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Home My WebLink AboutAttch 2f DSRSD;~ + , IrI'Y OF UBLIN ~ve e i ~r eJe.eaa~..~a~e DEC y ~ 2009 ~11Y ~AGER"5 ~F~ICE ~: ~/7~ •~^^. Section 2: Application for Comn~unity GrouplOrganizational Funding SECTION 2 ~~~~~~~1"~ Page 1 of 20 c~ ~ ~ ,:~ .:...~~~~~ ~~.~ ~~ ...:._,v w.. :.~._.~......µ,: ~ .~.,~-~ . ~._~_,~ ~:~.~. ~ .: ,b,_;r ..:.~.~. w __ ~~...~. w ~_~_._~,~~~ ~' CITY OF DUBLIN Fiscal Year 2010-2011 FUNDING AMOVNT REQUESTED~: ~25,000 SECTION 2 Page 2 of 20 ~ ~ ,~ CITY OF DUBLIN Fiscal Year 2010-2011 APPLICATION FOR FUNDS 1. Please select one expense category: ^ Capital /Operating 2. Applicant I~n~formation: ~ ~ ~ ~ ~ ~ Organization/Agency Name J Dublin San Ramon Ser~ices District (DSRSD) Mailing Address Dublin San Ramon Services District Street Address 7051 Dublin Blvd City D,ublin State ~ ~CA ~ ~ ~ ~ ~ ~ ~ Zip~~94568.,~~` ~~~~ ~~~ ~ • . . Bert Michalcz k (925) 828-0515 michalczyk(a~dsrsd.com ; Executive Director/Chairperson ~ ;Work Phone EmaiF ~ . ~ . Jeffrev Hansen (925 82~ 8-8700-` ; :jhesq(~n,earthlink.net. <_ . , , ; Board President (if applicable) Work Phone Email Please list the Primary Project Contact Person who would be able to answer questions about tliis application and project/program during the funding period. Justin Lo Financial Analyst Contact Person for Project/Program Job Title (925) 875-2241 lo dsrsd.com (925) 829-1180 Work Phone Email Fax Federal Tax Identification No. (required) 94-6050194 City of Dublin Business License No. (required) SECTION 2 Page 3 of 20 ~ ,~~ ~~ ~~ ~:,~ J~ ~~ City of Dublin Fiscal Year 2010-2011 Application for Funds 3. Proposed Project/Program Information (po not describe organization.) Amount of Funds Requested $ 25 000' ~ (Maximum $25,000 per project.) Proposed Project/Program Name: Payrnent Assistance for Low Income Residents of Dublin Proposed Project/Program Date(s): Start 0;7 / 01 / 10 mo. day ' yr. and End 06 / 30 /11 mo. day yr. Please. note: City Council Grant Funds are distributed on a reimbursement basis. If your Agericy needs a 100% disbursement af the beginning of the Fiscal Year, please indicate this . below and provide justification for th'is need. :,,. ~ / Agency is requesting 100% disbursernent at the beginning of the Fiscal Year: . ~ If selecfing tliis option, please provide justification in the blank space below. .~ ^ Agency is not requesting 100% disbursement at the beginning of the Fiscal Year: Please provide the frequency tfiat reimbursements will be submitted to the City in the blank'space below; e.g., monthly, q,uarterly, atproject completion, etc. DSRSD will create a separafe accoant for managing and tracking fhe use of this grant money and plans to absorb 100% of associated administrative costs so that all funds will be used to benefit the community. DSRSD would like to receive the entire amount at the beginning of the Fiscal Year to minimize the administrative impact of this program; any unused portion will be refunded back to the City of Dublin at the end of the fiscal year. SECTION 2 Page 4 of 20 ~~ ~ ,~; ~,~~~.: ,.,., ,m:.~ ~~.~~e ~~._~.. ~,.;-~.~:~.w7~~-~ ~~.:~~~ ~. .~~..~~. J~»~~xe~~aw~.e..~.~:~s:~ ...wa=rrsac;.ar_..~~....:.~::.~_.... . ,,..<: . .. ~ e.~-..-.~:,. ..... .. ..,°a-m~r,.:~cA.s~.,.'-":.~^~...;<;, u... ~ ~ .~ _..... ,. _~.., ._ ~ City of Dublin Fiscal Year 2010-2011 Application for Funds a. How would the requested funds be used? ^ Describe, in detail, the PROPOSED PROJECT/PROGRAM (not the Agency). ^ Bulleted text is acceptable, ^ Identify if the proposed project/.program is a new service, or extension of an existing one.. . ^ An additional page may be added, if needed. . DSRSD would like to create a new program to assist low.income: residents living in Dublin who are having trouble paying for water service. Residents will qualify for this program by presenting a current~ PG&E ~bill th~~at iri~'icates CARE ~~status (CARE is the low-income assistance program at PG&E. Eligibility is based on income as presented in Figure 1). . - . Figure 1: Income eligibility based on PG&E's CARE program ~ ~~~~- Number of`Persons in Household Total Combined Annual Income ~ ~ ~ 1-2 , r~- ~$30;500 3 ~ ~ $35,800 ~ _ 4 . , .. ` $43,2Q0 ~ - ~-5~ ~ ~ ~ ~ ~ "$5~0;600 ~ ~ 6 $58,000 For each additional erson, add: $7,400 A qualified resident will be eligible to receive assistance with one bill annually. They will simply present their most recent ,PGBiE bill showing CARE eligibility along with the bill they are having trouble paying. DSRSD will utilizing the grant funding by paying the customer's fxed charges and Tier One water service (up to $92.83). The program will continue for the fiscal year (7/1/2010 - 6/30/2011) or until the grant money is depleted. ~- SECTION 2 Page 5 of 20 ~ ~, , _ _ ~E b. How would the PROPOSED PROJECT/PROGRAM address an unmet community need and improve the quality of life for Dublin residents. Why is this project/program needed? (Additional page may be added, if needed): There are no prograans in the City of Dublin to assist low-income residents who are struggling to maintain their water service., Many of these customers only require temporary assistance to get back on track. The District an'd other agencies including 211 (a non-profit hotline that connects residents with community services), churches, and the City of Dublin regularly re'ceive requests from residents for this type of assistance. - The District is not allowed to charge some customers more than the cost: of their seryice in order to subsidize a lower rate for other customers. Mosf cities that provide water service~ are able to subsidize low-income or elderly rates by using General Fund monies: The City of Dublin would' join its neighbor"ing cities -iri'sup,porting a basic sei-vice hee"d by providing• ... . funding for_this program. ~ - ~ . ~ c. What docurnentation/data/recorcls support the need for tliis :PROPOSED • PROJECT/PROGRAM? Please identify your, data sour.ces. (Additional page may•.be added, if needed.) ; . . As of August 2009, about 9% of Dublin residents were enrolled.in PG&E's CARE program. This is an.increase from about 7.7% in the previous year. Preliminary numbers released by the,State Department of Finance in September show that Dublin's unemployment rate has increased to 6.9%, from the 2008 average of 3.7%. Water is an essential service and customers who are unable to pay,their bill can incur significant additional ¢osts from late :fees and service termination. It is the District's hope that providing this assistance will allow the customer time to plan for the next billing period. SECTION 2 Page 6 of 20 ~~ ~~ ~~.~~~.~:c~.~W~~~.~~~,~w;~~:.~ ,:-~.,.~~.~.~~~~ ~_~ ~..-~s~.~~~ ~~ ,~~ J " :~ City of Dublin Fiscal Year 2010-2011 Application for Funds d. Specify the PROPOSED PROJECT/PROGRAIVI population to be served. The program will serve low-income Dulilin~ residents. Usin~g PG&E's d~ata, DSRSD estimates the segmenf to contain over 4,000 residents.(9%) in the City of Dublin. e. Prgjects/programs must be evaluated to deterniine if they are being carried out efficiently and if project/program goals are being met: Please describe how you plan to monitor your project/program's success and impact. ~ An additional page may be added; if needed. Success of the program wi11 be measured by the number of Dublin residents that:r.eceive ~ ~ benefit and by the reduction in the number of customers who lose water service. ~DSRSD will track the number of affected residents to. evaluate the program's posative impactto.the community. Community awareness will be important to the program's success. DSRSD will publicize the program and inform local agencies such as community churches .and the 211-hotline. . . SECTION 2 Page 7 of 20 ~~ ,~ ~& ~~ -,, r ~. ,: « . ..~.:~:.:~..~.^~.::.w :.~r.~a" ., ...~,~,„ a...~.~~..e~;.. . ,...s~~a...+.:.~<.<;,-:z-a.cc~~ ~.z~a,.-~mas~r ~s~-zz.a,::.xv _.... °.. . L ~, ._ _ .....,,. ......,,.A .. . . ., ~ ~ f. Specify numbers of clients served by agency, then by PROPOSED PROJECT/PROGRAM: SECTION 2 Page 8 of 20 ~.~ ~ ~ i~.~,. ..~ ,, .~.~ _g~,.< . . ~ ~..~ ~~.~..., ~;,.~,:~~,. ~_,~-~~.~;, ~~~:~~ .~._~.. . ,~,:,,, ~r~:~._. ,,,~ ~ _....~ ~r City of Dublin Fiscal Year 2010-2011 Application for Funds 5. Financial Information - Operating Budget a. Expense Budget Further'Comments/Explanations (i~f necessary): ' SECTION 2 Page 9 of 20 ,~ , ~ City of Dublin Fiscal Year 2010-2011 Application for Funds Further Comments/Explanations (if necessary): SECTION 2 Page 10 of 20 ~ ~' b. Revenue Budget City of Dublin Fiscal Year 2010-2011 Application for Funds 6. General Age~cy Information ~ € ^ Past rant a licants ma check this tiox in lieu of corn letin item 6 a d if the ~ g PP~ Y P g~ ~-)~ - ; . ; program/organizational description on file with the City is correct and current. , ~ ~ ~~ ~ ~ ~~ ~ ; ~ a. List all years that Organization has previously received City of Dublin funding (not Community Development Block Grant = CDBG).' ~ ~ N/A -~ ~ . . _ ..._ : .. < , ., ~...... _ . ~ . , . , ~ : •. _. r ~ _ ~ ,~ ~ ~ ~ ° .. . . b. ~. Describe.the population(s) served by the Organization. . ~• t . , ~ . .. , - . _ , - . ~ Dublin San Ramon Services District (DSRSD) was fourided in 1953 and provides water and ~..: ~. recycled water to Dublin and Dougherty Valley; wastewater collection and treatment, ,•.~:: ~: ~ services to Dublin and south San Ramon; and by contract, sewage treatment for the city of ~ ~ . ~ Pleasanton. Sewerage services consist of wastewater collection, treatment, and disposal to ~ San Francis¢o Bay. The District owns, operates, and maintains the Regional Wastewater ; ~ Treatment Facility in Pleasanton, and a wastewater colleetion system. ~ ~ ~ ~ ~ The District services a population of approximately 140,000, including residential, E commercial, industrial, and institutional cusfomers. c. Describe all the services the Organization currently provides to Dublin residents. ^ An additional page may be added, if needed. DSRSD provides water and wastewater services to all Dublin residents. Recycled water services are available for some commercial and institutional customers. SECTION 2 Page 11 of 20 ~~ ,,~ ~~ ~r ~ d. Has your agency ever previously received funds from the City of Dublin? If yes, please specify in what Fiscal Years and the amount received each year. DSRSD has not previously received funds from the City of Dublin. The District takes pride in the many joint efforts that the District and City have done in the past as well as current efforts to find ways to work with the City to promote economic development. This grant would continue these partnership efforts to serve the Dublin community well. ~ ~ SECTION 2 Page 12 of 20 ~ ~ ,~ City of Dublin Fiscal Year 2010-2011 Application for Funds 7. Required Attachments: o Onlv one (1) copv aer Agencv of each of the following is required, even with multiple projects/programs submitted. o Applications without the following documents will not be reviewed for funding. o Please label attachments: A, B, C, etc. /^ A. Names of Governing Board; identify current Board officers. ~ 1' ^ B. Current total Organization operatin bg ud~, including revenue. ^ Clearly label/identify the program that iricludes the PROPOSED PROJECT/PROGRAM: / v C. Most recent audit report or tax return (if applicable). ~ o D. Resolution, letter or other document providing evidence of Board/Organization approval of application, and date approval was granted. ^ Board/Organizatiori approval rnay be ~pending. ,% ^ E. Organization's certificate of insurance showing coverage for liability and workers' compensation. /^ F. Application Verification Declaration Signature Page. ^ G. Signed affidavit form from each collaborating agency named in proposed project/program plan (if applicable). J^ H. Copy of IRS Letter of Determination indicating tax exempt status. _ SECTION 2 Page 13 of 20 ~ ~ City of Dublin Fiscal Year 2010-2011 Application for Funds APPLICATION VERIFICATION I attest that the information contained in this FY 2010 2011 grant application is accurate and that the funds requested will not supplant any other monies secured by .the organization. Attached is a resolution, letter, or other document providing evidence that the Board of Directors approved the application as submitted. Successful applicants are required to submit a summary report as soon as possible after submitting the reimbursement request, but not later th.an August ,~ 31, 2011. Eailure to.submit a report will result in ineligibility•for future funding~. ' .. ,, . ~ ~ ~ ~ Signatures: . . Executive Director Board President/Chairperson ' ~ Date Date SECTION 2 Page 14 of 20 ~~ ~~ ~ .. ~ . _,~M ::. . ,.~-~~,:m:~~ .:,;~~~,. ~ J ~= ~ ~ City of Dublin Fiscal Year 2010-2011 Application for Funds COLLABORATION AGENCY . AFFIDAVIT FORIVI o This form is to be completed by:each collaborating or.ganization as named by the applicant agency in Ylie proposed project/program: o Com~pleted-form's m~~ust be submitted~at"time-of application. ~ ~~~ Collaborating Agency Name: i . ''.,.e~ . . e .~S ~. ~ . f ~ Agency Division/Uepartment:.: ~ ~. ~ ~. . ~~ ~ ~ ~ ~ _ ~ ~ . ~ ( ' ' , n , ~ . ~ ~ v , . . ' . , . .. . . • i i . f Project/Prograrn~Trtle:~ : " , „ Project/Program Role Descripfion (i.e,;,facility space; staffsupport, etc.): ~,~ Agency Project/Program Contact Person " € ~ Title ~ ~ ~ ~ ~ ~ Phone Email I attest that the applicant agency and our organization agree to work collaboratively to implement the proposed project/program as identified in the FY 2010-2011 funding application. Executive Director Date Project/Program Contact Person Date SECTION 2 Page 15 of 20 ~ ~v ~~»~_ .~..~...__~ ..~......._~._.~.___..___-_____~..~__ _ _ ~ J~ ~~ CITY OF DUBLIN Fiscal Year 2010-2011 COMMUNITY GROUP/ORGANIZATIONAL FUNDING PROGRAM ~ REQUEST FOR REIMBURSEMENT i ~ [ AGENCY NAME ~~ ~ ... ; -y ~ f € , , MAILING ADDRESS FOR REIMBURSEM-ENT: . i ~ : f ' ~ . ~ . _ . .: , . ~ PROJECT/P~ROGRAM NA'1VIE < : ~ : x ~~ ~ ~ ;.~_ _ € ' CLALM~#~ ~ ~OF~s, i ~ ° ~ j ~ ~ • ~ ~ ! TOTAL FUNDING AMOUNT AWARDED TOTAL REIMBLJRSEMENT REQUESTED T~IIS-PERIOD ~ $ $:: E I attest that the above listed expenses are accurate and true and have been used as represented in the approved funding application. Submitted by: Signature: SECTION 2 Page 16 of 20 Date: ~:~ ~:~ „~~ ,~__ ~.:~ _.~1~,.~. ~~w ~a, ~~<.~_...._ ...,~, _.;;~ ~~~;sr~.,.,,.~;: .,~,~~~;.~ ,,,,,.F~,~~..~~~M:»~;~~~.~...~.;~r ~ ~ SECTION Z Page 17 of 20 ~ ~ ~, ~ . ~~~..~_~~.~-u~~. ~..~. _..,,... ~::~.~~~.~.:. _:.~~. Fx~~=~~~~:,.~~ x~.~. ~.,~~.~~ ~ CITY OF DUBLIN Fiscal Year 2010-2011 COMMUNITY GROUP/ORGANIZATIONAL FUNDING PROGRAM SUMMARY REPORT (Summary Report must be completed and submatted prior to August 31, 2011.) AGENCY NAME MAILING ADDRESS' TELEPHONE' PROJECT/PROGRAM NAME: TOTAL FUNDING AMOUNT AWARDED TOTAL REIMBURSEMENT RECEIVED `. ... _. , $ ;. ~~ . - $ ` . : _ _ ~ 1.) How has the PROJECT/PROGRAIVI addressed anx.unmet community need and improved the quality of life far Dublin residents. (Additional page may be added, if needed): ' . 2.) Please evaluate the success of your project/program. Were the goals outlined in the application met? Was the project/program carried out efficiently? Please use the objectives identified in your application to discuss your prograrr~project's success and impact. Include any documentation/data/records you have that support your-conclusions. ~' . SECTION 2 Page 18 of 20 ~L° ~~ City of Dublin Fiscal Year 2010-2011 SUMMARY REPORT 3) How many total participants were serued by this project/program? How many of those participants are Dublin residents? I attest that the above listed information is; accurate arid'true. Submitted by: Signatu're: SECTION 2 Page 19 of 20 _ Date; ,:. ~ :~ ~~ .,,,,.-..~..... ,....::~.:.s._~..-a.°ca~..-m.~-»-~.:r~,c.,~~o.av~z~„~w ... .:....~.u•xis:,.za~u_,..~_~.:m~r:,~srs~a.-anmx~~.~x _,.....-s.~,,:..~.~..m...:~..., ~.,.:.x,~z~:L ~~a~.r..~. ~m,r„~>.:r:~, ...w.,.~- . ~ ~$ A AGREEMENT BETWEEN CITY OF DUBLIN AND (insert or~anization name) THIS AGREEMENT, dated for identif cation this day of 2010, is entered into between the City of Dublin ("City") and,~organization~, RECITALS A. (organization~ has asked City to contribute $ ( Dollars) for use by (or~anization~ to cover , N costs in `'order to provide the services as descr'ibed in Exhibit A. The services'reridered pursuant to this agreement will be for the ~ per~iod July 1~, 201~0 through June 3a0; 2011. ~~~~ : ~~ B. City has determined that it is iri the interest of the residents of the City of Dublin to make ~ a donation o~f $ a~( ~Dollars) for such purpose, ~ provided certain conditions are met to ensure tliat the services will benefit the residents of City: AGREEMENT ' , . . City and (or~anization~. agree as follows: `' ~ . L Recitals " _ .. . The foregoing recitals are true and correct and are part of this agreerne`nt. '~~ 2. City Donation . _ .. . __ . .. . City shal'l donate $ ( Dollars) to be used by (organization~ to b`e: used : _ ~ ,, - ~ _ for operational support for as described in Exhibit A to this Agreement. The donation shall be paid upon invoice to.the City'. 3. Records (Or~anization~ shall maintain records for project/program review, evaluation; audit and/or other purposes and make them available to City upon request. 4. Periodic Reports ~ Upon request by City, (organization~ shall pro~ide reports describing the progress made by (organization~ accomplishing the goals and objecti~es outlined in the work plan. CITY OF DUBLIN Dated: By: Joni L. Pattillo, City Manager Dated: By: Title: SECTION 2 Page 20 of 20 ~ DSRSD Board of Directors, December, 2009 President Jeffrey G. Hansen was elected to the DSRSD Board of Directors in 1985. He is a business and real estate law attorney who has practiced in the East Bay for more than 26 years. Hansen received a bachelor of arts in political science from the University of California at Berkeley and a juris doctor degree from Golden Gate University. Vice President Dwight L. (Pat) Howard was first elected to the DSRSD Board in 2004 and re-elected in 2008. He is a licensed professional engineer with more than 30 years engineering experience. Director Howard has bachelor and master of science degrees in mechanical engineering from the University of California at Berkeley and a master of science in engineering management from Santa Clara University. Director Daniel J. Scannell was first elected to the DSRSD Board in 2000 and served as President in 2004 and 2009. An expert in legislative and regulatory issues, Director Scannell is a senior.policy analyst with a firm that contracts with the California Department of Public Health. He received a bachelor of arts<in political ~ science from the University of California at Berkeley. ,_. .. ,~...: ... ~ Director Richard M. Halket has served on the DSRSD Board since 2004 and was Board ~President in 2008: Director Halket is ,ari~ accountant. Previously he spent 10 years in the enterprise'.software industry and 1.0 years in hydrogeology consulting. Halket received a bachelor of science in geology from Stanford University and a master of science in hydrogeology from Washington State University. Director Georgean Vonheeder-Leopold was appointed to the DSRSD Board in September 2009 to fill a vacancy created when Director Thomas W. Ford died. Vonheeder-Leopold previously served on the DSRSD Board from 1992 unti12000 and has a total of 18 years of experience in public office. She was a member of the Dublin City Council from 1984 to 1990 after two years on the city's first Planning Commission. Director Vonheeder-Leopold has 35 years of experience in tax accounting. i .. - . ~ ~ . ~, { ~ ~~ ~ ~ ~ i" tnt~rnal Revenue Service~ Dafie: August 3, 2007 ~• DUBLIN SAfV RAMON SERV(CE DISTRICT • 7051 DUBLIN BLVD ~ ~ DUBLIN . CA 94~68 ~ Department of the 1'reasury P. O. ~ox 250$ ~ Cincinnat'i, OH 4~201 P~CSQ11 ~O COBI~aC$: Mrs. Turner 17-57018 , Customer ~ervlce Specialist . ~ `~@II Free~`Tel~~ahonQ Number: .877-829-55Q0 ~ Federal Idenfification YVumber: • ' 94-6050194 Qear Sir or 11%ladam: ~ ~ ~ ~ ~ . This is in response to your request of August 3, 2007, regarding your organization's federal tax status. ~~ ~ .'~J •~a ~ w'= .~'^'uS a. ~ r~ ~ r~ ~? ~a Our records indicate that your~organizatton may be a'govemmental instrumentality or a political swbdivision ;qf _•;~~ a state. " ~ ~ ~ ~ ~ . . . . _ . No provision of the Internal Revenue Code imposes a tax on the Income of governmental units (such..as states, ,. .,, ; and their political subdivisions). ~ Therefore, it has been the posit(on of the•Service that income of gov,ernmentai :., ~> ~ ' units is not generalfy subject to federal income taxation. if, however, an entity is not itself~a governmental .unit•, (or an "integral part" thereof), its income will, be subject to tax unless an~ excfusiQn or exemption applies::.:; :,;; ~- .. .. One exclusion is provided by section 1~1 ~(1) of the Code, which excludes from gross income: ~ -.,. ~. . "...income derived from ... the exerctse of any essential governmental function and ... . accruing to a State or any po(itical subdIvision thereof ..." ~ , .~ . Your organization's income may not be sUbject to tax, either because the organization is a governmenta( unit i ~(or an "integral part" thereof), or because the income is excluded under section 115: !n addition, your ~ • orgat~ization may also be eligible to receive charitable contributions, which are deductible for federal income, . estate, and gift tax purposes. Also, your organization is probably exempt from many federal excise taxes. Your organization may obtain a letter ruling on its status under section 115 by following the procedures . ~ specified in Rev. Proc. 2~02-1 or its successbr. ~ . Your organization may also qualify for exemption from federaf income tax as an organization described in section 501(c)(3) of the Code. If the organization is an ~entity separate fram the state, counfy, or municipal government, and if it does not have powers or purposes inconsistient with exemption (such as the power to tax - or to exercise enforcement of regulatory powers), your organization would qualify under section 501(c)(3). To ~ . apply for exemption, complete Form 1023 and pay the requi'red user fee. ~ DUBL(N SAN RAMON SERVICE DISTRICT 94-6050194 ~ ~ • ~ =2-. Sometimes governmental units are asked to provide proof~of their status as,part of a grant application. ~ If your . organization ls appiying for a grant from a private foundation, the foundation may be rEquesting certain information from your organization because of the restrlctions imposed by the Code on such foundations... One such restriction imposes a tax on private foundafions that make any "taxable expenditures." Unciar section .~ 4945(d) and (h) of the Code, "taxable:expenditures" include (1) any grant to an organization (unless excepted), unless the ~oundation exerc(ses "expenditure responsibility" with respect to the grant; and (2) any expenditure for non-charitable purposes. Under secfion 4942 of the Code, private foundations must also distribute certain amounts for charltal~le purposes each year- "qu~lifying distribufions"~-br incur a tax on the undistributed amounfi. ~"Qualifying distributions" inc4ude~certain amounts paid to'accomplisli charitable purposes. ~ . Private foundafion grants~ to governmental units for public ~or charitable purposes are not taxable expenditures •under these provisions, regardless.of whether the foundation exercises "expenditure responsibility." Under . section 53.4945-5(a)(4)~ii) of the Foundation and Simiiar Excise Tax Regulations, expenditure responsibility is not required for grants for charitable purp'oses to governmentai units (as defined in section 170(c)(9 )_of the_ . code). ~Similarly; grants to govemmental units for public purposes are "~ualifying distributions"; under.`section~ ~ ~ 53.4942(a)-3(a) of the regu)ations; and, if they are for charitable purposes, wiil nof be faxable expenditures,: under section 53.4945~6(a) of the regulations. Mosfigrants to governmental ~units will qualify as being.for,. ~ charitable (as wel! as public) purposes. ' ~ ~ . ~ ... - ~ . . Because of tfiese restrictions; some privafe foundation's~ require grant applicants to submit a letter from the ~ Service determining them to be exempt under section 501(c)(3) and, classified as a non-private foundatlon. :. ` Such a letter, or an underiying requirement tfiat a grantee be a public chariry, is not legaily requlred to be , relieved from. the restrictionsdescribed above, when the; prospective grantee is a governmental;unit~and the. : grant (s for qualifying (pub4ic or charitab{e) purposes: ' _- ~. ~ We believe this general'informafion will be of assistance to your organization.' This lett~r, however, is not a~ • ruling and may not be refied on as such. If you have any questions, please cail us at the telephone number , shown in the heading of this letter. . Sincarely, ~- ~'C ~~ ~. . ~ Michele M, Sullivan, Oper. Mgr. Accounts Managem.ent Operations 1 Reglonal - . . ~ : . Replonab .` ..... Wnfer - . Dublin San Ramon Serviees District ~acal5ewet LocelSewer LowlSewe~ local5ewer Sewer ~Regfonal; [eglonalSewN Sewm ' Water OperaNons Waler Water 'Admin: ' Relunding DVSfandby FY 2010 ADOPTED BUDGET Opemtlons QSF Replacement Eyepanilon ,OperaHons ' SeweqR3F Replacemenl Expaniion - Opeiations RSf Feplacemenf Expanslon CoalGenf'e~ OPEB Bond~ Dis}dd Tota~ WnrkingCapltalluly1,2004 $ 575,306 $1,523,608 $ 5,A40,722 $1.392,183 $ 5,895,971 .... 54;7bDJb2: _ _ ._ $ 10,733,756 519,415,048 $ .5,259;345 _. $1:221•94Y~ .. _. ... $ 3,016,46] $ 186,T14 ', ;,-<. . .. $303,719 $ 583,713 $60,308,152 LAVWMAdebfadjustment ~ 993,295~~ ~ '~.. . " '3,091;925 ~.. .- ~~ . - ~:~ _ , ;;;:: 4,085,220 AdJustedWorkingCapital 575,306 1.523,608 5,440,722 1,392,183 ..6,889,266 ~4;760.162~'. 1OJ33,756 22,506,973 5;259,345 7'i221,942~; 3,016,462 186214 ~~ 303,719 583,713 6A,393,372 Revenues: . . . . . . . - . .. ~ .. Service Cha~ges 1,878,269 15,100;492 "17,962,236 ' 34,94U,997 Inhashocture Charge , ~ ~ - ~ . 2,676,018 2,676,018 Connectlon Fees 281J77 256,447 ~~ 813,280. ~ 5.743,537 ~ ~ ~ 866,SB7 2,843,117 10.804,145 OtherRevenues 1,000 - 65,000 ~..145,000 ~~ ~ ' ~~-219,000: . i400,000'~ 283,680 .;1,538,546'~. 505,905 945,029 4,103J60 Interesl 14,110 24,630 90J70 21,080 .~~."~84940 ~' ~~76,960~~ 166,450 262,280 ~.68,010 ~21,370'. 59,730 (5,530) i. 6,530 9,270 900,000 Esflmatedpevenue 1,893,379 24,630 371,347 342.527 ~~.~-15,330,432 ~~~.~ ,76,96~~~1 ' 979,73~ 6,005,817 .18,244~,246 '~421,370~; 926,317 5,797,285 '~:5,$38.546?: 512,435 • 95A,299 53.424,320 imnsters In: . . . . ~ . .. ReplacemenlAlbcatlom d50,000 , . ~ ' 1,900,000 ~ - " 2J25,000 4,475,000 Other - ~ ~ . 43,063 ~~ 200,000 243,063 TotalTwnsfmsln 450,000 1,900,000. ~~43;063 . 2,125,000 200,000 4,718,063 To1a{Revenue 1,893.379 24,630 BZ1,347 342,527 ;.~75.330,432 ~.;:76,960~~ ~'~ 2,879;730 6,048,880 ''-18;249,246 421;370!; 3.051.377 5,797,285 J1,538:5461 712,435 954,299 SBJ42,383 Operating 6cpenses: . _ , ..;. .. . ~.; . .. ~ .~... ~ ~ ,::. . .... ,_ . .; ~~. Opemting . - . . ~ . . .. ~ Wagm and Benefifz 433,452 58,665 287,837 5,069;849 ~~ ~ - 43,370 ~~ 66.148 ~'-~ 2,858,969 - 375,605 454,629 ~ 5117 16,4 '~ 1C,759,708 OTherPersonnelCo:}s 6,600 . . 97,990.~ ~ . ~ • ~ ~ - 27,091- 6,450 ~ 65090{' S05,905 TU4,126 Chemlcab, Gas a Elecfric 1,944 , T,425;647. ~ - ~ ~ ' ~ 575;617. ~ . : 57.600;;. 2,060:806 Other Matedals 34,355 5,818 1,783 -~ 601,802- .:~ __ ~ 25,936 -' •286 ~~94,797~~ ~ 211,914 112094 >. 116,150'~ 1,204,929 WaterPurchase ~~ ~ ~ ~ ~ ~8;558,939~ ~ 8.558,939 Conimds . 102,005 . 21,990 1,840 ~633265~ ~: 310,880~ 33,840 - ~218,764 .' 22.080 89,920 Y' 917,704'~. 965.329 3,317,617 Other 13.650 . ~~~ 120.620~ ~' ~ ~ ~ ~ ~~65,365 ~~:,`46,b03'~. 246,238 ConldbutlontoJPA '7;778471 - - ' 1,547,245 ~ 3,325,716 Debf Service ' d;688,704 - ~ 11,394,512 2,687,650 15.770,866 CapifalOutloy 39,750 • ~ 83,500 105,750 '-3:. 229,000 NlocotedCosls 793,896 28,177 148,526 ,.:2;522567, - 21,491. ~`37,251 ,7:384;972 185,300 253,591 (4,775,765) 0 iatolOpemtingExpenses 785,902 154,400 439,986 '. 13;938,909 485,777 71,532;037 '>15,331;773 . 900,649 3,604,334 `;7,538546,'~. 505,905 965,329 50,182,947 CaplfalPro(ecfs 295,000 750 . ~ 3J00,000 .. 620,000 '~' 800,000 440,000 ~~ 5,255.750 Transfe~:Out ~ - `. ..- - ;.~ .. . . . ~ .. -... . ' ~" . ' y ~' ,~::. ~ ' ~ ~ i ~ Replaceme~fAllocatlons 450.000 '~1~.900000 ..` ,_ ~.. :. . .. . ,'. ,. . ~ ~. 2.125.000 ; P.. ;~~ ; .' ~' 4,475,000 Other - ' ~ ~ -43,063 ~.~:20U,000:~. 243,083 TofalTransfersOui 450,000 ~ 7;900,000 -~ ~ ~ 2,168,063 ~'.200,000~.: ~ ~~ 4,718.063 TofalExpen:es 1,235,902 • 449,400 440,736 ... 15,838.909 ~ ~= .';. 3,585J77 12,152,037 , ._ 17;499,836 ~200,000' 1,700,649 4,044,334 . r~,1,538,546'~. 505,905 • 965,329' 60,156,760 Ne~ Increase (decrease) pre RSF 657,477 24,630 _ (508,477J ,,, : _ 76,960' ~ -` - ~ ~ ~ . 749,410 ~Y21.370:~ W; 3 ` ~-'~ (2,014,37n RSF Transfer In (Ou1J (839,832) 839,832 ,,,~ ~ :i; ' 3~ „~ , ~ ~ ~. . . .: - ' . . ~ ;~'+ '~ 3 ~ ~~' .a .. ... . ~- x3.. , ... . . ~~ ~ ~ • e 3' ...A9:+~''. ..... . _. . : ._....~ ~ ,, . y~ r, ~ .. _~~ ~ iii . . .. ~:: ,~,i. , . , ,,,,. Nellncroase(deciease)post0.SF (182,355~ 864.462 371,947 (98,209) ~' (508,477) i~.. J6,960? , (705,44n {6,103,15n ~. .749,410 221.370~.. 7,350,668 1,752,957 :~ "~. 206.530 (11,030) (2,014,37~ . EndingWorkingCapNalJune30,2010 S 392,951 . 52,388,070 $ S,B12,669 $1.293,979 , , S!.,d,380,789 . _ . -~54;837;122, . 5 10,028,309 ; 576,403,876 . S_.:6;008,755 , . ~51;443.312'I S 4.367.130 51939166 ,u . :.$ ~.. -', $510,249 $ • $ 572,683 $62,378,994 Wolkln9CapHalTarflef(4mon}hy) 261,967 2761.0Y1 Tolalo(BofhFUnds 4.646.303 ii,zii.vii 7ofolofBofhFUntls' , ' ~$.11~.$91 ],a52,067 TofalolBofhFUntls Wo~kln9CapllalMiMm~m(1moMhs) 130.984 a2 TotalnnonMS 2,323,152 io toraineonrhs ~ - . 2,555,296 6 io~oinnon~hs Sfafus Above Target ato~e rarse~ Above Target nbo~e rorper Above Targei aeo~e roper , -l DUBLIN SAN RAMON SERVICES DISTRICT BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2009 k This Page Left Intentionally Blank DUBLIN SAN RAMON SERVICES DISTRICT BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 Table of Contents Pa~e INTRODUCTORY SECTION Independent Auditors' Report ................................................................................................ ..1 Management's Discussion and Analysis ................................................................................ .. 3 FINANCIAL STATEMENTS Comparative Statements of Net Assets .................................................................................. .. 8 Comparative Statements of Revenues and Expenses and Changes in Fund Net Assets:...... 10 , Statements of Cash Flows ...................:.........................:..............:..........:.......................::..:.~.;: . . . ~1,, 1. , ~ : ' ` ' NOTES TO.BASIC FINANCIAL STATEMENTS ..:.........:................:...:...............:..:.::...::.. 13 .. . ,. SUPPLEMENTARY INFORMATION : . - • Sewer Operations • . . . Combining Stafements of Net Assets .............................:.:..:..........:...:..................................: 36 ;, Combining Statements of Revenues and Expenses and Changes in Fund Net Assets ......:.. 37 Regional Sewer Operations Combining Statements of Net Assets ..................................................................................... 38 Combining Statements of Revenues and Expenses and Changes in Fund Net Assets ......... 39 Local Sewer Operations ~ Combining Statements of Net Assets ..................................................................................... 40 Combining .Statements of Revenues and Expenses and Changes in Fund Net Assets ......... 41 DUBLIN 5AN RAMON SERVICES DISTRICT BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 Table of Contents Water Operations Combining Statements of Net Assets .....................................................................................42 Combining Statements of Revenues and Expenses and Changes in Fund Net Assets .........43 Water Funds Combining Statements of Net Assets ..................................................................................... 44 Combining Statements of Revenues and Expenses and Changes in Fund Net Assets .........45 Allocations Combining Statements of Net Assets ...................:.........................................................:...:.: :.46 .: ~ Combining Statements of Revenues and Expenses and Changes in Fund Net Assets,:,..,::.47 . G ~ ~3~~CId,~l~3~"~~~~ ~~~~C3~"~7"~~~~~ ~~~~ ~~r~~g~t~ ~~s~, w ~a~~~~ ~~~ ~~~~~~;~~ ~"a~i, ~~~~~~r~;~~ ~~~'~~ t~~~) ~:~~-~~~'~ x ~"~~ (~~~~ ~~3£1-t3~~:~ s"iT sa ~'~' i?'-' e ~ 1ca.~ £;'c'~~~ ~~ #~~~ ~. ~€~t'€T INDElDENDEN'T AUDITORS' REPORT ~~°~`~'~4'•~~'~~w~`~~~~~~r~t~~.~~ra~ Board of Directors Dublin San Raznon Services District Dublin, Califomia We have audited the basic fmancial statements of the Dublin San Ramon Services District for the year ended June 30, 2009. These basic financial statements are the responsibility of the District's management. Our responsibility is to express an opinion on these basic fmancial statements based on our audit. Comparative data for the year ended June 30, 2008 has been summarized from the prior year financial statements audited by us where we expressed an unqualified opinion dated October 31, 2008. We conducted our audit in accordance with generally accepted auditing standards in the United States, of America. ,. Those standards require that we plan and perform the audit fo obtain reasonable assurance as to whether the basic. . finaneial statements are free of material misstatement. An audit includes examining on a test basis' eyidence . supporting the amounts and disclosures in the basic financial statements. An audit also includes assessing the accounting principles .used and significant estimates made by management, as .well as evaluating, the overall .basio financial statement presentation. We believe that our audit prouides a reasonable basis for our opinion. In our opinion, the basic financial statements referred to above present fairly in ali material respects the respective. fmancial position of the Dublin San Ramon Sen~ices District at June 30, 2009, and the results of its operations and its cash flows for the year dlen ended, in conformity with generally accepted accounting principles in .the.United States of America. As discussed in Note b, the District elected to remove its investments in Joint Powers Authorities as assets. Management's Discussion and Analysis is required by the Government Accounting Standards Board, but is not part of the basic financial statements. We have applied certain limited . procedures to #his information, principally inquiries of management regarding the methods of ineasuremeni and presentation of this information, but we did not audit this information and w~e express no opinion on it. Our audit u-as made for the purpose of forming au opinion on 2he basic fmancial statements tal:en as a whole. The supplemental infonnation listed in the Table of Contents is presented for purposes of addifional analysis and is not a required part of the basic financia] statements of the Dublin San Ramon Services District. Such information has been subjected to the auditing procedures applied in our audit of the basic fmancial statements, and in our opinion is fairly stated in all material respects in relation to the basic financial statements taken as a whole. October 34, 2009 9 ~ ~ ~- ~ ~ LkT~t'f~~~, l.J ~, :}~~t~r..>.~;~;~:.; ~~~;~~~~~~;~~~ This Page Left Intentionally Blank DUBLIN SAN RAMON SERVICES DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS OF BASIC FINANCIAL STATEMENTS Fiscal Years Ended June 30, 2009 and 2008 Financial Hi~hli~,hts for Fiscal Year 2009 / Total assets decreased by $93 million or -2.6% / Total liabilities decreased by $2.7 million or -4.7% / The District's net assets decreased $6.5 million or -2.2% / Tota1 revenues decreased $4.8 million or -8.9% / Total expenses increased $1.7 million or 3.2% Overview of the Financial Statements The following overview of the fmancial activities of Dublin San Ramon Services District summarizes changes in the District's basic fmancial statements. Basic financial statements consist of the Statement of Net Assets, Statement of Revenues and Expenses and Changes in Net Assets, Statement of Cash Flows and Notes to Financial Statements. The main purpose of these statements is to provide the reader with sufficient information to assess whether or not the District's overall fmancial position has improved or deferiorated. ~ , Increases or decreases in net assets over time are an indicator of the District's overall fmancial health and ..:~,,. should be considered together~with management's short and long-term plans for prospectively ~financing :. •~. ~~: ~. ~ operations and programs. _ - .. . _ The Statement of Net Assets includes all District assets and liabilities and provides information :about the .. ~',- nature and amounts of investments in resources (assets) and obligations to creditors (liabiliries). - These Statements provide data for calculating analytical review measures such as rate of return, capital structure, and ; ~. liquidity. Revenues and expenses are accounted for in the Statement of Revenues and Expenses and .Changes :~:: . .. in Net. Assets. These statements measure the success of District operations for the year and determine cost .. :.~ . recovery through user fees and other chazges, profitability, and credit worthiness. Lastly, the Statement of .: Cash Flows provide information about District cash receipts and disbursements and net changes in cash that result from operating activities, non-capital financing activities, capital financing activities and investing • ~ • activities. Thus, the Statement of Cash Flows shows sources and uses of cash. The format of the District's financial statements is in accordance with business-type activities known as enterprise funds. Enterprise funds are self-supporting funds that charge fees to users to cover the costs of operation, maintenance and recurring capital replacement (OM&R) similar to the accounting used by private sector companies. Enterprise funds report on the accrual basis of accounting recognizing all assets, liabilities, revenues and expenses applicable as of the financial statement date. The District is governed by a Board of Duectors, which sets policy, adopts budgets and appoints a General Manager to run operations. There are five Directors elected at-large to overlapping four-year terms. Chan~es in Net Assets The following condensed Statement of Net Assets - Table 1 and Statement of Revenues and Expenses and . Changes in Fund Net Assets - Table 2 are presented in a comparative format together with dollar and percentage of change from the previous year to help facilitate analysis of fmancial activity. DUBLIN SAN RAMON SERVICES DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS OF BASIC FINANCIAL STATEMENTS Fiscal Years Ended June 30, 2009 and 2008 TABLE 1 Condensed Statement of Net Assets , Fiscal Year Fiscal Year Fiscal Year Ended Ended % Ended % 2009 2008 Change 2007 Change " Current and restricted assets $ 74,499,140 $ 99,771,932 -253% $ 125,182,720 -20.3% Capital assets 262,094,523 245,371,443 6.8% 239,005,062 2.7% Other assets 11,972,578 12,760,929 -6.2% 5,856,940 117.9% Total assets 348,566,241 357,904,304 -2.6% 370,044,722 -3.3% Current and resh-icted liabilities 14,916,958 31,105,951 -52.0% 7,245,459 329.3% Long-tem liabilities 41,506,939 28,095,315 47.7% 64,096,815 -56.2% Totalliabilities 56,423,897 59,201,266 -4.7% 71,342,274 -17.0% Net assets .. Invested in capital assets, net of debt 227;411,394 207,889,308 9.4%. 18Z,277,912 . 11.0% , Restricted for expansion • . . • . 2~1,073,064 . 38,036,226 . -44.6% ~ ' 46;125,675 --1~7.5%-.. .: . .. ~ ' . Restrictedfordebtservice : . 3,538,390 3,123,483 . • 133%~ 5,647;854. : -44:7%• ~ :- .•,~ . Restricted for assessment district 512,667 854,612 -40.0% 854,725. .~::: Unrestricted 39,606,829 48,799,409 -18.8% 58,796,282 =17:0% ' Total net assefs : ' ,. - $ •292,142,344 _ $ 298,703',038 -2.2% $ 298,702,448 ' . . .. ~ As the aboye~table"iridicates; total assets decreased $93 million or 2.6 % during the fiscal year ended June' .~.'. : 30, 2009 (FYE 2009). This is comprised of a decrease in current an d restricted assets of $253 million, : - ` offset by a$16.7 million increase in capital assets. Th e decrease in curient and restricted assets is due to a' - decrease in cash and~investments of $24.7 million; $17.3 million was spent on acquisitions and construction . ~. of capital projects which expand and improve the Di strict's infrastructure, $5 million was spent on long- term debt and the balance was spent to cover net operating costs. Total liabilities decreased $2.7 million or 4.7 % during the fiscal year. 'This is primarily due to principal paid on long-tem debt of $3.0 million. Comparing FYE 2008 to FYE 2007 total liabilities decreased 17% which was due to $14.5 million of principal payments on long-term debt. See Financial Statement Note 7- Long Term Debt for a detailed explanation. Overall the District's total net assets decreased $6.5 million or 2.2% during FYE 2009 compared to FYE 2008 over FYE 2007 where total net assets had virtually no change. Many capital projects were completed in FYE 2009 which resulted in an increase over the past two years in Investment in Capital Assets and a decrease in Net Assets Restricted for Expansion. T'he decrease in Unrestricted Net Assefs is primarily the result of $7.0 million in Water Expansion projects funded from previously Unrestricted Funds. The balance of the reduction in Unrestricted Assets was for debt payments and to cover operating costs in the Water funds. 4 DUBLIN SAN RAMON SERVICES DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS OF BASIC FlNANCIAL STATEMENTS Fiscal Years Ended June 30, 2009 and 2008 TABLE 2 : Condensed Statement of Revenues and Expenses and Chaoges in Fund Net Assets Fiscal Year Fiscal Year Fiscal Year Ended Ended % Ended % 2009 2008 Change 2007 Change Operating revenues - sewer $16,041,196 $16,093,655 -0.3% $16,804,542 -4.2% ~ Operating revenues - water 14,175,310 14,082,681 0.?% 12,282,851 14.7% Other revenues 8,202,197 4,650,426 76.4% 4,620,0~7 0.7% Investmentincome 1,767,344 5,492,130 -67.8% 6,684,883 -17.8% Connection fees 2,381,361 10,292,687 -76.9% 14,063,483 -26.8% Contributions 6,695,327 3,471,772 92.9% 3,497,300 -0.7% Total revenues 49,262,735 54,083,351 -8.9% 57,953,136 -6.7% Operating expenses - sewer 29,787,076 28,691,777 3.8% 26,559,857 8.0% Operating expenses - water 24,183,138 23,377,198 3.4% 18,995,357 23.1% , Non-operating expenses 1,853,215 . ' .2,013,786 ~ -8.0% • 2,484,305 -18.9%, ~ , ~ - . , - , - Total expenses ~ ' • ~ ~ 55,823;429 ~ 34,082,761 ` ~ ~ 3.2% • 48,039;519 12:b°lo . =: : • • : ~. ~ . . Increase in fund net assets (6,560,694) 590 ~ . 9,913,617 -100.0%: .:: ~ . Fund net assets - beg of year 248,703,038 298,702;448. 288,788,831 3.4% •;:: ;. Fund net assets - end of year $ 292,142,344 $ 298,703,038 -2.2% $ 298,702,448 In FYE.2009 the District faced many of the same challenges as other businesses and municipalities. The • recent credit market collapse and the slowdown in development have lead to a decline in total revenues of $4.8 million or 8.9%. The largest decline was in Connection fee revenues with a decrease of $8.0 million from FYE 2008. This is the direct result of the housing market crash; new construction has come to a virlual standstill. The District also had a decline in Investment Income of $3.7 million; due to steep reductions in interest rates on investments. Several of the District's long-term, higher interest investments were called and replaced by lower interest rate investments. In addition, with the extreme drop in connection fee revenues, more cash was funneled into lower-earning liquid investments to ensure cash was available for debt service. The District did see an increase in Other Revenues and Contributions (developer donated facilities) of $3.6 million and $3.2 million respectively. The increase in Other Revenues was primarily due to a refund of prior year contributions from Livermore Amador Valley Water Management Agency (LAVWMA), a joint powers authority of which the District is a participant. Contr'sbutions increased as developers completed facilities that were already under conslruction prior to the construction slowdown. Total expenses increased $1.7 million or 3.2% during FYE 2009. Operating expenses in Sewer and Water increased $1.1 million and $0.8 million, respectively primarily due to increases in personnel costs and contract services. 5 DUBLIN SAN RAMON SERVICES DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS OF BASIC FINANCIAL STATEMENTS Fiscal Years Ended June 30, 2009 and 2008 Capital Assets and Debt Changes in District-wide capital assets and accumulated depreciation are as follows: Balance at Transfers & Balance at 06/30/08 Additions Retirements Adjustments 06/30/09 Capital assets being depreciated: Land & Improvements $ 7,800,273 $ - $ - $ 5,712,053 $ 13,512,326 Buildings ' 118,039,421 22,867 - 73,028 118,135,316 Equipment 59,762,331 347,571 (418,699) 403,415 60,094,618 Sub-surface lines 99,353,860 6,695,327 - 2,255,955 108,305,142 Total capital assets being depreciated: 284,955,885 7,065,765 (418,699) 8,444,451 300,047,402 Less: Improvements (2,086,152) (338,292) (2;424,444) Bu,ildings . . (17,768,281) (2,354,914) . ,, ~ (20,123,195) Equipment . -.. _, (21,021,330) , ; , (2,312,301) _ 418,699 ,. :: (22,914,932) , Sub-sucface lines (22,891,280) (2,219,525) ~ - - ~ (25,1,10,805) Total accumulated depreciation (63,767,043) (7,225,032) 418,699 - '.~~` (70,573,376) Net capital assets being depreciated 221,188,842 (159,267) . 0 8,444,451 • 229,474;026• Capital assets not being depreciated: . ` Construction in progress 24,182,601 16,882,347 - (8,444,451) 32,620,497 Total capital assets, net $'245,371,443 $ 16,723,080 $ 0 $ - $:262,094;523 . . In addition to Operations, Maintenance & Replacement (OM&R), the District also maintains an ongoing capital improvement program (CIP). The CIP 10-Year Plan (Plan) is a document that reflects the District's capital infrastructure needs for the next ten years. The Plar- is updated every two years in advance of the preparation of the Two-Year CIP Budget. The District spends a great deal on capital asset acquisition and capital projects to support growth in its service area. For FYE 2009 the District purchased, had contributed, or constructed the following assets: Contributed sub-surface lines $6,695,327 Land - Future Corporation Yard 5,640,000 Water main and water system improvements 2,284,437 Financial, management, and operating hazdware and software upgrades 320,428 Wastewater treatment plant improvements 224,326 Operations equipment, vehicles and office equipment 177,750 Building and landscape improvements 167,948 $15 510 216 6 DUBLIN SAN RAMON SERVICES DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS OF BASIC FINANCIAL STATEMENTS Fiscal Years Ended June 30, 2009 and 2008 For FYE 2009 the District had the following activity in construction in progress: Additions to Construction in Pro~ress Wastewater treatment plant maintenance building ' $7,008,057 Zone 2 and 3 Water Main Improvements 2,903,365 Water Pump Station 300B 2,494,648 Zone 2 and 3 Pump Station Improvements 1,409,485 Wastewater treatment plant new bar screens 931,201 Water and Recycled water system improvements 791,305 Wastewater system improvements 701,696 Security and emergency preparedness 340,464 SCADA and technology improvements 302,126 16.882347 The changes in long-term debt are as follows: Balance at Pri.ncipal , Debt Pavable. ;. 6/30/2008 . Additions , ; Payments 1997 Revenue.Bonds : ~: ; $ 1,475,000 . $ ,~:195,000 2000 Certificates ofParticipation 23,615,000 2,361,500 WateReuse Progam . 13,385,000 -• 490,000 ,- ~. . $ 38,475,000 $ ~ - $ 3;046,500 Balance at 6/30l2009 . . $ 1,280,000 ..: 21,253,500. ~ 12,895;000 $ 35,428,500 The District issued debt to fund expansion of the wastewater treatment facility, the recycled water facilities,. ' and to refmance debt issued for the District Administrative Office. For FYE 2009, no new debt was issued : and total principal repayment was $3,046,500. ~ - Financial Statement Note 8- Long Term Debt provides additional information on debt activity. Rates and Other Economic Factors The District is not subject to general economic conditions such as increases or declines in property tax values or other types of revenues that vary with economic conditions such as sales ta~ces. Accordingly, the District sets its rates to cover the costs of OM&R and debt-financed capital improvements. Contacting the District This fmancial report is designed to provide our customers, investors and creditors with a general overview of the Dish-ict's finances and to show accountability for the money it receives. If you have questions about this report, or need any additional fmancial information, contact the Financial Services Department at 7051 Dublin Blvd., Dublin, California 94568. 7 DUBLIN SAN RAMON SERVICES DISTRICT COMPARATIVE STATEMENTS OF NET ASSETS JiJNE 30, 2009 WITH SUMMARIZED TOTALS AS OF JLJNE 30, 2008 2009 Sewer Water Totals 2008 ASSETS Current assets: Pooled cash $5,119,973 $1,184,697 $6,304,670 $3,974,559 Pooled investrnents 45,797,861 10,613,571 56,411,432 83,474,664 Restricted investrnents 1,874,204 1,908,271 3,782,475 3,385,415 Accounts receivable 3,538,277 3,657,283 7,195,560 7,694,663 Interestreceivable 117,521 31,612 149,133 494,795 Employee notes receivable 4Q068 40,068 35,186 Deferred connection fees receivable 615,386 615,386 680,130 Prepaid expenses 263 153 416 32,520 Total current assets 57,103,553 17,395,587 74,499,140 99,771,932 Non-current assets: ~ Net OPEB asset 6,756,855 '~990,943 7,74~,798 7,936,575 Capital assets: ~ ' J Proper[y, plant and equipment 173,791;580 126,255,822 30Q047,402 284,955;885 Less accumulated depreciation 47,378,558 23,194,818 70,573,376 63,767,043 . Net property, plant and equipment 126,413,022 103,061,004 229,474,026 221,188,842 Construction in progress 17,083,329 ~ 15,537,168 32,620,497 24,182,601 Total capitai assets 143,496,351 ~ 118,598,172 262,094,523 245,371,443 Other assets: Deferred charges 745,371 189,165 934,536 992,865 Deferred connections receivable - long term 3,290,244 3,290,244 3,831,489 Total other assets 4,035,615 189,165 4,224,780 4,824,354 Total non-current assets 147,531,966 118,787,337 . 266,319,303 250,195,797 Total assets $211,392,374 $137,173,867 $348,566,241 $357,904,304 g DUBLIN SAN RAMON SERVICES DISTRICT COMPARATIVE STATEMENTS OF NET ASSETS JiJNE 30, 2009 WTI'H SUMMARIZED TOTALS AS OF JLTNE 30, 2008 LIABILIT'IES Current liabilities: Accounts payable Contractor bonds and deposits Accrued expenses Accrued compensated absences Interest payable Current portion of long-term debt Deferred revenue and other liabilities Tota] cunent liabilities • Long term liabilities: Long-term debt . less cunent portion Arbitrage payable DLD remediation payable Deferred revenue Total long tertn liabilities Total liabilities NET ASSETS Invested in capital assets, net of related debt Restricted for: Expansion Debt service Assessment district UnresVicted Total net asseu 2009 Sewer Water Totals 2008 2,173,653 $4,321,319 $6,494,972 $5,842,615 440,083 461,948 902,031 1,507,731 2,996 2,996 73,543 579,504 309,416 888,920 717,912 97,003 97,003 96,370 4,928,000 505,000 5,433,000 21,705,000 1,098,036 ],098,036 1,162,780 9,319,275 5,597,683 14,916,958 31,105,951 17,605,500 12;390,000 29,995,500 16,770,000 _ . 61,'110 61,710 56,371 620;000 620,000 620,000 • . 3,290,244 _ 7,539,485 10,829,729 10,648,944 21,515,744 19,991,195 41,506,939 28,~95,315 30,835,019 25,588,878 ~ 56,423,897 59,201,266 • 121,708,222 " ]05,703,172 227,411,394 207,889,308 21,073,064 21,073,064 38,036,226 1,777,201 1,761,189 3,538,390 3,123,483 512,667 512,667 854,612 35,998,868 3,607,961 39,606,829 48,799,409 $180,557,355 $111,584,989 $292,142,344 $298,703,038 See accompanying notes to basic financial statements 9 DUBLIN SAN RAMON SERVICES DISTRICT COMPARATIVE STATEMENTS OF REVENUES AND EXPENSES AND CHANGES IN FUND NET ASSETS FOR THE FISCAL YEAR ENDED J[JNE 30, 2009 WITH SUMMARIZED TOTALS FOR THE YEAR ENDED JUNE 30, 2008 2009 Sewer Water Total 2008 OPERATING REVENUES Wastewater service chazges Water sales Otherrevenues Total operating revenues OPERATING EXPENSES Personnel Materials ~ Contractual services Other ~ - Depreciation ~ Total operating expenses ' OPERATING (LOSS) NONOPERATING REVENUES (EXPENSE) Investrnent income, Interest expense Gain (Loss) on disposal of capital assets Total non-operating revenues (expense), net LOSS BEFORE CONTRIBUTIONS AND TRANSFERS $16,041,196 $16,041,196 $16,093,655 $14,175,310 14,175,310 14,082,681 6,155,226 2,046,971 8,202,197 4,650,426 22,196,422 16,222,281 38,418,703 34,826,762 10,445,744 , 6,636,103 17,081,847 16,004,939 2,393,732 8,187,679 10,581,411 10,679,183 12,517,754 6,383,015 18,900,769 18,261,684 66,207 ' , 114,948 181,155 260,983 4,363,639 - . 2,861,393 - ' 7,225,032. ;: 6,862,186 29,787,076 ~ 24,183,138 53,970,214; , 52,068,975 (7,590,654) . (7,960,857) (15,551;5:11) ; .(17.,242,213) 1,283,618 483,726 . 1,767,344 ~;. 5,492,130 (1,296,425) (556,907) (1,853,332) ,-~ (2,036,275) 61 56 117 ;.• ~ 22,489 (12,746) (73,125) (85,871). 3,478,344 (7,603,400) (8,033,982) (15,637,382) (13,763,869) Non-cash contributions Capital contributions - connection fees Transfers in Transfers (out) 1,545,890 5,149,437 6,695,327 3,471,772 2,123,173 258,188 2,381,361 10,292,687 187,746 (187,746) Changes in net assets (3,934,337) (2,626,357) (6,560,694) 590 TOTAL NET ASSETS, BEGINNING OF YEAR (as restated) 184,491,692 ] 14,211,346 298,703,038 298,702,448 TOTAL NET ASSETS, END OF YEAR $180,557,355 $111,584,989 $292,142,344 $298,703,038 See accompanying notes to basic financial statements 10 DUBLW SAN RAMON SERVICES DISTRICT STATEMENTS OF CA3H FLOWS PROPRIETARY FUNDS - ENTERPWSE FOR THE YEAR ENDED JUNE 30, 2009 WI7'H SUMMARlZED TOTALS FOR'1'F{E YEAR ENDED JUNE 30, 2008 CASH FIAWS FROM OPERATING ACTN[TIES Receipts from customers, users and joint powers authorities Payments for services and supplies Payments to or on behalf of employees Net Cash Provided (Used) by Operating Activities 2009 Sewer Water Total 2008 $23,048,947 $15,900,963 $38,949,910 $33,272,668 (15,361,905) (14,319,981) (29,681,886) (25,768,718) (1Q186,447) (6,54Q497) (16,726,944) (23,920,921) (2,499,405) (4,959,515) (7,458,920) (16,416,971) CASH FLOWS FROM NONCAPITAL FINANCING ACTNITIES Due to other funds Due from other funds Transfers in Transfers out . 3,061,467 (3,061,467) 187,746 (187,746) Net Cash Used in Noncapital Financing Activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTNTTIES Principal paid on long-term debt Interest paid on long-term debt Acquisition and construction of capital assets Sale of other capital assets .: _. Connection fees collected . . _ ~. (2,556,500) (490,000) (3,046,500) (14,525,000) (1,343,612) (567,416) (1,911,028) (1,784,884) (8,183>813) (9,068,972) (17,252,785) (9>767,227) 32,921 2,123;173 980,219 3,103,392 9,971,293 ' Net Cash (Used) for.Financing Activities CASH FLOWS FROM INVESTING ACTNITIES - ~ Interest receiyed ~ ` Purchase of U.S. govemment securities Sales of U.S. govemment securities Net proceeds (purchase) of other investments • Net proceeds (purchase) of LAIF investment Tlet Cash Provided by Investing Activities NET CHANGE IN CASH AND CASH EQUNALENTS CASH AND CASH EQUNALENTS, BEGINNING OF YEAR CASH AND CASH EQUNALENTS, END OF YEAR • (9,960,752) (9,146,169) (19,106,921) (16,072,897) 1,515,136 ~ • 597,869 2,113,005 :.~5,982,683 , (14,990,000), 14,078,354 14,246,977 28,325,331 49,000,000 (119,593) (430,113) (549,706) (18,633,540) (669,715) (322,963) (992,678) 10,410,380. 14,804,182 14,091,770 28,895,952 31,769,523 2,344,025 (13,914) 2,330,111 (720,345) 2,775,948 1,198;611 3,974,559 4,694,904 $5,119,973 $1,184,697 $6,304,670 $3,974,559 RECONCII,lAT10N OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTNITIES Operating (loss) Ad.justments to reconcile operating loss to net cash provided by operating activities: Depreciation (Increase) decrease in accounts receivable (Increase) decrease in employees ~ notes receivable (Increase) decreasein prepaid expenses (Increase) decrease in net OPEB asset Increase(decrease)in accountspayable increase (decrease) in DLD remediation payable lncrease (decrease)in arbiuage payable Increase (decrease) in conVactor bonds and deposits payable Increase (decrease)in accrued expenses Increase (decrease)in compensated absences Total adjustments ($7,590,654) ($7,960,857) ($15,551,511) ($17,242,213) 4,363,639 2,861,393 7,225,032 6,862,186 846,934 (347,831) 499,103 (1,563,465) (4,882) (4,882) (1,71]) 5,591 26,513 32,104 9,371 164,632 ~24,145 188,777 (7,936,575) (47,171) 699,528 652,357 2,742,802 620,000 5,339 5,339 14,326 (266,494) (339,206) (605,700) 114,616 (70,547) (70,547) (58,612) 99,547 71,461 171,008 22,304 5,091,249 3,001,342 8,092,591 825,242 NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES NON CASH TRANSACTIONS: Fair market value adjushnent (decrease) increase ConVibuted assets ($2,499,405) ($4,959,515) ($7,458,920) ($16,416,971) ($133,044) ($85,509) ($218,553) ($235,584) 1,545,890 5,149,437 6,695,327 3,471,772 See accompanying notes to basic financial statements 11 This Page Left Intentionally Blank DUBLIN SAN RAMON SERVICES DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2009 NOTE #1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. General Dublin San Ramon Services District (the District) is organized under the Community Services District Act provisions of the general laws of the State of California and is governed by a five-member Board of Directors. The District, which was established in 1953 and became active in 1960, provides water, recycled water and wastewater collection and treatment services. The District's jurisdiction is approximately 26 square miles in the counties of Alameda and Contra Costa, California. B. Basis of Accountin~ 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 enterprise, where the intent of the governing body is that the costs and expenses, including depreciation, and providing goods or services to the general public on a continuing basis, be fmanced or :~ recovered primarily through user charges. ~~ An enterprise fund is 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 all liabilities of the enterprise are recorded on its statement of net assets; and under the full accrual, basis of accounting all revenues are recognized when eamed and all expenses; including depreciation, are recognized when incurred. ... A Major Fund is a fund whose revenues, expenditures/expenses, assets or liabilities (excluding extraordinary ~ items) are at least 10 percent of corresponding totals for all funds. The District reports the following major Proprietary Funds: Water Enterprise - This enterprise accounts for the operation, maintenance and capital improvement projects of the water system, which is funded by user charges and other fees. Sewer Enterprise - This enterprise accounts for the operation, maintenance and capital improvement projects of the sewer system which are funded by user charges and other fees. The District applies all applicable pronouncements of the Governmental Accounting Standards Board (GASB) as well as any applicable pronouncements of the Financial Accounting Standards Board, the Accounting Principles Board, or any Accounting Research Bulletins issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements. C. Measurement Focus Enterprise funds are accounted for on a cost of services or economic resources measurement focus, which means that all assets and all liabilities associated with their activity are included on their balance sheets. Enterprise fund type operating statements present increases (revenues) and decreases (expenses) in total net assets. 13 DUBLIN SAN RAMON SERVICES DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2009 NOTE #1- SUMMARY OF SIGNIFICANTACCOUIVTING POLICIES (Continued) D. Reportin~Entitv In evaluating how to define the government for financial purposes, management has considered all potential component units. The decision to include a potential component unit in the reporting entity was made by applying the criteria prescribed by Generally Accepted Accounting Principals (GAAP). As required by GAAP, these financial statements present the primary government and its component units, entities for which the government is considered to be financially accountable. Financial accountability is interpreted to mean appointment of a voting majority of the component unit's board and either the ability to impose will by the primary government or the possibility that there is a fmancial benefit or burden on the primary government. In evaluating the financial reporting entity for purpose of preparing the basic financial statements, the District has determined it is fmancially accountable for the DSRSD Financing Corporation. The Corparation is included as a blended component unit in these basic financial statements. . E. Capital Assets .: . . . Capital _assets, which include property, plant, and equipment are recorded at historical costs or . estimated ~. ~ historical cosf, if actual cost is not available. Contributed assets are recorded at estimated fair value .on the. date. .: of contribution. -. . : _ . ~ ~ : . ,. The District defines capital assets as assets with an initial, individual cost of $5,000 and an estimated,useful life _~: in excess of one year. . ~ Depreciation is computed by the straight-line method based on the estimated useful lives of related ,asset: classifications. The District has assigned the useful lives listed below to capital assets: Land Improvements 15-25 years Buildings ~ 10-50 years Equipment 5-25 years Sub-surface lines 25-50 years F. Cash Flows Defined For purpose of the statements of cash flows the District defines cash and cash equivalents to include all cash in deposit accounts and cash on hand but does not include cash held in escrow for restricted purposes. G. Accounts Receivable The District bills its water consumption and sewer usage on a cycle billing method. Cycle billing results in an amount of services rendered but not yet billed at year-end. The District has recorded this revenue by estimating the unbilled amount. The estimate was calculated by using the billing subsequent to the balance sheet date (June 30) and calculating the amount of service provided prior to June 30. This calculated amount is included in accounts receivable. 14 DUBLIN SAN RAMON SERVICES DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2009 NOTE #1- SUMMARY OF SIGNIFICANT ACCOLINTING POLICIES (Continued) H. Accrued Compensated Absences The liability for vested vacation pay is calculated and accrued on an annual basis. The amount is computed using current employee accumulated vacation hours at current pay rates. T. Reclassification The Dish-ict changed the classification of certain amounts in the current year financial statements to improve their presentation. Amounts for the prior fiscal year have been reclassified to conform to the current year presentation. NOTE #2 - CASHAND INVESTMENTS A. Policies California Law generally requires banks and savings and loan institutions to pledge government : securities .~ .~. . with a market 'value of 110% of the District's cash on deposit, or first trust deed mortgage notes with a market ~._ . ~~ value of 150% of the deposit; as collateral for these deposits. Undei California Law this collateral :is. held in;a; _.; ;!~:; . separate investmentpool by another institution in the District's name and places the District ahead of.general, .;:? .., .,' creditors of the iristitution. As of June 30, 2009, the District's cash in bank was insured or collatetalized as .. ~ discussed above. At June 30, 2009, the District held $518,591 in escrow accounts on behalf of developei-s; ..~. . which were riot collateralized as allowed in the government code. .. The District invests in individual inveshnents and in investment pools. .Individual inveshnents are:evidenced; .- „ by specific ident~able securities instruments, or by an electronic entry registering the owner in the records of. ~~ the institution issuing the security, called the book entry system. In order to increase security, the District . employs the Trust Department of a bank as the custodian of certain District managed investments, regardless of their form. The DistricYs investments are carried at fair value, as requued by generally accepted accounting principles. The District adjusts the carrying value of its investments to reflect their fair value at each fiscal year end, and it includes the effects of these adjustments in income for that fiscal year. B. Classification f Cash and investments are classified in the fmancial statements as shown below, based on whether or not theu use is restricted under the terms of District debt instruments or Agency agreements. ~ Cash and cash equivalents $6,304,670 Investments 56,411,432 Restricted investments 3,782,475 Total Cash and investments $66,498,577 15 DUBLIN SAN RAMON SERVICES DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2009 NOTE #2 -. CASHAND 1NVESTMENTS (Continued) C. Inveshnents Authorized bv the California Govemment Code and the District's Investment Policv ` The District's Investment Policy and the California Government Code allow the District to invest in the following provided the credit ratings of the issuers are acceptable to the District; and approved percentages and maturities are not exceeded. The table below also identifies certain provisions of the California Government Code, or the District's Investrnent Policy where the District's Investment Policy is more resh-ictive. Minimum . Maximum Credit Authorized Investment Type Maturity Quality. Repurchase Agreements 1 Year None California Local Agency Investment Fund Upon Demand None +.:- ... U.S. Treasury Obligations 5 Years None _ U.S. Agency. Securities . . . . . S~Years None .: . . . . . - , Insured oi Collateialized Deposits with Banks, Savings and Loans Upon Demand None ~ .. Califomia Asset Management Program ` Upon Demand None : ~ ' 1 of the 2 Local Agency Bonds . 5 Yeazs Highest Medium Term Notes ~ -. 5 Years A. Commercial Paper ~ 180 Days A • With the exception of U.S. Treasury securities, U.S. Government Agancy sponsored obligations, the California Asset Management Program (CAMP) and the Local Agency Investment Fund (LAIF), no more than 50% of the District's total investment portfolio will be invested in a single security type or with a single institution. The District does not enter into reverse repurchase agreements. 16 DUBLIN SAN RAMON SERVICES DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2009 NOTE #2 - CASHAND IIWESTMENTS (Continued) D. Investments Authorized by Debt A~,reements The District must maintain required amounts of cash and investments with trustees or fiscal agents under the terms of certain debt issues. T'hese funds are unexpended bond proceeds or are pledged reserves to be used if the District fails to meet its obligations under these debt issues. The California Government Code requires these funds to be invested in accordance with District resolutions, bond indentures or State statutes. The table below identifies the investment types that are authorized for investments held by fiscal agents. The table also identifies certain provisions of these debt agreements: ~ Maximum Minimum Credit Authorized Inveshnent Type Maturity Quality U.S Agency Securities 5 years Aaa Bankers' Acceptances 360 days P-1 CommerciaT Paper • 270 days P-1 Money Market Mutual Funds ,.~ N/A AAAm . Califomia Local Agency Inveshnent Fund , N/A None ~ Pre-Funded Municipal Obligations N/A AAA Repurchase Agreements 30 days A There are no restrictions on the maximum amount invested ~ in each security type or maximum that can be invested in any one issuer. ~ E. Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investrnent. Normally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The District generally manages its interest rate risk by holding investments to maturity. Information about the sensitivity of the fau values of the District's inveshnents (including investrnents held by bond trustees) to market interest rate fluctuations is provided by the following table that shows the distribution of the District's investments by maturity or earliest call date: 17 DUBLIN SAN RAMON SERVICES DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEA,R ENDED JUNE 30, 2009 NOTE #2 - CASHAND INVESTMENTS (Continued) 12 Months More than 60 Investment Type or less Months Total Califomia Local Agency Inveshnent Fund $39,730,644 California Asset Management Program 16,680,788 Total Unrestricted Investments WestLB Guazantee Investment Contract Money Market Funds Escrow Deposits Total Restricted Investments Total Investments 56,4 l 1,432 2,093,312 $39,730,644 16,680,788 56,411,432 $1,170,572 1,170,572 2,093,312 518,591 5 ] 8,591 2,611,903 1,170,572 3,782,475 $59,023,335 $1,170,572 $60,193,907 The District is a voluntary participant in the Loca1 Agency Investment Fund (LAIF) that is regulated by . California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The District reports its investment in LAIF at the fair value amount provided by LAIF, which is the same as the value of the pool 'share. The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. Included in LAIF''s investrnent porifolio are collateralized mortgage obligations, mortgage-backed securities, other asset-backed securities, loans to certain state funds, and floating rate securities issued by federal agencies, government-sponsored enterprises, United States Treasury Notes and Bills, and corporations. At June 30, 2009, these investments matured in an average of 235 days. The District is a voluntary participant in the California Asset Management Program (CAMP). CAMP is an investment pool offered by the California Asset Management Trust (the Trust). The Trust is a joint powers authority and public agency created by the Declaration of Trust and established under the provisions of the Califomia Joint Exercise of Powers Act (California Government Code Sections 6500 et seq., or the "Act") for the purpose of exercising the common power of its Participants to invest certain proceeds of debt issues and surplus funds. The Pool's investments aze limited to investments permitted by subdivisions (a) to (n), inclusive, of Section 53601 of the California Government Code. The District reports its investments in CANIP at the fair value amounts provided by CAMP, which is the same as the value of the pool share. At June 30, 2009, the fair value approx.irnated is the District's cost. At June 30, 2009, these investrnents have an average maturity of 56 days. Money market funds are available for withdrawal on demand and at June 30, 2009, matured in an average of 4-18 days. 18 DUBLIN SAN RAMON SERVICES DISTRICT NOTES TO SASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2009 NOTE #2 - CASHAND 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, 2009 for each investment type as provided by Standard and Poor's. Investment Type _ AAA AA- Total California Asset Management Program Not rated.- Califomia Local Agency Inveshnent Fund Total Unrestricted Investments WestLB Guarantee Investinent Contract Money Market Funds Not rated: Escrow Deposits Total Resti-icted Investinents Total Investments $16,680,788 $16,680,788 39,730,644 56,411,432 $1,170,572 1,170,572 2,093,312 . . 2,093,312 518,591 3,782,475 ° $60,193,907 19 DUBLIN SAN RAMON SERVICES DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2009 NOTE #3 - RESTRICTED ASSETS AND RESTRICTED NET ASSETS A. Restricted Assets The Board is restricted by resolution in allocating connection fee revenues to the expansion of the District facilities and to certain related costs and may exercise discretion only in selecting among competing capital projects and activities. By resolution, the Board allocated ninety-five percent of connection fees for capital projects and five percent for indirect administrative overhead costs. The administrative overhead percentages may be adjusted at the discretion of the Board. Balances of restricted assets described above as of June 30, 2009 and 2008 are as follows: Legallv restricted funds 1997 Refunding Revenue Bonds 2000 Sewer COPs / Bank Certificates WateReuse Installment Purchase Contracts Contractor Retentions Total legally restricted funds B. Restricted Net Assets 2009 2008 $272,306 $275,410 1,601,898 1,602,844 , 1,389,680 1,307,640 ' S18,591 199,521 $3,782,475 $3,385,415 The District has restricted its net assets for capital expansion, asset replacement and other purposes in the amounts set forth below: ~ Capital expansion Local sewer expansion Regional sewer expansion Water expansion Debt Service 2000 Sewer COPs / Bank Certificates 1997 Bonds WateReuse Bonds Assessment District Dougherty Valley Assessment Dish-ict 2009 2008 $1,405,396 $2,014,132 19,667,668 30,641,457 5,380,637 21,073,064 38,036,226 1,510,188 1,602,844 267,013 269,370 1,761,189 1,251,269 3,538,390 3,123,483 512,667 854,612 512,667 854,612 Total restrictions on net assets $25,124,121 $42,014,321 20 ~ DUBLIN SAN RAMON SERVICES DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2009 NOTE #4 - CAPITAL ASSETS Changes in capital assets accounts are summarized below: Balar~ce ac salance u June 30, 2008 Additions Retirements Transfers June 30, 2009 • Capital assets being depreciated: Land and Improvements $7,800,273 $5,712,053 $13,512,326 Buildings 118,039,421 $22,867 73,028 118,135,316 Equipment 59,762,331 347,571 ($418,699) 403,415 60,094,618 Sub-surface lines 99,353,860 6,695,327 2,255,955 108,305,142 Total capital assets being depreciated: 284,955,885 7,065,765 (418,699) 8,444,451 300,047,402 • Less accumulated depreciation for. Improvements (2,086,152) (338,292) (2,424,444) Buildings (17,768,281) . (2,354,914) (20,123,195) Equipment (21,021,330) (2,312,301) 418,699 (22>914,932) ' Sub-surface lines ~ (22>891,280) (2,219,525) (25,110,805) . Total accumulated depreciation (63,767,043) (7,225,032) 418,699 . (70,573,376) Net capital assets being depreciated 221,P88,842 (159,267) 8,444,451 ~ 229;474,026 Capital assets not being depreciated: ConsWction in progess 24,182,601 16,882,347 (8,444,451) 32,620,497 Total capital assets, net $245,371,443 $16,723,080 $262,094,523 T`he District had outstanding construction commitments on capital projects totaling $2,860,196 at June 30, 2009. NOTE #S - DEFERRED CONNECTIONFEES RECENABLE In fiscal year ended June 30, 1997, the Disti-ict implemented a deferred payment program for regional sewer connection fees as a means to attract new business to the area. The program was modif ed in subsequent years and is now designed for commercial and affordable housing regional sewer connecrion fees between $25,000 and $100,000. Customers make a twenty percent down payment and enter into an agreement with the District to pay the balance over a maximum of ten years. The connection fee revenue is recognized as it is received. The portions outstanding are recorded as deferred connection fees receivable, which amounted to $3,905,630 at June 30, 2009. 21 DUBLIN SAN RAMON SERVICES DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2009 NOTE #6 -.70INT POWERSAUTHORTlIES A. LAVWMA The District is one of three participants in the Livermore Amador Valley Water Management Agency (LAVWMA), a joint powers authority formed in 1974, which constructed and operates an export pumping facility through which all wastewater in the area is discharged. The other two participants are the Cities of Livermore and Pleasanton, each also having a one-third representation in LAVWMA's Board of Directors, composed of two representatives from each participating agency. The LAVWMA's Board of Directors approves LAVWMA's annual budget, which is prepazed by LAVWMA's general manager. The Agency charges its members for project costs in proportion to their rights to the Agency's capacity. The District contracts with the City of Pleasanton ("City") to provide wastewater treatment and disposal. The District establishes user charges for these wastewater services. The City then establishes those same charges in its service area and remits the chazges they collect to the District on a monthly basis. A portion of the user charge is for the services provided by LAVWMA. LAVWMA bills the District for both the Disfict's and Pleasanton's share of these costs (which includes both operations and debt service). Financial statements for the Authority may be obtained from LAVWMA, 623 West Myrick Court, Clayton, Califomia 94517. LAVWMA has $131,160,000 in outstanding debt at June 30, 2009. The District is obligated to pay debt . . service totaling $94,620,045 or $6.9 million per,year. The total debt service represents both the District's shaze and the City of Pleasanton's share based upon a contractual agreement whereby the City collects rates and fees and remits them to the District. _ B. DERWA The District is also a participant (along with East Bay Municipal Utility District) in the DSRSD/EBMUD Recycled Water Authority (DERWA), a joint powers authority formed in 1995 to plan, design, construct, own and operate various facilities which together will maximize the volume of recycled water deliveries while recovering its costs. Once those facilities are constructed and continue for an approximate 10-20 year period, the members will extend conveyance facilities from the DERWA built facilities to their customers. Each member provides two representatives to DERWA's Board of Directors which approves the annual budget prepared by DERWA's treasurer. The Authority began its operations on June 28, 1995. DERWA has oonstructed a water recycling system, including treatment, conveyance, pumping and storage facilities which became operational on February 1, 2006. Operation and maintenance expenses are allocated based on each member's actual usage. Capital costs, including debt service, will be allocated based on each member's proportional value of capital assets. Financial statements may be obtained from DERWA, P.O. Box 24055 Oakland, California 94623. DERWA has an outstanding state loan totaling $23,219,224 as well as a commercial paper issuance of $46 million. The District's share of the total debt is 52.4% or $36,270,873. The letter of credit supporting the commercial paper will be expiring in January 2010 and DERWA is seeking a short-term extension. 22 DUBLIN SAN RAMON SERVICES DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR TgIE YEAR ENDED JUNE 30, 2009 NOTE #6 - INVESTMENT INJOINT POWERS A UTHORITIES (Continued) C. PRIOR YEAR RESTATEMENT During fiscal year ended June 30, 2009 the District reviewed its optional treatment of jointly governed organizations as investments in joint power authorities. As a result of that review, the District has removed the investments in joint power authorities and treated this as a change in accounting principle. The effect of this restatement is summarized below: Sewer Fund Water Fund Total Net assets previously reported as of June 30, 2007 $197,580,180 $117,075,173 $314,655,353 Restatements: Removal of investment in Joint Powers Authorities (13,958,038) (1,994,867) (15,952,905) Net assets, restated as of June 30, 20.07 :; .$.183,622,142 $ll 5,080,306 $298,702,448 , . . .. . , 23 DUBLIN SAN RAMON SERVICES DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2009 NOTE #7 - LONG-TERMDEBT 1997 Revenue Refunding Bonds 4.40%-5.01%, due 12/O1/2014 2000 Series COPs / Bank Certificates variable rate, due 07/O1/2013 WateReuse Progam variable rate, due OS/01/2028 Total Long-Term Debt A. Refunding Revenue Bonds Original Issue Balance Amo~nt June 30, 2008 $5,025,000 $1,475,000 55,000,000 16,415,000 Balance Retirements June 30, 2009 $195,000 $1,280,000 23,615,000 2,361,500 21,253,500 13,385,000 490,000 12,895,000 Amount due within one year $205,000 4,723,000 505,000 $38,475,000 $3,046,500 $35,428,500 $5,433,000 On December 11, 1997, the District issued $5,025,000 of 1997 Refunding Revenue Bonds. These lionds are payable from available Net Revenues of the water and waste water enterprises. Proceeds of the issuance were used to refund and retire the 1990 Certificates of Participation issued by the DSRSD Financing Corporation;.to provide a reserve fund and to pay costs of issuance. Interest rates range from 4% to 5%. These bonds mature. through December 1, 2014 with principal amounts due December 1, and interest payments due on December 1 and June 1 of each yeaz. A principal payment of $195,000 was made in fiscal year ending 2009. . The District is required to maintain a Reserve Fund in an amount equal to the maximum annual debt service. The Reserve Fund was initially funded from the proceeds of the Refunding Revenue Bonds in an amount equal to the Reserve Requirement. If on any Interest Payment Date there are insufficient monies in the Bond Fund to pay principal and interest then due, the Trustee is required to transfer so much of the Reserve Fund as is necessary to make such payxnent. Any monies on deposit in excess of the Reserve Requirement will be transferred to the Bond Fund. The pledge of future Water and Wastewater Fund Revenues ends upon repayment of the $1.5 million in remaining debt service on the bonds which is scheduled to occur in 2014. For fiscal year 2009, Water and Wastewater Fund Revenues including operating revenues and non-operating interest earnings amounted to $42.5 million and operating costs include operating expenses, but not interest, depreciation or amortizations and amounted to $38.2 million. Net Revenues available for debt service amounted to $4.3 million which represented coverage of 16.34 over the $262,991 in debt service. 24 DUBLIN SAN RAMON SERVICES DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2009 NOTE #7 - LONG-TERMDEBT (continuedJ B. Certificates of Partici~ation 2000 Series On August 2, 2000, $55,000,000 principal amount of 2000 Variable Rate Demand Certificates of Participation (2000 COPs) were issued throug~ the DSRSD Financing Corporation to finance the expansion of and improvements to the DSRSD Wastewater Treatment Plant. The Cert~cates are payable from Available Net Revenues of the District's Sewer enterprise, exclusive of regional connection fees. The District has a contractual agreement with the City of Pleasanton that states that surplus funds in the Regional Sewer Expansion Funds will be used to pay debt principal. A principal payment of $2,361,500 was made in fiscal yeaz ending 2009. In fiscal year 2009, the District tendered an outstanding balance of $23,615,000 of the 2000 COPs to the Stand- By Purchase Agreement provider, which converted the 2000 COPs into Bank Certificates. Converted Bank Certificates bear variable interest at prime plus 2% (5.25% at June 30, 2009) and are due in seri-iannual installments over five years. A balance of $21,253,500 remained at June 30, 2009. C. WateReuse Variable Rate Financing Pro~ ~ .._ ._. ~. ' . The District entered into an Installment Purchase Contract as of November 1, 2040 in the amount of $9;050;000 , to finance the acquisition, installment and construction of two reservoir projects, a pump station, a water:line and . , . .; related improvements. Proceeds were also utilized to establish a Reserve Fund and to pay costs of=issuance: . ~~ The Purchase Contract bears interest rate at the Bank of New York Western Trust Company's Weekly Rate; and is payable monthly. The interest rate as of June 30, 2009 was 4.5%. This issuance matures through 2028 with principal amounts due May 1_ : , The District entered into a second Installment Purchase Contract as on May 1, 2001 in the amount of $7;365,000 to fmance the acquisition, installation and construction of a water tank, a pump station, a water line, a recycled water main and related improvements. Proceeds were also utilized to establish a Reserve Fund and to pay costs of issuance. The Purchase Contract bears interest at the Bank of New York Western Trust Company's Weekly Rate, and is payable monthly. The interest rate as of June 30, 2009 was 4.5%. This issuance matures through 2028 with principal amounts due May 1. Both issuances are payable from a pledge of fees, charges and other amounts received from the available Net Revenue of the water enterprise. The pledge of future Water Fund Revenues ends upon repayment of the $19.2 million in remaining debt service on the bonds which is scheduled to occur in 2028. For fiscal year 2009, Water Fund Revenues including operating revenues and non-operating interest earnings amounted to $17 million and operating costs include operating expenses, but not interest, depreciation or amortizations and amounted to $16.8 million. Net Revenues available for debt service amounted to $200,000 which represented coverage of .18 over the $1.1 million in debt service. Pursuant to its installment contract, the District is required to set rates to achieve coverage of 1.1 times debt service. Effective as of July 1, 2009, the District has instituted new rates and pricing structures in which projected coverage for the upcoming year is expected to be 6.4 times debt service. The District is required to maintain a Reserve Fund for both of these contracts in an amount equal to the m~imum annual debt service. The Reserve Fund was initially funded from the proceeds of the Installment Purchase Contracts in an amount equal to the Reservation Fund to pay principal and interest then due, the Trustee is required to transfer so much of the Reserve Fund as is necessary to make such payment. Any monies on deposit in excess of the Reserve Requirement will be transferred to the Reservation Fund. 25 DUBLIN SAN RAMON SERVICES DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2009 NOTE #7 - LONG-TERMDEBT (continued) D. Variable Rate Debt The District has two debt issues with variable interest rates. The debt is subject to purchase on the demand of the holder at a price equal to principal plus accrued interest and delivery to the District's remarketing agent. The remarketing agent is authorized to use its best efforts to sell the repurchased bonds at a price equal to 100 percent of the principal amount by adjusting the interest rate. Under Stand-By Purchase Agreements issued by banks for each variable rate debt issue, the trustee or the remarketing agent is entitled to draw an amount sufficient to pay the purchase price of debt delivered to it. The District is required to pay to.the Banks an initial take out agreement fee and an annual commitment fee. For the Certificates of Participation 2000 Series, the Dish-ict entered into an agreement with JP Morgan Chase Bank which expired on December 11, 2008 as discussed below. Under the agreement, the available.principal . commitment is the lesser of $55,000,000 or the outstanding balance of the COPs. The interest rate on the principal commitment is the Bank's U.S. prime commercial lending rate plus 1%. In fiscal year 2009, the ;... District tendered an outstanding balance of $23,6.15,000 of the 2000 COPs to the Stand-By Purchase Agreement.: ;' _.~ ,; provider, which converted the 2000 COPs into Bank Certificates. Converted Bank Certificates bear, variabl.e ;; ~, ,. ' ~' interest: af prime plus 2% and are due in semiannual installmenfs over five years. The District paid an annual fee...; `~ ~,.,: - , - of $9,237 to the bank during fisca12008-09: . . ~ - ~ ~ _ .' ':_.... : .. . .. . ~ For the WateReuse Variable Rate Financing Participation, the-District eritered into an agreement with':DEPFA t - (Irish Bank), which expires June 24, 2015. The District paid an annual fee of $19,829 to the bank.during.fiscal~. .~:. . 2008-09. ,: _ . .:.. - E. Subsec~uent Event: Refundin~ Note ' ~ . _ . . Subsequent to June 30, 2009, the District refmanced the 1997 Refunding Revenue Bonds and the 2000.Variable Rate Demand Certificates of Participation into one refunding note for $18,486,000 with an interest rate of 438% per annum. These notes mature on September 1, 2019 with principal and interest payments due March 1 and September 1 of each year. 26 DUBLIN SAN RAMON SERVICES DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2009 NOTE #7 - LONG-TERMDEBT (continued) F. Repayment Scheclule Shown below are maturities for the District's debt issues, For The Year Ending June 30 Principal Interest Total 2010 $5,433,000 $1,754,773 $7,187,773 2011 5,458,000 1,474,112 6,932,112 2012 5,483,000 1,191,970 6,674,970 2013 5,518,000 908,252 6,426,252 2014 3,181,500 622,885 3,804,385 2015-2019 3,285,000 2,027,141 5,312,141 ~ , , 2020-2024_ 3,680,000 1,269,675 ' . • 4,949,675 . ' .. . . . ~::~. 20.25=2028 3,390,000 .:: . . 387,675 3,777,675 ~ , . . . . • ~ ~ = Tota1'payments due $35,428,500 ~ $9;636,483 ~ ' $45,064,983 . - . • . NOTE #8 - DEFERRED REVENUE AND OTHER LIABILITIES ~ ~ ' ~' Deferred reveriue and~otlier liabilities for the year-ended June 30, 2009 totaled $ 11,927,765. ~ ~ ' " As of June 30, 2009, the Water Fund recorded $7,539,485 from developers for future connection fee credits: ~ These amounts will be recognized as revenue when the connections are made. ~ ~. As of June 30; 2009, the Sewer Fund recorded $482,650 from developers for future connection fee credits. These amounts will be recognized as revenue when the connections are made. Sewer Fund Deferred revenue for the Deferred Connection Fee Program was also recorded in the amount of $3,905,630 (see Note 5). The current portion of this balance at June 30, 2009 is $615,386. 27 DUBLIN SAN RAMON SERVICES DISTRICT NOTES TO BASIC FINANCIA.L STATEMENTS FOR THE YEAR ENDED JUNE 30, 2049 NOTE' #9 - PENSION PL~4N A. Plan Description The District's defined benefit pension plan, (Miscellaneous Plan), provides retirement and disability benefits, annual cost of living adjustments, and death benefits to plan members and beneficiaries. The Miscellaneous Plan is part of the Public Agency portion of the California Public Employees Retirement System (Ca1PERS), a cost sharing multiple-employer plan administered by Ca1PERS, which acts as a common investment and administrative agent for participating public employers within the State of California. A menu of benefit provisions as well as other requirements is established by State statutes within the Public Employees' Retirement Law. The District selects optional benefit provisions from the benefit menu by contract with CaIPERS and adopts those benefits through local ordinance or resolution. Ca1PERS issues a separate comprehensive annual financial report. Copies of the Ca1PERS's annual financial report may be obtained from the CaIPERS Executive O~£ice, 400 P Street, Sacramento, California 95814. B. Fundin~ Policv Active plan members in the Miscellaneous Plan~ ar'e required to coritribute 10% of their annual coveied salary: ~ The District ~is required'to contribute the actuarially determined,`:remaining amounts necessary'to fund the benefits for its members. The actuarial methods and assumptioris'used a're those adopted by the Ca1PERS Board ,~ of Administration. The contribution requirements of the plan members are established by State statute and: the~ :~:: employer contributiori rate is established and may be ainended by Ca1PERS. -..~`. _. ' On November 16, 2004, the Board of Directors approved a resolution authorizing an amendment to the contract between PERS and the Dublin San Ramon Services District. Prior to the amendment, the Retirement Plari formula was 2A% at 55. The new formula of 2.7% at 55 formula provides local miscellaneous members, 2.7% of pay at age 55 for each yeaz of service credited with the employer. If retirement is earlier.than 55; the percentage of final compensation decreases for each quarter of age to 2% at age 50. Former DSRSD employees' service credit will not be affected by this change and the change became effective in November 2004. , The District has agreed to a cost sharing with employees to implement the new retirement formula. Increased cost on an annual basis to implement the program is approximately 7% and is spread over the next 20 years, which is the period over which PERS allows an agency to satisfy the increased liability. The cost sharing was negotiated with all employee bargaining groups and continues the employer-employee partnership of jointly funding retirement benefits. C. Annual Pension Cost For fiscal year 2008-2009, the District's annual pension cost was $1,469,162 and was equal to the District's required and actual contributions. The required contribution for fiscal year 2008-2009 was determined as part of the June 30 2007, actuarial valuation using the entry age normal actuarial cost method with the contributions determined as a percent of pay. The actuarial assumptions included (a) 7J5% investment rate of return (net of administrative expenses); (b) projected salary increases that vary by duration of service ranging from 3.25% to 14.45% for miscellaneous members; and (c) 3.25% cost-of-living adjustment. Both (a) and (b) include an inflation component of 3.0%. The actuarial value of Miscellaneous Plan's assets was determined using a technique that smoothes the affect of short-term volatility in the market value of investments over a two to five year period depending on the size of investment gains and/ar losses. Miscellaneous Plan's unfunded actuarial accrued liability (or excess assets) is being amortized as a level percentage of projected payroll on a closed basis. , ~: 28 DUBLIN SAN~RAMON SERVICES DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED NNE 30, 2009 NOTE #9 - PENSION PLAN (continued) D. Funded Status of Plan As requued by State law, effective July 1, 2005, the District's Miscellaneous Plan was terminated, and the employees in this plan were required by CALPERS to join new State-wide pools. One of the conditions of entry to these pools was that the District true-up any unfunded liabilities in the former Plans, either by paying cash or by increasing its future contribution rates through a Side Fund offered by CALPERS. The District satisfied its Miscellaneous Plan's unfunded liability of $5,297,210 by agreeing to contribute that amount to the Side Fund through an addition to its normal contribution rates over the next 12 years. • Annual Percentage of Net Fiscal Year Pension Cost APC ' Pension Ending (APC) Contributed Obligation . 6/30/2009 $1,469,162 100% - - . . 6/30/2008 . . 1,261,197 .: . . 100% _ . , , ., . : . ': 6/30/2007, ." 1,175,296. . . 100% , .. ~ -. ~ _ , ~Audited.annual ~financial statements are av.ailable:from CALPERS. at P.O. Box942709, Sacramento,.CA 94229- ~ 2709. ; . _ E. Three Year Trend Inforniation for Miscellaneous Plan Cost Sharin~ Pool ~ , ._ ,.CALPERS' latest available actuarial value (which differs from market value) and funding .progress for:.all ~ members of the cost sharing pool are set.forth below at their actuarial valuation date of June 30, 200.7. . Actuarial Entry Age Unfunded Annual Unfunded Valuation Accrued Value of (Overfunded) Funded Covered (Overfunded) . Date Liability Asset Liability Ratio Payroll as % of Payroll ` 2005 $872,346,612 $729,556,809 $142,789,803 83.6% $203,995,039 69.997% 2006 1,280,157,040 1,069,546,974 210,610,066 83.5% 304,898,179 69.076% 2007 1,627,025,950 1,362,059,317 264,966,633 83.7% 376,292,121 70.415% 29 DUBLIN SAN RAMON SERVICES DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2009 NOTE #10 - POST EMPLOYMENT HEALTH CARE BENEFITS The District provides medical and dental benefits for retired employees and their families under third-party insurance plans. While the District participates in the Cal-PERS medical plan, they are required to pay the same amounts for reriree medical insurance as they do for active employees. The Board sets the benefit amounts by resolution each year for each bazgaining group and in accordance with current employee contracts. Prior to 2004, the District paid these benefits regardless of the employee's length of service. Currendy, all new employees are automatically enrolled in a medical vesting program where they aze eligible for benefits based upon amounts set by Cal-PERS and length of service. Employees under the vesting program are not eligible to receive any medical benefits without accumulating at least ten years of PERS service with at least five of those years as a DSRSD employee. As of June 30, 2009, 58 participants were eligible to receive benefits. • Funding Policy and Actuarial Assumptions . The annual required contribution (ARC) was determined as part of a May 2008 actuarial valuation.using the; -.,:. ;~ .:. - entry age normal actuarial cost method. Tliis,is a projected benefit.cost method, which takes into account~~ .:. .~. ~ those. benefits that are expected to be: earned in the future as well as those already accrued. The actuarial' .:. ,. assumptions included (a) 7.75% investment rate of return, (b) 3.25% projected annual salary increase, and ' (c) 5% health inflation increases. The actuarial methods and assumptions used include techniques that: ,-.-._ smooth the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets. ~ Actuarial cal.culations reflect a long-term perspective and actuarial valuations involve estimates of. the value.. :. • ~ of reported. amounts and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to revision at least biannually as results are compared to past expectations ~ and new estimates are made about the future. The District's OPEB unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll using a 30 year amortization period. In accordance with the District's budget, the annual required contribution (ARC) is to be funded through out the year as a percentage of ,payroll. The District Boazd passed a resolution to participate in the California Employers Retirees Benefit Trust (CERBT), an irrevocable trust established to fund OPEB. CERBT is administered by Ca1PERS, and is managed by an appointed board not under the control of District Board. This Trust is not considered a component unit by the District and has been excluded from these financial statements. Separately issued financial statements for CERBT may be obtained from CALPERS at P.O. Box 942709, Sacramento, CA 94229-2709. 30 DUBLIN SAN RAMON SERVICES DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2009 NOTE #10 - POST EMPLOYMENT HEALTH CARE BENEFI7S (continued) Funding Progress and Funded Status Generally accepted accounting principles permit contributions to be treated as OPEB assets and deducted from the Actuarial Accrued Liability when such conh-ibutions are placed in an irrevocable trust or equivalent arrangement. During the fiscal year ended Ju~e 30, 2009, the District contributed the ARC amounting to $1,108,453 to the Plan which represented 10% of the $10.7 million of covered payroll. The District also contributed additional funds to CERBT representing funds accumulated in prior years. As a result, the District has recorded the Net OPEB Asset, representing the difference between the ARC, the amortization of the Net OPEB Asset and actual contributions, as presented below: Net OPEB Asset at June 30, 2008 $7,936,575 Annual required contribution (ARC) 936,000 Interest on net OPEB asset (615,085) Adjustment to annual required contribution 787,538 , . Annual OPEB cost 1,108,453 , : Contributions made:. ~ - District portions of current year premiums paid 467,991 ~ .. : Contributions to CERBT ~ ~ , 451,685 Total contributions ~ ' " ~ 919,676 ~Change in net OPEB Asset ' ~ ~ (188,777) Net OPEB Asset at June 30, 2009 $7,747,798 The actuarial accrued liability (AAL) representing the present value of future benefits, included in the actuarial study dated May, 2008, amounted to $11.17 million and was unfunded since no assets had been transferred into CERBT as of that date. However, as of June 30, 2009, the District transferred additional contriburions to CERBT, which along with investment income totaled $7,247,589 and reduced the unfunded actuarial accrued liability. ' The Plan's annual OPEB cost and actual contributions for fiscal years ended June 30, 2008 and 2009 are set forth below: Annual OPEB Fiscal Year Cost Actual Contribution Percentage of Annual Net OPEB Cost OPEB Contributed Asset 6/30/2008 $1,673,504 6/30/2009 1,108,453 $9,610,079 574% $7,936,575 919,676 83% 7,747,798 31 ~ DUBLIN SAN RAMON SERVICES DISTRICT NOTES TO BA5IC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2009 NOTE #10 - POST EMPLOYMENT HEALTH CARE BENEFITS (continued) ~ The Schedule of Funding Progress presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. Trend data from the actuarial studies is presented below: Unfunded Entry Age Unfunded Actuarial Actuarial Actuarial Actuarial Actuarial Liability as Valuation Value of Accrued Accrued Funded Covered Percentage of Date Assets Liability Liability Ratio Payroll Covered Payrol: 6/30/2007 $0 $11,170,000 $11,170,000 0.00% $9,376,000 119% NOTE #11- RISK MANAGEMENT The District is exposed to various risks of loss related to :torts: theft, :damage, and destruction of assets; errors and omissions; injuries to employees and natural disaster. The District joined together with other e.ntities to . ~ form the California Sanitation Risk Management District (CSRMA), a public entity risk pool currently operating as a common risk management and insurance program for 54 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. The District~ pays annual premiums to CSRMA for its general, liability; property damage and workers compensation~insurance. - . . CSRMA is governed by a Board composed of one representative from each member agency. The Board controls the operations of CSRMA including selection of management, and approval of operating budgets, independent of any influence by member entities. ~32 DUBLIN SAN RAMON SERVICES DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2009 NOTE #11- RISK MANAGEMENT (Continuea~ In addition to the primary insurance types provided for through CSRMA listed above, the District also, . maintains commercial fidelity bonds, a public employee dishonesty and public official bonds, to protect against employee theft or defalcation. Settled claims for CSRMA or commercial fidelity bonds have not exceeded coverage in any of the past three fiscal years. The following is a summary of the insurance policies carried by the District as of June 30, 2009: Company Nanne Type of Coverage Pooled Liability Bodily injury and property damage- CSRMA Pooled Liability auto, errors and omissions CSRMA-Clarendon American Insurance Company Pooled Insurance Program CSRMA'Various W k' C f Pl Excess liability Special Forni Property Limits Deductibles $15,750,000 5,000,000 $100,000 none 132,782,927 25,000 or ers ~ ompensa ion an . . ,. CSRMA Pooled Workers' Compensation 750,000 -' none CSRMA-National Union Fire Insurance of Pittsburgh, PA Excess workers' compensation liability . Statutory none Prior to July 1, 1994, the District was self-insured for workers' compensation and will continue to be responsible for any claims existing as of that date. Claims and judgments, including provision for claims incurred but not reported, are recorded when a loss is deemed probable of assertion and the amount of the loss is reasonably determinable. As discussed above, the District has coverage for such clauns, but it had retained the risk for the deductible or uninsured portion of these claims. 33 DUSLIN SAN RAMON SERVICES DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2009 NOTE #I1- RISK MANAGEMENT (Continued) The District's liability for uninsured claims is limited to workers' compensation and general liability claims, as discussed above, and was estimated by a third party claims administrator based on prior years claims experience as follows: General Liabiliri Balance at July 1 Net change in liability for claims and claims incurred but not reported ~ Claims paid Balance at June 30 2009 2008 $73,543 150,421 (220,968) $2,996 $132,155 79,799 (138,411) $73,543 T'he District has not exceeded its inswance coverage limits in any of the last three years. The District liability is included in accrued expenses on the fmancial statements. NOTE #12 - COMMITMENTSAND CONTINGENT LIABILITIES ' The District purchases water from the Alameda County Flood Control and Water Conservation District (Zone 7) under a thirty-year contract, which expires August 23, 2024. Under the terms of the contract, subject to various exceptions, the District is required to pwchase all of its water from Zone 7. .. ~ The District is a defendant in a number of lawsuits, which have arisen in the normal course of business: In the opinion of the District, these actions when finally adjudicated will not have a material adverse.effect on the fmancial position of the District. Tfie District operates a Dedicated Land Disposal `site upon which the District processes biosolids produced by the District's wastewater treaUnent pla~'t. On August 8, 2007, the San Francisco Bay Regional Water Quality Control Board issued Waste Discharge Requirements, which require the District to perform corrective actions for lrnown and reasonably foreseeable releases from the Dedicated Land Disposal site. At this time, the Regional Board and the District expect that the most likely corrective action, if any is needed, would be related to the potential impact to groundwater quality and resulting closure and post-closure activities. The District prepared an analysis in December 2007 to determine the estimated costs of these corrective actions which comprise drilling two extraction wells and constructing a conveyance pipeline for discharge of potentially impacted ground water into the District's collection system. The Study also included estimated costs of operation, maintenance and monitoring of the above facilities for a ten yeaz period after closure of the site which is expected to occur within thirty to fifty years. Actual closure and post-closure care costs may be higher, lower, or even not required due to inflation variances, changes in technology, or changes in State or Federal regulations. The present value of these closure and post closure costs, discounted at 5 percent amounted to $620,000 as of June 30, 2009. The District is required by State and federal laws and regulations to make annual funding contributions to finance closure and post-closure care. The District is in compliance with these requirements for the year ended June 30, 2009 with the establishment of the fully-funded liability for this purpose. 34 S UP P L E ME NTA R Y I NE Q R MA T I O N DUBLIN SAN RAMON SERVICES DISTRICT SEWER OPERATIONS COMBINING STATEMENT OF NET ASSETS JTJNE 30, 2009 Regional Local Allocation Sewer Sewer OPEB Sewer Total Total Allocation Fund Total ASSETS Curtent assets: Pooled cash $3,934,653 $469,953 $48,826 5166,541 $5,119,973 Pooled investments 35,617,894 8,799,109 1,380,858 45,797,861 Resuicted investmenu 1,874,204 1,874,204 Accounu receivable 3,O18,197 222,538 297,542 3,538,277 Interestreceivable 90,234 22,793 4,494 117,521 Employee notes receivable .40,068 40,068 Deferred connection fees receivable 615,386 615,386 Prepaid expenses 263 263 Totalcurrentasseu 45,190,636 10,014,393 346,631 1,SS1,893 57,103,553 Non-curnnt assets: Capital assets: Property, plant and equipment 126,872,130 46,919,450 173,791,580 Less accumulated depreciation 31,150,742 16,227,816 47,378,558 Net property, plant and equipment 95,721,388 30,691,634 126,413,022 Conswction in progress 15,437,125 1,646,204 17,083,329 Total capital assets 11 ],158,513 32,337,838 143,496,351 Other assets: Deferred charges 745,37] , 745,371 Net OPEB asset ~ 6,756,855 6,756,855 ~ ~ Deferred connections receivable - ~ long term 3,29Q244 3,290,244 Total other assets 4,035,615 6,756,855 10,792,470 Totalnon-currentassets 115,194,128 32,337,838 6,756,855 154,258,821 Total assets 160,384,764 42,352,231 346,631 8,308,748 211,392,374 LIABII.IT[ES Curtent liabilities: Accounts payable 2,040,674 54,252 ]09,479 (30,752) 2,173,653 ConVactor bonds and deposits 412,296 27,787 440,083 Accrued expenses 2,996 Z,996 Accrued compensated absences 294,222 48,130 237;152 579,504 Interest payable 97,003 97,003 Current portion of long-term debt 4,928,000 4,928,000 Deferred revenue 615,386 482,650 1,098,036 Total current liabilities 8,390,577 612,819 346,631 (30,752) 9,319,275 Long term liabilities: Long-term debt less current portion 17,605,500 , 17,605,500 DLD remediation payable 620,000 620,000 Uneamed revenue 3,290,244 3,290,244 Total long term liabilities 21,515,744 21,5 ] 5,744 Totalliabilities 29,906,321 612,819 346,631 (30,752) 30,835,019 NET ASSETS lnvested in capital assets, net of related debt 89,370,384 32,337,838 121,708 222 Expansion 19,667,668 1,405,396 21,073,064 Debt service ],777,201 1,777,201 Unrestricted 19,663,190 7,996,178 8,339,500 35,998,868 Totalnetassets $]30,478,443 $41,739,412 $8,339,500 $180,557,355 36 DUBLIN SAN RAMON SERVICES DISTRICT SEWER OPERATTONS COMBINING STATEMENTS OF REVENUES AND EXPENSES AND CHANGES IN FUND NET ASSETS FOR TI IE FISCAL YEAR ENDED J[INE 30, 2009 OPERATING REVENLTES Wastewater service charges Otherrevenues Total operating revenues OPERATING EXPENSES Personnei Materials Contractual services Other Overhead Chazges Depreciation Total operating expenses OPERATING INCOME (LOSS) NONOPERATING REVENUES (EXPENSE) Investment income Interest(expense) Gain on disposal of capital assets Total non-operating revenues (expense), net INCOME (LOSS) BEFORE CONTRIBUITONS AND TRANSFERS Non-cash confibutions Capital contributions - connection fees Transfers in 'fransfers (out) Changes in net asseu TOTAL NET ASSETS, BEGINNING OF YEAR TOTAL NET ASSETS, END OF YEAR Local Sewer Sewer Total Total Aliocation $14,209,325 $1,831,871 5,043,364 105,908 $1,005,954 19,252,689 1,937,779 1,005,954 AUocation OPEB Sewer Fund Eliminations Total $16,041,196 6,155,226 22,196,422 5,404,862 1,135,665 3,718,901 $186,316 10,445,744 2,239,467 60,373 93,892 2,393,732 11,609,003 379,690 529,061 12,517,754 39,714 12,951 13,542 66,207 2,469,779 738,089 (3,207,868) 3,343,916 1,019,723 4,363,639 25,106,741 3,346,491 1,147,528 186,316 24,787,076 (5,854,052) (1,408,712) 141 574 (186,316) (7,590,654) 995,245 245,690 42,683 , . 1,283,618 (1,296,425) (1,296,425) 7 . ' S4 61 (301,173) 245,744 42,683 (12,746) (6,155,225) (1,162,968) (141,574) (143,633) . . - • (7,603,400) 1,545,890 1,545,890 2,034,113 89,060 ' 2,123,~~3 5,920,496 595,535 141,574 53,417 ($6,7ll,022) (6,112,219) (598,803) 6,711;022 (4,312,835) 468,714 (90,216) (3,934,337) 134,791,278 41,270,698 8,429,716 184,491,692 $130,478,443 $41,739,412 $8,339,500 $180,557,355 37 v~ ...... ........q...~...>c..,..~o ...oua~. aa a ru~u~ ui.u~y DUBLIN SAN RAMON SERVICES DISTRICT To Whom It May Concern: 7051 Dublin Boulevazd Dublin, California 94568 Phone: 925 828 0515 FAX: 925 829 1180 www.dsrsd.com This letter is to confirm that we are in the process of seeking a Board resolution for the submitted grant application. Once that resolution passes, we will submit it (attachment D) along with the application verification page signed by our Board President. Regards, i/' '~ ~" "G~,~- Bert Michalczyk, General Manager Dublin San Ramon Services District is a Public En[ity City of Dublin Fiscal Year 2010-2011 Application for Funds APPLICATION VERIFICATION I attest that the information contained in this FY 2010-2011 grant application is accurate and that the funds requested will not supplant any other monies secured by the organization. Attached is a resolution, letter, or other document providing evidence that the Board of Directors approved the application as submitted. Successful applicants are required to submit a summary report as soon as possible after submitting the reimbursement request, but not later than August 31, 201 l. Failure to submit a report will result in ineligibility for future funding. Signatures: ,~~~~--- Executive Director Board President/Chairperson ~~^~5~5 Date Date SECTION 2 Page 14 of 20