HomeMy WebLinkAboutMINUTES - 11052002 - C.97 C,97
THE BOARD OF SUPERVISORS OF
CONTRA COSTA COUNTY,CALIFORNIA
Adopted this Order on November 5, 2002 by the following vote:
AYES: Supervisors Uilkema, Gerber,DeSaulnier, Glover and Gioia
NOES: None
ABSENT: None
ABSTAIN: None
SUBJECT: Audited Financial Statements of the Central Contra Costa Sanitary
District
IT IS BY THE BOARD ORDERED that the annual report from the Central
Contra Costa Sanitary District for Fiscal Year 2001/2002 is ACCEPTED.
I hereby certify that this is a true and correct copy of
an action taken and entered on the minutes of the
Board of Supervisors on the date shown.
f
Attested:November 5,2002
John Sweeten,Clerk of the Board
of Supervi rs and County Administrator
By:
Deputy Clerk
Central Contra ossa Sanlotary District
• Imhoff Place, . 94 • 228-9500 . i •
.
FAX:(925)676=7211
CHARLES W.BATTS
General Manager
KENTON L.ALM
RUMI-VtOCounsel for the District
(925)938-1430
JOYCE E.MURPHY
OCTRE'
2 5 ou Secretary of the.District
[CLERK BOARD F St ER I8
October 23, 2002 CONTRACOSTAco.
Board of Supervisors
County of contra costa
Financial Building
651 Pine Street
Martinez, CA 94553
Attn: Mr. John A. Aylard
Chief, Division of Audits
Enclosed is a copy of the audited financial statern nts of the central contra costa
Sanitary District for the fiscal year ended June 30, 002. There was no management
letter on internal accounting controls this year.
Sincerely,
Debbie Ratcliff
Controller
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Central Contra Costa Sanitary District
Financial Statements,
Independent Auditors' Report and
Supplementary Information
Introductory Section
Elected Officials and Administrative Personnel
Independent Auditors' Report 1
Financial Statements
Balance Sheet 2
Statement of Revenues and Expenses and Changes in Retained
Earnings 3
Statement of Cash Flows 4
Notes to Financial Statements 5 - 19
Supplementary Information
Schedule of Combining Balance Sheet 20
Schedule of Combining Statement of Revenues and Expenses 21
Schedule of Supplemental Statement of Changes in Fund Equity 22
Schedule of Running Expense-Comparison of Budget and
Actual Expenses by Department 23
Schedule of Running Expense- Supplemental Retained Earnings
Analysis 24
e, 5;7 17 6
Central Contra Costa Sanitary District
Elected Officials and Administrative Personnel
June 30, 2002
Board of Directors
Mario M. Menesini .......................................President
James A.Nejedly............................................President Pro-Tem.
Parke L. Boneysteele.....................................Member
GeraldR. I,ucey............................................Member
Barbara D. Flockett .......................................Member
Secretary of the District
Joyce Murphy
Legal Counsel
'Kenton L.Alm
Management
Charles Batts,Jr. ...........................................General Manager
Ann Farrell ....................................................Director of Engineering
James Kelly....................................................Director.of Operations
Randall Musgraves........................................Director of Administration
Debbie Ratcliff..............................................Controller
HOOD&
STRONG LLP
CERTIFIED PUBLIC ACCOUNTANTS
Consultants and
Independent Auditors" Report
Business Advisors
THE BOARD OF DIRECTORS
CENTRAL CONTRA COSTA SANITARY DISTRICT
Martinez, California 101 California
We have audited taccompanying
he balance sheet of CENTRAL CONTRA COSTA Suite 1500
SANITARY DISTRICT as of June 30, 2002 and the related statements of revenues and
expenses and changes in retained earnings and cash flows for the year then ended. These San Francisco
financial statements, are the responsibility of management. Our responsibility is to express
an opinion on these financial statements based on our audit. CA 94111
We conducted our audit in accordance with auditing standards generally accepted in the
United States of America and the State Controller's Minimum Audit Requirements for 415.781.0793
California Special Districts. Those standards require that we plan. and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material fix 415.421.2976
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting
principles les used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above present .fairly, in all material
respects, the financial position of Central Contra Costa Sanitary District at June 30, 2002,
and the results of its operations and cash flows for the year then ended, in conformity with
accounting principles generally accepted in the United States of America, as well as
accounting systems prescribed by the State Controller's Office for California Special
Districts.
Our audit was performed for the purpose of forming an opinion on the financial statements of
the District taken as a whole. The accompanying supplementary information on pages 20 -
24 is presented for purposes of additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the auditing procedures applied
1n the audit of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a whole.
August 28, 2002
San Francisco
1
Menlo Park,
Central Contra Costa Sanitary District
Balance Sheet
June 30, 2002
Assets
Current Assets:
Cash and investments available for operations $ 42,6149959
Accounts receivable 5,485,067
Interest receivable 73,248
Parts and supplies 1,321,104
Prepaid expenses 435,770
Total current assets 491930.1148
Restricted Cash and Investments 191047,756
Property,Plant and Equipment,net 44412 10,290
Construction in Progress 211333,905
Capital Cost Receivable 916,900
Revenue Bond Issuance Costs,net of amortization 419,217
Total assets $ 5359858,216
Liabilities and Fund Equity
Current Liabilities:
Accounts payable and accrued expenses $ 41024,540
Interest payable 362,601
Current portion of refunding revenue bonds 1.1333,000
Current portion of water reclamation loan contract 124,097
Liability for uninsured claims 379,710
Accrued compensated absences 4,2841357
Total current liabilities 109508,305
Current Liabilities Payable from Restricted Assets:
Refundable deposits 278,415
Revenue Bonds,net of current portion 359128,879
Water Reclamation Loan Contract,,net of current portion 21299,842
Total liabilities 481215,441
Fund Equity:
Contributed capital 253,423,222
Retained earnings 23492191,553
Total fund equity 4871,642.)775
Total liabilities and fund equity 535,8581216
The accompanying notes are an integral part of this statement 2
Central Contra Costa Sanitary District
Statement of Revenues and Expenses and
Changes in Retained Earnings
Year Ended June 30, 2002
Operating Revenues: $ 31228,855
Sewer service charges
Service charges- City of Concord 59897,008
Other service charges 617,768
Miscellaneous charges_ 508,916
Total operatin-g revenues 381,2529547
Operating Expenses:
Sewage collection and pumping stations 61513,304
Sewage treatment 169945,5745
Engineering 5,263,060
Administrative and general 8,145,848
Depreciation 13,833,124
Total operating expenses 50,701.081
Operating Loss (12,448,534)
Non-Operating Revenue(Expense):
Taxes 71551,581
City of Concord contributions to capital'dosts 11557,422
Contributed sewer lines 14,390,624
Customer contributions to capital costs 3,058,612
Permit and inspection fees 913,169
Interest earnings 1,498,751
Connection fees 4,196,316
Pump zone fees 276,042
Interest expense (11202,782)
Other income 1,032,527
Total non-operating revenue 33,2729262
Net Income 20,8239728
Retained Earnings-July 1, 2001 229534-31871
Transfers of Contributed Capital (15,948,046)
Retained Earnings-June 30,2002 $ 2341,2199553
The accompanying notes are an integral part of this statement. 3
5F2 to
Central Contra Costa Sanitary District
Statement of Cash Flows
Year Ended June 30, 2001
Operating Activities:
Operating loss $ (12,448,534)
Adjustments to reconcile operating loss to cash flows used by operating activities:
Depreciation 13j833j24
Other income 11122,033
(Increase)decrease in:
Accounts receivable 33,591
'Parts and supplies (1171,284)
Prepaid expenses (213,236)
Increase(decrease)in:
Accounts payable and accrued expenses (31970,155)
Refundable deposits 6,507
Liability for uninsured claims (6879214)
Accrued compensated absences 81,027
Net cash flows used by operating activities (2,360,141)
Investing Activities:
Interest received 1,989,126
Net cash flows provided by investing activities 11989,126
1
Capital and Related Financing Activities:
Purchase of property and equipment (31,502,874)
City of Concord contributions to capital costs 3,9401049
Customer contributions to capital costs 31914,9159
Developer reirabursement for sewer line construction costs 1090961,199
Bond issuance 1-6,565,000
Interest payments (11159,332)
Refunding revenue bonds principal payment (15285,000)
Water reclamation contract principal payments (120,952)
Net cash flows provided by capital financing activities 447,249
Noncapital Financing Activities:
Tax receipts 7,551,581
Fees received 5,385,527
Net cash flows provided by noncapital financing activities 129937,108
Net Increase in Cash and Investments 13,013,342
Cash and Investments Available for Operations and Restricted,beginning-of year 48,1649,373
Cash and Investments Available for Operations and Restricted,at end of year $ 61,662,715
Information Concerning Noncash Capital and Financing Activities:
Non-cash contributed capital-consisting of subsurface sewer lines $ 3,073,942
The accompanying notes are an integral part of this statement. 4
Central Contra Costa Sanitary District
Notes to the Financial Statements
Note 1 - Description and Summary of Significant Accounting Policies:
a. Reporting Entity
The Central Contra Costa Sanitary District, a special district and a public entity
established under the Sanitary District Act of 1923, provides sewer service for the
incorporated and unincorporated areas under its jurisdiction. The District is governed by
a Board of Directors comprised of five elected members. The District's financial
statements reflect only its own activities; it has no component units (other government
units overseen by the District).
b. Basis of AccountiRg
The District's financial statements are prepared on the accrual basis in accordance with
generally accepted accounting principles as promulgated by the Governmental
Accounting Standards-Board (GASB). In addition, the District applies all applicable
Financial Accounting Standards Board (FASB) pronouncements issued on or before
November 30, 1989, unless those pronouncements conflict with or contradict GASB
pronouncements.
The District is a proprietary entity; it uses an enterprise fund format to report its activities
for financial statement purposes. Enterprise.funds are used to account for operations that
are financed and operated in a manner similar to private business enterprises, where the
intent of the governing body,is that the costs and expenses, including depreciation, of
providing goods or services'to its customers be financed or recovered primarily through
user charges; or where the governing body has decided that periodic determination of
revenues earned, expenses incurred, and net income is appropriate for capital
maintenance,public policy, management control,accountability, or other purposes.
Enterprise funds are used to account for activities similar to those in the private sector,
where the proper matching of revenues and costs is important and the full accrual basis of
accounting is required. With this measurement focus, all assets and all liabilities of the
enterprise are recorded on its balance sheet, all revenues are recognized when earned and
all expenses, including depreciation, are recognized when incurred. Enterprise fund
equity includes'retained earnings and contributed capital.
For internal operating purposes, the District's Board of Directors has established three
separate sub-funds, each of which includes a separate self-balancing set of accounts and a
separate ,Board- approved budget,for revenues and expenses. These sub-funds are
combined into the single enterprise fund presented in the accompanying financial
statements. The nature and purpose of these sub-funds are as follows:
Running Expense accounts for the general operations of the District. Substantially all
operating revenues and expenses are accounted for in this sub-fund.
5
e.. , ', .
Central Contra Costa Sanitary District
Notes to the Financial Statements
Sewer Construction accounts for non-operating revenues which are to be used for
acquisition or construction of plant,,property and equipment.
Self Insurance accounts for interest earnings on cash balances in this sub-fund and cash
allocations from other sub-funds, as well as for costs of insurance premiums and of claims
not covered by the District's insurance coverage.
C$_
That portion of the District's retained earnings which is allocable to each of these sub-
funds has been shown separately in the accompanying financial statements.
The District's Board of Directors adopts annual budgets on a basis consistent with
generally accepted accounting principles.
c. Parts and Supplies
Parts and supplies are valued at average cost and are used primarily for internal purposes.
d. Prope!1y,Plant and Equipment
Purchased fixed assets are stated at historical cost. Fixed assets contributed to the
District are stated at estimated fair value at the time of contribution. Expenditures which
materially increase the value or life of a fixed asset are capitalized and depreciated over
the remaining useful life of the asset.
Depreciation of exhaustible fixed assets has been provided using the straight line method
as follows:
Years
Sewage Collection Facilities 75
Sewage Treatment Plant and Pumping Plants 40
Buildings 50
Furniture and Equipment 7 - 15
Motor Vehicles 6 - 15
e. Defined Contribution Retirement Plans
District employees may defer a portion of their compensation under a District sponsored
Deferred Compensation Plan created in accordance with Internal Revenue Code Section
457. Under this Plan, participants are not taxed on the deferred portion of their
compensation until it is distributed to them; distributions may be made only at
termination, retirement, death or in an emergency as defined by the Plan. The District
does not make contributions to the Plan.
6
Central Contra Costa Sanitary District
Notes to the Financial Statements
On August 20, 1997, the provisions of the Internal Revenue Code covering section 457
were amended to require existing plans to establish trusts for assets of plans so that they
would not be subject to the rights of general creditors. The District amended its plan
during the fiscal year ended June 30, 1999 to meet this requirement. Consequently, at
June 30, 2002,the plan assets are held in trust for the exclusive benefit of the participants
and are not included in the District's financial statements.
The District also contributes to a money purchase plan created in accordance with
Internal Revenue Code section 401(a). Contributions to the plan are made in accordance
with a memorandum of understanding stating that in lieu of making payments to Social
Security, the District contributes to the 401(a) Plan an amount equal to that which would
have been contributed to Social Security on behalf of its employees as long as the District
is not required to participate in Social Security. The assets are held in trust and are not
recorded on the books of the District. The District contributed $1,283,462 to the plan
during the year ended June 30,2002.
f. Property Taxes
Property tax revenue is recognized in the fiscal year for which the tax is levied. The
County of Contra Costa levies, bills and collects property taxes for the District; all
material amounts are collected by June 30.
General County taxes collected are the same as the amount levied since the County
participates in California's alternative method of apportionment called the Teeter Plan.
'The Teeter Plan as provided, in Section 4701 at seq. of the State Revenue and Taxation
Code establishes a mechanism for the County to advance the full amount of property tax
and other levies to taxing agencies based on the tax levy, rather than on the basis of actual
tax collections. Although this system is a simpler method to administer, the County
assumes the risk of delinquencies. The County in return retains the penalties and accrued
interest thereon.
Secured property tax is due in two installments, on November I and February 1,
becoming a lien on those dates, and becoming delinquent on December 10 and April 10,
respectively.,Delinquent accounts are assessed a penalty of 10 percent. Accounts which
remain unpaid on June 30 are charged an additional 1 1/2 percent per month. Unsecured
property tax is due on July I and becomes delinquent on August 31. The penalty
percentage rates are the same as secured property tax.
7
Central Contra Costa Sanitary District
Notes to the Financial Statements
g. Compensated Absences
The liability for vested vacation and sick pay is recorded as an expense when earned.
District employees have a vested interest in 100 percent of accrued vacation time and 85
percent of accrued sick time for employees hired before May 1, 1985. Employees hired
after May 1, 1985 have a vested interest in up to 40 percent of their sick time, based upon
length of employment with the District.
h. New Governmental Accounting Standards
The Governmental Accounting Standards Board issued Statement No. 34, Basic Financial
Statements - and Management's Discussion and Analysis - for State and Local
Governments in June 1999. Statement 34 establishes new financial reporting
requirements for state and local governments. The District has not adopted the new
standard for the current year but must adopt the standard for the fiscal year beginning
July 1, 2002. The effect of the new standard on the financial statements has not been
determined.
Note 2- Cash and Investments:
The District's cash is maintained on a pooled basis with that of Contra Costa County, which
treats the Districts total cash as a single account balance. All District receipts are deposited
with the County and all District disbursements are made by the County. The County
Treasurer's Office executes investment transactions on behalf of the District in accordance
with the District's investment policy and the constraints prescribed by the Government Code
of the State of California for authorized investments.
The District invests in individual investments and in investment pools. Individual
investments are evidenced by specific identifiable pieces of paper called 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 maximize security, individual
investment securities, such as treasury notes, are held in custodial accounts maintained by the
bank.
a. Categorization of Credit Risk of Securities Instruments
The District categorized its individual securities instruments in ascending order to reflect
the relative risk of loss of these instruments. This risk is called credit risk; the lower the
number, the lower-the risk. The three levels of risk prescribed by generally accepted
accounting principles are described below:
8
Central Contra Costa Sanitary District
Notes to the Financial Statements
Categorized Instruments
Category I - Securities in this category are registered in the District's name and are in
the possession of the Trust Department of the bank employed by the District solely
for this purpose.
Category 2 - Securities instruments and book entry form securities in this category
are held in the name of the bank's Trust Department in a separate account which is in
the Districts name.
Category 3 -Securities instruments or book entry form securities in this category are
not in the District's name or not held by the bank's Trust Department.
Uncategorized Instruments
Pooled investments are not categorized because of their pooled, rather than individual
nature. .The value of each participating dollar equals the fair value divided by the
amortized cost.
b. Authorized Investments
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. Maturities may not exceed one year except for Treasury notes and the Local
Agency Investment Fund.
■ United States Treasury Bills and Notes, and obligations of government agencies for
which the full faith and credit of the United States is pledged,
■ Collateralized Certificates of Deposit issued by a Federal or State chartered bank or a
Federal or State chartered savings and loan association,
■ Bankers Acceptances, drawn on and 'accepted by a commercial bank, which are
eligible for purchase by the Federal Reserve System,
■ Commercial Paper of prime quality limited to corporations with assets over $500
million,
■ State of California Local Agency Investment Fund (LAIF), under the authority of the
Office of the Treasurer of the State of California, in accordance with Government
code sections 16430 and 16480.,the stated investment authority for the Pooled Money
Investment Account.
9
Central Contra Costa Sanitary District
Notes to the Financial Statements
The total amount invested in a single issuer, except for Treasury Bills and Notes and
LAIF, may not exceed 15%of the District's investment portfolio.
c. Carrying,,Value
Investments in U.S. Treasury Notes are presented in the financial statements at cost
adjusted for amortization of premiums or discounts,which approximates fair value in the
aggregate.
Cash and investments are comprised of the following at June 30,2002:
Carrying Fair
Value Value
Uncategorized Pooled Cash and Investments:
Cash with Contra Costa County $ 4,2321454 $ 49232,453
California Local Agency Investment Fund 53,9211000 54,029,538
Categorized Cash and Investments:
U.S. Treasury Bills and Notes-Category 2 315091,261 3,520,679
Total cash and investments $ 619662,715 $ 61,7821,670
Carrying Fair
Value Value
Available immediately $ 539921!,000 $ 541029,538
Restricted cash 31509,1261 31520.5679
Cash 4,232,454 4,232!,453
Total cash and investments $ 61!0662,715 $ 61,782,670
10
Central Contra Costa Sanitary District
Notes to the Financial Statements
Cash and investments are classified in the financial statements as shown below, based on
whether or not their use is restricted under the terms of District debt instruments.,, agency
agreements,or refundable deposit agreements.
Cash and investments available for District operations $ 4219614,959
Restricted cash and investments 19,047,756
Total cash and investments $ 61,662,7 15
Cash and investments available for operations and restricted cash and investments are
considered cash and cash equivalents for purposes of the statement of cash flows because
these assets are highly liquid.
Note 3- Accounts Receivable:
At June 30,2002, accounts receivable are comprised of the following:
City of Concord(see Note 8) $ 41043,746
Developer reimbursement for sewer line construction costs 855,548
Commercial and other services charges,franchise fees and
assessments 635,627
Allowance for doubtful accounts (49,854)
Total accounts receivable $ 5!4851067
Central Contra Costa Sanitary District
Notes to the Financial Statements
Note 4- Property,Plant and Equipment,and Construction in Progress:
Property, plant and equipment, and construction in progress are summarized below for the
year-ended June 30,2002:
Balance, Balance,
Beginning Transfers End
of Year Additions Retirements from CIP of Year
At cost:
Land $ 16,7809269 $ 16,780,269
Sewage collection system 156,1711,458 $ (203,000) $ 12,569,841 168,538,299
Contributed sewer lines 105,714,493 $ 15,022,737 120,737,230
Outfall sewers 6,2541900 4,161 6,259,061
Sewage treatment plant 227,277,126 (25,000) 1,597,980 228,850,106
Recycled water
infrastructure 6,737,129 1,530,982 8,268,111
Pumping stations 22,052,039 (5005000) 6,705,040 28,257,079
Buildings 13,050,238 (2509000) 159,901 12,960,139
Furniture and equipment 12,0469591 (6239368) 1,509,354 12,932,577
Motor vehicles 3,4501625 3809499 (5619271) 3,269,853
Total cost $ 569,534,868 $ 15,403,236 $ (2,162,639) $ 24,077,259 $ 606,852,724
Less accumulated
depreciation:
Sewage system and lines $ 49,036,284 $ 3,766,249 $ (2039000) $ 52,599,533
Sewage treatment plant 82,1601,898 79282,257 (25,000) 89,418,155
Pumping stations -- 5,688,892 882,670 (500,000) 6,071,562
Buildings 3,6345,274 292,072 (250,000) 3,676,346
Furniture and equipment 7,228,644 190239443 (566,925) 7,685,162
Motor vehicles 2,368,163 237,481 (528,209) 2,077,435
Recycled water 765,289 348,952 1,114,241
Total accumulated
depreciation $ 150,882,444 $ 13,833,124 $ (2,073,134) $ 162,642,434
Net book value $ 418,652,424 $ 444,210,290
Transfers to
Additions Fixed Assets
Construction in progress $ 26,237,584 $ 19,173,580 $(24,077,259) $ 21,333,905
12
Central Contra Costa Sanitary District
Notes to the Financial Statements
Note 5- Contractual Assessment Districts;
Tile District established the Contractual Assessment District (CAD) program to help
homeowners finance the cost of connecting to the District. The construction costs associated
with thep rojects within the program are capitalized and depreciated. Individual homeowners
are assessed an amount equal to their share of the construction cost and the connection fee.
The portion of the assessment relating to construction cost is recognized as contributed
capital. The assessments plus interest are generally payable over 10 years.
Accounts receivable at June 30, 2002 include CAD assessment receivables of$579,318. The
cost incurred on CAD projects in progress at June 30, 2002 amounted to approximately
$1,,304,778;the total budgeted costs for these projects is approximately$1,759,000.
Note 6- Long-Term Debt:
a. Revenue Bonds-2002
In May 2002, the District issued $16,565,000 of Revenue Installment Certificates for
Wastewater Facilities Improvements,with interest rates ranging from 4.0%to 5.0%. The
bonds are secured by a pledge of revenue. Principal payments are due annually on
September 1, commencing in fiscal year 2005, and interest is payable semi-annually on
September I and March I of each year commencing September 1, 2002.
A reserve fund is established by the agreement and is required to be funded in an amount,
as of any date of calculation, equal to the maximum amount of Installment Payments due
in the current or any future year. As of June 30, 2002, the reserve was funded at
$1,296,261.
b. Refunding Revenue Bonds- 1998
In September 1998, the District issued $25,335,000 of Refunding Revenue Bonds with
interest rates ranging from 3.5% and 4.7%. The Bonds are secured by a pledge of
revenue. Principal payments are due annually on September 1, and interest is payable
semiannually on September I and March 1.
The District issued the 1998 Refunding Revenue Bonds to advance refund the 1994
Revenue Installment Certificates, which had interest rates of 5.25% to 6.25%. The net
proceeds from the issuance were used to purchase U.S. government securities and those
securities were deposited in an escrow fund to service and redeem the 1994 debt. As a
result, the advance refunding met the requirements of an in-substance debt defeasance,
and the outstanding balance of the 1994 debt was removed from the District's accounts.
13
;7 gd
Central Contra Costa Sanitary District
Notes to the Financial Statements
The excess of the amount required to be deposited into the escrow fund over the net
carrying amount of the 1994 debt resulted in a deferred loss. The deferred loss is
reported as reduction of the new debt and is being amortized over the 15 year term of the
new debt.
The outstanding principal balance of the defeased 1994 Revenue Installment Certificates
is$19,830,000 at June 30,2002.
The 2002 and 1998 Revenue Bonds debt service requirements are as follows:
2002 1998
Fiscal Year Debt Service Debt Service
Ended June 30, Requirement Requirement Total
2003 $ 546fi08 $ 21219,203 $ 2,765,811.
2004 7423,561 2,216,178 21958,739
2005 11,296,261 2,219,973 31,5161,234
2006 1,283,461 2,2201,674 395049135
2007 11,280,061 2,218,570 39498fi31
Thereafter 21!553,236 171746,976 39,3001212
Total 26,702,188 28,841,574 55,543.3762
Amount re resenting interest (10,1371,188) (61761,574) (16,898,762)
Principal outstanding 169565,000 22"10801,000 38 645,000
Less: Unamortized deferred loss on
refunding at June 30, 2002 (2,183,121) (23,183.9121)
169565,000 19,836,879 36,4619879
Less: Current portion of revenue
bonds (1,3331,000) (1,333,000)
Long-term portion of revenue bonds $ 16,565,000 $ 18,563,879 $ 35,128,879
14
Central Contra Costa Sanitary District
Notes to the Financial Statements
b. Water Reclamation Loan Contract
The District has entered into a contract with the State of California State Water Resources
Control Board (the Board) where the Board advanced to the District $2,916,872 for
design and construction costs for projects related to recycled water treatment programs.
The District must repay advances from the Board over a 20 year period beginning March
3 l!) 1999,with an interest rate of 2.6%. Debt service requirements are as follows:
Fiscal Year Debt
Ended Service
June 3-0, Requirement
2003 $ 187,119
2004 187,119
2005 187.,119
2006 187,119
2007 1871,119
Thereafter 210581,313
Total 2,993,908
Amount representing interest (56'x,969)
2,4231,939
Less: Current portion of Water Reclamation Loan Contract (124,097)
Long term portion of Water Reclamation Loan Contract $ 2,299,842
c. Local Improvement District Bonds
Within the District's ,boundaries, there exist several improvement districts which were
formed for the sole purpose of financing sewer system improvements. The District has
no oversight responsibility for these districts and is not liable for repayment of any bonds
issued to finance these local district improvements. Contra Costa County acts as the
agent for the property owners in these districts in collecting assessments, forwarding
collection's to bondholders,, and initiating foreclosure procedures, if appropriate. The
outstanding balance on,these districts'bonds was $3 10,000 at June 30,2002.
15
Central Contra Costa Sanitary District
Notes to the Financial Statements
Note 7- Risk Management:
a. Insurance Coverage
The District's insurance coverage is,as follows:
Self Insured
Deductible
Per
Types of Insurance/Coverap,,e Limits Occurrence
Ileal and Personal Property(including boiler and
machinery):
All risk $ 3501,000,000
Furniture, fixtures and computer equipment $ 2509000
All other property and contents(including boiler
and machinery and automobile) $ 250,000
General and Pollution:
General liability $2 510009000 $ 50,000
Pollution $ 1010001000 $ 501000
Excess Liability.-
General
iability:General liability $ 5100000 $ 5009000
Workers' Compensation:
Workers'compensation Statutory
b. Liability for uninsured Claims
The Governmental Accounting Standards Board (GASB) requires state and local
governments to record their liability for uninsured claims in their financial statements.
The District's uninsured claims activity and exposure relates primarily to its general and
automobile liability program. The District records its estimated liability for uninsured
claims in this area based on the results of periodic actuarial evaluations. The actuarial
evaluations are typically performed every two years. For intervening years, the liability
for uninsured claims is reviewed for adequacy based on claims activity during the
intervening period.
For the fiscal years 2002 and 2001, settlements have not exceeded insurance coverage.
16
F�
Central Contra Costa Sanitary District
Notes to the Financial Statements
Changes in the District's estimated liability for uninsured claims for fiscal years 2002 and
2001 is summarized as follows:
2002 2001
Beginning balance $ 15+ 661924 $ 901,000
Provisions for claims incurred in the current year
and changes in the liability for uninsured
claims incurred in prior years (417,947) 567,562
Claims and claim adjustment expenses paid (269,267) (401,638)
Ending balance $ 3791710 $ 150669924
Note 8- Agreement with City of Concord:
In 1974, the District and the City of Concord(the City)entered into a cost-sharing agreement
under which the District became responsible for providing sewage treatment facilities and
services to the City. Under this agreement, the City pays a service charge for its share of
operating, maintenance and administrative costs and makes a contribution for its share of
facilities capital costs expended. Service charges and contributions to capital costs from the
City totaled $5,897,008 and$1,557,422 respectively,for the year ended June 30, 2002.
The District had the opportunity to make an unexpected capital purchase of real property
adjacent to its existing treatment plant. The City of Concord's share according to the terms of
the above agreement is $905,255. Because the purchase was unexpected, the District agreed
to accept four equal annual payments beginning July 1, 2004 and annually thereafter on July
L The interest shall accrue at 2.06% on a declining balance basis and each installment
payment will be in the amount of$246,000. At the end of June 30, 2002, interest of$11,645
had accrued for a total receivable balance of$916,900.
17
Central Contra Costa Sanitary District
Notes to the Financial Statements
Note 9- Contributed Capital:
li ederal and state grants, the City of Concord capital cost sharing, contributions from
contractors of various projects, and contractual assessment district additions are treated as
contributed capital.
The changes in the District's contributed capital account were as follows:
Balance-July 1, 2001 $ 23 7,475 1.176
Capital cost sharing 1,557,422
Contributed sewer lines 14,390,624
Balance-June 30,2002 $ 2531423,222
Note 10- Pension Plan:
a. Plan Description
Substantially, all District full-time employees are eligible to participate in the Contra
Costa County Employees' Retirement Association, a cost-sharing multiple-employer
public employee deferred benefit retirement plan (Plan), governed by the County
Employee's Retirement Law,sof 1937, as amended. The latest available actuarial and
financial information for the Plan is for the year ended December 31, 2001. The Contra
Costa Employees' Retirement Association issues a publicly available financial report that
includes financial statements and supplemental information of the Plan. That report is
available by writing to Contra Costa County Employees' Retirement Association, 1355
Willow Way Suite 221, Concord, CA 94520-5728 or calling(925)646-5741.
The Plan provides for retirement, disability, death and survivor benefits. Annual cost-of-
living (COL) adjustments to retirement allowances can be granted by the Retirement
Board as provided by State statutes. Service retirements are based on age, length of
service and final average salary. Subject to vested status, employees can withdraw
contributions plus interest credited or leave them as a deferred retirement when they
terminate or transfer to a reciprocal retirement system.
18
Central Contra Costa Sanitary District
Notes to the Financial Statements
b. Plan Contribution Requirement
The Plan requires employees to pay one-half of the basic retirement benefit and one-half
of future COTS costs. However the District has chosen to pay the employee's basic
contributions. The contribution requirement and payment from the District for the plan
year ended December 31, 2001 was $3,395,287. These contributions represented 20% of
covered payroll. The District's contribution for the plan years ended December 31, 2000
and 1999 were $3,155,031 and $2,976,257 respectively and were equal to the District's
required contributions and the employee's basic contribution for each year.
Note 11 - ]Post-Employment Health Care Benefits:
The District provides certain health care and life insurance benefits for retired employees.
These benefits are provided for in negotiated employment agreements, commonly referred to
as Memorandums of Understanding, which cover. substantially all employees who reach
normal retirement age while working for the District. These benefits, and similar benefits for
active employees, are provided through a health maintenance organization and an insurance
company whose premiums are based on the benefits paid during the year. The District
recognizes the cost of providing those benefits by expensing the annual insurance premiums,
which were$1,027,611 for the 161 eligible retirees for the year ended June 30,2002.
Note 12- Commitments and Contingencies:
Commitments and contingencies, undeterminable in amount, include normal recurring
pending claims and litigation. In the opinion of management, based upon discussion with
legal counsel, there is no pending litigation which is likely to have a material adverse affect
on the financial position of the District.
Claims and losses are recorded when they are reasonably probable of being incurred and the
amount is estimable. Insurance proceeds and settlements are recorded when received.
The District has purchase commitments relating to construction projects at June 30, 2002 of
approximately$299733,000.
19
Central Contra Costa Sanitary District
Schedule of Combining Balance Sheet
June 30,2002
Running Sewer Self
Expense Construction Insurance Eliminations Total
Assets
Current Assets:
Cash and investments available for operations 2,311,275 $ 35,470,476 4,833,208 $ 42,614,959
Accounts receivable 2,431,991 3,053,076 5,485,067
Interest receivable 46,532 26,716 73,248
Due from other sub-funds 47,363,602 38,195,059 241,878 $ (85,800,539)
Parts and supplies 1,321,104 1,321,104
Prepaid expenses 435,770 435,770
Total current assets 53,910,274 76,745,327 5,075,086 (85,800,539) 49,930,148
Restricted Cash and Investments 2,629,826 16,417,930 19,047,756
Property,Plant and Equipment 444,210,290 444,210,290
Construction in Progress 21,333,905 21,333,905
Capital Cost Receivable 916,900 916,900
Revenue Bonds Issuance Costs,
net of amortization 272,147 147,070 419,217
Total assets $ 522,356,442 $ 94,227,227 $ 5,075,086 $ (85,800,539) $ 535,858,216
Liabilities and Fund Equity
Current Liabilities:
Accounts payable and accrued expenses $ 2,688,456 $ 1,308,627 $ 27,457 $ 4,024,540
Due to other sub-funds 38,203,528 47,135,271 461,740 $ (85,800,539) 0
Interest payable 304,159 58,442 362,601
Current portion of refunding revenue bonds 1,333,000 1,333,000
Current portion of water reclamation loan contract J24,097 124,097
Liability for uninsured claims 379,710 379,710
Accrued comEnsated absences 4,284,357 4,284,357
Total current liabilities 46,937,597 48,502,340 868,907 (85,800,539) 10,508,305
Current Liabilities Payable from Restricted Assets:
Refundable deposits 159,761 118,654 278,415
Revenue Bonds,net of current portion 18,563,879 16,565,000 35,128,879
Water Reclamation Loan Program Contract 2,299,842 1,299,842
Total liabilities 67,961,079 65,185,994 868,907 (85,800,539) 48,21.5,441
Fund Equity:
Contributed capital allocable to:
Contributed sewer lines 119,825,052 119,825,052
State and federal capital grants 75,301,279 75,301,279
Capital cost-sharing reimbursement 58,296,891 58,296,891
Total contributed capital 253,423,222 253,423,222
Retained earnings allocable to:
Running expense attributable to property,
plant and equipment 194,799,591 194,799,591
Running expense attributable to general
operations 6,172,550 6,172,550
Sewer construction 29,041,233 29,041,233
Self insurance 4,206,179 4,206,179
Total retained earnings 200,972,141 29,041,233 4,206,179 234.219,553
Total fund equity 454,395,363 29,041,233 4,206,179 487,642,775
Total liabilities and fund equity $ 522,356,442 $ 94,227,227 $ 5,075,086 (85,800,539) 535,858,216
20
Central Contra Costa Sanitary District
Schedule of Combining Statement of revenues and Expenses
Year.ended June 30, 2002
Running Sewer Self
Expense Construction Insurance Eliminations Totals
Operating Revenues;
Sewer service charges $ 319228,855 $ 315228,855
Service charges-City of
Concord 558979008 55897,008
Other service charges -61-73768 617,768
Miscellaneous charges 5089916 508,916
Total operating revenues 389252,547 38,252,547
Operating Expenses:
Sewage collection and
pumping stations 695139304 6,5139304
Sewage treatment 16,945,745 169945,745
Engineering 59263,060 5,263,060
Administrative and general 71668,689 $ 677,159 $ (200,000) 8,145,848
Depreciation 13,833,124 13,833,124
Total operating expenses 5092235922 6779159 (200,000) 50,701,081
Operating Loss (I 15971,375) (6773,159) 200,000 (129448,534)
Non-Operating Revenues
(Expenses):
Taxes 111369600 $ 614149981 755515581
City of Concord contributions
to capital costs 1,5575422 19557,422
Contributed sewer lines 149390,624 145390,624
Customer contributions to
capital costs 39058,612 39058,612
Permit and inspection fees 4695926 4439243 913,169
Interest earnings 2811,897 1,057,229 1595625 1,498,751
Connection fees 4,19693.1.6 4,196,316
Pump zone fees 276,042 276,042
Interest expense (1,202,782) (19202,782)
Other income(expense) 252,767 (12,000) 991,760 (200,000) l,032,527
Total non-operating
revenues(expenses) 9389408 315382,469 11151,385 (200,000) 33,272,262
Net Income(Loss) $ (11,032,967) $ 3153829469 $ 474,226 $ 0 $ 20,8231728
21
Central Contra Costa Sanitary District
Schedule of Supplemental Statement of Changes in Fund Equity
Year Ended June 30, 2002
Allocable to:
State and
Total Federal Capital
Contributed Sewer Capital Cost-Sharing
Capital Lines Grants Reimbursement
Contributed Capital:
Balance at beginning of year $ 23794751,176 $ 105,434,428 $ 751,301,279 56,739,469
Transfer of current year
capital cost sharing payment
from retained earnings to
contributed capital 1955 7,422 11557,422
Contributed sewer lines 14,390,5624 14,3905,624
Balance at end of year $ 253,423,222 $ 119,8251,052 $ 751,3019279 $ 58,2961,891
Allocable to:
Total
Retained Running Sewer Self
Earnings Expense Construction Insurance
Retained Earnings:
Balance at beginning of year $ 229,343,871 $ 2129715,653 $ 12.1896,265 $ 3,7319953
Net income(loss) 20,823,728 (11,0329967) 319382,469 474,226
Transfer of current year
capital cost sharing payment
from retained earnings to
contributed capital (115579422) (1,557,422)
To reclassify 1998 revenue bonds (199704.1250) 19,7041,250
Contributed Capital (141,390,624) (1493909624)
To reclassify current year
capital expenses 20,5519127 (20,5 51,127)
Balance at end of year $ 2349219,553 $ 20099729141 $ 299041,233 $ 49206,179
22
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Central Contra Costa Sanitary District
Running Expense
Schedule of Supplemental Retained Earnings Analysis
Year Ended June 30, 2002
General Operations:
Retained earnings attributable to
general operations at June 30,2001 $ 3!,372,393
2001 -2002 revenue $ 40,3939737
100 1 -2002 expense (519426,704)
Aw
Add back depreciation expense 131,8339124
2,800,157
Retained earnings attributable to
general operations at June 30,2002 6,172,5 5 0
Retained earnings attributable to 194,799,591
property, plant and equipment
Running Expense Retained Earnings $ 200,972,141
24