S A W P A · 11/21/2017 · Recommendation: Receive and file. SANTA ANA WATERSHED PROJECT...

S A W P A

REGULAR COMMISSION MEETING TUESDAY, NOVEMBER 21, 2017 – 9:30 A.M.

AGENDA

1. CALL TO ORDER/PLEDGE OF ALLEGIANCE (Susan Lien Longville, Chair)

2. ROLL CALL

3. PUBLIC COMMENTSMembers of the public may address the Commission on items within the jurisdiction of the Commission; however, no actionmay be taken on an item not appearing on the agenda unless the action is otherwise authorized by Government Code§54954.2(b).

4. CONSENT CALENDARAll matters listed on the Consent Calendar are considered routine and non-controversial and will be acted upon by theCommission by one motion as listed below.

A. APPROVAL OF MEETING MINUTES: NOVEMBER 7, 2017 ....................................................7 Recommendation: Approve as posted.

B. TREASURER’S REPORT – OCTOBER 2017 .................................................................................11 Recommendation: Approve as posted.

5. NEW BUSINESSA. FISCAL YEAR 2016-17 REPORT ON AUDIT (CM#2017.137) .....................................................17

Presenter: Karen Williams Recommendation: Review the Comprehensive Annual Financial Report (CAFR) for the Fiscal Year Ended June 30, 2017, which includes the Report on Audit prepared by White Nelson Diehl Evans LLP.

B. OWOW PLAN UPDATE 2018 STATUS (CM#2017.141) ................................................................159 Presenter: Mike Antos Recommendation: Receive and file.

SANTA ANA WATERSHED PROJECT AUTHORITY 11615 Sterling Avenue, Riverside, California 92503 • (951) 354-4220

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SAWPA Commission Regular Meeting Agenda

November 21, 2017

6. INFORMATIONAL REPORTSRecommendation: Receive for information.

A. INTER-FUND BORROWING – SEPTEMBER 2017 (CM#2017.138) .............................................165 Presenter: Karen Williams

B. PERFORMANCE INDICATORS/FINANCIAL REPORTING - SEPTEMBER 2017(CM#2017.139) ........................................................................................................................................169 Presenter: Karen Williams

C. FIRST QUARTER FYE 2018 EXPENSE REPORTS ........................................................................191 • General Manager• StaffPresenter: Karen Williams

D. BUDGET VS ACTUAL VARIANCE REPORT – FYE 2018 FIRST QUARTER - ENDINGSEPTEMBER 30, 2017 (CM#2017.140) ...............................................................................................195 Presenter: Karen Williams

E. FINANCIAL REPORT FOR THE FIRST QUARTER ENDING SEPTEMBER 30, 2017 ............203 • Inland Empire Brine Line• SAWPAPresenter: Karen Williams

F. GENERAL MANAGER’S REPORT ....................................................................................................223

G. SAWPA GENERAL MANAGERS MEETING NOTES – NOVEMBER 14, 2017 ..........................227

H. STATE LEGISLATIVE REPORT .......................................................................................................231 Presenter: Rich Haller

I. CHAIR’S COMMENTS/REPORT

J. COMMISSIONERS’ COMMENTS

K. COMMISSIONERS’ REQUEST FOR FUTURE AGENDA ITEMS

7. CLOSED SESSIONA. CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION PURSUANT TO

GOVERNMENT CODE SECTION 54956.9(d)(1)Name of Case: Spiniello Companies v. Charles King Company, Inc., Santa Ana Watershed ProjectAuthority, The Ohio Casualty Insurance Company (Superior Court of Los Angeles BC616589)

8. ADJOURNMENT

Americans with Disabilities Act: If you require any special disability related accommodations to participate in this meeting, please call (951) 354-4230 or email [email protected]. Notification at least 48 hours prior to the meeting will enable staff to make reasonablearrangements to ensure accessibility for this meeting. Requests should specify the nature of the disability and the type of accommodationrequested.Materials related to an item on this agenda submitted to the Commission after distribution of the agenda packet are available for public inspection during normal business hours at the SAWPA office, 11615 Sterling Avenue, Riverside, and available at www.sawpa.org, subject to staff’s ability to post documents prior to the meeting.

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http://www.sawpa.org/


November 21, 2017

Declaration of Posting I, Kelly Berry, Clerk of the Board of the Santa Ana Watershed Project Authority declare that on Wednesday, November 15, 2017, a copy of this agenda has been uploaded to the SAWPA website at www.sawpa.org and posted in SAWPA’s office at 11615 Sterling Avenue, Riverside, California. /s/

_______________________________________ Kelly Berry, CMC

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http://www.sawpa.org/

Page Intentionally Blank

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November 21, 2017 Page 4

2017 SAWPA Commission Meetings | Events First and Third Tuesday of the Month; unless otherwise noticed,

all Commission Workshops/Meetings begin at 9:30 a.m. and are held at SAWPA.)

July 7/4/17 No Meeting (Independence Day) 7/18/17 Regular Commission Meeting 7/31/17 Special Commission Meeting

August 8/1/17 Commission Workshop 8/15/17 Regular Commission Meeting 8/17/17 Special Commission Meeting

September 9/5/17 Commission Workshop 9/7/17 Special Commission Meeting 9/19/17 Regular Commission Meeting

October 10/3/17 Commission Workshop 10/17/17 Regular Commission Meeting

November 11/7/17 Commission Workshop 11/21/17 Regular Commission Meeting 11/28 – 12/1 ACWA Fall Conference, Anaheim

December 12/5/17 Commission Workshop 12/19/17 Regular Commission Meeting

SAWPA Compensable Meetings – Other Unless otherwise noted, all meetings are held at SAWPA.

Commissioners and Alternate Commissioners will receive compensation for attending the meetings listed below, pursuant to the Commission Compensation, Expense Reimbursement, and Ethics Training Policy.

IMPORTANT NOTE: These meetings are subject to change. Prior to attending any meeting listed below, please confirm meeting details by viewing the website calendar using the following link:

http://www.sawpa.org/events/

November 11/7/17 PA 23 Committee Special Mtg | CANCELLED 11/14/17 Lake Elsinore/Cyn Lake TMDL Mtg | 1:00 p.m. 11/16/17 PA 22 Committee Mtg | 8:00 a.m. 11/16/17 OWOW Steering Committee Mtg | 11:00 a.m. 11/16/17 Review of Technical Calibration Study Workgroup | 1:30 p.m. 11/16/17 CEQA Public Scoping Mtg for SA Sucker Habitat Protection & Beneficial Use Enhancement Project | 3:30 p.m. 11/27/17 OWOW Disadvantaged & Tribal Communities Pillar Mtg | 2:00 p.m. 11/29/17 CA Native American Tribes Wkshp| 10:00 a.m. 11/30/17 Natural Resources Stewardship Mtg | 1:30 p.m.

December 12/5/17 PA 23 Committee Mtg | 8:30 a.m. 12/12/17 WUE Pillar Mtg | 1:30 p.m. Western Municipal Water District 14205 Meridian Parkway, Riverside, CA 12/13/17 WR Optimization Pillar Mtg | 9:00 a.m. 12/13/17 Land Use/Water Planning Pillar Mtg | 1:00 p.m. 12/14/17 OWOW Pillar Integration Wkshp | 1:00 p.m. 12/28/17 PA 22 Committee Mtg | 8:00 a.m.

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http://www.sawpa.org/events/



2018 SAWPA Commission Meetings/Events First and Third Tuesday of the Month

(NOTE: Unless otherwise noticed, all Commission Workshops/Meetings begin at 9:30 a.m., and are held at SAWPA.)

January 1/2/18 Commission Workshop 1/16/18 Regular Commission Meeting

February 2/6/18 Commission Workshop 2/20/18 Regular Commission Meeting

March 3/6/18 Commission Workshop 3/20/18 Regular Commission Meeting

April 4/3/18 Commission Workshop 4/17/18 Regular Commission Meeting

May 5/1/18 Commission Workshop 5/8 – 5/11/18 ACWA Spring Conference, Sacramento 5/15/18 Regular Commission Meeting

June 6/5/18 Commission Workshop 6/19/18 Regular Commission Meeting

July 7/3/18 Commission Workshop 7/17/18 Regular Commission Meeting

August 8/7/18 Commission Workshop 8/21/18 Regular Commission Meeting

September 9/4/18 Commission Workshop 9/18/18 Regular Commission Meeting

October 10/2/18 Commission Workshop 10/16/18 Regular Commission Meeting

November 11/6/18 Commission Workshop 11/20/18 Regular Commission Meeting 11/27 – 11/30/18 ACWA Fall Conference, San Diego

December 12/4/18 Commission Workshop 12/18/18 Regular Commission Meeting

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SAWPA COMMISSION REGULAR MEETING MINUTES

NOVEMBER 7, 2017

COMMISSIONERS PRESENT Susan Lien Longville, Chair, San Bernardino Valley Municipal Water District Ronald W. Sullivan, Vice Chair, Eastern Municipal Water District Jasmin A. Hall, Secretary-Treasurer, Inland Empire Utilities Agency Philip L. Anthony, Orange County Water District Thomas P. Evans, Western Municipal Water District COMMISSIONERS ABSENT None. ALTERNATE COMMISSIONERS PRESENT; NON-VOTING

Gil Navarro, Alternate, San Bernardino Valley Municipal Water District Bruce Whitaker, Alternate, Orange County Water District

STAFF PRESENT Karen Williams, Larry McKenney, Mark Norton, Dean Unger, David

Ruhl, Carlos Quintero, Nicole Fortner, Kelly Berry

The Regular Commission Meeting of the Santa Ana Watershed Project Authority was called to order at 9:31 a.m. by Chair Longville at the Santa Ana Watershed Project Authority, 11615 Sterling Avenue, Riverside, California. 1. CALL TO ORDER/PLEDGE OF ALLEGIANCE 2. ROLL CALL

Roll call was duly noted and recorded by the Clerk of the Board. 3. PUBLIC COMMENTS

Alternate Commissioner Gil Navarro expressed the importance of Veterans Day, and recommended future adoption of a Resolution recognizing Veterans Day and the nation’s veterans.

4. CONSENT CALENDAR

A. APPROVAL OF MEETING MINUTES: OCTOBER 17, 2017

MOVED, approve the October 17, 2017 meeting minutes. Result: Adopted (Unanimously) Motion/Second: Anthony/Sullivan Ayes: Anthony, Evans, Hall, Longville, Sullivan Nays: None Abstentions: None Absent: None

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SAWPA Commission Regular Meeting Minutes


5. NEW BUSINESS

A. INLAND EMPIRE BRINE LINE RATE MODEL – TASK ORDER (CM#2017.135) Carlos Quintero provided a PowerPoint presentation on the Task Order with Raftelis Financial Consultants, Inc., to prepare the Inland Empire Brine Line Rate Model. An RFP was issued, and two proposals were received. Based on the submitted proposal and a review panel of SAWPA and EMWD staff, Raftelis Financial Consultants, Inc., was recommended. Raftelis has provided services to WMWD and IEUA. Quintero explained that the current rate model is no longer supported.

MOVED, authorize the General Manager to issue a General Services Agreement and Task Order to Raftelis Financial Consultants, Inc., in an amount not to exceed $79,517 to prepare the Inland Empire Brine Line Rate Model. Result: Adopted (Unanimously) Motion/Second: Evans/Sullivan Ayes: Anthony, Evans, Hall, Longville, Sullivan Nays: None Abstentions: None Absent: None

B. PEPPERWEED RESTORATION PROJECT (CM#2017.134)

Carlos Quintero provided a PowerPoint presentation on the Pepperweed Restoration Project. A three-acre mitigation project was required as part of the Reach 4B Lower Joint Repairs project completed in 2009; a 7.35-acre mitigation project was required as part of the Brine Line Repairs Upstream of Prado (Reaches 4A and 4B) project. The goal of the project was to restore riparian habitat suitable for the Least Bell’s Vireo and other avian species. The total restoration cost of the 10.35 acre site was approximately $23,700 per acre.

This item was for informational and discussion purposes; no action was taken on Agenda Item No. 5.B.

C. ACWA GENERAL SESSION MEMBERSHIP MEETING – 2017 FALL CONFERENCE

(CM#2017.136) It was the consensus of the Commission to designate a Commissioner to serve as SAWPA’s voting representative at the November 29, 2017 ACWA General Session Membership meeting. Commissioner Sullivan recommended Chair Longville, who agreed to serve as the voting representative. Chair Longville was directed to support the ACWA Nominating Committee recommendations for ACWA President and ACWA Vice President, and vote in accordance with her judgment relative to the proposed amendments to ACWA’s Bylaws.

MOVED, designate Susan Lien Longville as SAWPA’s voting representative at the November 29, 2017 ACWA General Session Membership meeting; and support the ACWA Nominating Committee recommendations for ACWA President and Vice President. Result: Adopted (Unanimously) Motion/Second: Sullivan/Anthony Ayes: Anthony, Evans, Hall, Longville, Sullivan Nays: None Abstentions: None Absent: None

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SAWPA Commission Regular Meeting Minutes


D. PROPOSITION 84 PROJECTS STATUS UPDATE

Nicole Fortner provided a PowerPoint presentation with a status update on Proposition 84 Projects. Commissioner Sullivan recommended issuing a press release on project status and accomplishments, which should be provided to local papers, ACWA staff and appropriate staff in Sacramento.

6. INFORMATIONAL REPORTS

The following oral/written reports/updates were received and filed.

A. CASH TRANSACTIONS REPORT – SEPTEMBER 2017

B. UPDATE ON PA 22 COMMITTEE ACTIVITIES (CM#2017.133) Mark Norton provided a PowerPoint presentation with an update on PA 22 Committee activities and Proposition 84 IRWM Drought Grant Status covering seven projects summarized on page 105 of the agenda packet. Chair Longville requested to be provided with more detailed information relative to the Smartscape Program with Orange County Coastkeeper.

C. GENERAL MANAGER’S REPORT

D. CHAIR’S COMMENTS/REPORT On October 3, 2017, the Commission adopted Resolution No. 2017-12 establishing that the two SAWPA Commission representatives appointed to the OWOW Steering Committee are the Vice Chair (currently, Commissioner Sullivan) and Secretary-Treasurer (currently, Commissioner Hall) of the Commission. Since Commissioner Sullivan is unable to attend the upcoming Committee meeting on November 16, 2017, which would be Commissioner Hall’s first committee meeting, Commissioner Evans will remain on the OWOW Steering Committee and convene the November 16, 2017 meeting. Commissioner Hall will be appointed effective in January 2018, pending resolution of scheduling concerns.

Chair Longville attended the PPIC briefing in Sacramento last week. SAWPA was a sponsor of the 40th anniversary celebration for Water Education Foundation, attended by Chair Longville on behalf of SAWPA.

E. COMMISSIONERS’ COMMENTS There were no Commissioners’ comments.

F. COMMISSIONERS’ REQUEST FOR FUTURE AGENDA ITEMS There were no requests for future agenda items.

7. CLOSED SESSION

There was no Closed Session. 8. ADJOURNMENT

There being no further business for review, Chair Longville adjourned the meeting at 10:35 a.m. Approved at a Regular Meeting of the Santa Ana Watershed Project Authority Commission on Tuesday, November 21, 2017. _____________________________________ Susan Lien Longville, Chair Attest: _____________________________________ Kelly Berry, CMC, Clerk of the Board

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Investment Security Purchase Maturity Call Date Yield To Investment Market Value Unrealized Coupon InterestType Type CUSIP Dealer Date Date (if appl) Par Value Maturity Cost Current Month Gain / (Loss) Rate Earned

Agency FHLMC 3137EACA5 WMS 03-27-14 03-27-19 No Call $500,000 1.790% 546,650.00 515,309.50 (31,340.50) 3.750% 760.14$ Agency FHLMC 3137EAEC9 WMS 09-16-16 08-12-21 No Call $1,000,000 1.335% 990,060.00 973,879.00 (16,181.00) 1.125% 1,133.79$ Agency FHLMC 3137EADB2 WMS 04-17-17 01-13-22 No Call $500,000 2.375% 512,767.00 508,326.00 (4,441.00) 2.375% 1,008.56$ Agency FHLB 313379EE5 WMS 05-26-15 06-14-19 No Call $500,000 1.420% 504,015.00 500,299.50 (3,715.50) 1.625% 603.10$ Agency FHLB 313383HU8 WMS 06-16-16 06-12-20 No Call $1,000,000 1.080% 1,026,088.00 1,000,074.00 (26,014.00) 1.750% 917.27$ Agency FNMA 3135GOZA4 WMS 03-27-14 02-19-19 No Call $500,000 1.800% 501,975.00 502,310.50 335.50 1.875% 764.38$ Agency FNMA 3136G1GP8 WMS 03-27-13 03-27-18 No Call $1,000,000 1.000% 1,000,000.00 998,985.00 (1,015.00) 1.000% 849.32$ Agency FNMA 3135G0H55 WMS 12-28-15 12-28-20 No Call $1,000,000 1.830% 1,002,140.00 1,003,084.00 944.00 1.875% 1,554.26$ Agency FNMA 3135G0F73 WMS 06-16-16 11-30-20 No Call $1,000,000 1.150% 1,015,157.00 992,286.00 (22,871.00) 1.500% 976.72$ Agency USTN 912828A34 WMS 11-17-15 11-30-18 No Call $1,000,000 1.166% 1,002,500.00 997,539.00 (4,961.00) 1.250% 990.21$ Agency USTN 912828WC WMS 11-17-15 10-31-20 No Call $1,000,000 1.638% 1,005,312.50 1,000,781.00 (4,531.50) 1.750% 1,391.04$ Agency USTN 912828G61 WMS 11-17-15 11-30-19 No Call $1,000,000 1.469% 1,001,210.94 998,008.00 (3,202.94) 1.500% 1,247.59$ Agency USTN 912828L32 WMS 06-17-16 08-31-20 No Call $500,000 1.030% 507,070.31 495,586.00 (11,484.31) 1.375% 437.53$ Agency USTN 912828L65 WMS 06-16-16 09-30-20 No Call $500,000 1.041% 506,992.19 495,273.50 (11,718.69) 1.375% 441.95$ Agency USTN 912828L99 WMS 06-16-16 10-31-20 No Call $500,000 1.051% 506,914.06 494,863.50 (12,050.56) 1.375% 446.10$ CORP Toyota Motor Credit Corp 89236TCP8 WMS 09-15-16 07-13-18 No Call $500,000 1.100% 504,057.50 500,022.00 (4,035.50) 1.550% 467.15$

CD Ally Bank 02006L2F9 WMS 01-13-15 04-20-20 No Call $248,000 1.800% 248,000.00 248,000.00 - 1.800% 379.13$ CD American Express 02587DP85 WMS 04-19-17 04-19-21 No Call $248,000 2.250% 248,000.00 248,000.00 - 2.250% 473.92$ CD American Express BK FSB AN4199708 WMS 05-10-17 05-10-21 No Call $248,000 2.200% 248,000.00 248,000.00 - 2.200% 463.39$ CD GE Cap Retail 36157PVU0 WMS 01-31-14 01-31-18 No Call $248,000 1.450% 248,000.00 248,280.35 280.35 1.450% 305.41$ CD National Bank of NY 634116CA3 WMS 06-18-14 06-18-18 No Call $248,000 1.300% 248,000.00 248,047.28 47.28 1.300% 273.82$ CD Capital Bank Fl Miami 139800CC8 WMS 05-27-15 05-29-18 No Call $248,000 1.100% 248,000.00 247,740.26 (259.74) 1.100% 231.69$ CD Capital One NA 14042RAG6 WMS 09-30-15 10-01-18 No Call $248,000 1.650% 248,000.00 248,585.79 585.79 1.650% 347.54$ CD Capital One Bank USA NA 140420VZ0 WMS 09-30-15 10-01-18 No Call $248,000 1.650% 248,000.00 248,585.79 585.79 1.650% 347.54$ CD Wells Fargo Bank NA 9497482W6 WMS 12-02-15 12-03-18 No Call $245,000 1.450% 245,000.00 245,000.00 - 1.450% 301.72$ CD CIT Bank 17284A6P8 TVI 03-13-13 03-13-18 No Call $248,000 1.100% 248,000.00 247,998.85 (1.15) 1.100% 231.69$

Total Actively Invested Funds $14,477,000 14,609,909.50$ 14,454,864.82$ (155,044.68)$ 1.613% 17,344.98$

Total Local Agency Investment Fund $27,727,571.74 1.143% 26,917.02

Total CalTRUST Investment Fund $2,181,639.78 1.510% 2,797.88

Total Invested Cash $14,477,000 44,519,121.02$ 1.314% 47,059.87$

Key to Security Type: Key to Dealers:FHLB = Federal Home Loan Bank FCS = FinaCorp SecuritiesFHLMC = Federal Home Loan Mortgage Corporation MBS = Multi-Bank SecuritiesFNMA = Federal National Mortgage Association MS = Mutual SecuritiesUSTN = US Treasury Note RCB = RBC Dain RauscherCORP = Corporate Note SA = Securities AmericaCD = Certificate of Deposit TVI = Time Value InvestmentsGDB = Goldman Sachs Bank WMS = Wedbush Morgan Securities

Santa Ana Watershed Project AuthorityINVESTMENT PORTFOLIO - MARKED TO MARKET - UNREALIZED GAINS & LOSSES

October 31, 2017SAWPA primarily maintains a "Buy and Hold" investment philosophy, with all investments held by the Citizens Business Bank via a third-party safekeeping contract.

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Oct-2017

0.0%

1.0%

2.0%

Securities LAIF CalTRUST Avg Rate ofReturn

1.613%1.143%

1.510%1.314%

Interest Rate Analysis

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Oct-2017

Securities, $14,609,910,

33%

CalTRUST, $2,181,640,

5%

LAIF, $27,727,572,

62%

Investments$44,519,121

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Oct-2017

Securities, $17,345, 37%

CalTRUST, $2,798, 6%

LAIF, $26,917, 57%

Interest$47,060

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COMMISSION MEMORANDUM NO. 2017.137 DATE: November 21, 2017 TO: SAWPA Commission SUBJECT: Fiscal Year 2016-17 Report on Audit

PREPARED BY: Karen Williams, Chief Financial Officer RECOMMENDATION It is recommended that the Commission review the Comprehensive Annual Financial Report (CAFR) for the Fiscal Year Ended June 30, 2017, which includes the Report on Audit prepared by White Nelson Diehl Evans LLP: 1. Accept the CAFR, including the Report on Audit as prepared by White Nelson Diehl Evans;

2. Direct staff to file the Report with the respective government agencies as required by law; and, 3. Direct staff to submit the CAFR, with any necessary changes, for the Certificate of Achievement for

Excellence in Financial Reporting Award. DISCUSSION As required by the State of California Government Code, all government agencies and/or special districts must contract for an independent financial audit. In addition, because SAWPA has received State Water Board grant funding, the independent audit must include additional work and reporting by the auditors, and testing of SAWPA’s internal control procedures for receipt of grant funding to ensure compliance with respective State and Federal laws and regulations. SAWPA has received the Government Finance Officers Associations (GFOA) Certificate of Achievement for Excellence in Financial Reporting for the last seven years. Staff will submit this CAFR for the award as well. The CAFR was prepared following the guidelines recommended by the Governmental Accounting Standards Board (GASB) and generally accepted accounting principles (GAAP). It includes three sections: 1. The Introductory Section, which provides an overview of the Agency, its background, organization,

recent activities and accomplishments over the past fiscal year, local and economic conditions and forecasts, service efforts and accomplishments, and future plans.

2. The Financial Section, which includes the independent auditor’s report, management’s discussion and

analysis, and all basic financial statements and notes to the basic financial statements.

3. The Statistical Section, which includes a number of unaudited tables and schedules that present historical trends for the past ten years, as well as demographic and other information about the Agency that is deemed relevant.

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CM#2017.137 November 21, 2017 Page 2 SAWPA is pleased to report that the financial statements presented herein, contain no qualifications or reportable conditions. This indicates that SAWPA’s financial reporting meets generally accepted GAAP, it is compliant with applicable State and Federal laws and regulations, and internal controls are sufficient to safeguard against material errors or fraud. Nitin Patel (Audit Partner) will be available to answer questions regarding SAWPA’s FY 2016-17 Report on Audit (financial statements). RESOURCE IMPACTS The FY 2016-17 Audit contains no financial deficiencies to report. Attachments: 1. FYE 2017 CAFR 2. Management Report 3. Internal Controls Letter

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Santa Ana Watershed Project Authority

Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2017

11615 Sterling Avenue ● Riverside ● California ● 92503www.sawpa.org ● (951) 354-4220 19


Riverside, CA

Comprehensive Annual Financial Report

For the Fiscal Year Ended

June 30, 2017

Prepared by the Finance Department

11615 Sterling Avenue, Riverside California 92503 951.354.4220 www.sawpa.org 20

Table of Contents

INTRODUCTORY SECTION Transmittal Letter ............................................................................................................................... i Authority Service Area Map ........................................................................................................... x Certificate of Achievement for Excellence in Financial Reporting ............................... xi Authority Officials ............................................................................................................................ xii Organizational Chart .................................................................................................................... xiii FINANCIAL SECTION Independent Auditor’s Report ...................................................................................................... 1 Management’s Discussion and Analysis ................................................................................... 5 Basic Financial Statements: Statements of Net Position – Proprietary Fund ......................................................... 19 Statements of Revenues, Expenses and Changes in Net Position - Proprietary Fund ................................................................................................................................................ 20 Statements of Cash Flows – Proprietary Fund ........................................................... 21 Statements of Fiduciary Assets and Liabilities – Agency Funds ......................... 23 Notes to the Basic Financial Statements ........................................................................ 24 Required Supplementary Information Schedule of Proportionate Share of the Net Pension Liability .............................. 71 Schedule of Contributions .................................................................................................... 72 Schedule of Funding Progress–Other Post-Employment Benefits ...................... 73 Supplementary Information Combining Schedule of Net Position – Enterprise Funds ....................................... 76 Combining Schedule of Revenues, Expenses and Changes in Net Position – Enterprise Funds ...................................................................................................................... 78 Combining Schedule of Net Position – Capital Projects Activities ..................... 80

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Combining Schedule of Revenues, Expenses and Changes in Net Position – Capital Projects Activities .................................................................................................... 84 Combining Schedule of Net Position – Enterprise Activities ............................... 88 Combining Schedule of Revenues, Expenses and Changes in Net Position – Enterprise Activities ............................................................................................................... 90 Combining Schedule of Fiduciary Assets and Liabilities–Agency Funds ........ 92 Combining Schedule of Changes in Fiduciary Assets and Liabilities – Agency Funds ............................................................................................................................................ 93 STATISTICAL SECTION Table I – Net Position by Component ..................................................................................... 96 Table II – Changes in Net Position ........................................................................................... 97 Table III – Revenues by Source ................................................................................................. 98 Table IV – Expenses by Function ............................................................................................. 99 Chart I – Combined Expenses and Revenues .................................................................... 100 Table V – Wastewater Discharge by Type .......................................................................... 101 Table VI – Summary of Wastewater Treatment Rates ................................................. 102 Table VII – Principal Sewer Customers ............................................................................... 103 Table VIII – Debt Coverage Ratio ........................................................................................... 104 Table IX – Debt Service Payment Schedule ....................................................................... 105 Chart II – Debt Service Payment Schedule ......................................................................... 106 Chart III – Capital Spending ...................................................................................................... 107 Chart IV – Total Debt to Assets ............................................................................................... 107 Table X – Demographic and Economic Statistics ............................................................ 108 Table XI – Principal Employers ............................................................................................... 108 Table XII – Number of Employees ......................................................................................... 109 Chart V – Total Employees ........................................................................................................ 109 Table XIII – Operating and Capital Indicators .................................................................. 110

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Introductory Section

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i

November 21, 2017

To the Chair of the Board of Commissioners, Members of the Commission, and Member Agencies of the Santa Ana Watershed Project Authority (SAWPA):

We are pleased to present the Santa Ana Watershed Project Authority’s (hereinafter referred to as “the Authority”) Comprehensive Annual Financial Report for the fiscal year ended June 30, 2017. The report was prepared by the Authority’s Finance Department following the guidelines recommended by the Governmental Accounting Standards Board (GASB) and generally accepted accounting principles (GAAP). Responsibility for both the accuracy of the data presented, and the completeness and fairness of the presentation, including disclosures, rests with the Authority’s management. We believe the data, as presented, is accurate in all material respects, and that it is presented in a manner that provides a fair representation of the financial position and results of operation of the Authority. Included are all disclosures we believe necessary to enhance your understanding of the financial condition of the Authority. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). The letter transmittal is designed to complement the MD&A and should be read in conjunction with it. The Authority’s MD&A can be found immediately following the Independent Auditors’ Report. The Authority’s financial statements have been audited by White Nelson Diehl Evans LLP, a firm of licensed certified public accountants. The goal of the independent audit is to provide reasonable assurance that the financial statements of the Authority for the fiscal year ended June 30, 2017, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditors concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the Authority’s financial statements for the fiscal year ended June 30, 2017, are fairly presented in conformity with GAAP. The independent auditors’ report is presented as the first component of the financial section of this report.

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Reporting Entity and Its Services Governmental Structure The Authority was first formed in 1968 as a planning agency, and reformed in 1972, with a mission to plan and build facilities to protect the water quality of the Santa Ana River Watershed (hereinafter referred to as “the Watershed”). The Authority is a Joint Powers Authority (JPA), comprised of the five largest water agencies in the Watershed: Eastern Municipal Water District (EMWD), Inland Empire Utilities Agency (IEUA), Orange County Water District (OCWD), San Bernardino Valley Municipal Water District (SBVMWD), and Western Municipal Water District (WMWD). Service Area The Watershed spans approximately 2,840 square miles, and covers San Bernardino, Riverside, and most of Orange Counties, as well as a small portion of Los Angeles County. It is home to over 6 million people. The Watershed, and the State as a whole, is facing many challenges in guaranteeing sufficient, high-quality water for the ever-growing population of the region. The Authority works with planners, scientists, water experts, design and construction engineers, and other government agencies to identify issues and develop innovative solutions to resolve many water-related problems. Vision The Authority’s vision is a sustainable Santa Ana River Watershed that provides clean and reliable water resources for a vibrant economy and high quality of life for all, while maintaining healthy ecosystems and open space opportunities. A successful Authority provides value to its member agencies and to the Watershed as a whole by facilitating collaboration across boundaries to address common goals and tackle problems that are larger than any individual entity. Mission The Authority strives to make the Santa Ana River Watershed sustainable through fact-based planning and informed decision-making; regional and multi-jurisdictional coordination; and the innovative development of policies, programs, and projects. Our mission is accomplished through a number of specific functions: Maintaining peace in the Watershed; Facilitating conflict resolution through collaborative processes; Preparing an integrated watershed-wide water management plan that provides a unified vision for the Watershed; Operating the Inland Empire Brine Line to convey salt out of the Watershed and support economic development; Developing water-related initiatives, particularly those that require the participation of several entities; Identifying, pursuing, securing, and administering supplemental funds for the Watershed; and Influencing legislation for the benefit of the Watershed.

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Our Values Our strategy and day-to-day operations are guided by values strongly held by our member agencies, management, and staff: Leadership in the development and advancement of a vision and plan for a sustainable Watershed, and in the incorporation of new paradigms for water and watershed planning. Collaboration and cooperation among member agencies and other stakeholders in the Watershed toward the formulation and implementation of solutions to watershed-wide, multi-jurisdictional problems. Creativity in the pursuit of new approaches to watershed planning, the use of new technologies, and the enhancement of a new water ethic in the Watershed. Fact-based decision-making to identify neutral and transparent solutions that maximize the benefit to the entire Watershed. Respect for all voices and perspectives in the Watershed to develop sound solutions and maximize consensus building. Transparency, integrity and professionalism to maintain the respect and trust of our partners, and to attract and retain talented and committed individuals to our organization. The Authority uses a three-pronged approach to accomplish our mission with the services it offers, which are listed below. Inland Empire Brine Line The Authority’s enterprise includes ownership and operation of the Inland Empire Brine Line (Brine Line). The 73-mile long regional brine line is designed to convey 30 million gallons per day of non-reclaimable wastewater from the upper Santa Ana River Basin to the Pacific Ocean for disposal, after treatment. The Brine Line is currently used for: 1) the disposal of high Total Dissolved Solids (TDS) brine from brackish groundwater desalter operations and power plants within the region; 2) the disposal of industrial wastewater that is unacceptable for discharge into local wastewater treatment facilities, usually because of high concentrations of TDS from commercial and industrial facilities; and 3) the disposal of domestic or industrial wastewater that is managed by public agencies and which meets standards of local treatment facilities. Some users of the Brine Line have temporary or emergency needs and connect to the system for a fixed term. This 44-year old utility was built as the fundamental method of salt export for the region. Historic import of water for agricultural purposes has increased the salinity of many groundwater basins within the Watershed. Removing salt by means of the Brine Line allows the Watershed to work towards achieving salt balance – a key Watershed goal and indicator of sustainability. Salt is removed from brackish groundwater by reverse osmosis desalters, which discharge the concentrated brine into the Brine Line. The treated water from the desalters is delivered for consumption as potable water. Brine disposal will be essential to support water recycling efforts and economic growth within the Watershed.

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Integrated Regional Watershed Planning SAWPA has been involved in watershed and integrated water resource planning since its formation. The last plan adopted in February 2014 is the Santa Ana Watershed Integrated Regional Water Management Plan (IRWMP) called the One Water One Watershed (OWOW) 2.0 Plan. The plan is being updated during FY 17-18 and is expected to be completed in late 2018. Using a decentralized stakeholder involvement process as well as involving experts from all fields and areas within the Watershed, an extraordinarily collaborative and visionary plan is used to address water challenges over the next two decades. The plan addresses climate change; water supply reliability; water and land use; water quality improvement; flood control and stormwater runoff; water use efficiency; water recycling; parks, recreation and open space; environmental justice; and environment and habitat. Through this integration of water resource management strategies along with workgroups (or pillars) designated for each strategy, scarce resources will be leveraged and cost effective solutions will be developed to address a multiplicity of water challenges using an integrated multi-beneficial approach. Roundtables The Authority has taken the lead role in establishing effective regional partnerships with the Regional Water Quality Control Board and other stakeholders in the Watershed to solve water quality problems, as well as water and natural resource problems. The Authority serves as the administrator/facilitator and creates a neutral venue for a number of efforts bringing together many agencies and organizations to address and solve a multiplicity of problems through integration and innovation.

Economic Conditions and Outlook Local Economy The Inland Empire and Orange County was among the nation’s hardest hit local economies during the Great Recession, beset by staggering numbers of foreclosures and one of the highest jobless rates in California. Today the Inland Empire is the fastest growing region in Southern California and it is predicted that this trend will continue over the next five years. Steady increases in job numbers and positive development in the sectors of healthcare and logistics have helped the region recover. Income levels have risen for the fifth consecutive year, unemployment rates continue to decrease, and the housing market continues to improve while still remaining affordable. Economic forecasters expect the economy to continue to improve and become stronger in the coming years due to the availability of land, the ideal location for commerce, a relatively strong manufacturing base, and affordable housing. Sound Financial Policies The Agency continues to manage funds to ensure financial stability and demonstrate responsible stewardship by sustaining reasonable rates for customers, containing costs through careful planning, preserving investments, safeguarding reserves, and active debt management.

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Financial Planning The Commission approves a biennial operating budget as a management tool. The budget is developed with input from the various departments within the organization and adopted prior to the start of each fiscal year. Monthly comparison reports of budget to actual are prepared, and quarterly budget-to-actual results by fund type are provided to and discussed with the Commission, along with financial position and other key performance information. Reserves Policy The Agency adopted a reserve policy, which states the purpose, source, and funding limits for each of its designated reserves. The reserves are essential for maintaining liquidity in the marketplace, which enables the Agency to access the lowest cost-of-capital borrowing opportunities. Investment Policy The Agency invests its funds in instruments permitted by California Government Code sections 53601 et seq., and in accordance with its investment policy. The investment objectives of the Agency are to first preserve capital, followed by maintaining liquidity, and finally, maximizing the rate of return without compromising the first two objectives. Debt Administration The Agency actively manages its debt portfolio, seeking to minimize its total debt costs. This goal is met by the use of state revolving fund (SRF) loans to fund part of its capital projects. Reserves will also be used to fund capital projects.

Major Initiatives and Accomplishments Fiscal year 2016-17 was another busy year for the Authority. It not only administers the day-to-day operations of the JPA, it operates the Brine Line Enterprise and Capital Improvement Program, administers the OWOW Program, administers several grant programs, serves as the Lake Elsinore & San Jacinto Watersheds Authority administrator, conducts regional planning activities, and facilitates seven stakeholder task force work groups. Some of the major initiatives and accomplishments for FYE 2017 are listed below. Brine Line Enterprise No Sewer System Overflows during the fiscal year. Continued construction of the Reach V repair project installing Cured-In-Place-Pipe

(CIPP). Completed construction of the Nichols Road Brine Line relocation along Reach V in Lake Elsinore. Continued to implement the SAWPA Pretreatment Program (PTP) refining and

standardizing procedures. Performed 228 on-site Discharger inspections, 465 monitoring (or sampling) events, and reissued 35 existing permits. Conducted audits of the member/contract agency pretreatment programs for

conformance with the Brine Line Ordinance and pretreatment requirement; all 29

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programs are in conformance with SAWPA’s requirements with no major findings found. Drafted a new Ordinance based upon the OCSD Ordinance adopted in February 2016.

Utilized a data and records management system (OnBase) for expedient notification of Brine Line Liquid Waste Hauler rejected loads. Continued to implement the Sewer System Management Plan (SSMP as required by the SWRCB’s statewide permit for Collection Systems in excess of one mile in length. Cleaned the Reach IV-B Upper pipeline eliminating hydraulic choke points caused by scale build up. Continued periodic siphon cleaning program for 13 system inverted siphons. Monitored facilities during the few winter storm events and performed minor repairs from erosion except Reach IV where significant ground cover of the Brine Line was washed away. SAWPA staff completed emergency repairs. Continued to locate facilities, particularly on Reach V, by “potholing” and updating “as-built” information. Conducted recurring maintenance of air release valves to reduce incidence of “dripping” or small releases of brine from the valves. Continued implementation of the Brine Line marketing plan. Completed repair of selected Maintenance Access Structures (MAS). Responded to nearly 6,000 requests from contractors to mark the location of the Brine Line in the field resulting in 908 utility markings in the field. Required direct

coordination with the contractor to review the proposed work and any potential concerns for the Brine Line. Monitored construction activities in close proximately to the Brine Line to ensure

protection of the Brine Line. Processed 35 grant invoices totaling nearly $33 million and conducted 33 quality assurance site visits. OWOW Implemented water use efficiency improvements using grant funding from the California

Department of Water Resources (DWR) Proposition 84 Integrated Regional Water Resources Management (IRWM) Emergency Drought Round. Over $12.8 million in grant funding along with $10.6 million in local match has been provided for SAWPA, its member agencies, and stakeholders. Funding is being used to implement water use efficiency improvements such as support for budget based water rate structures for retail water agencies, water use efficiency web based outreach tools, aerial mapping and area measurement using GIS throughout the Santa Ana River and Upper Santa Margarita Watersheds.

Completed agreements with project proponents to implement projects using the $61 million made available to SAWPA and the watershed from DWR’s Proposition 84 Integrated Regional Water Resources Management (IRWM) 2015 Round funding. This funding along with local matching funds of $173 will be used to implement three integrated large scale projects reflecting a multi-agency and multi-benefit approach. One of the three projects called the Santa Ana River Conservation and Conjunctive Use Project is a conjunctive use water storage project that will store over 180,000 AF of water for use in dry periods and is being implemented by a SAWPA Committee composed of the SAWPA member agencies and its non-profit partners.

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Executed agreements with DWR for Proposition 1 IRWM funding designated for Disadvantaged Community Involvement (DACI). $6.3 million has been specifically designated to the Santa Ana River Watershed to support the DACI focusing on needs assessment of disadvantaged communities in the watershed. The work on this effort commenced in FY 2016-17.

Commenced the 2018 Update process to the Santa Ana River Integrated Regional Water Management Plan known as the OWOW Plan 2018 Update. Executed an agreement with DWR using Proposition 1 IRWM funding of $250,000 awarded to SAWPA to update the OWOW Plan 2018 Update as necessary to meet new IRWM plan standards. Stakeholder Partnering (Roundtable Efforts)

Commenced the first year of pathogen monitoring under the new Regional Water Quality Monitoring Program Task Force. This task force is composed of SAWPA, the Regional Board, and the three flood control districts in Orange, San Bernardino, and Riverside Counties. This task force is implementing the necessary pathogen monitoring as required under the Stormwater Quality Standards Task Force. The new monitoring program reflects the merger of the ongoing pathogen monitoring conducted by the Middle Santa Ana River (MSAR) TMDL Task Force

Worked with the Regional Board in updating and revising TMDLs with the current focus on the Lake Elsinore and Canyon Lake nutrient TMDL. A draft TMDL Update report is anticipated by the end of 2017. Another TMDL update is anticipated for the MSAR pathogen TMDL starting in 2020.

Completed a Basin Plan Amendment for the Chino South groundwater management zone nitrate levels under the Basin Monitoring Program Task Force. This action ensures protection of the groundwater basin quality while allowing for water recycling facilities to continue discharging to the Santa Ana River for the next five years. Another Basin Plan Amendment is anticipated to reflect the results of future Santa Ana River Wasteload Allocation Plan in 2018.

Continued a joint salinity management study update through our involvement with Southern California Salinity Coalition, Metropolitan Water District of Southern California (MWDSC), and the US Bureau of Reclamation. This study is examining the impacts of the recent drought and water conservation on TDS trends of recycled water effluent and permit compliance. Future policy development working with the Regional Board to address the technical results of this study is anticipated in 2018.

Completed annual habitat survey for the threatened fish species, Santa Ana sucker fish. The Riverwalk is the longest running and largest voluntary annual habitat assessment conducted in Southern California for an aquatic species.

Supported the Lake Elsinore and San Jacinto Watersheds Authority and the associated TMDL Task Force in implementing two more successful alum applications to Canyon Lake to reduce the phosphorus content, reduce algae and help meet the TMDL targets for the lake. Water quality results over the past four years of alum application show significant improvements in water clarity, decreased algae and increased oxygen levels. Technology

Moved the Brine Line Web tools including Dig Alert to Java script platform. Created new phone app to view open Dig Alert tickets. Created apps for “Display Disadvantaged Communities” for turf removal program.

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Completed Brine Line marketing video and brochure. Updated to new IP phone system. Negotiated Konica Minolta agreement and installed new copiers. Upgraded 2 server operating systems. Upgraded and managed security system (Video). Continued Onbase upgrade and support. Upgraded and updated SAWPA website. Upgraded WIFI connection to a faster and more secure system (802.11ax).

Accounting System The Finance Department is responsible for providing financial services for the Authority, including financial accounting and reporting, payroll, accounts payable and receivable, custody and investment of funds, billing and collection of wastewater charges, and other revenues. The Authority accounts for its activities as an enterprise fund and prepares its financial statements on the accrual basis of accounting, under which revenues are recognized when earned and expenses are recorded when incurred. It is the intent of the Board of Commissioners to manage the Authority’s operations as a business, thus matching revenues against the cost of providing services.

Internal Controls The Authority operates within a system of internal accounting controls established and continually reviewed by management to provide reasonable assurance that assets are adequately safeguarded and transactions are recorded in accordance with Authority policies and procedures. When establishing and reviewing controls, management must consider the cost of the control and the value of the benefit derived from its utilization. Management normally maintains or implements only those controls for which its value adequately exceeds its cost. Recent audits have not noted any weaknesses in internal controls.

Audit and Financial Reporting

State Law requires the Agency to obtain an annual audit of its financial statements by an independent certified public accountant. The accounting firm of White Nelson Diehl Evans LLP has conducted the audit of the Authority’s financial statements. Their unqualified (clean) Independent Auditor’s Report appears in the Financial Section.

Awards The Government Finance Officers Association of the United States and Canada (“GFOA”) awarded a Certificate of Achievement for Excellence in Financial Reporting to the Authority for its comprehensive annual financial report for the fiscal year ended June 30, 2016. This was the seventh year that the Authority has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable

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and efficiently organized comprehensive annual financial report. This report must satisfy both GAAP and applicable legal requirements. A Certificate of Achievement is valid for a period of only one year. We believe that our current comprehensive annual financial report continues to meet the programs requirements and will submit our current June 30, 2017, report to the GFOA to determine its eligibility for a certificate. The GFOA of the United States and Canada presented a Distinguished Budget Presentation Award to the Authority for the two-year Budget beginning July 1, 2015. In order to receive this award, a government unit must publish a budget document that meets program criteria as a policy document, as an operating guide, as a financial plan, and as a communication device.

Acknowledgements The preparation of this report could not have been accomplished without the efficient and dedicated services of the entire staff of the Authority’s Finance Department. We also would like to express our appreciation to the other Authority Departments for their cooperation, assistance, and support. We further acknowledge the thorough and professional manner in which our auditors, White Nelson Diehl Evans LLP, conducted the audit. Additionally, we would like to acknowledge the Board of Commissioners for their continued support of the Authority’s goal of sound accountable financial management, and for maintaining the highest standards of professionalism in the management of the Authority’s finances. We truly appreciate their unfailing interest and support. Respectfully submitted,

Richard Haller General Manager Karen Williams Chief Financial Officer

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Santa Ana Watershed Project Authority Authority Service Area Map

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Santa Ana Watershed Project Authority Authority Officials Board of Commissioners

Susan Lien-Longville Chair SBVMWD Ronald W. Sullivan Vice Chair EMWD

Jasmin A. Hall Secretary/Treasurer IEUA Thomas P. Evans Commission Member WMWD

Phil Anthony Commission Member OCWD

Management Staff

Richard Haller General Manager Kelly Berry Administrative Services Manager/Clerk of the Board

Karen Williams Chief Financial Officer Dean Unger IS and Technology Manager

Richard Haller Executive Manager of Engineering and Operations Mark Norton Water Resources and Planning Manager

Larry McKenney Executive Counsel

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Santa Ana Watershed Project Authority Organizational Chart

Commission

General Manager

Public Affairs

Executive Counsel

Administrative

Services

Information Services &

Technology

Finance/

Accounting

Engineering &

Operations

Water Resources &

Planning

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Financial Section

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2875 Michelle Drive, Suite 300, Irvine, CA 92606 • Tel: 714.978.1300 • Fax: 714.978.7893

Offices located in Orange and San Diego Counties

INDEPENDENT AUDITORS’ REPORT

Board of Commissioners Santa Ana Watershed Project Authority Riverside, California ReportontheFinancialStatements We have audited the accompanying financial statements of the Santa Ana Watershed Project Authority (the Authority) as of and for the years ended June 30, 2017 and 2016, and the related notes to the financial statements, which collectively comprise the Authority’s basic financial statements as listed in the table of contents. Management’sResponsibilityfortheFinancialStatements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in GovernmentAuditingStandards, issued by the Comptroller General of the United States, and the State Controller’s Minimum Audit Requirements for California Special Districts. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the Authority’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Authority’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

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Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Santa Ana Watershed Project Authority as of June 30, 2017 and 2016, and the respective changes in financial position and cash flows thereof for the years then ended in accordance with accounting principles generally accepted in the United States of America. OtherMattersRequiredSupplementaryInformation Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the schedule of proportionate share of the net pension liability, the schedule of contributions ‐ defined benefit pension plans, and the schedule of funding progress ‐ other post‐employment benefits, identified as Required Supplementary Information (RSI) in the accompanying table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the RSI in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the financial statements, and other knowledge we obtained during the audit of the basic financial statements. We do not express an opinion or provide any assurance on the RSI because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. OtherInformation Our audits were conducted for the purpose of forming an opinion on the financial statements that collectively comprise the Authority’s basic financial statements. The introductory section, combining schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining schedules are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance.

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OtherReportingRequiredbyGovernmentAuditingStandards In accordance with Government Auditing Standards, we have also issued our report dated October 23, 2017, on our consideration of the Authority’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with GovernmentAuditingStandards in considering the Authority’s internal control over financial reporting and compliance. Irvine, California October 23, 2017

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MANAGEMENT’S DISCUSSION & ANALYSIS

The intent of the Management Discussion and Analysis is to provide highlights of the financial activities for the fiscal years ended June 30, 2017 and 2016 of the Santa Ana Watershed Project Authority (the “Authority”). Readers are encouraged to read this section in conjunction with the transmittal letter and the accompanying basic financial statements.

TheAuthority

The Santa Ana Watershed Project Authority was formed in 1972 pursuant to the provisions of Article 1, Chapter 5, Division 7, Title 1 of the Government Code of the State of California relating to the joint exercise powers common to public agencies. The Authority was formed for the purpose of undertaking projects for water quality control and protection and pollution abatement in the Santa Ana River Watershed. The Authority’s five member agencies are Eastern Municipal Water District (EMWD), Inland Empire Utilities Agency (IEUA), Orange County Water District (OCWD), San Bernardino Valley Municipal Water District (SBVMWD), and Western Municipal Water District (WMWD).

OverviewoftheFinancialStatements The Authority is a special purpose government (special district) engaged only in activities that support themselves through user charges and member contributions. Accordingly, the accompanying financial statements are presented in the format prescribed for proprietary funds by the Governmental Accounting Standards Board (GASB). These financial statements consist of three interrelated statements designed to provide the reader with relevant, understandable data about the Authority’s financial condition and operating results. They are the (1) Statement of Net Position; (2) Statement of Revenues, Expenses and Changes in Net Position; and (3) Statement of Cash Flows. The statement of net position presents information on all the Authority’s assets, deferred inflow of resources, liabilities, and deferred outflow of resources, with the differences between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Authority is improving or deteriorating. The statement of revenues, expenses and changes in net position presents information showing how the Authority’s net position changed during the year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of timing of the related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flow in future fiscal periods.

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MANAGEMENT’S DISCUSSION & ANALYSIS (CONTINUED)

The statement of cash flows conveys to financial statement users how the Authority managed cash resources during the year. This statement converts the change in net position presented on the statement of revenues, expenses and changes in net position into actual cash provided by and used for operations. The statement of cash flows also details how the Authority obtains cash through financing and investing activities, and how cash is spent for these purposes.

SummaryFinancialInformationandAnalysis The Authority’s financial operations remained sound during the fiscal year 2017. The statement of net position remains strong, providing a foundation for continued growth within the Authority’s service area. As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of the Authority, assets exceeded liabilities by $70.4 million at June 30, 2017, by $67.2 million at June 30, 2016, and by $65.0 million at June 30, 2015.

StatementsofNetPositionFor the Fiscal Years Ended June 30, 2017, 2016 and 2015

Fiscal Year End June 30, 2017 2016 Increase/

(Decrease) 2015 Increase/ (Decrease)

Assets Current $61,182,398 $61,665,449 $(483,051) $59,169,450 $2,495,999 Noncurrent 3,917,605 4,812,417 (894,812) 7,479,622 (2,667,205) Capital 113,502,447 108,686,977 4,815,470 106,401,959 2,285,018

Total Assets 178,602,450 175,164,843 3,437,607 173,051,031 2,113,812 Deferred Outflows 1,017,473 358,101 659,372 273,547 84,554 Liabilities Current 8,415,128 6,594,605 1,820,523 5,444,402 1,150,203 Noncurrent 100,542,958 101,235,572 (692,614) 102,060,945 (825,373)

Total Liabilities 108,958,086 107,830,177 1,127,909 107,505,347 324,830 Deferred Inflows 273,599 525,022 (251,423) 784,673 (259,651) Net Investment in Capital Assets 90,622,870 84,798,833 5,824,037 82,709,425 2,089,408 Restricted 3,921,155 3,923,403 (2,248) 3,969,074 (45,671) Unrestricted (Deficit) (24,155,787) (21,554,491) (2,601,296) (21,643,941) 89,450

Total Net Position $70,388,238 $67,167,745 $3,220,493 $65,034,558 $2,133,187

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The following denotes explanations on some of the changes between fiscal years 2017 and 2016, as compared in the table above.

The $0.5 million decrease in Current Assets is due to a decrease in cash used to fund the Reach V Capital Repair Project until SRF Loan funds are received and an increase in grants receivable for Proposition 84 grant projects.

The $0.9 million decrease in Noncurrent Assets is due primarily to a

decrease in installment notes from scheduled notes receivable receipts, and total payments of $0.6 million received for funds loaned to Orange County Flood Control District (OCFCD) for the relocation of the Santa Ana Regional Interceptor (SARI) located in Orange County.

The $4.8 million increase in Capital Assets is due primarily to the

Reach V Capital Repairs Project and an offset of depreciation and amortization to property, plant, and equipment.

The $1.8 million increase in Current Liabilities is due primarily to an

increase in accounts payable from the Proposition 84 grant projects, theWater‐EnergyDAC grant, and the Proposition 1 DACI grant.

The $0.7 million decrease in Noncurrent Liabilities is due primarily to

the amortization of pipeline and wastewater treatment rights combined with the decrease in long‐termdebt from scheduled debt service payments.

The following denotes explanations on some of the changes between fiscal years 2016 and 2015, as compared in the table above.

The $2.5 million increase in Current Assets is due to an increase in cash from Western Municipal Water District paying off a Notes Receivable early and an increase in grants receivable for Proposition 84 grant projects.

The $2.7 million decrease in Noncurrent Assets is due primarily to a

decrease in installment notes from scheduled notes receivable receipts, the early repayment of WMWD’s Note Receivable, and total payments of $1.7 million received for funds loaned to Orange County Flood Control District (OCFCD) for the relocation of the Santa Ana Regional Interceptor (SARI) located in Orange County.

The $2.3 million increase in Capital Assets is due primarily to the

Reach V Capital Repairs Project and an offset of depreciation and amortization to property, plant, and equipment.

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The $1.2 million increase in Current Liabilities is due primarily to an increase in accounts payable from the Proposition 84 grant projects.

The $0.8 million decrease in Noncurrent Liabilities is due primarily to

the amortization of pipeline and wastewater treatment rights combined with the decrease in long‐termdebt from scheduled debt service payments.

CategoryofNetPositionThe Authority is required to present its net assets in three categories: (1) Net Investment in Capital Assets; (2) Restricted; and (3) Unrestricted. Net Investment in Capital Assets At June 30, 2017, 2016 and 2015, Net Investment in Capital Assets consisted of the following:

NetInvestmentinCapitalAssets(In Millions)

2017 2016 2015 Property, Plant & Equipment $131.3 $131.2 $130.8Accumulated Depreciation (66.6) (63.4) (60.2)Wastewater Treatment & Disposal Rights 55.6 55.6 55.6Accumulated Amortization (26.7) (25.3) (23.9)Construction in Process 19.9 10.6 4.1Related Payables and Loans, Net of Discounts (22.9) (23.9) (23.7)

Total $90.6 $84.8 $82.7 Restricted At June 30, 2017 and 2016, Restricted Net Position of $3.9 million is legally restricted by contract to fund additional Arundo Management and Habitat Restoration projects within the Santa Ana River Watershed and by the State Water Resources Control Board (SWRCB) for a state revolving fund (SRF) loan reserve requirement. Unrestricted At June 30, 2017, the Authority had an unrestricted net deficit of $24.2 million. However, the Authority does possess $72.8 million in unearned revenues being realized over a 50 year period of approximately $2.5 million per year. At June 30, 2016, the Authority had an unrestricted net deficit of $21.5 million. However, the Authority does possess $75.2 million in unearned revenues being realized over a 50 year period of approximately $2.5 million per year.

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Change in Net Position Overall, the fiscal year ended June 30, 2017, brought an increase in net position of $3.2 million, a $1.1 million increase from the previous year. The primary reason for this increase over the prior year was due to an increase of $4.2 million in total revenues and an increase of $3.1 million in total expenses for FYE 2017. Overall, the fiscal year ended June 30, 2016, brought an increase in net position of $2.1 million, a $1.0 million increase from the previous year. The primary reason for this increase over the prior year was due an increase of $1.8 million in total revenues and an increase of $0.8 million in total expenses for FYE 2016.

ChangeinNetPosition(inmillions)

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StatementsofRevenues,Expenses,andChangesinNetPosition For the Fiscal Years Ended June 30, 2017, 2016 and 2015

Fiscal Year End June 30, 2017 2016 Increase/

(Decrease) 2015 Increase/ (Decrease)

Operating Revenues WWT & Disposal $11,273,024 $9,323,505 $1,949,519 $8,958,914 $364,591 WWT & Disposal Capacity Rights 2,519,533 2,519,748 (215) 2,510,154 9,594 Other Operating Revenues 204,904 205,774 (870) 262,128 (56,354)

Total Operating Revenues 13,997,461 12,049,027 1,948,434 11,731,196 317,831Nonoperating Revenues: Member Contributions 2,307,624 1,730,491 577,133 1,806,745 (76,254) Intergovernmental 4,795,478 2,765,270 2,030,208 1,257,581 1,507,689 Investment Income 193,157 567,709 (374,552) 432,179 135,530 Gain on Disposal of Asset ‐ 1,123 (1,123) 1,123 ‐

Total Nonoperating Revenues 7,296,259 5,064,593 2,231,666 3,497,628 1,566,965Total Revenues 21,293,720 17,113,620 4,180,100 15,228,824 1,884,796

Operating Expenses: WWT and Disposal 6,421,150 6,434,652 (13,502) 6,222,868 211,784 General, Admin, and Overhead 591,686 270,613 321,073 678,992 (408,379) Studies and Planning Costs 3,293,487 1,485,977 1,807,510 1,604,703 (118,726) Depreciation 3,174,253 3,170,554 3,699 3,149,943 20,611 Amortization of WWT and Disposal Rights 1,400,914 1,400,918 (4) 1,400,918 ‐

Total Operating Expenses 14,881,490 12,762,714 2,118,776 13,057,424 (294,710)Nonoperating Expenses: Interest Expense 563,942 655,473 (91,531) 757,784 (102,311) Grant Program Expenses 2,627,795 1,562,246 1,065,549 269,297 1,292,949

Total Nonoperating Expenses 3,191,737 2,217,719 974,018 1,027,081 1,190,638Total Expenses 18,073,227 14,980,433 3,092,794 14,084,505 895,928

Change in Net Positions 3,220,493 2,133,187 1,087,306 1,144,319 988,868Beginning Net Position 67,167,745 65,034,558 2,133,187 63,890,239 1,144,319

Ending Net Position $70,388,238 $67,167,745 $3,220,493 $65,034,558 $2,133,187

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Revenues Combined revenues for the fiscal year 2017 totaled $21.3 million, an increase of $4.2 million, or 24.4%, more than the prior fiscal year. The following denotes explanations on some of the changes between fiscal years 2017 and 2016.

The $1.9 million increase in Waste Water Treatment and Disposal is due to increases in biochemical oxygen demand (BOD) and total suspended solids (TSS) concentrations and planned rate increases for flow, BOD and TSS, pipeline, and treatment capacity charges.

The $0.6 million increase in Member Contributions is due to planned

increases for FYE 2017 member contributions and member contributions for the local share match for Proposition 84 final round projects.

The $2.0 million increase in Intergovernmental is due to Proposition

84 Drought and final round grant contracts, Proposition 1 DACI grant, andtheWater‐EnergyDAC grant.

Combined revenues for the fiscal year 2016 totaled $17.1 million, an increase of $1.8 million, or 12.3%, more than the prior fiscal year. The following denotes explanations on some of the changes between fiscal years 2016 and 2015.

The $0.3 million increase in Waste Water Treatment and Disposal is due to increases in biochemical oxygen demand (BOD) and total suspended solids (TSS) concentrations and planned rate increases for flow, BOD and TSS, pipeline, and treatment capacity charges.

The $1.5 million increase in Intergovernmental is due to Proposition

84 Drought and final round grant contracts.Expenses Combined expenses for the fiscal year 2017 totaled $18.1 million, an increase of $3.1 million,or 20.6% more than the prior fiscal year. The following denotes explanations on some of the changes between fiscal years 2017 and 2016.

The $1.8 million increase in Studies and Planning Costs is due to increased efforts in the RWQ Monitoring Task Force, the Water‐Energy DAC grant, and the Proposition 1 DACI grant.

The $1.1 million increase in Grant Program Expenses is due to the

Proposition 84 Drought projects and final round grant contracts, Proposition 1 DACI grant, and the Water‐Energy DAC grant.

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Combined expenses for the fiscal year 2016 totaled $14.9 million, an increase of $0.8 million,or 6.3% more than the prior fiscal year. The following denotes explanations on some of the changes between fiscal years 2016 and 2015.

The $0.2 million increase in Waste Water Treatment and Disposal is due to increases in BOD and TSS concentrations and planned rate increases from OCSD.

The $0.4 million decrease in General, Administration, and Overhead is

due to a shift in staff time being charged to Proposition 84 Drought projects and not grant administration.

The $1.2 million increase in Grant Program Expenses is due to the

Proposition 84 Drought projects and final round grant contracts. These rounds of grant funding will be implemented by SAWPA staff instead of by another pass‐throughagency.

CapitalAssetsExisting Capital Assets The following chart is the composition of the Authority’s total capital assets, not including depreciation and amortization, as of June 30, 2017; additional information can be found in Note 6 of the Notes to Financial Statements.

Brine Line & Equipment$128,362,228

Buildings$1,454,558

Furniture & Equipment$517,335

Land$765,444

Land Improvements

$140,217

Construction in Progress

$19,943,664

WWT Rights$55,662,342

Capital Assets$206,845,788

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A comparison of the changes by major category between the current and prior fiscal years is provided in the Category of Net Position section on page 8 of this report. Future Capital Improvements The capital improvements program (CIP) includes annual capital repairs to correct pipeline and MAS defects identified during closed circuit television (CCTV) and direct visual inspection. The repairs include items such as sealing pipe joints with major groundwater infiltration, repairing MAS and pipe corrosion protection (plastic "T‐Lok" type liner), and completing repairs where structure corrosion has occurred. A catastrophic failure and brine spill along Reach V caused SAWPA to investigate thein‐situcondition of the pipe installed in 2001. Data collected indicates that the PVC pipe is deformed beyond the recommended amount (5% deflection) at a number of locations. During FYE 2013, test pits were excavated along the five miles of pipe in question and additional areas of deflection greater than 5% were found. A panel of three pipeline experts was convened and recommended repair by installation of CIPP to strengthen the pipe. Based upon this recommendation, a project was developed and a detailed design prepared. In FYE 2015, bid documents were completed, bids were received, and a construction contract was awarded. Construction began in 2015 with completion originally expected in fiscal year 2016. However, quality issues developed that were not corrected resulting in the termination of the contract. A new contract has been awarded to correct the deficiencies in the first phase of the project and to complete phase 2 and 3. Project completion in expected in FYE 2018. A SRF loan is funding part of the project and will be repaid through discharger fees. A four mile stretch of the pipeline, termed the Santa Ana River Interceptor (SARI) within Orange County has been relocated outside the floodplain by the County of Orange Flood Control District. Relocation to the south side of the Santa Ana River protects the pipeline from Prado Dam water releases. In fiscal year 2012, the Authority loaned $10 million to the County of Orange and the Orange County Sanitation District (OCSD) loaned up to $70 million, to facilitate earlier completion of the relocation project. Project design was completed in fiscal year 2011 and the project was bid and awarded in fiscal year 2012. Construction completion was expected by fall 2013 but was delayed until spring 2014. Flows were diverted to the new line May 7, 2014. Prior to the relocation of the SARI outside the floodplain, OCSD had performed several protection projects installing grade stabilizers and bank protection that was constructed using large rock. Upon completion of the project and as part of the Army Corps of Engineers permit condition, OCSD is required to remove the rock from the Santa Ana River floodplain. Project design and preparation of bid documents are expected to be completed in FYE 2018. Construction is expected to commence in late FYE 2018 with completion in FYE 2019. As of June 2017, $6.6 million of the $10 million loaned by SAWPA to the County of Orange has been repaid.

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On Reach IV‐Dthe reinforced concrete pipe was installed with a plastic liner covering 270 degrees of the pipe. Since installation, the unlined pipe invert has suffered from corrosion. The range and amount of damage is under investigation but is likely to require repair of several miles of the pipeline and will cost several million dollars. The scope and magnitude of the problem will be developed in FYE 2018.

Long‐TermDebtThe Authority’s long‐termdebt consists of four loans from the SWRCB for construction of Reach V of the Brine Line, a loan from the SWRCB for repairs of Reach IV‐Aand IV‐B,a loan from a member agency for the repurchase of wastewater capacity and treatment/disposal rights, and a contractual obligation due to a related joint powers authority. During the fiscal years ended June 30, 2017, 2016 and 2015, the Authority made all of its scheduled principal payments on these debts as follows:

Debt Service 2017 2016 2015

SWRCB Brine Line $0 $966,256 $1,332,326

SWRCB TVRI Line 966,002 940,688 916,041

SWRCB Reach IVA & IVB 675,008 657,903 641,231

OCWD Repurchase of Wastewater Rights 317,061 299,114 282,183

WRCRWA* Contractual Obligation 505,239 491,479 478,093 *West Riverside County Regional Wastewater Authority These payments decreased the outstanding balance in long‐termdebt by $2.5 million. A new loan from the SWRCB for $15 million has been secured for the Reach V Capital Repair Project. Repayment for this loan will begin in FYE 2019. For more detailed information refer to Note 8 of the Notes to Financial Statements.

FiscalYear2017‐2018Budget Economic and Financial Factors The economy in the Authority’s service area is looking brighter. Steady increases in job numbers and positive development in the sectors of healthcare and logistics have helped the Inland Empire. Consumer spending has also continued to increase steadily. The Authority has continued to seek ways to increase efficiency and reduce our budget by optimizing operational processes and implementation of a number of cost cutting measures throughout operations.

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Since 2010, 6 positions have been added in Brine Line operations. These positions have been added to bring functions previously provided for by consultants in house, which greatly increase the efficiency and effectiveness of our operations. Through these efforts, we have been able to reduce costs and pass those savings on to our member agencies through reduced fees and member contributions. The Authority is faced with a $60 million Capital Improvement Program over the next 25 years. To ensure that there will be funds available to implement the program, the Authority conducted a long‐term financial plan and rate model for the Brine Line. This model has served as a financial planning tool to ensure sufficient revenues are collected for operating needs, capital needs, and the funding of a long‐term capital repair and replacement reserve. In FYE 2018, an RFP will be issued to design a new updated and user friendly rate model to serve future operations. Management is unaware of any other conditions that could have a significant past, present, or future impact on the Authority’s current financial position, net position, or operating results. Contacting the Authority’s Financial Management This financial report is designed to provide a general overview of the Authority’s finances for the Board of Commissioners, customers, investors, creditors, and other interest parties. Questions concerning any information provided in the report or requests for additional information should be addressed to the Authority’s Finance Department, 11615 Sterling Avenue, Riverside, CA 92503.

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16 56

BASICFINANCIALSTATEMENTS

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18 58

ASSETS: 2017 2016CURRENT ASSETS:

Cash and cash equivalents (Note 2) 30,202,815$ 34,739,461$ Cashandcashequivalents‐restricted(Note2) 958,089 960,948 Investments (Note 2) 19,114,269 19,795,929 Interest receivable 168,575 154,303 Accounts receivable 1,896,375 1,568,003 Accountsreceivable‐membercontributions 49,739 46,000 Accountsreceivable‐grants 2,592,186 882,591 Accountsreceivable‐other 3,571,194 962,252 Notesreceivable‐currentportion(Note3) 415,340 317,062 Prepaid expenses and other assets 303,256 328,340 Mitigation credits (Note 5) 1,910,560 1,910,560

TOTAL CURRENT ASSETS 61,182,398 61,665,449

NONCURRENT ASSETS:Notes receivable (Note 3) ‐ 336,073 Loan receivable (Note 4) 3,412,531 3,998,298 Otherpost‐employmentbenefit(OPEB)asset(Note13) 505,074 478,046 Capital assets (Note 6):

Not being depreciated 20,709,108 11,373,444 Being depreciated, net of accumulated depreciation and amortization 92,793,339 97,313,533

TOTAL NONCURRENT ASSETS 117,420,052 113,499,394

TOTAL ASSETS 178,602,450 175,164,843

DEFERRED OUTFLOWS OF RESOURCES:Deferred amounts from pension plans 1,017,473 358,101

LIABILITIES:CURRENT LIABILITIES:

Accounts payable 5,100,269 3,528,429 Accrued salaries and wages 127,124 134,875 Accrued interest payable 369,251 313,758 Long‐termliabilities‐duewithinoneyear:

Compensated absences (Note 7) 178,288 154,232 Loans payable (Note 8) 2,640,196 2,463,311

TOTAL CURRENT LIABILITIES 8,415,128 6,594,605

NONCURRENT LIABILITIES:Unearned revenue (Note 9) 72,719,287 75,229,441 Long‐termliabilities‐dueinmorethanoneyear:

Compensated absences (Note 7) 416,006 359,872 Loans payable (Note 8) 24,302,923 23,398,758 Net pension liability (Note 12) 3,104,742 2,247,501

TOTAL NONCURRENT LIABILITIES 100,542,958 101,235,572

TOTAL LIABILITIES 108,958,086 107,830,177

DEFERRED INFLOWS OF RESOURCES:Deferred amounts from pension plans 273,599 525,022

NET POSITION (NOTE 10):Net investment in capital assets 90,622,870 84,798,833 Restricted for:

SRF Reach IVA & IVB reserve requirement 1,050,000 1,050,000 Mitigation 2,871,155 2,873,403

Unrestricted (24,155,787) (21,554,491)

TOTAL NET POSITION 70,388,238$ 67,167,745$

See accompanying notes to the basic financial statements.

SANTA ANA WATERSHED PROJECT AUTHORITY

STATEMENTS OF NET POSITIONPROPRIETARY FUND

June 30, 2017 and 2016

Business‐TypeActivitiesEnterprise Fund

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2017 2016OPERATING REVENUES:

Wastewater treatment and disposal 11,273,024$ 9,323,505$ Wastewatertreatmentanddisposal‐capacityrights 2,519,533 2,519,748 Other 204,904 205,774

TOTAL OPERATING REVENUES 13,997,461 12,049,027

OPERATING EXPENSES:Wastewater treatment and disposal 6,421,150 6,434,652 General and administrative and overhead 591,686 270,613 Studies and planning costs 3,293,487 1,485,977

TOTAL OPERATING EXPENSES 10,306,323 8,191,242

OPERATING INCOME BEFOREDEPRECIATION AND AMORTIZATION 3,691,138 3,857,785

DEPRECIATION (3,174,253) (3,170,554) AMORTIZATION (1,400,914) (1,400,918)

OPERATING LOSS (884,029) (713,687)

NONOPERATING REVENUES (EXPENSES):Member contributions 2,307,624 1,730,491 Intergovernmental 4,795,478 2,765,270 Investment earnings 193,157 567,709 Gain on sale of mitigation credits ‐ 1,123 Interest expense (563,942) (655,473) Grant program expenses (2,627,795) (1,562,246)

TOTAL NONOPERATING REVENUES (EXPENSES) 4,104,522 2,846,874

CHANGES IN NET POSITION 3,220,493 2,133,187

NETPOSITION‐BEGINNINGOFYEAR 67,167,745 65,034,558

NETPOSITION‐ENDOFYEAR 70,388,238$ 67,167,745$



STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITIONPROPRIETARY FUND

For the fiscal years ended June 30, 2017 and 2016


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2017 2016CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from customers 11,982,497$ 12,805,157$ Cash received from sale of mitigation credits ‐ 11,123 Cash paid to employees (3,597,179) (3,304,384) Cash paid to suppliers (5,120,358) (3,131,684)

NET CASH PROVIDED BY OPERATING ACTIVITIES 3,264,960 6,380,212

CASH FLOWS FROM NONCAPITAL ANDRELATED FINANCING ACTIVITIES:

Member contributions 2,303,885 1,684,491 Other governments 3,071,796 2,503,797 Grant program expenses (2,627,795) (1,562,246)

NET CASH PROVIDED BY NONCAPITALAND RELATED FINANCING ACTIVITIES 2,747,886 2,626,042

CASH FLOWS FROM CAPITAL ANDRELATED FINANCING ACTIVITIES:

Acquisition and construction of capital assets (9,390,637) (6,856,490) Proceedsfromacquisitionoflong‐termdebt 949,504 3,059,571 Principalpaymentsonlong‐termdebt (2,463,310) (3,355,440) Interestpaidonlong‐termdebt (508,449) (699,657)

NET CASH USED BY CAPITAL ANDRELATED FINANCING ACTIVITIES (11,412,892) (7,852,016)

CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of investments (504,634) (6,445,380) Proceeds from sale of investments 1,186,290 10,611 Interest received 178,885 665,852

NET CASH PROVIDED (USED)BY INVESTING ACTIVITIES 860,541 (5,768,917)

NET DECREASE INCASH AND CASH EQUIVALENTS (4,539,505) (4,614,679)

CASHANDCASHEQUIVALENTS‐BEGINNINGOFYEAR 35,700,409 40,315,088

CASHANDCASHEQUIVALENTS‐ENDOFYEAR 31,160,904$ 35,700,409$

RECONCLIATION OF CASH AND CASH EQUIVALENTS TO THESTATEMENTS OF NET POSITION:

Cash and cash equivalents 30,202,815$ 34,739,461$ Cashandcashequivalents‐restricted 958,089 960,948

TOTAL CASH AND CASH EQUIVALENTS 31,160,904$ 35,700,409$



STATEMENTS OF CASH FLOWSPROPRIETARY FUND



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2017 2016RECONCILIATION OF OPERATING LOSS TO

NET CASH PROVIDED BY OPERATING ACTIVITIES:Operating loss (884,029)$ (713,687)$ Adjustments:

Amortization 1,400,914 1,400,918 Depreciation 3,174,253 3,170,554 Gain on sale of mitigation credits ‐ 1,123

Change in assets, deferred outflows of resources,liabilities and deferred inflows of resources:

(Increase) decrease in accounts receivable (328,367) 197,498 (Increase) decrease in prepaid expenses and other assets 25,084 (50,535) (Increase) decrease in mitigation credits ‐ 10,000 (Increase) decrease in notes receivable 237,795 1,892,655 (Increase) decrease in loan receivable 585,767 1,176,131 (Increase)decreaseinotherpost‐employmentbenefit(OPEB)asset (27,028) (75,619) (Increase) decrease in deferred outflows of

resources from pension plans (659,372) (84,554) Increase (decrease) in accounts payable 1,571,840 2,028,289 Increase (decrease) in accrued salaries and wages (7,751) 31,984 Increase (decrease) in compensated absences 80,190 87,475 Increase (decrease) in unearned revenue (2,510,154) (2,510,154) Increase (decrease) in net pension liability 857,241 77,785 Increase (decrease) in deferred inflows of

resources from pension plans (251,423) (259,651)

NET CASH PROVIDED BY OPERATING ACTIVITIES 3,264,960$ 6,380,212$

NONCASH INVESTING, CAPITALAND FINANCING ACTIVITIES:

Net increase in the fair value of investments 380,550$ 26,074$



STATEMENTS OF CASH FLOWSPROPRIETARY FUND

(CONTINUED)



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2017 2016

CURRENT ASSETS:Cash and cash equivalents 474,973$ 445,611$ Accountsreceivable‐grants 3,670,901 2,090,631

TOTAL ASSETS 4,145,874$ 2,536,242$

CURRENT LIABILITIES:Accounts payable 3,697,914$ 2,090,631$

TOTAL CURRENT LIABILITIES 3,697,914 2,090,631

NONCURRENT LIABILITIES:Deposits‐legaldefense 447,960 445,611

TOTAL NONCURRENT LIABILITIES 447,960 445,611

TOTAL LIABILITIES 4,145,874$ 2,536,242$


LIABILITIES

ASSETS


STATEMENTS OF FIDUCIARY ASSETS AND LIABILITIESAGENCY FUNDS

June 30, 2017 and 2016

Total Agency Funds

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NOTES TO THE BASIC FINANCIAL STATEMENTS

For the fiscal years ended June 30, 2017and 2016 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: a. Organization and Purpose:

The Santa Ana Watershed Project Authority (the Authority) was reformed in 1972 pursuant to the provisions of Article 1, Chapter 5, Division 7, Title 1 of the Government Code of the State of California relating to the joint exercise of powers common to public agencies, for the purpose of undertaking projects for water quality control and protection and pollution abatement in the Santa Ana River Watershed. The five member agencies are the Orange County Water District, Inland Empire Utilities Agency (formerly Chino Basin Municipal Water District), Eastern Municipal Water District, San Bernardino Valley Municipal Water District, and Western Municipal Water District. The Board of Commissioners is the governing body of the Authority. Each member of the Authority appoints, by Resolution of its governing body, one member of its governing body to act as its Commissioner on the Board.

Accounting principles generally accepted in the United States of America require that the reporting entity include (1) the primary government, (2) organizations for which the primary government is financially accountable, and (3) other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity’s financial statements to be misleading or incomplete. The criteria provided in Governmental Accounting Standard Board (GASB) Statements have been considered and there are no agencies or entities which should be presented with the Authority.

The Authority’s enterprise activities are accounted for on the basis of funds, each of which is considered a separate accounting entity. The operations of each activity are accounted for with a separate set of self‐balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, net position, revenue, and expenses. Authority resources are allocated to and accounted for in individual funds based on the purposes for which they are to be spent and the means by which spending activities are controlled. The Authority’s various funds are grouped as follows:

Capital Projects Activities ‐ Record the activity of the various capital improvement projects and programs undertaken by the Authority.

InternalAdministration ‐Reflect the grouping of general and administration expenses and department overhead costs. Reported amounts are net of allocations made in support of capital projects and enterprise activities.

EnterpriseActivities‐Reflect operations of the Inland Empire Brine Line System (Brine Line) pipelines.

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NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

a. Organization and Purpose (Continued): The Authority also has the following Fiduciary Funds: AgencyFunds:

Agency funds are utilized to record monies held on behalf of others in a fiduciary capacity. The Authority has two agency funds:

The Legal Defense Fund ‐ This fund was established in conjunction with the Environmental Protection Agency in connection with potential third‐party lawsuits arising from the discharge of effluent which originates from the Stringfellow Hazardous Waste Site, while the facility is operated by the Environmental Protection Agency or its agents under the use permit.

The IntegratedRegionalWaterManagementProgram(Prop84CapitalProjects) ‐ This fund was established to account for pass‐throughmonies of the Authority’s member agencies.

b. Basis of Presentation:

The Authority reports its activities as an enterprise fund, which is a Proprietary type fund used to account for operations that are financed and operated in a manner similar to a private business enterprise, where the intent of the Authority is that the cost of providing services on a continuing basis be financed or recovered primarily through user charges, capital grants, and similar funding.

c. Measurement Focus and Basis of Accounting: “Measurement focus” is a term used to describe which transactions are recorded within the various financial statements. “Basis of accounting” refers to when transactions are recorded regardless of the measurement focus applied. The accompanying financial statements are reported using the “economic resources measurement focus”, and the “accrual basis of accounting”. Under the economic measurement focus all assets, deferred outflows of resources, liabilities and deferred inflows of resources (whether current or noncurrent) associated with these activities are included on the statements of net position.

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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): c. Measurement Focus and Basis of Accounting (Continued):

The statements of revenues, expenses and changes in net position present increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows.

d. New Accounting Pronouncements: CurrentYearStandards: GASB 74 ‐FinancialReportingforPostemploymentBenefitPlansOtherThanPensionPlans, effective for periods beginning after June 15, 2016, and did not impact the Authority.

GASB 77 ‐ Tax Abatement Disclosure, effective for periods beginning after December 15, 2015, and did not impact the Authority.

GASB 79 ‐ Certain External Investment Pools and Pool Participants, contains certain provisions on portfolio quality, custodial credit risk, and shadow pricing, effective for periods beginning after December 15, 2015, and did not impact the Authority.

GASB 80 ‐ Blending Requirements for Certain Component Units, effective for periods beginning after June 15, 2016, and did not impact the Authority. PendingAccountingStandards: GASB has issued the following statements, which may impact the Authority’s financial reporting requirements in the future: GASB 75 ‐AccountingandFinancialReportingforPostemploymentBenefitsOtherThan

Pensions, effective for periods beginning after June 15, 2017. GASB 82 ‐Pension Issues, effective for periods beginning after June 15, 2016, except

for certain provisions on selection of assumptions, which is effective in the first reporting period in which the measurement date of the pension liability is on or after June 15, 2017.

GASB84‐FiduciaryActivities, effective for periods beginning after December 15, 2018. GASB85‐Omnibus2017, effective for periods beginning after June 15, 2017. GASB 86 ‐ Certain Debt Extinguishment Issues, effective for periods beginning after

June 15, 2017. GASB87‐Leases, effective for periods beginning after December 15, 2019.

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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): e. Deferred Outflows/Inflows of Resources:

In addition to assets, the statements of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to future periods and so will not be recognized as an outflow of resources (expense) until that time. The Authority has the following items that qualify for reporting in this category:

Deferred outflow related to pensions equal to employer contributions made after the measurement date of the net pension liability.

Deferred outflow related to pensions for differences between expected and actual experiences. This amount is amortized over a closed period equal to the average of the expected remaining services lives of all employees that are provided with pensions through the plans.

Deferred outflow related to pensions for difference between projected and actual

earnings on pension plan investments. These amounts are amortized over 5 years.

Deferred outflow related to pensions for changes in proportion and differences between employer contributions and proportionate share of contributions. This amount is amortized over a closed period equal to the average of the expected remaining services lives of all employees that are provided with pensions through the plans.

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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): e. Deferred Outflows/Inflows of Resources (Continued):

In addition to liabilities, the statements of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferredinflowsofresources, represents an acquisition of net position that applies to future periods and will not be recognized as an inflow of resources (revenue) until that time. The Authority has the following items that qualify for reporting in this category:

Deferred inflow related to pensions for differences between expected and actual experiences. This amount is amortized over a closed period equal to the average of the expected remaining services lives of all employees that are provided with pensions through the plans.

Deferred inflow from pensions resulting from changes in assumptions. This

amount is amortized over a closed period equal to the average of the expected remaining services lives of all employees that are provided with pensions through the plans.

Deferred inflow related to the pension plans for the changes in proportion and

differences between employer contributions and the proportionate share of contributions. This amount is amortized over a closed period equal to the average of the expected remaining services lives of all employees that are provided with pensions through the plans.

f. Net Position Flow Assumption:

Sometimes the Authority will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted ‐net position and unrestricted ‐ net position, a flow assumption must be made about the order in which the resources are considered to be applied. It is the Authority’s practice to consider restricted ‐net position to have been depleted before unrestricted ‐net position is applied; however it is at the Board of Commissioners’ discretion.

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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): g. Operating Revenues and Expenses:

Operating revenues, such as wastewater treatment and wastewater disposal, capacity rights, and contractual services, result from exchange transactions associated with the principal activity of the Authority. Exchange transactions are those in which each party receives and gives up essentially equal values. Revenues not included in the above category are reported as nonoperating revenues. Nonoperating revenues such as grant funding, member contributions, and investment income, result from nonexchange transactions or ancillary activities in which the Authority gives (receives) value without directly receiving (giving) value in exchange. Operating expenses include wastewater treatment and disposal, studies and planning costs, management, administration, and depreciation on capital assets. All expenses not meeting this definition are reported as nonoperating expenses.

h. Cash and Cash Equivalents:

Substantially all of Authority’s cash is invested in interest bearing cash accounts. The Authority considers all highly liquid investments with initial maturities of three months or less to be cash equivalents.

i. Investments and Investment Policy:

The Authority has adopted an investment policy directing the Authority’s Chief Financial Officer to deposit funds in financial institutions. Investments are stated at their fair value which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Investments that are not traded on a market, such as investments in external pools, are valued based on the stated fair value as represented by the external pool. Changes in fair value that occur during a fiscal year are recognized as investment income reported for that fiscal year. Investment income includes interest earnings, changes in market value, and any gains or losses realized upon the liquidation or sale of investments.

j. Restricted Assets: Restricted assets are financial resources generated for a specific purpose such as capital projects or debt service. These assets are for the benefit of a specified purpose and, as such, are legally or contractually restricted by an external third‐party agreement.

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k. Accounts Receivable: The Authority extends credit in the normal course of operations. Management deems all accounts receivable as collectible at year‐end. Accordingly, an allowance for doubtful accounts has not been recorded.

l. Prepaid Expenses:

Certain payments to vendors reflects costs or deposits applicable to future accounting periods and are recorded as prepaid items in the basic financial statements.

m. Mitigation Credits: Mitigation credits are recorded at cost and are purchased and used by those member agencies needing habitat mitigation within the Watershed for specific development projects.

n. Capital Assets: Capital assets acquired and/or constructed are capitalized at historical cost. Capital assets are defined as assets with an initial individual cost of more than $5,000 and an estimated useful life in excess of one year. Donated assets are recorded at acquisition value at the date of donation. Upon retirement or other disposition of capital assets, the cost and related accumulated depreciation are removed from the respective balances and any gains or losses are recognized. Depreciation is recorded on a straight‐linebasis over the estimated useful lives of the assets as follows:

Buildings and improvements 40 years Land improvements 15 to 20 years Furniture and office equipment 3 years Brine Line and equipment 25 years

Wastewater treatment and disposal rights are included as capital assets and are capitalized at cost. Amortization is computed using the straight‐linemethod over the remaining life of the Authority’s contract with the Orange County Sanitation District for the acquisition of the rights at the time the rights were acquired. The current contract expires April 26, 2046.

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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): o. Compensated Absences:

The Authority’s policy is to pay out sick leave time accrued upon retirement, death or termination on a variable scale of 15% to 60% based on years of service. Each full‐time employee accrues 96 hours of sick time per year. The liability for this benefit has been accrued in these financial statements. Employees of the Authority are entitled to paid vacation depending on length of service. Vacation is accrued for full‐time employees beginning on the first day of full‐timeemployment, and ranges from 12 to 22 days per year based on longevity with the Authority. Part‐time employees accrue vacation on a prorated basis based on the actual number of hours worked. Authority policy requires employees to pass a probationary period prior to payment for accrued vacation hours. Employees are allowed to accumulate vacation leave up to twice their annual accrual, but no more than 36 days.

p. Unearned Revenue: Unearned revenue represents advance payments received for wastewater treatment and disposal capacity rights sold, which are being recognized as revenue as the services are provided.

q. Capital Contributions: Capital contributions consist of grants awarded and contributions received for the acquisition and/or construction of capital assets. Contributions received for studies, planning, administration, and other noncapital assets are considered nonoperating revenue.

r. Capital and Operating Grants: When a grant agreement is approved and eligible expenditures are incurred, the amount is recorded as a capital or operating grant receivable on the statements of net position and as capital grant contribution or operating grant revenue, as appropriate, on the statements of revenues, expenses and changes in net position.

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s. Budgetary Policies: The Authority adopts a biannual non‐appropriated budget for planning, control, and evaluation purposes. Budgetary control and evaluation are affected by comparison of actual revenue and expense with planned revenue and expense for the period.

t. Net Position: The financial statements utilize a net position presentation. Net position is categorized as follows:

Net Investment inCapitalAssets ‐ This component of net position consists of capital assets, net of accumulated depreciation and reduced by any outstanding debt against the acquisition, construction, or improvement of those assets.

RestrictedNetPosition ‐ This component of net position consists of constraints placed on net position use imposed by creditors, grantors, contributors, or laws or regulations of other governments, or constraints imposed by law through constitutional provisions or enabling legislation.

Unrestricted Net Position ‐ This component of net position consists of net position that does not meet the definition of net investment in capital assets orrestricted.

u. Pensions:

For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Authority’s California Public Employees’ Retirement System (CalPERS) plans (Plans) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

v. Use of Estimates:

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that effect certain reported amounts and disclosures. Accordingly, actual results could differ from the estimates.

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2. CASH AND INVESTMENTS: CashandInvestments: Cash and investments as of June 30, 2017 and 2016 are classified in the accompanying financial statements as follows:

2017 2016 Statements of Net Position: Cash and cash equivalents $ 30,202,815 $ 34,739,461 Cash and cash equivalents‐restricted 958,089 960,948 Investments 19,114,269 19,795,929 Total cash and cash equivalents 50,275,173 55,496,338 Statements of Fiduciary Assets and Liabilities‐AgencyFunds: Cash and cash equivalents 474,973 445,611 Total cash and cash equivalents $ 50,750,146 $ 55,941,949

Cash and investments as of June 30, 2017 and 2016, consist of the following:

2017 2016 Cash on hand $ 500 $ 500 Deposits with financial institution 2,056,801 2,232,010 Investments 48,692,845 53,709,439 Total cash and investments $ 50,750,146 $ 55,941,949

Investments in LAIF and CalTRUST are considered highly liquid, as deposits can be converted to cash within 24 hours without loss of interest. As of June 30, 2017 and 2016, the LAIF and CalTRUST pools had a weighted average maturity of the following:

2017 2016 California Local Agency Investment Fund (LAIF) 194 days 167 days Investment Trust of California (CalTRUST) 748 days 741days

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2. CASH AND INVESTMENTS (CONTINUED): Investments Authorized by the California Government Code and the Authority’sInvestmentPolicy: The table below identifies the investment types that are authorized by the Authority in accordance with the California Government Code (or the Authority’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the Authority’s investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the Authority, rather than the general provisions of the California Government Code or the Authority’s investment policy.

Maximum Maximum Maximum Percentage Investment Authorized Investment Type Maturity of Portfolio in One Issuer

United States (U.S.) Treasury Bills, Notes and Bonds 5 years None N/A U.S. Government Sponsored Agency Securities 5 years None None Mutual Funds 90 days 15% None Municipal Bonds 5 years None None Banker’s Acceptances 180 days 40% 30% Commercial Paper 270 days 15% * Negotiable Certificates of Deposit 5 years 30% $250,000 Repurchase Agreements 1 year None None Medium‐Term Corporate Notes 5 years 30% None Local Agency Investment Fund (LAIF) N/A None N/A Collateralized Bank Deposits 5 years 25% None Investment Trust of California (CalTRUST) 5 years 15% N/A N/A‐NotApplicable *‐10%ofoutstanding paper of an issuing corporation

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2. CASH AND INVESTMENTS (CONTINUED): CustodialCreditRisk: Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker‐dealer)to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. With respect to investments, custodial credit risk generally applies only to direct investments in marketable securities. Custodial credit risk does not apply to a local government’s indirect investment in securities through the use of mutual funds or government investment pools (such as LAIF and CalTRUST). The California Government Code and the Authority’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit), and the Authority’s investment policy that requires no more than two‐thirds of the Authority’s deposits in a depository shall be collateralized by mortgage‐backed securities, with the remainder to be secured by non‐mortgage‐backedsecurities. The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure Authority deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. Of the Authority’s bank balances, up to $250,000 is federally insured and the remaining balance is collateralized in accordance with the Code; however, the collateralized securities are not held in the Authority’s name. InvestmentinStateInvestmentPool: The Authority is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the Authority’s investment in this pool is reported in the accompanying financial statements at amounts based upon the Authority’s prorated share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis.

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2. CASH AND INVESTMENTS (CONTINUED): InvestmentinCalTRUSTInvestmentPool:

CalTRUST is a Joint Powers Agency Authority created by local public agencies to provide a convenient method for local public agencies to pool their assets for investment purposes. CalTRUST is governed by a Board of Trustees made up of experienced local agency treasurers and investment officers. The Board sets overall policies for the program and selects and supervises the activities of the investment manager and other agents. CalTRUST maintains and administers four pooled accounts within the program: Money Market, Short‐Term, Medium‐Termand Long‐Term. The Money Market account permits daily transactions, with same‐day liquidity (provided redemption requests are received by 1:00 p.m. Pacific time), with no limit on the amount of funds that may be invested. The short‐term account permits an unlimited number of transactions per month (with prior day notice), with no limit on the amount of funds that may be invested. The medium‐and long‐termaccounts permit investments, withdrawals and transfers once per month, with five days advance notice. All CalTRUST accounts comply with the limits and restrictions placed on local agency investments by the California Government Code. CalTRUST imposes a $250,000 minimum investment; however, there is no maximum limit. The fair value of the Authority’s investment in this pool is reported in the accompanying financial statements at amounts based upon the Authority’s percentage interest of the fair value provided by CalTRUST for the CalTRUST accounts (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by CalTRUST. InterestRateRisk: Interest rate risk is the risk where changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The Authority manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments, and by timing cash flows from maturities so that a portion of the portfolio matures or comes close to maturity evenly over time as necessary to provide requirements for cash flow and liquidity needed for operations. Information about the sensitivity of the fair values of the Authority’s investments to market interest rate fluctuations is provided by the following table that shows the distribution of the Authority’s investments by maturity date.

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2. CASH AND INVESTMENTS (CONTINUED): InterestRateRisk(Continued): Maturities of investments and cash equivalents as of June 30, 2017, were as follows:

Remaining Maturity (in Months) 12 Months 13‐24 25‐60 Investment Type or Less Months Months Total U.S. Treasury Strips $ 940,977 $ 1,383,549 $ 3,874,234 $ 6,198,760 U.S. Government Sponsored Agency Securities 1,497,955 1,526,319 4,490,766 7,515,040 LAIF 29,578,578 ‐ ‐ 29,578,578 CalTRUST Medium‐Term Fund 2,175,131 ‐ ‐ 2,175,131 Medium‐Term Corporate Notes ‐ 499,971 ‐ 499,971 Negotiable Certificates of Deposit 1,240,365 741,000 744,000 2,725,365 $ 35,433,006 $ 4,150,839 $ 9,109,000 $ 48,692,845

Maturities of investments and cash equivalents as of June 30, 2016, were as follows:

Remaining Maturity (in Months) 12 Months 13‐24 25‐60 Investment Type or Less Months Months Total U.S. Treasury Strips $ 945,710 $ 939,094 $ 5,362,848 $ 7,247,652 U.S. Government Sponsored Agency Securities 1,503,948 1,505,215 4,640,357 7,649,520 LAIF 33,913,510 ‐ ‐ 33,913,510 CalTRUST Medium‐Term Fund 2,170,474 ‐ ‐ 2,170,474 Negotiable Certificates of Deposit 747,283 1,240,000 741,000 2,728,283 $ 39,280,925 $ 3,684,309 $ 10,744,205 $ 53,709,439

CreditRisk: Generally, 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 on the following page is the minimum rating required by (where applicable) the California Government Code, the Authority’s investment policy, or debt agreements, and the actual rating as of year end for each investment type. This is measured by the assignment of a rating by a nationally recognized statistical rating organization; however, LAIF is not rated.

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2. CASH AND INVESTMENTS (CONTINUED): CreditRisk(Continued): Credit ratings by Standard & Poor’s of investments and cash equivalents as of June 30, 2017, were as follows:

Minimum Exempt

Legal From Ratings as of Year End Not

Investment Type Total Rating Disclosure AA+ AA‐ A+ Rated

U.S. Treasury Strips $ 6,198,760 N/A $ 6,198,760 $ ‐ $ ‐ $ ‐ $ ‐

U.S. Government Sponsored

Agency Securities 7,515,040 N/A ‐ 7,515,040 ‐ ‐ ‐

LAIF 29,578,578 N/A ‐ ‐ ‐ ‐ 29,578,578

CalTRUST Medium‐Term Fund 2,175,131 N/A ‐ ‐ ‐ 2,175,131 ‐

Medium‐Term Corporate Notes 499,971 A ‐ ‐ 499,971 ‐ ‐

Negotiable Certificates of Deposit 2,725,365 N/A ‐ ‐ ‐ ‐ 2,725,365

$ 48,692,845 $ 6,198,760 $ 7,515,040 $ 499,971 $ 2,175,131 $ 32,303,943

Credit ratings by Standard & Poor’s of investments and cash equivalents as of June 30, 2016, were as follows:

Minimum Exempt Rating as

Legal From of Year End Not

Investment Type Total Rating Disclosure AA+ A+ Rated

U.S. Treasury Strips $ 7,247,652 N/A $ 7,247,652 $ ‐ $ ‐ $ ‐

U.S. Government Sponsored

Agency Securities 7,649,520 N/A ‐ 7,649,520 ‐ ‐

LAIF 33,913,510 N/A ‐ ‐ ‐ 33,913,510

CalTRUST Medium‐Term Fund 2,170,474 N/A ‐ ‐ 2,170,474 ‐

Negotiable Certificates of Deposit 2,728,283 N/A ‐ ‐ ‐ 2,728,283

$ 53,709,439 $ 7,247,652 $ 7,649,520 $ 2,170,474 $ 36,641,793

ConcentrationofCreditRisk: The investment policy of the Authority contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. The Authority has no investments that represent 5% or more of total Authority investments invested in one issuer.

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2. CASH AND INVESTMENTS (CONTINUED):

FairValueMeasurements: The Authority categorizes its fair value measurement within the fair value hierarchy established by accounting principles generally accepted in the United States of America. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets, Level 2 inputs are significant other observable inputs, and Level 3 inputs are significant unobservable inputs. The Authority has the following recurring fair value measurements as of June 30, 2017: Quoted Observable Unobservable Prices Inputs Inputs Level 1 Level 2 Level 3 Total U.S. Treasury Strips $ ‐ $ 6,198,760 $ ‐ $ 6,198,760 U.S. Government Sponsored Agency Securities ‐ 7,515,040 ‐ 7,515,040 Medium‐Term Corporate Notes ‐ 499,971 ‐ 499,971 Negotiable Certificates of Deposit ‐ 2,725,365 ‐ 2,725,365 Total Investments $ ‐ $ 16,939,136 $ ‐ 16,939,136 Local Agency Investment Fund* 29,578,578 CalTRUST Investment Pool* 2,175,131 Total Investment Portfolio $ 48,692,845 *Not subject to fair value measurement hierarchy

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2. CASH AND INVESTMENTS (CONTINUED):

FairValueMeasurements(Continued): The Authority has the following recurring fair value measurements as of June 30, 2016: Quoted Observable Unobservable Prices Inputs Inputs Level 1 Level 2 Level 3 Total U.S. Treasury Strips $ ‐ $ 7,247,652 $ ‐ $ 7,247,652 U.S. Government Sponsored Agency Securities ‐ 7,649,520 ‐ 7,649,520 Negotiable Certificates of Deposit ‐ 2,728,283 ‐ 2,728,283 Total Investments $ ‐ $ 17,625,455 $ ‐ 17,625,455 Local Agency Investment Fund* 33,913,510 CalTRUST Investment Pool* 2,170,474 Total Investment Portfolio $ 53,709,439 *Not subject to fair value measurement hierarchy

3. NOTES RECEIVABLE: During the year ended June 30, 1998, the Authority sold capacity rights in the Brine Line pipeline under an installment agreement with Inland Empire Utilities Agency. Sale terms specify annual installments of $267,188 with zero interest due July 1 of each year through 2018. The receivable has been discounted at the imputed interest rate of 6.00% and totals $252,063 and $489,858 at June 30, 2017 and 2016, respectively. Remaining repayments total $267,187 and $534,375 with an unamortized discount of $15,124 and $44,517 at June 30, 2017 and 2016, respectively. During the year ended June 30, 1999, the Authority sold capacity rights in the Brine Line pipeline under and installment agreement with Western Municipal Water District. Sale terms specify annual installments of $89,063 with zero interest due July 1 of each year through 2018. The receivable has been discounted at the imputed interest rate of 6.00% and totals $163,277 at June 30, 2017 and 2016. Remaining repayments total $178,115 with an unamortized discount of $14,838 at June 30, 2017 and 2016. Payments due in 2016 were received early and payment due in 2017 was received late, resulting in resulting in no change in the remaining balance.

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3. NOTES RECEIVABLE (CONTINUED): Notes receivable amounts at June 30, 2017, are as follows:

Fiscal Year Ending Principal Interest Total 2018 $ 415,340 $ 29,962 $ 445,302 Less: current portion (415,340) Total noncurrent $ ‐ 4. LOAN RECEIVABLE:

On June 29, 2010, the Authority agreed to loan Orange County Flood Control District (OCFCD), 10% of the total costs, not to exceed $10 million for the protection and relocation of the Santa Ana Regional Interceptor Line Project (SARI Project). On June 21, 2011, the agreement was amended to increase the loan to 10% of total costs, not to exceed $12 million. As of June 30, 2017, the Authority has made deposits totaling $10 million. Terms of the agreement call for payment of principal to commence once subvention funding is received at a zero percent interest rate due each year through July 1, 2022. Principal and interest payments are based on subvention funding received by OCFCD, which totaled $585,767 and $1,176,131 for fiscal years ended June 30, 2017 and 2016, respectively. On the unpaid balance at July 1, 2018, interest will accrue at the current LAIF interest rate. The receivable has been discounted at the June 30, 2012 LAIF interest rate of 0.363%, and totals $3,412,531 and $3,998,298 at June 30, 2017 and 2016, respectively. Remaining repayments total $3,428,165 and $4,017,059 with an unamortized discount of $15,634 and $18,761 at June 30, 2017 and 2016, respectively.

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5. MITIGATION CREDITS:

On March 17, 2000, the State of California voted to approve, Proposition 13, the Costa‐MachadoWater Act of 2000 containing the Southern California Integrated Watershed Program (SCIWP), providing $235 million for local grant assistance. The State Legislature appropriated the funds to the State Water Resource Control Board (SWRCB) to be allocated to the Authority for projects to rehabilitate and improve the Santa Ana River Watershed.

On April 23, 2003, as part of the SCIWP, the Authority purchased 100 acres of mitigation credits from the Riverside County Regional Park and Open Space District. These credits are purchased and used by those needing habitat mitigation within the Watershed for specific development projects.

The changes to mitigation credits at June 30, 2017 and 2016 were as follows:

Balance Balance 2016 Additions Deletions 2017 $ 1,910,560 $ ‐ $ ‐ $ 1,910,560

Balance Balance 2015 Additions Deletions 2016 $ 1,920,560 $ ‐ $ (10,000) $ 1,910,560

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6. CAPITAL ASSETS: Changes in capital assets for the year ended June 30, 2017, were as follows:

Balance Balance 2016 Additions Deletions 2017 Capital assets, not being depreciated: Land $ 765,444 $ ‐ $ ‐ $ 765,444 Construction in progress 10,608,000 9,335,664 ‐ 19,943,664 Total capital assets, not being depreciated 11,373,444 9,335,664 ‐ 20,709,108 Capital assets, being depreciated and amortized: Land improvements 140,217 ‐ ‐ 140,217 Buildings 1,454,558 ‐ ‐ 1,454,558 Furniture and equipment 494,389 22,946 ‐ 517,335 Brine Line and equipment 128,330,201 32,027 ‐ 128,362,228 Wastewater treatment and disposal rights 55,662,342 ‐ ‐ 55,662,342 Total capital assets, being depreciated and amortized 186,081,707 54,973 ‐ 186,136,680 Less accumulated depreciation and amortization for: Land improvements (83,398) (3,505) ‐ (86,903) Buildings (863,659) (37,549) ‐ (901,208) Furniture and equipment (299,395) (35,422) ‐ (334,817) Brine Line and equipment (62,195,128) (3,097,777) ‐ (65,292,905) Accumulated amortization (25,326,594) (1,400,914) ‐ (26,727,508) Total accumulated depreciation and amortization (88,768,174) (4,575,167) ‐ (93,343,341) Total capital assets, being depreciated, net 97,313,533 (4,520,194) ‐ 92,793,339 Total capital assets, net $108,686,977 $ 4,815,470 $ ‐ $ 113,502,447

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6. CAPITAL ASSETS (CONTINUED): Changes in capital assets for the year ended June 30, 2016, were as follows:

Balance Balance 2015 Additions Deletions 2016 Capital assets, not being depreciated: Land $ 765,444 $ ‐ $ ‐ $ 765,444 Construction in progress 4,123,656 6,484,344 ‐ 10,608,000 Total capital assets, not being depreciated 4,889,100 6,484,344 ‐ 11,373,444 Capital assets, being depreciated and amortized: Land improvements 140,217 ‐ ‐ 140,217 Buildings 1,454,558 ‐ ‐ 1,454,558 Furniture and equipment 382,092 112,297 ‐ 494,389 Brine Line and equipment 128,070,352 259,849 ‐ 128,330,201 Wastewater treatment and disposal rights 55,662,342 ‐ ‐ 55,662,342 Total capital assets, being depreciated and amortized 185,709,561 372,146 ‐ 186,081,707 Less accumulated depreciation and amortization for: Land improvements (79,893) (3,505) ‐ (83,398) Buildings (826,110) (37,549) ‐ (863,659) Furniture and equipment (267,415) (31,980) ‐ (299,395) Brine Line and equipment (59,097,608) (3,097,520) ‐ (62,195,128) Accumulated amortization (23,925,676) (1,400,918) ‐ (25,326,594) Total accumulated depreciation and amortization (84,196,702) (4,571,472) ‐ (88,768,174) Total capital assets, being depreciated, net 101,512,859 (4,199,326) ‐ 97,313,533 Total capital assets, net $106,401,959 $ 2,285,018 $ ‐ $ 108,686,977

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7. COMPENSATED ABSENCES: Compensated absences comprise unpaid vacation and sick leave which is accrued as earned. The changes to compensated absences at June 30, 2017 and 2016 were as follows:

Balance Balance Current Long‐term 2016 Earned Taken 2017 Portion Portion

Compensated absences $ 514,104 $ 403,025 $ (322,835) $ 594,294 $ 178,288 $ 416,006

Balance Balance Current Long‐term 2015 Earned Taken 2016 Portion Portion

Compensated absences $ 426,629 $ 408,464 $ (320,989) $ 514,104 $ 154,232 $ 359,872

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8. LONG‐TERM DEBT: Changes in long‐term debt for the year ended June 30, 2017, were as follows:

Principal Balance Payments Balance 2016 Additions Amortization 2017 SWRCB Brine Line Reach V Loans: Loan I $ 1,849,601 $ ‐ $ (288,126) $ 1,561,475 Loan II & III 1,490,972 ‐ (232,827) 1,258,145 Loan IV 1,043,405 ‐ (196,923) 846,482 Loan V 1,588,946 ‐ (248,126) 1,340,820 Total SWRCB Brine Line Reach V Loans 5,972,924 ‐ (966,002) 5,006,922 Member Agency Loans: OCWD Loan 653,146 ‐ (317,061) 336,085 WRCRWA SFR Loans #2, 3 and 4 1,024,421 ‐ (505,239) 519,182 Total Member Agency Loans 1,677,567 ‐ (822,300) 855,267 State Revolving Fund Loan Reach IVA & IVB 14,202,503 ‐ (675,008) 13,527,495 SWRCB Inland Empire Brine Line Reach V Loans: Loan I 4,009,075 3,544,360 ‐ 7,553,435 Total long‐term debt 25,862,069 $ 3,544,360 $ (2,463,310) 26,943,119 Less: current portion (2,463,311) (2,640,196) Long‐term portion $ 23,398,758 $ 24,302,923

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8. LONG‐TERM DEBT (CONTINUED): Changes in long‐term debt for the year ended June 30, 2016, were as follows:

Principal Balance Payments Balance 2015 Additions Amortization 2016 SWRCB Contract Loans: Loan #4 $ 454,730 $ ‐ $ (454,730) $ ‐ Loan #5 511,526 ‐ (511,526) ‐ Total SWRCB Contract Loans 966,256 ‐ (966,256) ‐ SWRCB Brine Line Reach V Loans: Loan I 2,130,152 ‐ (280,551) 1,849,601 Loan II & III 1,717,898 ‐ (226,926) 1,490,972 Loan IV 1,234,778 ‐ (191,373) 1,043,405 Loan V 1,830,784 ‐ (241,838) 1,588,946 Total SWRCB Brine Line Reach V Loans 6,913,612 ‐ (940,688) 5,972,924 Member Agency Loans: OCWD Loan 952,260 ‐ (299,114) 653,146 WRCRWA SFR Loans #2, 3 and 4 1,515,900 ‐ (491,479) 1,024,421 Total Member Agency Loans 2,468,160 ‐ (790,593) 1,677,567 State Revolving Fund Loan Reach IVA & IVB 14,860,406 ‐ (657,903) 14,202,503 SWRCB Inland Empire Brine Line Reach V Loans: Loan I ‐ 4,009,075 ‐ 4,009,075 Total long‐term debt 25,208,434 $ 4,009,075 $ (3,355,440) 25,862,069 Less: current portion (3,355,440) (2,463,311) Long‐term portion $ 21,852,994 $ 23,398,758

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8. LONG‐TERM DEBT (CONTINUED): StateWaterResourcesControlBoard‐LoanNo.4:

This loan, in the amount of $6,828,963, was for the construction of Reach IV‐D of the Brine Line Pipeline. Annual principal and interest payments of $468,372, at the rate of 3.00%, commenced on November 30, 1996, and matured on November 30, 2015. StateWaterResourcesControlBoard‐LoanNo.5: This loan, in the amount of $7,814,181, was for the construction of Reach IV‐E of the Brine Line Pipeline. Annual principal and interest payments of $526,243 in fiscal year 2015 and $525,849 in fiscal year 2016, at the rate of 2.80%, commenced on January 10, 1996, and matured on January 10, 2016. StateWaterResourcesControlBoard‐BrineLineReachVLoanNo.I: This loan, in the amount of $5,089,798, was for the construction of Reach V of the Brine Line Pipeline. Annual principal and interest payments of $388,065, at the rate of 2.70%, commenced on October 5, 2002, and will mature on October 5, 2021.

Fiscal Year Ending Principal Interest Total 2018 $ 295,906 $ 42,159 $ 338,065 2019 303,895 34,170 338,065 2020 312,100 25,965 338,065 2021 320,527 17,538 338,065 2022 329,047 8,886 337,933 Total 1,561,475 $ 128,718 $ 1,690,193 Less: current portion (295,906) Total noncurrent $ 1,265,569

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8. LONG‐TERM DEBT (CONTINUED): StateWaterResourcesControlBoard‐BrineLineReachVLoanNo.IIandIII: This loan, in the amount of $4,187,933, was for the construction of Reach V of the Brine Line Pipeline. Annual principal and interest payments of $271,592, at the rate of 2.60%, commenced on October 5, 2002, and will mature on October 5, 2021.


StateWaterResourcesControlBoard‐BrineLineReachVLoanNo.IV: This loan, in the amount of $3,373,815, was for the construction of Reach V of the Brine Line Pipeline. Annual principal and interest payments of $227,182, at the rate of 2.90%, commenced on September 11, 2001, and will mature on September 11, 2020.

Fiscal Year Ending Principal Interest Total 2018 $ 202,634 $ 24,548 $ 227,182 2019 208,510 18,672 227,182 2020 214,557 12,625 227,182 2021 220,781 6,401 227,182 Total 846,482 $ 62,246 $ 908,728 Less: current portion (202,634) Total noncurrent $ 643,848

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8. LONG‐TERM DEBT (CONTINUED): StateWaterResourcesControlBoard‐BrineLineReachVLoanNo.V: This loan, in the amount of $4,455,792, was for the construction of Reach V of the Brine Line Pipeline. Annual principal and interest payments of $289,439, at the rate of 2.90%, commenced on October 5, 2004, and will mature on October 5, 2021.


OrangeCountyWaterDistrict: This was a purchase obligation for Brine Line Pipeline capacity in the amount of $4,706,326. Annual principal and interest payments of $356,250, at the rate of 6.00%, commenced on July 1, 1999, and will mature on July 1, 2018.

Fiscal Year Ending Principal Interest Total 2018 $ 336,085 $ 20,165 $ 356,250 Less: current portion (336,085) Total noncurrent $ ‐

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8. LONG‐TERM DEBT (CONTINUED): WesternRiversideCountyRegionalWastewaterAuthority:

This is a contractual obligation, in the amount of $8,003,454, with the WRCRWA Joint Powers Authority for a portion of loans from the State Water Resources Control Board for the construction of wastewater treatment facilities. Annual principal and interest payments of $533,924, at the rate of 2.80%, commenced on February 13, 1999, and will mature on June 1, 2018.

Fiscal Year Ending Principal Interest Total 2018 $ 519,182 $ 14,537 $ 533,719 Less: current portion (519,182) Total noncurrent $ ‐

StateRevolvingFundLoan‐ReachIV‐AandIV‐B:

On April 13, 2011, the Authority entered into a loan agreement to receive up to $16,850,337 from the California State Water Resources Control Board to repair the existing brine disposal pipeline to extend its useful life of the Inland Empire Brine Line upstream of Prado Dam. Terms of the loan call for annual principal and interest payments of $1,044,273 based on the net loan amount of $16,850,337, at the rate of 2.60%, commenced on December 29, 2013, and will mature on December 29, 2032.

Fiscal Year Ending Principal Interest Total 2018 $ 692,558 $ 351,715 $ 1,044,273 2019 710,565 333,708 1,044,273 2020 729,040 315,233 1,044,273 2021 747,994 296,279 1,044,273 2022 767,442 276,831 1,044,273 2023‐2027 4,147,095 1,074,271 5,221,366 2028‐2032 4,714,990 506,376 5,221,366 2033 1,017,811 26,463 1,044,274 Total 13,527,495 $ 3,180,876 $ 16,708,371 Less: current portion (692,558) Total noncurrent $ 12,834,937

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8. LONG‐TERM DEBT (CONTINUED): SWRCBInlandEmpireBrineLineReachVLoans‐LoanI

On May 14, 2014, the Authority entered into a loan agreement to receive up to $19,000,000 from the California State Water Resources Control Board to repair the existing brine disposal pipeline to extend its useful life of the Inland Empire Brine Line. Terms of the loan call for annual principal and interest payments of $176,542 based on the net loan amount of $7,553,435, commencing on October 31, 2017 at the rate of 1.9%, maturing October 31, 2046. As of June 30, 2017, only $4,009,075 of the loan proceeds have been drawn down and utilized and $3,544,360 are recorded as a receivable in the Reach V Capital Projects Capital Projects Activities Fund representing reimbursable expenses for fiscal year 2016‐2017 not yet received as of June 30, 2017. The Authority will have additional loan draws in future years, which will increase the net loan amount.

Fiscal Year Ending Principal Interest Total 2018 $ 100,374 $ 76,168 $ 176,542 2019 102,281 74,261 176,542 2020 104,224 72,318 176,542 2021 106,205 70,337 176,542 2022 108,223 68,319 176,542 2023‐2027 572,749 309,961 882,710 2028‐2032 629,267 253,443 882,710 2033‐2037 691,363 191,347 882,710 2038‐2042 759,586 123,124 882,710 2043‐2047 834,803 47,907 882,710 Principal as of June 30, 2017* 3,544,360 ‐ 3,544,360 Total 7,553,435 $ 1,287,185 $ 8,840,620 Less: current portion (100,374) Total noncurrent $ 7,453,061 *As of June 30, 2017, the future debt service requirements have not been determined.

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9. UNEARNED REVENUE: The changes to unearned revenue at June 30, 2017 and 2016 were as follows:

Balance Balance 2016 Additions Deletions 2017 $ 75,229,441 $ ‐ $ (2,510,154) $ 72,719,287 Balance Balance 2015 Additions Deletions 2016 $ 77,739,595 $ ‐ $ (2,510,154) $ 75,229,441 10. NET POSITION:

Calculation of net position as of June 30, 2017 and 2016, were as follows: 2017 2016 Net investment in capital assets: Capital assets‐notbeingdepreciated $ 20,709,108 $ 11,373,444 Depreciable capital assets, net 92,793,339 97,313,533 SWRCB Brine Line Reach V loans payable (5,006,922) (5,972,924) OCWD loan payable (336,085) (653,146) SRF Reach IVA & IVB loan payable (13,527,495) (14,202,503) SWRCB Brine Line Reach V loans payable (7,553,435) (4,009,075) SWRCB Brine Line Reach V loans receivable (note 8) 3,544,360 949,504 Total net investment in capital assets 90,622,870 84,798,833 Restricted net position: SRF Reach IVA & IVB reserve requirement 1,050,000 1,050,000 Mitigation 2,871,155 2,873,403 Total restricted 3,921,155 3,923,403

Unrestricted net position (24,155,787) (21,554,491) Total net position $ 70,388,238 $ 67,167,745

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11. JOINT VENTURES: WesternRiversideCountyRegionalWastewaterAuthority(WRCRWA): The Authority was a member of WRCRWA, a Joint Powers Authority created on April 23, 1992, for the purpose of developing a regional wastewater treatment facility for the benefit of its members. On June 30, 2012, Addendum No. 7 to the Joint Exercise of Powers Agreement was entered into by all members of the Authority to execute the withdrawal of the Authority from WRCRWA. The Authority is responsible for a certain portion of WRCRWA’s long‐term debt and will continue making annual debt service payments to the Joint Powers Authority for its share of the State Revolving Fund Loans from the State Water Resources Control Board. The recorded amount is reflected in the financial statements as long‐term debt. In addition, the Authority will continue to provide mutual aid for planned and unplanned facilities maintenance. The financial statements of WRCRWA are available from Western Municipal Water District, 14205 Meridian Parkway, Riverside, California 92508. LakeElsinore&SanJacintoWatershedsAuthority(LESJWA): The Authority is a member of LESJWA, a Joint Powers Authority created on March 8, 2000, for the purpose of implementing projects and programs to improve the two watersheds in order to preserve agricultural land, protect wildlife habitat, protect and enhance recreational resources, and improve lake water quality, for the benefit of the general public. Other members include the City of Canyon Lake, the City of Lake Elsinore, Elsinore Valley Municipal Water District, and the County of Riverside. Each member agency appoints one Director and one alternate to serve on the Board, with both also on the member’s agency’s board. Each member agency has agreed to make contributions for construction and operations, if necessary. Upon dissolution of LESJWA, each member agency will receive its proportionate or otherwise defined share of the assets, and each member agency will contribute its proportionate or otherwise defined share of any enforceable liabilities incurred. The Authority conducts the administrative function of LESJWA, which reimburses the Authority based on invoices for administrative services provided. During the years ended June 30, 2017 and 2016, administrative services provided to LESJWA totaled $193,263 and $188,700, respectively, which are included in operating revenue. The financial statements for LESJWA are available at the Authority.

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11. JOINT VENTURES (CONTINUED): LakeElsinore&SanJacintoWatershedsAuthority(LESJWA)(Continued): As of June 30, 2017 and 2016, LESJWA had assets, liabilities and net position as follows:

2017 2016 Total assets $ 854,457 $ 577,697 Total liabilities and deferred inflows of resources $ 126,128 $ 79,933

Net position $ 728,329 $ 497,764

12. DEFINED BENEFIT PENSION PLANS:

a. General Information about the Pension Plans: PlanDescriptions: All qualified permanent and probationary employees are eligible to participate in the Authority’s 2% at 55 (Classic) and 2% at 62 (PEPRA) Miscellaneous Employee Pension Plans, cost‐sharingmultiple employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS). Benefit provisions under the Plans are established by State statute and Authority resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website. BenefitsProvided: CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 to 62 with statutorily reduced benefits. All members are eligible for non-industrial disability benefits after five (5) years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

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12. DEFINED BENEFIT PENSION PLANS (CONTINUED):

a. General Information about the Pension Plans (Continued): BenefitsProvided(Continued): The Plans’ provisions and benefits in effect at June 30, 2017, are summarized as follows:

Prior to On or AfterHire date January 1, 2013 January 1, 2013Benefit formula 2%@55 2%@62Benefit vesting schedule 5 years of service 5 years of serviceBenefit payments monthly for life monthly for lifeRetirement age 50‐63 52‐67Monthly benefits, as a % of eligible compensation 1.426% to 2.418% 1.0% to 2.5%Required employee contribution rates 7% 6.25%Required employer contribution rates:

Normal cost rate 9.846% 7.066%Payment of unfunded liability 106,117$ 57$

Miscellaneous

Contributions: Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through the CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The Authority is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Authority contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contributions requirements are classified as plan member contributions.

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b. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions: As of June 30, 2017and 2016, the Authority reported net pension liabilities for its proportionate shares of the net pension liability of all Plans as follows:

2017 2016

Miscellaneous 3,104,742$ 2,247,501$

The Authority’s net pension liabilities were measured as of June 30, 2016 and 2015, and the total pension liabilities used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2015, rolled forward to June 30, 2016, and June 30, 2014, rolled forward to June 30 15, respectively, using standard update procedures. The Authority’s proportionate share of the net pension liability was based on a projection of the Authority’s long‐term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined. The changes in the Authority’s proportionate share of the collective net pension liabilities were as follows:

MiscellaneousProportion‐June 30, 2015 (measurement date) 0.08192%Proportion‐June 30, 2016 (measurement date) 0.08937%Change‐Increase (Decrease) 0.00745%

Proportion‐June 30, 2014 (measurement date) 0.08779%Proportion‐June 30, 2015 (measurement date) 0.08192%Change‐Increase (Decrease) ‐0.00587%

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b. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued): For the year ended June 30, 2017, the Authority recognized pension expense of $335,342. At June 30, 2017, the Authority reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred DeferredOutflows Inflows

of Resources of ResourcesPension contributions subsequent to

measurement date 388,896$ ‐$ Differences between expected and actual experience 12,115 (2,776) Change in assumptions ‐ (114,617) Change in employer's proportion and differences

between the employer's contributions and the employer's proportionate share of contributions 19,919 (156,206)

Net differences between projected and actualearnings on plan investments 596,543 ‐

Total 1,017,473$ (273,599)$

$388,896 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2018. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will reduce pension expense as follows:

Year

EndingJune 30, Amount

2018 (57,795)$ 2019 (14,942) 2020 273,204 2021 154,511 2022 ‐

Thereafter ‐

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b. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued): For the year ended June 30, 2016, the Authority recognized pension expense of $72,599. At June 30, 2016, the Authority reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred DeferredOutflows Inflows

of Resources of ResourcesPension contributions subsequent to

measurement date 339,020$ ‐$ Differences between expected and actual experience 19,081 ‐ Change in assumptions ‐ (180,517) Change in employer's proportion and differences

between the employer's contributions and the employer's proportionate share of contributions ‐ (254,009)

Net differences between projected and actualearnings on plan investments ‐ (90,496)

Total 358,101$ (525,022)$

$339,020 reported as deferred outflows of resources related to contributions subsequent to the measurement date was recognized as a reduction of the net pension liability in the year ended June 30, 2017. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will reduce pension expense as follows:

Year

EndingJune 30, Amount

2017 (224,184)$ 2018 (220,214) 2019 (177,218) 2020 115,675 2021 ‐

Thereafter ‐

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b. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued): ActuarialAssumptions: For the measurement periods ended June 30, 2016 and 2015 (the measurement dates), the total pension liabilities were determined by rolling forward the June 30, 2015 and 2014 total pension liabilities determined in the June 30, 2015 and 2014 actuarial accounting valuations, respectively. The June 30, 2016 and 2015 total pension liabilities were based on the following actuarial methods and assumptions:

MiscellaneousValuation Dates June 30, 2015 and 2014Measurement Dates June 30, 2016 and 2015Actuarial Cost Method Entry‐Age Normal Cost MethodActuarial Assumptions:

Discount Rate 7.65%Inflation 2.75%Salary Increase (1)Mortality Rate table (2)Post Retirement Benefit Increase (3)

(1) Varies by entry age and service(2)

(3)

The probabilities of mortality are derived using CalPERS' membership data for all funds. The mortalitytable used was developed based on CalPERS' specific data. The table includes 20 years of mortalityimprovements using Society of Actuaries Scale BB. For more details on this table, please refer to the2014 experience study report. Contract COLA up to 2.75% until Purchasing Power Protection Allowance Floor on Purchasing Powerapplies, 2.75% thereafter.

All other actuarial assumptions used in the June 30, 2015 and 2014 valuations were based on the results of an actuarial experience study for the period from 1997 to 2011, including updates to salary increase, mortality and retirement rates. The Experience Study report can be obtained at the CalPERS website under Forms and Publications. ChangeofAssumptions: There were no changes of assumptions during the measurement period of June 30, 2016. GASB 68, paragraph 68 states that the long‐term expected rate of return should be determined net of pension plan investment expense but without reduction for pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014 measurement date was net of administrative expenses. The discount rate of 7.65% used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense.

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b. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued): DiscountRate: The discount rate used to measure the total pension liability was 7.65% for each Plan. To determine whether the municipal bond rate should be used in the calculation of a discount rate for each plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing of the Plans, the tests revealed the assets would not run out. Therefore, the current 7.65% discount rate is appropriate and the use of the municipal bond rate calculation is not deemed necessary. The long term expected discount rate of 7.65% is applied to all plans in the Public Employees Retirement Fund (PERF). The cash flows used in the testing were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. The stress test results are presented in a detailed report called “GASB Crossover Testing Report” that can be obtained from the CalPERS website under the GASB 68 section. The long‐termexpected rate of return on pension plan investments was determined using a building‐blockmethod in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

In determining the long‐term expected rate of return, CalPERS took into account both short‐term and long‐termmarket return expectations as well as the expected pension fund (PERF) cash flows. Taking into account historical returns of all the Public Employees Retirement Funds’ asset classes (which includes the agent plan and two cost‐sharingplans or PERF A, B, and C funds), expected compound (geometric) returns were calculated over the short‐term (first 10 years) and the long‐term (11‐60 years) using a building‐block approach. Using the expected nominal returns for both short‐term and long‐term, the present value of benefits was calculated for each PERF fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short‐termand long‐term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent.

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b. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued): DiscountRate(Continued): The table below reflects the long‐termexpected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. The target allocation shown was adopted by the CalPERS Board effective on July 1, 2015.

New Real Return Real ReturnStrategic Years Years

Allocation 1‐10(a) 11+ (b)Global Equity 51.00% 5.25% 5.71%Global Fixed Income 20.00% 0.99% 2.43%Inflation Sensitive 6.00% 0.45% 3.36%Private Equity 10.00% 6.83% 6.95%Real Estate 10.00% 4.50% 5.13%Infrastructure and Forestland 2.00% 4.50% 5.09%Liquidity 1.00% ‐0.55% -1.05%

Total 100.00%

(a) An expected inflation of 2.5% used for this period(b) An expected inflation of 3.0% used for this period

Asset Class

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b. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued): SensitivityoftheProportionateShareoftheNetPensionLiabilitytoChangesintheDiscountRate: The following presents the Authority’s proportionate share of the net pension liability for all Plans, calculated using the discount rate for all Plans, as well as what the Authority’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1‐percentage point lower or 1‐percentage point higher than the current rate:

2017 2016Miscellaneous Miscellaneous

1% Decrease 6.65% 6.65%Net Pension Liability 5,067,496$ 4,109,682$

Current Discount Rate 7.65% 7.65%Net Pension Liability 3,104,742$ 2,247,501$

1% Increase 8.65% 8.65%Net Pension Liability 1,482,621$ 710,055$

PensionPlansFiduciaryNetPosition: Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports. SubsequentEvents: In December 2016, CalPERS’ Board of Directors voted to lower the discount rate used in its actuarial valuations from 7.5% to 7.0% over three fiscal years, beginning in fiscal year 2018. The change in the discount rate will affect the contribution rates for employers beginning in fiscal year 2019, and result in increases to employers’ normal costs and unfunded actuarial liabilities. For the GASB Statement 68 accounting valuations, the discount rate will move straight to 7% starting with the June 30, 2017 measurement date reports and will result in an increase to employer’s total pension liabilities.

c. Payable to the Pension Plans:

At June 30, 2017 and 2016, the Authority had no outstanding amount of contributions to the pension plans required for the years ended June 30, 2017 and 2016.

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13. OTHER POST‐EMPLOYMENT BENEFITS (OPEB) ASSET: PlanDescriptionandBenefitsOffered:The Authority’s defined benefit post employment healthcare plan, SAWPA Post Employment Healthcare Plan (SPHP), provides medical benefits to eligible retired Authority employees and spouses. The Authority’s employees hired prior to July 1, 2005 who retire at age 58 or older with a minimum of ten years of service with the Authority are eligible for lifetime medical benefits. Benefits are also provided to spouses. The Authority’s benefits cease upon the death of the retiree. Employees hired on, or after, July 1, 2005 are not eligible to receive employer subsidized postemployment medical benefits. The Authority contributes the entire premium cost up to a predetermined cap. The cap is defined as the Kaiser Family premium rate. The 2017 monthly cap per retiree is $1,506. SPHP is part of the Public Agency portion of the California Employers’ Retiree Trust Fund (CERBT), an agent multiple‐employerplan administered by California Public Employees’ Retirement System (CalPERS), 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 statute within the Public Employees’ Retirement Law. SPHP selects optional benefit provisions from the benefit menu by contract with CalPERS and adopts those benefits through Authority resolution. CalPERS issues a Comprehensive Annual Financial Report (CAFR). The CAFR is issued in aggregate and includes the sum of all CalPERS plans. Copies of the CalPERS CAFR may be obtained from the CalPERS Executive Office, 400 P Street, Sacramento, California 95814. Eligibility: The Authority pays a portion of the cost of health insurance for retirees under any group plan offered by CalPERS, subject to certain restrictions as determined by the Authority. Membership in the OPEB plan consisted of the following members as of June 30:

2017 2016 2015 Active plan members 9 9 10 Retirees and beneficiaries receiving benefits 5 5 4 Separated plan members entitled to but not yet receiving benefits ‐ ‐ ‐ Total plan membership 14 14 14

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13. OTHER POST‐EMPLOYMENT BENEFITS (OPEB) ASSET (CONTINUED):

FundingPolicy: The contribution requirements of plan members and the Authority are established and may be amended by the Commission. The Authority contributes the entire premium cost up to a predetermined cap. The 2017 calendar cap is $1,506 per month, and the 2016 calendar cap was $1,471 per month. Employees hired on, or after July 1, 2005, are not eligible to receive employer subsidized post employment medical benefits. For the year ended June 30, 2017, the Authority made a medical contribution of $115,816 which paid $50,003 in health care costs for its retirees and their covered dependents and a contribution of $65,813 to the OPEB trust. For the year ended June 30, 2016, the Authority made a medical contribution of $113,226 which paid $47,682 in health care costs for its retirees and their covered dependents and a contribution of $65,544 to the OPEB trust. AnnualOPEBCostandNetOPEBAsset: The Authority is required to contribute the Annual Required Contribution (ARC) of the Employer, an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an on‐going basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the Authority’s annual OPEB cost, the amount actually contributed to the plan, and the changes in the Authority’s net OPEB asset to the SPHP for the fiscal year ended June 30, 2017, and the two preceding years:

2017 2016 2015 Annual OPEB cost (expense): Annual required contribution (ARC) $ 65,813 $ 64,607 $ 64,753 Interest on net OPEB asset (32,000) (27,000) (25,000) Adjustment to annual required contribution 54,975 ‐ 28,556 Total annual OPEB cost (expense) 88,788 37,607 68,309 Change in net OPEB asset: Actual contributions made (115,816) (113,226) (118,506) Total change in net OPEB asset (27,028) (75,619) (50,197) OPEB asset, beginning of year (478,046) (402,427) (352,230) OPEB asset, end of year $ (505,074) $ (478,046) $ (402,427)

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13. OTHER POST‐EMPLOYMENT BENEFITS (OPEB) ASSET (CONTINUED): Three‐YearTrendInformationofNetOPEBAsset: Fiscal Annual Percentage Net Year OPEB of Annual OPEB OPEB Ended Cost Cost Contributed Asset 2017 $ 88,788 130.44% $ (505,074) 2016 37,607 301.08% (478,046) 2015 68,309 173.49% (402,427)

See the Schedule of Funding Progress of the Authority’s Other Post Employment Benefits Asset in the Required Supplementary Information Section. FundedStatusandFundingProgress:

As of July 1, 2015, the most recent actuarial valuation date, the actuarial accrued liability for benefits was $1,531,845, and the actuarial value of assets was $967,991, resulting in an unfunded actuarial accrued liability (UAAL) of $563,854 and a funded ratio (actuarial value of assets as a percentage of the actuarial accrued liability) of 63.19%. The covered payroll (annual payroll of active employees covered by the plan) was $1,142,323 and the ratio of the UAAL to covered payroll was 49.36%.

ActuarialMethodsandAssumptions:

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about rates of employee turnover, retirement, mortality, as well as economic assumptions regarding claim costs per retiree, healthcare inflation and interest rates. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the basic financial statements, presents multi‐year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.

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13. OTHER POST‐EMPLOYMENT BENEFITS (OPEB) ASSET (CONTINUED):

ActuarialMethodsandAssumptions(Continued):

Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short‐term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long‐term perspective of the calculations. The following is a summary of the actuarial methods and assumptions used in the July 1, 2015 actuarial investment valuation:

Valuation Date July 1, 2015 Actuarial Cost Method Entry Age Normal Cost Method Amortization Method Level Percent of Payroll Amortization Period Closed 30 year amortization Remaining Amortization Period 22 years as of the valuation date Actuarial Assumptions: Investment Rate of Return 6.73% Projected Salary Increases 3.25% Healthcare Trend Rate Starting at 8.0% and decreasing to an ultimate rate of 5.0% in 12 years Inflation Rate 3.0%

14. RISK MANAGEMENT:

The Authority is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The Authority purchases commercial insurance policies from independent third parties. Settled claims have been immaterial and have not exceeded insurance coverage for the past three years. On February 22, 1986, the Authority became self‐insured with respect to its comprehensive liability coverage for toxic waste handling as allowed under California Government Code, Section 990. Coverage includes occurrences and incidents resulting in liability to the Authority, its Commissioners, officers, employees and agents. There are no outstanding claims pending.

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15. COMMITMENTS AND CONTINGENCIES: GrantAwards: Grant funds received by the Authority are subject to audit by the grantor agencies. Such audits could lead to requests for reimbursements to the grantor agencies for expenditures disallowed under terms of the grant. Management of the Authority believes that such disallowances, if any, would not be significant. Litigation: In the ordinary course of operations, the Authority is subject to claims and litigation from outside parties. After consultation with legal counsel, the Authority believes the ultimate outcome of such matters, if any, will not materially affect its financial condition. OtherCommitmentsandContingencies: The Authority is contractually obligated to pay a pro rata share of capital costs associated with the maintenance of the Santa Ana Regional Interceptor (SARI) Pipeline owned by OCSD. Within the SARI pipeline, the Authority’s portion is referred to as the Inland Empire Brine Line. The percentage varies with each Reach of the SARI. There is currently a significant portion of the SARI Pipeline being considered for protection and/or relocation. The Authority could potentially be responsible for 76 percent of the related costs. In addition, there is a capital project estimated at $3 million for which the Authority could potentially be responsible for 76 percent of the related costs.

16. SUBSEQUENT EVENTS:

Events occurring after June 30, 2017, have been evaluated for possible adjustments to the financial statements or disclosure as of October 23, 2017, which is the date these financial statements were available to be issued.

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REQUIREDSUPPLEMENTARYINFORMATION

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Fiscal year ended June 30, 2017 June 30, 2016 June 30, 2015

Measurement period June 30, 2016 June 30, 2015 June 30, 2014

Plan's proportion of the net pension liability 0.03588% 0.03274% 0.03487%

Plan's proportionate share of the net pension liability 3,104,742$ 2,247,501$ 2,169,716$

Plan'scovered‐employeepayroll 2,795,885$ 2,560,510$ 2,294,398$

Plan's proportionate share of the net pension liability asapercentageofcovered‐employeepayroll 111.05% 87.78% 94.57%

Plan's proportionate share of the fiduciary net position as 74.06% 78.40% 79.82%a percentage of the Plan's total pension liability

Plan's proportionate share of aggregate employer contributions 427,284$ 395,243$ 287,045$

Notes to Schedule:

Benefit Changes:There were no changes in benefits.

Changes in Assumptions:From fiscal year June 30, 2015 to June 30, 2016:

From fiscal year June 30, 2016 to June 30, 2017:There were no changes in assumptions.

*‐Fiscalyear2015wasthe1styearofimplementation,therefore only three years are shown.


SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY

Last Ten Fiscal Years*

Miscellaneous

GASB 68, paragraph 68 states that the long‐term expected rate of return should be determined net of pensionplan investment expense but without reduction for pension plan administrative expense. The discount rate of7.50% used for the June 30, 2014 measurement date was net of administrative expenses. The discount rate of7.65% used for the June 30, 2015 measurement date is without reduction of pension plan administrativeexpense.

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Fiscal year ended June 30, 2017 June 30, 2016 June 30, 2015

Contractually required contribution (actuarially determined) 388,896$ 339,020$ 273,547$

Contributions in relation to the actuarially determined contributio (388,896) (339,020) (273,547)

Contribution deficiency (excess) ‐$ ‐$ ‐$

Covered‐employeepayroll 3,098,371$ 2,795,885$ 2,560,510$

Contributionsasapercentageofcovered‐employeepayroll 12.55% 12.13% 10.68%

Notes to Schedule:

Valuation Date 6/30/2014

Methods and Assumptions Used to Determine Contribution Rates:Single and agent employers Entry age**Amortization method Level percentage of payroll, closed**Asset valuation method Market Value***Inflation 2.75%**Salary increases Depending on Age, Service, and type of employment**Investment rate of return 7.50%, net of pension plan investment expense, including inflation**Retirement ageMortality

*‐Fiscalyear2015wasthe1styearofimplementation,therefore only three years are shown.**‐ThevaluationforJune30,2012and2013(applicabletofiscal years ended June 30, 2015 and 2016, respectively)

included the same actuarial assumptions.***‐ThevaluationforJune30,2012(applicabletofiscalyear ended June 30, 2015) valued assets using a 15 Year

Smoothed Market method. The market value asset valuation method was utilized for the June 30, 2013 and 2014 valuations (applicable to fiscal years ended June 30, 2016 and 2017, respectively).


SCHEDULE OF CONTRIBUTIONS

Last Ten Fiscal Years*

Morality assumptions are based on mortality rates resulting from the mostrecent CalPERS Experience Study adopted by the CalPERS Board.**

50 for all plans with the exception of 52 for Miscellaneous PEPRA 2% @ 62**

Miscellaneous

72 112

UnfundedActuarial Actuarial UAAL as aAccrued Actuarial Value Accrued Funded % of

Actuarial Liability of Assets Liability Ratio Covered CoveredValuation (AAL) (AVA) (UAAL) AVA Payroll Payroll

Date (a) (b) (a)‐(b) (b)/(a) (c) [(a)‐(b)]/c]

07/01/2015 1,531,845$ 967,991$ 563,854$ 63.19% 1,142,323$ 49.36%07/01/2013 1,296,696 727,793 568,903 56.13% 1,194,801 47.61%07/01/2011 1,306,417 460,621 845,796 35.26% 1,177,709 71.82%



SCHEDULEOFFUNDINGPROGRESS‐OTHERPOST‐EMPLOYMENTBENEFITS

73 113


74 114

SUPPLEMENTARYINFORMATION

75 115

CapitalProjects Internal Enterprise

ASSETS: Activities Administration ActivitiesCURRENT ASSETS:

Cash and cash equivalents 1,714,671$ 3,198,805$ 25,289,339$ Cashandcashequivalents‐restricted 958,089 ‐ ‐ Investments ‐ ‐ 19,114,269 Interest receivable 7,663 8,831 152,081 Accounts receivable ‐ ‐ 1,896,375 Accountsreceivable‐membercontributions ‐ 49,739 ‐ Accountsreceivable‐grants 634,374 591,072 1,366,740 Accountsreceivable‐other 3,571,012 182 ‐ Notesreceivable‐currentportion ‐ ‐ 415,340 Prepaid expenses and other assets ‐ 100,931 202,325 Mitigation credits 1,910,560 ‐ ‐ Due from other funds ‐ 323,944 ‐

TOTAL CURRENT ASSETS 8,796,369 4,273,504 48,436,469

NONCURRENT ASSETS:Notes receivable ‐ ‐ ‐ Loan receivable ‐ ‐ 3,412,531 Otherpost‐employmentbenefit(OPEB)asset ‐ 505,074 ‐ Capital assets:

Not being depreciated 19,943,664 445,436 320,008 Being depreciated, net of accumulated depreciation and amortization ‐ 699,003 92,094,336

TOTAL NONCURRENT ASSETS 19,943,664 1,649,513 95,826,875

TOTAL ASSETS 28,740,033 5,923,017 144,263,344

DEFERRED OUTFLOWS OF RESOURCES:Deferred amounts from pension plans ‐ 1,017,473 ‐


Accounts payable 3,209,064 56,382 1,834,823 Accrued salaries and wages ‐ 127,124 ‐ Accrued interest payable 88,995 ‐ 280,256 Due to other funds 114,452 ‐ 209,492 Long‐termliabilities‐duewithinoneyear:

Compensated absences ‐ 178,288 ‐ Loans payable 100,374 ‐ 2,539,822

TOTAL CURRENT LIABILITIES 3,512,885 361,794 4,864,393

NONCURRENT LIABILITIES:Unearned revenue ‐ ‐ 72,719,287 Long‐termliabilities‐dueinmorethanoneyear:

Compensated absences ‐ 416,006 ‐ Loans payable 7,453,061 ‐ 16,849,862 Net pension liability ‐ 3,104,742 ‐

TOTAL NONCURRENT LIABILITIES 7,453,061 3,520,748 89,569,149

TOTAL LIABILITIES 10,965,946 3,882,542 94,433,542

DEFERRED INFLOWS OF RESOURCES:Deferred amounts from pension plans ‐ 273,599 ‐

NET POSITION:Net investment in capital assets 15,934,589 1,144,439 73,543,842 Restricted for:

SRF Reach IVA & IVB reserve requirement ‐ ‐ 1,050,000 Mitigation 2,871,155 ‐ ‐

Unrestricted (1,031,657) 1,639,910 (24,764,040)

TOTAL NET POSITION 17,774,087$ 2,784,349$ 49,829,802$


COMBINING SCHEDULE OF NET POSITIONENTERPRISE FUNDS

June 30, 2017(With comparative totals for June 30, 2016)

76 116

2017 2016

30,202,815$ 34,739,461$ 958,089 960,948

19,114,269 19,795,929 168,575 154,303

1,896,375 1,568,003 49,739 46,000

2,592,186 882,591 3,571,194 962,252

415,340 317,062 303,256 328,340

1,910,560 1,910,560 323,944 310,576

61,506,342 61,976,025

‐ 336,073 3,412,531 3,998,298

505,074 478,046

20,709,108 11,373,444 92,793,339 97,313,533

117,420,052 113,499,394

178,926,394 175,475,419

1,017,473 358,101

5,100,269 3,528,429 127,124 134,875 369,251 313,758 323,944 310,576

178,288 154,232 2,640,196 2,463,311 8,739,072 6,905,181

72,719,287 75,229,441

416,006 359,872 24,302,923 23,398,758

3,104,742 2,247,501 100,542,958 101,235,572

109,282,030 108,140,753

273,599 525,022

90,622,870 84,798,833

1,050,000 1,050,000 2,871,155 2,873,403

(24,155,787) (21,554,491)

70,388,238$ 67,167,745$

Totals

77 117

CapitalProjects Internal Enterprise

Activities Administration ActivitiesOPERATING REVENUES:

Wastewater treatment and disposal ‐$ ‐$ 11,273,024$ Wastewatertreatmentanddisposal‐capacityrights ‐ ‐ 2,519,533 Other 193,263 11,641 ‐

TOTAL OPERATING REVENUES 193,263 11,641 13,792,557

OPERATING EXPENSES:Wastewater treatment and disposal ‐ ‐ 6,421,150 General and administrative and overhead ‐ 591,686 ‐ Studies and planning costs 3,293,487 ‐ ‐

TOTAL OPERATING EXPENSES 3,293,487 591,686 6,421,150

OPERATING INCOME (LOSS) BEFOREDEPRECIATION AND AMORTIZATION (3,100,224) (580,045) 7,371,407

DEPRECIATION ‐ (66,636) (3,107,617) AMORTIZATION ‐ ‐ (1,400,914)

OPERATING INCOME (LOSS) (3,100,224) (646,681) 2,862,876

NONOPERATING REVENUES (EXPENSES):Member contributions 1,453,104 699,305 155,215 Intergovernmental 1,622,024 558,472 2,614,982 Investment earnings 27,223 28,844 137,090 Gain on sale of mitigation credits ‐ ‐ ‐ Interest expense ‐ ‐ (563,942) Grant program expenses ‐ ‐ (2,627,795)

TOTAL NONOPERATING REVENUES (EXPENSES) 3,102,351 1,286,621 (284,450)

INCOME BEFORE TRANSFERS 2,127 639,940 2,578,426

TRANSFERS 7,263,161 ‐ (7,263,161)

CHANGES IN NET POSITION 7,265,288 639,940 (4,684,735)

NETPOSITION‐BEGINNINGOFYEAR 10,508,799 2,144,409 54,514,537

NETPOSITION‐ENDOFYEAR 17,774,087$ 2,784,349$ 49,829,802$

For the fiscal year ended June 30, 2017(With comparative totals for the fiscal year ended June 30, 2016)


COMBINING SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITIONENTERPRISE FUNDS

78 118

2017 2016

11,273,024$ 9,323,505$ 2,519,533 2,519,748

204,904 205,774

13,997,461 12,049,027

6,421,150 6,434,652 591,686 270,613

3,293,487 1,485,977

10,306,323 8,191,242

3,691,138 3,857,785

(3,174,253) (3,170,554) (1,400,914) (1,400,918)

(884,029) (713,687)

2,307,624 1,730,491 4,795,478 2,765,270

193,157 567,709 ‐ 1,123

(563,942) (655,473) (2,627,795) (1,562,246)

4,104,522 2,846,874

3,220,493 2,133,187

‐ ‐

3,220,493 2,133,187

67,167,745 65,034,558

70,388,238$ 67,167,745$

Totals

79 119

ImportedBrine Line WaterProtection Basin Recharge

ASSETS: Project Planning WorkgroupCURRENT ASSETS:

Cash and cash equivalents ‐$ 78,099$ 11,652$ Cashandcashequivalents‐restricted ‐ ‐ ‐ Interest receivable ‐ 311 31 Accountsreceivable‐grants ‐ ‐ ‐ Accountsreceivable‐other ‐ ‐ ‐ Mitigation credits ‐ ‐ ‐

TOTAL CURRENT ASSETS ‐ 78,410 11,683

NONCURRENT ASSETS:Capital assets:

Not being depreciated ‐ ‐ ‐ TOTAL NONCURRENT ASSETS ‐ ‐ ‐

TOTAL ASSETS ‐ 78,410 11,683


Accounts payable 10,465 126 ‐ Accrued interest payable ‐ ‐ ‐ Due to other funds ‐ ‐ ‐ Long‐termliabilities‐duewithinoneyear:

Loans payable ‐ ‐ ‐ TOTAL CURRENT LIABILITIES 10,465 126 ‐

NONCURRENT LIABILITIES:Long‐termliabilities‐dueinmorethanoneyear:

Loans payable ‐ ‐ ‐ TOTAL NONCURRENT LIABILITIES ‐ ‐ ‐

TOTAL LIABILITIES 10,465 126 ‐

NET POSITION:Net investment in capital assets ‐ ‐ ‐ Restricted for mitigation ‐ ‐ ‐ Unrestricted (10,465) 78,284 11,683

TOTAL NET POSITION (10,465)$ 78,284$ 11,683$


COMBINING SCHEDULE OF NET POSITIONCAPITAL PROJECTS ACTIVITIES


80 120

Basin Santa Ana ArundoWatershed Monitoring River MSAR RWQ Management

Management Program Fish TMDL Monitoring & HabitatPlan Task Force Conservation Task Force Task Force Restoration

38,171$ 370,641$ 231,857$ 206,591$ 86,459$ ‐$ ‐ ‐ ‐ ‐ ‐ 958,089

233 1,386 513 606 310 2,506 ‐ ‐ ‐ ‐ 19,396 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,910,560

38,404 372,027 232,370 207,197 106,165 2,871,155

‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

38,404 372,027 232,370 207,197 106,165 2,871,155

3,405 104,342 9,614 9,653 67,375 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

‐ ‐ ‐ ‐ ‐ ‐ 3,405 104,342 9,614 9,653 67,375 ‐

‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

3,405 104,342 9,614 9,653 67,375 ‐

‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,871,155

34,999 267,685 222,756 197,544 38,790 ‐

34,999$ 267,685$ 222,756$ 197,544$ 38,790$ 2,871,155$

(Continued)

81 121

Water‐ Emerging LakeEnergy Constituents Elsinore

ASSETS: DAC Grant Task Force ManagementCURRENT ASSETS:

Cash and cash equivalents 604,757$ 86,444$ ‐$ Cashandcashequivalents‐restricted ‐ ‐ ‐ Interest receivable 1,529 238 ‐ Accountsreceivable‐grants 443,238 ‐ ‐ Accountsreceivable‐other ‐ ‐ 10,650 Mitigation credits ‐ ‐ ‐

TOTAL CURRENT ASSETS 1,049,524 86,682 10,650

NONCURRENT ASSETS:Capital assets:

Not being depreciated ‐ ‐ ‐ TOTAL NONCURRENT ASSETS ‐ ‐ ‐

TOTAL ASSETS 1,049,524 86,682 10,650


Accounts payable 348,617 171 10 Accrued interest payable ‐ ‐ 34 Due to other funds ‐ ‐ 9,244 Long‐termliabilities‐duewithinoneyear:

Loans payable ‐ ‐ ‐ TOTAL CURRENT LIABILITIES 348,617 171 9,288

NONCURRENT LIABILITIES:Long‐termliabilities‐dueinmorethanoneyear:

Loans payable ‐ ‐ ‐ TOTAL NONCURRENT LIABILITIES ‐ ‐ ‐

TOTAL LIABILITIES 348,617 171 9,288

NET POSITION:Net investment in capital assets ‐ ‐ ‐ Restricted for mitigation ‐ ‐ ‐ Unrestricted 700,907 86,511 1,362

TOTAL NET POSITION 700,907$ 86,511$ 1,362$

(With comparative totals for June 30, 2016)


COMBINING SCHEDULE OF NET POSITIONCAPITAL PROJECTS ACTIVITIES (CONTINUED)

June 30, 2017

82 122

Reach V Capital Prop 1

Projects DACI Grant 2017 2016

‐$ ‐$ 1,714,671$ 1,521,659$ ‐ ‐ 958,089 960,948 ‐ ‐ 7,663 5,137 ‐ 171,740 634,374 143,643

3,560,362 ‐ 3,571,012 961,709 ‐ ‐ 1,910,560 1,910,560

3,560,362 171,740 8,796,369 5,503,656

19,943,664 ‐ 19,943,664 10,608,000 19,943,664 ‐ 19,943,664 10,608,000

23,504,026 171,740 28,740,033 16,111,656

2,582,027 73,259 3,209,064 1,582,966 88,961 ‐ 88,995 30

‐ 105,208 114,452 10,786

100,374 ‐ 100,374 ‐ 2,771,362 178,467 3,512,885 1,593,782

7,453,061 ‐ 7,453,061 4,009,075 7,453,061 ‐ 7,453,061 4,009,075

10,224,423 178,467 10,965,946 5,602,857

15,934,589 ‐ 15,934,589 7,548,429 ‐ ‐ 2,871,155 2,873,403

(2,654,986) (6,727) (1,031,657) 86,967

13,279,603$ (6,727)$ 17,774,087$ 10,508,799$

Totals

83 123

ImportedBrine Line WaterProtection Basin Recharge

Project Planning WorkgroupOPERATING REVENUES:

Other ‐$ ‐$ ‐$

TOTAL OPERATING REVENUES ‐ ‐ ‐

OPERATING EXPENSES:Studies and planning costs 57,521 387,693 8,461

TOTAL OPERATING EXPENSES 57,521 387,693 8,461

OPERATING LOSS (57,521) (387,693) (8,461)

NONOPERATING REVENUES (EXPENSES):Member contributions ‐ 370,000 ‐ Intergovernmental ‐ ‐ ‐ Investment earnings ‐ 1,991 131 Gain on sale of mitigation credits ‐ ‐ ‐

TOTAL NONOPERATING REVENUES (EXPENSES) ‐ 371,991 131

INCOME (LOSS) BEFORE TRANSFERS (57,521) (15,702) (8,330)

TRANSFERS 47,056 ‐ ‐

CHANGES IN NET POSITION (10,465) (15,702) (8,330)

NETPOSITION‐BEGINNINGOFYEAR ‐ 93,986 20,013

NETPOSITION‐ENDOFYEAR (10,465)$ 78,284$ 11,683$


COMBINING SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITIONCAPITAL PROJECTS ACTIVITIES


84 124

Basin Santa Ana ArundoWatershed Monitoring River MSAR RWQ Management

Management Program Fish TMDL Monitoring & HabitatPlan Task Force Conservation Task Force Task Force Restoration

‐$ ‐$ ‐$ ‐$ ‐$ ‐$

‐ ‐ ‐ ‐ ‐ ‐

349,666 596,333 57,556 83,631 328,086 10,587

349,666 596,333 57,556 83,631 328,086 10,587

(349,666) (596,333) (57,556) (83,631) (328,086) (10,587)

300,000 80,720 25,000 ‐ 50,000 ‐ ‐ 314,953 71,708 255,113 19,396 ‐

1,721 5,699 1,646 2,309 1,235 8,339 ‐ ‐ ‐ ‐ ‐ ‐

301,721 401,372 98,354 257,422 70,631 8,339

(47,945) (194,961) 40,798 173,791 (257,455) (2,248)

‐ ‐ ‐ (289,175) 289,175 ‐

(47,945) (194,961) 40,798 (115,384) 31,720 (2,248)

82,944 462,646 181,958 312,928 7,070 2,873,403

34,999$ 267,685$ 222,756$ 197,544$ 38,790$ 2,871,155$

(Continued)

85 125

Water‐ Emerging LakeEnergy Constituents Elsinore

DAC Grant Task Force ManagementOPERATING REVENUES:

Other ‐$ ‐$ 193,263$

TOTAL OPERATING REVENUES ‐ ‐ 193,263

OPERATING EXPENSES:Studies and planning costs 984,126 48,097 203,263

TOTAL OPERATING EXPENSES 984,126 48,097 203,263

OPERATING LOSS (984,126) (48,097) (10,000)

NONOPERATING REVENUES (EXPENSES):Member contributions 612,000 5,384 10,000 Intergovernmental 759,502 29,612 ‐ Investment earnings 3,244 908 ‐ Gain on sale of mitigation credits ‐ ‐ ‐

TOTAL NONOPERATING REVENUES (EXPENSES) 1,374,746 35,904 10,000

INCOME (LOSS) BEFORE TRANSFERS 390,620 (12,193) ‐

TRANSFERS ‐ ‐ ‐

CHANGES IN NET POSITION 390,620 (12,193) ‐

NETPOSITION‐BEGINNINGOFYEAR 310,287 98,704 1,362

NETPOSITION‐ENDOFYEAR 700,907$ 86,511$ 1,362$


COMBINING SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITIONCAPITAL PROJECTS ACTIVITIES (CONTINUED)


86 126

Reach VCapital Prop 1

Projects DACI Grant 2017 2016

‐$ ‐$ 193,263$ 188,939$

‐ ‐ 193,263 188,939

‐ 178,467 3,293,487 1,485,977

‐ 178,467 3,293,487 1,485,977

‐ (178,467) (3,100,224) (1,297,038)

‐ ‐ 1,453,104 1,112,696 ‐ 171,740 1,622,024 867,363 ‐ ‐ 27,223 16,237 ‐ ‐ ‐ 1,123

‐ 171,740 3,102,351 1,997,419

‐ (6,727) 2,127 700,381

7,216,105 ‐ 7,263,161 2,435,235

7,216,105 (6,727) 7,265,288 3,135,616

6,063,498 ‐ 10,508,799 7,373,183

13,279,603$ (6,727)$ 17,774,087$ 10,508,799$

Totals

87 127

Prop84‐ Brine LineASSETS: Drought Enterprise

CURRENT ASSETS:Cash and cash equivalents ‐$ 25,289,339$ Investments ‐ 19,114,269 Interest receivable ‐ 152,081 Accounts receivable ‐ 1,896,375 Accountsreceivable‐grants 1,366,740 ‐ Notesreceivable‐currentportion ‐ 415,340 Prepaid expenses and other assets ‐ 202,325

TOTAL CURRENT ASSETS 1,366,740 47,069,729

NONCURRENT ASSETS:Notes receivable ‐ ‐ Loan receivable ‐ 3,412,531 Capital assets:

Not being depreciated ‐ 320,008 Being depreciated, net of accumulated

depreciation and amortization ‐ 92,094,336 TOTAL NONCURRENT ASSETS ‐ 95,826,875

TOTAL ASSETS 1,366,740 142,896,604


Accounts payable 1,014,881 819,942 Accrued interest payable ‐ 280,256 Due to other funds 209,492 ‐ Long‐termliabilities‐duewithinoneyear:

Loans payable ‐ 2,539,822 TOTAL CURRENT LIABILITIES 1,224,373 3,640,020

NONCURRENT LIABILITIES:Unearned revenue ‐ 72,719,287 Long‐termliabilities‐dueinmorethanoneyear:

Loans payable ‐ 16,849,862 TOTAL NONCURRENT LIABILITIES ‐ 89,569,149

TOTAL LIABILITIES 1,224,373 93,209,169

NET POSITION:Net investment in capital assets ‐ 73,543,842 Restricted for

SRF Reach IVA & IVB reserve requirement ‐ 1,050,000 Unrestricted 142,367 (24,906,407)

TOTAL NET POSITION 142,367$ 49,687,435$

(With comparative totals for June 30, 2016)


COMBINING SCHEDULE OF NET POSITIONENTERPRISE ACTIVITIES

June 30, 2017

88 128

2017 2016

25,289,339$ 30,224,016$ 19,114,269 19,795,929

152,081 143,086 1,896,375 1,568,003 1,366,740 615,286

415,340 317,062 202,325 205,509

48,436,469 52,868,891

‐ 336,073 3,412,531 3,998,298

320,008 320,008

92,094,336 96,562,272 95,826,875 101,216,651

144,263,344 154,085,542

1,834,823 1,875,052 280,256 313,728 209,492 299,790

2,539,822 2,463,311 4,864,393 4,951,881

72,719,287 75,229,441

16,849,862 19,389,683 89,569,149 94,619,124

94,433,542 99,571,005

73,543,842 76,053,707

1,050,000 1,050,000 (24,764,040) (22,589,170)

49,829,802$ 54,514,537$

Totals

89 129

Prop84‐ Brine LineDrought Enterprise

OPERATING REVENUES:Wastewater treatment and disposal ‐$ 11,273,024$ Wastewatertreatmentanddisposal‐capacityrights ‐ 2,519,533

TOTAL OPERATING REVENUES ‐ 13,792,557

OPERATING EXPENSES:Wastewater treatment and disposal ‐ 6,421,150

TOTAL OPERATING EXPENSES ‐ 6,421,150

OPERATING INCOME BEFOREDEPRECIATION AND AMORTIZATION ‐ 7,371,407

DEPRECIATION ‐ (3,107,617) AMORTIZATION ‐ (1,400,914)

OPERATING INCOME ‐ 2,862,876

NONOPERATING REVENUES (EXPENSES):Member contributions 155,215 ‐ Intergovernmental 2,614,915 67 Investment earnings ‐ 137,090 Interest expense ‐ (563,942) Grant program expenses (2,627,795) ‐

TOTAL NONOPERATINGREVENUES (EXPENSES) 142,335 (426,785)

INCOME BEFORE TRANSFERS 142,335 2,436,091

TRANSFERS ‐ (7,263,161)

CHANGES IN NET POSITION 142,335 (4,827,070)

NETPOSITION‐BEGINNINGOFYEAR 32 54,514,505

NETPOSITION‐ENDOFYEAR 142,367$ 49,687,435$



COMBINING SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITIONENTERPRISE ACTIVITIES

90 130

2017 2016

11,273,024$ 9,323,505$ 2,519,533 2,519,748

13,792,557 11,843,253

6,421,150 6,434,652

6,421,150 6,434,652

7,371,407 5,408,601

(3,107,617) (3,101,715) (1,400,914) (1,400,918)

2,862,876 905,968

155,215 ‐ 2,614,982 1,585,632

137,090 533,527 (563,942) (655,317)

(2,627,795) (1,562,246)

(284,450) (98,404)

2,578,426 807,564

(7,263,161) (2,435,235)

(4,684,735) (1,627,671)

54,514,537 56,142,208

49,829,802$ 54,514,537$

Totals

91 131

IntegratedRegional

ManagementProgram

Legal Prop 84Defense Capital

Fund Projects 2017 2016

CURRENT ASSETS:Cash and cash equivalents 447,960$ 27,013$ 474,973$ 445,611$ Accountsreceivable‐grants ‐ 3,670,901 3,670,901 2,090,631

TOTAL ASSETS 447,960$ 3,697,914$ 4,145,874$ 2,536,242$

CURRENT LIABILITIES:Accounts payable ‐$ 3,697,914 3,697,914$ 2,090,631$

TOTAL CURRENT LIABILITIES ‐ 3,697,914 3,697,914 2,090,631

NONCURRENT LIABILITIES:Deposits‐legaldefense 447,960 ‐ 447,960 445,611

TOTAL NONCURRENT LIABILITIES 447,960 ‐ 447,960 445,611

TOTAL LIABILITIES 447,960$ 3,697,914$ 4,145,874$ 2,536,242$

LIABILITIES

ASSETS


COMBINING SCHEDULE OF FIDUCIARY ASSETS AND LIABILITIESAGENCY FUNDS


Totals

92 132

Balance BalanceJuly 1, 2016 Additions Deletions June 30, 2017

CURRENT ASSETS:Cash and cash equivalents 445,611$ 2,349$ ‐$ 447,960$

NONCURRENT LIABILITIES:Deposits‐legaldefense 445,611$ 895,920$ 893,571$ 447,960$

CURRENT ASSETS:Cash and cash equivalents ‐$ 4,682,414$ 4,655,401$ 27,013$ Accountsreceivable‐grants 2,090,631 10,246,310 8,666,040 3,670,901

TOTAL ASSETS 2,090,631$ 14,928,724$ 13,321,441$ 3,697,914$

CURRENT LIABILITIES:Accounts payable 2,090,631$ 9,118,177$ 7,510,894$ 3,697,914$

CURRENT ASSETS:Cash and cash equivalents 445,611$ 4,684,763$ 4,655,401$ 474,973$ Accountsreceivable‐grants 2,090,631 10,246,310 8,666,040 3,670,901

TOTAL ASSETS 2,536,242$ 14,931,073$ 13,321,441$ 4,145,874$

CURRENT LIABILITIES:Accounts payable 2,090,631$ 9,118,177$ 7,510,894$ 3,697,914$

NONCURRENT LIABILITIES:Deposits‐legaldefense 445,611 895,920 893,571 447,960

TOTAL LIABILITIES 2,536,242$ 10,014,097$ 8,404,465$ 4,145,874$


COMBINING SCHEDULE OF CHANGES IN FIDUCIARY ASSETS AND LIABILITIESAGENCY FUNDS

For the fiscal year ended June 30, 2017

LEGALDEFENSEFUND

PROP84CAPITALPROJECTS

TOTALAGENCYFUNDS

INTEGRATEDREGIONALWATERMANAGEMENTPROGRAM‐

93 133


94 134

Statistical Section

135

Statistical Section

This part of the Authority’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the Authority’s overall financial health. Contents Financial Trends These schedules contain trend information to help the reader understand how the Authority’s financial performance and well-being have changed over time. Revenue Capacity These schedules contain information to help the reader assess the factors affecting the Authority’s ability to generate revenues. Debt Capacity These schedules present information to help the reader assess the affordability of the Authority’s current levels of outstanding debt and the Authority’s ability to issue additional debt in the future. Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the Authority’s financial activities take place and to help make comparisons over time and with other agencies. Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the Authority’s financial report relates to the service the Authority provides.

95 136

Table I – Net Position by Component Last Ten Fiscal Years

2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 Net Investment in Capital Assets $90,622,870 $84,798,833 $82,709,425 $80,456,568 $81,274,020 $80,560,654 $81,597,589 $81,698,370 $81,573,415 $81,560,047 Restricted 3,921,155 3,923,403 3,969,074 4,167,861 4,232,102 4,263,626 3,347,218 3,597,747 3,893,268 3,938,199 Unrestricted (24,155,787) (21,554,491) (21,643,941) (20,734,190) (17,845,678) (17,765,116) (19,325,941) (19,535,270) (22,350,886) (26,108,445)

Total Net Position $70,388,238 $67,167,745 $65,034,558 $63,890,239 $67,660,444 $67,059,164 $65,618,866 $65,760,847 $63,115,797 $59,389,801

Source: Santa Ana Watershed Project Authority

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Table II – Changes in Net Position Last Ten Fiscal Years Fiscal Year Operating Revenue (1) Operating Expense (2) Operating

Income/(Loss) Total NonOperating Revenue/ (Expense)

Income/(Loss) Before Capital Contributions Special Items (3) Change in Net

Position 2017 $13,997,461 $14,881,490 ($884,029) $4,104,522 $3,220,493 $0 $3,220,4932016 12,049,027 12,762,714 (713,687) 2,846,874 2,133,187 0 2,133,1872015 11,731,196 13,057,424 (1,326,228) 2,470,547 1,144,319 0 1,144,3192014 11,243,430 14,527,075 (3,283,645) 2,219,169 (1,064,476) (2,705,729) (3,770,205)2013 11,900,861 14,312,673 (2,411,812) 3,013,092 601,280 0 601,2802012 12,739,489 14,859,529 (2,120,040) 3,394,668 1,274,628 0 1,274,6282011 13,743,782 16,662,206 (2,918,424) 2,776,443 (141,981) 0 (141,981)2010 15,189,120 16,709,227 (1,520,107) 5,119,045 3,598,938 0 $3,598,9382009 12,420,640 15,011,847 (2,591,207) 6,317,202 3,725,995 0 3,725,9952008 11,914,294 16,381,550 (4,467,256) 8,719,824 4,252,568 0 4,252,568

(1) See Table III for details of revenues. (2) See Table IV for details of expenses. (3) Reduction of net position from implementation of GASB 68. Source: Santa Ana Watershed Project Authority

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Table III – Revenues by Source (Excluding Capital Contributions and Special Items) Last Ten Fiscal Years Operating Revenues NonOperating Revenues

Fiscal Year WWT & Disposal WWT & Disposal Capacity Rights Program Admin Other Operating Total Operating Revenue Member Contributions Inter

Government Investment Income Gain on Disposal of Asset Other Non Operating Income Total Non Operating Income Combined Revenue 2017 $11,273,024 $2,519,533 $0 $204,904 $13,997,461 $2,307,624 $4,795,478 $193,157 $0 $0 $7,296,259 $21,293,720 2016 9,323,505 2,519,748 0 205,774 12,049,027 1,730,491 2,765,270 567,709 1,123 0 5,064,593 17,113,620 2015 8,958,914 2,510,154 0 262,128 11,731,196 1,806,745 1,257,581 432,179 1,123 0 3,497,628 15,228,824 2014 8,575,085 2,510,154 0 158,191 11,243,430 1,771,587 843,283 457,867 13,021 0 3,085,758 14,329,188 2013 9,170,287 2,510,154 0 220,420 11,900,861 1,829,845 1,432,832 343,591 0 0 3,606,268 15,507,129 2012 10,053,123 2,481,109 0 205,257 12,739,489 1,697,194 2,563,956 1,058,984 2,223 0 5,322,357 18,061,846 2011 10,989,257 2,467,971 268,253 18,301 13,743,782 1,646,170 1,542,723 1,178,639 0 42,000 4,409,532 18,153,314 2010 12,391,354 2,458,418 256,486 82,862 15,189,120 1,499,558 2,514,206 2,007,183 1,616 0 6,022,563 21,211,683 2009 9,738,141 2,458,750 223,749 0 12,420,640 1,723,395 2,638,131 2,963,353 0 1,214 7,326,093 19,746,733 2008 9,247,855 2,438,152 227,787 500 11,914,294 2,065,577 3,031,370 4,683,608 54,612 63 9,835,230 21,749,524


98 139

Table IV – Expenses by Function Last Ten Fiscal Years Operating Expenses Fiscal

Year WWT & Disposal General & Admin Studies & Planning Costs Depreciation Amortization of WWT Rights Total Operating

Expenses Total Non Operating Expenses Combined

Expenses 2017 $6,421,150 $591,686 $3,293,487 $3,174,253 $1,400,914 $14,881,490 $3,191,737 $18,073,227 2016 6,434,652 270,613 1,485,977 3,170,554 1,400,918 12,762,714 2,217,719 14,980,433 2015 6,222,868 678,992 1,604,703 3,149,943 1,400,918 13,057,424 1,027,081 14,084,505 2014 6,864,435 487,308 2,636,556 3,137,858 1,400,918 14,527,075 866,589 15,393,664 2013 6,686,530 588,883 2,501,681 3,134,661 1,400,918 14,312,673 593,176 14,905,849 2012 7,356,155 1,125,143 2,244,658 2,732,655 1,400,918 14,859,529 1,927,689 16,787,218 2011 7,491,739 838,929 4,287,122 2,643,498 1,400,918 16,662,206 1,633,089 18,295,295 2010 9,803,154 850,538 1,998,300 2,656,317 1,400,918 16,709,227 903,518 17,612,745 2009 6,767,974 1,038,758 3,148,432 2,655,765 1,400,918 15,011,847 1,008,891 16,020,738 2008 6,886,304 741,243 4,729,137 2,656,488 1,368,378 16,381,550 1,115,406 17,496,956


99 140

Chart I - Combined Expenses and RevenuesLast Ten Fiscal Years


-

5

10

15

20

25

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Combined Expenses

Combined Revenues

InM

illio

ns

100 141

Table V - Wastewater Discharge by Type Last Ten Fiscal Years Discharge Type 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 Industrial * 182.3629 176.0173 149.1266 149.7733 153.7463 235.2575 233.8056 186.6322 176.3998 306.1084 Domestic * 605.6648 539.1186 686.9780 817.2502 854.2526 1,027.1307 1,015.4773 908.3414 852.0116 837.9343 Power Plant * 211.0939 203.7717 255.9079 238.1875 285.4555 362.7061 346.2390 285.0138 249.9794 130.0546 Water Supply/Desalter * 2,832,6086 2,789.4969 2,894.5452 2,698.2170 2,728.7335 2,657.6589 2,702.2033 2,877.3705 2,923.6592 2,508.3150 Temp/Emergency * 12.9104 4.7210 6.9285 10.6266 7.9366 5.0106 20.1418 18.1715 7.3531 0.0000 Truck Discharge * 29.9249 34.3066 27.2869 23.3557 30.6147 42.3407 43.2777 53.3668 62.5716 64.0861

Total 3,874.5655 3,747.4321 4,020.7731 3,937.4103 4,060.7392 4,330.1045 4,361.1447 4,328.8962 4,271.9747 3,846.4984 * MGD = million gallons per day Source: Santa Ana Watershed Project Authority

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Table VI - Summary of Wastewater Treatment Rates Last Ten Fiscal Years Fiscal Year Flow per

MGD* BOD

Charge (1,000

lbs) TSS

Charge (1,000 lbs)

Minimum Flow Charge

Monthly Fixed Pipeline Charge

Monthly Fixed Treatment

Charge Truck – Non-Brine (per gallon) Truck – Tier 1 (per

gallon) Truck – Tier 2 (per gallon) Truck – Tier 3 (per

gallon) Truck – Brine (per gallon)

2017 $858.00 $307.00 $429.00 $150.00 $5,639.00 $11,433.00 (a) $0.016 $0.033 (b) $0.011 2016 817.00 301.00 420.00 150.00 5,370.00 10,888.00 (a) 0.015 0.032 (c) 0.010 2015 777.00 295.00 411.00 150.00 5,114.00 10,369.00 (a) 0.015 0.031 (d) 0.010 2014 736.00 266.00 395.00 150.00 4,870.00 9,875.00 (a) 0.015 0.031 (e) 0.010 2013 794.00 253.00 376.00 150.00 4,083.00 8,749.00 (a) 0.015 0.030 (f) 0.010 2012 830.00 225.00 335.00 150.00 3,430.00 7,868.00 (a) 0.014 0.029 (g) 0.010 2011 891.00 312.00 462.00 150.00 2,710.00 6,775.00 (a) 0.015 0.032 (h) 0.010 2010 850.00 283.00 420.00 150.00 2,581.00 6,452.00 0.029 0.000 0.000 0.000 0.010 2009 792.00 257.00 381.00 150.00 2,417.00 6,044.00 0.028 0.000 0.000 0.000 0.007 2008 754.00 233.00 346.00 150.00 2,265.00 5,663.00 0.026 0.000 0.000 0.000 0.007 * MGD – million gallons per day

(a) Non-brine truck rate was divided into three tiers based on BOD and TSS Concentrations. Tier 1 = 100 to 999 mg/l, Tier 2 = 1,000 to 2,499 mg/l, and Tier 3 = 2,500 mg/l and higher. (b) FYE 2017 – Tier 3 dischargers will be charged based on actual concentrations of the waste discharge using the following components: $0.0027/gallon, $0.695/pound of BOD, and $0.662/pound of TSS. (c) FYE 2016 – Tier 3 dischargers will be charged based on actual concentrations of the waste discharged using the following components: $0.0026/gallon, $0.694/pound of BOD, and $0.661/pound of TSS. (d) FYE 2015 – Tier 3 dischargers will be charged based on actual concentrations of the waste discharged using the following components: $0.0026/gallon, $0.687/pound of BOD, and $0.652/pound of TSS. (e) FYE 2014 – Tier 3 dischargers will be charged based on actual concentrations of the waste discharged using the following components: $0.0026/gallon, $0.658/pound of BOD, and $0.636/pound of TSS. (f) FYE 2013 - Tier 3 dischargers will be charged based on the actual concentration of the waste discharged using the following components: $0.0026/gallon, $0.645/pound of BOD, and $0.617/pound of

TSS. (g) FYE 2012 - Tier 3 dischargers will be charged based on the actual concentration of the waste discharged using the following components: $0.0026/gallon, $0.617/pound of BOD, and $0.576/pound of

TSS. (h) FYE 2011 - Tier 3 dischargers will be charged based on the actual concentration of the waste discharged using the following components: $0.0025/gallon, $0.672/pound of BOD, and

$0.683/pound of TSS. Source: Santa Ana Watershed Project Authority

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Table VII - Principal Sewer Customers Current Fiscal Year and Nine Years Prior Fiscal Year 2016-17 Customer Name Discharge in

MG* Percentage of Total Discharge Chino Desalter I 634.4081 16.37% Temescal Desalter 572.7716 14.78% Chino Desalter II 449.6705 11.02% Arlington Desalter 394.0887 10.17% Perris Desalter 360.9813 9.32% Menifee Desalter 277.7634 7.17% JCSD – Etiwanda** 257.2223 6.64% Mountainview Power Plant 168.0345 4.34% Lewis Homes Development 166.9504 4.31% Yucaipa Valley Water District 130.6397 3.37 Total Principal Customers 3,412.5305 87.49% Other Customers 462.035 12.51%

Total Discharge 3,874.5655 100.00% Fiscal Year 2007-08 Customer Name Discharge in

MG* Percentage of Total Discharge Chino Desalter I 703.6847 18.29% Temescal Desalter 550.0433 14.30% Chino Desalter II 453.5709 11.79% Arlington Desalter 445.7001 11.59% California Rehabilitation Center 287.4208 7.47% JCSD – Etiwanda ** 284.7073 7.40% Menifee Desalter 197.8308 5.14% Golden Cheese 160.0247 4.16% Perris Desalter 156.2700 4.06% Chino Institute for Women 127.8794 3.32% Total Principal Customers 3,367.1320 87.52% Other Customers 479.3664 12.48%

Total Discharge 3,846.4984 100.00% * MG – million gallons ** Jurupa Community Services District (JCSD) connections. Source: Santa Ana Watershed Project Authority

103 144

Table VIII - Debt Coverage Ratio Last Ten Fiscal Years Fiscal Year Combined Expenses

Debt Service Requirements Debt to Expense Ratio SRF Loans * Member Loans ** Total Debt 2017 $18,073,226 $2,704,475 $356,250 $3,060,725 16.9% 2016 14,980,433 3,618,242 356,250 3,974,492 26.5% 2015 14,084,505 4,152,560 356,250 4,508,810 32.0% 2014 15,393,664 4,222,260 356,250 4,578,510 29.7% 2013 14,905,849 4,179,190 356,250 4,535,440 30.4% 2012 16,787,218 4,179,191 356,250 4,535,441 27.0% 2011 18,295,295 4,179,191 356,250 4,535,441 24.8% 2010 17,612,745 4,179,192 356,250 4,535,442 25.8% 2009 16,020,738 4,179,191 356,250 4,535,441 28.3% 2008 17,496,956 4,179,191 356,250 4,535,441 25.9% The Authority does not receive property tax. All revenues are collected through rates and fees or

agency contributions. The Authority does not have any outstanding Revenue Bonds. The only debt of the Authority is SRF and member agency loans. Treasury strips were purchased to fully cover all future debt service payments. The Treasury strips mature as debt service payments come due. No operating revenues are used to make debt service payments. Notes: * State Revolving Fund (SRF) Loans for construction of the Brine Line. ** Repurchase of Pipeline Capacity from Orange County Water District. Source: Santa Ana Watershed Project Authority

104 145

Table IX - Debt Service Payment Schedule Fiscal Years 2017 - 2048 Fiscal Year Interest Principal Total Payment New SRF Loan Remaining

Principal 2017 $615,366 $2,445,358 $3,060,725 0 $19,706,9422018 539,727 2,520,997 3,060,725 15,088,592 32,274,5372019 748,142 2,443,135 3,191,277 0 29,831,4022020 674,909 2,160,119 2,835,027 0 27,671,2832021 620,485 2,214,543 2,835,027 0 25,456,7402022 564,670 2,043,043 2,607,713 0 23,413,6972023 514,020 1,194,730 1,708,750 0 22,218,9672024 485,808 1,222,942 1,708,750 0 20,996,0262025 456,917 1,251,833 1,708,750 0 19,744,1932026 427,330 1,281,420 1,708,750 0 18,462,7742027 397,030 1,311,719 1,708,750 0 17,151,0542028 366,000 1,342,750 1,708,750 0 15,808,3042029 334,221 1,374,529 1,708,750 0 14,433,7762030 301,675 1,407,074 1,708,750 0 13,026,7012031 268,344 1,440,405 1,708,750 0 11,586,2962032 234,208 1,474,541 1,708,750 0 10,111,7552033 199,248 1,509,501 1,708,749 0 8,602,2542034 163,443 501,033 664,476 0 8,101,2202035 153,923 510,553 664,476 0 7,590,6672036 144,223 520,254 664,476 0 7,070,4132037 134,338 530,138 664,476 0 6,540,2752038 124,265 540,211 664,476 0 6,000,0642039 114,001 550,475 664,476 0 5,449,5892040 103,542 560,934 664,476 0 4,888,6552041 92,884 571,592 664,476 0 4,317,0632042 82,024 582,452 664,476 0 3,734,6112043 70,958 593,519 664,476 0 3,141,0922044 59,681 604,796 664,476 0 2,536,2972045 48,190 616,287 664,476 0 1,920,0102046 36,480 627,996 664,476 0 1,292,0142047 24,548 639,928 664,476 0 652,0872048 12,390 652,087 664,477 0 0

Source: Santa Ana Watershed Project Authority 105 146

Chart II - Debt Service Payment ScheduleFiscal Years 2017 - 2048

$0

$1

$2

$3

$4

$5

$6

2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 2045 2047

Mill

ions

PrincipalInterest


106 147

Chart III – Capital Spending Last Ten Fiscal Years

Chart IV – Total Debt to Assets Last Ten Fiscal Years


107 148

Table X - Demographic and Economic Statistics Last Ten Calendar Years Fiscal Year Population

County (3) Personal Income (1)

Per Capita Personal Income County

Unemployment Rate (June)4

County State 2017 2,384,783 $5,363,874,000 $35,058 (2) 5.7% 4.7% 2016 2,347,828 5,203,504,800 34,506 (5) 6.7 5.4 2015 2,308,441 5,122,926,900 34,359 (5) 6.6 6.3 2014 2,279,967 4,994,193,600 33,836 (5) 8.4 7.4 2013 2,255,059 4,868,571,400 33,278 (5) 9.2 8.5 2012 2,227,577 4,602,590,000 31,742 (5) 11.8 10.7 2011 2,217,778 4,294,524,500 29,927 (5) 13.3 11.8 2010 2,179,692 4,134,913,000 29,222 (5) 14.5 12.2 2009 2,107,653 4,164,720,000 29,748 (5) 13.7 11.6 2008 2,088,322 4,263,372,000 30,894 (5) 8.4 6.9

(1) Projected personal income based on Riverside County Per Capital Personal Income. (2) Projected based on a 10 year average. (3) Source: California, State Department of Finance. (4) Source: CA Employment Development Department and US Dept. of Labor. County data as of June 2017. (5) Source: County of Riverside Comprehensive Annual Financial Report. Table XI - Principal Employers Fiscal Year Ended June 30, 2017

Employer No. of Employees Percentage of Total Labor

Force County of Riverside 22,538 2.27% University of California, Riverside 8,686 0.87% March Air Reserve Base 8,500 0.86% Amazon 7,500 0.75% Kaiser Permanente Riverside Medical Center 5,739 0.58% Corona-Norco Unified School District 5,399 0.54% Riverside Unified School District 4,236 0.43% Pechanga Resort & Casino 4,000 0.40% Riverside University Health System 3,876 0.39% Eisenhower Medical Center 3,665 0.37% Hemet Unified School District 3,665 0.37%

Total 77,804 7.83% Sources: County of Riverside Economic Development Agency

108 149

Table XII - Number of Employees Last Ten Fiscal Years Department 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008

Executive Management 2 2 2 2 2 2 2 1 1 1 Administrative Services 5 5 5 5 5 5 5 4 4 5 Engineering & Operations 9 8 8 8 6 5 4 3 3 3 Finance/Accounting 3 3 3 3 3 3 3 3 3 3 Water Resources & Planning 4 4 3 3 3 3 3 3 3 3 Information Systems & Technology 3 3 3 3 3 3 3 3 3 3

Total 26 25 24 24 22 21 20 17 17 18 Notes: All managers are included with their divisions. Temporary and Interns are not included. Chart V – Total Employees Last Ten Fiscal Years


109 150

Table XIII - Operating and Capital Indicators Last Ten Fiscal Years 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 Total Meter Connections 51 48 48 50 50 50 45 46 42 36 Number of Air Release Valves 63 65 65 65 65 65 62 62 62 62 Miles of Sewer Lines 73 73 73 73 73 73 73 73 73 73 Total Flows for Fiscal Years

(MG) 3,874.5655 3,747.4321 4,020.7731 3,937.4103 4,060.7392 4,330.1045 4,361.1447 4,328.8962 4,271.9747 3,846.498 Owned Treatment Capacity (MGs) 17 17 17 17 17 17 17 17 17 17

Miscellaneous Statistics Year of Formation: 1972 Governing Body: 5-Member Board of Commissioners (1 from each Member Agency elected Board of Directors) Form of Government: Joint Powers Authority Staff: 26 full-time equivalent employees Authority: Section 6500 et. Seq. Government Code Service: Waste Disposal, Watershed Planning, Task Force Facilitation Service Area (square miles): 2,840 Total Population Served: Approximately 6 million Source: Santa Ana Watershed Project Authority

110 151


11615 Sterling Avenue ● Riverside ● California ● 92503www.sawpa.org ● (951) 354-4220 152



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Board of Commissioners Santa Ana Watershed Project Authority Riverside, California We have audited the financial statements of Santa Ana Watershed Project Authority (the Authority) for the year ended June 30, 2017. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and Government Auditing Standards as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our planning matters letter to you dated May 10, 2017. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the Authority are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during fiscal year 2016-2017. We noted no transactions entered into by the Authority during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the Authority’s financial statements were:

a. Management’s estimate of the fair value of investments is based on quoted prices in active market.

b. Management’s estimate to recognize revenue received in advance for wastewater treatment and disposal capacity rights as the services are provided.

c. Management’s estimate of the useful lives of capital assets for depreciation purposes is based on the length of time it is believed that those assets will provide some economic benefit in the future.

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Significant Audit Findings (Continued) Qualitative Aspects of Accounting Practices (Continued) Sensitive Estimates (Continued)

d. The annual required contribution, pension expense, net pension liability and corresponding deferred outflows of resources and deferred inflows of resources for the Authority’s public defined benefit plans with CalPERS are based on an actuarial valuation.

e. Management’s estimate of the Other Post-Employment Benefits Plan actuarial accrued liability, which impacts the annual required contributions, is based upon several key assumptions that are set by management with the assistance of an independent third party actuary. These key assumptions include anticipated investment rate of return, health care cost trends, projected salary increases, mortality and certain amortization periods.

We evaluated the key factors and assumptions used to develop these estimates in determining that they are reasonable in relation to the financial statements taken as a whole. Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the financial statements were reported in Note 5 regarding mitigation credits, Note 12 regarding the defined benefit pension plans, and Note 13 regarding Other Post-Employment Benefits. The financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. Also, the following material misstatement detected as a result of audit procedures was corrected by management: increasing construction in progress and accounts payable for the retention due on construction invoices. Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditors’ report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated October 23, 2017.

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Significant Audit Findings (Continued) Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the Authority’s financial statements or a determination of the type of auditors’ opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the Authority’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters We applied certain limited procedures to management’s discussion and analysis, the schedule of proportionate share of the net pension liability, the schedule of contributions - defined benefit pension plans, and the schedule of funding progress - other post-employment benefits, which are required supplementary information (RSI) that supplements the financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI. We were engaged to report on the combining schedules, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. We were not engaged to report on the introductory and statistical sections, which accompany the financial statements but are not RSI. We did not audit or perform other procedures on this other information and we do not express an opinion or provide any assurance on it.

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Restriction on Use This information is intended solely for the use of the Board of Commissioners and management of the Authority and is not intended to be, and should not be, used by anyone other than these specified parties. Irvine, California October 23, 2017

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INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER

FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Board of Commissioners Santa Ana Watershed Project Authority Riverside, California We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the Santa Ana Watershed Project Authority (the Authority) as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the Authority’s basic financial statements and have issued our report thereon dated October 23, 2017. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the Authority’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Authority’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Authority’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Authority’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit, we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

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Compliance and Other Matters As part of obtaining reasonable assurance about whether the Authority’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Authority’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Authority’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Irvine, California October 23, 2017

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COMMISSION MEMORANDUM NO. 2017.141 DATE: November 21, 2017 TO: SAWPA Commission SUBJECT: OWOW Plan Update 2018 Status PREPARED BY: Mike Antos, Senior Watershed Manager RECOMMENDATION

It is recommended that the Commission receive and file this staff report. DISCUSSION The OWOW Plan Update 2018 is being conducted by the OWOW Steering Committing through the Pillars, ten stakeholder workgroups chaired by volunteer stakeholders (among them the member agency GMs), facilitated by the SAWPA Planning Department. Each Pillar is working separately, together in small groups as-needed, and every-other month together at one Pillar Integration Meeting. During October many of the Pillars met to continue work on the OWOW Plan Update 2018 material, and a Pillar Integration meeting was held for further brainstorming about potential projects that are both high-priority in the watershed and likely eligible for the Prop 1 grant funding expected in 2018. In the multiple meetings now held, two items are being mentioned again and again. First, the crisis of homelessness in the counties and cities of the watershed is forward in many minds. Second, the multi-beneficial nature of sustainable sediment management efforts has been raised. There are of course other items gathered from these meetings, however, now across several conversations including different participants these two issues have been of interest. The Pillars effort is focused on submitting drafts of completed chapters by the end of the calendar year. Each is at various levels of completion on their data gathering and writing. Below are specific updates from the ten Pillars, in alphabetical order, as of November 13, 2017: Beneficial Use Assurance The Pillar Delegate, Greg Woodside conducted no meetings in October. It was indicated that the Workgroup plans to focus on efforts to update the chapter in November. Climate Change Response SAWPA staff are working with this Pillar workgroup and the Bureau of Reclamation to identify climate change response questions that USBR can answer given their expertise and data. This will update a product USBR provided to OWOW 2.0. Land Use and Water Planning The Pillar had its fifth meeting on October 25. The group decided to focus its chapter on several land use types: managed and non-managed habitat lands, agricultural lands, and urban areas. Several of the group members are providing management and policy strategies related to these specific land use types for the next meeting on December 13.

159

CM#2017.141 November 21, 2017 Page 2 Data Management & Monitoring The Pillar Delegate, Elizabeth Hurst conducted no meetings in October. Staff has not received any updated from the Pillar Delegate in the past couple of months. SAWPA staff will continue to reach out to the Pillar Delegate to get an update on the effort. A recent presentation by Greg Gearheart at the State Water Board reveals a similar planning effort underway at the state. SAWPA staff will work to engage with Greg’s staff. Disadvantaged Communities and Tribal Communities This pillar met on 10/23 to review the ongoing writing by all workgroup members. To date about six members have contributed writing of the Disadvantaged Communities chapter. The team working on the Tribal Communities chapter is taking its draft ideas to a Tribal Engagement workshop at SAWPA on November 29. Invitations to the event were distributed early in November. Integrated Stormwater Management This pillar did not meet since the previous update. The pillar is revising the new chapter outline with plans to develop its broad recommended project and policy strategies before writing its supporting material. Natural Resources Stewardship The Pillar had a meeting on October 25. The group discussed the issue of managing recreation in areas that are set aside for habitat conservation, changing local policies that are limiting the use of herbicide, the issue of managing isolated patches of conservation areas, and new invasive species to the watershed. The Pillar Chair, Jeff Beehler of the San Bernardino Valley Water Conservation District, is currently working with staff to reorganize the Pillar chapter to follow the template outline provided by SAWPA. Water Recycling The Pillar Delegate, Kelley Gage conducted no meetings in October. Kelley is continuing to collect the individual recycled water/sewer agency data. To assist in the collection of this data SAWPA will share recycled water agency data collected through the basin monitoring task Force effort. The plan is to schedule a Recycled Water Pillar meeting once that data collection is complete. Water Resource Optimization The Pillar last met in September, but the group members are working toward updating their assigned sections of the chapter. The group is looking at meeting the week of December 11. Water Use Efficiency The Pillar had its second meeting on October 10. Several of the group members have provided chapter edits. The Team had discussions on how to move forward with the chapter update in the case that the State Legislature does not pass legislation enacted Governor Brown’s Long Term Water Conservation Executive Order (B-37-16). The group decided to keep the discussion on long term conservation broad enough, but still focused on the recent emphasis of water conservation and data management. CRITICAL SUCCESS FACTORS

1. Continued support from SAWPA commission of OWOW Steering Committee’s decision making authority as a means of ensuring trust, transparency, and external communications.

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2. Active participation of a diverse group of stakeholders representing counties, cities, and water districts, as well as the private sector and the regulatory, environmental, and environmental justice communities who integrate the different interests in the watershed beyond political boundaries. Ensuring all perspectives are heard and valued.

RESOURCE IMPACTS The OWOW Plan Update 2018 is supported by Fund 373, and a Department of Water Resources IRWM Planning Grant. ATTACHMENT

1. OWOW Goals & Objectives v4

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162

The One Water One Watershed Plan Update 2018 describes how collaborative watershed planning, water and land management, and project implementation supports improved sustainability, resilience, and economic prosperity throughout the Santa Ana River Watershed through 2040.

The six goals1of the OWOW Plan Update 2018 are to…

Achieve resilient water resources through innovation and optimization.

Objectives: • Increase the reuse of water • Innovate to increase water-use efficiency and conservation • Manage precipitation as a valuable watershed resource • Reduce carbon emissions from water resources management • Safely strengthen links between flood protection and water conservation • Sustainably manage groundwater basins

Educate and build trust between people and organizations.

Objectives: • Adopt policies strengthening transparency in water management decision-making • Collaborate with educators to broaden youth knowledge about water • Develop strong ongoing consultation and partnership with Native American tribes • Ensure conservation is a way of life in the Santa Ana River Watershed • Innovate communication strategies for diverse communities • Maintain and grow watershed and sub-watershed collaborative water management

efforts

Engage with members of disadvantaged communities to diminish environmental injustices.

Objectives: • Adopt best-practices for environmental justice action throughout water management • Analyze and confront unequal community vulnerabilities to climate impacts • Ensure community voices help identify strengths and needs • Strive to include community cultural values in watershed management decision-making • Support broad-based collaboratives alleviating homelessness

1 The goals, and each goal’s objectives, are listed alphabetically because OWOW Plan Update 2018 considers each

to be without specific prioritization.

Comment [MAA1]: Requested by Steering Committee member to be added.

Comment [MAA2]: Softened from “Diminish”

Comment [MAA3]: Softened from “eliminate”

Comment [MAA4]: One objective deleted for clarity “Develop regional consensus for compassionate community identification”

Comment [MAA5]: Added

Comment [MAA6]: Strengthened from “Support community voices to…”

Comment [MAA7]: Softened from “Ensure community cultural values influence…”

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K:\Governance\Commission\Commission Memos\INBOX for Com Memos\Temporary Folder - Nov 21 2017\5.B.1 CM 2017.141 OWOW Update 2018 Status Rpt - Attach 1.docx Last saved: 11/15/2017 2:48 PM

Ensure high quality water for all people and the environment.

Objectives:

• Achieve and maintain salt balance in the watershed • Ensure every human being in the watershed has safe, clean, affordable, and accessible

water adequate for human consumption, cooking, and sanitary purposes • Protect and improve source water quality • Protect beneficial uses and attain water quality standards in freshwater and marine

environments • Reduce water systems vulnerability to climate impacts • Support alignment of regulatory action with watershed goals

Improve data integration, tracking and reporting to strengthen decision-making.

Objectives: • Apply new technologies to maintain and enhance transparency and efficiency • Collaborate to produce regular publicly-accessible watershed health reports • Develop standard data formats and data fields for comparative analyses • Increase appropriate access to data for decision-makers, managers, and the public • Reduce redundancy in data collection in overlapping programs • Streamline regulatory reporting requirements

Preserve and enhance recreational landscapes, open space, habitat, and natural hydrologic function.

Objectives: • Conduct regional effort to remove and manage invasive species • Include ecosystem function in new development planning and construction • Preserve and restore beneficial hydrologic function of streams, arroyos, water bodies,

and the coastal zone • Protect and restore wildlife corridors and habitat connectivity • Protect endangered and threatened species, and species of special concern • Support healthy watershed policies with local land use authority

Comment [MAA8]: Added

164

COMMISSION MEMORANDUM NO. 2017.138 DATE: November 21, 2017 TO: SAWPA Commission SUBJECT: Inter-Fund Borrowing – September 2017 PREPARED BY: Karen Williams, Chief Financial Officer RECOMMENDATION It is recommended that the Commission receive and file the informational report on short-term, cash-flow inter-fund borrowing. DISCUSSION On December 13, 2005, the Commission approved Resolution No. 452, Inter-Fund and Inter-Project Loan Policy. Staff was directed to bring back an accounting of the loans each month for review when the total exceeded $250,000 in aggregate. The following projects, with negative cash flow, are listed below with the amounts borrowed from SAWPA General Fund Reserves in September 2017. The total amount borrowed is over the aggregate $250,000 amount recommended in Resolution No. 452, Inter-Fund and Inter-Project Loan Policy. The Commission has requested that this item be brought back each month as an informational item when the loan amount is over the $250,000 aggregate amount.

Fund Fund Name 08/31/17 Balance

Loan Receipts

New Charges

09/30/17 Balance

130 Proposition 84 Admin $87,707.69 ($49,915.20) $16,929.65 $54,722.14 135 Proposition 84 Admin R2 75,531.42 (33,612.58) 3,946.02 45,864.86 140 Proposition 84 Admin R3 41,955.81 (31,048.49) 22,379.82 33,287.14 145 Proposition 84 Admin R4 371,290.33 (298,746.57) 14,502.90 87,046.66 398 Proposition 1 – DACI Grant 127,844.37 (0.00) 17,747.72 145,592.09 477 LESJWA Administration 23,398.27 (10,522.88) (294.75) 12,580.64 504 Prop 84 – Round I, II Capital 0.00 (18,298.02) 0.00 (18,298.02) 504 Prop 84 - Drought Projects 61,805.66 (36,685.66) 63,884.88 89,004.88 504 Prop 84 – SARCCUP Projects 245,793.82 (245,793.82) 0.00 0.00

Total Funds Borrowed $1,035,327.37 ($724,623.22) $139,096.24 $449,800.39 General Fund Reserves Balance $3,457,620.79 Less Amount Borrowed 449,800.39 Balance of General Fund Reserves $3,007,820.40 The following table lists each fund that has a negative cash flow, the source of funding for the fund, how often the fund is billed, and the projected rate of payment for the fund.

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CM#2017.138 November 21, 2017 Page 2

NEGATIVE CASH-FLOW FUNDS

Fund No. Source of Funding Billing Frequency

Projected Payment Time

130,135,140, 145 – Proposition 84 Admin DWR – Prop 84 Grant Monthly/Quarterly Up to 4 months 398 – Proposition 1 – DACI Grant DWR – Prop 1 Grant Monthly Up to 4 months

477 – LESJWA Admin Reimbursement from LESJWA Monthly 2 to 4 weeks 504 - Proposition 84 Drought Projects DWR – Prop 84 Grant Monthly Up to 4 months

504 – Proposition 84 SARCCUP Projects DWR – Prop 84 Grant Monthly/Quarterly Up to 4 month

Fund 130 The outstanding balance of the funds due from DWR is the mandatory 10% retention from each invoice billed. Retention funds will not be released until the Proposition 84 Round I contract is completed in 2018. Fund 135 This fund is for the administration of Proposition 84 Round II grant funds. These funds will be billed quarterly and 10% will be withheld for retention. Fund 140 This fund is for the administration of Proposition 84 Drought Round grant funds. These funds will be billed monthly and 10% will be withheld for retention. Fund 145 This fund is for the administration of Proposition 84 Round 2015 grant funds. These funds will be billed quarterly and 10% will be withheld for retention. Fund 398 This fund is for the Proposition 1 DACI grant project. These funds will be billed monthly once the contracts with DWR have been signed. Fund 477 Each month LESJWA is billed the cost for administering the JPA. Once the bill is received, LESJWA submits payment within two weeks. Fund 504 This fund is for the implementation of drought related projects and SARCCUP projects which are administered through PA-22 and PA23. The following graph shows projected inter-fund loan balances, total unrestricted General Fund Reserves available for loans, and projected cash net of loans through June 2018. The projected loan balance is expected to remain over the $250,000 aggregate limit through June 2018 because of Proposition 1 and 84 grants, but can be covered by General Fund Reserves without a major impact on cash flow.

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RESOURCE IMPACTS The funds borrowed from the General Fund Reserves will be paid back with interest when the funding is received. Interfund loans for grants are not charged interest unless the grant contracts specifically states interest is eligible for reimbursement. There is sufficient cash available to cover proposed borrowings and to pay budgeted expenditures for the General Fund.

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000Ju

l-17

Aug-

17

Sep-

17

Oct

-17

Nov

-17

Dec-

17

Jan-

18

Feb-

18

Mar

-18

Apr-

18

May

-18

Jun-

18

Thou

sand

s

Projected General Cash / Reserves Fund Balance

Unrestricted Reserve Funds Interfund Loans

$250,000 Projected Cash Net of Loans

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168

COMMISSION MEMORANDUM NO. 2017.139 DATE: November 21, 2017 TO: SAWPA Commission SUBJECT: Performance Indicators and Financial Reporting – September 2017 PREPARED BY: Karen Williams, Chief Financial Officer RECOMMENDATION It is recommended that the Commission receive and file staff’s report. DISCUSSION The attached reports have been developed to keep the Commission informed as to SAWPA’s business and budget performance. These reports are categorized into the following groups: financial reporting, cash and investments, and performance indicators. They are explained in detail below. As new reports are developed, they will be added for the Commission’s review. Financial Reporting

Balance Sheet by Fund Type Lists total assets, liabilities, and equity by fund type for a given period.

Revenue & Expense by Fund Type Lists total revenue and expenses by fund type for a given period.

Receivables Management Shows total outstanding accounts receivable by age.

Open Task Order Schedule Shows SAWPA’s total outstanding obligation for open task orders.

List of SAWPA Funds Shows each SAWPA Fund with the fund description and fund group.

Debt Service Funding Analysis Shows total annual income by source used to make debt service payments through debt maturity at FYE 2048.

Debt Service Payment Schedule Shows total debt service interest and principal payments through debt maturity at FYE 2048.

Cash and Investments

Total Cash and Investments (chart) Shows the changes in cash and investments balance for the last twelve months.

Cash Balance & Source of Funds Shows total cash and investments for all SAWPA funds and the types of investments held for each fund.

Cash & Investments (pie chart) Shows total cash and investments for all SAWPA funds and the percentage of each investment type.

Reserve Account Analysis Shows changes to each reserve account for the year and projected ending balance for each.

Twelve Month Security Schedule (chart)

Shows the maturity dates for securities held and percentage of securities in each category.

Treasurer’s Report Shows book and market value for both Treasury strips and securities held by the Agency.

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CM#2017.139 November 21, 2017 Page 2 Performance Indicators

Average Daily Flow by Month Shows total flow in the Brine Line System by month compared to total treatment capacity owned. This is an indicator of the available capacity in the line. As we add yearly flows, it will show trends in flow throughout the year.

Summary of Labor Multipliers Summarizes the information generated from the following two reports and compares the actual benefit and Indirect Cost Allocation rates to the total budgeted rates.

General Fund Costs Lists total Fund No. 100 costs to date and the amount of those costs recovered through the Indirect Cost Allocation and member contributions.

Benefit Summary Lists total employee benefit costs actual to budget and projects them through the end of the year. This report compares how the actual benefit rate compares to the budgeted rate.

Labor Hours Budget vs. Actual Shows total budgeted hours for each project and compares them to the actual hours charged to each.

RESOURCE IMPACTS Staff expects minimal impacts to SAWPA or its member agencies related to this effort. Attachments: 1. Balance Sheet by Fund Type 10. Reserve Account Analysis 2. Revenue & Expense by Fund Type 11. Twelve-Month Maturity Schedule - Securities 3. Accounts Receivable Aging Report 12. Treasurer’s Report 4. Open Task Order Schedule 13. Average Daily Flow by Month 5. List of SAWPA Funds 14. Summary of Labor Multipliers 6. Debt Service Funding Analysis 15. General Fund Costs 7. Debt Service Payment Schedule 16. Benefits 8. Total Cash and Investments (chart) 17. Labor Hours Budgeted vs. Actual 9. Cash Balance & Source of Funds

170

GeneralFund

Brine LineEnterprise

CapitalProjects

OWOWProjects

RoundtableProjects

FundTotals

Assets

Current AssetsCash and Investments $4,318,255.76 $46,151,497.60 ($2,382,129.80) $414,111.56 $1,941,391.47 $50,443,126.59Accounts Receivable 304,833.11 2,074,167.43 10,763.34 6,252,878.95 550,532.83 9,193,175.66Installment Notes Receivable 0.00 3,496,542.28 0.00 0.00 0.00 3,496,542.28Interest Receivable 0.00 68,771.49 0.00 0.00 0.00 68,771.49Prepaids and Deposits 542,525.75 149,914.82 0.00 0.00 0.00 692,440.57

Total Current Assets 5,165,614.62 51,940,893.62 (2,371,366.46) 6,666,990.51 2,491,924.30 63,894,056.59

Fixed AssetsProperty, Plant & Equipment

less accum depreciation 1,133,679.11 62,961,815.97 0.00 0.00 0.00 64,095,495.08Work In Process 0.00 0.00 24,104,550.05 0.00 0.00 24,104,550.05

Total fixed assets 1,133,679.11 62,961,815.97 24,104,550.05 0.00 0.00 88,200,045.13

Other AssetsWastewater treatment/disposal

rights, net of amortization 0.00 28,701,347.34 0.00 0.00 0.00 28,701,347.34Inventory - Mitigation Credits 0.00 0.00 0.00 0.00 1,910,560.00 1,910,560.00

Total Other Assets 0.00 28,701,347.34 0.00 0.00 1,910,560.00 30,611,907.34

Total Assets $6,299,293.73 $143,604,056.93 $21,733,183.59 $6,666,990.51 $4,402,484.30 $182,706,009.06Liabilities and Fund EquityCurrent Liabilities

Accounts Payable/Accrued Expenses $738,255.62 $1,475,598.67 $4,486,613.37 $4,899,885.58 $200,433.43 $11,800,786.67Accrued Interest Payable 0.00 280,256.23 88,960.82 0.00 0.00 369,217.05

Noncurrent LiabilitiesLong-term Debt 3,104,742.00 19,187,048.95 3,993,073.00 0.00 0.00 26,284,863.95Deferred Revenue 0.00 72,719,287.50 0.00 0.00 0.00 72,719,287.50Total Liabilities 3,842,997.62 93,662,191.35 8,568,647.19 4,899,885.58 200,433.43 111,174,155.17

Fund EquityContributed Capital 0.00 20,920,507.03 0.00 0.00 0.00 20,920,507.03Retained Earnings 2,752,388.00 28,766,923.00 13,269,138.70 949,951.40 3,697,486.05 49,435,887.15Revenue Over/Under Expenditures (296,091.89) 254,435.55 (104,602.30) 817,153.53 504,564.82 1,175,459.71

Total Fund Equity 2,456,296.11 49,941,865.58 13,164,536.40 1,767,104.93 4,202,050.87 71,531,853.89

Total Liabilities & Fund Equity $6,299,293.73 $143,604,056.93 $21,733,183.59 $6,666,990.51 $4,402,484.30 $182,706,009.06

Santa Ana Watershed Project AuthorityBalance Sheet by Fund Type

For the Two Months Ending Thursday, August 31, 2017

171

GeneralFund

Brine LineEnterprise

CapitalProjects

OWOWProjects

RoundtableProjects

FundTotals

Operating RevenueDischarge Fees $0.00 $2,072,839.88 $0.00 $0.00 $0.00 $2,072,839.88Grant Proceeds 0.00 0.00 0.00 166,117.59 0.00 166,117.59Financing Proceeds 0.00 0.00 0.00 0.00 30,715.69 30,715.69

Total Operating Revenue 0.00 2,072,839.88 0.00 166,117.59 30,715.69 2,269,673.16

Operating ExpensesLabor 300,789.36 155,844.74 120.41 91,269.73 26,361.54 574,385.78Benefits 101,037.13 68,104.15 52.62 39,884.88 11,519.97 220,598.75Indirect Costs 0.00 219,896.91 169.89 128,781.59 37,196.13 386,044.52Education & Training 1,499.58 0.00 0.00 125.00 0.00 1,624.58Consulting & Professional Services 66,227.92 5,735.15 115,022.72 258,522.19 206,075.23 651,583.21Operating Costs 1,003.49 539,224.17 0.00 0.00 0.00 540,227.66Repair & Maintenance 11,147.83 31,073.03 0.00 0.00 0.00 42,220.86Phone & Utilities 11,888.86 1,139.64 0.00 0.00 0.00 13,028.50Equipment & Computers 25,450.00 31,842.62 0.00 149.32 0.00 57,441.94Meeting & Travel 5,513.10 109.48 0.00 2,686.98 0.00 8,309.56Other Administrative Costs 10,394.25 2,409.55 0.00 5,770.00 10,000.00 28,573.80Benefits Applied 67,841.28 0.00 0.00 0.00 0.00 67,841.28Indirect Costs Applied (434,847.37) 0.00 0.00 0.00 0.00 (434,847.37)Other Expenses 5,612.61 22,802.14 0.00 0.00 0.00 28,414.75Construction 0.00 0.00 0.00 (62,225.63) 0.00 (62,225.63)

Total Operating Expenses 173,558.04 1,078,181.58 115,365.64 464,964.06 291,152.87 2,123,222.19

Operating Income (Loss) (173,558.04) 994,658.30 (115,365.64) (298,846.47) (260,437.18) 146,450.97

Nonoperating Income (Expense)Member Contributions 646,115.00 0.00 0.00 776,000.00 20,000.00 1,442,115.00Other Agency Contributions 0.00 0.00 0.00 340,000.00 745,002.00 1,085,002.00Interest Income 0.00 36,889.84 0.00 0.00 0.00 36,889.84Interest Expense - Debt Service 0.00 373.97 0.00 0.00 0.00 373.97Other Income 518.46 (24,921.92) 10,763.34 0.00 0.00 (13,640.12)Use of Reserves (13,147.47) 0.00 0.00 0.00 0.00 (13,147.47)

Total Nonoperating Income (Expense) 633,485.99 12,341.89 10,763.34 1,116,000.00 765,002.00 2,537,593.22

Excess Rev over (under) Exp $459,927.95 $1,007,000.19 ($104,602.30) $817,153.53 $504,564.82 $2,684,044.19

Santa Ana Watershed Project AuthorityRevenue & Expenses by Fund Type

For the Two Months Ending Thursday, August 31, 2017

172

Aging ReportSanta Ana Watershed Project AuthorityReceivables as of September 30, 2017

Customer Name Project Total Current 0-30 Days 31-60 Days 61 and Over

Beaumont, City of Basin Monitoring TF 14,019.00 14,019.00 Chino Basin Desalter Authority Brine Line 368,196.81 182,289.40 185,907.41 Chino Basin Watermaster Basin Monitoring TF, MSAR TMDL 23,407.00 23,407.00 Claremont, City of MSAR TMDL 11,153.00 11,153.00 Department of Water Resources Prop 84, WECAN 1,979,051.35 305,033.20 1,674,018.15 Eastern Municipal Water District Brine Line, MA Contributions, Emerging Constituents 361,498.30 165,944.70 192,476.60 3,077.00 Eastvale, City of MSAR TMDL 11,153.00 11,153.00 Elsinore Valley Municipal Water District Basin Monitoring TF, Emerging Constituents 17,096.00 17,096.00 Inland Empire Utilities Agency Brine Line, MA Contributions, Basin Monitoring TF 285,175.15 133,087.00 149,011.15 3,077.00 Jurupa Community Services District Basin Monitoring TF 14,019.00 14,019.00 Jurupa Valley, City of MSAR TMDL 11,153.00 11,153.00 Lake Elsinore & San Jacinto Watersheds Authority LESJWA Administration 13,942.58 13,942.58 Orange County Water District Member Agency Contributions, SA Fish Conservation 61,000.00 61,000.00 Redlands, City of Basin Monitoring TF 12,254.00 12,254.00 Rialto, City of Basin Monitoring TF, Emerging Constituents 17,096.00 17,096.00 Riverside County Flood Control District MSAR TMDL, Basin Monitoring TF 11,153.00 11,153.00 Riverside, City of (Public Utilities) Basin Monitoring TF 7,009.50 7,009.50 Riverside, City of (Wastewater Treatment) Emerging Constituents 3,077.00 3,077.00 RIX Treatment Basin Monitoring TF 14,019.00 14,019.00 San Bernardino Valley Municipal Water District Brine Line, Basin Monitoring TF, MA Contributions 188,042.24 91,271.60 96,770.64 Temescal Valley Water District Basin Monitoring TF, Emerging Constituents 14,464.00 14,464.00 Western Riverside County Regional Wastewater Authority Basin Monitoring TF 14,019.00 14,019.00 Western Municipal Water District Brine Line, MA Contributions. SARCCUP Cost Share 948,945.42 507,091.05 441,854.37 Yucaipa Valley Water District Basin Monitoring TF 14,019.00 14,019.00

Total Accounts Receivable 4,414,962.35 - 1,093,626.33 1,371,053.37 1,950,282.65

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Task Order No. Fund No. Vendor Name Task Description Begin Date End Date Original Change Total Billed Contract SAWPA CommentsProject Contracts Contract Orders Contract To Date Balance ManagerACS100-09 100-00 Accent Computer Solutions IT Support 04/11/2017 03/30/2018 42,000.00$ -$ 42,000.00$ 29,214.25$ 12,785.75$ Dean Unger

ACS100-10 100-00 Accent Computer Solutions Office 365 Migration 05/01/2017 06/30/2018 17,500.00$ -$ 17,500.00$ 11,848.00$ 5,652.00$ Dean Unger

BMA100-01 100-00 Bob Murray & Associates GM Recruitment 05/02/2017 12/31/2017 24,900.00$ -$ 24,900.00$ 23,899.69$ 1,000.31$ Kelly Berry

INSOL100-10 100-00 Integrated Systems Solutions GP Software Annual Technical Support 07/01/2017 06/30/2018 4,000.00$ -$ 4,000.00$ 808.50$ 3,191.50$ Dean Unger

NICO100-05 100-00 Nicolay Consulting Group GASB 45/75 Transisiton Plan 08/22/2017 06/30/2019 7,200.00$ -$ 7,200.00$ -$ 7,200.00$ Karen Williams

WNDE100-05 100-00 White Nelson Diehl Evans LLC FYE 2017 Audit 05/08/2017 06/30/2018 26,370.00$ -$ 26,370.00$ 22,350.00$ 4,020.00$ Karen Williams

WCA100-03-02 100-03 West Coast Advisors State Legislative Consulting FY16-18 11/24/2015 12/31/2018 345,000.00$ -$ 345,000.00$ 218,000.00$ 127,000.00$ Rich Haller

DOUG240-02 240 Douglas Environmental Brine Line Meter Calibration 07/01/2017 06/30/2018 4,970.00$ 9,855.00$ 14,825.00$ 260.00$ 14,565.00$ Carlos Quintero On Call

WO2018-05 240 E S Babcock Brine Line Sample Collection & Analysis 07/01/2017 06/30/2018 87,578.00$ -$ 87,578.00$ 13,416.00$ 74,162.00$ Carols Quintero

HAZ240-08 240 Haz Mat Trans Inc Brine Line Facility Repair & Maintenance 07/01/2017 06/30/2018 35,000.00$ -$ 35,000.00$ 1,965.00$ 33,035.00$ Carlos Quintero On Call

HAZ240-07 240 Haz Mat Trans Inc On Call Draining & Emergency Clean Up 06/29/2015 06/30/2018 98,215.00$ -$ 98,215.00$ 5,055.00$ 93,160.00$ Carlos Quintero On Call

HOU240-02 240 Houston Harris PCS Inc Brine Line On Call Pipeline Cleaning 06/16/2015 06/30/2018 318,120.00$ 225,000.00$ 543,120.00$ 291,377.50$ 251,742.50$ Carlos Quintero On Call

HOU240-03 240 Houston Harris PCS Inc Brine Line On Call Inspection Services 07/01/2017 06/30/2018 38,000.00$ -$ 38,000.00$ 7,472.45$ 30,527.55$ Carlos Quintero On Call

WO2018-10 240 IEUA Reach IV-A Upper Support 07/01/2017 06/30/2018 10,000.00$ -$ 10,000.00$ -$ 10,000.00$ Carlos Quintero

INN240-02 240 Innerline Engineering Inc Brine Line On-Call Line Cleaning 06/29/2015 06/30/2018 46,900.00$ 50,000.00$ 96,900.00$ 59,191.34$ 37,708.66$ Carlos Quintero On Call

SAWA323-01 240 SAWA Habitat Mitigation in Prado Basin 01/29/2010 10/31/2017 245,000.00$ -$ 245,000.00$ 226,951.46$ 18,048.54$ Carlos Quintero

TKE240-02 240 TKE Engineering & Planning Brine Line On-Call Land Surveying 06/26/2015 06/30/2018 30,300.00$ -$ 30,300.00$ 11,545.00$ 18,755.00$ Carlos Quintero On Call

TRU240-19 240 Trussell Technologies Water Quality Monitoring Investigation 01/06/2017 08/31/2017 34,638.00$ -$ 34,638.00$ 34,628.00$ 10.00$ Carlos Quintero

TRU240-20 240 Trussell Technologies BL Water Quality Analysis 09/07/2017 08/31/2018 49,885.00$ -$ 49,885.00$ -$ 49,885.00$ Carlos Quintero

WO2018-01 240 WMWD Sample Collection & Analysis 07/01/2017 06/30/2018 90,000.00$ -$ 90,000.00$ 17,046.35 72,953.65$ David Ruhl

WO2018-02 240 WMWD Brine Line Operations & Maintenance 07/01/2017 06/30/2018 25,000.00$ -$ 25,000.00$ 3,115.02 21,884.98$ David Ruhl

DUDK326-05 326 Dudek Litigation Support 11/28/2016 12/31/2017 25,000.00$ 25,000.00$ 50,000.00$ 29,815.00$ 20,185.00$ David Ruhl

DUDK326-06 326 Dudek Reach V Rehabilitation - Ph I, Tasks 3-4 03/03/2017 06/30/2018 134,900.00$ -$ 134,900.00$ 32,906.51$ 101,993.49$ David Ruhl

HAMM326-01 326 Hammons Strategies Strategic Communication Services 05/24/2016 12/31/2017 18,500.00$ 60,750.00$ 79,250.00$ 67,500.00$ 11,750.00$ Rich Haller


September 2017Open Task Orders Schedule

(Reflects Invoices Received as of 10/13/17)

174

Task Order No. Fund No. Vendor Name Task Description Begin Date End Date Original Change Total Billed Contract SAWPA CommentsProject Contracts Contract Orders Contract To Date Balance Manager




WO2018-03 326 PSI Lab CIPP Sampling 07/01/2017 06/30/2018 30,010.00$ -$ 30,010.00$ 18,500.00$ 11,510.00$ David Ruhl

VALI326-04 326 Vali Cooper & Associates Inc IEBL Reach V Rehabilitation 03/15/2017 06/30/2018 1,252,400.00$ -$ 1,252,400.00$ 568,058.90$ 684,341.10$ David Ruhl

PO3379 Const 326 WEKA IEBL Reach V Rehab & Improvement 09/13/2016 01/16/2018 2,044,602.00$ 13,283,733.99$ 15,328,335.99$ 12,477,808.98$ 2,850,527.01$ David Ruhl

CDM374-01 374 CDM Smith Triennial Ambient Water Quality Update 08/15/2016 09/30/2017 349,960.00$ 55,153.00$ 405,113.00$ 402,225.77$ 2,887.23$ Mark Norton

CDM374-02 374 CDM Smith CEQA Supplemental doc & analysis 09/27/2016 12/31/2017 29,527.00$ 10,000.00$ 39,527.00$ 38,707.65$ 819.35$ Mark Norton

GEOS374-01 374 GeoScience Support Service SAR WLA Model Update 02/01/2017 06/30/2018 249,800.00$ -$ 249,800.00$ 149,973.75$ 99,826.25$ Mark Norton

RISK374-06 374 Risk Sciences Basin Monitoring TF 07/27/2016 06/30/2018 73,000.00$ -$ 73,000.00$ 72,693.39$ 306.61$ Mark Norton

SCH381-01 381 Scheevel Engineering S.A. Sucker - Beneficial Use Project 04/18/2017 12/31/2018 96,725.00$ -$ 96,725.00$ 43,797.75$ 52,927.25$ Ian Achimore

AMEC384-01 384-01 Amec Foster Wheeler Tier 2 - Bacteria Source Investigation 07/18/2017 06/30/2018 49,960.00$ -$ 49,960.00$ 18,446.00$ 31,514.00$ Rick Whetsel

CDM384-15 384-01 CDM Smith CBRP Implementation Support 02/08/2017 12/31/2017 12,135.00$ -$ 12,135.00$ 5,399.64$ 6,735.36$ Mark Norton

RISK384-08 384-01 Risk Sciences MSAR TMDL Task Force 07/12/2015 06/30/2018 87,300.00$ -$ 87,300.00$ 39,963.35$ 47,336.65$ Rick Whetsel

CDM386-12 386 CDM Smith Regional Bacteria Monitoring Program 04/18/2017 06/30/2018 317,046.00$ -$ 317,046.00$ 102,968.66$ 214,077.34$ Rick Whetsel

DEGR392-03 392 DeGrave Communications Social Media Support - EC TF 07/01/2017 06/30/2018 30,000.00$ -$ 30,000.00$ 6,487.61$ 23,512.39$ Mark Norton

PO3289 397 CAPOC Green House Gas Contract - WECAN 06/27/2016 10/31/2018 16,628.00$ -$ 16,628.00$ 3,623.58$ 13,004.42$ Mike Antos

PO3377 397 CAPR Green House Gas Contract - WECAN 10/31/2016 09/30/2017 85,000.00$ -$ 85,000.00$ 33,150.00$ 51,850.00$ Mike Antos

PO3285 397 CAPSB Green House Gas Contract - WECAN 06/20/2016 09/30/2017 868,153.00$ -$ 868,153.00$ 223,103.74$ 645,049.26$ Mike Antos

ECOT397-01 397 Ecotech WECAN Landscaping Project 05/26/2016 10/31/2018 1,300,000.00$ 2,000.00$ 1,302,000.00$ 750,698.00$ 551,302.00$ Mike Antos

ECOT397-02 397 Ecotech WECAN Landscaping Project 04/04/2017 10/30/2018 612,000.00$ -$ 612,000.00$ 15,344.00$ 596,656.00$ Mike Antos

GMC397-01 397 Green Media Creations WECAN Outreach and Management 05/26/2016 10/31/2018 170,000.00$ -$ 170,000.00$ 152,276.85$ 17,723.15$ Mike Antos

GMC397-02 397 Green Media Creations WVWD Turf Removal 04/11/2017 10/30/2018 80,000.00$ -$ 80,000.00$ 48,703.93$ 31,296.07$ Mike Antos

PO3280 397 Orange County Coastkeeper Green House Gas Contract - WECAN 06/07/2016 12/31/2017 92,520.00$ -$ 92,520.00$ 92,955.21$ (435.21)$ Mike Antos

PO3466 398 California Rural Water Association Disadvantaged Communities Grant 07/19/2017 04/30/2020 240,000.00$ -$ 240,000.00$ 18,762.22$ 221,237.78$ Mike Antos

PO3375 398 Local Government Commission Civic Spark WaterCorps Services 10/17/2016 09/30/2017 37,000.00$ -$ 37,000.00$ 33,656.92$ 3,343.08$ Mike Antos175

Task Order No. Fund No. Vendor Name Task Description Begin Date End Date Original Change Total Billed Contract SAWPA CommentsProject Contracts Contract Orders Contract To Date Balance Manager




PO3463 398 Local Government Commission Disadvantaged Communities Grant 07/19/2017 04/30/2020 442,000.00$ -$ 442,000.00$ 36,044.76$ 405,955.24$ Mike Antos

PO3465 398 University Enterprises Corporation Disadvantaged Communities Grant 07/19/2017 04/30/2020 1,290,500.00$ -$ 1,290,500.00$ 30,335.30$ 1,260,164.70$ Mike Antos

PO3464 398 Water Education Foundation Disadvantaged Communities Grant 07/19/2017 04/30/2020 150,000.00$ -$ 150,000.00$ 3,519.01$ 146,480.99$ Mike Antos

CVS504-301-01 504-00 CV Strategies FAQ on Conservation Based Rates 11/29/2016 08/31/2018 25,000.00$ 600.00$ 25,600.00$ 18,488.75$ 7,111.25$ Ian Achimore

MSS504-301-01 504-00 Miller Spatial Services Geocoding & Business Type Classification 08/24/2017 12/31/2018 300,000.00$ -$ 300,000.00$ -$ 300,000.00$ Rick Whetsel

OMNI504-301-01 504-00 OmniEarth Inc Web Based Water Consumption Reporting 09/21/2015 12/31/2017 1,500,000.00$ -$ 1,500,000.00$ 732,587.85$ 767,412.15$ Mark Norton

RMC504-401-02 504-04 RMC Water and Environment SARCCUP Program Mgmt Services 07/01/2017 06/30/2018 260,515.00$ -$ 260,515.00$ 30,512.53$ 230,002.47$ Mark Norton10,295,689.82$

176

LIST OF SAWPA FUNDS AS OF 09/01/17

Fund No. Fund Description Fund

Group 100-00 General Fund General 100-03 State Lobbying General 100-04 Federal Lobbying General 100-05 Grant Applications General

130 Proposition 84 – Program Management - Round 1 OWOW 135 Proposition 84 – Program Management – Round 2 OWOW 140 Proposition 84 – Program Management – Drought Round OWOW 145 Proposition 84 – Program Management – 2015 Round OWOW 240 Brine Line Enterprise Brine Line

320-01 Brine Line Protection – Downstream Prado Capital Projects 320-03 Brine Line Protection Above Prado Capital Projects 320-04 Brine Line Protection D/S Prado in Riverside County Capital Projects

326 Reach V Capital Repairs Capital Projects 327 Reach IV-D Corrosion Repair Capital Projects

370-01 Basin Planning General OWOW 370-02 USBR Partnership Studies OWOW

372 Imported Water Recharge Work Group Roundtable 373 Watershed Management (OWOW) OWOW 374 Basin Monitoring Program Task Force Roundtable 381 Santa Ana River Fish Conservation Roundtable

384-01 MSAR TMDL Task Force Roundtable 386 Regional Water Quality Monitoring Task Force Roundtable 387 Arundo Management & Habitat Restoration Roundtable 392 Emerging Constituents Task Force Roundtable 396 Forest First Roundtable 397 Energy – Water DAC Grant Project OWOW 398 Proposition 1 - DACI OWOW 477 LESJWA Administration Roundtable

504-01 Proposition 84 – Capital Projects Round 1 & 2 OWOW 504-00 Proposition 84 – Drought Capital Projects OWOW 504-04 Proposition 84 – Final Round SARCCUP OWOW

177

Santa Ana Watershed Project AuthorityBrine Line Debt Service Funding Analysis

September 30, 2017

FYE T-Strip Capacity Ending CashMaturity Loan Receipts Rates Loan Pymts Interest Earned * Excess Cash Balance

Beginning Balance 3,509,025 2017 949,000 356,251 1,552,521 (3,060,725) 27,407 (175,546) 3,333,479 2018 949,000 356,251 2,136,173 (3,060,725) 66,670 447,368 3,780,848 2019 395,000 89,053 1,708,750 (3,191,277) 26,392 (972,082) 2,808,766 2020 395,000 - 1,708,750 (2,835,027) 56,175 (675,102) 2,133,664 2021 - - 1,708,750 (2,835,027) 42,673 (1,083,604) 1,050,060 2022 - - 1,708,750 (2,607,713) 21,001 (877,961) 172,099 2023 - - 1,708,750 (1,708,750) 3,442 3,442 175,541 2024 - - 1,708,750 (1,708,750) 3,511 3,511 179,051 2025 - - 1,708,750 (1,708,750) 3,581 3,581 182,632 2026 - - 1,708,750 (1,708,750) 3,653 3,653 186,285 2027 - - 1,708,750 (1,708,750) 3,726 3,726 190,010 2028 - - 1,708,750 (1,708,750) 3,800 3,800 193,811 2029 - - 1,708,750 (1,708,750) 3,876 3,876 197,687 2030 - - 1,708,750 (1,708,750) 3,954 3,954 201,640 2031 - - 1,708,750 (1,708,750) 4,033 4,033 205,673 2032 - - 1,708,750 (1,708,750) 4,113 4,113 209,786 2033 - - 1,708,749 (1,708,749) 4,196 4,196 213,982 2034 - - 664,476 (664,476) 4,280 4,280 218,261 2035 - - 664,476 (664,476) 4,365 4,365 222,628 2036 - - 664,476 (664,476) 4,452 4,452 227,079 2037 - - 664,476 (664,476) 4,541 4,541 231,621 2038 - - 664,476 (664,476) 4,632 4,632 236,253 2039 - - 664,476 (664,476) 4,725 4,725 240,978 2040 - - 664,476 (664,476) 4,819 4,819 245,797 2041 - - 664,476 (664,476) 4,916 4,916 250,713 2042 - - 664,476 (664,476) 5,014 5,014 255,727 2043 - - 664,476 (664,476) 5,114 5,114 260,841 2044 - - 664,476 (664,476) 5,217 5,217 266,058 2045 - - 664,476 (664,476) 5,321 5,321 271,379 2046 - - 664,476 (664,476) 5,427 5,427 276,806 2047 - - 664,476 (664,476) 5,536 5,536 282,342 2048 - - 664,476 (664,476) 5,647 5,647 287,990

2,688,000 801,554 39,287,083 (46,353,883) 356,209 (3,221,036) -

*Interest earned is based on a conservative 2.00% average return over the period

178

Santa Ana Watershed Project AuthorityBrine Line Debt Service Payment Schedule

September 30, 2017

New RemainingFYE Interest Principal Total Payment SRF Loan Principal2017 615,366 2,445,358 3,060,725 - 19,706,942 2018 539,727 2,520,997 3,060,725 15,088,592 32,274,537 2019 748,142 2,443,135 3,191,277 - 29,831,402 2020 674,909 2,160,119 2,835,027 - 27,671,283 2021 620,485 2,214,543 2,835,027 - 25,456,740 2022 564,670 2,043,043 2,607,713 - 23,413,697 2023 514,020 1,194,730 1,708,750 - 22,218,967 2024 485,808 1,222,942 1,708,750 - 20,996,026 2025 456,917 1,251,833 1,708,750 - 19,744,193 2026 427,330 1,281,420 1,708,750 - 18,462,774 2027 397,030 1,311,719 1,708,750 - 17,151,054 2028 366,000 1,342,750 1,708,750 - 15,808,304 2029 334,221 1,374,529 1,708,750 - 14,433,776 2030 301,675 1,407,074 1,708,750 - 13,026,701 2031 268,344 1,440,405 1,708,750 - 11,586,296 2032 234,208 1,474,541 1,708,750 - 10,111,755 2033 199,248 1,509,501 1,708,749 - 8,602,254 2034 163,443 501,033 664,476 - 8,101,220 2035 153,923 510,553 664,476 - 7,590,667 2036 144,223 520,254 664,476 - 7,070,413 2037 134,338 530,138 664,476 - 6,540,275 2038 124,265 540,211 664,476 - 6,000,064 2039 114,001 550,475 664,476 - 5,449,589 2040 103,542 560,934 664,476 - 4,888,655 2041 92,884 571,592 664,476 - 4,317,063 2042 82,024 582,452 664,476 - 3,734,611 2043 70,958 593,519 664,476 - 3,141,092 2044 59,681 604,796 664,476 - 2,536,297 2045 48,190 616,287 664,476 - 1,920,010 2046 36,480 627,996 664,476 - 1,292,014 2047 24,548 639,928 664,476 - 652,087 2048 12,390 652,087 664,477 - (0)

$0

$1

$2

$3

$4

$5

$6

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

2043

2044

2045

2046

2047

2048

Mill

ions

Debt Service Payment ScheduleFiscal Years 2017-2048

Principal

Interest

179

$56

$57

$55$55

$55 $54 $54$53

$51

$51

$51

$52

$41

$46

$51

$56

$61

$66

$71

Oct'16 Nov'16 Dec'16 Jan'17 Feb'17 Mar'17 Apr'17 May'17 Jun'17 Jul'17 Aug'17 Sep'17

Millions

Total Cash & Investments

180

Checking CalTRUST LAIF Savings Investment Certificates Treasury(Cash) Investments Account EPA Securities of Deposit Strips

100 General Fund 3,007,820$ 3,007,820 - - - - - - 3,007,820$ 100 Building Reserve 920,782$ - - 920,782 - - - - 920,782$ 370 Basin Planning General 334,687$ - - 334,687 - - - - 334,687$ 370 USBR Partnership Studies 40,572$ - - 40,572 - - - - 40,572$ 373 Watershed Management Plan 364,046$ - - 364,046 - - - - 364,046$ 240 Self Insurance Reserve 3,881,186$ - - 3,881,186 - - - - 3,881,186$ 240 Brine Line Debt Retirement 4,810,007$ - - 3,106,207 - - - 1,703,800 4,810,007$ 240 Brine Line - Pipeline Replacement 16,050,934$ - - 1,562,628 - 12,010,941 2,477,365 - 16,050,934$ 240 Brine Line - OCSD Rehabilitation 3,525,815$ - 2,183,120 1,342,695 - - - - 3,525,815$ 240 Brine Line - Capacity Management 7,853,899$ - - 7,853,899 - - - - 7,853,899$ 240 Brine Line - OCSD Future Capacity 1,729,799$ - - 1,729,799 - - - - 1,729,799$ 240 Brine Line - Flow Imbalance Reserve 86,545$ - - 86,545 - - - - 86,545$ 240 Brine Line - Operating Reserve 3,205,659$ 2,952,044 - 253,615 - - - - 3,205,659$ 401 Legal Defense Fund 447,960$ - - - 447,960 - - - 447,960$ 372 Imported Water Recharge 10,591$ - - 10,591 - - - 10,591$ 374 Basin Monitoring Program TF 351,616$ - - 351,616 - - - - 351,616$ 381 SAR Fish Conservation 211,949$ - - 211,949 - - - - 211,949$ 384 Middle SAR TMDL TF 186,631$ - - 186,631 - - - - 186,631$ 386 RWQ Monitoring TF 299,603$ - - 299,603 - - - - 299,603$ 387 Mitigation Bank Credits 952,318$ - - 952,318 - - - - 952,318$ 392 Emerging Constituents TF 98,148$ - - 98,148 - - - - 98,148$ 397 Energy - Water DAC Grant 973,510$ - - 973,510 - - - - 973,510$ 504 Prop 84 - SARCCUP Projects 3,090,101$ - - 3,090,101 - - - 3,090,101$

52,434,180$ 5,959,864$ 2,183,120$ 27,651,131$ 447,960$ 12,010,941$ 2,477,365$ 1,703,800$ 52,434,180$

CASH BALANCE & SOURCE OF FUNDSSeptember 30, 2017

Reserve Accounts Cash and Investments

Total Total

h & b

181

T‐Strips, $1,703,800, 3%

Savings ‐ EPA, $447,960, 1%

LAIF, $27,651,131, 53%

Securities, $12,010,941, 23%

Certificates of Deposit, $2,477,365, 5%

CalTRUST Investments, $2,183,120, 4%

Cash & Investments ‐ September 2017$52,434,180

182

Santa Ana Watershed Project AuthorityReserve Account Analysis

September 30, 2017

Estimated Balance @ Interest Fund Loan/T-Strip Debt Service Inter-Fund Fund Balance @ Fund Balance @

Reserve Account 6/30/2017 Earned Contributions Receipts Payments Loans Expenses 9/30/2017 Changes 6/30/2018

Brine Line Operating Reserve 4,545,484 12,817 1,055,387 (2,408,029) 3,205,659 - 3,205,659 Flow Imbalance Reserve 84,608 221 1,717 86,545 - 86,545 OCSD Future Capacity 1,725,296 4,502 1,729,799 - 1,729,799 Capacity Management 7,851,194 2,705 7,853,899 - 7,853,899 Pipeline Replacement 13,807,175 6,218,450 (3,974,691) 16,050,934 (3,114,841) 12,936,093 OCSD Rehabilitation 7,506,389 19,426 (4,000,000) 3,525,815 - 3,525,815 Debt Retirement 3,333,479 8,712 534,043 356,251 (1,126,278) 3,106,207 2,372,157 5,478,364 Self Insurance 3,846,181 10,005 25,000 3,881,186 (75,000) 3,806,186 General Fund 3,263,214 6,661 6,536 (449,800) 181,210 3,007,820 - 3,007,820 Building Reserve 818,646 2,136 100,000 920,782 - 920,782

46,325,606 67,185 3,941,132 356,251 (1,126,278) (449,800) (6,201,510) 43,368,645 (817,684) 42,550,962

183

SAWPATREASURER'S REPORT

As of September 30, 2017

Investment T-Strips Safekeeping US Bank

Purchase Maturity Initial Current Book Market Interest

T-STRIPS Debt Date Date PAR Cost Discount Discount Value Value RateUSB WEST RIV 07/09/1999 11/15/2017 334,000.00 106,493.00 227,507.44 - 334,000.00 333,535.74 6.33%

USB WEST RIV 07/12/1999 05/15/2018 220,000.00 67,632.00 152,367.60 7,151.22 212,848.78 218,215.14 6.36%

USB TVRI 02/11/2000 05/15/2020 1,185,000.00 353,177.40 831,822.60 80,686.96 1,104,313.04 1,157,442.04 6.39%

1,739,000.00$ 527,302.40$ 1,211,697.64$ 87,838.18$ 1,651,161.82 1,709,192.92$ 6.36%

Investment Commercial Safekeeping US Bank

Purchase Maturity Unit Current Market Interest

Type Security Date Date Cost Cost Principal Value Value RateAgency FHLMC 3/27/2014 3/27/2019 109.33 546,650.00$ 500,000.00$ 500,000.00$ 517,043.50 3.75%Agency FHLMC 9/16/2016 8/12/2021 100.00 990,060.00$ 1,000,000.00$ 1,000,000.00$ 975,627.00 1.125%Agency FHLMC 4/17/2017 1/13/2022 102.55 512,767.00$ 500,000.00$ 500,000.00$ 509,407.00 2.375%Agency FHLB 5/26/2015 6/14/2019 100.80 504,015.00$ 500,000.00$ 500,000.00$ 501,065.50 1.63%Agency FHLB 6/16/2016 6/12/2020 102.61 1,026,088.00$ 1,000,000.00$ 1,000,000.00$ 1,003,000.00 1.75%Agency FNMA 3/27/2014 2/19/2019 100.40 501,975.00$ 500,000.00$ 500,000.00$ 503,051.50 1.88%Agengy FNMA 3/27/2013 3/27/2018 100.00 1,000,000.00$ 1,000,000.00$ 1,000,000.00$ 998,715.00 1.00%Agency FNMA 12/28/2015 12/28/2020 100.21 1,002,140.00$ 1,000,000.00$ 1,000,000.00$ 1,006,305.00 1.88%Agency FNMA 6/16/2016 11/30/2020 101.52 1,015,157.00$ 1,000,000.00$ 1,000,000.00$ 994,601.00 1.50%Agengy USTN 11/17/2015 11/30/2018 100.00 1,002,500.00$ 1,000,000.00$ 1,000,000.00$ 998,438.00 1.25%Agengy USTN 11/17/2015 10/31/2020 100.00 1,005,312.50$ 1,000,000.00$ 1,000,000.00$ 1,004,102.00 1.75%Agengy USTN 11/17/2015 11/30/2019 100.00 1,001,210.94$ 1,000,000.00$ 1,000,000.00$ 1,000,430.00 1.50%Agengy USTN 6/17/2016 8/31/2020 101.13 507,070.31$ 500,000.00$ 500,000.00$ 496,992.00 1.38%Agengy USTN 6/16/2016 9/30/2020 101.12 506,992.19$ 500,000.00$ 500,000.00$ 496,738.50 1.38%Agengy USTN 6/16/2016 10/31/2020 101.12 506,914.06$ 500,000.00$ 500,000.00$ 496,347.50 1.38%CORP Toyota Motor Credit 9/15/2016 7/13/2018 100.00 504,057.50$ 500,000.00$ 500,000.00$ 500,234.00 1.55%CD Ally Bank 4/20/2017 4/20/2020 100.00 248,000.00$ 248,000.00$ 248,000.00$ 248,000.00 1.80%CD American Exp Centurion 4/19/2017 4/19/2021 100.00 248,000.00$ 248,000.00$ 248,000.00$ 248,000.00 2.25%CD American Express BK FSB 5/10/2017 5/10/2021 100.00 248,000.00$ 248,000.00$ 248,000.00$ 248,000.00 2.20%CD CIT Bank 3/13/2013 3/13/2018 100.00 248,000.00$ 248,000.00$ 248,000.00$ 248,023.54 1.10%CD GE Capital Retail 1/31/2014 1/31/2018 100.00 248,000.00$ 248,000.00$ 248,000.00$ 248,372.84 1.45%CD Capital Bank FL 5/27/2015 5/29/2018 100.00 248,000.00$ 248,000.00$ 248,000.00$ 247,895.62 1.10%CD Capital One Bank USA NA 9/30/2015 10/1/2018 100.00 248,000.00$ 248,000.00$ 248,000.00$ 248,000.00 1.65%CD Capital One NA 9/30/2015 10/1/2018 100.00 248,000.00$ 248,000.00$ 248,000.00$ 248,000.00 1.65%CD Wells Fargo Bank NA 12/2/2015 12/3/2018 100.00 245,000.00$ 245,000.00$ 245,000.00$ 245,000.00 1.45%CD National Bank of NY 6/18/2014 6/18/2018 100.00 248,000.00$ 248,000.00$ 248,000.00$ 248,015.81 1.30%

14,609,909.50$ 14,477,000.00$ 14,477,000.00$ 14,479,405.31 1.65%

184

Santa Ana Watershed Project AuthorityTreasurer's Report

As of September 30, 2017

Investment T-Strips Issuer U.S.Gov't Banker USB Source of MV US Bank

Debt Service WEST RIV.

Months to Initial Current Book Market InterestPurchase Date Maturity Date Maturity PAR Cost Discount Discount Value Value Rate

07/09/1999 11/15/2017 5 334,000.00 106,493.00 227,507.44 0.00 334,000.00 333,535.74 6.33%334,000.00$ 106,493.00$ 227,507.44$ -$ 334,000.00$ 333,535.74$

6.33%

Investment T-Strips Issuer U.S.Gov't Banker USB Source of MV US Bank

Debt Service WEST RIV.


07/12/1999 05/15/2018 11 220,000.00 67,632.00 152,367.60 7,151.22 212,848.78 218,215.14 6.36%220,000.00$ 67,632.00$ 152,367.60$ 7,151.22$ 212,848.78 218,215.14$

6.36%

Investment T-Strips Issuer U.S.Gov't Banker USB Source of MV US Bank Debt Service TVRI


02/11/2001 05/15/2018 11 395,000.00 124,500.05 270,499.95 13,103.10 381,896.90 391,795.37 6.43%02/11/2002 05/15/2019 23 395,000.00 117,646.80 277,353.20 27,131.95 367,868.05 385,960.82 6.39%02/11/2000 05/15/2020 35 395,000.00 111,030.55 283,969.45 40,451.91 354,548.09 379,685.85 6.36%

1,185,000.00$ 353,177.40$ 831,822.60$ 80,686.96$ 1,104,313.04$ 1,157,442.04$ 6.39%

185

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

$4,500,000

$5,000,000

$5,500,000

$6,000,000

$6,500,000

< 1 YR 1 to 2 YRS 2 to 3 YRS 3 to 4 YRS 4 to 5 YRS

Twelve Month Maturity ScheduleSecurities

22%

19%

38%17%

3%

186

SUMMARY OFLABOR MULTIPLIERS

Benefit Rate

Total Employee Benefits 312,196 0.316Total Payroll 988,842

Gross Indirect Costs 806,752Less: Member Contributions & Other Revenue (112,500)Indirect Costs for Distribution 694,252

Indirect Rate

Direct Labor 575,648 1.206Indirect Costs 694,252

FY 2017-18 Labor multiplier - thru 09/30/17 1.522

FY 2016-17 Labor multiplier 1.901





187

Actual thru Actual thruG/L Acct. Description 9/30/17 G/L Acct. Description 9/30/17

51000 Salaries - Regular 413,194$ 60171 Equipment Rented 8,872$ 52000 Benefits 137,346$ 60172 Equipment Repair / Maintenance -$ 60111 Tuition Reimbursement -$ 60180 Computer Hardware 830$ 60112 Training 400$ 60181 Software / Updates / Licensing 44,022$ 60113 Education -$ 60182 Internet Services 3,584$ 60114 Other Training & Education 1,861$ 60183 Computer Supplies 290$ 60120 Audit Fees 12,550$ 60184 Computer Repair / Maintenance -$ 60121 Consulting 73,777$ 60190 Offsite Meeting / Travel Expense 143$ 60126 Temporary Services -$ 60191 In House Meetings 496$ 60128 Other Professional Services 700$ 60192 Conference Expense 4,952$ 60129 Other Contract Services -$ 60193 Car, Repair, Maint -$ 60130 Legal Fees -$ 60200 Dues 665$ 60133 Employment Recruitment -$ 60202 Subscriptions 316$ 60153 Materials & Supplies -$ 60203 Contributions 2,500$ 60154 Safety 1,003$ 60210 Bank Charges -$ 60155 Security 1,272$ 60211 Shipping / Postage 151$ 60156 Custodial Contract Services 4,341$ 60212 Office Supplies 2,042$ 60157 Landscaping Maintenance 4,970$ 60213 Offsite Storage 968$ 60158 HVAC 2,029$ 60220 Commission Fees 2,600$ 60159 Facility Repair & Maintenance 1,986$ 60221 Commission Mileage Reimb. 1,038$ 60160 Telephone 4,156$ 60222 Other Commission Expense 166$ 60161 Cellular / Paging Services 4,305$ 60230 Other Expense 45$ 60163 Electricity 6,199$ 80000 Retiree Medical Expense 28,250$ 60164 Water Services 3,252$ 80001 Insurance Expense 5,613$ 60170 Equipment Expensed 868$ 80000 Building Repair/Replacement Reserve 25,000$

13005 Fixed Assets -$

Total Costs 806,752$

Direct Costs Paid by Projects 634,017$ Member Contribution Offset 112,500$ 746,517$

Over allocation % -8.7%Over (Under) Allocation of General Fund Costs (60,235)$

(Continued - next column)

INDIRECT COSTS( to be Distributed)

188

Actual @ ProjectedG/L Acct Description Budget 9/30/17 FYE 2018

70101 FICA Expense 185,067 41,064$ 164,256$ 70102 Medicare Expense 52,612 12,303$ 49,212$ 70103 State Unemployment Insurance 5,712 433$ 6,300$ 70104 Worker's Compensation Insurance 80,165 8,866$ 68,288$ 70105 State Disability Insurance 24,702 5,164$ 20,656$ 70106 PERS Pension Plan 662,665 124,098$ 496,390$ 70111 Medical Expense 445,725 98,246$ 392,984$ 70112 Dental Expense 31,680 6,857$ 27,428$ 70113 Vision Insurance 8,014 1,775$ 7,100$ 70114 Life Insurance Expense 15,491 3,662$ 14,648$ 70115 Long Term Disability 17,956 4,078$ 16,312$ 70116 Wellness Program Expense 3,500 250$ 1,000$ 70117 401a Profit Sharing - Employers Contribution - -$ -$ 70120 Car Allowance 36,000 5,400$ 21,600$

Total Benefits 1,569,289 312,196 1,286,174 Total Payroll 3,592,414 988,842$ 3,955,368$ Benefits Rate 43.7% 31.6% 32.5%

BENEFITS SUMMARY(Distributed based on Actual Labor)

189

Fund Budget Actual %

100 General & Administrative 23,953 6,494 27.11%130 Prop 84 Round 1 Administration 925 212 22.95%135 Prop 84 Round 2 Administration 865 78 8.96%140 Prop 84 2014 Drought Administration 655 257 39.27%145 Prop 84 Final Round Administration 1,750 195 11.16%240 Brine Line Enterprise 17,550 4,319 24.61%320 Brine Line Protection 250 2 0.90%326 Reach V Capital Repairs 2,171 680 31.33%327 Reach IV-D Corrosion Repairs 755 - 0.00%

370-01 General Basin Planning 2,480 543 21.88%370-02 USBR Partnership Studies 115 5 4.35%

372 Imported Water Recharge 45 11 23.33%373 Watershed Management Plan 2,895 488 16.86%374 Basin Monitoring Program 435 125 28.74%381 SAR Fish Conservation 200 100 49.75%

384-01 Chino TMDL Facilitation 150 49 32.67%386MONIT Storm Water Quality Standards TF 110 41 36.82%386STORM Storm Water Quality Standards TF - - 100.00%

387 Arundo Removal & Habitat Restoration 185 46 24.86%392 Emerging Constituents 56 30 54.02%396 Forest First 30 - 0.00%397 Water-Energy Grant Administration 480 93 19.43%

397EXPAN Water-Energy WVWD Administration - 7 100.00%398ADMIN DACI Grant 2,395 224 9.33%477TMDL LESJWA - TMDL Task Force 760 169 22.20%477-02 LESJWA - Administration 355 92 25.77%

504-301A Prop 84 2014 Drought Implementation 995 93 9.37%504-301C Prop 84 2014 Drought Implementation 685 198 28.94%504-401I Prop 84 Final Round Implementation 140 20 14.29%

504-401PA23 Prop 84 Final Round Implementation 430 45 10.47%504-402WUE Prop 84 Final Round Implementation 265 - 0.00%

62,080 14,613 23.54%

Note: Should be at 25% of budget for 3 months

Santa Ana Watershed Project AuthorityLabor Hours Budget vs Actual

Month Ending September 30, 2017

190

Santa Ana Watershed Project AuthorityGeneral Manager - Expense Report

1st Quarter FYE 2018

Staff Haller

Sum of Amount Expn TypePosting Date Activity Meals Registration Grand Total

07/31/2017 ACWA Conference Registration 699.00 699.00 07/31/2017 Total 699.00 699.00

08/31/2017 Lunch Meeting - Wicke's, 8/23/17 53.02 53.02 08/31/2017 Total 53.02 53.02 Grand Total 53.02 699.00 752.02

191

Santa Ana Watershed Project AuthorityStaff - Expense Report1st Quarter FYE 2018

Sum of Amount Expn TypeStaff Posting Date Activity Airfare Hotel Meals Mileage Misc Parking Registration Grand Total

Achimore 07/31/2017 Travel for Water Quality Training, 7/25/17 11.24 11.24 Travel for Weed Management meeting, 7/27/17 11.24 11.24

08/31/2017 Trail Advisory Meeting - Riverside, 8/2/17 10.00 10.00 Travel for Santa Sucker / Riverwalk 0 8/16/17 and 8/17/17 31.57 31.57 Travel to Technical Advisory Meeting & Garden Grove Council 14.99 14.99

09/30/2017 Flood Management Conference - Hyatt Regency, 9/5/17 17.00 17.00 Travel for September (Rate Studies) 125.73 125.73 Travel for September (OWOW) 55.64 55.64

Achimore Total 250.41 27.00 277.41 Antos 07/31/2017 CWP Conference - Burbank Airport 12.00 12.00

CWP27 Planning Committee - Southwest, 7/1/17 291.97 291.97 Meals at Sierra Water Summit, 7/23/17 29.46 29.46 Sierra Summit - Holiday Inn, 7/23/17 75.90 75.90 Sierra Summit - Payless Rental Car, 7/24/17 109.96 109.96 Sierra Summit - Silver State 76, 7/24/17 22.27 22.27 Sierra Water Summit Meal - 7/23/17 10.96 10.96 Travel to Claremont, 7/21/17 3.75 3.75 Travel to Ontario, 7/20/17 17.66 17.66

08/31/2017 AWRA Annual Conference 610.00 610.00 CA Water Policy Committee - Burbank Airport, 8/23/17 12.00 12.00 CA Water Policy Committee - Lyft, 8/23/17 44.98 44.98 CA Water Policy Committee - Southwest, 8/09/17 296.90 296.90 CA Water Policy Committee - Southwest, 8/15/17 265.46 265.46 Sierra Water Group Summit - Burbank Airport, 7/24/17 24.00 24.00 Travel for DACI, 8/4/17 and 8/16/17 51.90 51.90 Travel to airport for Water Plan Policy Meeting, 8/23/17 25.68 25.68 Travel to airport for Water Policy Conference, 8/28/17 25.68 25.68 Travel to Orange for OC IRWM, 8/15/17 and 8/29/17 52.44 52.44 Water Plan Policy Committee Lunch, 8/23/17 23.00 23.00

09/30/2017 AWRA Conference - Alaska Air, 8/24/17 174.90 174.90 CA Water Plenary & Roudtable of Regions - Southwest, 9/5/17 125.45 125.45 CA Water Policy Committee - Burbank Airport, 8/28/17 12.00 12.00 CA Water Policy Committee - Burbank Airport, 9/18/17 12.00 12.00 CA Water Policy Committee - Lyft, 9/18/17 20.90 20.90 IEUA Breakfast and Plenary Lunch (September) 40.00 40.00 IRWM Roundtable meeting lunch - 9/21/17 9.00 9.00 Travel for Stormwater and DWR Roundtable - 9/7/17 and 9/21/17 24.56 24.56 Travel to Burbank Airport - 9/18/17 and 9/27/17 49.22 49.22 Travel to Downtown LA (metro), 9/15/17 3.50 3.50 Travel to UC Irvine (DCI), 9/14/17 52.43 52.43

Antos Total 1,154.68 75.90 112.42 303.32 201.61 72.00 610.00 2,529.93

192

Berry 07/31/2017 Meeting Regsitration - Personnell Management, 7/12/17 25.00 25.00 08/31/2017 Commission Meeting Breakfast - Panera, 8/17/17 196.42 196.42

Commission Meeting Goods - Costco, 8/16/17 102.08 102.08 Pretreatment Meeting Goods - Costco, 8/16/17 15.99 15.99

09/30/2017 Commission Meeting Goods - Costco, 9/18/17 21.48 21.48 GM Meeting Goods - Costco, 9/18/17 21.48 21.48 Trip to Costco & 99cent store - 9/18/17, 9/19/17 4.82 4.82

Berry Total 4.82 357.45 25.00 387.27 Blancas 08/31/2017 OWOW Steering Committee - EZ Cater, 7/27/17 227.88 227.88

Blancas Total 227.88 227.88 Lewis 09/30/2017 CSMFO Meeting Registration - 9/6/17 30.00 30.00

Lewis Total 30.00 30.00 McKenney 08/31/2017 CA Water Policy Committee - Southwest, 8/18/17 358.97 358.97

McKenney Total 358.97 358.97 Norton 07/31/2017 ASCE Conference Registration, 7/10/17 645.00 645.00

Norton Total 645.00 645.00 Oldenburg 08/31/2017 MISAC 2017 Conference - Monterey Bay Inn, 8/7/17 790.46 790.46

MISAC 2017 Conference Registration, 8/7/17 525.00 525.00 Oldenburg Total 790.46 525.00 1,315.46

Patterson 07/31/2017 Commission Meeting Goods - Ralphs, 7/17/17 50.33 50.33 Pretreatment Meeting Goods - Ralphs, 7/17/17 8.98 8.98

08/31/2017 Purchase goods a Costco - 8/15/17 3.21 3.21 09/30/2017 Commission Meeting Goods - Stater Bros, 9/5/17 23.15 23.15

Commissioners Lunch - Olive Garden, 9/7/17 305.95 305.95 Purchase Goods at Costco & Ralphs, 9/19/17, 9/27/17, 9/28/17 9.64 9.64

Patterson Total 305.95 12.85 82.46 401.26 Plasencia 07/31/2017 Travel to EMWD Perris Plant, 7/18/17 27.82 27.82

Plasencia Total 27.82 27.82 Ruhl 07/31/2017 Drive to Eastvale & OCSD, 7/13/17, 7/26/17 49.23 49.23

Toll Road going to OCSD, 7/26/17 4.25 4.25 Ruhl Total 49.23 4.25 53.48

Unger 08/31/2017 MISAC 2017 Conference - Monterey Bay Inn, 8/7/17 790.46 790.46 MISAC 2017 Conference Registration, 8/7/17 525.00 525.00

09/30/2017 Lunch Meeting w/Doug Mende - Riverside Thai, 9/11/17 20.29 20.29 Unger Total 790.46 20.29 525.00 1,335.75

Villa 07/31/2017 GM Meeting Goods - Ralphs, 7/11/17 21.97 21.97 08/31/2017 Commission Meeting Goods - Ralphs, 7/31/17 59.90 59.90

GM Meeting Goods - Ralphs, 8/7/17 22.07 22.07 09/30/2017 OC Coastkeeper Toast the Coast Event, 8/31/17 800.00 800.00

Villa Total 103.94 800.00 903.94 Vitt 07/31/2017 GIS Conference - Meals, 07/10/17-07/12/17 40.25 40.25

GIS Conference - Parking, 07/09/17-07/13/17 102.00 102.00 GIS Conference - Westin Hotel, 7/13/17 730.28 730.28 Travel to/from GIS Conference - 7/09/17 - 07/13/17 104.86 104.86

Vitt Total 730.28 40.25 104.86 102.00 977.39 Whetsel 07/31/2017 Travel to SBCFCD, 7/6/17 23.54 23.54

08/31/2017 Travel to SBVMWD and EMWD (August) 70.62 70.62 09/30/2017 Travel to Canyon Lake (Alum Project), 9/26/17 37.45 37.45

Travel to SBCFCD, 9/28/17 23.54 23.54 Whetsel Total 155.15 155.15

Williams 07/31/2017 CSMFO Meeting Registration - 7/5/17 30.00 30.00 09/30/2017 CSMFO Meeting Registration - 9/6/17 30.00 30.00

Williams Total 60.00 60.00 Grand Total 1,513.65 2,387.10 706.79 908.46 749.71 201.00 3,220.00 9,686.71

193


194

COMMISSION MEMORANDUM NO. 2017.140 DATE: November 21, 2017 TO: SAWPA Commission SUBJECT: Budget vs. Actual Variance Report FYE 2018 1st Quarter – September 30, 2017 PREPARED BY: Karen Williams, Chief Financial Officer RECOMMENDATION It is recommended that the Commission receive and file the informational report on FYE 2018 First Quarter Budget vs. Actual Variance Report. DISCUSSION Staff has developed a Budget vs. Actual Variance Report and presents this report on a quarterly basis. Attached is the FYE 2018 Budget vs. Actual Variance Report through September 30, 2017. The Agency’s net revenue was $1,970,796, which was $358,402 more favorable than budgeted. Several significant items comprise the majority of this favorable variance: Operating Revenue was $204,898 more than budgeted. This favorable variance is due to higher concentrations of BOD and TSS and not reducing the prior year’s imbalance amount until September. Operating Expense was $1,898,266 less than budgeted. This favorable variance is due to a slow start for Proposition 1 and 84 projects, a slow start to many of the projects for the Brine Line and the delayed start of the Reach IV-D Corrosion Repair project. Non-Operating Revenue/Expense was $1,816,204 less than budgeted. This unfavorable variance is due to the slow start of the Proposition 1 and 84 projects and the delayed start of the Reach IV-D Corrosion Repair project. Favorable Revenue Variances Listed below are explanations of favorable variances of $150,000 or more for individual revenue categories: Discharge Fees – The 7% variance of $204,898 is due to higher concentrations of BOD and TSS and not reducing the TSS imbalance amount until the September billings. Unfavorable Revenue Variances Listed below are explanations of unfavorable variances of $150,000 or more for individual revenue categories: State Grant Proceeds – The 71% variance of $1,016,044 is due to slower implementation of the Proposition 84 Drought and WECAN Projects. There has been an unanticipated delay by retail agencies in the implementation of conservation based rates and a delay in the negotiation of the sub-grantee agreements for the Smartscape project. For Proposition 1 DACI the first billing of the year will be in October. Since partner invoices are not due until then many costs have not been received through September.

195

CM#2017.140 November 21, 2017 Page 2 Use of Reserves – The 8% variance of $633,553 is due to the delayed start of the Reach IV-D Corrosion Repair project which is funded by reserves, and the debt service payments that are paid from reserves are not due until December. Favorable Expense Variances Listed below are explanations of favorable variances of $150,000 or more for individual expense categories: Consulting & Professional Services – The 26% variance of $487,694 is due to most of the activities that are planned for the OWOW, Roundtable, and Brine Line projects will occur later in the year. Operating Costs – The 20% variance of $187,978 is due to the majority of the planned work in the Brine Line being done by in-house operations staff instead of Western Municipal Water District staff. Program Expenses – The 100% variance of $510,125 is due to slower implementation of the Proposition 84 Drought, SARCCUP, and WECAN Projects than originally estimated. Construction – The 7% variance of $449,184 is due to the delayed start of the Reach IV-D Corrosion Repair project. Once the Reach V Repair project is complete, work on this project will begin. Unfavorable Expense Variances There were no unfavorable variances of $150,000 or more for expense categories this quarter. RESOURCE IMPACTS None. Attachment:

1. Variance Report

196

Santa Ana Watershed Project AuthorityFYE 2018 Budget vs. Actual

for the Period Ending September 30, 2017

Consolidated

FavorableFYE 2018 3-Month YTD (Unfavorable)

Budget Budget Actual Variance

Operating Revenue

Discharge Fees $11,427,616 $2,856,904 $3,061,802 $204,898 7.17%

Total Operating Revenue 11,427,616 2,856,904 3,061,802 204,898 7.17%

Operating Expenses

Labor 3,592,415 898,104 862,533 35,570 3.96%Benefits 1,569,288 392,322 413,936 -21,614 -5.51%Education & Training 67,300 16,825 3,720 13,105 77.89%Consulting & Professional Services 7,409,001 1,852,250 1,364,557 487,694 26.33%Operating Costs 3,772,265 943,066 755,088 187,978 19.93%Repair & Maintenance 798,270 199,568 63,855 135,712 68.00%Phone & Utilities 77,950 19,488 19,686 -198 -1.02%Equipment & Computers 416,400 104,100 97,934 6,166 5.92%Meeting & Travel 115,200 28,800 10,403 18,397 63.88%Other Administrative Costs 324,016 81,004 35,174 45,830 56.58%Other Expense 309,759 77,440 47,123 30,317 39.15%Program Expenses 2,040,501 510,125 0 510,125 100.00%Construction 12,025,000 6,843,064 6,393,880 449,184 6.56%Operating Transfers 144,252 144,252 144,252 0 -100.00%Indirect Costs 0 0 0 0 0.00%

Total Operating Expenses 32,661,617 12,110,407 10,212,141 1,898,266 15.67%

Net Operating Revenue / (Deficit) -21,234,001 -9,253,503 -7,150,340 -1,693,368 18.30%

Non-Operating Revenue (Expense)

Member Agency Contributions 1,442,118 1,442,118 1,442,118 0 0.00%Participant Fees 1,682,056 1,682,056 1,538,612 -143,444 -8.53%State Grant Proceeds 5,691,297 1,422,824 406,780 -1,016,044 -71.41%Federal Grant Proceeds 50,000 12,500 0 -12,500 -100.00%SRF Loan Proceeds 7,500,000 0 0 0 100.00%Mitigation Credit Sales 88,980 0 0 0 0.00%Debt Service -3,060,719 -1,126,278 -1,126,278 0 0.00%T-Strip Maturities 949,000 0 0 0 0.00%Interest & Investments 1,045,772 459,766 476,406 16,640 3.62%Other Income 202,027 50,507 58,925 8,418 100.00%Contributions to Reserves -3,949,173 -987,294 -951,573 -35,721 -3.62%Operating Transfers 144,252 144,252 144,252 0 100.00%Use of Reserves 9,280,479 7,765,447 7,131,894 -633,553 -8.16%

Net Non-Operating Revenue / (Deficit) 21,066,089 10,865,897 9,121,136 -1,816,204 -16.71%

Net Revenue / (Deficit) -$167,911 $1,612,394 $1,970,796 $358,402

197


for the Period Ending September 30, 2017General Fund



Operating Revenue

Total Operating Revenue $0 $0 $0 $0 0.00%

Operating Expenses

Labor 1,500,898 375,225 413,194 -37,970 -10.12%Benefits 655,643 163,911 217,575 -53,664 -32.74%Education & Training 57,300 14,325 3,720 10,605 74.03%Consulting & Professional Services 261,000 65,250 98,495 -33,245 -50.95%Operating Costs 5,820 1,455 2,275 -820 -56.37%Repair & Maintenance 103,270 25,818 14,635 11,183 43.31%Phone & Utilities 68,200 17,050 17,912 -862 -5.05%Equipment & Computers 274,800 68,700 60,590 8,110 11.80%Meeting & Travel 77,500 19,375 6,760 12,615 65.11%Other Administrative Costs 221,456 55,364 15,174 40,190 72.59%Other Expense 157,956 39,489 10,753 28,736 72.77%Indirect Costs -2,950,725 -737,681 -634,017 -103,664 14.05%

Total Operating Expenses 433,118 108,280 227,065 -118,785 -109.70%

Net Operating Revenue / (Deficit) -433,118 -108,280 -227,065 118,785 -109.70%


Member Agency Contributions 646,118 646,118 646,115 -3 0.00%Interest & Investments 0 0 9,425 9,425 100.00%Other Income 0 0 541 541 100.00%Building Reserve -100,000 -25,000 0 -25,000 -100.00%Retiree Medical Reserve -113,000 -28,250 -17,530 -10,720 -37.95%

Net Non-Operating Revenue / (Deficit) 433,118 592,868 638,551 -25,757 -4.34%

Net Revenue / (Deficit) $0 $484,589 $411,488 -$73,100

198


for the Period Ending September 30, 2017Brine Line Enterprise Fund



Operating Revenue

Discharge Fees $11,427,616 $2,856,904 $3,061,802 $204,898 7.17%

Total Operating Revenue 11,427,616 2,856,904 3,061,802 204,898 7.17%

Operating Expenses

Labor 902,886 225,722 229,516 -3,794 -1.68%Benefits 394,411 98,603 100,298 -1,696 -1.72%Education & Training 10,000 2,500 0 2,500 100.00%Consulting & Professional Services 295,000 73,750 5,735 68,015 92.22%Operating Costs 3,756,445 939,111 752,813 186,298 19.84%Repair & Maintenance 695,000 173,750 49,220 124,530 71.67%Phone & Utilities 9,750 2,438 1,774 663 27.22%Equipment & Computers 137,500 34,375 37,195 -2,820 -8.20%Meeting & Travel 7,750 1,938 109 1,828 94.35%Other Administrative Costs 57,100 14,275 3,978 10,297 72.14%Other Expense 151,803 37,951 36,370 1,581 4.17%Indirect Costs 1,273,798 318,450 323,847 -5,397 -1.69%

Total Operating Expenses 7,691,444 1,922,861 1,540,856 382,005 19.87%

Net Operating Revenue / (Deficit) 3,736,172 934,044 1,520,945 246,068 26.34%


Interest & Investments 1,045,772 459,766 459,452 -314 -0.07%Other Income 0 0 33 33 100.00%Debt Service -3,060,719 -1,126,278 -1,126,278 0 0.00%T-Strip Maturities 949,000 0 0 0 0.00%Use of Reserves 1,065,947 0 0 0 0.00%Contributions to Reserves -3,736,173 -934,043 -934,043 0 0.00%

Net Non-Operating Revenue / (Deficit) -3,736,172 -1,600,555 -1,600,835 -281 0.02%

Net Revenue / (Deficit) $0 -$666,511 -$79,891 $586,620

199


for the Period Ending September 30, 2017OWOW Fund



Operating Revenue


Operating Expenses

Labor 805,639 201,410 135,008 66,402 32.97%Benefits 351,930 87,983 58,998 28,984 32.94%Consulting & Professional Services 3,024,037 756,009 404,899 351,111 46.44%Equipment & Computers 4,100 1,025 149 876 85.43%Meeting & Travel 22,800 5,700 3,272 2,428 42.60%Other Administrative Costs 17,710 4,428 6,022 -1,594 -36.01%Program Expenses 2,040,501 510,125 0 510,125 100.00%Indirect Costs 1,136,600 284,150 190,496 93,654 32.96%

Total Operating Expenses 7,403,317 1,850,829 798,844 1,051,985 56.84%

Net Operating Revenue / (Deficit) -7,403,317 -1,850,829 -798,844 -1,051,985 56.84%


Member Agency Contributions 776,000 776,000 776,000 0 0.00%Participant Fees 818,612 818,612 793,610 -25,002 -3.05%State Grant Proceeds 5,691,297 1,422,824 406,780 -1,016,044 -71.41%Federal Grant Proceeds 50,000 12,500 0 -12,500 -100.00%Other Income 0 0 13,692 13,692 100.00%Interest & Investments 0 0 2,922 2,922 100.00%

Net Non-Operating Revenue / (Deficit) 7,335,908 3,029,936 1,993,004 -1,036,932 -34.22%

Net Revenue / (Deficit) -$67,409 $1,179,107 $1,194,160 $15,053

Project Reimbursement (Prop 84 Capital) $21,080,225 $21,080,225 $165,143 -$20,915,082

200


for the Period Ending September 30, 2017Roundtable Fund



Operating Revenue


Operating Expenses

Labor 147,347 36,837 34,910 1,927 5.23%Benefits 64,366 16,092 15,256 836 5.19%Consulting & Professional Services 843,964 210,991 259,769 -48,778 -23.12%Meeting & Travel 1,150 288 37 250 86.97%Other Administrative Costs 10,250 2,563 10,000 -7,438 -290.24%Operating Transfer 144,252 144,252 144,252 0 0.00%Indirect Costs 207,877 51,969 49,258 2,711 5.22%

Total Operating Expenses 1,419,206 462,991 513,482 -50,492 -10.91%

Net Operating Revenue / (Deficit) -1,419,206 -462,991 -513,482 50,492 -10.91%


Member Agency Contributions 20,000 20,000 20,000 0 0.00%Participant Fees 863,445 863,445 745,002 -118,443 -13.72%Mitigation Credit Sales 88,980 0 0 0 0.00%Other Income 202,027 50,507 44,658 -5,848 -11.58%Operating Transfer 144,252 144,252 144,252 0 0.00%Interest & Investments 0 0 4,607 4,607 100.00%

Net Non-Operating Revenue / (Deficit) 1,318,704 1,078,204 958,519 -119,685 -11.10%

Net Revenue / (Deficit) -$100,502 $615,213 $445,037 -$170,176

201


for the Period Ending September 30, 2017Capital Fund



Operating Revenue


Operating Expenses

Labor 235,645 58,911 49,905 9,006 15.29%Benefits 102,938 25,735 21,809 3,926 15.26%Consulting & Professional Services 2,985,000 746,250 595,658 150,592 20.18%Operating Costs 10,000 2,500 0 2,500 100.00%Meeting & Travel 6,000 1,500 225 1,275 85.02%Other Administrative Costs 17,500 4,375 0 4,375 100.00%Construction 12,025,000 6,843,064 6,393,880 449,184 6.56%Indirect Costs 332,450 83,113 70,416 12,696 15.28%

Total Operating Expenses 15,714,532 7,765,447 7,131,894 633,553 8.16%

Net Operating Revenue / (Deficit) -15,714,532 -7,765,447 -7,131,894 -633,553 8.16%


SRF Loan Proceeds 7,500,000 0 0 0 0.00%Use of Reserves 8,214,532 7,765,447 7,131,894 -633,553 -8.16%

Net Non-Operating Revenue / (Deficit) 15,714,532 7,765,447 7,131,894 -633,553 -8.16%

Net Revenue / (Deficit) $0 $0 $0 $0

202

Financial Report for the Inland Empire Brine Line Enterprise/CIP for the 1st Quarter Ending

September 30, 2017


Agenda

• Cash & Investments• Reserve Account Balances• Transfer, Uses & Contributions from/to

Reserves• Enterprise Revenues• Enterprise Expenses• Enterprise Performance• Capital Improvement Program

203

Cash & Investments

$41,143,844

Checking, $2,952,044 ,

7% CalTRUST, $2,183,120 ,

6%

LAIF, $19,816,574 ,

48%

CD's, $2,477,365 ,

6%

Securities, $12,010,941 ,

29%

T-Strips, $1,703,800 ,

4%

Cash & Investments

204

Reserve Account Balances

Reserve Account BalanceSelf Insurance $3,881,186Debt Retirement 4,810,007Pipeline Replacement 16,050,934OCSD Rehabilitation 3,525,815Capacity Management 7,853,899OCSD Future Capacity 1,729,799Flow Imbalance Reserve 86,545Operating Reserve 3,205,659

Total Reserves $41,143,844

Reserve Account Balances Trends

Reserve Balance @ 12/31/16

Balance @ 03/31/17

Balance @ 06/30/17

Balance @ 09/30/17

Self Insurance $3,795,922 $3,812,588 $3,846,181 $3,881,186

Debt Retirement 5,707,360 5,475,338 5,037,279 4,810,007

Pipeline Replacement 17,850,481 16,155,981 13,807,175 16,050,934

OCSD Rehabilitation 7,281,550 7,364,885 7,506,389 3,525,815

Capacity Mgmt 7,815,783 7,815,783 7,851,194 7,853,899

OCSD Future Capacity 1,721,404 1,721,404 1,725,296 1,729,799

Flow Imbalance Reserve 83,563 84,418 84,608 86,545

Operating Reserve 3,971,781 5,103,311 4,545,484 3,205,659

Total $48,227,844 $47,533,708 $44,403,606 $41,143,844

205

• Pipeline Replacement Reserve– Contribution of $375,000– Transfer of $1,843,450 from Operating Reserve– Transfer of $4,000,000 from OCSD Rehabilitation– Use of $3,974,691 for Capital Projects

• Self Insurance Reserve– Contribution of $25,000

• Debt Service Reserve– Contribution of $534,043

• Flow Imbalance Reserve– Contribution of $1,717

Transfers, Use and Contributions To/From Reserves

Total Operating Revenues

Source Actual Budget Variance Positive/(Negative)

BOD/TSS Fees $825,312 $651,611 $173,701Volumetric Fees 909,543 901,000 8,543Fixed Charges 1,129,842 1,183,730 (53,888)Truck Discharge 187,705 112,500 75,205Permit Fees 9,400 8,063 1,337Total Operating Revenues $3,061,802 $2,856,904 $204,898

206

Operating Revenues vs. Budget

Total Operating Expenses

Source Actual Budget VariancePositive/(Negative)

Treatment Costs ($533,243) ($651,611) $118,368

Volumetric Costs (180,343) (184,000) 3,657

Operating Costs (39,227) (103,500) 64,273

General & Administration (733,087) (736,252) 3,165

Facility Repair & Maintenance (49,220) (173,750) 124,530

Consulting & Prof. Services (5,735) (73,750) 68,015

Total Operating Expenses ($1,540,856) ($1,922,861) $382,005

207

Operating Expenses vs. Budget

Non Operating Revenues and Expenses

Source Actual Budget VariancePositive/(Negative)

Use of Reserves (Debt Service) $0 $0 $0

Interest & Investments 459,452 459,766 (314)

Other Income 33 0 33

Debt Service Payments (1,126,278) (1,126,278) 0

Contributions to Reserves (934,043) (934,043) 0

Total Non Operating ($1,600,835) ($1,600,555) ($281)

208

Enterprise Performance

SAWPA Billed

OCSD Billing Difference

Total Flow (MG) 1,015.288 1,026.540 (11.252)

Total BOD (1,000 lbs) 480.154 359.576 120.578

Total TSS (1,000 lbs) 1,580.197 1,112.975 467.222

BOD cost per 1,000 lbs $307.00 $278.96 $28.04

TSS cost per 1,000 lbs $429.00 $388.99 $40.01

Flow, BOD, TSS Actual vs. OCSD Billing


Revenue Billed

OCSD Charges Difference

Flow (pass through) $178,366 $180,343 ($1,977)

BOD 147,407 100,307 47,100

TSS 677,905 432,936 244,969

TD Allowance 1,026 0 1,026

Total $1,004,704 $713,586 $291,118

OCSD Flow, BOD & TSS Charges vs. Revenue Billed

209


OCSD Flow, BOD & TSS Charges vs. Revenue Collected

Capital Project Fund

Funding = Reserves and SRF Loans

210

Capital Project Fund

Capital Project Fund (320)

• D/S Prado in OC – emergency protection work, pipeline relocation

• Above Prado - pipeline relocation and manhole lid adjustments – when required

• D/S Prado in Riv County – bank armoring

Brine Line Protection / Relocation Projects

211

Questions ?

212

Financial Report for the 1st Quarter Ending September 30, 2017


Agenda

• Cash & Investments• Fund Overview• General Fund• OWOW Funds• Roundtable Funds

213

Cash & Investments

Checking Accounts$3,007,820

27%

LAIF$7,834,554

69%

Savings - EPA$447,960

4%

$11,290,334

Cash & Investments

General Fund $3,928,602

OWOW Fund 4,802,916

Roundtable Fund 2,110,856

Fiduciary Fund 447,960

Total $11,290,334

Total by Fund

214

Cash & Investments

Fund Checking (Cash)

LAIF Account Total

General Fund $3,007,820 $0 $3,007,820

Building Reserve 0 920,782 920,782

Total $3,007,820 $920,782 $3,928,602

General Funds

Cash & Investments

Fund LAIF Account Total

General Basin Planning $334,687 $334,687

USBR Partnership Studies 40,572 40,572

Watershed Mgmt Plan 364,046 364,046

Water – Energy DAC Grant 973,510 973,510

Prop 84 SARCCUP Projects 3,090,101 3,090,101

Total $4,802,916 $4,802,916

OWOW Funds

215

Cash & Investments

Fund LAIF Account Total

Imported Water Recharge $10,591 $10,591Basin Monitoring 351,616 351,616RWQ Monitoring TF 299,603 299,603SAR Fish Conservation 211,949 211,949Middle SAR TMDL TF 186,631 186,631Emerging Constituents TF 98,148 98,148Mitigation Banking 952,318 952,318Total $2,110,856 $2,110,856

Roundtable Funds

Cash & Investments

FundLAIF

AccountSavings

EPA Total

Legal Defense Fund $0 $447,960 $447,960

Total $0 $447,960 $447,960

Fiduciary Funds

216

Cash & Investments

0.6540.678

0.7190.751

0.7770.821

0.8840.925

0.978

1.0511.084

1.112

0

0.2

0.4

0.6

0.8

1

1.2

Oct'16 Nov'16 Dec'16 Jan'17 Feb'17 Mar'17 Apr'17 May'17 Jun'17 Jul'17 Aug'17 Sep'17

LAIF Interest Rates

Cash & Investments

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

Interest Rate Comparison

Securities

LAIF

Ave Rate of Return

CalTRUST

2yr Treasury

217

Analysis by Fund Type

General Fund OWOW RoundtableFunding/Revenue $656,081 $1,993,004 $958,519Costs/Expenses $244,595 $798,844 $513,482

$-

$500

$1,000

$1,500

$2,000

$2,500

Thou

sand

s

Revenues and Expenses

General Fund

Revenue ExpenseActual $656,081 $244,595Budget $646,118 $161,530

$-

$100

$200

$300

$400

$500

$600

$700

Thou

sand

s

Budget vs. Actual

218

OWOW Funds

Revenue ExpenseActual $1,993,004 $798,844Budget $3,029,936 $1,850,829

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

Thou

sand

s

Budget vs. Actual

Project Reimbursement (Prop 84) $165,143

OWOW Funds

GeneralPlanning

USBRPartnership

WatershedMgmt

Energy -Water DAC

GrantProp 1 - DACI

GrantProp 84Program

MgmtProp 84Drought

Prop 84SARCCUP

Funding $356,369 $20,067 $414,056 $541,017 $39,916 $104,532 $54,486 $462,562Costs $78,388 $1,193 $87,674 $364,741 $84,097 $114,996 $54,486 $13,269

$-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

Hun

dred

s

Costs vs. Funding

219

Roundtable Funds

Revenue ExpenseActual $958,519 $513,482Budget $1,078,204 $462,991

$-

$200

$400

$600

$800

$1,000

$1,200

Thou

sand

s

Budget vs. Actual

Roundtable Funds

Imported WaterRecharge

BasinMonitoring

SAR FishConservation

Middle SARTMDL TF

RWQMonitoring TF

ArundoRemoval

EmergingConstiuents LESJWA Admin

Funding $25 $273,325 $29,504 $201,156 $357,440 $2,192 $40,219 $54,658Costs $1,092 $166,225 $26,462 $197,542 $47,206 $8,277 $11,982 $54,696

$-

$50

$100

$150

$200

$250

$300

$350

$400

Thou

sand

s

Costs vs. Funding

220

Questions ?

221


222

Santa Ana Watershed Project Authority Executive Financial Information Report

September 2017

Staff comments provided on the last page are an integral part of this report.

Overview This report highlights the agency’s key financial indicators for the Fiscal Year‐to‐Date (FYTD) through September 2017 unless otherwise noted.

Budget to Actual Expenses by Fund Type

Favorable

Annual Budget

FYTD Budget

FYTD Actual

Favorable (Unfavorable)

Variance General Fund $646,118 $161,530 $244,595 ($83,066)

Brine Line Enterprise 11,427,616 2,856,904 2,474,899 382,005

Debt Service Fund 3,060,719 1,126,278 1,126,278 ‐

Capital Project Fund 15,714,532 7,765,447 7,131,894 633,553

OWOW Fund 7,403,317 1,850,829 798,844 1,051,985

Roundtable Fund 1,419,206 462,991 513,482 (50,492)

Total $39,671,508 $14,223,979 $12,289,992 $1,933,986

Budget to Actual Expenses by Fund Type

0

1

2

3

4

5

6

7

8

9

GeneralFund

Brine LineFund

Debt ServiceFund

CapitalProject Fund

OWOWFund

RoundtableFund

Millions

Budget

Actual

223

Budget to Actual Revenues by Source

Concern

Annual Budget

FYTD Budget

FYTD Actual

Favorable (Unfavorable)

Variance Member Contributions $1,442,118 $1,442,118 $1,442,118 $‐

Participant Fees 1,682,056 1,682,056 1,538,612 (143,444)

Discharge Fees 11,427,616 2,856,904 3,061,802 204,898

SRF Loans 7,500,000 ‐ ‐ ‐

Interest & Investments 1,994,772 459,766 476,406 16,641

Use of Reserves 9,280,479 7,765,447 7,131,894 (633,553)

Mitigation Credit Sales 88,980 ‐ ‐ ‐

Other 202,027 50,507 58,925 8,418

Operating Transfers 144,252 144,252 144,252 ‐

Grant Proceeds 5,741,297 1,435,324 406,780 (1,028,544)

Total $39,503,596 $15,836,373 $14,260,789 ($1,575,585)

Budget to Actual Revenues by Source

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

MemberContributions

ParticipantFees

DischargeFees

SRF Loans Interest &Investments

Use ofReserves

MitigationCredit Sales

Other OperatingTransfers

GrantProceeds

Millions Budget

Actual

224

Total Cash & Investments ‐ September

Reserve Fund Balance ‐ September

Amount General Fund $3,007,820Building Fund 920,782Legal Defense Fund 447,960OWOW Fund 4,802,916Roundtable Fund 2,110,856Self Insurance 3,881,186Debt Retirement 4,810,007Pipeline Replacement 16,050,934OCSD Rehabilitation 3,525,815Capacity Management 7,853,899Future Capacity 1,729,799Flow Imbalance 86,545Brine Line Operating 3,205,659

Total Reserves $52,434,180

Checking11%

CalTRUST 4%

LAIF53%

Savings EPA1%

Securities23%

Certificates of Deposit5%

Treasury Strips3%

$52.4 Million

225

Legend

Compared to Budget

Ahead or Favorable Above +5% Favorable Revenue or Expense Variance

On Track +5% to ‐2% Variance

Behind ‐3% to ‐5% Variance

Concern Below ‐5% Variance

Staff Comments

For this month’s report, the item(s) explained below are either “behind”, a “concern”, or have changed significantly from the prior month. 1) Grant Proceeds are 71.7% lower than budget. While this is a concern it is projected that

these projects will be within the budget amount for FYE 2018. The variance is due to several issues. For Proposition 84 Drought projects, there has been an unanticipated delay by retail agencies in the implementation of conservation based rates. For Proposition 84 SARCCUP there has been a delay on the negotiation of the sub‐grantee agreement for Smartscape and a lack of implementing legislation regarding the new water use efficiency standards which has slowed down the project. For Proposition 1 DACI, partner invoices are not due until October for the first quarter billing.

Aside from Grant Proceeds, all other revenue sources and non‐grant related expenses are on track.

226

GENERAL MANAGERS MEETING NOTES TUESDAY, NOVEMBER 14, 2017 PARTICIPANTS PRESENT REPRESENTING Paul Jones Eastern Municipal Water District Joe Grindstaff (arrived at 8:00 a.m.) Inland Empire Utilities Agency Doug Headrick San Bernardino Valley Municipal Water District John Rossi (arrived at 7:46 a.m.) Western Municipal Water District Karen Williams Santa Ana Watershed Project Authority Larry McKenney (Via-Conference Call) Santa Ana Watershed Project Authority Mark Norton Santa Ana Watershed Project Authority David Ruhl Santa Ana Watershed Project Authority Carlos Quintero Santa Ana Watershed Project Authority Sara Villa Santa Ana Watershed Project Authority PARTICIPANTS ABSENT Michael Markus Orange County Water District CALL TO ORDER Doug Headrick called the meeting to order at 7:38 a.m. at SAWPA, 11615 Sterling Avenue, Riverside, California. OWOW UPDATE Mark Norton informed the General Mangers that the OWOW Steering Committee meeting is scheduled November 16th at 11:00 a.m. at SAWPA. Carmel Brown, Chief of DWR Financial Assistance Branch will be giving a presentation about the Department of Water Resources’s IRWM activities. Norton noted that Ms. Brown will also be available to provide some feedback to the Steering Committee as to why the State is focusing so much on the Disadvantaged Communities water need assessments. A staff led tour with DWR representatives will take place right after the OWOW Steering Committee meeting to tour some of the Proposition 84 projects that are underway and are being funded by the State. Also on the OWOW Steering Committee meeting agenda, Larry McKenney will be providing a background update to the OWOW Steering Committee about the OWOW Governance and Process as background for many of the new OWOW Steering Committee members. Mike Antos will provide an update on the upcoming second Homelessness Symposium. The main agenda item will be the OWOW Plan Update 2018 Goals and Objectives Workshop where the goals and objectives will be looked over again to achieve a consensus and approval. Norton noted that a letter was sent to the OWOW Steering Committee Chair on behalf of OCWD recommending that the goals and objectives be re-drafted. The intent of the workshop is to discuss the goals and objectives with input by the OWOW Pillar Chairs, OWOW Steering Committee and SAWPA staff and then using live editing of text finalize the OWOW Plan Update 2018 goals and objectives. The goals and objectives will not be formally adopted until the whole plan is adopted in the fall of 2018, though a framework is needed so that the pillars have guidance in preparing their chapter write-ups. Paul Jones expressed concerns and said that the basic conflict is how the IRWM funds are being administered; if they are water supply, water quality, stormwater management, or environmental management, etc. The prioritization and organization of the document is a concern. Mark Norton indicated that the process of defining OWOW Goals and Objectives for the IRWM plan development is separate and distinct from the project selection criteria that will be used to define priorities for the future IRWM funding. He encouraged that any questions or concerns be brought up at the OWOW Steering Committee meeting/workshop on November 16th. Doug Headrick expressed concerns regarding a discussion that took place during a previous Commission Meeting about him requesting changing SAWPA’s role in facilitating regional watershed wide projects. Norton stated that what was presented to the Commission was the pros and cons of whether SAWPA should be more of a facilitator of project development and bringing on consultants to assist in getting a short list of projects or whether SAWPA should continue its previous role as the grant administrator and support and facilitate all project proponents under a fair, open and competitive process. Doug Headrick noted he would consult with Susan Lien Longville due to there being mixed communication.

227

GM Meeting Notes November 14, 2017

Page 2

ROUNDTABLES UPDATE Mark Norton distributed an updated brochure of the Roundtable efforts of workgroups/task forces. He provided a brief status update on each task force. GeoScience is currently working on the Wasteload Allocation for the Santa Ana River, and a Basin Monitoring Program Peer Review Workshop is scheduled November 16th, and GeoScience will be providing an update on the new model. All other efforts are ongoing and progressing. UPDATES/DISCUSSION ITEMS Brine Line Update. David Ruhl and Carlos Quintero provided updates on the following: • Reach V Repair – The contractor is doing clean-up work, punch list items and demobilizing the construction

yard, the contract completion is in January 2018, though the contractor is a couple months ahead of schedule.

• Pretreatment Program Update: o Update of Program Documents – The member agencies helped with various sections of the Program

Documents. SAWPA has received those sections from the member agencies. SAWPA staff is reviewing the sections and is anticipating distributing a complete package of the Program Documents by the end of the year.

• OCSD Rock Removal – OCSD’s consultant Michael Baker, is working on the project permits in hopes to have them obtained by the end of December as well as the final design. It is anticipated to advertise for bids around April 2018 and start the rock removal in July 2018.

• Joint Policy Committee Meeting – Rich Haller is coordinating with OCSD to schedule a Joint Operations Committee meeting and a Joint Policy Committee meeting to review the Amendment No. 2 to the 1972 SARI Pipeline Agreement.

• Technical Writer/Grant Writer RFQ – The Technical Writer/Grant Writer RFQ went out last month and the RFQ’s are due Wednesday, November 15.

• Reach IV-D RFP – There are about seven miles on Reach IV-D (City of Chino) that the PVC liner inside the pipe is only 270 degrees versus 360 degrees. The invert of the pipe is unlined. There is deterioration of the concrete at the interface of the PVC line. An RFP is being prepared to prepare a work plan to investigate the condition of the pipe and recommend a repair and prepare a cost estimate. The RFP is anticipated to go to Commission in the December/January timeframe.

• Rate Model – A Task Order was issued to Raftelis Financial Consultants and a kick-off meeting is scheduled

November 21. It is anticipated to hold a workshop with member agency staff in late January/early February.

• Lease and Loan Capacity Pool – The Lease and Loan Capacity Pool is addressed by Ordinance No. 8. IEUA has requested additional time to provide a detail review of the Lease and Loan Capacity Pool agreement. SAWPA is awaiting comments from IEUA.

• Inland Bioenergy Permit Violations – SAWPA is working with Burrtec Waste Industries to correct some

deficiencies within Inland Bioenergy’s site and with the permit. SAWPA issued a Cease and Desist Order, Compliance Order and Civil Penalty Order to Inland Bioenergy in October 2017. Burrtec Waste Industries issued a response though it was incomplete. SAWPA received a portion of the total penalty amount. SAWPA is currently working with Burrtec Waste Industries to obtain compliance with the order.

• Beaumont Request to Discharge to Brine Line – SAWPA staff met with the City of Beaumont in October, to discuss information requested by OCSD regarding discharge to the Brine Line. SAWPA is working with Beaumont to obtain information on their Pretreament Program.

228

GM Meeting Notes November 14, 2017

Page 3

• Anaergia (Potential New Customer) – Anaergia (located on the site formerly occupied by Enertech) has indicated they will be applying for a Discharge Permit. SAWPA will be working with Anaergia in preparing their permit application and compliance with the permit issued.

• Other Potential New Customers – There’s possible interest from Mira Loma Peaker Generation Station. The

permit conditions and requirements are essentially the same as Grapeland Peaker Generation Station. WORKSHOP FOLLOW UP David Ruhl informed the General Managers that SAWPA is working on preparing a draft Project Agreement 21. Paul Jones requested a list of all the Project Agreements that are going to be formed. David Ruhl noted that the list will be distributed. FUTURE SAWPA COMMISSION AGENDA ITEMS David Ruhl referenced the handout that was provided of the Agenda Planning Matrix. Karen Williams noted that the CAFR will be going to the Commission in December if there isn’t a November Meeting. PA 22 Meeting is scheduled for Thursday, November 16. AGENCY UPDATES Nothing to report at this time. SCHEDULE NEXT GM MEETING The next General Managers meeting is scheduled for December 12, 2017, at 7:30 a.m. at SAWPA. The meeting adjourned at 8:50 a.m. COMMISSION REVIEW: November 21, 2017 2017-11-14 GM Mtg Notes

229


230

Legislative Status Report for SAWPA11/13/2017

AB 18 (Garcia, Eduardo D) California Clean Water, Climate, Coastal Protection, and Outdoor Access ForAll Act of 2018.

Current Text: Amended: 8/30/2017 Text Introduced: 12/5/2016 Last Amend: 8/30/2017 Status: 9/1/2017-From committee: Do pass and re-refer to Com. on APPR. (Ayes 4. Noes 1.) (August

31). Re-referred to Com. on APPR. Location: 9/1/2017-S. APPR. Summary: Under current law, programs have been established pursuant to bond acts for, among

other things, the development and enhancement of state and local parks and recreational facilities.This bill would enact the California Clean Water, Climate, Coastal Protection, and Outdoor Access For AllAct of 2018, which, if approved by the voters, would authorize the issuance of bonds in an amount of$3,470,000,000 pursuant to the State General Obligation Bond Law to finance a clean water, climate,coastal protection, and outdoor access for all program.

AB 151 (Burke D) California Global Warming Solutions Act of 2006: market-based compliancemechanisms: scoping plan: report.

Current Text: Amended: 5/2/2017 Text Introduced: 1/11/2017 Last Amend: 5/2/2017 Status: 8/24/2017-Ordered to inactive file at the request of Assembly Member Burke. Location: 8/24/2017-A. INACTIVE FILE Summary: Would require the State Air Resources Board to report to the appropriate policy and fiscal

committees of the Legislature to receive input, guidance, and assistance before adopting guidelinesand regulations implementing the scoping plan and a regulation ensuring statewide greenhouse gasemissions are reduced to at least 40% below the 1990 level by 2030. This bill contains other relatedprovisions and other existing laws.

AB 166 (Salas D) Building Homes and Jobs Act: recording fee: hardship refund. Current Text: Amended: 9/8/2017 Text Introduced: 1/13/2017 Last Amend: 9/8/2017 Status: 9/16/2017-Re-referred to Com. on H. & C.D. pursuant to Assembly Rule 77.2. Joint Rule 62(a),

file notice suspended. From committee: That the Senate amendments be concurred in. (Ayes 4. Noes2.) (September 16). Assembly Rule 63 suspended.

Location: 9/16/2017-A. H. & C.D. Summary: Current law authorizes a fee for recording and indexing every instrument, paper, or notice

required or permitted by law to be recorded, not to exceed $10 for the first page and $3 for eachadditional page, to reimburse a county for the costs of specified services relating to recording thosedocuments. Current law authorizes various additional recording fees for specified purposes. This billwould authorize a property owner to request a refund based on hardship of a fee, proposed to beimposed by SB 2, if he or she files a claim with the county recorder, in the county in which the fee wascollected, that certifies under penalty of perjury that he or she meets specified criteria related tohousehold income and the fee was levied and collected as part of a transaction to a refinance of theproperty that was the subject of the recording.

AB 196 (Bigelow R) Greenhouse Gas Reduction Fund: water supply and wastewater systems. Current Text: Amended: 3/6/2017 Text Introduced: 1/19/2017 Last Amend: 3/6/2017 Status: 9/1/2017-Failed Deadline pursuant to Rule 61(a)(12). (Last location was APPR. SUSPENSE FILE

on 7/17/2017)(May be acted upon Jan 2018) Location: 9/1/2017-S. 2 YEAR Summary: Current law requires moneys from the Greenhouse Gas Reduction Fund to be allocated for

the purpose of reducing greenhouse gas emissions in this state and satisfying other purposes.Current law authorizes specified investments, including water use and supply, if the investmentfurthers the regulatory purposes of the California Global Warming Solutions Act of 2006 and isconsistent with law. This bill would authorize the use of the moneys in the fund for electric pumpefficiency, water and wastewater systems, pump and pump motor efficiency improvements, anddrinking water transmission and distribution systems’ water loss if the investment furthers theregulatory purposes of the act and is consistent with law.

AB 252 (Ridley-Thomas D) Local government: taxation: prohibition: video streaming services.

Page 1/14

231

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Current Text: Amended: 2/28/2017 Text Introduced: 1/31/2017 Last Amend: 2/28/2017 Status: 5/12/2017-Failed Deadline pursuant to Rule 61(a)(3). (Last location was RLS. on 4/25/2017)

(May be acted upon Jan 2018) Location: 5/12/2017-A. 2 YEAR Summary: Would, until January 1, 2023, prohibit the imposition by a city, city and county, or county,

including a chartered city, city and county, or county, of a tax on video streaming services, including,but not limited to, any tax on the sale or use of video streaming services or any utility user tax onvideo streaming services. This bill contains other related provisions.

AB 272 (Gipson D) Southeast Los Angeles County Drinking Water Relief Act. Current Text: Amended: 3/21/2017 Text Introduced: 2/1/2017 Last Amend: 3/21/2017 Status: 4/28/2017-Failed Deadline pursuant to Rule 61(a)(2). (Last location was W.,P. & W. on

4/5/2017)(May be acted upon Jan 2018) Location: 4/28/2017-A. 2 YEAR Summary: The California Safe Drinking Water Act provides for the operation of public water systems

and imposes on the State Water Resources Control Board various responsibilities and duties. This bill,the Southeast Los Angeles County Drinking Water Relief Act, would authorize the department and thestate board to condition the awardance of financial assistance to an urban water supplier in southeastLos Angeles County that does not have adequate technical, managerial, and financial capacity for awater infrastructure project on the participation of a public water agency that has sufficient technical,managerial, and financial capacity to complete and operate the project.

AB 313 (Gray D) Water. Current Text: Vetoed: 10/15/2017 Text Introduced: 2/6/2017 Last Amend: 7/18/2017 Status: 10/15/2017-Vetoed by Governor. Location: 10/15/2017-A. VETOED Summary: Current law authorizes the State Water Resources Control Board to adopt an order setting

administrative civil liability based on the allegations set forth in the complaint without a hearing, unlessa written request for a hearing signed by, or on behalf of, the party served with the complaint isdelivered to or received by mail by the board within 20 days after receipt of the complaint. This bill,commencing July 1, 2018, would establish a Water Rights Division within the Office of AdministrativeHearings, as prescribed.

AB 339 (Mathis R) State Water Pollution Cleanup and Abatement Account. Current Text: Chaptered: 10/3/2017 Text Introduced: 2/7/2017 Last Amend: 4/4/2017 Status: 10/3/2017-Approved by the Governor. Chaptered by Secretary of State - Chapter 439,

Statutes of 2017. Location: 10/3/2017-A. CHAPTERED Summary: The Porter-Cologne Water Quality Control Act creates the State Water Pollution Cleanup

and Abatement Account in the State Water Quality Control Fund and continuously appropriatesmoneys in the account to the state board for the purposes of cleaning up waste or abating its effectson state waters. Current law, until July 1, 2018, authorizes the state board to pay these moneys fromthe account to, among others, a community water system that services a disadvantaged community tobe used to assist in addressing urgent drinking water need, among other purposes. This bill wouldlimit the above-described payments to grants, and would delete the July 1, 2018, sunset date. Byextending the term of an existing appropriation, this bill would make an appropriation.

AB 355 (Chu D) Water pollution: enforcement. Current Text: Chaptered: 10/6/2017 Text Introduced: 2/8/2017 Last Amend: 6/7/2017 Status: 10/6/2017-Approved by the Governor. Chaptered by Secretary of State - Chapter 524,

Statutes of 2017. Location: 10/6/2017-A. CHAPTERED Summary: Current law permits the State Water Resources Control Board or regional board, in lieu of

assessing all or a portion of the mandatory minimum penalties against a publicly owned treatmentworks serving a small community, as defined, to elect to require the publicly owned treatment works tospend an equivalent amount towards completion of a compliance project proposed by the publicly

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owned treatment works if the state board or regional board makes certain findings. Current law, forthese purposes, defines "a publicly owned treatment works serving a small community." This bill, forpurposes of the exception, would instead define publicly owned treatment works serving a smallcommunity as a publicly owned treatment works serving a population of 20,000 persons or fewer or arural county, with a financial hardship.

AB 378 (Garcia, Cristina D) Greenhouse gases, criteria air pollutants, and toxic air contaminants. Current Text: Amended: 5/30/2017 Text Introduced: 2/9/2017 Last Amend: 5/30/2017 Status: 9/11/2017-Reconsideration granted. Ordered to inactive file at the request of Assembly

Member Cristina Garcia. Location: 9/11/2017-A. INACTIVE FILE Summary: The California Global Warming Solutions Act requires the State Air Resources Board, when

adopting rules and regulations to achieve greenhouse gas emissions reductions beyond the statewidegreenhouse gas emissions limit and to protect the state’s most impacted and disadvantagedcommunities, to follow specified requirements, consider the social costs of the emissions ofgreenhouse gases, and prioritize specified emission reduction rules and regulations. This bill wouldrequire the state board to consider and account for the social costs of the emissions of greenhousegases when adopting those rules and regulations.

AB 429 (Grayson D) State water policy: water rights: use and transferability. Current Text: Introduced: 2/13/2017 Text Introduced: 2/13/2017 Status: 5/12/2017-Failed Deadline pursuant to Rule 61(a)(3). (Last location was PRINT on 2/13/2017)

(May be acted upon Jan 2018) Location: 5/12/2017-A. 2 YEAR Summary: Current law declares that the growing water needs of the state require the use of water in

an efficient manner and that the efficient use of water requires certainty in the definition of propertyrights to the use of water and transferability of those rights. This bill would make nonsubstantivechanges to those declarations.

AB 474 (Garcia, Eduardo D) Hazardous waste: spent brine solutions. Current Text: Chaptered: 10/15/2017 Text Introduced: 2/13/2017 Last Amend: 8/21/2017 Status: 10/15/2017-Approved by the Governor. Chaptered by Secretary of State - Chapter 840,

Statutes of 2017. Location: 10/15/2017-A. CHAPTERED Summary: Current law exempts from certain requirements of the Hazardous Waste Control Law

wastes from the extraction, beneficiation, or processing of ores and minerals that are not subject toregulation under the federal Resource Conservation and Recovery Act of 1976, including spent brinesolutions used to produce geothermal energy that meet specified requirements. This bill would exemptspent brine solutions that are byproducts of the treatment of groundwater to meet California drinkingwater standards from those same requirements if certain conditions are met, including that the spentbrine solutions are transferred for dewatering via a closed piping system to lined surfaceimpoundments regulated by the California regional water quality control boards.

AB 487 (Mathis R) Sustainable Groundwater Management Act. Current Text: Introduced: 2/13/2017 Text Introduced: 2/13/2017 Status: 5/12/2017-Failed Deadline pursuant to Rule 61(a)(3). (Last location was PRINT on 2/13/2017)

(May be acted upon Jan 2018) Location: 5/12/2017-A. 2 YEAR Summary: Would state the intent of the Legislature to enact statutory changes relating to the

Sustainable Groundwater Management Act.

AB 554 (Cunningham R) Desalination: statewide goal. Current Text: Amended: 3/27/2017 Text Introduced: 2/14/2017 Last Amend: 3/27/2017 Status: 6/2/2017-Failed Deadline pursuant to Rule 61(a)(8). (Last location was APPR. on 5/26/2017)

(May be acted upon Jan 2018) Location: 6/2/2017-A. 2 YEAR Summary: The Cobey-Porter Saline Water Conversion Law provides that is it the intention of the

Legislature that the Department of Water Resources undertake to find economic and efficient methodsof desalting saline water so that desalted water may be made available to help meet the growing

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water requirements of the state. This bill would establish a goal to desalinate 300,000 acre-feet ofdrinking water per year by the year 2025 and 500,000 acre-feet of drinking water per year by the year2030.

AB 560 (Salas D) Safe Drinking Water State Revolving Fund: project financing: severely disadvantagedcommunities.

Current Text: Chaptered: 10/7/2017 Text Introduced: 2/14/2017 Last Amend: 7/12/2017 Status: 10/7/2017-Approved by the Governor. Chaptered by Secretary of State - Chapter 552,

Statutes of 2017. Location: 10/7/2017-A. CHAPTERED Summary: Would, to the extent permitted by federal law, authorize the State Water Resources

Control Board to provide grant funding, and principal forgiveness and 0% financing on loans, from theSafe Drinking Water State Revolving Fund to a project for a water system with a service area thatqualifies as a severely disadvantaged community if the water system demonstrates that repaying aSafe Drinking Water State Revolving Fund loan with interest would result in unaffordable water rates,as defined.

AB 574 (Quirk D) Potable reuse. Current Text: Chaptered: 10/6/2017 Text Introduced: 2/14/2017 Last Amend: 9/1/2017 Status: 10/6/2017-Approved by the Governor. Chaptered by Secretary of State - Chapter 528,

Statutes of 2017. Location: 10/6/2017-A. CHAPTERED Summary: Current law required the State Department of Public Health to, on or before December 31,

2013, adopt uniform water recycling criteria for indirect potable reuse for groundwater recharge.Current law also required the department to develop and adopt uniform water recycling criteria forsurface water augmentation, as defined, by December 31, 2016, if a specified expert panel found thatthe criteria would adequately protect public health, and required the department to investigate thefeasibility of developing uniform water recycling criteria for direct potable reuse and to provide a finalreport on that investigation to the Legislature by December 31, 2016. Current law defined the terms“direct potable reuse” and “surface water augmentation” for these purposes. This bill would specifythat “direct potable reuse” includes “raw water augmentation” and “treated drinking wateraugmentation.”

AB 577 (Caballero D) Disadvantaged communities. Current Text: Amended: 3/9/2017 Text Introduced: 2/14/2017 Last Amend: 3/9/2017 Status: 4/28/2017-Failed Deadline pursuant to Rule 61(a)(2). (Last location was E.S. & T.M. on

2/27/2017)(May be acted upon Jan 2018) Location: 4/28/2017-A. 2 YEAR Summary: Current law defines a disadvantaged community as a community with an annual median

household income that is less than 80% of the statewide annual median household income for variouspurposes, that include, but are not limited to, the Water Quality, Supply, and InfrastructureImprovement Act of 2014, eligibility for certain entities to apply for funds from the State Water PollutionCleanup and Abatement Account, and authorization for a community revitalization and investmentauthority to carry out a community revitalization plan. This bill would expand the definition of adisadvantaged community to include a community with an annual per capita income that is less than80% of the statewide annual per capita income.

AB 594 (Irwin D) Water supply planning: California Environmental Quality Act: photovoltaic or windenergy generation facility.

Current Text: Introduced: 2/14/2017 Text Introduced: 2/14/2017 Status: 4/28/2017-Failed Deadline pursuant to Rule 61(a)(2). (Last location was W.,P. & W. on

2/27/2017)(May be acted upon Jan 2018) Location: 4/28/2017-A. 2 YEAR Summary: Current law requires a city or county that determines that a project, as defined, is subject

to the California Environmental Quality Act to identify any public water system that may supply waterfor the project and to request those public water systems to prepare a specified water supplyassessment. If no public water system is identified, the city or county is required to prepare the watersupply assessment. Current law, until January 1, 2018, exempts from the definition of “project” aproposed photovoltaic or wind energy generation facility that would demand no more than 75 acre-feet of water annually. This bill would indefinitely exempt from the definition of “project” a proposed

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photovoltaic or wind energy generation facility that would demand no more than 50 acre-feet of waterannually.

AB 640 (Harper R) Recycled water: recycling criteria. Current Text: Introduced: 2/14/2017 Text Introduced: 2/14/2017 Status: 5/12/2017-Failed Deadline pursuant to Rule 61(a)(3). (Last location was PRINT on 2/14/2017)

(May be acted upon Jan 2018) Location: 5/12/2017-A. 2 YEAR Summary: Current law, the Porter-Cologne Water Quality Control Act, requires the State Water

Resources Control Board to establish uniform statewide recycling criteria for each varying type of useof recycled water if the use involves the protection of public health. The act defines recycling criteria tomean the levels of constituents of recycled water, and the means for assurance of reliability under thedesign concept that will result in recycled water that is safe for the uses to be made.This bill wouldmake technical, nonsubstantive changes to that definition.

AB 641 (Harper R) Water conservation and reclamation projects. Current Text: Introduced: 2/14/2017 Text Introduced: 2/14/2017 Status: 5/12/2017-Failed Deadline pursuant to Rule 61(a)(3). (Last location was PRINT on 2/14/2017)

(May be acted upon Jan 2018) Location: 5/12/2017-A. 2 YEAR Summary: Current law, the Water Conservation Projects Act of 1985, declares that the intent of the

act is to encourage local agencies and private enterprise to implement potential water conservationand reclamation projects by establishing a state program to finance or assist in financing projects thatmeet state criteria and will result in an additional supply of water for use in areas of need.This billwould make nonsubstantive changes in that provision.

AB 642 (Harper R) Desalinated water. Current Text: Introduced: 2/14/2017 Text Introduced: 2/14/2017 Status: 5/12/2017-Failed Deadline pursuant to Rule 61(a)(3). (Last location was PRINT on 2/14/2017)

(May be acted upon Jan 2018) Location: 5/12/2017-A. 2 YEAR Summary: The Cobey-Porter Saline Water Conversion Law declares that the growing water needs of

the state require the development of cost-effective and efficient water supply technologies and thatdesalination technology is now feasible to help provide significant new water supplies from seawater,brackish water, and reclaimed water.This bill would declare the intent of the Legislature to enactsubsequent legislation relating to desalination.

AB 685 (Fong R) Water: dams and reservoirs. Current Text: Introduced: 2/15/2017 Text Introduced: 2/15/2017 Status: 5/12/2017-Failed Deadline pursuant to Rule 61(a)(3). (Last location was PRINT on 2/15/2017)

(May be acted upon Jan 2018) Location: 5/12/2017-A. 2 YEAR Summary: Current law provides that all dams and reservoirs in the state are under the jurisdiction of

the Department of Water Resources. Current law authorizes the department to require owners ofdams and reservoirs to keep records of, and to report on, maintenance, operation, staffing, andengineering and geologic investigations.This bill would make nonsubstantive changes to thatprovision.

AB 791 (Frazier D) Sacramento-San Joaquin Delta: State Water Project and federal Central ValleyProject: new conveyance facility.

Current Text: Amended: 3/21/2017 Text Introduced: 2/15/2017 Last Amend: 3/21/2017 Status: 5/26/2017-Failed Deadline pursuant to Rule 61(a)(5). (Last location was APPR. SUSPENSE FILE

on 5/10/2017)(May be acted upon Jan 2018) Location: 5/26/2017-A. 2 YEAR Summary: The Sacramento-San Joaquin Delta Reform Act of 2009 prohibits construction of a new Delta

conveyance facility from being initiated until the persons or entities that contract to receive water fromthe State Water Project and the federal Central Valley Project or a joint powers authority representingthose entities have made arrangements or entered into contracts to pay for certain costs required forthe construction, operation, and maintenance of the facility and full mitigation of property tax orassessments levied for land used in the construction, location, mitigation, or operation of the facility.This bill would require, before a water contractor enters into a contract to pay for these costs, that the

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lead agency provide the breakdown of costs for each water contractor entering into a contract andwhat benefits each contractor will receive based on the proportion it has financed of the proposedconveyance project.

AB 792 (Frazier D) Sacramento-San Joaquin Delta: Delta Plan: certification of consistency. Current Text: Amended: 3/28/2017 Text Introduced: 2/15/2017 Last Amend: 3/28/2017 Status: 4/28/2017-Failed Deadline pursuant to Rule 61(a)(2). (Last location was W.,P. & W. on

3/20/2017)(May be acted upon Jan 2018) Location: 4/28/2017-A. 2 YEAR Summary: The Sacramento-San Joaquin Delta Reform Act of 2009 establishes the Delta Stewardship

Council and requires the council to develop, adopt, and commence implementation of a comprehensivemanagement plan for the Delta, known as the Delta Plan. The act requires a state or local publicagency that proposes to undertake a covered action to prepare and submit to the council a writtencertification of consistency with the Delta Plan before undertaking that action. This bill would prohibitthe council from granting a certification of consistency with the Delta Plan until the board hascompleted its update of a specified water quality control plan.

AB 793 (Frazier D) Sacramento-San Joaquin Delta: financing. Current Text: Amended: 3/27/2017 Text Introduced: 2/15/2017 Last Amend: 3/27/2017 Status: 5/12/2017-Failed Deadline pursuant to Rule 61(a)(3). (Last location was W.,P. & W. on

3/2/2017)(May be acted upon Jan 2018) Location: 5/12/2017-A. 2 YEAR Summary: Would declare it to be state policy that the existing state of the Sacramento-San Joaquin

Delta is recognized and defined as an integral component of California’s water infrastructure. The billwould state that the maintenance and repair of the Delta are eligible for the same forms of financingas other water collection and treatment infrastructure and would specify the maintenance and repairactivities that are eligible are limited to certain cleanup and abatement-related restoration andconservation activities.

AB 833 (Allen, Travis R) Public employees’ retirement. Current Text: Introduced: 2/16/2017 Text Introduced: 2/16/2017 Status: 5/12/2017-Failed Deadline pursuant to Rule 61(a)(3). (Last location was PRINT on 2/16/2017)

(May be acted upon Jan 2018) Location: 5/12/2017-A. 2 YEAR Summary: Current law, the California Public Employees’ Pension Reform Act of 2013, establishes

various limits on retirement benefits generally applicable to a public employee retirement system,except as specified, and among other things, prescribes limits on service after retirement withoutreinstatement into the applicable retirement system.This bill would make a nonsubstantive change tothat provision.

AB 869 (Rubio D) Sustainable water use and demand reduction: recycled water. Current Text: Amended: 8/24/2017 Text Introduced: 2/16/2017 Last Amend: 8/24/2017 Status: 9/1/2017-Failed Deadline pursuant to Rule 61(a)(12). (Last location was N.R. & W. on

8/24/2017)(May be acted upon Jan 2018) Location: 9/1/2017-S. 2 YEAR Summary: Current law imposes various water use reduction requirements that apply to urban retail

water suppliers, including a requirement that the state achieve a 20% reduction in urban per capitawater use by December 31, 2020. This bill would require long-term standards for urban waterconservation and water use to include a credit for recycled water, as specified.

AB 892 (Waldron R) Municipal water districts: water service: Indian tribes. Current Text: Amended: 3/23/2017 Text Introduced: 2/16/2017 Last Amend: 3/23/2017 Status: 5/12/2017-Failed Deadline pursuant to Rule 61(a)(3). (Last location was L. GOV. on 3/23/2017)

(May be acted upon Jan 2018) Location: 5/12/2017-A. 2 YEAR Summary: Current law, upon the request of certain Indian tribes and the satisfaction of certain

conditions, requires a district to provide service of water at substantially the same terms applicable tothe customers of the district to the Indian tribe’s lands that are not within a district, as prescribed. This

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bill would authorize, rather than require, a district to provide this service of water. The bill would applythis authorization to all Indian tribes whose lands are owned by the tribe.

AB 967 (Gloria D) Human remains disposal: alkaline hydrolysis: licensure and regulation. Current Text: Chaptered: 10/15/2017 Text Introduced: 2/16/2017 Last Amend: 9/12/2017 Status: 10/15/2017-Approved by the Governor. Chaptered by Secretary of State - Chapter 846,

Statutes of 2017. Location: 10/15/2017-A. CHAPTERED Summary: Would, commencing July 1, 2020, require the Cemetery and Funeral Bureau to license and

regulate hydrolysis facilities, as defined, and hydrolysis facility managers, and would enactrequirements applicable to hydrolysis facilities substantially similar to those applicable to crematoria.By expanding the definition of crimes relating to the disposition of human remains and creating newcrimes, this bill would impose a state-mandated local program.

AB 968 (Rubio D) Urban water use: water efficiency. Current Text: Amended: 4/17/2017 Text Introduced: 2/16/2017 Last Amend: 4/17/2017 Status: 5/26/2017-Failed Deadline pursuant to Rule 61(a)(5). (Last location was APPR. SUSPENSE FILE

on 5/10/2017)(May be acted upon Jan 2018) Location: 5/26/2017-A. 2 YEAR Summary: Would require each urban retail water supplier to develop a water efficiency target, as

defined, for 2025 in its 2020 urban water management plan required to be submitted by July 1, 2021,and to achieve that target. The bill would authorize an urban retail water supplier to adjust andupdate the water efficiency target, as appropriate, when the supplier reports its compliance inachieving the water efficiency targets and its implementation of the identified performance measures inits 2025 urban water management plan required to be submitted by July 1, 2026. The bill wouldrequire each urban retail water supplier to meet its adjusted 2025 water efficiency target by December31, 2025, unless the supplier makes a certain report to the department.

AB 975 (Friedman D) Natural resources: wild and scenic rivers. Current Text: Amended: 5/4/2017 Text Introduced: 2/16/2017 Last Amend: 5/4/2017 Status: 7/14/2017-Failed Deadline pursuant to Rule 61(a)(10). (Last location was INACTIVE FILE on

6/5/2017)(May be acted upon Jan 2018) Location: 7/14/2017-A. 2 YEAR Summary: Current law establishes that it is the policy of the state that certain rivers that possess

extraordinary scenic, recreational, fishery, or wildlife values shall be preserved in their free-flowingstate, together with their immediate environments, for the benefit and enjoyment of the people of thestate. This bill would revise that policy to specify that certain rivers that possess scenic, recreational,fishery, wildlife, historical, cultural, geological, or other similar values shall be preserved in their free-flowing state, together with their immediate environments, for the benefit and enjoyment of thepeople of the state, and would revise the definition of “immediate environments,” and define the term“extraordinary value” for purposes of that policy.

AB 979 (Lackey R) Local agency formation commissions: district representation. Current Text: Chaptered: 9/1/2017 Text Introduced: 2/16/2017 Last Amend: 5/15/2017 Status: 9/1/2017-Approved by the Governor. Chaptered by Secretary of State - Chapter 203, Statutes

of 2017. Location: 9/1/2017-A. CHAPTERED Summary: The Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 provides for the

selection of representatives of independent special districts on each local agency formation commissionby an independent special district selection committee pursuant to a nomination and election process.This bill would additionally require the executive officer to call and hold a meeting of the special districtselection committee upon the adoption of a resolution of intention by the committee relating toproceedings for representation of independent special districts upon the commission pursuant tospecified law.

AB 1000 (Friedman D) Water conveyance: use of facility with unused capacity. Current Text: Amended: 7/3/2017 Text Introduced: 2/16/2017 Last Amend: 7/3/2017

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Status: 9/1/2017-Failed Deadline pursuant to Rule 61(a)(12). (Last location was APPR. SUSPENSE FILEon 8/28/2017)(May be acted upon Jan 2018)

Location: 9/1/2017-S. 2 YEAR Summary: Current law prohibits the state or a regional or local public agency from denying a bona fide

transferor of water from using a water conveyance facility that has unused capacity for the period oftime for which that capacity is available, if fair compensation is paid for that use and otherrequirements are met. This bill would, notwithstanding that provision, prohibit a transferor of waterfrom using a water conveyance facility that has unused capacity to transfer water from a groundwaterbasin underlying desert lands, as defined, that is in the vicinity of specified federal lands or state landsto outside of the groundwater basin unless the State Lands Commission, in consultation with theDepartment of Fish and Wildlife, finds that the transfer of the water will not adversely affect thenatural or cultural resources of those federal and state lands.

AB 1009 (Gallagher R) Sustainable groundwater management: groundwater sustainability agencies. Current Text: Introduced: 2/16/2017 Text Introduced: 2/16/2017 Status: 5/12/2017-Failed Deadline pursuant to Rule 61(a)(3). (Last location was PRINT on 2/16/2017)

(May be acted upon Jan 2018) Location: 5/12/2017-A. 2 YEAR Summary: The Sustainable Groundwater Management Act generally authorizes any local agency or

combination of local agencies overlying a basin to decide to become a groundwater sustainabilityagency for that basin. The act requires a groundwater sustainability agency to establish and maintaina list of persons interested in receiving notices regarding plan preparation, meeting announcements,and availability of draft plans, maps, and other relevant documents. This bill would make anonsubstantive change in these provisions.

AB 1050 (Allen, Travis R) California Endangered Species Act: Delta smelt. Current Text: Amended: 3/28/2017 Text Introduced: 2/16/2017 Last Amend: 3/28/2017 Status: 4/28/2017-Failed Deadline pursuant to Rule 61(a)(2). (Last location was W.,P. & W. on

3/27/2017)(May be acted upon Jan 2018) Location: 4/28/2017-A. 2 YEAR Summary: The California Endangered Species Act requires the Fish and Game Commission to establish

a list of endangered species and a list of threatened species and requires the commission to add orremove species from either list if it finds, upon the receipt of sufficient scientific information, that theaction is warranted. The act prohibits the taking of an endangered or threatened species, except asspecified. This bill would require the commission to remove the Delta smelt from the endangeredspecies list.

AB 1211 (Dahle R) State policy for water quality control. Current Text: Introduced: 2/17/2017 Text Introduced: 2/17/2017 Status: 5/12/2017-Failed Deadline pursuant to Rule 61(a)(3). (Last location was PRINT on 2/17/2017)

(May be acted upon Jan 2018) Location: 5/12/2017-A. 2 YEAR Summary: Under current law, the Porter-Cologne Water Quality Control Act, the state policy for water

quality control is required to consist of water quality principles and guidelines for long-range resourceplanning, water quality objectives, and other principles and guidelines deemed essential by the StateWater Resources Control Board for water quality control.This bill would make technical, nonsubstantivechanges to that provision.

AB 1235 (Daly D) Santa Ana River Conservancy Program. Current Text: Amended: 3/28/2017 Text Introduced: 2/17/2017 Last Amend: 3/28/2017 Status: 5/26/2017-In committee: Held under submission. Location: 5/3/2017-A. APPR. SUSPENSE FILE Summary: Current law establishes the State Coastal Conservancy with prescribed powers and

responsibilities for implementing and administering various programs intended to preserve, protect,and restore the state's coastal areas. Current law also establishes the Santa Ana River ConservancyProgram, to be administered by the conservancy, for purposes related to the implementation ofprojects to restore, preserve, and enhance specified lands in the Santa Ana River region, asdefined.This bill would appropriate the sum of $20,000,000 from the General Fund to the conservancyto be expended for the purposes of the program.

AB 1270 (Gallagher R) Dams and reservoirs: inspections and reporting.

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Current Text: Amended: 9/12/2017 Text Introduced: 2/17/2017 Last Amend: 9/12/2017 Status: 9/16/2017-Ordered to inactive file at the request of Senator McGuire. Location: 9/16/2017-S. INACTIVE FILE Summary: Current law requires the Department of Water Resources, from time to time, to make

inspections of dams and reservoirs at state expense for the purpose of determining their safety. Thisbill would repeal those provisions and instead would require the Division of Safety of Dams to inspectdams, reservoirs, and critical appurtenant structures within its jurisdiction once per fiscal year with theexception of low hazard potential dams which the bill would require to receive inspections, at aminimum, every two fiscal years, as specified. The bill would provide that the dam inspection reportsare public records subject to the California Public Records Act.

AB 1323 (Weber D) Sustainable water use and demand reduction: stakeholder workgroup. Current Text: Amended: 5/30/2017 Text Introduced: 2/17/2017 Last Amend: 5/30/2017 Status: 9/1/2017-Failed Deadline pursuant to Rule 61(a)(12). (Last location was APPR. SUSPENSE FILE

on 8/21/2017)(May be acted upon Jan 2018) Location: 9/1/2017-S. 2 YEAR Summary: Would, with a specified exception, require the Department of Water Resources to convene

a stakeholder workgroup with prescribed representatives invited to participate, including, amongothers, representatives of the department and the State Water Resources Control Board, no later thanFebruary 1, 2019. The bill would require the stakeholder workgroup to develop, evaluate, andrecommend proposals for establishing new water use targets for urban water suppliers and toexamine and report to the Governor and the Legislature by December 31, 2019, as specified.

AB 1369 (Gray D) Water quality and storage. Current Text: Introduced: 2/17/2017 Text Introduced: 2/17/2017 Status: 4/28/2017-Failed Deadline pursuant to Rule 61(a)(2). (Last location was W.,P. & W. on

3/27/2017)(May be acted upon Jan 2018) Location: 4/28/2017-A. 2 YEAR Summary: Current law requires all moneys, except for fines and penalties, collected by the State Air

Resources Board from the auction or sale of allowances as part of a market-based compliancemechanism relative to reduction of greenhouse gas emissions to be deposited in the Greenhouse GasReduction Fund. This bill would require the Department of Water Resources to increase statewidewater storage capacity by 25% by January 1, 2025, and 50% by January 1, 2050, as specified.

AB 1442 (Allen, Travis R) Bonds: transportation: water projects. Current Text: Amended: 3/28/2017 Text Introduced: 2/17/2017 Last Amend: 3/28/2017 Status: 4/25/2017-In committee: Set, second hearing. Failed passage. Reconsideration granted. Location: 3/27/2017-A. TRANS. Summary: Would provide that no further bonds shall be sold for high-speed rail purposes pursuant to

the Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century, except as specificallyprovided with respect to an existing appropriation for high-speed rail purposes for early improvementprojects in the Phase 1 blended system. The bill, subject to the above exception, would requireredirection of the unspent proceeds received from outstanding bonds issued and sold for other high-speed rail purposes prior to the effective date of these provisions, upon appropriation, for use inretiring the debt incurred from the issuance and sale of those outstanding bonds.

AB 1481 (Nazarian D) Water: public use. Current Text: Introduced: 2/17/2017 Text Introduced: 2/17/2017 Status: 5/12/2017-Failed Deadline pursuant to Rule 61(a)(3). (Last location was PRINT on 2/17/2017)

(May be acted upon Jan 2018) Location: 5/12/2017-A. 2 YEAR Summary: Current law declares that all water within the state is the property of the people of the

state, but the right to the use of the water may be acquired by appropriation in the manner providedby law.This bill would make nonsubstantive changes to that provision.

AB 1587 (Levine D) Invasive species: dreissenid mussels. Current Text: Amended: 6/29/2017 Text Introduced: 2/17/2017

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Last Amend: 6/29/2017 Status: 9/1/2017-Failed Deadline pursuant to Rule 61(a)(12). (Last location was APPR. SUSPENSE FILE

on 8/21/2017)(May be acted upon Jan 2018) Location: 9/1/2017-S. 2 YEAR Summary: Current law, until January 1, 2020, generally prohibits a person from possessing, importing,

shipping, or transporting in the state, or from placing, planting, or causing to be placed or planted inany water within the state, dreissenid mussels, and authorizes the Director of Fish and Wildlife or hisor her designee to engage in various enforcement activities with regard to dreissenid mussels. Currentlaw authorizes the director to conduct inspections of waters of the state and facilities located withinwaters of the state that may contain dreissenid mussels and, if those mussels are detected or may bepresent, order the closure of the waters or facilities to conveyances or otherwise restrict access to thewaters or facilities, with the concurrence of the Secretary of the Natural Resources Agency. This billwould also authorize a peace officer to engage in certain of these enforcement activities, asprescribed, and would extend to January 1, 2023, the repeal date of those provisions.

AB 1605 (Caballero D) Maximum contaminant level: nitrate: replacement water. Current Text: Amended: 4/27/2017 Text Introduced: 2/17/2017 Last Amend: 4/27/2017 Status: 5/26/2017-Failed Deadline pursuant to Rule 61(a)(5). (Last location was JUD. on 5/1/2017)

(May be acted upon Jan 2018) Location: 5/26/2017-A. 2 YEAR Summary: The California Safe Drinking Water Act, requires the state board to administer provisions

relating to the regulation of drinking water to protect public health and vests with the state boardspecified responsibilities. This bill would prohibit a person or entity providing replacement water, asdefined, to address drinking water that exceeds the maximum contaminant level for nitrate ingroundwater from being deemed to have caused pollution or a nuisance, or from being liable fornegligence or trespass, if certain conditions are met.

AB 1654 (Rubio D) Water conservation. Current Text: Amended: 7/12/2017 Text Introduced: 2/17/2017 Last Amend: 7/12/2017 Status: 7/21/2017-Failed Deadline pursuant to Rule 61(a)(11). (Last location was RLS. on 7/17/2017)

(May be acted upon Jan 2018) Location: 7/21/2017-S. 2 YEAR Summary: Would state the intent of the Legislature to enact legislation necessary to help make water

conservation a California way of life.

AB 1667 (Friedman D) Water management planning. Current Text: Amended: 7/3/2017 Text Introduced: 2/17/2017 Last Amend: 7/3/2017 Status: 7/14/2017-Failed Deadline pursuant to Rule 61(a)(10). (Last location was N.R. & W. on

7/11/2017)(May be acted upon Jan 2018) Location: 7/14/2017-S. 2 YEAR Summary: Would require the State Water Resources Control Board, in consultation with the

Department of Water Resources, to adopt long-term standards for urban water conservation andwater use on or before May 20, 2021. The bill would also require the board, in consultation with thedepartment, to adopt performance measures for commercial, industrial, and institutional water use onor before that date.

AB 1668 (Friedman D) Water management planning. Current Text: Amended: 9/8/2017 Text Introduced: 2/17/2017 Last Amend: 9/8/2017 Status: 9/15/2017-From committee: Do pass and re-refer to Com. on RLS. (Ayes 5. Noes 0.)

(September 15). Re-referred to Com. on RLS. Location: 9/15/2017-S. RLS. Summary: Current law requires the state to achieve a 20% reduction in urban per capita water use in

California by December 31, 2020. Current law requires each urban retail water supplier to developurban water use targets and an interim urban water use target, as specified. This bill would requirethe State Water Resources Control Board, in coordination with the Department of Water Resources, toadopt long-term standards for the efficient use of water, as provided, and performance measures forcommercial, industrial, and institutional water use on or before June 30, 2021.

AB 1669 (Friedman D) Urban water conservation standards and use reporting.Page 10/14

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Current Text: Amended: 4/18/2017 Text Introduced: 2/17/2017 Last Amend: 4/18/2017 Status: 5/26/2017-Failed Deadline pursuant to Rule 61(a)(5). (Last location was APPR. SUSPENSE FILE

on 5/10/2017)(May be acted upon Jan 2018) Location: 5/26/2017-A. 2 YEAR Summary: Would require the State Water Resources Control Board, in consultation with the

Department of Water Resources, to adopt long-term standards for urban water conservation andwater use by May 20, 2021. The bill would authorize the board, in consultation with the department, toadopt interim standards for urban water conservation and water use by emergency regulation. The billwould require the board, before adopting an emergency regulation, to provide at least 60 days for thepublic to review and comment on the proposed regulation and would require the board to hold a publichearing.

AB 1673 (Aguiar-Curry D) The California Water Plan. Current Text: Introduced: 2/17/2017 Text Introduced: 2/17/2017 Status: 5/12/2017-Failed Deadline pursuant to Rule 61(a)(3). (Last location was PRINT on 2/17/2017)

(May be acted upon Jan 2018) Location: 5/12/2017-A. 2 YEAR Summary: Current law requires the Department of Water Resources to update every 5 years the plan

for the orderly and coordinated control, protection, conservation, development, and use of the waterresources of the state, which is known as The California Water Plan.This bill would make technical,nonsubstantive changes to that requirement.

SB 5 (De León D) California Drought, Water, Parks, Climate, Coastal Protection, and Outdoor AccessFor All Act of 2018.

Current Text: Chaptered: 10/15/2017 Text Introduced: 12/5/2016 Last Amend: 9/10/2017 Status: 10/15/2017-Approved by the Governor. Chaptered by Secretary of State. Chapter 852,

Statutes of 2017. Location: 10/15/2017-S. CHAPTERED Summary: Would enact the California Drought, Water, Parks, Climate, Coastal Protection, and Outdoor

Access For All Act of 2018, which, if approved by the voters, would authorize the issuance of bonds inan amount of $4,000,000,000 pursuant to the State General Obligation Bond Law to finance adrought, water, parks, climate, coastal protection, and outdoor access for all program. The bill, uponvoter approval, would reallocate $100,000,000 of the unissued bonds authorized for the purposes ofPropositions 1, 40, and 84 to finance the purposes of a drought, water, parks, climate, coastalprotection, and outdoor access for all program.

SB 49 (De León D) California Environmental, Public Health, and Workers Defense Act of 2017. Current Text: Amended: 9/12/2017 Text Introduced: 12/5/2016 Last Amend: 9/12/2017 Status: 9/12/2017-From committee with author's amendments. Read second time and amended. Re-

referred to Com. on RLS. Location: 9/11/2017-A. RLS. Summary: Would require specified agencies to take prescribed actions to maintain and enforce certain

requirements and standards pertaining to air, water, and protected species. By imposing new duties onlocal agencies, this bill would impose a state-mandated local program. This bill contains other relatedprovisions and other existing laws.

SB 80 (Wieckowski D) California Environmental Quality Act: notices. Current Text: Vetoed: 10/16/2017 Text Introduced: 1/11/2017 Last Amend: 6/21/2017 Status: 10/15/2017-Vetoed by the Governor. In Senate. Consideration of Governor's veto pending. Location: 10/16/2017-S. VETOED Summary: The California Environmental Quality Act requires the lead agency to mail certain notices to

persons who have filed a written request for notices. The act provides that if the agency offers toprovide the notices by email, upon filing a written request for notices, a person may request that thenotices be provided to him or her by email. This bill would require the lead agency to post thosenotices on the agency’s Internet Web site. The bill would require the agency to offer to provide thosenotices by email. Because this bill would increase the level of service provided by a local agency, thisbill would impose a state-mandated local program.

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SB 193 (Cannella R) Monterey County Water Resources Agency: Lake Nacimiento and Lake San Antonio:white bass.

Current Text: Amended: 6/8/2017 Text Introduced: 1/30/2017 Last Amend: 6/8/2017 Status: 6/8/2017-From committee with author's amendments. Read second time and amended. Re-

referred to Com. on N.R. & W. Location: 6/8/2017-S. N.R. & W. Summary: Current law makes it unlawful to place, plant, or cause to be placed or planted, in any of

the waters of this state, any live fish, any fresh or salt water animal, or any aquatic plant, whethertaken without or within the state, without first submitting it for inspection to, and securing the writtenpermission of, the Department of Fish and Wildlife. Current law also makes it unlawful to transport orpossess any live white bass, whether taken within or without the state, unless it is first submitted forinspection to, and written permission is obtained from, the department. This bill would exempt themovement of white bass between Lake Nacimiento and Lake San Antonio through the interlakeunderground tunnel or pipeline from the above-described provisions relating to fish and wildlife.

SB 200 (Morrell R) Public employees’ retirement benefits: final compensation. Current Text: Introduced: 1/31/2017 Text Introduced: 1/31/2017 Status: 5/12/2017-Failed Deadline pursuant to Rule 61(a)(3). (Last location was RLS. on 1/31/2017)

(May be acted upon Jan 2018) Location: 5/12/2017-S. 2 YEAR Summary: The California Public Employees’ Pension Reform Act of 2013 provides, for purposes of

determining a retirement benefit paid to a person who first becomes a member of a public retirementsystem on or after January 1, 2013, that final compensation means the highest average annualpensionable compensation earned, as defined, during a period of at least 36 consecutive months, or atleast 3 consecutive school years. This bill would make a nonsubstantive change to that provision.

SB 231 (Hertzberg D) Local government: fees and charges. Current Text: Chaptered: 10/6/2017 Text Introduced: 2/2/2017 Last Amend: 4/19/2017 Status: 10/6/2017-Approved by the Governor. Chaptered by Secretary of State. Chapter 536, Statutes

of 2017. Location: 10/6/2017-S. CHAPTERED Summary: Articles XIIIC and XIIID of the California Constitution generally require that assessments,

fees, and charges be submitted to property owners for approval or rejection after the provision ofwritten notice and the holding of a public hearing. Current law, the Proposition 218 OmnibusImplementation Act, prescribes specific procedures and parameters for local jurisdictions to comply withArticles XIIIC and XIIID of the California Constitution and defines terms for these purposes. This billwould define the term “sewer” for these purposes. The bill would also make findings and declarationsrelating to the definition of the term “sewer” for these purposes.

SB 417 (Berryhill R) State Water Resources Control Board. Current Text: Introduced: 2/15/2017 Text Introduced: 2/15/2017 Status: 5/12/2017-Failed Deadline pursuant to Rule 61(a)(3). (Last location was RLS. on 2/15/2017)

(May be acted upon Jan 2018) Location: 5/12/2017-S. 2 YEAR Summary: Current law declares that to provide for the orderly and efficient administration of the

water resources in the state, it is necessary to establish the State Water Resources Control Board toexercise the adjudicatory and regulatory functions of the state in the field of water resources. Existinglaw declares the intent of the Legislature to combine the water rights, water quality, and drinkingwater functions of the state government to provide for coordinated consideration of water rights,water quality, and safe and reliable drinking water. This bill would make nonsubstantive changes tothese declarations.

SB 564 (McGuire D) Joint powers authorities: Water Bill Savings Act. Current Text: Chaptered: 10/2/2017 Text Introduced: 2/17/2017 Last Amend: 8/31/2017 Status: 10/2/2017-Approved by the Governor. Chaptered by Secretary of State. Chapter 430, Statutes

of 2017. Location: 10/2/2017-S. CHAPTERED Summary: Would enact the Water Bill Savings Act, which would authorize a joint powers authority to

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http://district12.cssrc.us/


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Angeles, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, and Sonoma or its publiclyowned utility to acquire, install, or repair a water efficiency improvement on the customer’s propertyserved by the local agency or its publicly owned utility. The bill would require the customer to repay theauthority through an efficiency charge on the customer’s water bill to be established and collected bythe local agency or its publicly owned utility on behalf of the authority pursuant to a servicingagreement.

SB 606 (Skinner D) Water management planning. Current Text: Amended: 9/6/2017 Text Introduced: 2/17/2017 Last Amend: 9/6/2017 Status: 9/13/2017-Assembly Rule 96 suspended. Withdrawn from committee. Ordered to third reading. Location: 9/13/2017-A. THIRD READING Summary: Current law requires the state to achieve a 20% reduction in urban per capita water use in

California by December 31, 2020. Current law requires each urban retail water supplier to developurban water use targets and an interim urban water use target, as specified. The bill would require anurban retail water supplier to calculate an urban water use objective no later than July 1, 2022, and byJuly 1 every year thereafter, and its actual urban water use by those same dates.

SB 623 (Monning D) Water quality: Safe and Affordable Drinking Water Fund. Current Text: Amended: 8/21/2017 Text Introduced: 2/17/2017 Last Amend: 8/21/2017 Status: 9/1/2017-From committee: Without recommendation. (Ayes 11. Noes 0.) (September 1) Re-

referred to Com. on RLS. Location: 9/1/2017-A. RLS. Summary: Would establish the Safe and Affordable Drinking Water Fund in the State Treasury and

would provide that moneys in the fund are continuously appropriated to the State Water ResourcesControl Board. The bill would require the board to administer the fund to secure access to safe drinkingwater for all Californians, while also ensuring the long-term sustainability of drinking water service andinfrastructure. The bill would authorize the state board to provide for the deposit into the fund offederal contributions, voluntary contributions, gifts, grants, bequests, and settlements from partiesresponsible for contamination of drinking water supplies.

SB 669 (Moorlach R) Sustainable groundwater management: adjudicated groundwater basins. Current Text: Introduced: 2/17/2017 Text Introduced: 2/17/2017 Status: 5/12/2017-Failed Deadline pursuant to Rule 61(a)(3). (Last location was RLS. on 2/17/2017)

(May be acted upon Jan 2018) Location: 5/12/2017-S. 2 YEAR Summary: The Sustainable Groundwater Management Act, requires all groundwater basins

designated as high- or medium-priority basins by the Department of Water Resources that aredesignated as basins subject to critical overdraft to be managed under a groundwater sustainabilityplan or coordinated groundwater sustainability plans by January 31, 2020, and requires all otherbasins designated as high- or medium-priority basins to be managed under a groundwatersustainability plan or coordinated groundwater sustainability plans by January 31, 2022, except asspecified. Under current law, the provisions of the act do not apply to an adjudicated groundwaterbasin, as specified, or to a local agency that conforms to the requirements of an adjudication of waterrights for an adjudicated groundwater basin. This bill would make a nonsubstantive change in theseprovisions.

SB 740 (Wiener D) Onsite treated water. Current Text: Amended: 4/26/2017 Text Introduced: 2/17/2017 Last Amend: 4/26/2017 Status: 5/26/2017-Failed Deadline pursuant to Rule 61(a)(5). (Last location was APPR. SUSPENSE FILE

on 5/25/2017)(May be acted upon Jan 2018) Location: 5/26/2017-S. 2 YEAR Summary: Would, on or before December 1, 2018, require the State Water Resources Control Board,

in consultation with other state agencies, to adopt regulations, consistent with federal and state lawin effect on January 1, 2018, to provide comprehensive risk-based standards for local jurisdictionspermitting programs for onsite recycling of water in multifamily residential, commercial, and mixed-usebuildings for nonpotable use. The bill would require the regulations to address specified issues andpractices relating to the management, monitoring, and treatment of recycled water for nonpotable use.

SB 778 (Hertzberg D) Water systems: consolidations: administrative and managerial services. Current Text: Amended: 7/13/2017 Text

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Introduced: 2/17/2017 Last Amend: 7/13/2017 Status: 9/1/2017-Failed Deadline pursuant to Rule 61(a)(12). (Last location was APPR. on 8/23/2017)

(May be acted upon Jan 2018) Location: 9/1/2017-A. 2 YEAR Summary: Would require, on or before March 1, 2018, and regularly thereafter, as specified, the State

Water Resources Control Board to track and publish on its Internet Web site an analysis of allvoluntary and ordered consolidations of water systems that have occurred on or after July 1, 2014.The bill would require the published information to include the resulting outcomes of the consolidationsand whether the consolidations have succeeded or failed in providing an adequate supply of safedrinking water to the communities served by the consolidated water systems.

SCA 4 (Hertzberg D) Water conservation. Current Text: Introduced: 2/2/2017 Text Introduced: 2/2/2017 Status: 2/16/2017-Referred to Com. on RLS. Location: 2/2/2017-S. RLS. Summary: The California Constitution requires that the water resources of the state be put to

beneficial use to the fullest extent of which they are capable and that the waste or unreasonable useor unreasonable method of use of water be prevented.This measure would declare the intent of theLegislature to amend the California Constitution to provide a program that would ensure thataffordable water is available to all Californians and to ensure that water conservation is given apermanent role in California’s future.

SCA 10 (Moorlach R) Public employee retirement benefits. Current Text: Introduced: 2/17/2017 Text Introduced: 2/17/2017 Status: 6/20/2017-June 26 set for first hearing canceled at the request of author. Location: 3/2/2017-S. P.E. & R. Summary: Would prohibit a government employer from providing public employees any retirement

benefit increase until that increase is approved by a 2/3 vote of the electorate of the applicablejurisdiction and that vote is certified. The measure would define retirement benefit to mean anypostemployment benefit and would define benefit increase as any change that increases the value ofan employee’s retirement benefit. The measure would define a government employer to include,among others, the state and any of its subdivisions, cities, counties, school districts, special districts,the Regents of the University of California, and the California State University.

Total Measures: 64Total Tracking Forms: 64

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