds of HHW per Car
Fiscal 68 66 63
64
65
64
61
61
Pharmaceutical Collection Program - Inception 2009
Number of Collection Sites
Calendar 10 12 13
13
13
13
13
12
Pounds of Expired or Unwanted medications Collected
Calendar 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:
276 full-time equivalent employees (291 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 (8-Collection Sites)
Retail HHW Collection Program
Type Of Treatment: Discharge - Secondary; Reclamation - Tertiary
Service Area: 146 square miles
Total Population Served: 484,795 (HHW service area 517,600)
Sewer Service Charge: $660 for single family homes and $625 for multi -family homes.
Source: Central Contra Costa Sanitary District records
S-12
December 19, 2022 Special FINANCE Committee Meeting Agenda Packet - Page 149 of 194
16,029 15,959
3,410 3,627
1,535 1,535
15 15
14.6 13.5
1.4 1.5
58 53
4.8 5.5
6 9
1.0 5.1
4,635 22,208
35,634 33,658
17.9% 16.7%
$95 $88
76 65
12 8
5,645 5,396
Page 91 of 114
Attachment 2
CENTRAL CONTRA COSTA SANITARY DISTRICT
MEMORANDUM ON INTERNAL CONTROL
AND
REQUIRED COMMUNICATIONS
FOR THE YEAR ENDED
JUNE 30, 2022
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Page 93 of 114
CENTRAL CONTRA COSTA SANITARY DISTRICT
MEMORANDUM ON INTERNAL CONTROL
AND
REQUIRED COMMUNICATIONS
For the Year Ended June 30, 2022
Table of Contents
Page
Memorandum on Internal Control...................................................................................................1
Scheduleof Other Matters.......................................................................................................3
Required Communications.............................................................................................................15
SignificantAudit Matters............................................................................................................15
Qualitative Aspects of Accounting Practices......................................................................15
AccountingEstimates...........................................................................................................17
Corrected and Uncorrected Misstatements..........................................................................17
Disagreements with Management........................................................................................18
Management Representations...............................................................................................18
Management Consultations with Other Independent Accountants
....................................18
Other Audit Findings or Issues.............................................................................................18
OtherMatters...............................................................................................................................18
December 19, 2022 Special FINANCE Committee Meeting Agenda Packet - Page 152 of 194
Page 94 of 114
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Page 95 of 114
U/, M A&ASSO�ZTE
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, 2022, 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.
,04* 2, �- Xu w...,
Pleasant Hill, California
December 8, 2022
Accountancy Corporation
3478 Buskirk Avenue, Suite 215
Pleasant Hill, CA 94523
r 925.930.0902
F 925.930.0135
E mazeamazeassociates.com
w mazeassociates.com
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CENTRAL CONTRA COSTA SANITARY DISTRICT
SCHEDULE OF OTHER MATTERS
FOR THE YEAR ENDED JUNE 30, 2022
2022-01 New GASB Pronouncements Not Yet Effective
NEW GASB PRONOUNCEMENTS OR PRONOUNCEMENTS NOT YET EFFECTIVE
The following comment represents new pronouncements taking affect in the next few years. We cite them here
to keep you informed of developments:
EFFECTIVE FISCAL YEARS 2022, 2023 and 2024:
[fry 3isI171",
The objectives of this Statement are to enhance comparability in accounting and financial reporting and to
improve the consistency of authoritative literature by addressing (1) practice issues that have been identified
during implementation and application of certain GASB Statements and (2) accounting and financial reporting
for financial guarantees. The practice issues addressed by this Statement are as follows:
• Classification and reporting of derivative instruments within the scope of Statement No. 53, Accounting
and Financial Reporting for Derivative Instruments, that do not meet the definition of either an
investment derivative instrument or a hedging derivative instrument
• Clarification of provisions in Statement No. 87, Leases, as amended, related to the determination of the
lease term, classification of a lease as a short term lease, recognition and measurement of a lease
liability and a lease asset, and identification of lease incentives
• Clarification of provisions in Statement No. 94, Public -Private and Public -Public Partnerships and
Availability Payment Arrangements, related to (a) the determination of the public -private and public -
public partnership (PPP) term and (b) recognition and measurement of installment payments and the
transfer of the underlying PPP asset
• Clarification of provisions in Statement No. 96, Subscription -Based Information Technology
Arrangements, related to the subscription -based information technology arrangement (SBITA) term,
classification of a SBITA as a short term SBITA, and recognition and measurement of a subscription
liability
• Extension of the period during which the London Interbank Offered Rate (LIBOR) is considered an
appropriate benchmark interest rate for the qualitative evaluation of the effectiveness of an interest rate
swap that hedges the interest rate risk of taxable debt
• Accounting for the distribution of benefits as part of the Supplemental Nutrition Assistance Program
(SNAP)
• Disclosures related to nonmonetary transactions
• Pledges of future revenues when resources are not received by the pledging government
December 19, 2022 Special FINANCE Committee Meeting Agenda Packet - Page 156 of 194
Page 98 of 114
CENTRAL CONTRA COSTA SANITARY DISTRICT
SCHEDULE OF OTHER MATTERS
FOR THE YEAR ENDED JUNE 30, 2022
GASB 99 —.Omnibus 2022 (Continued)
• Clarification of provisions in Statement No. 34, Basic Financial Statements —and Management's
Discussion and Analysis for State and Local Governments, as amended, related to the focus of the
government -wide financial statements
• Terminology updates related to certain provisions of Statement No. 63, Financial Reporting of Deferred
Ouy7ows of Resources, Deferred Inflows of Resources, and Net Position
• Terminology used in Statement 53 to refer to resource flows statements.
The Requirements of this Statement are Effective as Follows:
The requirements in paragraphs 26-32 related to extension of the use of LIBOR, accounting for SNAP
distributions, disclosures of nonmonetary transactions, pledges of future revenues by pledging governments,
clarification of certain provisions in Statement 34, as amended, and terminology updates related to Statement 53
and Statement 63 are effective upon issuance.
The requirements in paragraphs 11-25 related to leases, PPPs, and SBITAs are effective for fiscal years
beginning after June 15, 2022, and all reporting periods thereafter.
The requirements in paragraphs 4-10 related to financial guarantees and the classification and reporting of
derivative instruments within the scope of Statement 53 are effective for fiscal years beginning after June 15,
2023, and all reporting periods thereafter.
Earlier application is encouraged and is permitted by individual topic.
How the Changes in This Statement Will Improve Financial Reporting
The requirements of this Statement will enhance comparability in the application of accounting and financial
reporting requirements and will improve the consistency of authoritative literature. Consistent authoritative
literature enables governments and other stakeholders to more easily locate and apply the correct accounting and
financial reporting provisions, which improves the consistency with which such provisions are applied. The
comparability of financial statements also will improve as a result of this Statement. Better consistency and
comparability improve the usefulness of information for users of state and local government financial
statements.
4
December 19, 2022 Special FINANCE Committee Meeting Agenda Packet - Page 157 of 194
Page 99 of 114
CENTRAL CONTRA COSTA SANITARY DISTRICT
SCHEDULE OF OTHER MATTERS
FOR THE YEAR ENDED JUNE 30, 2022
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.
December 19, 2022 Special FINANCE Committee Meeting Agenda Packet - Page 158 of 194
Page 100 of 114
CENTRAL CONTRA COSTA SANITARY DISTRICT
SCHEDULE OF OTHER MATTERS
FOR THE YEAR ENDED JUNE 30, 2022
GASB 91— Conduit Debt Oblizations (Continued)
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.
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 parry 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.
6
December 19, 2022 Special FINANCE Committee Meeting Agenda Packet - Page 159 of 194
Page 101 of 114
CENTRAL CONTRA COSTA SANITARY DISTRICT
SCHEDULE OF OTHER MATTERS
FOR THE YEAR ENDED JUNE 30, 2022
GASB 94 — Public -Private and Public -Public Partnerships and Availability Pavment Arrangements
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 noncancelable 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, 2022
GASB 94 — Public -Private and Public -Public Partnerships and Availability Payment Arrangements
(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.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
SCHEDULE OF OTHER MATTERS
FOR THE YEAR ENDED JUNE 30, 2022
GASB 96 — Subscrintion-Based Information Technology Arrangements
This Statement provides guidance on the accounting and financial reporting for subscription -based information
technology arrangements (SBITAs) for government end users (governments). This Statement (1) defines a
SBITA; (2) establishes that a SBITA results in a right -to -use subscription asset —an intangible asset —and a
corresponding subscription liability; (3) provides the capitalization criteria for outlays other than subscription
payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. To
the extent relevant, the standards for SBITAs are based on the standards established in Statement No. 87,
Leases, as amended.
A SBITA is defined as a contract that conveys control of the right to use another parry's (a SBITA vendor's)
information technology (IT) software, alone or in combination with tangible capital assets (the underlying IT
assets), as specified in the contract for a period of time in an exchange or exchange -like transaction.
The subscription term includes the period during which a government has a noncancelable right to use the
underlying IT assets. The subscription term also includes periods covered by an option to extend (if it is
reasonably certain that the government or SBITA vendor will exercise that option) or to terminate (if it is
reasonably certain that the government or SBITA vendor will not exercise that option).
Under this Statement, a government generally should recognize a right -to -use subscription asset —an intangible
asset —and a corresponding subscription liability. A government should recognize the subscription liability at
the commencement of the subscription term, —which is when the subscription asset is placed into service. The
subscription liability should be initially measured at the present value of subscription payments expected to be
made during the subscription term. Future subscription payments should be discounted using the interest rate the
SBITA vendor charges the government, which may be implicit, or the government's incremental borrowing rate
if the interest rate is not readily determinable. A government should recognize amortization of the discount on
the subscription liability as an outflow of resources (for example, interest expense) in subsequent financial
reporting periods.
The subscription asset should be initially measured as the sum of (1) the initial subscription liability amount, (2)
payments made to the SBITA vendor before commencement of the subscription term, and (3) capitalizable
implementation costs, less any incentives received from the SBITA vendor at or before the commencement of
the subscription term. A government should recognize amortization of the subscription asset as an outflow of
resources over the subscription term.
Activities associated with a SBITA, other than making subscription payments, should be grouped into the
following three stages, and their costs should be accounted for accordingly:
• Preliminary Project Stage, including activities such as evaluating alternatives, determining needed
technology, and selecting a SBITA vendor. Outlays in this stage should be expensed as incurred.
• Initial Implementation Stage, including all ancillary charges necessary to place the subscription asset
into service. Outlays in this stage generally should be capitalized as an addition to the subscription asset.
• Operation and Additional Implementation Stage, including activities such as subsequent implementation
activities, maintenance, and other activities for a government's ongoing operations related to a SBITA.
Outlays in this stage should be expensed as incurred unless they meet specific capitalization criteria.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
SCHEDULE OF OTHER MATTERS
FOR THE YEAR ENDED JUNE 30, 2022
GASB 96 — Subscrintion-Based Information Technolo--v Arrangements (Continued
In classifying certain outlays into the appropriate stage, the nature of the activity should be the determining
factor. Training costs should be expensed as incurred, regardless of the stage in which they are incurred.
If a SBITA contract contains multiple components, a government should account for each component as a
separate SBITA or nonsubscription component and allocate the contract price to the different components. If it
is not practicable to determine a best estimate for price allocation for some or all components in the contract, a
government should account for those components as a single SBITA.
This Statement provides an exception for short-term SBITAs. Short-term SBITAs have a maximum possible
term under the SBITA contract of 12 months (or less), including any options to extend, regardless of their
probability of being exercised. Subscription payments for short-term SBITAs should be recognized as outflows
of resources.
This Statement requires a government to disclose descriptive information about its SBITAs other than short-
term SBITAs, such as the amount of the subscription asset, accumulated amortization, other payments not
included in the measurement of a subscription liability, principal and interest requirements for the subscription
liability, and other essential information.
How the Changes in this Statement will Improve Financial Reporting
The requirements of this Statement will improve financial reporting by establishing a definition for SBITAs and
providing uniform guidance for accounting and financial reporting for transactions that meet that definition.
That definition and uniform guidance will result in greater consistency in practice. Establishing the
capitalization criteria for implementation costs also will reduce diversity and improve comparability in financial
reporting by governments. This Statement also will enhance the relevance and reliability of a government's
financial statements by requiring a government to report a subscription asset and subscription liability for a
SBITA and to disclose essential information about the arrangement. The disclosures will allow users to
understand the scale and important aspects of a government's SBITA activities and evaluate a government's
obligations and assets resulting from SBITAs.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
SCHEDULE OF OTHER MATTERS
FOR THE YEAR ENDED JUNE 30, 2022
EFFECTIVE FISCAL YEAR 2023/24:
GASB 100 — Accounting for Changes and Error Corrections
The primary objective of this Statement is to enhance accounting and financial reporting requirements for
accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and
comparable information for making decisions or assessing accountability
This Statement defines accounting changes as changes in accounting principles, changes in accounting
estimates, and changes to or within the financial reporting entity and describes the transactions or other events
that constitute those changes. As part of those descriptions, for (1) certain changes in accounting principles and
(2) certain changes in accounting estimates that result from a change in measurement methodology, a new
principle or methodology should be justified on the basis that it is preferable to the principle or methodology
used before the change. That preferability should be based on the qualitative characteristics of financial
reporting —understandability, reliability, relevance, timeliness, consistency, and comparability. This Statement
also addresses corrections of errors in previously issued financial statements.
This Statement prescribes the accounting and financial reporting for (1) each type of accounting change and (2)
error corrections. This Statement requires that (a) changes in accounting principles and error corrections be
reported retroactively by restating prior periods, (b) changes to or within the financial reporting entity be
reported by adjusting beginning balances of the current period, and (c) changes in accounting estimates be
reported prospectively by recognizing the change in the current period. The requirements of this Statement for
changes in accounting principles apply to the implementation of a new pronouncement in absence of specific
transition provisions in the new pronouncement. This Statement also requires that the aggregate amount of
adjustments to and restatements of beginning net position, fund balance, or fund net position, as applicable, be
displayed by reporting unit in the financial statements.
This Statement requires disclosure in notes to financial statements of descriptive information about accounting
changes and error corrections, such as their nature. In addition, information about the quantitative effects on
beginning balances of each accounting change and error correction should be disclosed by reporting unit in a
tabular format to reconcile beginning balances as previously reported to beginning balances as restated.
Furthermore, this Statement addresses how information that is affected by a change in accounting principle or
error correction should be presented in required supplementary information (RSI) and supplementary
information (SI). For periods that are earlier than those included in the basic financial statements, information
presented in RSI or SI should be restated for error corrections, if practicable, but not for changes in accounting
principles.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
SCHEDULE OF OTHER MATTERS
FOR THE YEAR ENDED JUNE 30, 2022
EFFECTIVE FISCAL YEAR 2024/25:
GASB 101— Compensated Absences
The objective of this Statement is to better meet the information needs of financial statement users by updating
the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the
recognition and measurement guidance under a unified model and by amending certain previously required
disclosures.
Recognition And Measurement
This Statement requires that liabilities for compensated absences be recognized for (1) leave that has not been
used and (2) leave that has been used but not yet paid in cash or settled through noncash means. A liability
should be recognized for leave that has not been used if (a) the leave is attributable to services already rendered,
(b) the leave accumulates, and (c) the leave is more likely than not to be used for time off or otherwise paid in
cash or settled through noncash means. Leave is attributable to services already rendered when an employee has
performed the services required to earn the leave. Leave that accumulates is carried forward from the reporting
period in which it is earned to a future reporting period during which it may be used for time off or otherwise
paid or settled. In estimating the leave that is more likely than not to be used or otherwise paid or settled, a
government should consider relevant factors such as employment policies related to compensated absences and
historical information about the use or payment of compensated absences. However, leave that is more likely
than not to be settled through conversion to defined benefit postemployment benefits should not be included in a
liability for compensated absences.
This Statement requires that a liability for certain types of compensated absences —including parental leave,
military leave, and jury duty leave —not be recognized until the leave commences. This Statement also requires
that a liability for specific types of compensated absences not be recognized until the leave is used.
This Statement also establishes guidance for measuring a liability for leave that has not been used, generally
using an employee's pay rate as of the date of the financial statements. A liability for leave that has been used
but not yet paid or settled should be measured at the amount of the cash payment or noncash settlement to be
made. Certain salary -related payments that are directly and incrementally associated with payments for leave
also should be included in the measurement of the liabilities.
With respect to financial statements prepared using the current financial resources measurement focus, this
Statement requires that expenditures be recognized for the amount that normally would be liquidated with
expendable available financial resources.
Notes To Financial Statements
This Statement amends the existing requirement to disclose the gross increases and decreases in a liability for
compensated absences to allow governments to disclose only the net change in the liability (as long as they
identify it as a net change). In addition, governments are no longer required to disclose which governmental
funds typically have been used to liquidate the liability for compensated absences.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
SCHEDULE OF OTHER MATTERS
FOR THE YEAR ENDED JUNE 30, 2022
GASB 101— Compensated Absences (Continued)
How the Changes in this Statement Will Improve Financial Reporting
The unified recognition and measurement model in this Statement will result in a liability for compensated
absences that more appropriately reflects when a government incurs an obligation. In addition, the model can be
applied consistently to any type of compensated absence and will eliminate potential comparability issues
between governments that offer different types of leave.
The model also will result in a more robust estimate of the amount of compensated absences that a government
will pay or settle, which will enhance the relevance and reliability of information about the liability for
compensated absences.
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t/. M A&ASSO�ZTE
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, 2022. Professional standards require that we communicate to you the following information
related to our audit under generally accepted auditing standards.
Professional standards require that we provide you with information about our responsibilities under generally
accepted auditing standards, as well as certain information related to the planned scope and timing of our
audit. We have communicated such information orally during our discussion with the Audit Committee on July
11, 2022. Professional standards also require that we communicate to you the following information related to
our audit
Significant Audit Matters
Qualitative Aspects of Accounting Practices
Accounting Policies - Management is responsible for the selection and use of appropriate accounting policies.
The significant accounting policies used by the District are included 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
except as follows:
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.
Accountancy Corporation
3478 Buskirk Avenue, Suite 215
Pleasant Hill, CA 94523
r 925.930.0902
F 925.930.0135
E mazeamazeassociates.com
w mazeassociates.com
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The pronouncement became effective, and as disclosed in Note 12 to the financial statements required a
prior period restatement for the cumulative effect on the financial statements. The beginning the
balances of leases receivable and deferred inflows of resources related to leases were $4,748,025 as of
July 1, 2021 and restated and increased the balances in that amount, and the net effect on beginning net
position was zero. The beginning the balances of leases liability and deferred outflow of resources
related to leases were $1,158,111 as of July 1, 2021 and restated and increased the balances in that
amount, and the net effect on beginning net position was zero. See the Leases disclosure in Note 12.
The pronouncement became effective, but did not have a material effect on the financial statements.
GASB 97 — Certain Component Unit Criteria, and Accountinz and Financial Reportinz for Internal
Revenue Code Section 457 Deferred Compensation Plans An Amendment of GASB
Statements No. 14 and No. 84, and a Supersession of GASB Statement No. 32
The primary objectives of this Statement are to (1) increase consistency and comparability related to the
reporting of fiduciary component units in circumstances in which a potential component unit does not
have a governing board and the primary government performs the duties that a governing board
typically would perform; (2) mitigate costs associated with the reporting of certain defined contribution
pension plans, defined contribution other postemployment benefit (OPEB) plans, and employee benefit
plans other than pension plans or OPEB plans (other employee benefit plans) as fiduciary component
units in fiduciary fund financial statements; and (3) enhance the relevance, consistency, and
comparability of the accounting and financial reporting for Internal Revenue Code (IRC) Section 457
deferred compensation plans (Section 457 plans) that meet the definition of a pension plan and for
benefits provided through those plans.
The pronouncement became effective, but did not have a material effect on the financial statements.
GASB 99 — Omnibus 2022
The objectives of this Statement are to enhance comparability in accounting and financial reporting and
to improve the consistency of authoritative literature by addressing (1) practice issues that have been
identified during implementation and application of certain GASB Statements and (2) accounting and
financial reporting for financial guarantees. The Statement contains provisions that are to be
implemented in phases over three fiscal years. The practice issues addressed by this Statement that are
effective in fiscal year 2022 are as follows:
• Extension of the period during which the London Interbank Offered Rate (LIBOR) is
considered an appropriate benchmark interest rate for the qualitative evaluation of the
effectiveness of an interest rate swap that hedges the interest rate risk of taxable debt
• Accounting for the distribution of benefits as part of the Supplemental Nutrition Assistance
Program (SNAP)
• Disclosures related to nonmonetary transactions
• Pledges of future revenues when resources are not received by the pledging government
• Clarification of provisions in Statement No. 34, Basic Financial Statements —and
Management's Discussion and Analysis for State and Local Governments, as amended, related
to the focus of the government -wide financial statements
• Terminology updates related to certain provisions of Statement No. 63, Financial Reporting of
Deferred Ou flows of Resources, Deferred Inflows of Resources, and Net Position
• Terminology used in Statement 53 to refer to resource flows statements.
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The requirements in paragraphs 26-32 of the pronouncement became effective, but did not have a
material effect on the financial statements.
The following pronouncements became effective, but did not have a material effect on the financial statements:
GASB 89 — Accounting for Interest Cost Incurred before the End of a Construction Period
GASB 92 — Omnibus 2020
GASB 93 — Replacement of Interbank Offered Rates
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, 2022. The value
of the District's net pension asset 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, 2022. 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.
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.
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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 8, 2022.
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.
Other Matters
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.
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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 8, 2022
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