HomeMy WebLinkAbout18. Accept the independently audit Annual Comprehensive Financial Report for fiscal year ended June 30, 2022Item 18.
BOARD OF DI RECTORS
POSIT ION PA PER
M E E T ING D AT E:J A NUA RY 19, 2023
S UB J E C T: A C C E P T T HE (1) A UD I T E D A NNUA L C O MP R E HE NS I V E F I NA NC I A L
R E P O RT (A C F R) F O R T HE F I S C A L YE A R E ND E D J UNE 30, 2022,
P E R F O R ME D B Y MA Z E & A S S O C I AT E S , A ND (2) I ND E P E ND E NT
A UD I TO R S' ME MO R A ND UM O N I NT E R NA L C O NT R O L A ND R E Q UI R E D
C O MMUNI C AT I O NS F O R T HE F I S C A L YE A R E ND E D J UNE 30, 2022
GUEST PRESENT ER: DAVID ALVEY, MAZE & ASSOCIATES
S UB M I T T E D B Y:
K E V I N MI Z UNO, F I NA NC E MA NA G E R
I NI T I AT I NG D E PART M E NT:
A D MI NI S T R AT I O N-F I NA NC E
RE V IE WE D B Y:P HI L I P L E I B E R , D I R E C TO R O F F I NA NC E A ND A D MI NI S T R AT I O N
R oger S . B ailey
General Manager
IS S UE
T he audited A C F R of Central S an for the f iscal year ended J une 30, 2022, and the independent auditors'
memorandum on internal control and required communications for the f iscal year ended J une 30, 2022,
are being submitted to the Board f or acceptance.
B AC K G RO UND
Independent Audit Results
T he independent audit firm of Maze & A ssociates has completed their ninth consecutive audit of Central
San's annual financial statements f or the fiscal year ended J une 30, 2022, and has issued their audit
opinion thereon. T he objective of this annually required independent audit is the expression of an opinion
as to whether the basic financial statements are f airly presented, in all material respects, in conformity with
United States Generally A ccepted Accounting Principles (G A A P ) and to report on the f airness of the
supplementary inf ormation in relation to the financial statements taken as a whole. T he audit is conducted
in accordance with Generally A ccepted Auditing Standards in the United States (G A A S). G A A S requires
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the independent auditor to plan and perform the audit to obtain reasonable, but not absolute, assurance
about whether the financial statements are f ree from material misstatement. P rocedures performed
necessary to gather suf f icient audit evidence supporting their opinion are based on a comprehensive
assessment of C entral San's f inancial risks, and incorporate an element of both internal control risks and
inherent business risks. Management is pleased to announce C entral San's independent auditor ’s report
for the f iscal year ended J une 30, 2022, expresses an unmodified (clean) opinion. T he I ndependent
Auditors' R eport including the audit opinion is included on Page 1 of the attached A C F R (Attachment 1).
I n accordance with California Government Code Section 53891, inf ormation f rom the audit is also used
to prepare an annual report f iled with the State C ontroller’s Of f ice (S C O). T his report is referred to as the
F inancial Transactions Report (F T R), and is prepared f ollowing the reporting guidelines published by the
S C O annually. Now that the annual independent audit has been completed, the F T R for the f iscal year
ended J une 30, 2022, will be remitted electronically by the J anuary 31, 2023 reporting deadline. T he
audited f inancial statements will also be sent to the C ontra C osta C ounty Auditor-Controller's Of f ice, the
C ontra C osta C ounty B oard of Supervisors, the B ond R ating A gencies, and posted to the Electronic
Municipal Market A ccess (E MMA ) website as required by continuing disclosure requirements f or Central
San's bond and certif icate debt issuances.
I n accordance with G A A S , in the perf ormance of their audit of the annual financial statements, the
independent auditors evaluated C entral San's internal controls over financial reporting. B ased 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. T he 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
I nternal C ontrol and Required Communications” (A ttachment 2). I n addition to the clean audit opinion,
management is pleased to report there were no significant deficiencies or material misstatements
identif ied by the auditors as part of this year's audit.
Financial Summary
Pursuant to G A A P, as a stand-alone business-type governmental entity, C entral San uses an enterprise
fund format to report its activities for financial statement purposes. Under this enterprise f und f ormat, all
non-f iduciary sub-f unds of the C entral San (i.e., R unning E xpense, S ewer Construction, Self -I nsurance,
D ebt S ervice) are consolidated into a single reporting unit and reported in a Statement of Net P osition;
Statement of R evenues, E xpenses and C hanges in Net Position; and a Statement of C ash F lows. T his
consolidated reporting unit is considered an "opinion unit" and is what Central S an's independent auditors
have rendered their (clean) opinion on. A ccordingly, the emphasis of the annual audited f inancial
statements is at the D istrict-wide level pursuant to G A A P, and not at the sub-f und level.
C entral San's total ending net position increased by $64.8 million or 7.84% in 2021-22. T his increase is
primarily due to the D istrict’s prior year actuarily determined net pension liability of $48.9 million
transf orming into a net pension asset of $53.5 million. T his is attributable to the D istrict paying of f the
actuarially-determined Unf unded Actuarily Accrued L iability (UA A L ) of $70.8 million in J une 2021 in
addition to higher than actuarially projected market returns on pension plan assets f or the year ended
D ecember 31, 2021, which is the measurement date used for the F iscal Year (F Y) 2021-22 G A S B 68
valuation.
GF OA Award Program
T he Government F inance Officers A ssociation (G F O A) is a prof essional association of state/provincial
and local finance of f icers in the United S tates and Canada, and has served the public f inance prof ession
since 1906. T he G F O A established the C ertif icate of A chievement f or E xcellence in F inancial Reporting
Program in 1945 to encourage and assist state and local governments to go beyond the minimum
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requirements of Generally A ccepted Accounting Principles (G A A P ) issued by the Government
Accounting Standards Board (G A S B ), and to prepare an A C F R that provides transparency and f ull
disclosure, and then recognize individual governments that succeed in achieving that goal.
On October 18, 2022, C entral San was awarded a Certificate of Achievement for Excellence in
Financial Reporting by the G F O A f or the report submitted f or the fiscal year ended J une 30, 2021,
representing the 22nd consecutive year Central S an has received the award. T he C ertif icate of
Achievement is the highest form of recognition for excellence in state and local government financial
reporting. I n order to be awarded a C ertif icate of A chievement, a government agency must publish an
easily readable report in a prescribed f ormat report that complies with G A A P, as well as the G F O A
program requirements. T he A C F R includes ten years of Central S an's historical, financial, and statistical
data. T he A C F R provides a concise document for internal management use, as well as external use with
other agencies, and is posted on C entral San's website f or the general public. A C ertif icate of
Achievement is valid for a period of one year.
T he F inance D ivision has prepared the C entral San's A C F R as of J une 30, 2022. Management is
conf ident that the current A C F R continues to meet the Certificate of Achievement for Excellence in
F inancial R eporting P rogram requirements, and intends to submit it to the G F O A to determine its eligibility
for another certificate.
ALT E RNAT I V E S /C O NS I D E RAT IO NS
Acceptance of the audited Annual Comprehensive F inancial Report and the independent auditors'
memorandum on internal control and required communications for the f iscal year ended J une 30, 2022, is
required.
T he B oard could direct staff not to pursue the G F O A award f or the A C F R. However, pursuing the award
is advised, a best practice, and consistent with Central S an's strategic plan and goals to provide
exceptional customer service and maintain an excellent reputation in the community.
F I NANC IAL I M PAC T S
T he acceptance of the audited A C F R f or the comparative fiscal year ended J une 30, 2022, does not have
direct fiscal impact on C entral San.
Staf f intends to submit the attached A C F R to the G F O A for the Certificate of Achievement for
Excellence in Financial Reporting program, f or which there is an application fee f or submission of an
A C F R for review based on total revenues of the entity applying. B ased on this sliding f ee schedule,
C entral San's f ee is expected to be $560. F unding necessary to cover this cost was included in the
adopted budget f or the current f iscal year ending J une 30, 2023.
C O M M I T T E E RE C O M M E ND AT IO N
T he F inance C ommittee reviewed this matter at its meeting on December 19, 2022 and recommended
approval.
RE C O M M E ND E D B O ARD AC T I O N
Accept the draft audited A C F R for the f iscal year ended J une 30, 2022, and the auditors' memorandum
on internal control and required communications for the f iscal year ended J une 30, 2022.
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Strategic Plan Tie-I n
G O A L FO U R : G overnance and Fiscal R esponsibility
Strategy 1 - Promote and uphold ethical behavior, openness, and accessibility, Strategy 3 - Maintain financial stability
and sustainability
AT TAC HM E NT S :
D escription
1. Annual Comprehensive F inancial Report f or f iscal year ended J une 30, 2022
2. Auditors' Memorandum on I nternal C ontrol and Required Communications
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05-01-ACFR-2022
Annual Comprehensive Financial Report
For the Fiscal Year
Ended June 30, 2022
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CENTRAL CONTRA COSTA SANITARY
DISTRICT
MARTINEZ, 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:
Letter of Transmittal ............................................................................................... i
Board of Directors ................................................................................................. ix
Mission Statement ................................................................................................ x
Organization Chart ............................................................................................... xi
Map of 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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05-01-ACFR-2022
Annual Comprehensive
Financial Report
Introduction
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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.
PROFILE OF THE GOVERNMENT
History and Services Provided
The District was established in 1946 under the Sanitary District Act of 1923 and is
located approximately 30 miles east of San Francisco. The District builds, operates and
maintains the facilities required to collect and clean wastewater for approximately
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 25th 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
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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
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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
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O UR V ISION
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
MISSION, VISION,& VALUES
O UR MISSION
To protect public health and the environment
• 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.• INTEGRITY
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.• DIVERSITY, EQUITY,
AND INCLUSION
We value people of all backgrounds,
cultures, and perspectives, and we are committed to the principles of equity and
inclusion.
January 19, 2023 Regular Board Meeting Agenda Packet - Page 168 of 319
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Planning &
Development
Services
General Manager
CENTRAL CONTRA COSTA SANITARY DISTRICT
Organizational Chart - Composite
Electorate
Board Members
Purchasing &
Materials
Services
Secretary of the
District
Human Resources
& Organizational
Development
Internal Auditor
Director of
Finance &
Administration
Director of
Engineering &
Technical Services
Capital
Projects
Director of
Operations
Counsel for the
District
Environmental &
Regulatory
Compliance
Communications
& Interngov.
Relations
Risk Management
Collection
System
Operations
Plant
Maintenance
Plant
Operations
Information
Technology
FinancexiJanuary 19, 2023 Regular Board Meeting Agenda Packet - Page 169 of 319 Page 20 of 115
"
!
Pittsburg
Antioch
Berkeley
Oakland
Hercules
Benicia
San
Pablo
Bay
San
Francisco
Bay
¬«4
¬«24
Orinda
Lafayette
Pleasant Hill
Martinez
Concord
Walnut Creek
Clayton
Moraga
Alamo
Danville
San Ramon
¬«4
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!(1 !(2
!(3
!(4
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!(8!(9!(10 !(11 !(12!(13
!(14
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!(16
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§¨¦680680
§¨¦8080
Suisun Bay
Central Contra Costa Sanitary District Service Area
June 30, 2022 Date: 11/16/2022
"
!
"
!
Wastewater treatment and HHW collection
for 134,497 residents in Concord and Clayton
by contract
Wastewater collection and treatment and
HHW collection for 352,832 people
Legend i
!Central San's Headquarter, Treatment Plant,
and HHW Collection Facility
"Central San's Collection System Operations
Department (sewer maintenance) Building
HHW disposal services only
Pump 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
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
0 2 4
Miles RPrivately Owned Pump Station!(
Pump or Lift Station!(
xii
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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
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05-01-ACFR-2022
Annual Comprehensive
Financial Report
Financials
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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.
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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.
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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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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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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:
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Table 1 – Condensed Statement of Net Position
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.
2022 2021 2020
$ Increase
(Decrease)
% Increase
(Decrease)
$ Increase
(Decrease)
% Increase
(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 18.0%
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%
Liabilities
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% 4,514,638 100.0%
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) -100.0% (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%
Year Ending June 30 2022 vs. 2021 2022 vs. 2020
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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
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
2022 2021 2020
$ Increase
(Decrease)
% Increase
(Decrease)
$ Increase
(Decrease)
% Increase
(Decrease)
Revenues:
Operating revenues
Sewer service charges $116,767,447 $ 87,327,907 $ 85,332,494 $ 29,439,540 33.7% $ 31,434,953 36.8%
Other 2,164,237 1,914,654 1,890,285 249,583 13.0% 273,952 14.5%
Total operating revenue 118,931,684 89,242,561 87,222,779 29,689,123 33.3% 31,708,905 36.4%
Non-operating revenues
Property taxes 21,239,420 20,516,826 18,876,886 722,594 3.5% 2,362,534 12.5%
Permit and inspection fees 2,308,395 2,440,187 2,251,245 (131,792) -5.4% 57,150 2.5%
Investment earnings 772,909 1,678,028 2,310,269 (905,119) -53.9% (1,537,360) -66.5%
Other 2,053,331 3,193,569 1,219,811 (1,140,238) -35.7% 833,520 68.3%
Total non-operating revenue 26,374,055 27,828,610 24,658,211 (1,454,555) -5.2% 1,715,844 7.0%
Total revenues 145,305,739 117,071,171 111,880,990 28,234,568 24.1% 33,424,749 29.9%
Expenses
Operating expense other than depreciation 79,894,599 83,913,477 79,462,379 (4,018,878) -4.8% 432,220 0.5%
Depreciation 22,853,140 21,531,302 21,253,062 1,321,838 6.1% 1,600,078 7.5%
Non-operating expenses 1,950,841 542,226 604,851 1,408,615 259.8% 1,345,990 222.5%
Total expenses 104,698,580 105,987,005 101,320,292 (1,288,425) -1.2% 3,378,288 3.3%
Income before capital contributions 40,607,159 11,084,166 10,560,698 29,522,993 266.4% 30,046,461 284.5%
Capital contributions 24,148,455 46,644,333 53,068,468 (22,495,878) -48.2% (28,920,013) -54.5%
Increase in net position 64,755,614 57,728,499 63,629,166 7,027,115 12.2% 1,126,448 1.8%
Beginning net position 825,489,227 767,760,728 704,131,562 57,728,499 7.5% 121,357,665 17.2%
Ending net position $890,244,841 $825,489,227 $767,760,728 $ 64,755,614 7.8% $122,484,113 16.0%
Year Ending June 30 2022 vs. 2021 2022 vs. 2020
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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
2022 2021 2020
$ Increase
(Decrease)
% Increase
(Decrease)
$ Increase
(Decrease)
% Increase
(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%
Year Ending June 30 2022 vs. 2021 2022 vs. 2020
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The increase in capital assets, net of depreciation, of $52.2 million from 2020-21 to 2021-22 and $101.2
million from 2019-20 to 2021-22 is a result of an expanding capital improvement program over these
years to address expanded capacity to meet increased development, address more stringent regulations
regarding PFAS and other issues, improve the sustainability of operations and technology, and reduce the
District’s environmental footprint. In this timeframe, spending has exceeded annual depreciation and
being largely financed by pay-as-you-go resources (i.e., new revenue and reserves) rather than debt. This
year’s major addition to construction-in-progress includes the following:
Project Description Capital Outlay
Filter Plant & Clearwell Improvements Ph. 1A (7361) 15,563,494$
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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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
CENTRAL CONTRA COSTA SANITARY DISTRICT
STATEMENT OF NET POSITION
JUNE 30, 2022
See accompanying notes to financial statements
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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
STATEMENT OF NET POSITION
JUNE 30, 2022
See accompanying notes to financial statements
CENTRAL CONTRA COSTA SANITARY DISTRICT
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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
CENTRAL CONTRA COSTA SANITARY DISTRICT
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR THE YEAR ENDED JUNE 30, 2022
See accompanying notes to financial statements
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CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $118,944,502
Payments to suppliers (25,220,586)
Payments to employees and related benefits (53,523,454)
Net cash provided by operating activities 40,200,462
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Receipt of taxes 21,239,420
Inspection/permit fees and other non-operating income 3,365,549
Net cash provided by noncapital financing activities 24,604,969
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Capital contributions 19,563,482
Connection fees 4,584,973
Acquisition and construction of capital assets (75,132,106)
Interest paid on long-term debt (864,539)
Principal payments on long-term debt (11,623,011)
Net cash used for capital and related financing activities (63,471,201)
CASH FLOWS FROM INVESTING ACTIVITIES
Redemption of investments 30,000,000
Acquisition of investments (97,000,000)
Interest received 973,100
Net cash provided by investing activities (66,026,900)
NET INCREASE (DECREASE) IN CASH (64,692,670)
Cash, beginning of year 84,103,318
Cash, end of year $19,410,648
CENTRAL CONTRA COSTA SANITARY DISTRICT
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2022
See accompanying notes to financial statements
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Reconciliation of operating (loss) to net cash provided by
operating activities:
Operating income (losses)$16,183,945
Adjustments to reconcile operating losses to cash
flows from operating activities:
Depreciation 22,516,574
Amortization 528,195
Changes in assets and liabilities:
Receivables, net 952,161
Parts and supplies (1,041,330)
Prepaid expenses 1,857,836
Accounts payable and accrued expenses (4,208,797)
Accrued payroll and related expenses 1,178,783
Refundable deposits 157,469
Claims 49,411
Net pension liability 3,412,120
Net OPEB liability (2,252,561)
Lease related 866,656
Net cash provided (used) by operating activities $40,200,462
SCHEDULE OF NON CASH ACTIVITY
Change in fair value of investments $973,100
Capital contributions 24,148,455
Total non cash activity $25,121,555
CASH AND CASH EQUIVALENTS, AS PRESENTED ON
STATEMENT OF NET POSITION:
Unrestricted cash and cash equivalents $19,368,680
Restricted cash and cash equivalents 41,968
Total cash and cash equivalents at end of year $19,410,648
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2022
See accompanying notes to financial statements
CENTRAL CONTRA COSTA SANITARY DISTRICT
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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
I.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 1½ 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 $19,368,680
Short term investments 123,540,000
Restricted cash and cash equivalents 14
Total District Cash and Investments 142,908,694
Cash and Investments held with Pension Trust 41,954
Total Cash and Investments $142,950,648
B. Policies and Practices
The District is authorized under California Government Code to make direct investments in local
agency bonds, notes, or warrants within the State: U.S. Treasury instruments, registered State
warrants or treasury notes, securities of the U.S. Governments, or its agencies, commercial paper,
certificates of deposit placed with commercial banks and/or savings with loan companies, and
certificates of participation. State code and the District’s investment policy prohibit the District
from investing in investments with a rating of less than A or equivalent.
Investments purchases and sales are coordinated by the District’s Treasurer, Contra Costa
County, at the request of the District.
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CENTRAL CONTRA COSTA SANITARY DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the 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 LAIF.
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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 (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 Level 2 Total
Investments Reported at Fair Value:
U.S. Treasury Obligations $48,500,000 $48,500,000
U.S. Federal Agency Securities - FHLB 18,500,000 18,500,000
Total $67,000,000 67,000,000
External Investment Pool (Exempt):
California Local Agency Investment Fund 64,000,000
Investments Exempt from Fair Value Hierarchy:
Restricted Cash 14
Cash and Investments held with Pension Trust 41,954
Cash in bank and On Hand 11,908,680
Total Cash and Investments $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.
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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 (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 LAIF which is regulated by the
California Government Code under the oversight of the Treasurer of the State of California. LAIF is
not registered with the Securities and Exchange Commission. The fair value of the District’s
investment in this pool is reported in the accompanying financial statements at amounts based upon
the District’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in
relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the
accounting records maintained by LAIF, which are recorded on an amortized cost basis. At June 30,
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.
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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 (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.
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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)$23,934,463
Household Hazardous Waste Partners 877,608
All Other 1,325,415
Total Accounts Receivable $26,137,486
Employee Computer Loans Receivable:
The District provides loans to its employees for the purchase of personal computers. These loans
are payable through payroll deductions of $100 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.
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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
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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:
Original Amount
Issue Balance Balance due within
Amount June 30, 2021 Retirements June 30, 2022 one year
2018 Series A Wastewater Revenue
Refunding Bonds
1.39-2.34%, due 9/1/2029 $15,135,000 $13,910,000 $1,270,000 $12,640,000 $1,335,000
2018 Series B Wastewater Revenue
Refunding Bonds
2.62-3.12%, due 9/1/2023 4,315,000 1,655,000 535,000 1,120,000 550,000
2021 Wastewater Revenue Certificates
of Participation
0.05% - 0.62% due 9/1/2028 50,570,000 50,570,000 8,645,000 41,925,000 8,865,000
Total long-term debt 66,135,000 10,450,000 55,685,000 10,750,000
Add: Unamortized premium
Revenue Bonds/Certificates 9,598,331 1,173,011 8,425,320
Total Long-Term Debt, net 75,733,331 $11,623,011 64,110,320 $10,750,000
Less Current Portion (10,450,000)(10,750,000)
Long Term Portion $65,283,331 $53,360,320
B. Debt Service Requirements
The debt service requirements are as follows:
Fiscal Year
Ending
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
Series A Series B TotalCertificates of Participation
2018 Wastewater Revenue Refuding 2021 Wastewater Revenue
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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.
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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:
Self Insured
Deductible Per
Type of Coverage Insurer Limits Occurrence
All-Risk Property:
Special Form Property Alliant Property Insurance Program $647,243,248 $250,000
Crime National Union Fire Ins. Company 1,000,000 2,500
Liability:
Fiduciary Liability Insurance Hudson Insurance Company 1,000,000 -
Pollution- General Liability Aspen Specialty Ins. Company 1,000,000 5,000 - 50,000
Commercial Environment Excess Aspen Specialty Ins. Company 1,000,000 5,000 - 50,000
Excess Liability Safety National Casualty Company 10,000,000 500,000
E xcess Following Form Liability Policy Allied World Assurance Company (U.S.), Inc.5,000,000 -
Excess Following Form Liability Policy Hallmark Speialty 5,000,000 -
Employment Practice Liability Indian Harbor Insurance Company 500,000 35,000
Workers' Compensation:
Excess Workers' Compensation Safety National Casualty Corporation Statutory -
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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:
2022 2021 2020
Beginning balance $1,455,065 $1,221,293 $1,157,797
Provisions for claims incurred in the current
year and changes in the liability for
retained-losses incurred in prior years 202,162 596,645 257,075
Claims paid and/or adjustments (152,751) (362,873) (193,579)
Ending balance $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.
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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
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:
Miscellaneous
Membership date Prior to January 1, 2013 On or after January 1, 2013
Benefit vesting schedule 10 years service 5 years service
Benefit payments monthly for life monthly for life
Leave cash out pensionable?Yes No
Benefit % per year of service 2%2%
Final pensionable salary formula Highest 12 consecutive months Annual average of highest 36
consecutive months
Annual benefit cap Hired before 1/1/1996 - None
Hired 1/1/1996 - 12/31/2012 -
$290,000
$153,671
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.
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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)
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:
Reporting Date for
Employer under GASB 68
as of June 30
Proportion of the
Net Pension
Liability (Asset)
Proportionate share of
Net Pension
Liability (Asset)
Covered
Payroll
Proportionate share of the
Net Pension Liability as a
percentage of its
covered payroll
Plan Fiduciary Net
Pension as a percenta ge
of the
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:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date $2,879,688
Differences between expected and actual experience 11,308,988 ($1,212,926)
Changes of assumptions or other inputs 37,852,446 (4,649,486)
Change in proportion and differences between employer
contributions and proportionate share of contributions 70,386,428 (2,449,209)
Net difference between projected and actual earnings
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 $878,508
2024 (32,884,877)
2025 (11,371,838)
2026 (16,852,874)
Total ($60,231,081)
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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:
Miscellaneous
Valuation Date December 31, 2020
Measurement Date December 31, 2021
Actuarial Cost Method Entry Age Actuarial Cost Method
Amortization Method Level percent of payroll
Actuarial Assumptions:
Discount Rate 6.75%
Inflation Rate 2.50%
Payroll Growth 2.75% (1)
Projected Salary Increase 3.50% - 14.00%
Cost of Living Adjustments 2.75%
Investment Rate of Return 6.75%
Mortality Pub-2010 General Healthy Retiree Amount-Weighted
Above-Median Mortality Table
(1) Plus "across the board" real salary increases of 0.5% per year
Discount Rate – The discount rate used to measure the Total Pension Liability (TPL) was 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.
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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:
Asset Class
Target
Allocation
Long-Term
Expected Real
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)
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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.
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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 267
Inactive employees or beneficiaries currently
receiving benefit payments 275
Inactive employees entitled to but not yet
receiving benefit payments 0
Total 542
B. Net OPEB Liability
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:
Actuarial Assumptions
Valuation Date July 1, 2020
Measurement Date June 30, 2022
Actuarial Cost Method Entry Age Normal, Level Percent of Pay
Actuarial Assumptions:
Contribution and Funding Policy District contributes full ADC less benefit payments to PARS trust
Benefits payments paid outside the trust
PARS portfolio: Moderate
Long-Term Expected Rate of Return on
Investments 5.50% at June 30, 2021
Discount Rate 5.50% at June 30, 2022
General Inflation 2.75% Annually
Mortality, Disability, Termination,
Retirement CCCERA 2015-17 Experience Study
Mortality Improvement Mortality improvement projected generationally with Scale MP-2018
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
Healthcare Participation Currently Covered: 100%
for future Retirees 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
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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)
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:
Long-Term
Target Expected Real
Asset Class Component Allocation Rate of Return
Global Equity 48.0% 4.56%
Fixed Income 45.0% 0.78%
Real Estate Investment Trust 2.0% 4.06%
Cash 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.
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NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2022
NOTE 10 – POST EMPLOYMENT HEALTH CARE BENEFITS (Continued)
C. Changes in Net OPEB Liability
The changes in the net OPEB liability follows:
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability/(Asset)
(a)(b)(a) - (b)
Balance at June 30, 2021 $85,326,987 $84,607,283 $719,704
Changes Recognized for the Measurement Period:
Service Cost 2,150,741 2,150,741
Interest on the total OPEB liability 4,696,247 4,696,247
Changes in benefit terms
Differences between expected and actual experience
Changes of assumptions
Contributions from the employer 5,168,000 (5,168,000)
Contributions from the employee
Net investment income (10,230,951) 10,230,951
Benefit payments (4,182,821) (4,182,821)
Administrative expenses (221,902)221,902
Net changes 2,664,167 (9,467,674) 12,131,841
Balance at June 30, 2022 $87,991,154 $75,139,609 $12,851,545
Increase (Decrease)
D.Sensitivity of the Net OPEB Liability to Changes in the Discount Rate and Healthcare Cost
Trend Rates
The following presents the net OPEB liability of the District at June 30, 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
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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.
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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.
Balance
June 30, 2021 Balance
Leases Receivable (as restated) Additions Retirements June 30, 2022
Land $5,092,905 - $457,117 $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:
Balance
June 30, 2021 Balance
Leases Payable (as restated) Additions Retirements June 30, 2022
Land $827,341 - $64,784 $762,557
Equipment 337,858 - 112,609 225,249
Total $1,165,199 - $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 Total
2023 $179,721 $7,666 $187,387
2024 182,246 6,719 188,965
2025 72,805 5,869 78,674
2026 75,900 5,134 81,035
2027 79,097 4,368 83,466
2028-2032 398,037 9,295 407,330
$987,806 $39,051 $1,026,857
NOTE 13 – COMMITMENTS AND CONTINGENCIES
Commitments and contingencies, undeterminable in amount, include normal recurring pending
claims and litigation. In the opinion of management, based upon discussion with legal counsel,
there is no pending litigation which is likely to have a material adverse effect on the financial
position of the District.
Claims and losses are recorded when they are reasonably probable of being incurred and the
amount is estimable. Insurance proceeds and settlements are recorded when received.
The District has a number of purchase commitments for ongoing operating and capital projects
that involve multi-year contracts. Purchase commitments related to these multi-year contracts are
approximately $42,848,558 as of June 30, 2022.
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REQUIRED SUPPLEMENTARY INFORMATION
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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 Payroll2 $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%
CENTRAL CONTRA COSTA SANITARY DISTRICT
Last 10 Fiscal Years1
PROPORTIONATE SHARE OF NET PENSION LIABILITY (ASSET)
2 Covered payroll represents compensation earnable and pensionable compensation for the measurement period ended December 31st. Only compensation earnable and pensionable
compensation that would possibly go into the determination of retirement benefits are included.
1 The fiscal year ending June 30, 2015 was the first year of implementation.
As of fiscal year ending June 30, 2022
Cost-Sharing Multiple Employer Defined Benefit Retirement Plan
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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 70,944,418 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 of covered-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
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 1st 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.
6.75%, net of pension plan investment expense, including inflation
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Measurement Date June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017
Total OPEB Liability
Service Cost $2,150,741 $2,249,861 $2,184,331 $2,447,310 $2,370,276 $2,295,667
Interest 4,696,247 4,616,239 4,482,146 6,596,612 6,396,063 6,203,230
Changes in benefit terms (27,603,524)
Differences between expected and actual experience 3,219,980 (7,346,935)
Changes of assumptions (464,535)3,495,645
Benefit payments (4,182,821) (4,654,246) (4,145,654) (5,697,440) (5,571,750) (5,404,627)
Net change in total OPEB liability 2,664,167 4,967,299 2,520,823 (28,108,332) 3,194,589 3,094,270
Total OPEB liability - beginning 85,326,987 80,359,688 77,838,865 105,947,197 102,752,608 99,658,338
Total OPEB liability - ending (a)$87,991,154 $85,326,987 $80,359,688 $77,838,865 $105,947,197 $102,752,608
Plan fiduciary net position
Contributions - employer $5,168,000 $4,654,246 $5,395,654 $7,280,240 $9,649,750 $10,433,327
Contributions - employee
Adjustment to Beginning Balance (138,800)
Net investment income (10,230,951) 14,958,207 2,994,909 4,920,923 3,354,822 4,735,576
Administrative expense (221,902) (200,304) (182,833) (174,362) (164,446) (5,404,627)
Benefit payments (4,182,821) (4,654,246) (4,145,654) (5,697,440) (5,571,750) (139,063)
Net change in plan fiduciary net position (9,467,674) 14,619,103 4,062,076 6,329,361 7,268,376 9,625,213
Plan fiduciary net position - beginning 84,607,283 69,988,180 65,926,104 59,596,743 52,328,367 42,703,154
Plan fiduciary net position - ending (b)$75,139,609 $84,607,283 $69,988,180 $65,926,104 $59,596,743 $52,328,367
Net OPEB liability - ending (a)-(b)$12,851,545 $719,704 $10,371,508 $11,912,761 $46,350,454 $50,424,241
Plan fiduciary net position as a percentage of
the total OPEB liability 85.39%99.16% 87.09%84.70%56.25% 50.93%
Covered payroll $40,961,867 $41,625,151 $40,356,579 $38,479,260 $36,638,935 $35,178,106
Net OPEB liability as a percentage
of covered-employee payroll 31.37% 1.73% 25.70%30.96%126.51% 143.34%
Notes to schedule:
* Fiscal year 2017 was the first year of implementation.
CENTRAL CONTRA COSTA SANITARY DISTRICT
POST-RETIREMENT HEALTH CARE DEFINED BENEFIT PLAN
SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS
Single Employer
Last 10 fiscal years*
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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
Actuarial Cost Method:
Amortization Method:
Asset Valuation Method:
Actuarial Assumptions:
Discount Rate
General Inflation
Medical Trend
Dental Trend
Mortality Rate
Mortality Improvement
* Fiscal year 2017 was the first year of implementation.
5.50% at June 30, 2022
2.75% Annually
July 1, 2020
Investment gains and losses spread over 5-year rolling period
Entry Age Normal, Level Percent of Pay
Level dollar
Mortality improvement projected generationally with Scale MP-2018
CCCERA 2012-2014 Experience Study
3.75% annually
Non-Medicare - 7% 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
Medicare (Non-Kaiser) - 6.1% for 2022, decreasing to an ultimate rate of 4% in 2076
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SUPPLEMENTARY INFORMATION
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Running Sewer Self Debt
Expense Construction Insurance Service Elimination Total
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $13,364,433 $6,004,247 $19,368,680
Restricted cash and equivalents 41,954 $14 41,968
Short term investments 31,940,000 80,500,000 $11,100,000 123,540,000
Accounts receivable 18,267,149 7,870,337 26,137,486
Employee computer loans receivable 10,212 10,212
Interest receivable 118,739 151,677 18,824 289,240
Current portion of lease receivable 502,430 502,430
Due from other funds 466,883 ($466,883)
Supplies & material inventory 4,127,524 4,127,524
Prepaid expenses 655,357 6,842 662,199
Total current assets 69,494,681 94,533,103 11,118,824 14 174,679,739
NON-CURRENT ASSETS:
Assessment Districts receivable 1,416,297 1,416,297
Non-current portion of lease receivable 4,133,358 4,133,358
Net Pension Asset 53,543,789 53,543,789
CAPITAL ASSETS
Nondepreciable 118,401,159 118,401,159
Depreciable, net of accumulated depreciation 694,343,750 694,343,750
Total capital assets, net 812,744,909 812,744,909
Total non-current assets 870,422,056 1,416,297 871,838,353
TOTAL ASSETS 939,916,737 95,949,400 11,118,824 14 1,046,518,092
DEFERRED OUTFLOWS OF RESOURCES
Pension related 122,427,550 122,427,550
OPEB related 8,302,309 8,302,309
Total deferred outflows 130,729,859 130,729,859
LIABILITIES
CURRENT LIABILITIES:
Accounts payable and accrued expenses 1,932,222 9,018,821 1,917 10,952,960
Salaries & benefits payable 2,119,705 59,973 2,179,678
Interest payable 61,344 344,917 920,936 1,327,197
Current portion of lease payabale 179,721 179,721
Current portion of long-term obligations 10,750,000 10,750,000
Accrued compensated absences - current portion 627,288 627,288
Liability for uninsured claims 1,504,476 1,504,476
Refundable deposits 271,681 163,045 434,726
Due to other funds 466,883 (466,883)
Total current liabilities 5,191,961 9,586,756 1,973,276 11,670,936 27,956,046
NON-CURRENT LIABILITIES:
Non-current portion of long-term obligations 53,360,320 53,360,320
Accrued compensated absences, noncurrent portion 5,645,587 5,645,587
Non-current portion of lease payable 808,085 808,085
Net OPEB liability 12,851,545 12,851,545
Total noncurrent liabilities 19,305,217 53,360,320 72,665,537
TOTAL LIABILITIES 24,497,178 9,586,756 1,973,276 65,031,256 100,621,583
DEFERRED INFLOWS OF RESOURCES
Pension related 179,778,943 179,778,943
OPEB related 2,087,946 2,087,946
Lease related 4,514,638 4,514,638
Total deferred inflows 186,381,527 186,381,527
NET POSITION
Net investment in capital assets 811,757,103 (64,110,320)747,646,783
Restricted for debt service 14 14
Unrestricted 48,010,788 86,362,644 9,145,548 (920,936)142,598,044
TOTAL NET POSITION $859,767,891 $86,362,644 $9,145,548 ($65,031,242) $890,244,841
CENTRAL CONTRA COSTA SANITARY DISTRICT
COMBINING SCHEDULE OF NET POSITION
ENTERPRISE SUB-FUNDS
JUNE 30, 2022
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Running Sewer Self Debt
Expense Construction Insurance Service Elimination Total
OPERATING REVENUES
Sewer service charges (SSC)$99,104,227 $1,576,419 $100,680,646
Service charges - City of Concord 16,086,801 16,086,801
Miscellaneous charges 2,164,237 2,164,237
Total operating revenues 117,355,265 1,576,419 118,931,684
OPERATING EXPENSES
Salaries & benefits 55,911,207 55,911,207
Contracted services 9,186,464 434,339 $2,201 9,623,004
Utilities & fuel 6,524,066 6,524,066
Chemicals 1,820,344 1,820,344
General supplies 2,627,899 2,627,899
Other operating expenses 1,064,709 1,205,964 9,183 ($22,749)2,257,107
Loss (gain) on sale of asset 1,075,200 ($135,857)939,343
Depreciation expense 22,516,574 22,516,574
Amortization expense 528,195 528,195
Total operating expenses 101,254,658 (135,857)1,640,303 11,384 (22,749)102,747,739
OPERATING INCOME (LOSS)16,100,607 135,857 (63,884)(11,384)22,749 16,183,945
NONOPERATING REVENUES (EXPENSES)
Property taxes 8,856,057 12,383,363 21,239,420
Permit and inspection fees 2,048,087 260,308 2,308,395
Grants 996,177 996,177
Interest earnings 376,720 342,006 33,830 20,353 772,909
Interest expense (8,508)(1,942,333)(1,950,841)
Other income (expense), net 824,264 232,890 22,749 (22,749)1,057,154
Total nonoperating revenues 4,236,740 9,691,261 56,579 10,461,383 (22,749)24,423,214
NET INCOME (LOSS) BEFORE CAPITAL 20,337,347 9,827,118 (7,305)10,449,999 40,607,159
CONTRIBUTIONS AND TRANSFERS
CAPITAL CONTRIBUTIONS AND TRANSFERS
Other government revenue - Concord 7,799,702 7,799,702
Customer contributions to capital 10,267,767 10,267,767
Capital contributions - connection fees 4,584,973 4,584,973
Non-exchange capital contributions/donations 1,496,013 1,496,013
Total capital contributions 1,496,013 22,652,442 24,148,455
Transfers In (Out)70,936,093 (39,207,710)2,700,000 (34,428,383)
CHANGE IN NET POSITION 92,769,453 (6,728,150)2,692,695 (23,978,384)64,755,614
NET POSITION, BEGINNING OF YEAR 766,998,438 93,090,794 6,452,853 (41,052,858)825,489,227
NET POSITION, END OF YEAR $859,767,891 $86,362,644 $9,145,548 ($65,031,242) $890,244,841
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
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Statistics
05-01-ACFR-2022
Annual Comprehensive
Financial Report
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Central Contra Costa Sanitary DistrictChanges in Net Position and Statement of Net PositionChanges in Net Position 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022Operating 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$100,680,646City 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 16,086,801Other Service Charges 1,076,4011,035,134 1,006,197963,014 1,029,500 1,078,594 1,126,239 1,176,242 1,171,378 - Miscellaneous Charges 751,880 544,589 593,780 623,659 606,453 619,997689,727 714,043 743,276 2,164,237Total Operating Revenue 69,082,686 74,002,008 84,516,434 87,734,53688,625,441 92,496,435 85,678,166 87,222,779 89,242,561 118,931,684Operating Expenses:Salaries & Benefits 49,811,21858,954,452 66,104,63063,988,158 62,342,392 68,862,484 65,071,382 62,672,096 134,187,829 55,538,097Chemicals, 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 10,972,308Professional & Outside Services 2,836,638 3,995,860 3,322,881 4,196,302 3,891,224 2,988,280 3,276,763 2,684,0344,160,807 5,404,618Hauling, Disposal, Repairs & Maintenance 4,239,421 4,041,355 4,758,260 5,780,533 5,662,0865,461,011 5,755,590 5,435,406 5,751,355 3,781,839Self-Insurance (net of transfers) 159,961 214,290 496,381 72,486 (300,108) (332,483) 1,039,444 1,110,798 550,000 1,640,304Pension/OPEB Expense - - (3,012,757) (9,778,389) (4,080,558) 1,104,358 (33,307,168) (2,386,849) (70,933,999) 373,099Depreciation 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 23,044,768All Other 2,693,135 2,346,583 2,473,963 3,343,778 2,942,592 2,558,1222,366,416 1,858,144 1,459,081 1,992,706Total Operating Expenses 88,737,742 99,508,394 104,350,790 97,792,517 101,464,785 109,681,078 73,278,924100,715,441 105,444,779 102,747,739Operating 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) 16,183,945Non-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 21,239,420Connection & Other Fees 1,169,8091,575,251 1,843,9422,546,723 2,600,888 2,592,137 2,648,708 2,251,245 2,440,187 2,308,395Interest Income 405,474 359,288318,475 562,308 761,838 1,223,349 2,573,964 2,310,269 1,678,028 772,909Interest 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 2,053,331Total 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 24,423,214Income 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 40,607,159Customer 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 18,067,469Contributed Sewer Lines 939,6281,462,316 794,218 1,774,168 2,899,042 2,003,614 2,179,641 1,761,808 923,468 1,496,013 Capital Contributions - Connection Fees 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 4,584,973CHANGE 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 64,755,614Total Net Position - Beginning 626,602,973 635,714,997 644,345,666563,607,078 593,570,427 626,637,016 620,971,490 704,131,562 767,760,728 825,489,227Prior 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 $890,244,841Statement of Net Position 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022Net 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 $747,646,783Restricted 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 14Unrestricted 71,460,518 71,530,395 (13,856,024) 7,362,273 21,417,325(6,757,356) 48,816,628 75,640,917 105,725,880 142,598,044Total 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$890,244,841Source: Central Contra Costa Sanitary District Audited Financial StatementsLast Ten Fiscal Years S-1January 19, 2023 Regular Board Meeting Agenda Packet - Page 229 of 319 Page 80 of 115
Fiscal Sewer Service City of Other Service Miscellaneous TotalYear Charges* Concord Charges Charges Operating2012-2013 $56,770,984 $10,483,421 $1,076,401 $751,880 $69,082,6862013-2014 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 Fiscal Property Customer Connections All Total Non-Operating Year Taxes Contributions *1 & Other Fees *2 Interest Other & Contributions2012-2013 $13,010,477 $8,940,775 $7,261,338 $405,474 $951,100 $30,569,1642013-2014 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. 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 StatementsOperating RevenueNon-Operating Revenue*1 Customer Contributions include the portion of SSC that is allocated to Sewer Construction Fund, City of Concord reimbursement of capital costs, and $- $20,000,000 $40,000,000 $60,000,000 $80,000,000 $100,000,000 $120,000,000 $140,000,000 $160,000,000 $180,000,0002012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-20192019-2020 2020-2021 2021-2022DollarsFiscal YearCentral Contra Costa Sanitary DistrictRevenue By TypeLast Ten Fiscal YearsOperating RevenueNon-Operating RevenueS-2January 19, 2023 Regular Board Meeting Agenda Packet - Page 230 of 319 Page 81 of 115
Fiscal Salaries Chemicals, Utilities Professional & Hauling, Disposal, Self-Insurance Depreciation Pension/OPEB All Total Operating Non-OperatingYear and Benefits & Supplies Outside Services Repairs & Maintenance Expense* Other Expenses Expenses2012-2013 $49,811,218 $7,401,103 $2,836,638 $4,239,421 $2,380,466 $21,596,266 - $472,630 $88,737,742 $1,802,0842013-2014 58,954,453 8,063,310 3,995,861 4,041,356 858,738 21,892,545 - 1,702,131 99,508,394 1,996,689 2014-2015 66,104,630 7,466,490 3,322,881 4,758,260 1,146,381 22,740,942 ($3,012,757) 1,823,963 104,350,790 1,523,127 2015-2016 63,988,158 7,304,619 4,196,302 5,780,533 1,572,486 22,885,030 (9,778,389) 1,843,778 97,792,517 1,427,641 2016-2017 62,342,392 8,115,004 3,891,224 5,662,086 619,892 22,892,153 (4,080,558) 2,022,592 101,464,785 1,313,398 2017-2018 68,862,484 7,477,602 2,988,280 5,461,011 252,517 21,561,704 1,104,358 1,973,122 109,681,078 1,230,680 2018-2019 65,071,382 8,093,144 3,276,763 5,755,590 1,039,444 20,983,353 (33,307,168) 2,366,416 73,278,924 1,025,006 2019-2020 62,672,096 8,088,750 2,684,034 5,435,406 1,110,798 21,253,062 (2,386,849) 1,858,144 100,715,441 604,851 2020-2021 134,187,829 8,738,404 4,160,807 5,751,355 550,000 21,531,302 (70,933,999) 1,459,081 105,444,779 542,226 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 1,950,841 Informational - not graphedSource: 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".OPERATING EXPENSES $(71,000,000) $(21,000,000) $29,000,000 $79,000,000 $129,000,000 $179,000,0002012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-20192019-2020 2020-2021 2021-2022DollarsFiscal YearCentral Contra Costa Sanitary DistrictOperating Expenses by TypeLast Ten Fiscal YearsSalaries and BenefitsChemicals, Utilities & SuppliesProfessional & Outside ServicesHauling, Disposal, Repairs & MaintenanceSelf-InsuranceDepreciationPension/OPEB Expense*All OtherS-3January 19, 2023 Regular Board Meeting Agenda Packet - Page 231 of 319 Page 82 of 115
FacilityFiscal Year Operations Capital Self-Insurance TotalCapacity Fee *22012-2013 $344 $27 - $371 $5,7972013-2014 365 40 - 405 5,9302014-2015 416 23 - 439 5,9952015-2016 422 49 - 471 6,0052016-2017 432 71 - 503 5,9482017-2018 447 83 - 530 6,3002018-2019 400 167 - 567 6,7002019-2020 408 190 - 598 6,5892020-2021 277 352 - 629 6,8032021-2022 $442 $209 $10 $660 $6,803PumpFiscal Year Operations Capital Self-Insurance TotalZone Fee *32012-2013 $344 $27 - $371 $1,6252013-2014 365 40 - 405 1,5872014-2015 416 23 - 439 1,5852015-2016 415 48 - 463 1,6502016-2017 418 69 - 487 1,6082017-2018 432 81 - 513 1,6392018-2019 388 161 - 549 1,6362019-2020 386 180 - 566 1,5862020-2021 262 334 - 596 1,5852021-2022 $418 $198 $9 $625 $1,585*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 DivisionCentral Contra Costa Sanitary DistrictMajor Revenue Base and RatesHistorical and Current FeesLast Ten Fiscal YearsMulti-Family Annual Sewer Service Charge (SSC) *1Single Family Annual Sewer Service Charge (SSC) *1S-4January 19, 2023 Regular Board Meeting Agenda Packet - Page 232 of 319 Page 83 of 115
Fiscal Year Local Secured Unsecured Total % Change2012-2013 $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* Collection Sewer Service Charges* CollectionFiscal Year Levied & Collected Percentage % Change Levied & Collected Percentage % Change2012-2013 $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 $1,051,461.Source: Contra Costa County Auditor-Controller's OfficeLast Ten Fiscal YearsCentral Contra Costa Sanitary DistrictAssessed and Estimated Actual Valuation of Taxable PropertyLast Ten Fiscal YearsProperty Tax and Sewer Service Charge Fees Levied and CollectedS-5January 19, 2023 Regular Board Meeting Agenda Packet - Page 233 of 319 Page 84 of 115
Sewer Service Percentage of Sewer Service Percentage of Sewer Service Percentage of Sewer Service Percentage of Sewer Service Percentage of Charges Total Sewer Charges Total Sewer Charges Total Sewer Charges Total Sewer Charges Total Sewer CustomerCollectedRankService ChargesCollectedRankService ChargesCollectedRankService ChargesCollectedRankService ChargesCollectedRankService ChargesCity of Concord 1.10,483,421$ 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%First Walnut Creek Mutual 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%Park Regency Apartments 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%Contra Costa County General Services 2.321,803 4 0.43%384,750 3 0.46%451,567 2 0.50% 638,608 2 0.65%547,943 2 0.53%Second Walnut Creek Mutual Apts 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%John Muir Health 2.176,381 6 0.23%145,091 10 0.18% - - 218,919 7 0.22%322,601 6 0.31%Sun Valley Mall 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%St. Mary's College Contract158,480 8 0.21% - - - - - - - -Branch Creek Vista Apartments 148,400 9 0.20%162,000 7 0.20%175,600 7 0.20% --194,800 9 0.19%Bay Landing Apartments 133,560 10 0.18%145,800 9 0.18%158,040 9 0.18% - - - -Chevron Offices & Office Park - - 419,590 2 0.51% ------Kaiser Foundation Hospital 2.- - - - 158,848 8 0.18% 186,232 10 0.19%186,281 10 0.18%Archstone Apartments - - - - 153,650 10 0.17% - - - -Muirland @ Windemere Apartments - - - -153,650 10 0.17% - - - -Willows Shopping Center 2.- - - - - - 206,210 9 0.21% - -San Ramon Unified School District - - - - - - 215,044 8 0.22%225,339 8 0.22%Total 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%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 CustomerCollectedRankService ChargesCollectedRankService ChargesCollectedRankService ChargesCollectedRankService ChargesCollectedRankService ChargesCity of Concord 1.14,973,623$ 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%First Walnut Creek Mutual 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%Park Regency Apartments 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%Second Walnut Creek Mutual Apts 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%John Muir Health 2. 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%Branch Creek Vista Apartments 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%Bay Landing Apartments - - - - - - - - 225,000 7 0.17%Kaiser Foundation Hospital 2.- - 244,180 9 0.20% - - - -222,277 8 0.16%Muirland @ Windemere Apartments - - - - - - - -218,750 9 0.16%Archstone Apartments - - - - - - - - 198,876 10 0.15%Contra Costa County General Services 2.556,782 2 0.50% - -733,416 2 0.57% 740,223 2 0.58% - -Sun Valley Mall 354,208 6 0.32%453,512 4 0.38%373,171 7 0.29% 339,061 7 0.27% - -St. Mary's College Contract - - - - - - 242,777 8 0.19% - -San Ramon Unified School District 247,766 8 0.22%266,550 8 0.22%283,631 9 0.22% 215,229 10 0.17% - -Bishop Ranch City Center - - 315,106 7 0.26%335,017 8 0.26% - - - -Willows Shopping Center 2.188,828 10 0.17% - - - - - - - -Total 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/improvementof 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 Division2016-20172018-20192017-20182021-20222019-2020 2020-2021Central Contra Costa Sanitary DistrictSewer Service ChargeTen Largest CustomersLast Ten Fiscal Years2013-2014 2014-20152012-20132015-2016S-6January 19, 2023 Regular Board Meeting Agenda Packet - Page 234 of 319 Page 85 of 115
Fiscal Year Discharge Volume (mg) Service Charges Capital Contributions Total2012-13 4,213 $10,483,421 $3,616,771 $14,100,1922013-14 3,914 11,625,864 3,820,858 15,446,7222014-15 3,826 12,892,945 2,897,491 15,790,4362015-16 3,878 13,913,960 3,671,892 17,585,8522016-17 4,800 13,851,253 4,476,961 18,328,2142017-18 4,265 14,973,623 6,364,725 21,338,3482018-19 4,512 15,205,292 7,973,516 23,178,8082019-20 4,383 14,923,591 11,393,000 26,316,5912020-21 3,922 15,048,782 10,064,155 25,112,9372021-22 3,973 16,134,761 7,799,702 23,934,463User Group No. of Parcels2021-2022 Sewer Service Charge Billings Residential Unit EquivalentsPercentage of TotalResidential 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) $421,920Prior Year Adjustments 251,282Total FY 2021-2022 Sewer Service Charge Revenue$110,948,413Central Contra Costa Sanitary DistrictActive Service Accounts and Fiscal Year BillingsFiscal Year 2021-2022Central Contra Costa Sanitary DistrictPayments Under the Concord AgreementLast 10 Fiscal YearsSewer Service ChargesS-7January 19, 2023 Regular Board Meeting Agenda Packet - Page 235 of 319 Page 86 of 115
Fiscal Total Interest & Total Interest & Total Rev. BondsWater Rec. Total DebtYear Principal Debt Service Principal Amortization Debt Service Principal Amortization Debt Service & COP'sLoan Outstanding2012-2013 $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 $44,461,8262013-2014 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 40,577,2452014-2015 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 36,543,3852015-2016 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 34,160,1342016-2017 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 31,682,3772017-2018 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 - 29,095,0002018-2019 - 1,025,006 1,025,006 - - - - 1,025,006 1,025,006 21,806,631 - 21,806,6312019-2020 2,145,000 604,851 2,749,851 - - - 2,145,000 604,851 2,749,851 19,447,392 - 19,447,3922020-2021 1,740,000 542,226 2,282,226 - - - 1,740,000 542,226 2,282,226 75,733,331 - 75,733,3312021-2022 10,450,000 2,125,376 12,575,376 - - - 10,450,000 2,125,376 12,575,376 64,110,319 - 64,110,319TotalTotal Operating Non-OperatingDebt Service Capital Debt ServiceAnnual Debt Annual Debt Total Debt FiscalDebtExpenses less Revenue &Net Coverage Improvement Adjusted Net Coverage Service toService per OutstandingYearServiceDepreciation *1 ContributionsRevenue *2 (Net Revenue) *3Fees/ConcordRevenue *4(Adj. Net Revenue) *5Operating Exp.Customer Per Customer2012-2013 $5,567,495 $69,082,686 $67,141,476 $30,569,164 $32,510,3745.84 $9,708,300 $22,802,074 4.10 8.29% $33.78 $269.732013-2014 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 12,575,376 118,931,684 80,231,165 50,522,510 89,223,029 7.10 12,384,675 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. Debt Restrictions:*1 2014-2015 includes implementaion of pension expense reporting changes for GASB 68 & 71.Revenue Pledge & Covenant: The District pledges*2 Net Revenue = Operating Revenue, less Total Operating Expenses less Depreciation, plus Non-Operating Revenue & Contributions.Property Tax Revenue along with its ability to raise Sewer*3 This ratio must be above 1.00 to meet the Debt Rate Covenant (Net Revenue/Total Debt Service).Service Charge (SSC) rates. Debt Coverage requirements*4 Adjusted Net Revenue = Net Revenue less Capital Improvement Fees (Connection Fees) and City of Concord Capital Charges. In FY 2019-20 the Board,are discussed in the footnotes to the left. by Resolution, adopted rate stabilization fund reserve accounts for the O&M and Sewer Construction funds, contributing initial seed monies of $2.61 million.*5 This ratio must be above 1.25 to meet the Debt Rate Covenant (Adjusted Net Revenue/Total Debt Service).Source: Central Contra Costa Sanitary District Audited Financial Statements and Internal Accounting RecordsRevenue Summary Of Debt ServiceLast Ten Fiscal YearsSummary By Type Of DebtRevenue Bonds (2018 & 2009) & COPsWater Reclamation LoanTotal Debt Service Annual ExpenseTOTAL DEBT SERVICE OUTSTANDINGInterest &AmortizationDebt Service Coverage SummaryDebt RatiosOperating $0$2,000,000$4,000,000$6,000,000$8,000,000$10,000,000$12,000,000$14,000,000DollarsDebt Service Paid Each Fiscal Year$0$15,000,000$30,000,000$45,000,000$60,000,000$75,000,000DollarsOutstanding Debt Each Fiscal YearIn 2021, the District issued COP's for $58.0M, see Note 6S-8January 19, 2023 Regular Board Meeting Agenda Packet - Page 236 of 319 Page 87 of 115
Inside District Concord/ Total %As Of January 1Boundaries Clayton Served Change2012 326,900 134,200 461,100 1.3%2013 332,600 134,900 467,500 1.4%2014 335,009 135,856 470,865 0.7%2015 339,029 137,357 476,386 1.2%2016 340,667 140,916 481,583 1.1%2017 344,591 139,654 484,245 0.6%2018 348,333 140,590 488,923 1.0%2019 352,733 141,542 494,275 1.1%2020 342,149 141,480 483,629 -1.1%2021 352,832 134,497 487,329 -1.4%Source: Central Contra Costa Sanitary District Environmental Services DivisionEstimated % of Total County Estimated % of Total County Employers EmployeesRankEmployment EmployeesRankEmploymentChevron Corporation 10,000+ T-1 2.01% 1,329 3 0.28%Kaiser Permanente 10,000+ T-1 2.01% 2,000 2 0.42%Bio-Rad Laboratories 1,000-4,999 T-2 0.60% 900 9 0.19%John Muir Medical Center 1,000-4,999 T-2 0.60% 2,200 1 0.46%La Raza Market 1,000-4,999 T-2 0.60% - -USS-POSCO Industries 1,000-4,999 T-2 0.60% - -Target Corporation - - 1,262 4 0.26%Walmart Stores, Inc. - - 1,150 5 0.24%Doctors Medical Center - - 937 7 0.19%Contra Costa Newspaper, Inc. - - 1,140 6 0.24%Shell/Martinez Refinery - - 900 8 0.19%Texaco Inc. - - 800 10 0.17%All Others 466,700 93.58% 465,281 97.36%Total 498,700 100.0% 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. List of Ten Largest Employers in Contra Costa CountyLast Year and Nine Years Ago*2021* 2012*Central Contra Costa Sanitary DistrictDemographic and Economic DataPopulation ServedLast Ten Calendar YearsS-9January 19, 2023 Regular Board Meeting Agenda Packet - Page 237 of 319 Page 88 of 115
Fiscal Year Per CapitaEnded Personal Personal June 30 Population* Income* Income*2012 1,079,093 $66,772,041,000 $61,878 9.0%2013 1,095,310 67,290,115,000 61,435 7.4%2014 1,110,971 71,164,468,000 64,056 6.2%2015 1,126,027 77,914,957,000 69,195 5.0%2016 1,138,645 82,204,425,000 72,195 4.4%2017 1,147,439 87,810,279,000 76,527 3.8%2018 1,150,215 94,900,003,000 82,506 2.7%2019 1,153,526 98,423,318,000 85,324 7.9%2020 1,152,333 106,318,748,000 92,264 5.3%2021 1,161,413 115,342,618,000 99,312 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. Unemployment Rate**Average AnnualCentral Contra Costa Sanitary DistrictDemographic and Economic StatisticsContra Costa CountyLast Ten Fiscal YearsS-10January 19, 2023 Regular Board Meeting Agenda Packet - Page 238 of 319 Page 89 of 115
Department2013201420152016201720182019202020212022Administration39 44 46 49 43 43 41 44 51 50Engineering75 73 72 88 88 89 90 89 90 92OperationsCollection Systems 56 55 56 55 55 54 54 53 55 55Plant 76 81 88 79 83 81 77 81 75 73Pumping Station88877712776Operations Total140 144 152 141 145 142 143 141 137 134District Total 254 261 270 278 276 274 274 274 278 276District Total 244 243 244 249 259 278 268 269 261 275Source: Central Contra Costa Sanitary District Finance and Human Resources DivisionsCentral Contra Costa Sanitary DistrictFull-time Equivalent Positions Filled by DepartmentLast Ten Fiscal YearsFull-time Equivalent Positions Filled as of June 30Number of Retirees and Surviving Spouses as of June 30Last Ten Fiscal YearsS-11January 19, 2023 Regular Board Meeting Agenda Packet - Page 239 of 319 Page 90 of 115
Central Contra Costa Sanitary DistrictCapital Asset and Operating StatisticsLast Ten Calendar or Fiscal YearsTreatment PlantYear2012 2013 2014 2015 2016 2017 2018 2019 2020 2021Treatment Plant Permitted CapacityCalendar53.8 53.8 53.8 53.8 53.8 53.8 53.8 53.8 53.8 53.8Average Dry Weather Flow (ADWF)Calendar33.2 33.8 30.4 29.1 30.8 33.3 31.8 34.1 33.2 29.5Wastewater Treated per dayCalendar39.8 36.8 35.6 31.8 35.4 43.2 36.0 41.2 35.3 34.6Sludge to Furnace (Dry)*1Fiscal15,097 14,590 16,789 16,623 17,031 16,279 16,498 16,056 16,029 15,959 Ash to Reuse Site (Wet)*2Fiscal3,667 3,618 3,811 3,651 4,230 3,475 3,577 3,450 3,410 3,627 *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 SewersPipeline Miles Calendar1,526 1,526 1,519 1,519 1,519 1,535 1,535 1,535 1,535 1,535Number of pumping stations (owned)Calendar16 16 16 16 16 15 15 15 15 15Recycled WaterRecycled Water Distribution Pipeline (miles)*3Calendar11.7 14.3 14.3 14.6 14.6 14.6 14.6 14.6 14.6 13.5Average Recycled Water Produced (million gallons per day)Calendar1.7 1.7 1.6 1.7 1.5 1.6 1.6 1.6 1.4 1.5Number of Recycled Water Customers SitesCalendar29 29 29 43 47 47 49 50 58 53Commercial Truck Fill Use (million gallons per year)Calendar<0.1 <0.1 0.3 4.4 0.4 0.6 0.6 4.6 4.8 5.5Commercial Truck Fill CustomersCalendar2 1 11 37 26 14 13 12 6 9Estimated Residential Fill Station Use (million gallons per year)CalendarN/A N/A N/A 11.8 6.5 2.5 2.3 1.3 1.0 5.1Residential Fill Station Customer VisitsCalendarN/A N/A N/A 55,552 28,598 11,633 9,780 5,671 4,635 22,208*3 In 2021, pipeline miles only include active pressurized recycled water mains and laterals.Household Hazardous Waste (HHW) - Inception 1997/1998Program Participation (Number of cars)Fiscal29,119 30,379 31,779 33,468 33,037 35,640 36,108 27,818 35,634 33,658 Percentage of Households in Service AreaFiscal15.4% 15.9% 16.6% 16.8% 16.7% 18.1% 18.4% 14.0% 17.9% 16.7%Operating Cost per CarFiscal$93 $83 $78 $72 $80 $77 $78 $100 $95 $88Pounds of HHW per CarFiscal68 66 63 64 65 64 61 61 76 65Pharmaceutical Collection Program - Inception 2009Number of Collection SitesCalendar10 12 13 13 13 13 13 12 12 8Pounds of Expired or Unwanted medications CollectedCalendar12,240 12,428 14,041 15,366 16,485 17,337 17,178 9,918 5,645 5,396 Governing Body: 5-Member Board of Directors elected at largeGovernmental Structure: Established in 1946 under the Sanitary District Act of 1923Staff: 276 full-time equivalent employees (291 budgeted/authorized)Authority: California Health and Safety Code Section 4700 et. Seq.Services: Wastewater collection, treatment, and disposalHousehold Hazardous Waste (HHW) FacilityRecycled Water Residential and Truck Recycled Water Fill StationPharmaceutical Collection Program (8-Collection Sites)Retail HHW Collection ProgramType Of Treatment: Discharge - Secondary; Reclamation - TertiaryService Area: 146 square milesTotal 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 recordsMiscellaneous StatisticsMillions of Gallons per Day (mgd)Tons per YearOther DataS-12January 19, 2023 Regular Board Meeting Agenda Packet - Page 240 of 319 Page 91 of 115
CENTRAL CONTRA COSTA SANITARY DISTRICT
MEMORANDUM ON INTERNAL CONTROL
AND
REQUIRED COMMUNICATIONS
FOR THE YEAR ENDED
JUNE 30, 2022
Attachment 2
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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
Schedule of Other Matters ....................................................................................................... 3
Required Communications ............................................................................................................. 15
Significant Audit Matters ............................................................................................................ 15
Qualitative Aspects of Accounting Practices ...................................................................... 15
Accounting Estimates ........................................................................................................... 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
Other Matters ............................................................................................................................... 18
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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.
Pleasant Hill, California
December 8, 2022
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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:
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 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
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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
Outflows 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.
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SCHEDULE OF OTHER MATTERS
FOR THE YEAR ENDED JUNE 30, 2022
EFFECTIVE FISCAL YEAR 2022/23:
GASB 91 – Conduit Debt Obligations
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.
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GASB 91 – Conduit Debt Obligations (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 party has exclusive use of the entire
capital asset during the arrangement, the issuer should not recognize a capital asset until the
arrangement ends.
If the title does not pass to the third-party obligor and the third party has exclusive use of only
portions of the capital asset during the arrangement, the issuer, at the inception of the arrangement,
should recognize the entire capital asset and a deferred inflow of resources. The deferred inflow of
resources should be reduced, and an inflow recognized, in a systematic and rational manner over the
term of the arrangement.
This Statement requires issuers to disclose general information about their conduit debt obligations, organized
by type of commitment, including the aggregate outstanding principal amount of the issuers’ conduit debt
obligations and a description of each type of commitment. Issuers that recognize liabilities related to supporting
the debt service of conduit debt obligations also should disclose information about the amount recognized and
how the liabilities changed during the reporting period.
How the Changes in this Statement will Improve Financial Reporting
The requirements of this Statement will improve financial reporting by eliminating the existing option for
issuers to report conduit debt obligations as their own liabilities, thereby ending significant diversity in practice.
The clarified definition will resolve stakeholders’ uncertainty as to whether a given financing is, in fact, a
conduit debt obligation. Requiring issuers to recognize liabilities associated with additional commitments
extended by issuers and to recognize assets and deferred inflows of resources related to certain arrangements
associated with conduit debt obligations also will eliminate diversity, thereby improving comparability in
reporting by issuers. Revised disclosure requirements will provide financial statement users with better
information regarding the commitments issuers extend and the likelihood that they will fulfill those
commitments. That information will inform users of the potential impact of such commitments on the financial
resources of issuers and help users assess issuers’ roles in conduit debt obligations.
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GASB 94 – Public-Private and Public-Public Partnerships and Availability Payment 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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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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SCHEDULE OF OTHER MATTERS
FOR THE YEAR ENDED JUNE 30, 2022
GASB 96 – Subscription-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 party’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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SCHEDULE OF OTHER MATTERS
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GASB 96 – Subscription-Based Information Technology 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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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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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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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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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.
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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 Accounting and Financial Reporting 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 Outflows 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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