AGENDA REGULAR MEETING BOARD OF DIRECTORS ORANGE … · 2013. 10. 16. · AGENDA REGULAR MEETING BOARD OF DIRECTORS ORANGE COUNTY WATER DISTRICT 18700 Ward Street, Fountain Valley,

AGENDA REGULAR MEETING BOARD OF DIRECTORS

ORANGE COUNTY WATER DISTRICT 18700 Ward Street, Fountain Valley, CA (714) 378-3200

Wednesday, October 16, 2013 – 5:30 p.m., Boardroom PLEDGE OF ALLEGIANCE ROLL CALL VISITOR PARTICIPATION Members of the audience wishing to address the Board on items of interest to the public are requested to identify

themselves. If the matter on which they wish to comment is an Agenda item, the visitor will be called on when that matter comes up for consideration on the Agenda. If the item is on the Consent Calendar, it will be removed from the Consent Calendar for separate consideration. Visitors are requested to limit comments to three minutes.

ITEMS RECEIVED TOO LATE TO BE AGENDIZED RECOMMENDATION: Adopt resolution determining need to take immediate action on item(s) and that the

need for action came to the attention of the District subsequent to the posting of the Agenda (requires two-thirds vote of the Board members present, or, if less than two-thirds of the members are present, a unanimous vote of those members present.)

CONSENT CALENDAR (ITEMS NOS. 1 - 20) All matters on the Consent Calendar are to be approved by one motion unless a Board member or staff request

separate action on a specific item. 1. APPROVAL OF CASH DISBURSEMENTS RECOMMENDATION: Ratify/authorize payment of bills 2. APPROVAL OF MINUTES OF BOARD OF DIRECTORS MEETING HELD SEPTEMBER 4, 2013 RECOMMENDATION: Approve as presented 3. AMENDMENT TO AGREEMENT WITH PILLSBURY, WINTHROP, SHAW, PITTMAN, LLP

FOR ADDITIONAL LEGAL SERVICES RECOMMENDATION: Ratify execution of Amendment No. 1 to Legal Services Retainer

Agreement No. 0921 with Pillsbury, Winthrop, Shaw, Pittman, LLP for $100,000, for additional legal work, bringing the total contract amount to $135,000

4. ANNUAL RENEWAL OF DISTRICT HEALTH INSURANCE PLANS RECOMMENDATION: 1) Authorize renewal of the following health insurance plans

effective January 1, 2014:

a) ACWA/JPIA sponsored Anthem Blue Cross - Prudent Buyer Classic PPO medical insurance plan

b) ACWA/JPIA sponsored Anthem Blue Cross - Prudent Buyer Advantage PPO medical insurance plan

c) ACWA/JPIA sponsored Anthem Blue Cross - High Deductible Health Plan (PPO) medical insurance plan

d) ACWA/JPIA sponsored Delta Dental (PPO) dental insurance plan

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e) ACWA/JPIA sponsored Delta Care PMI Health Maintenance Organization (HMO) dental insurance plan

f) ACWA/JPIA sponsored VSP Vision Service Plan g) Prudential Life sponsored short/long term disability and life

insurance plans; and 2) Authorize the District to contract for the Medical Health

Maintenance Organization (HMO) insurance plan with Anthem Blue Cross through the ACWA/JPIA pool effective January 1, 2014

CONSENT CALENDAR ITEM RECOMMENDED FOR APPROVAL AT COMMUNICATIONS/

LEGISLATIVE LIAISON COMMITTEE MEETING HELD OCTOBER 3 (ITEMS NO. 5 – 6) 5. FEDERAL LEGISLATIVE UPDATE

RECOMMENDATION: Receive and file 6. STATE LEGISLATIVE UPDATE

RECOMMENDATION: Receive and file CONSENT CALENDAR ITEMS RECOMMENDED FOR APPROVAL AT WATER ISSUES

COMMITTEE MEETING HELD OCTOBER 9 (ITEMS NO. 7 - 11) 7. CONTRACT GBM-2012-2: DESTRUCTION OF MONITORING WELL OCWD-SA22 AND

CONSTRUCTION OF REPLACEMENT MONITORING WELL OCWD-SA22R – CHANGE ORDERS AND FILE NOTICE OF COMPLETION (CASCADE DRILLING)

RECOMMENDATION: 1) Ratify Change Order No. 1 to Cascade Drilling in the amount of

$37,800 and Change Order No. 2 to Cascade Drilling in the amount of $4,750; and

2) Accept completion of work and authorize filing of Notice of

Completion for Contract No. GBM-2012-2, Destruction of Monitoring Well OCWD-SA22 and Construction of Replacement Monitoring Well OCWD-SA22R

8. CONTRACT NO. GA-2013-1, GREEN ACRES PROJECT JAMBOREE ROAD BRIDGE

CROSSING SAN DIEGO CREEK REPAIR PROJECT- CHANGE ORDER AND FILE NOTICE OF COMPLETION (ATLAS-ALLIED, INC.)

RECOMMENDATION: 1) Ratify Change Order No. 1 to Atlas Allied, Inc. in the amount of

$8,240; and

2) Accept completion of work and authorize filing a Notice of

Completion for Contract No. GA-2013-1, Green Acres Project Jamboree Road Bridge Crossing San Diego Creek Repair Project

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9. CONTRACT NO. FV-2013-2, REPLACEMENT OF ADMINISTRATION BUILDING WINDOWS PROJECT - CHANGE ORDERS AND REVISED BUDGET

RECOMMENDATION: 1) Ratify Change Order No. 1 to CC Construction & Development, Inc. in the amount of $1,500 to modify door glass;

2) Authorize issuance of Change Order No. 2 to CC Construction & Development, Inc. in the amount of $10,176 for replacement of

13 MWDOC windows; and

3) Authorize a revised project budget of $81,176

10. CONTRACT NO. LAB-2013-1: ADVANCED WATER Q/A LABORATORY LABS 222 & 223 HVAC MODIFICATIONS PROJECT- NOTICE INVITING BIDS

RECOMMENDATION: Authorize publication of Notice Inviting Bids for Contract No.

LAB-2013-1: Advanced Water Q/A Laboratory Labs 222 & 223 HVAC Modifications Project

11. MEMORANDUM OF UNDERSTANDING WITH THE CITY OF SANTA ANA FOR FUTURE

MID BASIN INJECTION SITES RECOMMENDATION: Authorize the General Manager to negotiate the Memorandum of

Understanding with the City of Santa Ana for four injection well sites and pipeline

CONSENT CALENDAR ITEMS RECOMMENDED FOR APPROVAL AT ADMINISTRATION

FINANCE ISSUES COMMITTEE MEETING HELD OCTOBER 10 (ITEMS NO. 12 - 20) 12. MONTHLY CASH CONTROL REPORT

RECOMMENDATION: Receive and file Summary Cash and Cash Equivalents Control Report dated September 30, 2013

13. MONTHLY CASH DISBURSEMENTS DETAIL REPORT

RECOMMENDATION: Receive and file the Cash Disbursements Detail Report for the period of August 29 through September 25, 2013

14. DISTRICT TRAVEL / EXPENSE REPORTS - FY 2012–13 RECOMMENDATION: Receive and file District Travel and Expense reports for FY 2012-

2013

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15. AMENDMENT TO AGREEMENT WITH ALSTON & BIRD FOR ADDITIONAL LEGAL ANALYSIS ON REGULATORY COMPLIANCE ISSUES FOR COGENERATION FACILITY

RECOMMENDATION: Authorize execution of Amendment No. 1 to Engagement Agreement

with Alston & Bird for $20,000 for additional legal work on regulatory compliance issues, bringing the total contract amount to $40,000

16. AGREEMENT TO ARAMARK UNIFORM SERVICES FOR DISTRICT UNIFORMS RECOMMENDATION: Authorize execution of Agreement to Aramark Uniform Services for

an amount not to exceed $35,000 for uniform services, for the period of November 1, 2013 through October 31, 2016, with an option to renew for an additional two year period based upon performance

17. INDEPENDENT AUDITORS REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2013 RECOMMENDATION: Receive and file Audit Reports prepared by Lance, Soll and

Lunghard, LLP for the period ended June 30, 2013 18. INVESTMENT PORTFOLIO HOLDINGS REPORT

RECOMMENDATION: Agendize for October 16 Board meeting: Receive and file Investment Portfolio Holdings Report dated September 30, 2013

19. AGREEMENT TO BUREAU VERITAS FOR HEALTH & SAFETY CONSULTING SERVICES RECOMMENDATION: Authorize Agreement to Bureau Veritas for an amount not to exceed

$181,718 to provide health and safety consulting services 20. CITY OF ANAHEIM’S NOTICE TO APPRAISE PROPERTY LOCATED ON BALL ROAD AND

PHOENIX CLUB DRIVE IN ANAHEIM RECOMMENDATION: Transmit letter to the City of Anaheim that clarifies the District is

granting access to District property due to historical interagency cooperation; requesting the property appraisal results, and objecting to any potential condemnation process that may damage the interagency relationship

END OF CONSENT CALENDAR

MATTER FOR CONSIDERATION 21. ACCESSING WATER RESERVE FUND TO PURCHASE ADDITIONAL METROPOLITAN

WATER DISTRICT SUPPLIES RECOMMENDATION: Authorize staff to access cash reserves from the water reserve fund to

purchase up to 18,900 acre feet of additional MWD imported water at a maximum cost of $12.6 million

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22. INFORMATIONAL ITEMS A. WATER RESOURCES SUMMARY – SEPTEMBER 2013

B. SANTA ANA WATERSHED PROJECT AUTHORITY REPORT ACTIVITIES

C. GROUNDWATER PRODUCERS MEETING MINUTES – OCTOBER 9, 2013

D. COMMITTEE REPORTS

► Oct 2 Communication/Legislative Liaison Committee (Chair Sidhu) ► Oct 9 Water Issues Committee (Chair Green)

► Oct 10 Administration and Finance Issues Committee (Chair Barr) ► Oct 14 GWRS Steering Committee (Vice Chair Yoh)

23. VERBAL REPORTS

PRESIDENT'S REPORT GENERAL MANAGER'S REPORT DIRECTORS’ REPORTS

► Reports on Conferences/Meetings Attended at District Expense (at which a quorum of the Board was present) GENERAL COUNSEL REPORT

24. ADJOURNMENT TO CLOSED SESSION

CONFERENCE WITH LABOR NEGOTIATORS [Government Code Section 54957.6] OCWD designated representative: Stephanie Dosier Employee Organization: Orange County Employee Association

CONFERENCE WITH REAL PROPERTY NEGOTIATORS

[Government Code Section 54956.8] Real property located at: 3199 East La Palma Avenue, Anaheim OCWD negotiators: Mike Markus Negotiating party: Panattoni Development Corporation Under negotiation: Price and Terms

CONFERENCE WITH REAL PROPERTY NEGOTIATORS [Government Code Section 54956.8] Real property located at: Parcels (3) 253-473-01 - 1200 S. Phoenix Club Drive, Anaheim, CA 92806 253-631-32 - 1200 S. Phoenix Club Drive, Anaheim, CA 92806 253-631-39 - 1200 S. Phoenix Club Drive, Anaheim, CA 92806 OCWD negotiator: Michael Markus Negotiating party: Basin Development, LLC (Competitive Power Ventures) Under negotiation: Price and Terms

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CONFERENCE WITH REAL PROPERTY NEGOTIATORS [Government Code Section 54956.8] Real property located at: Parcels (2) El Dorado Drive, Seal Beach, CA 90740 Golden Rain Road, Seal Beach, CA 90740 OCWD negotiator: Mike Markus Negotiating party: Golden Rain Foundation Under negotiation: Price and Terms RECONVENE IN OPEN SESSION

ADJOURNMENT

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Agenda Posting: In accordance with the requirements of California Government Code Section 54954.2, this agenda has been posted in the main lobby of the Orange County Water District, 18700 Ward Street, Fountain Valley, CA not less than 72 hours prior to the meeting date and time above. All written materials relating to each agenda item are available for public inspection in the office of the Assistant District Secretary. Backup material for the Agenda is available at the District offices for public review and can be viewed online at the District’s website: www.ocwd.com. Accommodations to the Disabled: Pursuant to the Americans with Disabilities Act, persons with a disability who require a disability-related modification or accommodation in order to participate in a meeting, including auxiliary aids or services, may request such modification or accommodation from the District Secretary at (714)378-3233, by email at [email protected] by fax at (714) 378-3373. Notification 24 hours prior to the meeting will enable District staff to make reasonable arrangements to assure accessibility to the meeting. Availability of Agenda Material: As a general rule, agenda reports or other written documentation that has been prepared or organized with respect to each item of business listed on the agenda can be reviewed at www.ocwd.com. Copies of these materials and other disclosable public records distributed to all or a majority of the members of the Board of Directors in connection with an open session agenda item are also on file with and available for inspection at the Office of the District Secretary, 18700 Ward Street, Fountain Valley, California, during regular business hours, 8 a.m. to 5 p.m., Monday through Friday. If such writings are distributed to members of the Board of Directors on the day of a Board meeting, the writings will be available at the entrance to the Board of Directors meeting room at the Orange County Water District office.

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AGENDA ITEM SUBMITTAL Meeting Date: October 16, 2013 Budgeted: N/A Budgeted Amount: N/A To: Board of Directors Cost Estimate: $2,349,281.23 Funding Source: N/A Program/Line Item No. N/A From: Mike Markus General Counsel Approval: N/A Engineers/Feasibility Report: N/A Staff Contact: K. Greene CEQA Compliance: N/A Subject: APPROVAL OF CASH DISBURSEMENTS SUMMARY For the period September 26, 2013 through October 9, 2013 including manual checks and wire transfers, staff is presenting cash disbursements totaling $2,349,281.23 disbursed for each period as follows.

Accounts Payable:

09/26/2013 to 10/02/2013 $ 558,626.86

10/03/2013 to 10/09/2013 $ 877,183.37

Payroll: $ 913,471.00

Total Disbursements $ 2,349,281.23

RECOMMENDATION Ratify/Authorize payment of bills PRIOR RELEVANT BOARD ACTION(S) Semi-monthly

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`MINUTES OF MEETING

BOARD OF DIRECTORS, ORANGE COUNTY WATER DISTRICT September 4, 2013, 5:30 p.m.

President Dewane called to order the September 4, 2013 adjourned regular meeting of the Orange County Water District Board of Directors at 5:30 p.m. in the Boardroom at the District office. Following the Pledge of Allegiance to the Flag, the Secretary called the roll and reported a quorum as follows. Directors Philip Anthony Kathryn Barr Denis Bilodeau (arrived 5:35 p.m.) Shawn Dewane Cathy Green Vincent Sarmiento Stephen Sheldon (arrived 5:35 p.m.) Harry Sidhu Bruce Whitaker (arrived 5:35 p.m.) Roger Yoh Others Linda Whitaker Andree Johnson – Brady Consultants Bill Everest – Cardno Paul Schoenberger – Mesa Water District Don Calkins – City of Anaheim Brian Ragland – City of Huntington Beach

Staff Michael Markus, General Manager Joel Kuperberg, General Counsel Judy-Rae Karlsen, Assistant District Secretary Jason Dadakis, Bruce Dosier, Randy Fick, Roy Herndon, Bill Hunt, John Kennedy, Rae Krause, Tim Sovich, Eleanor Torres Mike Wehner, Greg Woodside, Nira Yamachika

Keith Lyon – Municipal Water District of Orange County VISITOR PARTICIPATION There were no persons wishing to address the Board. CONSENT CALENDAR The Consent Calendar was approved upon motion by Director Barr, seconded by Director Anthony and carried [7-0] as follows. 1. Approval of Cash Disbursements

MOTION NO. 13-126

APPROVING CASH DISBURSEMENTS Payment of bills for the period August 15, 2013 through August 28, 2013 in the total amount of $5,000,235.96 is ratified and approved.

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2. Approval of Minutes of Board of Directors Meetings

MOTION NO. 13-127 APPROVING MINUTES OF BOARD MEETING

The minutes of the Board of Directors meeting held July 24 and August 7, 2013 are hereby approved as presented. 3. Resolution Commending Mike Raahauge and the Raahauge Family for their Contributions to

the Growth of Sports Shooting and Hunting in Southern California

RESOLUTION NO. 13-9-111 RESOLUTION COMMENDING MIKE RAAHAUGE AND THE RAAHAUGE FAMILY FOR

THEIR CONTRIBUTIONS TO THE GROWTH OF SPORTS SHOOTING AND HUNTING IN SOUTHERN CALIFORNIA

WHEREAS, it is with a deep sense of loss that the Board of Directors of the Orange County Water District acknowledges the passing of Mike Raahauge on May 6, 2013; and WHEREAS, Mike Raahauge, with his father Linc at the helm, opened the shooting and hunting complex in Prado Basin on the Santa Ana River in Corona. Raahauge’s Pheasant Hunting Club has been in operation since 1971. In the fall and winter, ducks, geese, and other migrating waterfowl find their way home to the 1,200 acres of what is known as “the range”; and WHEREAS, at the passing of his father Linc, in 1989, Mike took leadership of the facility, his awareness of what the public wanted and his ability to provide it allowed the business to expand and grow steadily; and WHEREAS, the popularity of Sporting Clays grew, Raahauge’s was one of the first shooting ranges in the west to offer a range. In the 1980’s United States Olympian Dan Carlisle introduced Sporting Clays to Mike who shortly opened his first sporting clay range at the Pheasant Club property on Bluff Street in Norco, California. The game’s popularity took off rapidly and still runs nearly thirty years later; and WHEARAS, Mike considered providing new hunters with proper training as one of his most important responsibilities. 15 hunter safety education courses are offered each year at the facility. He was very proud to have put an estimated 100,000 students through the safety classes over the past 30 years. Mike was also given the Department of Fish and Wildlife's highest civilian award posthumously for his 40 years of being a visionary in California's hunting and shooting community and dedication to the hunter safety education program; and WHEREAS, as an industry visionary, Mike recognized the decline in the shooting and hunting sports three decades ago. In an effort to bring new shooters and hunters into the sport, he started the Raahauge’s Shooting Sports Fair, the original hands-on gun show. Unlike other expensive purchases, prospective buyers could not “test drive” the firearm before purchase. The Sports Fair gave them an opportunity to do just that. It remains one of the only shows of its kind in the nation; and WHEREAS, Mike also donated his facility to fundraising events over the years. One such event was the annual Youth Safari Day in conjunction with the Orange County Safari Club chapter. The event

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exposes urban youngsters to a wide range of outdoor sports, from kayaking to rock climbing to archery. Youngsters can also participate in nature walks in Prado Basin and fishing for catfish in a pond on the complex. This year marked the event’s 15th anniversary; and NOW, THEREFORE, let it be resolved that the Orange County Water District Board of Directors wishes to pass on its deepest sympathy to Mike’s wife Elaine and their family. Mike’s loss will be felt throughout Orange County and in the national industry of shooting sports. We wish Elaine and the Raahauge Family the very best as they carry on the torch and continue to educate the next generation of sporting enthusiasts.

4. Contract No. NBGPP-2013-1, North Basin Groundwater Protection Project Pipeline

Construction

RESOLUTION NO. 13-9-112 REJECT ALL BIDS FOR CONTRACT NO. NBGPP-2013-1, NORTH BASIN

GROUNDWTER PROTECTION PROJECT PIPELINE CONSTRUCTION Whereas, A Notice Inviting Bids For Contract No. NBGPP-2013-1, North Basin Groundwater Protection Project Pipeline Construction was published in The Orange County Register on April 10, 2013; and WHEREAS, Addendum No. 1 and No. 2 were subsequently issued modifying the contract bid documents; and WHEREAS, staff has advised that the following bids were received on May 22, 2013;

E.J. Meyer Company $ 7,333,333 GRFCO, Inc. $ 7,976,664 Spiniello Companies $ 8,107,720 Vido Artukovich & Son, Inc./Vidmar, Inc. A JV $ 8,481,057 Lonerock, Inc. $ 8,722,320 Mladen Buntich Construction, Inc. $ 9,131,925 Blois Construction, Inc. $ 9,624,756 W.A. Rasic Construction Co., Inc. $ 9,659,637 Paulus Engineering, Inc. $ 9,818,737 J A Salazar Construction & Supply Corp. $ 9,972,649

WHEREAS, District staff reports the project bids were significantly higher than anticipated and some time will be required to research alternate methods to remediate the groundwater, therefore staff recommends rejection of all bids for this contract; NOW, THEREFORE, the Board of Directors of the Orange County Water District does hereby resolve as follows: Section 1: All bids submitted for Contract No. NBGPP-2013-1, North Basin Groundwater Protection Project Pipeline Construction project are hereby rejected and the District staff is instructed to return the Bid Bonds to the bidders.

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CONSENT CALENDAR ITEMS RECOMMENDED FOR APPROVAL AT PROPERTY MANAGEMENT COMMITTEE MEETING HELD AUGUST 23 5. Amendment to Pipeline License with Orange County Transportation Authority

RESOLUTION NO. 13-9-113 AUTHORIZING AMENDMENT TO PIPELINE LICENSE WITH ORANGE COUNTY

TRANSPORTATION AUTHORITY WHEREAS, the Property Management Committee of this Board has presented and recommended approving and authorizing execution of an Amendment to the Pipeline License with Orange County Transportation Authority that revises indemnity and insurance requirements. NOW, THEREFORE, the Board of Directors of the Orange County Water District does hereby approve and authorize execution of Amendment to the Pipeline License with Orange County Transportation Authority as described herein; and, upon approval as to form by District General Counsel, execution by the District’s officers is authorized. Directors Bilodeau, Sheldon and Whitaker arrived at 5:35 p.m. at this point in tonight’s meeting.

6. Informational Items A. Seawater Intrusion Update District Hydrogeologist Roy Herndon reported that controlling seawater intrusion continues to be one of the District’s key basin management responsibilities. He presented a detailed overview of the groundwater basin and where seawater intrusion occurs along the coast at various pathways. Mr. Herndon’s presentation covered the geology and typography of the Talbert Gap, Bolsa Gap, Sunset Gap, and the Alamitos Gap. He presented the proposed barrier improvements and noted where the 6 monitoring wells are proposed for the Sunset Gap and the 8 monitoring wells that are part of the Alamitos Barrier Improvement project. 7. Verbal Reports

Reports on Conferences/Meetings Attended at District Expense (Quorum of the Board was present)

The Board reported on attendance at the following Committee meeting and noted the Minutes/Action Agenda are included in tonight’s Board packet.

August 23 – Property Management Committee 8. Director Reports Director Anthony reported that Santa Ana Watershed Project Authority approved the “Bay Delta Conservation Plan”. Director Dewane requested staff to consider drafting a policy for infrastructure needs.

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9. Adjournment to Closed Session The Board adjourned to Closed Session at 6:20 p.m. as follows:

CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION [Paragraph (1) of subdivision (d) of Section 54956.9]: One (1) Case OCWD v. Northrop Corporation, et al (VOC Litigation) Superior Court Case No. 04CC00715

RECONVENE IN OPEN SESSION The Board reconvened in Open Session at 7:15 p.m. whereupon General Counsel Joel Kuperberg announced that the Board took no reportable action in Closed Session. ADJOURNMENT There being no further business to come before the Board, the meeting was adjourned at 7:15 p.m. _____________________________________ Judy-Rae Karlsen, Assistant District Secretary ________________________________ Shawn Dewane, President

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AGENDA ITEM SUBMITTAL Meeting Date: October 16, 2013 Budgeted: No Budgeted Amount: N/A To: Board of Directors Cost Estimate: $135,000 Funding Source: N/A Program/ Line Item No. 1010.53005 From: Mike Markus General Counsel Approval: Required Engineers/Feasibility Report: N/A Staff Contact: R. Fick CEQA Compliance: N/A Subject: AMENDMENT TO AGREEMENT WITH PILLSBURY, WINTHROP, SHAW,

PITTMAN, LLP FOR ADDITIONAL LEGAL SERVICES SUMMARY Pillsbury, Winthrop, Shaw, Pittman, LLP was hired to provide legal services in July 2013 for $35,000 to assist with the groundwater contamination litigation. The estimate for services has since increased and an additional $100,000 is requested. RECOMMENDATION Agendize for October 16 Board meeting: Ratify execution of Amendment No. 1 to Legal Services Retainer Agreement No. 0921 with Pillsbury, Winthrop, Shaw, Pittman, LLP for $100,000, for additional legal work, bringing the total contract amount to $135,000. PRIOR RELEVANT BOARD ACTION(S) None

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AGENDA ITEM SUBMITTAL

Meeting Date: October 16, 2013 Budgeted: Yes - Partial Budgeted Amount: $3,101,107 To: Board of Directors Cost Estimate: Approx. $3,413,417 Funding Source: General Fund Program/ Line Item No. Various From: Mike Markus General Counsel Approval: N/A Engineers/Feasibility Report: N/A Staff Contact: S Dosier/L Wirtz CEQA Compliance: N/A

Subject: ANNUAL RENEWAL OF DISTRICT HEALTH INSURANCE PLANS SUMMARY District staff annually reviews OCWD’s health insurance benefits to ensure the District maintains competitive premium rates and benefits for the employees. The District works closely with the Association of California Water Agencies/Joint Powers Authority (ACWA/JPIA) as well as an outside broker, Alliant Insurance Services, to obtain quotes from various carriers. Staff received final quotes from all carriers and those are outlined in this submittal. Attachment(s):

A) Anthem Blue Cross HMO Plan Comparison Chart B) Health Plan Premium Rate Sheet - 2014 C) Medical Plan Benefit Comparison

RECOMMENDATION

1) Authorize renewal of the following health insurance plans effective January 1, 2014:

a. ACWA/JPIA sponsored Anthem Blue Cross - Prudent Buyer Classic PPO medical insurance plan

b. ACWA/JPIA sponsored Anthem Blue Cross - Prudent Buyer Advantage PPO medical insurance plan

c. ACWA/JPIA sponsored Anthem Blue Cross - High Deductible Health Plan (PPO) medical insurance plan

d. ACWA/JPIA sponsored Delta Dental (PPO) dental insurance plan e. ACWA/JPIA sponsored Delta Care PMI Health Maintenance Organization (HMO)

dental insurance plan f. ACWA/JPIA sponsored VSP Vision Service Plan g. Prudential Life sponsored short/long term disability and life insurance plans.

2) Authorize the District to contract for the Medical Health Maintenance Organization (HMO)

insurance plan with Anthem Blue Cross through the ACWA/JPIA pool effective January 1, 2014.

DISCUSSION

HMO Plan - Anthem Blue Cross The District currently contracts directly (outside of ACWA/JPIA) with Anthem Blue Cross for its HMO medical insurance. Staff works with broker, Anna Laliberte of Alliant Insurance Services Inc. to assist in the renewal of the current Anthem Blue Cross HMO plan. We have been notified by our broker that for the 2014 plan year renewal, OCWD can obtain lower premium rates with the Anthem Blue Cross HMO if we contract for the same plan through ACWA/JPIA. This will be the first time that OCWD can obtain lower premium rates with the same plan in the ACWA/JPIA pool. By moving the plan over to the ACWA/JPIA pool plan, OCWD can then also qualify for the Incentive Rates (4% discount) on all of the medical plans offered. This means that the District will experience an overall lower rate increase for the 2014 renewal. While premiums are still increasing for the 2014 Plan Year, they will be 4% lower than anticipated for the current ACWA Medical PPO and High Deductible Health Plans. The Anthem Blue Cross HMO plan under the ACWA/JPIA pool has the same plan design and provider listing as the existing Anthem Blue Cross HMO Plan that we contract with on a direct agreement. However, there are several coverage enhancements with the ACWA/JPIA plan design and one benefit coverage difference. Overall, the Anthem Blue Cross HMO Plan under the ACWA/JPIA Pool offers a richer plan in terms of benefit coverage for the participants. A comparison of the current Plan versus the ACWA/JPIA sponsored plan is outlined in Attachment A. OCWD has an agreement with Alliant as our Broker of Record. The Agreement stipulates that Alliant is to receive commissions of $45,000 annually. Commissions are typically paid by the insurance carriers directly to the broker. However, effective January 1, 2014, the HMO contract will fall under the ACWA/JPIA pool, therefore, Alliant will no longer receive the expected commission income of the full $45,000 as there will be an approximate shortfall of about $25,000. Alliant will continue to receive commission income from the life and disability plans, but not enough to cover their negotiated income. These commission fees must then be paid by OCWD directly. However, these out-of-pocket costs for the District are offset by the cost savings that will occur with the application of the Incentive Rates across all medical plans (approximately $90,000 annually). It is important to note that Alliant will continue to work with the District on our assessment of all the health plans (including marketing all medical plans against other pooled programs) to ensure that we continue to offer plans in place that are the most competitive in both benefits and cost. Additionally, they will be working with staff to review retiree plan alternatives as well as ensure full compliance with the provisions of the Affordable Care Act. Staff is recommending that the District contract for the Anthem Blue Cross HMO plan through the ACWA/JPIA Pool effective January 1, 2014. ACWA/JPIA Anthem Blue Cross Prudent Buyer Classic and Advantage PPO Plans -Renewal ACWA/JPIA continues to self insure the PPO plans it offers to its member agencies.

ACWA/JPIA holds reserves and earns interest to offset claims and administrative expenses. The PPO contracts with Anthem are renewed for 2014 with a premium increase of 2.2% for the Anthem Classic PPO Plan and a premium increase of 4.2% for the Anthem Advantage PPO Plan effective January 1, 2014. These rate increases take into account the savings with the application of the incentive rate discount of 4%. Factors that contributed to the 2014 ACWA/JPIA rate increases include; Affordable Care Act Taxes and Fees on the self-funded PPO plans, regional price differences being brought up to date as well as the adjustment of premium ratios per enrollment tier. ACWA/JPIA’s Executive Committee voted to approve the Employee Benefits Committee’s recommendation to reduce the 2014 rate increase and to pay Affordable Care Act Taxes by drawing from reserve funds. ACWA/JPIA High Deductible Health Fund Plan The Anthem Blue Cross PPO High Deductible Health Plan is administered through ACWA/JPIA. The plan is renewed for 2014 with an average premium rate increase of 14%. This rate increase also takes into account the savings with the application of the incentive rate discount of 4%. The plan benefits were changed by ACWA/JPIA in coordination with Anthem to reflect higher co-insurance rates, however, there are now lower out-of-pocket maximums in place to off-set those increased co-pays. Delta Dental DPO The Delta Dental PPO plan is administered through ACWA/JPIA and is being renewed for one year with no premium rate increase in 2014. Delta Care HMO The Delta Care HMO plan is administered through ACWA/JPIA and is being renewed for 2014 with a premium increase of 8.21%. Beginning in January 2014, ACWA/JPIA will add the Delta Care plan billing to ACWA/JPIA’s invoicing for billing consistency as with all other plans. Previously invoicing was received direct from Delta Care. Due to this billing change, ACWA/JPIA will now include a $2.24 per employee per month Administrative Fee that is added to the total premium. Those total rates are reflected in the attached premium sheet (Attachment B). VSP Vision Service Plan ACWA/JPIA has renewed its Vision Service Plan (VSP) contract for 2014 with a premium increase of 6%. It is important to note that 2% of the annual renewal fee is made up of Affordable Care Act fees. Short/Long Term Disability and Life Insurance The District currently has contracts with Prudential Life for short/long term disability and life insurance. Short/long term disability and voluntary life coverage is being renewed for one year with no premium rate increase for 2014. Our basic life insurance coverage is being renewed for two years with no premium rate increase for 2014.

Health Plan Renewal Premium Rates and Benefits Attachment B provides the premium rates, monthly District cap and the employee’s share of the premiums for each health plan offered for review. Additionally a comparison of each of the medical plans offered has been attached as Attachment C. Staff is currently finalizing all of the open enrollment materials and will be starting the open enrollment period shortly for all employees with Board approval. PRIOR RELEVANT BOARD ACTION(S) – Annual

Medical Plan Benefits Anthem ACWA - Anthem

Premier HMO 20 CaliforniaCare HMO

Current / Renewal Option 1

Calendar Year Deductible

Individual / Family NONE NONE

Annual Out-of-Pocket Maximum

Individual / Family $1,500 / $3,000 $500 / $1,500

Physician Office Visit $20 $10

Specialist Copay $20 $10

Preventative Care No Charge No Charge

Lab and X-Ray

CT, MRI, PET scans $100 Copay No Charge

Other lab and x-ray tests No Charge No Charge

Hospitalization

Inpatient $200 / Admit No Charge

Outpatient $100 No Charge

Emergency Room $100 $50

(waived if admitted) (waived if admitted)

Urgent Care Services $20 $10

(waived if admitted) (waived if admitted)

Durable Medical Equipment 20% No Charge

Chiropractic Care1 $20$10 / Visit

(Up to 30 visits per calendar year)(60 days/year combined with outpatient rehab therapy)

Acupuncture Care $20 Not Covered

PRESCRIPTION DRUGS Generic / Brand / Non Formulary Generic / Brand

Retail - 30 day supply $10 / $25 / $45 $5 / $15 / $45

Mail Order - up to 90 day supply $10 / $50 / $90 $10 / $30 / $90

This summary is for informational purpose only. It does not amend, extend, or alter the current policy in any way. In the event information in this summary differs from the Plan Document, the Plan Document will

prevail.

1 Chiropractic care is currently covered under the Anthem Direct HMO under the rehab benefit, under the Anthem

ACWA HMO is is covered as a rider and does not need to be associated with rehab.

Attachment A

© 2013 Alliant Employee Benefits, a division of Alliant Insurance Services, Inc.

COVERAGEMonthly

Premiums

Monthly

District Cap

Monthly

Employee

Contribution

Anthem Blue Cross Prudent Buyer Classic (PPO Plan)(SET CAP)

Active Employee Only $656.06 $656.06 $0.00 Active Employee + 1 Dep $1,426.09 $1,180.75 $245.34

Active Employee + 2 or more Dep $1,793.39 $1,390.83 $402.56

Retiree Only (w/o Medicare) $656.06 $656.06 $0.00

Retiree + 1 Dep (w/o Medicare) $1,426.09 $1,180.75 $245.34

Retiree (with Medicare A,B) $498.40 $498.40 $0.00

Retiree +1 Dep (with Medicare A,B) $1,179.81 $940.01 $239.80Annual Renewal Date: Jan 1

Anthem Blue Cross Prudent Buyer Advantage (PPO Plan)(SET CAP)

Active Employee Only $530.34 $569.57 $0.00 Active Employee + 1 Dep $1,248.57 $1,159.21 $89.36 Active Employee + 2 or more Dep $1,446.31 $1,369.98 $76.33

Retiree Only (w/o Medicare) $530.34 $569.57 $0.00

Retiree + 1 Dep (w/o Medicare) $1,248.57 $1,159.21 $89.36

Retiree (with Medicare A,B) $410.49 $473.55 $0.00

Retiree +1 Dep (with Medicare A,B) $969.55 $939.41 $30.14Annual Renewal Date: Jan 1

Anthem Blue Cross - Health Fund (High Deductible Plan)(SET CAP)

Employee Only $539.75 $576.25 $0.00 Employee + 1 Dep $1,171.17 $1,093.55 $77.62 Employee + 2 or more Dep $1,472.36 $1,293.24 $179.12Annual Renewal Date: Jan 1

Anthem Blue Cross Premium 20 (HMO Plan)(SET CAP)

Employee Only $595.75 $595.75 $0.00 Employee + 1 Dep $1,181.60 $943.26 $238.34 Employee + 2 or more Dep $1,584.03 $1,202.36 $381.67 Annual Renewal Date: Jan 1

Delta Dental (PPO Plan)(100/20/80%)

Employee Only $49.24 $49.24 $0.00 Employee + 1 Dep $98.22 $78.58 $19.64 Employee + 2 or more Dep $169.66 $135.73 $33.93 Annual Renewal Date: Jan 1

Delta Care (HMO Plan)(100/20/80%)

Employee Only $26.93 $26.93 $0.00 Employee + 1 Dep $43.10 $34.48 $8.62 Employee + 2 or more Dep $62.46 $49.97 $12.49 Annual Renewal Date: Jan 1

Vision Service Plan (VSP) (100%)

Employee and Dependents $18.56 $18.56 $0.00 Annual Renewal Date: Jan 1

Attachment B

OCWD INSURANCE BENEFITSAll coverage becomes effective on the first of the month following one full calendar month of consecutive service

HR/Payroll Premium Sheet

OCWD HEALTH INSURANCE PREMIUMS

Represented & Non-Represented Employees, Retirees and Board Members

Rates as of January 1, 2014

Medical BenefitsAnthem Blue Cross

CaliforniaCare

HMO PPO Non-PPO PPO Non-PPO PPO Non-PPO

DEDUCTIBLE

(per calendar year)

HOSPITAL

Inpatient No Copay No Charge No Charge 20% 40% 20%

Outpatient No Copay No Charge No Charge 20% 40% 20%

PHYSICIAN MEDICAL SERVICES MAJOR MEDICAL

Office Visits & Specialist Visits $10/Visit $15/Visit 20% $20/Visit 40% 20% 40%

Well Women Exams No Copay No Copay 20% No Copay 40% No Copay 40%

Dependent Children Preventative Services

No Copay No Copay 20% No Copay 40% No Copay

40% (limited to

$20/exam; $12/ immunization)

Adult Preventative Services No Copay No Copay Not Covered No Copay 40% No Copay 40%

SURGICAL SERVICES

Surgeon and Surgical AssistantNo Copay 20% 20% 20% 40% 20% 40%

Anesthesiologist or Anesthetist No Copay 20% 20% 20% 40% 20% 40%

DIAGNOSTIC X-RAY/LABPreventative (including mammogram, Pap smear, and prostate cancer screening)

Diagnostic X-ray and laboratory services No Copay

20% 20% 20% 40% 20% 40%

DURABLE MEDICAL EQUIPMENTNo Copay 20% 20% 20% 40% 20% 40%

PREGNANCY & MATERNITY CARE

Pre- and Postnatal Care Office Visits $10/Visit $15/Visit 20% 20% 40% 20% 40%

EMERGENCY CARE

Ambulance$50/Trip (when medically

necessary)20% 20% 20% 20% 20% 20%

Emergency Room Visit $50 Copay (copay waived if admitted)

HOME HEALTH SERVICES

No Copay No Charge No Charge 20% 40% 20% 40%

SKILLED NURSING FACILITY20% 40%

Limited to 100 days/

calendar year; subject to

utilization review

Limited to 100 days/

calendar year; subject to

utilization review

No Deductible

$200/ Member $500/ Member

Orange County Water District ATTACHMENT CHealth Plan Comparison Information Summary for 2014

Anthem Blue Cross Prudent Buyer Classic

Anthem Blue Cross Prudent Buyer Advantage

Anthem Blue Cross Account Based Health Plan

$1000/ Family $600/ Family

$50 copay (copay waived if admitted)

20% + $50 copay (copay waived if admitted)

20% No ChargeNo ChargeNo Copay

$1,500/ Member

$3,000/ Family

MAJOR MEDICAL (except where copayments

apply)

MAJOR MEDICAL (except where copayments

apply)

MAJOR MEDICAL (except where copayments apply)

40%

BASIC BENEFIT MAJOR MEDICAL

MAJOR MEDICAL

(limited to 100 visits/calendar year; one visit equals 4 hours

or less)

(limited to 100 visits/calendar year; one visit equals 4 hours

or less) (limited to 100 visits/calendar year)

BASIC BENEFIT MAJOR MEDICAL

20% + $100 copay (copay waived if admitted)

20% Limited to 100 days/

calendar year; subject to utilization

review

40% Limited to 100 days/

calendar year; subject to utilization

review

No Copay Limited to 100 days/ calendar year; subject to utilization

review

No Copay Limited to 100 days/ calendar year; subject to utilization

review

Services provided in a licensed skilled nursing facility when medically necessary

No Copay Limited to 100

days/calendar year

40% (add'l deductable

$500/admit for non-PPO hospital

or residentail treatment ctr if pre-auth not

obtained

MAJOR MEDICAL

40%No Charge


CaliforniaCare


CHIROPRACTIC

$10/Visit (Chiro Rider benefits limited to 30 visits per

year; Appliances limited to $50 per year)

20% Max 30 visits per

year

20% Max 30 visits per

year

20% Limited to 24

visits per calendar year;

add'l visits may be

authorized

40% Limited to 24

visits per calendar

year; add'l visits may be

authorized

20% Limited to 24

visits per calendar year; add'l visits may be authorized

40% (Limited to $25/visit)

Limited to 24 visits per

calendar year; add'l visits may be authorized

ACUPUNCTURE Not Covered Not Covered Not Covered20% Limited to 12 visits per calendar year

40% Limited to 12

visits per calendar year

20% Limited to 12


40% Limited to 12


PRESCRIPTION DRUGS 30 Day Supply

Generic $5 $5 $5 $10

Brand $15 $15 $15 $20

Nonformulary $45 $45 $45 $40

Max Out-of-Pocket

$2,000/member Combined max for retail

& mail order

$2,000 Combined

max for retail & mail order

N/A

$2,000 Combined


N/A

$5,000/member; $10,000 family Combined max for retail & mail

order

N/A

Mail Order (90-day supply) 90 Day Supply

Generic $10 $10 Not Covered $10 Not covered $20 Not Covered

Brand $10 $30 Not Covered $30 Not covered $40 Not Covered

Nonformulary $90 $90 Not Covered $90 Not covered $80 Not Covered

Max Out-of-Pocket

$2,000/member Combined max for retail

& mail order

$2,000 combined max

for retail & mail order

N/A $2,000 combined max


N/A


order

N/A

Self-administered injectable drugs, except insulin (30 day supply)

30 Day Supply

Copayment

20% of prescription drug max allowed amount (not to

exceed $100 per prescription)

20% of prescription

drug max allowed

amount (not to exceed $100

per prescription

20% of prescription

drug max allowed


per prescription

20% of prescription

drug max allowed amount

Max Out-of-Pocket$2,000/member

Combined max for retail & mail order

$2,000 Combined


$2,000 Combined



order




$3,000/ Member

$6,000/ family

$10,000/ Member

MAXIMUM COPAYMENTS/STOP-LOSS AMOUNTS (per calendar year)

Max Copayment $500/Member $1,500/Family

$1,000/ Member

$2,000/ Member

90 Day Supply 90 Day Supply 90 Day Supply

30 Day Supply 30 Day Supply

Member pays the

participating pharmacy

copays plus 50% of

remaining prescription drug max

allowed amt & exess max

allow. costs.

Member pays the participating

pharmacy copays plus 50% of remaining

prescription drug max allowed amt

& exess max allow. costs.

Member pays the


copays plus 50% of


allow. amt & excess max allow. costs.

Member pays the


copays plus 50% of



Member pays the


copays plus 50% of



Member pays the participating

pharmacy copays plus 50% of remaining

prescription drug max allow. amt &

excess max allow. costs.


$2,500/ Member; $4,000/ Family

30 Day Supply


CaliforniaCare


Self-administered injectable drugs, except insulin (90 day supply)

90 Day Supply

Copayment

20% of prescription drug max allowed amount (not

to exceed $200 per prescription)

20% of prescription

drug max allowed


per prescription

Not Covered

20% of prescription

drug max allowed


per prescription

Not Covered

20% of prescription

drug max allowed amount

Not Covered

Max Out-of-Pocket$2,000/member

Combined max for retail & mail order

$2,000 combined max


N/A$2,000

combined max for retail & mail order

N/A


order

N/A

MENTAL or NERVOUS DISORDERS & SUBSTANCE ABUSE

Physician Services

Outpatient $10/Visit

No Charge - (1-3 visits); $15 Copay -

(after 3rd visit)

20%$20/visit

(deductable waived)

40% 20% 40%

Inpatient No Copay 20% 20% 20% 40% 20% 40%

Outpatient Facility-Based

Mental or Nervous Disorders No Copay 20% 20% 20% 40% 20% 40%

Substance Abuse No Copay 20% 20% 20% 40% 20% 40%

Inpatient Facility-Based

Mental or Nervous Disorders No Copay No Copay No Copay 20% 40% 20% 40%

Substance Abuse No Copay No Copay No Copay 20% 40% 20% 40%





5

Backup materials for Committee items are available in the Committee packet. Materials distributed at Committee meetings are attached hereto

1

AGENDA ITEM SUBMITTAL Meeting Date: October 3, 2013 Budgeted: N/A Budgeted Amount: N/A To: Communications/Leg. Liaison Cte Cost Estimate: N/A Board of Directors Funding Source: N/A Program/Line Item No.: N/A From: Mike Markus General Counsel Approval: N/A Engineers/Feasibility Report: N/A Staff Contact: E. Torres/R. Ennis CEQA Compliance: N/A Subject: FEDERAL LEGISLATIVE UPDATE SUMMARY OCWD staff and federal consultants James McConnell and Eric Sapirstein are working with the Los Angeles Army Corps of Engineers and members of the Orange County congressional delegation to advance the Prado Basin, CA Study. Attachment(s): James McConnell Federal Update – September 2013 Eric Sapirstein Federal Update – September 2013 RECOMMENDATION Agendize for October 16 Board meeting: Receive and file DISCUSSION/ANALYSIS Prado Basin, CA Study – Update OCWD staff and its federal advocates will provide an oral report on the status of the Prado Basin, CA Feasibility Study and an update on the October 2013 trip to Washington D.C. to discuss the Study with members of Congress, congressional staff and the U.S. Army Corps of Engineers staff.

6

1



Meeting Date: October 3, 2013 Budgeted: N/A Budgeted Amount: N/A To: Communications/Leg Liaison Cte Cost Estimate: N/A Board of Directors Funding Source: N/A Program/Line Item No.: N/A From: Mike Markus General Counsel Approval: N/A Engineers/Feasibility Report: N/A Staff Contact: E. Torres/R. Ennis CEQA Compliance: N/A Subject: STATE LEGISLATIVE UPDATE SUMMARY Orange County Water District (OCWD) staff and Townsend Public Affairs continue to review and advocate on issues and legislation at the state level that impact the District. Current issues include the release of Round 2 Proposition 84 Implementation Grant funding recommendations and the submission of a grant application for the Fletcher Basin Improvement project to the Orange County Transportation Authority’s Measure M2 Environmental Cleanup Program Tier 2 Grant Program.

Attachment(s):

SAWPA Implementation Grant Proposal Evaluation Proposition 84 Round 2 Implementation Grant Funding Recommendations Townsend Public Affairs – September 2013 Report Townsend Public Affairs – Legislative Matrix

RECOMMENDATION Agendize for October 16 Board meeting: Receive and file DISCUSSION/ANALYSIS OWOW 2.0 IRWM/Proposition 84, Round 2 Funding Update In September 2013, the California Department of Water Resources (DWR) announced the release of Round 2 Proposition (Prop.) 84 Implementation Grant draft funding recommendations. The Proposition 84 Chapter 2 Integrated Regional Water Management (IRWM) Grant Program, administered by DWR, provides funding for projects that assist local public agencies meet long term water needs of the state including the delivery of safe drinking water and the protection of water quality and the environment. Twenty-two proposals are recommended for total funding of $131.1 million to fund 139 projects. Orange County Water District (OCWD) is in the Santa Ana Watershed Project Authority (SAWPA) IRWM Region. The Santa Ana Watershed Project Authority (SAWPA)

2

Commission approved the One Water One Watershed (OWOW) Steering Committee’s recommended portfolio of projects for Prop. 84 Round 2 Funding in December 2012. The DWR completed an evaluation of the Implementation Grant proposal submitted by SAWPA on behalf of the SAWPA IRWM Region. The proposal included 20 projects for $16,667,000 in grant funding. The proposal received 42 out of a maximum of 80 points. As a result of the low score, DWR is recommending 50% funding. Below is a summary of DWR’s analysis of the SAWPA grant proposal: WORK PLAN

Documentation/rationales incomplete or insufficient; project goals and objectives not clearly defined

Some projects missing descriptions and deliverables Unclear how projects linked; synergies among projects not discussed Not clear if some projects can be fully implemented because budgets not completely

described

BUDGET Supporting cost documentation or explanation missing for most projects A majority of projects missing adequate cost estimates; few projects have sufficient

detail to verify if costs are reasonable

SCHEDULE Documentation incomplete and insufficient In most cases, schedule for completion of projects not consistent with tasks listed in

work plan Insufficient information on some projects to determine reasonableness of schedules;

some missing beginning or end dates; some have evaluation and assessment tasks finished before project completion or have construction finished before design complete

MONITORING, ASSESSMENT, AND PERFORMANCE MEASURES Documentation or rationales incomplete or insufficient Not all targets are quantified Lack of sufficient detail and narrative to determine if project performance can be

effectively monitored Submittal lacks sufficient documentation to support achievement of proposed targets

TECHNICAL JUSTIFICATION Proposal appears technically justified but lacks documentation of technical adequacy

of projects Deficiencies include inconsistent units for calculating CO2 emissions avoided,

presumptions of zero baseline recharge for many recharge projects, and omitted runoff losses in calculating recharge volumes

BENEFITS AND COST ANALYSIS Quality of analysis or clear and complete documentation lacking

3

How projects fit into the existing infrastructure and how benefits would be obtained not clearly described

Claims of physical benefits cannot be verified for most projects; for some projects documentation of benefits claimed is missing

Numerous inconsistencies involving calculation of hydrology, water supply and flood damage reduction, double-counting and triple-counting of benefits

PROGRAM PREFERENCES Proposal claims that 6 program preferences and 8 statewide priorities are met but

only 3 preferences are adequately documented Application does not explain how the projects will effectively integrate water

management programs and projects within the region Preference of resolving significant water-related conflicts within or between regions

is not explained; the application does not identify or define a specific conflict or purport to effectively resolve one

Preference of effectively integrating water management with land use planning is not explained

OCWD submitted multiple projects for inclusion in SAWPA’s Prop. 84 IRWM Implementation Grant, Round 2 funding request. Ultimately, the Prado Basin Sediment Management Demonstration Project was included in the Round 2 package with a request for $750,000. Another OCWD project submitted during Round 2, Alamitos Barrier Improvements, was selected to receive carryover funding from Prop. 84 Round 1 from projects that could not meet their contractual obligations. As such, the Alamitos Barrier Improvements project is considered a Round 1 project and will not be impacted by the final DWR funding decision on the SAWPA Round 2 proposal. The public comment period for Round 2 Proposition 84 Implementation Grant draft funding recommendations began on September 25, 2013 and closes on October 10, 2013. On October 7, DWR will hold a Public Comment Meeting to provide a brief presentation on draft funding recommendations and an Open House to discuss the applicants' proposal evaluations with DWR staff. Applicants, stakeholders, and the public are encouraged to provide public comments after the presentation. Measure M2 Environmental Cleanup Program Tier 2 Grant Program – Fletcher Basin Improvement Project In September 2013, OCWD and Orange County Flood Control District (OCFCD) staff submitted an application for the Fletcher Basin Improvement Project to Orange County Transportation Authority’s Measure M2 (M2) Environmental Cleanup Program (ECP) Tier 2 grant program. The M2 ECP Tier 2 Program is designed to fund regional, potentially multi-jurisdictional, capital-intensive projects. Examples include constructed wetlands, detention/infiltration basins, and bioswales, which mitigate pollutants such as litter and debris, heavy metals, organic chemicals, and sediment.

4

Fletcher Basin was constructed by OCFCD in 1951 as a flood-retarding basin. The 4.8 acre basin was filled in by OCFCD to dispose of excess sediment, however a channel remains in which nuisance water and stormwater pass unabated though the site and eventually reach the Santa Ana River and the Pacific Ocean. OCWD and OCFCD have embarked on an innovative collaborative effort to not only restore Fletcher Basin to its original intended purpose, which is to provide flood protection, but to improve the basin to enhance water quality and water supply benefits. The water quality of the Santa Ana River, which is currently impaired by elevated bacteria levels, will be improved because nuisance and some stormflows will be captured in Fletcher Basin before reaching the Santa Ana River. Non-point source urban runoff that will be captured in Fletcher Basin includes runoff from operation of motor vehicles, highway maintenance, and other transportation-related activities that occur in the area to storm drains from local streets, secondary roadways, main arteries, county roads, and specifically, SR 55. Urban runoff pollutants that will be treated in Fletcher Basin include organics, sediment, nutrients, litter, oxygen-demanding substances, metals, and pathogenic materials. The Fletcher Basin Improvement Project will also help improve beach water quality by reducing the amount of urban stormwater runoff and non-point source (transportation-generated) pollution that reaches the Pacific Ocean at Newport Beach and Huntington Beach. Transportation-related contaminants in water recharged in Fletcher Basin will be removed through the soil-aquifer treatment process as the water percolates to the underlying groundwater aquifer. Once the water reaches the aquifer, it will mix with the groundwater and become part of the water supplies of the region. This is the second call for projects in Tier 2 and provides an allocation of approximately $25.3 million to Orange County local agencies. Only County of Orange agencies and Orange County cities are eligible lead entities, thus OCWD was able to join the application as a partner with OCFCD as the lead entity. The maximum amount that an applicant can receive per project is $5 million in M2 ECP funds. OCWD and OCFCD submitted a grant request in the amount of $2,525,000. This represents roughly half of the total cost of the project. During the call for projects, OCWD staff met with OCTA staff and its consultants, Geosyntec, for a site visit and pre-application screening. OCWD staff also secured letters of support for the project from Orange County state legislative delegation; as well as Groundwater Producers, the City of Orange, and OC Waste and Recycling. OCTA is expected to issue its recommendations for this round of funding in Winter 2013/2014.

7


AGENDA ITEM SUBMITTAL Meeting Date: October 9, 2013 Budgeted: Yes Budgeted Amount: $220,000 To: Water Issues Committee Cost Estimate: $199,539 Board of Directors Funding Source: R&R Program/ Line Item No. R11029 From: Mike Markus General Counsel Approval: N/A Engineers/Feasibility Report: N/A Staff Contact: R. Herndon/D. Field CEQA Compliance: Categorical Exemption filed Subject: CONTRACT GBM-2012-2: DESTRUCTION OF MONITORING WELL OCWD-

SA22 AND CONSTRUCTION OF REPLACEMENT MONITORING WELL OCWD-SA22R: CHANGE ORDERS AND FILE NOTICE OF COMPLETION (CASCADE DRILLING)

SUMMARY Cascade Drilling (Cascade) has completed construction and development of replacement monitoring well OCWD-SA22R and destruction of monitoring well OCWD-SA22. The final construction/destruction cost was $199,539. Attachment(s): Figure 1. Location Map Change Order No. 1, Contract No. GBM-2012-2 Change Order No. 2, Contract No. GBM-2012-2 RECOMMENDATION Agendize for October 16 Board meeting: 1. Ratify Change Order No. 1 to Cascade Drilling in the amount of $37,800 and

Change Order No. 2 to Cascade Drilling in the amount of $4,750; and 2. Accept completion of work and authorize filing of Notice of Completion for Contract

No. GBM-2012-2, Destruction of Monitoring Well OCWD-SA22 and Construction of Replacement Monitoring Well OCWD-SA22R

BACKGROUND/ANALYSIS In August 2012, the Board authorized destruction of Talbert Gap seawater intrusion monitoring well OCWD-SA22 and construction of replacement monitoring well OCWD-SA22R (SA22 Project). The well locations are shown on Figure 1. On March 20, 2013, the Board authorized award of Contract GBM-2012-2 for this work to Cascade Drilling. The Notice to Proceed was issued with an effective date of April 16, 2013. All work under this contract was completed by August 30, 2013, exceeding the original contract date by 76 days. Reasons for the additional time are explained below.

Construction and development of replacement monitoring well OCWD-SA22R (SA22R) started on May 15, 2013 and was completed on June 25, 2013. Destruction of monitoring well OCWD-SA22 (SA22) started on June 27, 2013 and was completed on August 30, 2013. There was a delay in completing the destruction of SA22 due to difficulty removing fill from the deep well casing. The casing had partially collapsed, and rock was protruding into the well. On August 26, 2013 Cascade sealed the SA22 well casings with bentonite and began over-drilling the well with a rotary sonic drill rig and core. Approximately 20 feet of well casing was removed from the borehole. At a depth of 20 feet bgs, the core deviated from the original borehole, apparently due to the well being crooked. Drilling continued to a depth of 50 ft bgs in an attempt to re-locate the original well casing. The well casing could not be re-located, and the borehole was grouted with neat cement. Change Order No. 1 consists of the following: 1. Increased line item costs associated with SA22R well development: Due to

unforeseen geologic conditions, an additional 30 hours of development was required to properly clean the well screen and filter pack. Based on the contracted hourly development rate of $250, the cost for the 30 hours of additional well development is $7,500. Also, the additional development generated water that needed off-site disposal. The cost for the additional off-site water disposal is $18,716.

2. Increased costs associated with the destruction of SA22: Destruction of this well

required additional out of scope tasks including over-drilling the well and grouting the borehole with neat cement. The additional proposed cost for over-drilling and grouting the borehole was $40,230.

3. Increase total contract time by 107 calendar days: Additional days were required for

the completion of this work due to the additional development and destruction tasks described above.

Change Order No. 1 in the amount of $37,800 covered additional development-related costs and well destruction costs totaling $66,446, less $28,646 in unspent borehole abandonment and well construction costs. Change Order No. 2 consists of additional out of scope street slurry costs for the destruction of SA22 as requested by the City of Huntington Beach. The City requested that the street be slurry-coated near SA22 after destruction was completed. This task was requested by the City so the area would match the existing street, which had been recently slurry-coated. The additional cost for slurry-coating and traffic control was $4,750. Tables 1 and 2 below summarize the contracted and total R&R project approved and actual budgets.

Table 1 Summary of Contract GBM-2012-2

Item Description Budgeted Contracted Final

Expenditures1. Destruction of OCWD-SA22 (in scope) $ 23,850 $ 23,179 $ 11,3002. Construction of OCWD-SA22R (in scope) 177,000 147,240 130,4733. Change Order No. 1

Less unspent line item costs for destruction of OCWD-SA22 Less unspent line item costs for construction of OCWD-SA22R

Net Change Order Amount:

-- 66,446 -11,879

-16,767

37,800

53,016

4. Change Order No. 2 -- 4,750 4,750Total Project Budget: $ 200,850 $ 212,969 $ 199,539

Table 2 Summary of SA22 Project Budget

Item Description Budgeted Contracted Final

Expenditures1. Destruction of OCWD-SA22 (including portion of C.O. #1 and C.O #2)

$ 23,850 $ 56,280 $ 42,850

2. Construction of OCWD-SA22R (including portion of C.O. #1)

177,000 156,689 156,689

3. Surveying -- 2,800 2,8004. Construction Inspection Services (PSA No. 0885)

19,150 34,595 33,581

Total Project Budget: $ 220,000 $ 250,364 $ 235,920 PRIOR RELEVANT BOARD ACTIONS 07/24/2013 R13-07-94 – Approve Change Order for additional monitoring well OCWD-SA22R development costs and monitoring well OCWD-SA22 destruction costs and Amendment to Agreement with Geotechnical Consultants for construction inspection services 03/20/2013 R13-3-24 – Award Contract GBM-2012-2 destruction of monitoring well OCWD-SA22 and construction of replacement monitoring well OCWD-SA22R to Cascade Drilling 11/28/12 R12-11-137 – Award Agreement to Geotechnical Consultants for inspection services for destruction of monitoring well OCWD-SA22 and construction of replacement monitoring well OCWD-SA22R 08/15/12 R12-8-101 – Authorize destruction of monitoring well OCWD-SA22 and construction of replacement monitoring well OCWD-SA22R

8



Meeting Date: October 9, 2013 Budgeted: Yes Budgeted Amount: $338,840 To: Water Issues Committee Cost Estimate: $347,080 Board of Directors Funding Source: R&R Program/ Line Item No. R12029 From: Mike Markus General Counsel Approval: N/A Engineers/Feasibility Report: N/A Staff Contact: C. Olsen/B. Smith CEQA Compliance: Cat. Exemption Subject: CONTRACT NO. GA-2013-1, GREEN ACRES PROJECT JAMBOREE

ROAD BRIDGE CROSSING SAN DIEGO CREEK REPAIR PROJECT - FILE NOTICE OF COMPLETION (ATLAS-ALLIED, INC.)

SUMMARY The Green Acres Project (GAP) Jamboree Road Bridge Crossing San Diego Creek Repair Project has recently been completed and acceptance of the project’s completion is being brought to the Board for approval. One Change Order was executed for additional repair work. A lower than estimated quantity of GAP water was purchased from Irvine Ranch Water District (IRWD) to supply end-users in Newport Beach. RECOMMENDATIONS Agendize for October 16 Board meeting:

1. Ratify Change Order No. 1 to Atlas-Allied, Inc. in the amount of $8,240; and

2. Accept completion of work and authorize filing a Notice of Completion for

Contract No. GA-2013-1, Green Acres Project Jamboree Road Bridge Crossing San Diego Creek Repair Project.

BACKGROUND/ANALYSIS The recently completed work includes traffic control on Jamboree Road, excavation to expose the pipeline in two locations, removal and installation of steel pipeline and flexible couplers, preparation and painting of exposed pipe, and repairing the site features to pre-construction conditions. Change Order No. 1 was issued, under the General Manager’s signing authority, to remove surface rust located on eight exposed pipeline joints and to paint these portions in order to protect against future rust development. Staff issued an Agreement to Smith-Emery Laboratories to provide welding inspection services during construction. Construction management was performed in-house for this project. The repair was expected to require up to a 35 day shutdown of GAP service to 17 service meters within the City of Newport Beach, but only required a 24 day shutdown and end-user GAP demand was also lower than expected during the shutdown period. Figure 1 depicts the location of the project.

Table 1 presents the project budget. The work for this project was completed within the allowed schedule.

Table 1- Project Budget GAP Repair at San Diego Creek

Description

Approved Budget (5/22/13)

Expenses

Design Design Contract $ 18,700 $ 18,690Construction Construction Contract Change Order No. 1 Construction Management (In-house) Construction Support Services Purchase IRWD Recycled Water

$ 338,840$ 0$ 0$ 900$ 48,022

$ 338,840$ 8,240$ 0$ 900$ 16,051

Project Contingency $ 17,538 $ 0Total Project Budget $ 424,000 $ 382,721

Figure 1

Project Vicinity Map

PRIOR RELEVANT BOARD ACTION(S) 5/22/2013, R13-5-52: AwardContract No. GA-2013-1, Green Acres Project Jamboree Road

Bridge Crossing San Diego Creek Repair Project, to Atlas-Allied, Inc.

3/20/2013, M13 – 38: Authorize Publication of Notice Inviting Bids and filing of Categorical Exemption for Contract No. GA-2013-1.

9



Meeting Date: October 9, 2013

Budgeted: Yes

Budgeted Amount: $71,000 To: Board of Directors Cost Estimate: $81,176 Funding Source: R&R Program/Line Item No:R12005.17300.45001 From: Mike Markus General Counsel Approval: N/A Engineers/Feasibility Report: N/A Staff Contact: B. Smith / C. Olsen CEQA Compliance: N/A Subject: CONTRACT NO. FV-2013-2, REPLACEMENT OF ADMINISTRATION

BUILDING WINDOWS PROJECT - CHANGE ORDERS AND REVISED BUDGET

SUMMARY The Municipal Water District of Orange County (MWDOC) would like to utilize OCWD’s window replacement contract to replace 13 windows in the MWDOC office area. MWDOC has budgeted for the window replacement and will reimburse OCWD for the costs, which will be Change Order No. 2 to the FV-2013-2 contract. RECOMMENDATION Agendize for October 16 Board meeting:

1. Ratify issuance of Change Order No. 1 to CC Construction & Development, Inc. in the amount of $1,500 to modify door glass;

2. Authorize issuance of Change Order No. 2 to CC Construction & Development, Inc. in the amount of $10,176 for replacement of 13 MWDOC windows; and

3. Authorize a revised project budget of $81,176. BACKGROUND/ANALYSIS OCWD awarded Contract No. FV-2013-2, Replacement of Administration Building Windows Project, to CC Construction & Development at the July 24, 2013 Board Meeting. The project will replace all exterior glass of the Fountain Valley administration building in order to eliminate leaks and improve energy efficiency. Change Order No. 1 was issued under the signing authority of the General Manager as a modification to the glass required within the doors. MWDOC has requested that Change Order No. 2 be issued to CC Construction & Development, Inc. for the replacement of 13 windows in the MWDOC office area. MWDOC has budgeted for the window replacement and will reimburse OCWD for the cost of Change Order No. 2. The existing MWDOC office area windows to be replaced are louvered and allow significant amounts of air to pass through, resulting in energy inefficiencies. The new windows will be dual-pane, insulated and reflective glass. Table 1 shows the projected project budget.

Table 1- Project Budget Replacement of Administration Building Windows

Description

Approved Budget

Projected Expenses

Construction Construction Contract Change Order No. 1 Change Order No. 2 (MWDOC windows) Construction Management (In-house)

$ 65,000$ 0$ 0$ 0

$ 65,000$ 1,500$ 10,176$ 0

Project Contingency $ 6,000 $ 4,500Total Project Budget $ 71,000 $ 81,176

PRIOR RELEVANT BOARD ACTION(S) 7/24/13, R13-7-85: Awarding Contract No. FV-2013-1: Replacement of Administration

Building Windows Project, to CC Construction & Development 6/19/13, R13-6-68: Rejecting bids for Contract No. FV-2013-1: Replacement of

Administration Building Windows Project and authoriz re-publication of Notice Inviting Bids

5/1/13, M13-64: Authorize publication of Notice Inviting Bids for Contract No.

FV-2013-1: Replacement of Administration Building Windows Project

10



Meeting Date: October 9, 2013

Budgeted: Yes

Budgeted Amount: $250,000 To: Water Issues Committee Cost Estimate: $250,000 Board of Directors Funding Source: CIP Program/ Line Item No. C12001 From: Mike Markus General Counsel Approval: N/A Engineers/Feasibility Report: N/A Staff Contact: C. Olsen / B. Smith CEQA Compliance: N/A Subject: CONTRACT NO. LAB-2013-1: ADVANCED WATER Q/A LABORATORY

ROOMS 222 & 223 HVAC MODIFICATIONS PROJECT- NOTICE INVITING BIDS

SUMMARY The final design plans and specifications for the HVAC Modifications for two rooms in the Advanced Water Laboratory have been completed. Staff recommends issuing the Publication of Notice Inviting Bids for the construction contract. Attachment(s): Notice Inviting Bids -Draft RECOMMENDATION Agendize for October 16 meeting: Authorize publication of Notice Inviting Bids for Contract No. LAB-2013-1: Advanced Water Q/A Laboratory Rooms 222 & 223 HVAC Modifications Project. BACKGROUND/ANALYSIS Since the Advanced Water Quality Assurance Laboratory (Lab) completed construction in 2009, more equipment has been placed in rooms 222 and 223 than the heating, ventilation, and air conditioning (HVAC) system was designed to cool. The additional heat load caused by the increased amount of equipment causes staff to attempt increased air flow to the rooms by propping doors open. This is a safety concern, as doors are supposed to remain closed per fire code, and causes an uncomfortable work environment for staff. Grounds Engineering Group, Inc. has completed design documents to re-balance the airflow in room 222 and upgrade valves and ducting to room 223. The implementation of this design will provide adequate airflow and cooling for the current and future projected heat loads of the two rooms. Staff is recommending issuance of Notice Inviting Bids for Contract No. LAB-2013-1. Staff anticipates bringing a contract award to the December 11, 2013 Water Issues Committee. This project is budgeted in the Fiscal Year 2013-14 Budget.

PRIOR RELEVANT BOARD ACTION(S) N/A

11



Meeting Date: October 9, 2013 Budgeted: NA Budgeted Amount: NA To: Water Issues Committee Cost Estimate: NA Board of Directors Funding Source: NA Program/ Line Item No. NA From: Mike Markus General Counsel Approval: Yes Engineers/Feasibility Report: NA Staff Contact: C. Olsen/B. Smith CEQA Compliance: NA Subject: MEMORANDUM OF UNDERSTANDING WITH THE CITY OF SANTA ANA

FOR FUTURE MID BASIN INJECTION SITES SUMMARY Staff has been working to locate several future Mid Basin injection well sites near the existing Demonstration Mid Basin Injection (DMBI) site. Four sites have been identified as having favorable conditions and proximity to the DMBI site, all of which are located in Santa Ana’s Centennial Park. Staff recommends entering into a Memorandum of Understanding (MOU) with the City of Santa Ana for the four injection well sites and pipeline. RECOMMENDATION Agendize for October 16 Board meeting: Authorize the General Manager to negotiate the Memorandum of Understanding with the City of Santa Ana for four injection well sites and pipeline. BACKGROUND/ANALYSIS The DMBI Project includes one injection well (MBI-1), two monitoring wells (SAR-10 and SAR-11), well housing, supply and discharge pipelines and supporting facilities. These facilities are located on County properties in Fountain Valley and Santa Ana, near the intersection of Edinger Avenue and the Santa Ana River. The purpose of the injection well is to directly inject Groundwater Replenishment System (GWRS) water into the Principal Aquifer. Additional Mid Basin injection well sites located in the vicinity of the groundwater producers’ wells operated by the City of Santa Ana, Irvine Ranch Water District, City of Fountain Valley, and Mesa Water will increase groundwater levels to help sustain pumping in the area. The project is identified in the District’s Long-Term Facilities Plan. It will also work well in conjunction with the existing Talbert Gap Seawater Intrusion Injection Barrier by providing an additional local source of aquifer replenishment. Furthermore, creating additional GWRS water injection capacity will free up OCWD’s recharge basins, such that they can be used for capturing Santa Ana River storm flows and for recharging imported replenishment water during future wet

years, thereby increasing the local water supply. This project would also be beneficial in recharging water from the GWRS Final Expansion. Four injection wells are proposed to be located at Centennial Park in Santa Ana, which is across the Santa Ana River from the DMBI site. The Park is large enough so that OCWD can construct four injection wells on the site and maintain the necessary spacing. It is estimated that these four additional injection wells will recharge approximately 10,000 acre-feet per year of GWRS water into the groundwater basin. The Centennial Park site is a preferred location to construct the injection wells. The area has a favorable aquifer hydrogeology and permeability that supports the development of the four proposed injection wells. As with the DMBI site, Centennial Park is located a sufficient distance from existing water supply wells such that the project will conform to regulatory requirements for minimum subsurface residence time prior to extraction for potable use. Staff has prepared an MOU for the future Mid Basin injection well expansion. The MOU is with the City of Santa Ana for the construction and maintenance of the four injection wells and pipeline within Centennial Park. City staff has requested that the pipeline and injection wells be located in the parking lots and access roads rather than the grass open space. Staff is negotiating paving improvements for the Park’s access roads and parking lots in lieu of an easement cost. Although the costs haven’t been finalized and OCWD would obtain an easement for the well sites, pipeline and appurtenances, the City is amenable to OCWD repairing the parking lot and access road pavement as an alternative to easement costs. Staff recommends authorizing the General Manager to negotiate and finalize the MOU with the City of Santa Ana for the injection wells, pipeline and monitoring well construction and operation. The MOU would then be brought back to the Board for review and approval. MOU would preserve these locations for future well sites if the Board ultimately decides to move forward with the project. This decision point is expected to occur in about 12 months. Table 1 below provides a project schedule and sequence. In addition to the time it will take to plan and design a project of this size, staff will also need to observe and collect data from the DMBI site once it’s in operation to verify spacing and components of future injection wells.

Table 1: Project Schedule

Project Component Finish

Complete CEQA, SRF coord. and approval 3rd Qtr 2015

Present Engineer’s Report to Board 3rd Qtr 2015

Finalize Lease Agreement/Permitting 3rd Qtr 2015

Well Drilling and Equipping Design 4th Qtr 2016

Construct Pipeline and Well Equipping 4th Qtr 2017

The construction and operation of the injection wells and monitoring wells would be subject to CEQA. Staff will to review the project to determine the required CEQA documentation and supporting technical studies.

Figure 1: Centennial Park Injection Well Locations

PRIOR RELEVANT BOARD ACTION(S) 2/20/13 R13-2-16: Authorizing Filing of Notice of Completion for Contract MBI-2011-1, Demonstration Mid-Basin Injection Project - Notice of Completion (Layne Christensen Company) 12/19/12 M12-190: Authorizing Issuance of Notice Inviting Bids for Contract No. MBI-2012-1, Phase II of Demonstration Mid-Basin Injection Project 9/19/12: R12-9-114 - Authorize issuance of Change Orders Nos. 7- 9 to Layne Christensen Company for a total amount of $136,633; authorize execution of Amendment No. 4 to Agreement 0640 (MWH) for $66,575 for additional drilling

oversight and monitoring activities; and approve and authorize a project budget increase in the amount of $203,208 for a total project budget of $5,359,742. 5/16/12, R12-5-49 – Authorize issuance of Change Order No. 6 to Contract MBI-2011-1 with Layne Christensen Company in the amount of $110,492 to add a fourth zone of well screen for monitoring well SAR-10; authorize execution of Amendment No. 3 to Agreement 0640 with MWH for $146,042 for additional drilling oversight and monitoring activities; and approve a budget increase of $256,534 for a total project budget of $5,156,534. 3/21/12, M12-43 – Authorize issuance of Change Order No. 4 to Contract MBI-2011-1 with Layne in the amount of $179,477 for changes to the well screening for the Demonstration Mid-Basin Injection Well Project 9/14/11, R11-9-137 - Authorize issuance of Amendment No. 2 to Agreement No. 0640 with MWH for an amount not to exceed $158,814 for additional out-of scope engineering services in support of the design of the Demonstration Mid-Basin Injection Well Project 9/14/11, R11-9-136 - Authorize issuance of Amendment No. 1 to Agreement No. 0759 with Constructive Community Relations for public outreach services for the Demonstration Mid-Basin Injection Project for an amount not to exceed $30,000 for an amended total of $49,870 6/15/11, R11-6-96 - Receive and file Affidavit of Publication of Notice Inviting Bids, ratify issuance of Addendum No. 1; and accept bid and award contract MBI-2011-1 to Layne Christensen Company, for the amount of $2,335,000. 4/20/11, M11-64 - Authorize publication of Notice Inviting Bids for Construction Contract MBI-2011-1, Demonstration Mid-Basin Injection Well Project - Well Drilling Phase. 8/18/10, R10-8-130 - Authorize issuance of Amendment No. 1 to Agreement No. 0640 with MWH for an amount not to exceed $48,780 for geochemical assessment services in support of the design of the Demonstration Mid-Basin Injection Project 2/17/10, R10-2-30: Authorize issuance of Agreement No. 0640 to MWH for a fee not to exceed $634,750 for engineering design services for the Demonstration Mid-Basin Injection Project 11/18/09, R09-11-171: Adopt and Certify the Final Initial Study/Mitigated Negative Declaration; Authorize filing of Notice of Determination; Determine the Demonstration Mid-Basin Injection Project feasible, necessary, and of general benefit to the lands of the District, and declare project duly instituted; Approve Engineer’s Report and establish a project budget of $4.9 million; and Authorize issuance of a Request for Proposals for engineering design services for the project, including the design of the injection well, two monitoring wells, necessary pipelines, and related site improvements

12



Meeting Date: October 10, 2013 Budgeted: N/A Budgeted Amount: N/A To: Administration/Finance Issues Cte. Cost Estimate: N/A Board of Directors Funding Source: N/A Program/Line Item No.: N/A

From: Mike Markus General Counsel Approval: N/A Engineers Report: N/A Staff Contact: R. Fick/V. Sharma CEQA Compliance: N/A Subject: MONTHLY CASH CONTROL REPORT SUMMARY The following monthly financial information is provided in the staff report. Attachment(s): Summary Cash and Cash Equivalent Control Report Summary of Cash Reserves Summary Sources and Disbursements Sources of Funds Disbursement of Funds

RECOMMENDATION Agendize for October 16 Board meeting: Receive and file Summary Cash and Cash Equivalents Control Report dated September 30, 2013. PRIOR RELEVANT BOARD ACTION(S) Monthly

13



Meeting Date: October 10, 2013 Budgeted: Yes Budgeted Amount: N/A To: Administration/Finance Issues Cte. Cost Estimate: N/A Board of Directors Funding Source: All Program/Line Item No. N/A From: Mike Markus General Counsel Approval: N/A Engineers/Feasibility Report: N/A Staff Contact: R. Fick / K. Greene CEQA Compliance: N/A Subject: MONTHLY CASH DISBURSEMENTS DETAIL REPORT SUMMARY The Committee requested that staff provide information related to the District’s cash disbursements and that it be included for review at Administration / Finance Issues Committee meetings. Attachment(s): Cash Disbursement Reports for the period August 29 – September 25, 2013 RECOMMENDATION Agendize for the October 16 Board meeting: Receive and file the Cash Disbursements Detail Report for the period of August 29 through September 25, 2013 BACKGROUND / ANALYSIS At the request of the Committee, the Check Register report which is provided separately to all Directors will now be included in detail for review at Administration/Finance Issues Committee meetings. Checks numbered with a series beginning with a 4 represent normal automated system vendor check payments while checks numbered with a series beginning with a 9 ( the last pages of the report ) are manual checks or wire transfer disbursements. PRIOR RELEVANT BOARD ACTION(S) Monthly.

14



Meeting Date: October 10, 2013 Budgeted: Yes Budgeted Amount: $120,500

To: Administration/Finance Issues Cte. Cost Estimate: $123,968 Board of Directors Funding Source: General Fund

Program/Line Item No. N/A From: Mike Markus General Counsel Approval: N/A

Engineers/Feasibility Report: N/A Staff Contact: R. Fick/K. Greene CEQA Compliance: N/A

Subject: DISTRICT TRAVEL / EXPENSE REPORTS – FY 2012–13 SUMMARY Attached for Board review are the District Travel – Expense Reports for fiscal year 2012-13.

Attachment(s): District Travel – Expense Report – FY 2012–13 Board of Directors District Travel – Expense Report – FY 2012–13 General Manager District Travel – Expense Report – FY 2012–13 Staff District Travel – Expense Report – FY 2012–13 Cash Reimbursements RECOMMENDATION

Agendize for the October 16 Board meeting: Receive and file District Travel and Expense reports for FY 2012-2013.

DISCUSSION / ANALYSIS The actual travel expenses for the Directors for the FY 2012-13 were $33,656. The actual travel expenses for the General Manager were $14,400. The actual travel costs for staff were $75,912. Cash reimbursements paid to employees and Directors during the year are also attached.. The California Government Code requires that cash reimbursements in excess of $50 paid to employees and Directors be reported annually. PRIOR RELEVANT BOARD ACTION(S) 09/16/2009 M09-114 - Authorize staff to present travel and reimbursement reports on an annual basis in accordance with California Government Code, Section 53065.5

15



Meeting Date: October 10, 2013 Budgeted: No Budgeted Amount: N/A To: Administration/Finance Issues Cte Cost Estimate: $40,000 Board of Directors Funding Source: N/A Program/ Line Item No. 1010.53005 From: Mike Markus General Counsel Approval: Required Engineers/Feasibility Report: N/A Staff Contact: WT Hunt CEQA Compliance: N/A Subject: AMENDMENT TO AGREEMENT WITH ALSTON & BIRD FOR

ADDITIONAL LEGAL ANALYSIS ON REGULATORY COMPLIANCE ISSUES FOR COGENERATION FACILITY

SUMMARY Staff is researching the potential development of on-site electricity generation capability at the GWRS facility. Prior to spending resources on feasibility reports and financial analysis, staff contacted South Coast Air Quality Management District (SCAQMD) to determine regulations and eligibility requirements for the project. RECOMMENDATION Agendize for October 16 Board meeting: Authorize execution of Amendment No. 1 to Engagement Agreement with Alston & Bird for $20,000, for additional legal work on regulatory compliance issues, bringing the total contract amount to $40,000. BACKGROUND/ANALYSIS District staff is researching the potential development of an on-site electricity generation capability at the GWRS. The research was initiated based on the historically low cost of natural gas and the existing gas infrastructure that is available to supply a large scale cogeneration facility. The initial roadblock when considering a project like this is the regulatory compliance issues for such a project. Similar large scale projects are sometimes not feasible in non-attainment air districts like Orange County. Based on the importance of the regulatory question, staff initiated an analysis and contacted South Coast Air Quality Management District (SCAQMD) to determine regulations and eligibility requirements for the project prior to spending significant funds on the engineering feasibility and financial analysis that will be required. Staff retained the law firm of Alston & Bird, a reputable Los Angeles law firm specializing in air quality permitting and regulatory negotiations. Initial legal fees were estimated at $19,000 and were covered under the General Manager’s signing authority.

As the investigation continues, additional complexities have resulted in increased effort and additional expenditures are required. Staff is recommending Amendment No. 1 to the Engagement Agreement with Alston & Bird in the amount of 20,000, bringing the total contract amount to $40,000. The cost of this initial review of air quality regulations was higher than expected, but the results were more favorable than anticipated, making the extra effort worthwhile. Staff received a response from the Deputy Executive Officer of the SCAQMD with a written determination that OCWD stands as “an essential public service” which exempts OCWD from new source review and gives OCWD free access to their “Priority Reserve” of Emission Reduction Credits. This ruling has major financial implications and will have a significant impact on the decision to move forward with environmental and economic feasibility studies. There are additional considerations for this complex project, however, this initial finding is an encouraging first step in the analysis for this future project. PRIOR RELEVANT BOARD ACTION(S) None

16



Meeting Date: October 10, 2013 Budgeted: Yes Budgeted Amount: $57,000 To: Administration/Finance Issues Cte Cost Estimate: $35,000 Board of Directors Funding Source: General Fund Program/Line Item No. From: Mike Markus General Counsel Approval: N/A Engineers/Feasibility Report Approved: N/A Staff Contact: B. Howard/B. Dunivin CEQA Compliance: N/A Subject: AGREEMENT TO ARAMARK UNIFORM SERVICES FOR DISTRICT UNIFORMS SUMMARY Staff issued a Request for Proposals (RFP) for Uniform Services for the Fountain Valley, Anaheim and Prado facilities. Proposals were solicited from six vendors and six responses were received. Staff requests approval to enter into a three-year agreement with Aramark Uniform Services commencing November 1, 2013 and ending October 31, 2016. RECOMMENDATION Agendize for October 16 Board meeting: Authorize execution of Agreement to Aramark Uniform Services for an amount not to exceed $35,000 for uniform services, for the period November 1, 2013 through October 31, 2016, with an option to renew for an additional two years based upon performance. BACKGROUND/ANALYSIS The District currently contracts with AmeriPride Uniform Services for uniform services at the Fountain Valley, Anaheim and Prado facilities for an annual cost of approximately $47,000. Uniform service includes rental and cleaning for garments, cleaning towels, and floor mats. In April 2008 staff solicited proposals and AmeriPride Uniform Services was selected to provide the uniform services for a three-year term. In September 2011 the Board authorized AmeriPride Uniform Services to provide the uniform services for one additional year. In order to ensure the District is receiving the best price for uniform services, staff issued an RFP to six vendors. A meeting was held with all potential proposers to answer questions or clarify the information requested. Six vendors submitted proposals. They are:

VENDOR

PROPOSAL AMOUNT ANNUAL EST. AMT. INCLUDES EMBLEMS, LOGOS & REPLACEMENTS

Aramark Uniform Services $25,744 $32,145 AmeriPride Uniform Services $33,937 $39,176 G & K Services $36,691 $41,646 Prudential Overall Supply $41,198 $52,072 UniFirst Corporation $42,712 $52,281 Cintas $47,279 $58,213 The actual cost for uniform service varies from month to month depending upon the number of uniforms laundered, repairs made and uniforms replaced. This additional cost will add to the proposed amount for initial supply and laundry of uniforms, towels and mats. Actual expenditures are estimated to be $35,000. After reviewing the proposals and meeting with vendors, staff recommends awarding the contract to Aramark Uniform Services. They are a well-established company and have been ranked as one of “America’s Most Admired Companies” consistently since 1998. Their Santa Ana office is one of 228 services centers throughout the United States. They service other water districts and municipalities. Installation of the uniforms will be within 90 days from the time measurements are taken. Aramark submitted a thorough proposal, attended the pre-proposal meeting and are very interested in providing a good service. All new uniforms will be provided at the commencement of the agreement. The uniforms are picked up, laundered, repaired, replaced when needed and delivered to each facility. Since the uniform vendors have an initial capital investment in this account, they require a three-year agreement for the uniform services. PRIOR RELEVANT BOARD ACTION(S) 04/18/2007 - M07-61 Authorize request for proposal be issued for the uniform services 04/16/2008 - R08-4-60 Authorize execution by the General Manager of an Agreement for uniform

services with AmeriPride Uniform Services or the period May 1, 2008 through June 30, 2011

09/21/2011 - R11-9-143 Authorize Amendment No. 1 to Agreement No. 0469 for AmeriPride Uniform Services, FOR $45,000 for a one-year period commencing October 1, 2011

17


AGENDA ITEM SUBMITTAL Meeting Date: October 10, 2013 Budgeted: N/A Budgeted Amount: N/A To: Administration/Finance Issues Cte. Cost Estimate: N/A Board of Directors Funding Source: N/A Program/Line Item No.: N/A From: Mike Markus General Counsel Approval: N/A Engineers/Feasibility Report: N/A Staff Contact: R. Fick /V. Sharma CEQA Compliance: N/A Subject: INDEPENDENT AUDITORS REPORT FOR THE FISCAL YEAR ENDED

JUNE 30, 2013 SUMMARY The Independent Auditors Report on the District’s Comprehensive Annual Financial report and Single Audit report for the fiscal year ended June 30, 2013 is complete. Bryan Gruber from Lance, Soll and Lunghard, LLP, our auditor, will present the report to the Committee and answer any questions. Attachment(s): Lance, Soll and Lunghard, LLP Audit Summary letter Report on Internal Control over Financial Reporting, compliance and other matters. The Districts Comprehensive Annual Financial Report for the years ended June 30,

2013 and 2012. Single Audit Report for the year ended June 30, 2013 Ratios for financial analysis

RECOMMENDATION Agendize for October 16 Board meeting: Receive and file Audit Reports prepared by Lance, Soll and Lunghard, LLP for the period ended June 30, 2013. BACKGROUND/ANALYSIS

The Audit Report is prepared for the OCWD Board of Directors to provide a detailed analysis of District financial management’s performance, the adequacy of corporate policies, procedures, internal controls and financial reporting systems. The Independent Auditor’s Report concludes that the financial statements attached present a fair representation of the results of operations for the year. Single audit is a requirement of the United States government for the organizations that expends $500,000 or more of the federal funds during the year. The purpose of the single audit is to provide assurance to the US Federal Government to the management and use of Federal funds by the District. The District’s Ground Water Replenishment System Initial Expansion (GWRSIE) project is funded by the State Revolving Fund


(SRF) loan. The SRF loan program receives Federal funds that it uses to fund GWRSIE project. The District received $ 22,947,292 of Federal funds during the fiscal year ended June 30, 2013. The auditors have no recommendations that should be pursued by management in order to strengthen controls and improve reporting. No further issues requiring improvement were discovered and, consequently, no letter with recommendations is included this year. PRIOR RELEVANT BOARD ACTION(S) Annual

October 10, 2013 Board of Directors Orange County Water District Fountain Valley, California We have audited the financial statements of Orange County Water District as of and for the year ended June 30, 2013, and have issued our report dated October 10, 2013. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and, Government Auditing Standards and OMB Circular A-133, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated July 15, 2013. 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 District are described in the notes to the financial statements. As described in Note 1 to the financial statements, the District changed its accounting policies related to debt issuance cost by adopting Statement of Governmental Accounting Standards (GASB Statement) No. 65, Items Previously Reported as Assets and Liabilities, in the fiscal year ended June 30, 2013. Accordingly, the cumulative effect of the accounting change as of the beginning of the fiscal year is reported in the Statement of Activities and the Statement of Changes in Net Position. We noted no transactions entered into by the governmental unit 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 financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no difficulties in dealing with management in performing and completing our audit.

Board of Directors Orange County Water District Fountain Valley, California

Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. No misstatements were found. Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated October 10, 2013. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the governmental unit’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the governmental unit’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 With respect to the supplementary information accompanying the financial statements, 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.

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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 Directors Orange County Water District Fountain Valley, California We have audited, in accordance with the 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 Orange County Water District (the “District”) as of and for the year ended June 30, 2013, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated October 10, 2013.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered the District’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 opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’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.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the District’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.

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Fountain Valley, California

Orange County Water District Orange County Water District

Comprehensive Annual Comprehensive Annual

Financial ReportFinancial Report

for the fiscal year ended June 30, 2013for the fiscal year ended June 30, 2013

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ORANGE COUNTY WATER DISTRICT FOUNTAIN VALLEY, CALIFORNIA

COMPREHENSIVE ANNUAL FINANCIAL REPORT

WITH REPORT ON AUDIT BY INDEPENDENT

CERTIFIED PUBLIC ACCOUNTANTS

FOR THE YEARS ENDED JUNE 30, 2013 and 2012

PREPARED BY: FINANCE DEPARTMENT

ORANGE COUNTY WATER DISTRICT TABLE OF CONTENTS June 30, 2013 and 2012

INTRODUCTORY SECTION: Transmittal Letter ................................................................................................................ i Organizational Structure .................................................................................................. xii Board of Directors ........................................................................................................... xiii District Vital Statistic ...................................................................................................... xiv GFOA Certificate of Achievement in Financial Reporting ..............................................xv FINANCIAL SECTION: Independent Auditors' Report .............................................................................................1 Management's Discussion and Analysis .............................................................................3 BASIC FINANCIAL STATEMENTS: Statement of Net Position .................................................................................................12 Statement of Revenues, Expenses and Changes in Net Position ......................................15 Statement of Cash Flows ..................................................................................................16 Notes to Basic Financial Statements .................................................................................19 REQUIRED SUPPLEMENTARY INFORMATION ......................................................56 STATISTICAL SECTION: Description of Statistical Section ......................................................................................59 Financial Trends:

Net Position by Component ........................................................................................60 Changes in Net Position ..............................................................................................61 Operating Revenues by Source ...................................................................................62 Operating Expenses by Function ................................................................................63

Revenue Capacity: Total Sales Acre-Feet and Revenue by Water Type ...................................................64 Water Rates by Water Type ........................................................................................65 Changes in Top Ten Customers' Groundwater Production ........................................66

Debt Capacity: Ten-Year Real Secured and Real Unsecured Assessed Tax Values ............................67 Ten-Year Computation of Legal Debt Margin ...........................................................68 Pledged -Revenue Coverage ........................................................................................69 Ratios of Outstanding Debt .........................................................................................70

Demographic and Economic Information: Demographic Statistics ...............................................................................................71 Principal Employers ....................................................................................................72

Operating Information: Personnel Trends .........................................................................................................73 Fiscal Year 2012-2013 Groundwater Production by Agency .....................................74 Demographic and Production Indicators .....................................................................75 Capital Asset Statistics by Function ...........................................................................76

SINCE 1933

Introductory Section

LETTER OF TRANSMITTAL

October 10, 2013 To the Board of Directors of the Orange County Water District: It is our pleasure to submit the Comprehensive Annual Financial Report of the Orange County Water District (District) for the fiscal year ended June 30, 2013 and 2012. District staff worked collectively and followed guidelines set forth by the Governmental Accounting Standards Board to prepare this report. This document, which contains a complete set of basic financial statements, is presented in conformity with generally accepted accounting principles (GAAP) and audited by Lance, Soll & Lunghard, LLP, a firm of licensed certified public accountants, in accordance with generally accepted auditing standards. State law requires that all special-purpose local governments publish these basic financial statements within six months of the close of the agency’s fiscal year. Management assumes full responsibility for the completeness and reliability of the information contained in this report. To provide a reasonable basis for making these representations, the District has established a comprehensive framework of internal controls. The District’s internal controls have been designed to provide appropriate assurance that the basic financial statements will be free from material misstatements. The goal of the independent audit was to provide reasonable assurance and not absolute assurance that the basic financial statements of the District for the fiscal year ended June 30, 2013 were free of material misstatement. The independent audit involved examining the District’s records on a test basis, disclosures in the basic financial statements, assessing the accounting principles used, estimates made by management, and evaluating the overall financial statement presentation. The independent auditors rendered an unqualified opinion that the District’s basic financial statements for the fiscal year ended June 30, 2013 are presented fairly in conformity with GAAP. The Management Discussion and Analysis (MD&A), which follows the Independent Auditor’s Report, provides an overview and analysis of the basic financial statements and should be read in conjunction with the financial statements.

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AGENCY PROFILE The District was formed in 1933 by a special act of the California State Legislature to protect Orange County’s rights to water in the Santa Ana River. The District’s primary responsibility is managing the vast groundwater basin under northern and central Orange County that supplies water to 19 cities and water districts (Producers), serving more than 2.4 million Orange County residents. The District gives highest priority to protection, safety, and enhancement of groundwater. A ten member Board of Directors (Board), seven of whom are elected officials, govern the District. The other three Directors are appointed by their representative city councils of Anaheim, Fullerton and Santa Ana. The District currently has 216 employees overseeing day-to-day activities at the direction of the General Manager. The District Act provides for local financing of the District's operations by a combination of ad valorem taxes and water use assessments. It empowers the District to levy and collect a replenishment assessment (RA) on water extracted from the groundwater basin. These monies are used to purchase supplemental water for groundwater recharge, to construct, operate and maintain water production facilities, and to acquire water rights and spreading facilities to replenish and protect the groundwater supply of the District and for administrative purposes. The Board also sets an annual basin equity assessment (BEA) that generally represents the differential cost between pumping groundwater and purchasing supplemental water. Producers annually pay the BEA on each acre-foot pumped in excess of the basin production percentage (BPP) established by the Board. The District primarily recharges the groundwater basin with Santa Ana River flows, Groundwater Replenishment System (GWRS) water and to a lesser extent with supplemental water purchased from the Metropolitan Water District of Southern California (MWD). The Santa Ana River flows are essentially free to the District, less the expense to capture and percolate the water, resulting in groundwater that costs about a third of the cost of water imported from Northern California and the Colorado River. Valued at about $66.6 million a year, the Santa Ana River flows are percolated into deep groundwater aquifers through spreading basins in Anaheim and Orange. By naturally filtering the water through the ground, the District saves ratepayers millions of dollars each year in water treatment costs. The groundwater basin provides about two-thirds of all water used within the District’s service area. With one of the most sophisticated groundwater protection programs in the country, the District uses more than 650 (owned and non-owned) wells providing more than 1,300 sampling points from which the District takes more than 20,000 water samples and conducts approximately 400,000 laboratory analyses every year. The District’s monitoring program looks for more than 550 contaminants, which are more than the required 144 target contaminants required by health agencies.

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The District currently holds rights to all Santa Ana River flows reaching Prado Dam in Riverside County (the dam is owned by the U.S. Army Corps of Engineers for flood prevention). The District owns 2,150 acres behind the dam that is used for water conservation, water quality improvement and environmental enhancement. The District saves approximately $4.2 million a year by collecting storm water behind Prado Dam, which is recharged into the basin instead of being lost to the ocean. The District operates the world’s largest wastewater purification facility of its kind, called the Groundwater Replenishment System (GWRS). The GWRS takes highly treated sewer water destined for the ocean, purifies it to near-distilled quality, and puts it back into the groundwater basin and the District’s seawater intrusion barrier. The GWRS, a joint project of the District and the Orange County Sanitation District (OCSD), produces high-quality water for about the same cost of supplemental water, but uses less energy than is required to import water from Northern California. Additional efforts to increase local water supplies include expanding the capacity of the existing percolation facilities, treating poor quality water to make it useable, studying methods to extend the life of water treatment filtration membranes, improving advanced purification technologies, and studying the quality of Santa Ana River water and other water-related issues. Other District activities focus on expanding the Prado wetlands, groundwater treatment at well heads, computer modeling of the groundwater basin and conservation of endangered or threatened species. The District continues to adopt strategies to ensure that sufficient water supplies will be available in the future to replenish, protect and maximize the use of the groundwater basin. Ensuring water quality continues to be a top priority for the District; extra effort is extended in the area of monitoring water quality and improving coastal conditions, along with sound financial choices to minimize the costs of projects. Those extra efforts are summarized in the items listed below: Maintaining and Improving Water Quality

Drinking water in California is among the most highly regulated and safest in the world. Operating for more than five years now, the GWRS brings Orange County’s water quality to a higher level. The District conducts monitoring programs on behalf of the local water retailers to meet monitoring requirements implemented by the California Department of Health Services and the U.S. Environmental Protection Agency. The District also implements additional monitoring programs for the purpose of groundwater management. These programs are designed to give the District an advance warning of potential problems so corrective action can be taken to protect northern and central Orange County’s water supply before there is a problem. The District’s organic and inorganic laboratory provides real value to local water retailers by testing all groundwater to ensure public health. The District has always maintained a proactive policy toward maintaining water quality.

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Improving Coastal Conditions

Production from the basin requires coastal mitigation measures. The District has implemented various capital projects to improve coastal conditions. The District’s two main objectives are to ensure high quality coastal groundwater supplies and to protect the coastal aquifer subunits from seawater intrusion through expansion of the seawater barrier.

Using the Safest and Most Cost-Effective Financing Option The District has traditionally and successfully used long-term debt financing in the form of Certificates of Participation and low cost State loans to pay for capital projects that have increased water production, removed pockets of contamination, increased producer pumping capacity, increased the capture of Santa Ana River flows, and prevented seawater intrusion. The District is always seeking ways to minimize capital project costs. ECONOMIC CONDITION AND OUTLOOK The District’s service boundary covers virtually the entire northern half of Orange County. More than 2.4 million Orange County residents rely on the District for about two-thirds of their water needs. Orange County is one of the major metropolitan areas in California and the nation representing the third most populous county in the state, and fifth in the nation. Population growth is about 1.0% annually. Orange County’s economy has slowed in the past year and it is expected to remain slow for the next year. Local and statewide unemployment has gone down compared to last year. The local unemployment rate in June 2013 was 6.1% versus 8.9% for California and 7.6% for the nation. The California State Budget has passed. Although the precise implications of the state budget are unclear at this time, the District is expecting no cuts in the ad valorem property tax revenues for the upcoming fiscal year 2013-14. During the water year 2012-13, the District replenished approximately 226,597 acre-feet (af) of water. This groundwater replenishment consisted of 112,307af of Santa Ana River flows, 72,627 af of GWRS water, non-local recharge of 25,443 af of MWD imported water and 15,571af of MWD conjunctive use project (CUP) water. Other water sources include natural replenishment from rainfall that provided an additional estimated 30,150 af of water. Groundwater use in Orange County in 2012-13 was approximately 308,646 af or 100.6 billion gallons during the water year. Groundwater met 68% of the water demand within District boundaries. There are challenges ahead in meeting future water demand, but with continued investment in cost-effective capital improvement projects, the District is confident that the groundwater basin can stay ahead of demand and continue to provide a reliable, high-quality water supply.

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MAJOR INITIATIVES FOR THE FUTURE District is Planning the Following Projects for Fiscal Year 2013-2014: The District’s combined projects will provide regional and statewide benefits. All of these projects are an effective response to meeting the federal mandate to decrease California’s dependency on imported waters from the Colorado River and the Sacramento-San Joaquin River Delta (the “Delta”). The current method of moving water through the Delta to the pumps of the California State Water Project is in jeopardy due to recent environmental rulings. The District’s projects help to diminish the region’s reliance on uncertain imported water supplies Groundwater Replenishment System Initial Expansion

The Groundwater Replenishment System (GWRS) was designed and built to be easily expanded. With the completion of Orange County Sanitation District’s Steve Anderson Lift Station in May 2009, the GWRS is receiving more feed water. Now that the GWRS is operating at full capacity of 70 million gallons per day (MGD), the District is working towards expansion of the system. The expansion of GWRS has been designed and a contract has been issued for construction. Construction will be completed in October 2014. Initial Expansion will increase production capacity by 30 million gallons per day (MGD) from our current capacity of 70 MGD to 100 MGD. The facility is expandable to 130 MGD; however, expansion from 100 MGD to 130 MGD will not occur for several years. La Palma Basin The land purchase for the future La Palma Basin is underway. After purchasing the land, an engineered design and CEQA documentation will be prepared. Then the project will consist of excavating and constructing the recharge basin, a pipeline connecting the basin to the existing GWRS pipeline and a pump station. Fletcher Basin Rehabilitation Fletcher Basin is owned by Orange County Flood Control Division (OCFCD) and was formerly used to impede storm water flow prior to discharge into the Santa Ana River. Currently, the site is used to dispose of excess soils. The rehabilitation project would convert Fletcher Basin into a recharge basin and make improvements to enhance flood control. This project would include excavating the basin of excess soils; cleaning, hauling and disposing of soils; construction of an influent pipeline and inlet/outlet structure into the basin; construction of a low-flow channel to route nuisance water directly to the Fletcher Channel; installation of a sump pump to evacuate the water into Fletcher Channel. The project will provide additional percolation capacity of 950 af per year.

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Mid-Basin Injection Demonstration Project – Phase II The well equipping (Phase II) of the Mid-Basin Injection Demonstration Project is ready to be built. Phase II involves equipping the injection well with a 30'x50' building which will contain piping, a backwash pump and motor, a micro hydro turbine, electrical panels and controls, valves, meters, and a power transformer. When complete this injection well recharge up to 3.0 million gallons per day of water from the GWRS. Alamitos Barrier Improvements This is a joint project between the Engineering, Hydrogeology and Planning departments to develop improvements to the Alamitos Barrier to strengthen the control over seawater intrusion. Numerous issues need to be addressed including the condition of the barrier pipeline, new injection wells, and additional source water for injection. Sediment Management in the Santa Ana River The Army Corps of Engineers has been engaged in discussion regarding the need to address sediment transportation in the SAR. Currently, this sediment is trapped behind the dam which reduces flood control and water conservation capabilities. A study has been undertaken to develop a method of moving sediment through the Prado dam. Once complete a dredging operation will be utilized behind the dam to demonstrate the effectiveness of sediment removal. Burris Pump Station The District has completed the design for the Phase I construction which will occur this fiscal year. Phase 1 involves draining Burris Basin and constructing a portion of the building site and an earthen berm. The berm will protect the construction site from being inundated with water while the existing pump station continues to operate. This will allow Phase 2 construction, the final construction of the wet well and pump station, to occur throughout the coming storm season. Water Conservation Program The District is dedicated to the creation, promotion and management of water education and conservation programs throughout Orange County. Each year, District staff gives more than 120 presentations to community leaders and groups and conducts more than 250 tours of District facilities. The goal of the District’s water conservation, outreach and education programs is to draw families’ attention to the state’s water needs and crisis, teach them useful and simple ways to reduce water consumption and respect this natural resource, and have them make life-long commitments to conserving water. The components that comprise the O.C. Family Water Conservation Program are: Children’s Water Education Festival

The Children’s Water Education Festival is the largest event of its kind in the nation, serving 4,500 to 7,000 elementary school students every year. Thanks to more than 400

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volunteers and the support of Disneyland Resort Environmental Affairs, the Festival celebrated its 17th anniversary in March 2013. This two-day event brings the classroom outdoors and teaches children about water resources, recycling, pollution prevention, wetland preservation and other environmental topics through interactive and hands-on activities. Over the past 17 years, the Festival has educated more than 100,000 students, teachers and parents. This educational field trip is widely sought after by educators. O.C. Water Summit The annual O.C. Water Summit teaches individuals, business, community and civic leaders where our water comes from, and provides information about the water supply crisis and water quality challenges we face. The 6-year old event educates the public on what temporary measures are in place to address these issues as well as possible solutions to water reliability and preserving the Bay-Delta, California’s main source of water. A collaborative effort between businesses, water agencies and local governments, the Summit provides a platform for individuals in the community to work with water utilities and legislators on creating and implementing solutions that will see Orange County through future water challenges. Topics for each Summit are determined according to the water climate each year. O.C. Water Hero Program The O.C. Water Hero Program was designed to make water conservation fun while helping children and parents develop effective water-use efficiency habits that will last a lifetime. When a child signs up to commit to saving 20 gallons of water a day, they receive a letter confirming their Water Hero status along with a Water Hero Kit that includes a Water Hero badge, Water Waster “Fix It Ticket” pad, conservation stickers, a five-minute shower timer, activity pages based on California state teaching standards and a water saving pledge card for parents to sign and return. When the Water Hero’s parent pledges to save 20 gallons of water a day too, then the child becomes a Water Superhero. Superheroes receive a certificate, indoor/outdoor water saving tips and a t-shirt. The goal is to raise awareness of the need to conserve water and motivate county residents to reduce their water consumption by 20 gallons per day, per person. Since its inception in 2007, almost 20,000 Water Heroes and Superheroes have enrolled in the program Facility Tours, Speaker’s Bureau and Water 101 As a leader in water reuse and groundwater management, the District receives hundreds of requests annually to provide tours and briefings for visitors from local colleges, water agencies, the surrounding community and international organizations. Through its active speaker’s bureau program, the District also receives requests for representatives to go out to the community and speak to numerous organizations and schools, as well as at local, national and international conferences.

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The District is committed to proactive public outreach and education and will make every effort to accommodate requests for speakers and tours. Educating the public about advanced wastewater purification is important to garnering support for future GWRS-like projects that are being planned around the world. O.C. Water 101 is a free water education class offered to residents and colleges. The class focuses on the global water crisis, how water affects health, California’s unique water situation, what the future holds for water supplies in Orange County and what water agencies are doing to help conserve available water resources. The class also includes discussions on high-tech solutions to help alleviate water shortages today and in the future, as well as provides individuals with the resources and information necessary to save water. Some of the more notable visitors to the GWRS include Senator Dianne Feinstein; Congresswomen Loretta Sanchez and Grace Napolitano; Congressmen Tom McClintock, Gary Miller, Dana Rohrabacher and Ed Royce; Governor of California Jerry Brown; and Lt. Governor John Garamendi. SERVICE EFFORTS AND ACCOMPLISHMENTS Many parts of the world are experiencing drought and water shortages, including the southwestern and southeastern United States, Singapore, the Middle East and Australia. Government and water officials in these areas constantly look for new sources to provide a reliable, long-term water supply. As technology increases and public opinion shifts, treating wastewater at an advanced recycled water treatment facility is now a viable water source for many of these areas. Through the success of the District’s Groundwater Replenishment System (GWRS), indirect potable reuse (IPR) projects have been implemented or are being planned. More than 20,000 visitors have toured GWRS since 2008, many of whom were international water experts and elected officials from six continents hoping to learn more about IPR and ultimately replicate the project in their regions. As an example, guests have hailed from across the U.S., Mexico, Canada, Brazil, Israel, Spain, Greece, Kenya, Japan, China, Korea, Germany, Britain, Italy, Russia, Australia, Singapore, India and Taiwan. In California alone, there are more than five other GWRS-like projects currently being developed by other agencies including the City of San Diego, Los Angeles Department of Water and Power, Santa Clara Valley Water District, and the GRIP Project sponsored by four water agencies in Los Angeles County. The GWRS has been featured in hundreds of print and broadcast stories, both mainstream and trade press, locally, nationally and internationally. In 2004, four years before it was constructed and operational, the project had already been in more than 40 balanced media reports including ABC Nightly News with Peter Jennings, National Public Radio, and the Wall Street Journal. The District has received numerous awards for its service efforts and accomplishments in the recent years. The District is known globally for its leadership and innovation. Its work

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on water quality and reliability, the environment, and sound financial management has been recognized by local and international organizations. The following list of awards is representative of the acclaim and recognition bestowed on the District and the GWRS from 2010 through June 2013.

2013: American Academy for Environmental Engineers and Scientists recognized the District with the Environmental Education Award for its ongoing GWRS outreach campaign. (April 2013) Southwest Membrane Operators Association recognized the District and the District’s Principal Process Engineer & GWRS Program Manager Mehul Patel, P.E., with Distinguished Service Awards. Patel received the award for five years of service on the SWMOA Board of Directors and the District for allowing its staff to participate and contribute to the goals and mission of the Association. (April 2013) 2012: American Water Works Association (AWWA) and American Membrane Technology Association (AMTA) recognized the GWRS with the Membrane Facility of the Year Award. (February 2012) WateReuse Association, California Section recognized the District’s Director of Water Production William (Bill) Dunivin with the 2012 Recycled Water Staff Person of the Year Award. (March 2012) Government Finance Officers Association (GFOA) recognized the District with the Certificate of Achievement for Excellence in Financial Reporting (CAFR) Program for superb financial accountability and reporting of its fiscal year that ended June 30, 2011. The CAFR Program is GFOA’s highest form of recognition in the area of governmental accounting and financial reporting. (June 2012) Bolsa Chica Conservancy recognized the District with the 2012 Conservator of the Year Award for its leadership in environmental conservation in groundwater quality, reliability and sustainability, and for its commitment and dedication to conservation through its highly acclaimed GWRS and many other programs. (December 2012)

2010:

The United States Fish & Wildlife Service (USFW) recognized the District’s Natural Resources Director Richard Zembal with the Services 2009 Recovery Champion Award, one of only 18 awarded nationally. The Recovery Champion award recognizes USFW employees and their partners for contributions to the recovery of threatened and endangered species in the United States. (March 2010) RELEVANT FINANCIAL POLICIES Internal Control Structure

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District management is responsible for the establishment and maintenance of the internal control structure that ensures that the assets of the District are protected from loss, theft, or misuse. The internal control structure also ensures that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. The District’s internal control structure is designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be derived, and (2) the valuation of costs and benefits requires estimates and judgments by management. Accounting and Budgetary Policies The District maintains its accounting records on an accrual basis. A great deal of consideration is given to the adequacy of internal accounting controls in developing and evaluating the District’s accounting system. Internal accounting controls are designed to provide reasonable assurance regarding: (1) the safeguard of District assets against theft or unauthorized use: and (2) the reliability of financial records for preparing financial statements and maintaining accountability of assets. The concept of reasonable assurance recognizes that the cost of control should not exceed the benefits likely to be derived and it requires management’s estimates and judgment in evaluation of costs and benefits. The District’s Board of Directors adopts an annual budget prior to June 30 each fiscal year. The budget includes proposed expenses by department (function) and the means of financing them. Budgetary controls and evaluation are affected by comparisons of actual revenue and expenses with planned revenues and expenses for the period. The Board approves total budgeted appropriations and any amendments to the appropriations throughout the year. The District has adopted a Uniform Purchasing Policy that identifies agreed- upon purchasing standards. Debt Management The District’s debt mainly consists of Certificates of Participation (COP), state loans and commercial paper. The District has executed 14 issuances since 1989. Only four issuances are outstanding (2003A, 2005B, 2009A & 2013A) as of June 30, 2013. Other issuances are either current, advanced refunded, defeased or refinanced with the help of the state loans and refunding bonds. During the FY 2012-13, the District issued $53 million of new revenue refunding bonds to defease its 2003B COPs. This current refunding will result in $14 million present value savings in future debt service cost. The District has a letter of credit financing agreement supporting a commercial paper program with Bayerische Landesbank. The District has credit capacity of $45 million to meet its future financing needs thru the commercial paper program.

The District has an AAA rating from Fitch and Standard & Poor's and an Aal rating from Moody's based on the District's long-term credit quality. The ratings mean the District is one of the highest rated water agencies in the State of California. Maintaining a high rating saves the District and local water rate payers millions of dollars by allowing the District to borrow money more easily and at lower rates.

The high ratings reflect great confidence in the District's general and fiscal management and its leadership in the water industry. It bears truth to the District's competitive wholesale water rates, particularly in comparison to alternative water supply options, strong debt service coverage, and the District's ability to address Southern California's long-term water supply problems with new water projects like the GWRS.

OTHER INFORMATION

Independent Audit: The District policy, as well as sound financial practice, requires an annual audit of financial records and transactions of all operations of the District by independent certified public accountants selected by the Board of Directors. The accounting firm of Lance, Soli & Lunghard, LLP, was selected to perform the (2012-13) audit. The auditor's opinion is included in this report.

Awards: The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the Orange County Water District for its comprehensive annual financial report (CAFR) for the fiscal year ended June 30, 2012. In order to be awarded a Certificate of Achievement, a governmental unit must publish an easily readable and efficiently organized CAFR, whose contents conform to program standards. This report must satisfY both generally accepted accounting principles and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year. We believe our current CAFR continues to meet the Certificate of Achievement requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate of achievement.

Acknowledgements: The preparation of a comprehensive annual financial report on a timely basis is a large task, made possible only by the combined efforts of many persons. Employees of the Finance Department deserve special recognition. Without their efforts, the completion of this report would not have been possible. We would also like to thank and recognize the members of the Board of Directors, the General Manager, and especially the Administration and Finance Committee members for their continued support in the planning and implementation ofthe District's fiscal policies.

Randy Fick General Manager Chief Financial Officer/Treasurer

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Orange County Water District Organizational Structure

Board of Directors

Greg WoodsideExecutive Director

Planning & Natural Resources

John KennedyExecutive Director

Engineering & Local Resources

Mike WehnerAssistant GM

Water Quality & Regulations

Bill HuntExecutive Director

Operations

Eleanor TorresPublic Affairs

Mike MarkusGeneral Manager

Bruce DosierIS/Property

Management

Stephanie DosierHuman Resources

Janice DurantBoard

Administration

Kevin GreeneAccounting

Vishav SharmaFinance

Bonnie HowardPurchasing

Jason DadakisRegulatory

Lee YooLaboratory

Nira YamachikaWater Quality

Don PhippsResearch &

Development

Greg WoodsidePlanning & Watershed

Management

Roy HerndonHydrogeology

Chris OlsenEngineering

Dick ZembalNatural Resources

Chris McConaughyField Headquarters

Manager

Bill DunivinGWRS/Water

Production

Legal Counsel

Randy FickCFO/Treasurer

Scott NygrenWetlands

Operations

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Orange County Water District Comprehensive Annual Financial Report

Fiscal Year 2012-13

Board of Directors

Kathryn Barr, Service Area 1

Denis Bilodeau, Service Area 2

Roger Yoh, 2nd Vice President Service Area 3

Philip Anthony, Service Area 4

Stephen Sheldon, Service Area 5

Cathy Green, 1st Vice President, Service Area 6

Shawn Dewane, President, Service Area 7

Vincent Sarmiento, Service Area 8

Harry Sidhu, Service Area 9

Bruce Whitaker, Service Area 10

� � � � � � �

Michael R. Markus, P.E. General Manager

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ORANGE COUNTY WATER DISTRICT

DISTRICT VITAL STATISTICS

Date of Enactment: 1933 Form of Government: Special District of the State of California Area (square miles): 358 Employees (full-time): 216

Major Groundwater Producing Agencies:Anaheim, City of Mesa Consolidated Water District Buena Park, City of Newport Beach, City of East Orange County Water District Orange, City of Fountain Valley, City of Santa Ana, City of Fullerton, City of Seal Beach, City of Garden Grove, City of Serrano Water District Golden State Water Company Tustin, City of Huntington Beach, City of Westminster, City of Irvine Ranch Water District Yorba Linda Water District La Palma, City of

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Financial Section

Independent Auditor’s Report

INDEPENDENT AUDITORS’ REPORT

Board of Directors Orange County Water District Fountain Valley, California

We have audited the accompanying financial statements of the Orange County Water District (the “District”) as of and for the year ended June 30, 2013 and 2012, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; 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.

Auditor’s Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit 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, and the State Controller’s Minimum Audit Requirements for California Special Districts. Those standards require that we plan and perform the audit 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 auditor’s 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 auditor considers internal control relevant to the entity’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 entity’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 opinions.

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the District, as of June 30, 2013 and 2012, and, the respective changes in financial position and, where applicable, cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

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2

Management’s Discussion and Analysis

Financial Highlights


MANAGEMENT’S DISCUSSION AND ANALYSIS

For the year ended June 30, 2013 The following summary analysis is a brief discussion of the Orange County Water District’s (District) performance that provides an overview of the District’s financial activities for the year ended June 30, 2013. It has been prepared by District staff, and should be read in conjunction with the financial statements and the notes to the financial statements, which follow this analysis. FINANCIALHIGHLIGHTS

• In fiscal year ended June 30, 2013, the District’s operating revenues from all sources

increased by $7.74 million or 9.00% from the prior year primarily due to increased water demands and increased rates. The District increased its basin pumping percentage to 68% from 65% and increased the replenishment assessment from $254 to $266 per acre-foot which resulted in an increase of $7.73 million or 10.60% in replenishment assessment.

• Operating expenses before depreciation and amortization increased $0.75 million or

1.42% as compared to the prior year primarily due to the increased production of the Groundwater Replenishment System (GWRS). GWRS produced 72,627 acre-feet in FYE 2013 versus 71,679 acre-feet in FYE 2012 or a 1.32% increase in the output of the treatment facility.

• Metropolitan Water District of Southern California (MWD) had less surplus water

available during the current year; as a result, the District was able to purchase less low cost water from MWD. Water purchases during the current year were $13,825,244 as compared to $29,139,553 in prior year a decrease of $15.3 million or 52.56%.

• The District’s net position increased by $1.4 million or 0.41% as compared to the prior

year. The main reason for this increase is the lower cost of depreciation, increased revenues and reduced amount of water purchase as compared to the prior year.

OVERVIEW OF THE FINANCIAL STATEMENTS The District operates as a utility enterprise and presents its financial statements using the full accrual basis of accounting. The basic financial statements of the District consist of the Statement of Net Position, the Statement of Revenues, Expenses, and Changes in Net Position, and the Statement of Cash Flows. The Statement of Net Position includes all of the District’s assets and liabilities and provides information about the nature and amounts of investments in resources (assets) and the obligations to creditors (liabilities). It also provides the basis for computing the rate of return, evaluating the capital structure of the District, and assessing the liquidity and financial flexibility of the District.

3



For the year ended June 30, 2013 The Statement of Revenues, Expenses, and Changes in Net Position provide information on the District’s operations and can be used to determine whether the District has recovered all of its costs through its rates and other charges. This statement can also be used to determine the District credit worthiness and profitability. The Statement of Cash Flows provides information regarding the District’s cash receipts and cash payments and changes in cash resulting from operations, investments and financing activities. Additionally, the Statement of Cash Flows provides answers to such questions as where did cash come from, what was cash used for, and what was the change in cash balance during the reporting period. FINANCIAL ANALYSIS OF THE DISTRICT Our analysis of the District begins on page 12 of the Financial Statements. One of the most important questions asked about the District’s finances is “Is the District as a whole better off or worse off as a result of the year’s activities?” The Statement of Net Position, and the Statement of Revenues, Expenses and Changes in Net Position report information about the District’s activities in a way that will help answer this question. These two statements report the net position of the District and changes in them. You can think of the District’s net position - the difference between assets and liabilities - as one way to measure financial health or financial position. Over time, increases or decreases in the District’s net position are one indicator of whether its financial health is improving or deteriorating. However, one will need to consider other non-financial factors such as changes in economic conditions, new or changed government legislation or accounting standards, population growth, and zoning. STATEMENT OF NET POSITION Net position may serve over time as a useful indicator of a government’s financial position. In the case of the District, assets exceeded liabilities by $345.9 million at June 30, 2013 compared with $344.4 million at June 30, 2012 (restated). A significant portion of the increase in the District’s net position can be attributed to the increased revenues, decrease in the cost of water purchase and depreciation expense during the year. The District’s operational and non-operational activities resulted in an increase in net position of $1.35 million and the District received capital contributions of $0.06 million from various federal, state and local agencies towards its capital program. The District reported a decrease of $22.02 (restated) in Net Position for the year ended June 30, 2012 as compared to the year ended June 30, 2011. The main reason for the decrease can be attributed to the water purchase and implementation of GASB 65. The following is a summary of the District’s Statement of Net Position.

4



For the year ended June 30, 2013

Condensed Statements of Net Position June 30,

2013 June 30, 2012

(Restated)Change

2013 v. 2012 June 30, 2011 Change

2012 v. 2011Assets:

Current Assets $266,595,332 $241,215,254 $25,380,078 $269,097,912 ($27,882,658)Non-current Assets:

Capital Assets 623,864,227 601,692,005 22,172,222 599,870,229 1,821,776Other Non-current

Assets and Deferred Outflows

23,801,127 38,048,029 (14,246,902) 20,179,441 17,868,588

Total Assets and Deferred Outflows

$914,260,686 $880,955,288 $33,305,398 $889,147,582 ($8,192,294)

Liabilities:

Current Liabilities $30,316,661 $23,497,982 $6,818,679 $48,102,115 ($24,604,133)Non-current Liabilities:

Long-term Debt 518,548,959 485,323,524 33,225,435 460,188,459 25,135,065Other Long-term

Liabilities and Deferred Inflows

19,543,838 27,689,431 (8,145,593) 14,392,477 13,296,954

Total Liabilities and Deferred Inflows

$568,409,458 $536,510,937 $31,898,521 $522,683,051 $13,827,886

Net Position: Net Investment in Capital Assets

$99,650,065 $111,571,069 ($11,921,004) $116,111,449 ($4,540,380)

Restricted for construction and capital projects

10,068,925 15,423,222 (5,354,297) 31,826,297 (16,403,075)

Restricted for debt services

11,135,627 11,419,326 (283,699) 11,423,764 (4,438)

Restricted for custodial costs

10,378,695 12,236,349 (1,857,654) 20,767 12,215,582

Unrestricted 214,617,916 193,794,385 20,823,531 207,082,254 (13,287,869)

Total Net Position $345,851,228 $344,444,351 $1,406,877 $366,464,531 ($22,020,180) The District reported an increase in net position of $1.41 million for the year ended June 30, 2013 as compared to the year ended June 30, 2012 (Restated). The main reasons for the increase was increased revenues, decrease in the cost of water purchase and depreciation expense. For the year ended June30, 2012 a decrease in net position of $22.02 million (Restated) was reported as compared to the year ended June 30, 2011. The change between the periods is due to the purchase of the replenishment water from MWD and prior period adjustment due to the implementation of GASB 65. The following is a summary:

5


MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)


Condensed Statements of Revenues, Expenses and Changes in Net Position

Year Ended June 30, 2013

Year Ended June 30, 2012

(Restated) Change

2013 v. 2012

Restated Year Ended

June 30, 2011 Change

2012 v. 2011 Revenues: Operating Revenues

Replenishment assessment $80,694,951 $72,961,431 $7,733,520 $66,799,060 $6,162,371

Basin equity assessment 2,082,761 2,219,153 (136,392) 1,771,328 447,825

Reclaimed water revenues 10,978,979 10,833,568 145,411 9,540,017 1,293,551

Non-operating Revenues Property Taxes 22,497,113 19,383,140 3,113,973 18,592,612 790,528Investment Income (1,372,396) 3,035,882 (4,408,278) 2,814,104 221,778Rental Income Net of

Expenses 1,628,627 1,128,904 499,723 1,190,357 (61,453)

Other Non-operating Revenues

(557,866) 7,312,870 (7,870,736) (2,832,749) 10,145,619

Total Revenues $115,952,169 $116,874,948 ($922,779) $97,874,729 $19,000,219 Expenses:

Operating expenses $53,502,225 $52,755,246 $746,979 $49,537,521 $3,217,725Water Purchases 13,825,244 29,139,553 (15,314,309) 15,708,425 13,431,128

Depreciation & Amortization

31,453,784 33,346,141 (1,892,357) 33,069,585 276,556

Non-operating Expenses 15,823,476 17,996,235 (2,172,759) 16,241,797 1,754,438

Total Expenses $114,604,729 $133,237,175 ($18,632,446) $114,557,328 $18,679,847

Income (Loss) before Capital Contributions

$1,347,440 ($16,362,227) $17,709,667 ($16,682,599) $320,372

Capital Contributions 59,437 778,674 (719,237) 1,165,960 (387,286)Change in Net Position $1,406,877 ($15,583,553) $16,990,430 ($15,516,639) ($66,914)

Beginning Net Position Restatements

$344,444,351-

$366,464,531(6,436,627)

($22,020,180)6,436,627

$381,981,170 -

($15,516,639) (6,436,627)

Ending Net Position $345,851,228 $344,444,351 $1,406,877 $366,464,531 ($22,020,180)

6



For the year ended June 30, 2013 CAPITAL ASSETS At June 30, 2013, the District had invested $962.4 million in capital assets, including land, water rights, structures and improvements, equipment and construction-in-progress. Capital additions net of transfers totaled $53.6 million made during the fiscal year ended June 30, 2013 and capital additions net of transfers totaled $37.2 million for the fiscal year ended June 30, 2012. The main reasons for these capital additions were the purchase of equipment and construction in progress on various water basin/water recycling projects in fiscal year ending 2013. Net Capital assets worth ($8,668) were retired during the year ended June 30, 2013 as compared to ($2,408,335) worth of capital assets were retired during the year ended June 30, 2012. The following is a summary of the capital assets at June 30, 2013, June 30, 2012, and June 30, 2011 respectively:

Capital Assets

June 30, 2012 Transfers/ Additions

Adjustments/ Deletions June 30, 2013

Land $31,412,307 $ - $ - $31,412,307Water Rights 6,823,570 - - 6,823,570Structures and Improvements

650,018,115 1,824,836 - 651,842,951

Infrastructure 61,482,991 1,570,147 - 63,053,138Equipment 113,557,263 4,007,852 (20,205,053) 97,360,062Construction in Progress

65,723,985 46,218,270 - 111,942,255

Subtotal 929,018,231 53,621,105 (20,205,053) 962,434,283Less:

Accumulated depreciation

(327,326,226) (31,440,215) 20,196,385

(338,570,056)

Net Capital Assets

$601,692,005 $22,180,890 ($8,668) $623,864,227

7




June 30, 2011 Transfers/ Additions

Adjustments/ Deletions June 30, 2012

Land $31,412,307 $ - $ - $31,412,307Water Rights 6,823,570 - - 6,823,570Structures and Improvements

641,015,447 9,008,891 (6,223) 650,018,115

Infrastructure 61,330,324 152,667 - 61,482,991Equipment 116,677,522 2,669,719 (5,789,978) 113,557,263Construction in Progress

40,336,475 25,386,510 1,000 65,723,985

Subtotal 897,595,645 37,217,787 (5,795,201) 929,018,231Less:

Accumulated depreciation

(297,725,416) (32,987,676) 3,386,866

(327,326,226)

Net Capital Assets

$599,870,229 $4,230,111 ($2,408,335) $601,692,005

Additional information can be found in Note 4 of the notes to financial statements. DEBT ADMINISTRATION At June 30, 2013 the District had $527.4 million in total debt as compared to $494.0 million at the fiscal year ended June 30, 2012. It includes loans from the State of California, commercial paper and installment purchase agreements associated with the certificates of participation. This amount represents a net increase of $33.4 million from the prior year. This increase is due to the additional State of California State revolving fund loan for the construction of the Groundwater Replenishment System Initial Expansion project. The following is a summary of the long-term debt at June 30, 2013, June 30, 2012 and June 30, 2011 respectively:

Long-Term Debt

June 30, 2013 June 30, 2012Change

2013 v. 2012 June 30, 2011 Change

2012 v. 2011 Certificates of

Participation $355,731,085 $357,673,503 ($1,942,418) $350,269,778 $7,403,725

State of California loans payable

171,706,235 136,313,916 35,392,319 118,439,002 17,874,914

Commercial Paper

- - - 15,050,000 (15,050,000)

Total $527,437,320 $493,987,419 $33,449,901 $483,758,780 $10,228,639

8



For the year ended June 30, 2013 The District has received the following ratings from the three major credit rating agencies:

Fitch Ratings: AAA Moody’s: Aa1 Standard & Poor’s: AAA

Additional information can be found in Note 6 of the notes to financial statements. ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES The Board of Directors approved the budget for the fiscal year 2013-14. The budgeted operating expenses total $74.4 million which includes a net water budget of $20.0 million. The annual budget also includes $31.8 million for debt service and $13.7 million for R&R fund expenditure and reserves. The Board increased the Replenishment Assessment from $266 per acre-foot to $276 per acre-foot and the basin pumping percentage from 68% to 70%. A multi-year construction-in-progress (CIP) budget of $65.6 million was adopted. These CIP projects will be funded by the District’s restricted funds, State loans, project reimbursements and $5 million pay-as-you-go from the general fund. The financial markets continue to go through tough economic times and the District like other cities and local governments is facing the same challenges. Orange County’s economy has slowed in the past years and it is expected to grow slowly in the next year. The County’s unemployment rate in June 2013 is 6.1% versus 8.5% for California and 7.6% for the nation. CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, customers, investors, and creditors with a general overview of the District’s finances and to demonstrate the District’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact the Finance department, at the Orange County Water District, 18700 Ward Street, Fountain Valley, CA, 92708.

9

10

Basic Financial Statements

Statement of Net Position Statement of Revenues, Expenses and Changes in Net Position

Statement of Cash Flows

11

2012

CURRENT ASSETS:UNRESTRICTED ASSETS:

Cash and cash equivalents 15,485,995 $ 45,921,522 $ Investments 126,800,045 95,352,763 Accounts receivable 61,864,188 42,933,839 Taxes receivable 393,593 391,465 Accrued interest receivable 752,069 571,785 Inventory 14,003,102 10,914,568 Prepaid expenses 880,936 695,104 Current portion of notes receivable 4,123,281 711,550

TOTAL UNRESTRICTED ASSETS 224,303,209 197,492,596

RESTRICTED ASSETS:Cash and cash equivalents 5,450,000 4,631,884 Investments 26,260,771 26,678,512 Accrued interest and other receivable 94,594 58,063 Custodial cash and investments 6,156,435 10,650,409 Custodial escrow retention 4,330,323 1,703,790

TOTAL RESTRICTED ASSETS 42,292,123 43,722,658

TOTAL CURRENT ASSETS 266,595,332 241,215,254

NONCURRENT ASSETS:CAPITAL ASSETS:

Capital assets, not depreciated 150,178,132 103,959,862 Capital assets, depreciated, net 473,686,095 497,732,143

TOTAL CAPITAL ASSETS 623,864,227 601,692,005

OTHER NONCURRENT ASSETS:Due from other governments 304,713 927,280 Notes receivable, less current portion above 4,785,460 9,291,514 Other post-employment benefits (OPEB) asset 231,655 231,655 Derivative instruments 15,256,141 23,731,097

TOTAL OTHER NONCURRENT ASSETS 20,577,969 34,181,546

TOTAL NONCURRENT ASSETS 644,442,196 635,873,551

TOTAL ASSETS 911,037,528 877,088,805

Deferred charges on refunding 3,223,158 3,866,483 TOTAL DEFERRED OUTFLOWS OF RESOURCES 3,223,158 3,866,483


STATEMENT OF NET POSITIONJUNE 30, 2013 AND 2012

2013 ASSETS

DEFERRED OUTFLOWS OF RESOURCES

See independent auditors' report and notes to basic financial statements.12

2013 2012

CURRENT LIABILITIES:PAYABLE FROM UNRESTRICTED CURRENT ASSETS:

Accounts payable and accrued expenses 6,253,691 4,663,342 Accrued interest payable 4,094,417 5,183,674 Deposits 39,747 40,347 Current portion of compensated absences 331,569 302,963 Current portion of long-term debt 8,888,361 8,663,895

TOTAL PAYABLE FROM UNRESTRICTED CURRENT ASSETS: 19,607,785 18,854,221

PAYABLE FROM RESTRICTED ASSETS:Accounts payable and accrued expenses 6,230,900 2,484,473 Retentions payable 4,356,613 2,037,940 Custodial liability 121,363 121,348

TOTAL PAYABLE FROM RESTRICTED ASSETS: 10,708,876 4,643,761

TOTAL CURRENT LIABILITIES 30,316,661 23,497,982

NONCURRENT LIABILITIES:LONG-TERM DEBT:

Certificates of participation 355,731,085 357,673,503 State of California loans payable 171,706,235 136,313,916

Subtotal: 527,437,320 493,987,419 Less: current portion above 8,888,361 8,663,895

TOTAL LONG-TERM DEBT 518,548,959 485,323,524

OTHER NONCURRENT LIABILITIES:Accrued compensated absences 4,287,697 3,958,334

TOTAL OTHER NONCURRENT LIABILITIES 4,287,697 3,958,334

TOTAL NONCURRENT LIABILITIES 522,836,656 489,281,858

TOTAL LIABILITIES 553,153,317 512,779,840

Derivative instruments 15,256,141 23,731,097 TOTAL DEFERRED INFLOWS OF RESOURCES 15,256,141 23,731,097

NET POSITION:Net Investment in Capital Assets 99,650,065 111,571,069 Restricted for the construction of capital assets 10,068,925 15,423,222 Restricted for debt service 11,135,627 11,419,326 Restricted for custodial costs 10,378,695 12,236,349 Unrestricted 214,617,916 193,794,385

TOTAL NET POSITION 345,851,228$ 344,444,351$


LIABILITIES

DEFERRED INFLOWS OF RESOURCES

STATEMENT OF NET POSITION (CONTINUED)JUNE 30, 2013 AND 2012


14

OPERATING REVENUES:Replenishment assessments 80,694,951$ 72,961,431$ Basin equity assessments 2,082,761 2,219,153 Reclaimed water revenue 10,978,979 10,833,568

TOTAL OPERATING REVENUES 93,756,691 86,014,152

OPERATING EXPENSES:Water purchases 13,825,244 29,139,553 Water production 27,242,617 27,222,877 Depreciation and amortization 31,453,784 33,346,141 General and administrative 26,259,608 25,532,369

TOTAL OPERATING EXPENSES 98,781,253 115,240,940

OPERATING LOSS (5,024,562) (29,226,788)

NONOPERATING REVENUES (EXPENSES):Property taxes 22,497,113 19,383,140 Investment income 1,982,990 2,761,169 Fair Market Value Adjustment (3,355,386) 274,713 Rental income, net of expenses 1,628,627 1,128,904 Legal settlements, net of expenses (2,129,432) 5,918,428 Other nonoperating revenues, net of expenses 1,571,566 1,394,442 Interest expense (15,681,765) (15,587,900) Loss on disposal of capital assets (141,711) (2,408,335)

TOTAL NONOPERATING REVENUES (EXPENSES) 6,372,002 12,864,561

NET INCOME (LOSS) BEFORECAPITAL CONTRIBUTIONS 1,347,440 (16,362,227)

CAPITAL CONTRIBUTIONS FROM OTHER PARTIES 59,437 778,674

CHANGES IN NET POSITION 1,406,877 (15,583,553)

NET POSITION - BEGINNING OF YEAR 344,444,351 366,464,531

RESTATEMENTS - (6,436,627)

NET POSITION - BEGINNING OF YEAR, AS RESTATED 344,444,351 360,027,904

NET POSITION - END OF YEAR 345,851,228$ 344,444,351$

2012


STATEMENT OF REVENUES, EXPENSESAND CHANGES IN NET POSITIONFOR THE YEARS ENDED JUNE 30, 2013 AND 2012

2013


CASH FLOWS FROM OPERATING ACTIVITIES:Cash received from customers 77,020,475$ 79,493,327$ Cash payments to suppliers for goods and services (35,628,212) (73,459,205) Cash payments to employees for services (26,960,805) (26,189,889) Rental income, net of expenses 1,628,627 1,128,904 Legal settlements, net of expenses (2,129,432) 5,918,428

NET CASH PROVIDED BY OPERATING ACTIVITIES 13,930,653 (13,108,435)

CASH FLOWS FROM NONCAPITALFINANCING ACTIVITIES:

Cash received from property taxes 22,494,985 19,391,454 NET CASH PROVIDED BY NONCAPITAL

FINANCING ACTIVITIES 22,494,985 19,391,454

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:

Repayments received (issuance) of notes receivable 1,094,323 (2,381,775) Acquisition and construction of capital assets (44,203,437) (37,217,787) Proceeds from certificates of participation 53,000,000 - Proceeds from loans payable 42,076,213 24,435,235 Principal paid on long-term debt (7,377,267) (23,570,321)Payments made to refunding escrow agent (63,170,000) - Interest paid on long-term debt (16,771,022) (15,983,720)Payments received from capital contributions 59,437 778,674

NET CASH USED BY CAPITAL ANDRELATING FINANCING ACTIVITIES (35,291,753) (53,939,694)

CASH FLOWS FROM INVESTING ACTIVITIES:Net investment transactions (29,162,085) 50,665,256 Interest on investments (1,589,211) 3,065,803

NET CASH PROVIDED BY INVESTING ACTIVITIES (30,751,296) 53,731,059

NET INCREASE/(DECREASE) IN CASHAND CASH EQUIVALENTS (29,617,411) 6,074,384

CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 50,553,406 44,479,022

CASH AND CASH EQUIVALENTS - END OF YEAR 20,935,995$ 50,553,406$


STATEMENT OF CASH FLOWS

FOR THE YEARS ENDED JUNE 30, 2013 AND 2012

2013 2012


RECONCILIATION OF OPERATING LOSS TO NETCASH PROVIDED BY OPERATING ACTIVITIES

Operating loss (5,024,562)$ (29,226,788)$ Adjustments to reconcile operating loss

net cash provided (used) by operating activities:Depreciation and amortization 31,453,784 33,346,141 Other nonoperating revenues 1,571,566 1,394,442 Rental income, net of expenses 1,628,627 1,128,904 Legal settlements, net of expenses (2,129,432) 5,918,428

Change in assets and liabilities(Increase) decrease in accounts receivables (18,930,349) (8,229,363) (Increase) decrease in inventory (3,088,534) (8,463,994) (Increase) decrease in prepaid expenses (185,832) (56,703) (Increase) decrease in due from other governments 622,567 314,096 Increase (decrease) in accounts payable

and accrued expenses 5,336,776 (11,420,595) Increase (decrease) in retentions payable 2,318,673 1,924,728 Increase (decrease) in deposits payable (600) (78,855) Increase (decrease) in accrued compensated absences 357,969 341,124

Total Adjustments 18,955,215 16,118,353

NET CASH PROVIDED BY OPERATING ACTIVITIES 13,930,653$ (13,108,435)$

CASH AND CASH EQUIVALENTS - FINANCIAL STATEMENT CLASSIFICATION:

Unrestricted assets 15,485,995$ 45,921,522$ Restricted assets 5,450,000 4,631,884

TOTAL CASH AND CASH EQUIVALENTS-FINANCIAL STATEMENT CLASSIFICATION 20,935,995$ 50,553,406$

NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES:

Amortization of (discounts) premiums and deferred amounts on refunding 9,564,280$ 316,899$ Fair Value of Investments (3,355,386) 274,713 Gain/(Loss) on disposal of capital assets (141,711) (2,408,335)

STATEMENT OF CASH FLOWS (CONTINUED)

FOR THE YEARS ENDED JUNE 30, 2013 AND 2012

2013 2012



18

Notes to Basic Financial Statements

ORANGE COUNTY WATER DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2013 AND 2012

See independent auditors’ report.

Note 1: Summary of Significant Accounting Policies

a. Organization and Description of the District The Orange County Water District (the District) was formed by a special act of the California State Legislature in 1933. The District was formed because of the heavy overdraft of the Orange County groundwater supply and excessive diversion of the Santa Ana River by users upstream from the County of Orange. The major functions of the District are the management of the Orange County groundwater basin, the conservation of the basin groundwater and the protection of Orange County’s water rights in the natural flows of the Santa Ana River. The legal boundaries of the District lie wholly within the County of Orange, California. Administration and operation of the District is conducted through a Board of Directors representing ten divisions, with seven being duly elected at large and three appointed. The criteria used in determining the scope of the reporting entity are based on the provisions of GASB Statement 14. The District is the primary government unit. Component units are those entities which are financially accountable to the primary government, either because the District appoints a voting majority or the component unit’s board, or because the component unit will provide a financial benefit or impose a financial burden on the District. The District’s reporting entity includes the Orange County Water District Public Facilities Corporation (the Public Facilities Corporation). Although the District and the Public Facilities Corporation are legally separate entities, the District’s Board of Directors is financially responsible for the Public Facilities Corporation and, therefore, the accompanying financial statements include the accounts and records of the Public Facilities Corporation using the blending method as required by accounting principles generally accepted in the United States of America. There are no separate financial statements for the Public Facilities Corporation.

b. Basic Financial Statements

The basic financial statements are comprised of the Statement of Net Position, the Statement of Revenues, Expenses and Changes in Net Position, the Statement of Cash Flows and the Notes to the Basic Financial Statements.

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

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ORANGE COUNTY WATER DISTRICT NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2013 AND 2012


Note 1: Summary of Significant Accounting Policies (Continued)

measurement focus, and the accrual basis of accounting. Under the economic measurement focus all assets and liabilities (whether current or noncurrent) associated with these activities are included on the Statement of Net Position. The Statement 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.

An enterprise fund distinguishes operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with the District’s principal ongoing operations. The principal operating revenues of the District are charges to producers for replenishment assessments, basin equity assessments and water sales. Operating expenses for the District include water purchases, water production, general and administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. Nonoperating revenues consist of property taxes, rental income, investment income and other miscellaneous revenues.

d. Net Position In the Statement of Net Position, net position is classified in the following categories:

• Net investment in capital assets - This amount is the District’s net investment in its various capital assets and includes capital assets net of accumulated depreciation and capital-related deferred outflows of resources and reduced by capital-related borrowings and deferred inflows of resources.

• Restricted for debt service - This amount is restricted for various bond

issues and is not available for the general needs of the District. These funds must be maintained at specific levels, and are restricted by certain bond covenants.

• Restricted for construction of capital assets - This amount is restricted for

specific capital projects which are authorized and approved by the Board of Directors.

• Restricted for custodial costs - This amount is restricted for custodial costs due to third parties.

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• Unrestricted - This amount is all net position that does not meet the definition of “net investment in capital assets” or “restricted”.

e. Property Taxes and Assessments

Property taxes and assessments are billed by the County of Orange to property owners. The amount apportioned to the District each year is based upon the District’s tax receipts for the three-year period ended June 30, 1978 in relation to total County tax receipts and is adjusted annually for area growth. The District’s property tax calendar for the fiscal years ended June 30, 2013 and 2012, were as follows: Lien Date: January 1Levy Date: July 1Due Date: First Installment - November 1

Second Installment - February 1Delinquent Date: First Installment - December 10

Second Installment - April 10 The County collects the taxes from the property owners and remits the funds to the District periodically during the year. At June 30, 2013 and 2012, taxes receivable totaled $393,593 and $391,465, respectively.

f. Inventory

Inventory consists primarily of water, supplies and parts and is valued at weighted average cost.

g. Investments

Investments are stated at their fair value which represents the quoted or stated market value. 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.

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h. Capital Assets

Capital assets purchased or acquired are reported at historical cost. Contributed assets are reported at fair market value as of the date received. During the fiscal years ended June 30, 2013 and 2012, the District received capital contributions of $59,437 and $778,674, respectively. Capital outlays that cost $5,000 or more and that significantly extend the useful life of an asset are capitalized. Other costs incurred for repairs and maintenance are expensed as incurred. Depreciation is calculated on the straight-line method over the following estimated useful lives:

Useful LifeStructures and improvements 3-50 yearsInfrastructure 3-75 yearsEquipment 3-30 years

Depreciation totaled $31,440,215 and $32,987,676 for the years ended June 30, 2013 and 2012, respectively.

i. Deferred outflows/inflows of resources

In addition to assets, the statement of financial 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 a future period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then. The District only has one item that qualifies for reporting in this category. It is the deferred charge on refunding reported in the District’s statement of net position. A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The District only has one item that qualifies for reporting in this category. It is related to the derivative instruments interest rate swap agreements reported at fair value.

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j. Net position flow assumption Sometimes the District 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 in the District-wide statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the District’s policy to consider restricted – net position to have been depleted before unrestricted – net position is applied.

k. Capitalized Interest

The District incurs interest charges on the Certificates of Participation, Commercial Paper and the State of California loans payable. There was no capitalized interest for the years ended June 30, 2013 and 2012.

l. Classification of Liabilities

Certain liabilities which are currently payable have been classified as “payable from restricted assets” because they will be funded from restricted assets.

m. Compensated Absences

Vested or accumulated vacation and sick leave are expensed as benefits accrue to employees. The following is a summary of the changes in compensated absences for the year ended June 30, 2013 and 2012:

Balance at July 1, 2012 Additions Reductions

Balance at June 30, 2013

Due Within One Year

Absences 4,261,297$ 2,260,454$ 1,902,485$ 4,619,266$ 331,569$

Balance at July 1, 2011 Additions Reductions


Due Within One Year

Absences 3,920,173$ 2,102,802$ 1,761,678$ 4,261,297$ 302,963$

Compensated

Compensated

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n. Cash and Cash Equivalents For purposes of the statement of cash flows, the District considers all investment instruments purchased with a maturity of three months or less to be cash equivalents.

o. Use of Estimates

The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America and, accordingly, include amounts that are based on management’s best estimates and judgments. Accordingly, actual results could differ from the estimates.

p. Reclassifications

Certain prior year amounts have been reclassified to conform with the current year presentation.

q. Change in Accounting Principle The District implemented GASB Statement 65, Items Previously Reported as Assets and Liabilities. GASB 65, among other things, amends prior guidance with respect to the treatment of debt issuance costs. Debt issuance costs should be recognized in the period incurred rather than reported on the statement of net position as deferred charges and recognized systematically over the life of the debt. The accounting changes of this statement should be applied retroactive and therefore the District has reported a restatement of beginning net position for any unamortized debt issuance costs (deferred charges) previously reported on the statement of net position to conform.

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Note 2: Cash and Investments

Cash and investments held by the District were comprised of the following at June 30, 2013 and 2012:

2013 2012

15,485,995$ 45,921,522$ 126,800,045 95,352,763

5,450,000 4,631,884 26,260,771 26,678,512 6,156,435 10,650,409 4,330,323 1,703,790

Total 184,483,569$ 184,938,880$

Investments

Custodial escrow retention

Financial Statement Classification:Current:

Restricted:

Cash and cash equivalentsInvestments

Cash and cash equivalents

Custodial cash and cash equivalents

Cash and investments as of June 30, 2013 and 2012 consisted of the following:

2013 20122,700$ 2,700$

2,590,170 574,967 181,890,699 184,361,213

Total Cash and Investments 184,483,569$ 184,938,880$

Cash on handDeposits with financial institutionsInvestments

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Note 2: Cash and Investments (Continued) Investments Authorized by the California Government Code and the District’s Investment Policy The table below identifies the investment types that are authorized for the District by the California Government Code (or the District’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the District’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 District, rather than the general provisions of the California Government Code or the District’s investment policy.

Maximum Maturity

Percentage of Portfolio

Maximum Investment

in One Issuer5 years No Limitation No Limitation

Federal Agency Securities 5 years No Limitation No Limitation180 days 15% 5%180 days 15% 5%

Collateralized Certificates of Deposit 1 year 15% No Limitation5 years 15% 5%1 year 15% 5%

30 days 10% 5%5 years 15% 5%

N/A 15% 5%5 years 15% 5%

N/A No Limitation $50 MillionN/A No Limitation $20 MillionN/A No Limitation No LimitationN/A No Limitation $20 MillionN/A 15% No Limitation

Authorized Investment Type

Asset Backed SecuritiesLAIFCounty Pooled Investment FundHigh Grade State Municipal BondsLocal Government Investment FundCalifornia Local Agency Municipal Bonds

United States Treasury Obligations

Bankers AcceptanceCommercial Paper

Negotiable Certificates of DepositPlacement Service Certificates of DepositRepurchase AgreementsMedium Term NotesMutual Funds

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Note 2: Cash and Investments (Continued)

Investments Authorized by Debt Agreements

Investments of debt proceeds held by bond trustees are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the District’s investment policy. The table below identifies the investment types that are authorized for investments held by bond trustees. The table also identifies certain provisions of these debt agreements that address interest rate risk and concentration of risk.

Maximum Maturity

Maximum Percentage Allowed

Maximum Investment

in One IssuerNo Limitation No Limitation No Limitation

Federal Agency Securities No Limitation No Limitation No Limitation180 days No Limitation No Limitation270 days No Limitation No Limitation

N/A No Limitation No Limitation30 days No Limitation No Limitation

N/A - Not Applicable

Guaranteed Investment Contracts

Authorized Investment TypeUnited States Treasury Obligations

Bankers AcceptancesCommercial PaperMoney Market Mutual Funds

Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the District 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 is maturing or coming close to maturity as necessary to provide the cash flow and liquidity needed for operations. Information about the sensitivity of the fair values of the District’s investments (including investments held by bond trustee) to market interest rate fluctuations are provided by the following tables that show the distribution of the District’s investments by maturity as of June 30, 2013 and 2012.

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Note 2: Cash and Investments (Continued) June 30, 2013

12 Months or Less

13 - 24Months

25 - 60Months Total

Federal Agency Securities 1,402,660$ -$ 124,021,561$ 125,424,221$ 12,558,163 - - 12,558,163

4,330,323 - - 4,330,323 13,230,646 - - 13,230,646

5,174,207 - - 5,174,207 4,022,440 - - 4,022,440

148,006 - - 148,006 Federal Agency Securities - - 10,987,621 10,987,621

- Federal Agency Securities 6,015,072 - - 6,015,072

46,881,517$ -$ 135,009,182$ 181,890,699$

Investment Type

Local Agency Investment FundEscrow DepositsCollateralized Certificates of Deposit

Held by SWAP Provider:

Orange County TreasurerMedium Term NotesHeld by Bond Trustee:

Money Market Mutual Funds

June 30, 2012

12 Months or Less

13 - 24 Months

25 - 60Months Total

Federal Agency Securities -$ 7,446,842$ 83,391,925$ 90,838,767$ 12,478,578 - - 12,478,578

Escrow Deposits 1,703,789 - - 1,703,789 40,054,720 - - 40,054,720 10,042,260 - - 10,042,260

3,101,310 4,193,400 - 7,294,710

168,734 - - 168,734 Federal Agency Securities - - 11,250,594 11,250,594

Federal Agency Securities - - 10,529,061 10,529,061 67,549,391$ 11,640,242$ 105,171,580$ 184,361,213$

Held by SWAP Provider:

Medium Term NotesHeld by Bond Trustee:

Money Market Mutual Funds

Remaining Maturity

Investment Type

Local Agency Investment FundOrange County Treasurer

Collateralized Certificates of Deposit

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Disclosures Relating to Credit Risk

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 in the following tables are the Standard and Poor’s credit ratings for the District’s investments as of June 30, 2013 and 2012.

June 30, 2013 Minimum

Legal Requirement

Total as ofJune 30, 2013 AAA AA+ AA Unrated

N/A 125,424,221$ -$ 125,424,221$ -$ -$

N/A 12,558,163 - - - 12,558,163 Escrow Deposits N/A 4,330,323 - - - 4,330,323

N/A 13,230,646 - - - 13,230,646 N/A 5,174,207 - - - 5,174,207 A 4,022,440 - - 4,022,440 -

Funds AAA 148,006 148,006 - - - N/A 10,987,621 - 10,987,621 - -

Held by SWAP Provider:N/A 6,015,072 - 6,015,072 - -

181,890,699$ 148,006$ 142,426,914$ 4,022,440$ 35,293,339$ Federal Agency Securities

Money Market Mutual

Federal Agency Securities

Held by Bond Trustee:

Investment Type

Federal Agency SecuritiesCollateralized Certificates

of Deposit

Local Agency Investment FundOrange County TreasurerMedium Term Notes

June 30, 2012

Minimum Legal

RequirementTotal as of

June 30, 2012 AAA AA+ AA Unrated

N/A 90,838,767$ -$ 90,838,767$ -$ -$ - - - - -

of deposit N/A 12,478,578 - - - 12,478,578 Escrow Deposits 1,703,789 - - - 1,703,789

N/A 40,054,720 - - - 40,054,720 N/A 10,042,260 - - - 10,042,260 A 7,294,710 - - 7,294,710 -

Funds AAA 168,734 168,734 - - - N/A 11,250,594 - 11,250,594 - -

Held by SWAP Provider:N/A 10,529,061 - 10,529,061 - -

184,361,213$ 168,734$ 112,618,422$ 7,294,710$ 64,279,347$ Federal Agency Securities

Money Market Mutual


Held by Bond Trustee:

Investment Type

Federal Agency SecuritiesCollateralized Certificates

Local Agency Investment FundOrange County TreasurerMedium Term Notes

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Concentration of Credit Risk Investments in any one issuer that represents 5% or more of total District’s investments as of June 30, 2013 and 2012, are as follows: June 30, 2013

Reported AmountPercent of

Investments26,800,677$ 14.73%

Federal National Mortgage Association 57,706,291 31.73%

Federal Home Loan Mortgage Corporation 40,298,366 22.16%

Federal Farm Credit Banks Federal Agency Securities 14,659,380 8.06%



IssuerFederal Home Loan Bank

Investment Type


June 30, 2012

Reported Amount

Percent of Investments

20,147,254$ 10.93%

Federal National Mortgage Association 69,174,218 37.52%

Federal Home Loan Mortgage Corporation 23,296,954 12.64%



IssuerFederal Home Loan Bank

Investment Type


Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, the District 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, the District will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the District’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). 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 District deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.

30




Investment in State Investment Pool The District is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the District’s investment in this pool is reported in the accompanying financial statements at amounts based upon the District’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. Investment in County Investment Pool The Orange County Pooled Investment Fund (OCPIF) is a pooled investment fund program governed by the Orange County Board of Supervisors, and is administered by the Orange County Treasurer and Tax Collector. Investments in OCPIF are highly liquid as deposits and withdrawals can be made at any time without penalty.

31



Note 3: Restricted Assets

Restricted assets were provided by, and are to be used for, the following at June 30, 2013:

Use Amount

Various Agencies and Interest Earned Construction of Capital Assets 20,656,438$

Proceeds and Interest Earned Debt Service 11,135,627 Custodial Costs 10,500,058

42,292,123$

Funding SourceReimbursement and Contribution from

Certificates of Participation

Custodial Receipts

Restricted assets were provided by, and are to be used for, the following at June 30, 2012:

Use Amount

Various Agencies and Interest Earned Construction of Capital Assets 19,949,133$

Proceeds and Interest Earned Debt Service 11,419,326 Custodial Costs 12,354,199

43,722,658$

Funding SourceReimbursement and Contribution from

Certificates of Participation

Custodial Receipts

When both restricted and unrestricted resources are available for capital projects, the District may use restricted resources first and then unrestricted resources as necessary.

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Note 4: Capital Assets

A summary of the changes in capital assets for the year ended June 30, 2013, is as follows:

Beginning Balance July 1, 2012 Transfers Additions Deletions

EndingBalance

June 30, 2013

not being depreciated:31,412,307$ -$ -$ -$ 31,412,307$

6,823,570 - - - 6,823,570 65,723,985 (7,402,835) 53,621,105 - 111,942,255

Total capital assets, not being depreciated 103,959,862 (7,402,835) 53,621,105 - 150,178,132

650,018,115 1,824,836 - - 651,842,951 61,482,991 1,570,147 - - 63,053,138

113,557,263 4,007,852 - (20,205,053) 97,360,062

Total capital assets, being depreciated 825,058,369 7,402,835 - (20,205,053) 812,256,151

(262,018,072) - (21,565,104) - (283,583,176) (6,754,045) - (1,512,351) - (8,266,396)

(58,554,109) - (8,362,760) 20,196,385 (46,720,484)

Total accumulated depreciation (327,326,226) - (31,440,215) 20,196,385 (338,570,056)

Total capital assets being depreciated, net 497,732,143 7,402,835 (31,440,215) (8,668) 473,686,095

Total capital assets, net 601,692,005$ -$ 22,180,890$ (8,668)$ 623,864,227$

Equipment

Structure and improvementsInfrastructureEquipment

Less Accumulated Depreciation for:Structure and improvementsInfrastructure

Capital assets,

LandWater rightsConstruction in progress

Capital assets, being depreciated:

33



Note 4: Capital Assets (Continued)

A summary of the changes in capital assets for the year ended June 30, 2012, is as follows:

Beginning Balance

July 1, 2011 Transfers Additions Deletions

EndingBalance

June 30, 2012

not being depreciated:31,412,307$ -$ -$ -$ 31,412,307$

6,823,570 - - - 6,823,570 40,336,475 (11,831,277) 37,217,787 1,000 65,723,985

Total capital assets, not being depreciated 78,572,352 (11,831,277) 37,217,787 1,000 103,959,862

641,015,447 9,008,891 - (6,223) 650,018,115 61,330,324 152,667 - - 61,482,991

116,677,522 2,669,719 - (5,789,978) 113,557,263

Total capital assets, being depreciated 819,023,293 11,831,277 - (5,796,201) 825,058,369

(240,602,051) - (21,422,244) 6,223 (262,018,072) (5,228,461) - (1,525,584) - (6,754,045)

(51,894,904) - (10,039,848) 3,380,643 (58,554,109)

Total accumulated depreciation (297,725,416) - (32,987,676) 3,386,866 (327,326,226)

Total capital assets being depreciated, net 521,297,877 11,831,277 (32,987,676) (2,409,335) 497,732,143

Total capital assets, net 599,870,229$ -$ 4,230,111$ (2,408,335)$ 601,692,005$

Equipment

Structure and improvementsInfrastructureEquipment

Less Accumulated Depreciation for:Structure and improvementsInfrastructure

Capital assets,

LandWater rightsConstruction in progress

Capital assets, being depreciated:

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Note 5: Notes Receivable

The District contracts with other local agencies to provide long-term, low-interest financing for the construction of conjunctive use wells and other facilities projects owned by the District. Costs incurred for construction of these facilities are recorded as capital assets. Notes receivable are recorded for the project costs with the offsetting amount to contributed capital. The capital assets are depreciated over the life of the corresponding note receivable. Notes receivable consists of the following at June 30, 2013 and 2012:

2013 201210,003,064$ 7,621,289$

Add: Notes issued - 3,500,000 (1,094,323) (1,118,225)

Balance at June 30 8,908,741 10,003,064 (4,123,281) (711,550)

Total noncurrent notes receivable 4,785,460$ 9,291,514$

Balance at July 1

Less: Payments received

Less: Current portion

Payment requirements on the notes receivable subsequent to June 30, 2013, are as follows:

Year Ending

June 30, Principal Interest Total2014 4,123,281$ 471,769$ 4,595,050$ 2015 928,309 104,923 1,033,232 2016 883,198 84,956 968,154 2017 901,834 66,321 968,155 2018 821,195 47,025 868,220

2019-2025 1,250,924 75,337 1,326,261

Total 8,908,741$ 850,331$ 9,759,072$

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Note 6: Long-Term Debt

Certificates of Participation 2003B Certificates of Participation In January 2003, the Public Facilities Corporation issued $145,060,000 of Certificates of Participation, Series B, to assist the District in refunding the remaining portion of the 1990 Series B Certificates of Participation, in refunding a portion of Commercial Paper and to finance the cost of certain capital improvements and the defeased Certificates of Participation have been redeemed. The Certificates are obligations of the Public Facilities Corporation payable solely from payments received from the District pursuant to the Installment Purchase Agreement, by and between the District and the Public Facilities Corporation. The Installment Purchase Agreement requires the District to prescribe, assess and collect replenishment assessments and additional replenishment assessments which, together with other revenues, will be at least sufficient to yield each fiscal year net revenues equal to 125% of debt service. In August 2007, the District extinguished $13,920,000 of the 2003 Series B Certificates through an advance refunding resulting in a defeasance of debt. District funds of $14,209,750 were used to purchase Federal Agency Securities. Those Securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the Certificates of Participation issue. As a result, this portion of the 2003 Series B Certificates is considered defeased and the related liabilities have been removed from the District’s financial statements. The advance refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $264,783. The outstanding balance on the defeased Certificates of Participation to be paid by the escrow agent totaled $0 as of June 30, 2013 and $13,000,000 as of June 30, 2012. In November 2007, the District extinguished $11,295,000 of the 2003 Series B Certificates through an advance refunding resulting in a defeasance of debt. District funds of $12,086,623 were used to purchase Federal Agency Securities. Those Securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the Certificates of Participation issue. As a result, this portion of the 2003 Series B Certificates is considered defeased and the related liabilities have been removed from the District’s financial statements. The advance refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $649,518.

36



Note 6: Long-Term Debt (Continued)

The outstanding balance on the defeased Certificates of Participation to be paid by the escrow agent totaled $0 as of June 30, 2013 and $9,940,900 as of June 30, 2012. In February 2008, the District extinguished $39,975,000 of the 2003 Series B Certificates through an advance refunding resulting in a defeasance of debt. District funds of $42,707,428 were used to purchase Federal Agency Securities. Those Securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the Certificates of Participation issue. As a result, this portion of the 2003 Series B Certificates is considered defeased and the related liabilities have been removed from the District’s financial statements. The advance refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt at the old debt at the time of issuance of $2,662,243. The outstanding balance on the defeased Certificates of Participation to be paid by the escrow agent totaled $0 and $37,555,000 as of June 30, 2013 and 2012, respectively. In June 2013, the District extinguished the remaining balance of $63,170,000 of the 2003 Series B Certificates of Participation with the issuance of 2013 Series A Refunding Revenue Bond. There is no balance as of June 30, 2013. 2003A Certificates of Participation In June 2003, the Public Facilities Corporation issued $129,815,000 of Certificates of Participation, Series A, to assist the District in refunding the remaining portion of the 1993 Adjustable Rate Revenue Certificates of Participation and to finance the cost of certain capital improvements. A portion of the issuance proceeds used to refund the 1993 Certificates of Participation were placed in an irrevocable trust with an escrow agent. As a result, $113,500,000 of the 1993 Certificates of Participation are considered to be in substance defeased, and the related liabilities have been removed from the District’s financial statements. The defeased Certificates have been redeemed. The Certificates are obligations of the Public Facilities Corporation payable solely from payments received from the District pursuant to the Installment Purchase Agreement, by and between the District and the Public Facilities Corporation. The Installment Purchase Agreement requires the District to prescribe, assess and collect

37



Note 6: Long-Term Debt (Continued) replenishment assessments and additional replenishment assessments which, together with other revenues, will be at least sufficient to yield each fiscal year net revenues equal to 125% of debt service. The 2003 Series A Certificates of Participation are due in annual installments of $13,755,000 to $18,535,000 from August 2035 to August 2042 with interest at an adjustable rate calculated weekly and payable monthly. The 2003A Certificates of Participation outstanding totaled $129,815,000 as of June 30, 2013 and 2012. The interest rate at June 30, 2013 and 2012, was 0.07% and 0.18%, respectively. 2005B Certificates of Participation In January 2005, the Public Facilities Corporation issued $76,765,000 of Certificates of Participation, Series B, to assist the District in financing a portion of the cost of certain capital improvements, the refunding of a portion of the 1999 Certificates of Participation, the funding of a reserve fund for the Certificates, the funding of capitalized interest and to pay certain costs of executing and delivering the Certificates. The refunded portion of the Certificates has been redeemed. The Certificates are obligations of the Public Facilities Corporation payable solely from payments received from the District pursuant to the Installment Purchase Agreement, by and between the District and the Public Facilities Corporation. The Installment Purchase Agreement requires the District to prescribe, assess and collect replenishment assessments and additional replenishment assessments which, together with other revenues, will be at least sufficient to yield each fiscal year net revenues equal to 125% of debt service. In February 2008, the District extinguished $42,065,000 of the 2005 Series B Certificates through an advance refunding resulting in a defeasance of debt. District funds of $45,807,992 were used to purchase Federal Agency Securities. Those Securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the Certificates of Participation issue. As a result, this portion of the 2005 Series B Certificates is considered defeased and the related liabilities have been removed from the District’s financial statements. The advance refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $3,671,162. The outstanding balance on the defeased Certificates of Participation to be paid by the escrow agent totaled $34,025,000 and $36,690,000 as of June 30, 2013 and 2012, respectively.

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Note 6: Long-Term Debt (Continued) The 2005 Series B Certificates of Participation are due in annual installments of $1,750,000 to $3,410,000 from August 2013 to August 2024; interest at 3.25% to 5.0% payable semiannually on February 15 and August 15. A surety bond for $7,343,550, issued by MBIA Insurance, satisfies the reserve requirement. MBIA Insurance is rated BB+ by Standard and Poor’s. The 2005B Certificates of Participation outstanding totaled $30,420,000 and $31,840,000 as of June 30, 2013 and 2012, respectively. 2009A Certificates of Participation In August 2009, the Public Facilities Corporation issued $130,080,000 Revenue Refunding Certificates of Participation, Series A, to assist the District in refunding the remaining portion of the 2008A Certificates of Participation, the funding of a reserve fund for the Certificates, and to pay certain costs of executing and delivering the Certificates. The proceeds were placed in an irrevocable trust with an escrow agent. As a result, the 2008A Certificates are considered to be in substance defeased, and the related liabilities have been removed from the District’s financial statements. The defeased Certificates have been redeemed. The Certificates are obligations of the Public Facilities Corporation payable solely from payments received from the District pursuant to the Installment Purchase Agreement, by and between the District and the Corporation. The Installment Purchase Agreement requires the District to prescribe, assess and collect replenishment assessments and additional replenishment assessments which, together with other revenues, will be at least sufficient to yield each fiscal year net revenues equal to 125% of debt service. The advance refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $2,526,835. The 2009 Series A Certificates of Participation are due in annual installments of $570,000 to $13,585,000 from August 2013 to August 2030; interest at 2% to 5.25%. Certificates are due in annual installments of $1,335,000 to $18,290,000 from August 2030 to August 2041; interest at 4.75% to 5%, payable semiannually on February 15 and August 15. The 2009A Certificates of Participation outstanding totaled $128,460,000 and $129,020,000 as of June 30, 2013 and 2012, respectively.

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Note 6: Long-Term Debt (Continued) 2013A Refunding Revenue Bond In June 2013, the District issued $53,000,000 of Refunding Revenue Bonds to defease the remaining $63,170,000 of 2003B Certificates of Participation. The Bonds consist of $53,000,000 of serial bonds. The bonds accrue interest at rates between 4.00% and 5.00% and mature between August, 2025 and August, 2033, in amounts ranging from $675,000 to $13,900,000. The current refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $1,534,199. Other Defeased Certificates of Participation In February 2007, the Public Facilities Corporation issued $11,320,000 of Certificates of Participation, Series A. In February 2008, the District extinguished the remaining outstanding balance of the 2007 Series A Certificates through an advance refunding resulting in a defeasance of debt. The transaction resulted in a loss on the refunding transaction of $250,462. The outstanding balance on the defeased Certificates of Participation to be paid by the escrow agent totaled $9,475,000 as of June 30, 2013 and 2012.

The following is a summary of the changes in Certificates of Participation for the year ended June 30, 2013:

Balance at July 1, 2012 Defeased Additions Reductions


Due Within One Year

Participation (COP):2003B COP 63,170,000$ (63,170,000)$ -$ -$ -$ - 2003A COP 129,815,000 - - - 129,815,000 - 2005B COP 31,840,000 - - (1,420,000) 30,420,000 1,750,000 2009A COP 129,020,000 - - (560,000) 128,460,000 570,000 2013A COP - - 53,000,000 - 53,000,000 -

353,845,000 (63,170,000) 53,000,000 (1,980,000) 341,695,000 2,320,000$

Unamortized(discount) premium 3,828,503 - 11,460,292 (1,252,710) 14,036,085

Total 357,673,503$ (63,170,000)$ 64,460,292$ (3,232,710)$ 355,731,085$

Add:

Certificates of

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Note 6: Long-Term Debt (Continued) The following is a summary of the changes in Certificates of Participation for the year ended June 30, 2012:

Balance at July 1, 2011 Adjustments

Adjusted Beginning Balance Additions Reductions


Due Within One Year

Participation (COP):2003B COP 63,170,000$ -$ 63,170,000$ -$ -$ 63,170,000$ -$ 2003A COP 129,815,000 - 129,815,000 - - 129,815,000 - 2005B COP 33,210,000 - 33,210,000 - (1,370,000) 31,840,000 1,420,000 2009A COP 129,610,000 - 129,610,000 - (590,000) 129,020,000 560,000

355,805,000 - 355,805,000 - (1,960,000) 353,845,000 1,980,000$

Unamortized(discount) premium 2,387,793 1,591,408 3,979,201 - (150,698) 3,828,503

Total 358,192,793$ 1,591,408$ 359,784,201$ -$ (2,110,698)$ 357,673,503$

Add:

Certificates of

Aggregate maturities of the Certificates of Participation and interest payments (using 0.07% on the 2003A variable rate debt) subsequent to June 30, 2013, are as follows:

Year Ending Principal Interest Total2013-2014 2,320,000$ 9,800,026$ 12,120,026$ 2014-2015 2,420,000 10,501,521 12,921,521 2015-2016 2,500,000 10,393,571 12,893,571 2016-2017 2,625,000 10,271,996 12,896,996 2017-2018 3,070,000 10,140,021 13,210,021 2019-2023 17,815,000 48,275,453 66,090,453 2024-2028 21,895,000 43,425,428 65,320,428 2029-2033 70,035,000 31,968,978 102,003,978 2034-2038 95,300,000 14,717,114 110,017,114 2039-2043 123,715,000 4,890,892 128,605,892

Total 341,695,000$ 194,385,000$ 536,080,000$

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State of California Loans Payable

Irvine Desalter In May 1992, the District entered into an agreement with the State Water Resources Control Board for the design and construction of wellhead treatment facilities for removal of salt and nitrate to restore groundwater degraded by past agricultural practices. The District may borrow up to $19,008,000 or the eligible costs of the project, whichever is less. At June 30, 2013, the State Water Resources Control Board had disbursed $3,581,604 under the loan contract. The loan has an interest rate of 3.1% with maturities through 2013. The outstanding balance totaled $0 and $235,863 as of June 30, 2013 and 2012, respectively. This agreement was paid off in current fiscal year.

Green Acres Phase II In July 1997, the District entered into a loan contract with the State Water Resources Control Board for the construction of an extension of pipeline into Newport Beach including appurtenances and service meters. The District may borrow up to $4,380,132 or the eligible costs of the project, whichever is less. At June 30, 2013, the State Water Resources Control Board had disbursed $4,292,529 under the loan contract. The loan has an interest rate of 2.8% with maturities through 2017. The outstanding balance totaled $1,173,153 and $1,423,621 as of June 30, 2013 and 2012, respectively. Groundwater Replenishment System (GWRS) In May 2006, the District entered into an agreement with the State Water Resources Control Board for the construction of Groundwater Replenishment System project. The District may borrow up to $8,659,470 or the eligible costs of the project, whichever is less. At June 30, 2013, the State Water Resources Control Board had disbursed $7,216,196 under the loan contract. The loan has an interest rate of 1.8% with maturities through 2024. The outstanding balance totaled $4,706,347 and $5,085,356 as of June 30, 2013 and 2012, respectively.

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GWRS Barrier Facilities In May 2006, the District entered into an agreement with the State Water Resources Control Board for construction of the new injection wells. The District may borrow up to $4,491,018 or the eligible costs of the project, whichever is less. At June 30, 2013, the State Water Resources Control Board had disbursed $3,479,837 under the loan contract. The loan has an interest rate of 1.8% with maturities through 2026. The outstanding balance totaled $2,510,657 and $2,679,524 as of June 30, 2013 and 2012, respectively. GWRS Pipeline Unit 1 In May 2006, the District entered into an agreement with the State Water Resources Control Board for construction of the first portion of the Groundwater Replenishment System pipeline. The District may borrow up to $5,310,891 or the eligible costs of the project, whichever is less. At June 30, 2013, the State Water Resources Control Board had disbursed $4,425,725 under the loan contract. The loan has an interest rate of 1.8% with maturities through 2026. The outstanding balance totaled $3,192,131 and $3,406,765 as of June 30, 2013 and 2012, respectively.

GWRS Pipeline Unit 2 In May 2006, the District entered into an agreement with the State Water Resources Control Board for construction of the second portion of the Groundwater Replenishment System pipeline. The District may borrow up to $3,452,552 or the eligible costs of the project, whichever is less. At June 30, 2013, the State Water Resources Control Board had disbursed $2,877,115 under the loan contract. The loan has an interest rate of 1.8% with maturities through 2026. The outstanding balance totaled $2,073,849 and $2,213,196 as of June 30, 2013 and 2012, respectively. GWRS Pipeline Unit 3 In May 2006, the District entered into an agreement with the State Water Resources Control Board for construction of the third portion of the Groundwater Replenishment System pipeline. The District may borrow up to $4,137,559 or the eligible costs of the project, whichever is less. At June 30, 2013, the State Water Resources Control Board had disbursed $3,429,338 under the loan contract. The loan has an interest rate of 1.8% with maturities through 2026. The outstanding balance totaled $2,339,442 and $2,495,994 as of June 30, 2013 and 2012, respectively.

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GWRS Advanced Water Treatment Facility In June 2006, the District entered into an agreement with the State Water Resources Control Board for construction of the new advanced wastewater treatment facility for the District’s Groundwater Replenishment System. The District may borrow up to $136,802,193 or the eligible costs of the project, whichever is less. At June 30, 2013, the State Water Resources Control Board had disbursed $114,000,776 under the loan contract. The loan has an interest rate of 1.8% with maturities through 2028. The outstanding balance totaled $89,199,209 and $94,338,362 as of June 30, 2013 and 2012, respectively. Groundwater Replenishment System Initial Expansion In August 2011, the District entered into an agreement with the Clean Water State Revolving Fund Control Board for construction of the Groundwater Replenishment System Initial Expansion project. The District may borrow up to $137,442,775 or the eligible costs of the project, whichever is less. At June 30, 2013, the State Water Resources Control Board had disbursed $66,511,448. The loan has an interest rate of 2.6% with maturities through 2034. The outstanding balance totaled $66,511,448 and $24,435,235 as of June 30, 2013 and 2012, respectively.

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The following is a summary of the changes in loans payable to the State of California for the year ended June 30, 2013:

Balance at

July 1, 2012 Additions ReductionsBalance at

June 30, 2013Due Within One Year

235,863$ -$ (235,863)$ -$ -$ 1,423,621 - (250,468) 1,173,153 257,482 5,085,356 - (379,009) 4,706,347 386,616 2,679,524 - (168,867) 2,510,657 172,076 3,406,765 - (214,634) 3,192,131 218,722 2,213,196 - (139,347) 2,073,849 142,014 2,495,994 - (156,552) 2,339,442 159,638

94,338,362 - (5,139,154) 89,199,208 5,231,813 GWRS Initial Expansion 24,435,235 42,076,213 - 66,511,448 -

Total 136,313,916$ 42,076,213$ (6,683,894)$ 171,706,235$ 6,568,361$

GWRS Pipeline Unit 1GWRS Pipeline Unit 2GWRS Pipeline Unit 3GWRS Advanced Water Treatment Facility

Irvine DesalterGreen Acres Phase IIGWRSGWRS Barrier Facilities

The following is a summary of the changes in loans payable to the State of California for the year ended June 30, 2012:

Balance at

July 1, 2011 Additions ReductionsBalance at

June 30, 2012Due Within One Year

466,255$ -$ (230,392)$ 235,863$ 235,863$ 1,667,268 - (243,647) 1,423,621 250,469 5,456,907 - (371,551) 5,085,356 379,009 2,845,243 - (165,719) 2,679,524 168,868 3,617,387 - (210,622) 3,406,765 214,634 2,349,925 - (136,729) 2,213,196 139,346 2,649,519 - (153,525) 2,495,994 156,552

99,386,498 - (5,048,136) 94,338,362 5,139,154 GWRS Initial Expansion - 24,435,235 - 24,435,235 -

Total 118,439,002$ 24,435,235$ (6,560,321)$ 136,313,916$ 6,683,895$

GWRS Pipeline Unit 1GWRS Pipeline Unit 2GWRS Pipeline Unit 3

GWRS Advanced Water Treatment Facility

Irvine DesalterGreen Acres Phase IIGWRSGWRS Barrier Facilities

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Debt service requirements on the loans payable to the State of California subsequent to June 30, 2013, are as follows:

Year Ending June 30, Principal Interest Total

2014 6,568,361$ 1,929,899$ 8,498,260$ 2015 6,690,962 1,807,299 8,498,261 2016 6,815,877 1,682,384 8,498,261 2017 7,042,303 1,556,041 8,598,344 2018 6,785,271 1,422,659 8,207,930

2019-2023 35,833,523 5,206,130 41,039,653 2024-2028 35,458,490 1,883,285 37,341,775

GWSR Initial Expansion

Principal as of June 30, 2013* 66,511,448 - 66,511,448

Total 171,706,235$ 15,487,697$ 187,193,932$

*As of June 30, 2013 the future debt service requirements have not been determined.

Note 7: Derivative Instruments Interest Rate Swap Agreements

Objective The District executed two interest rate swap agreements on February 5, 2007 (the swaps) with swap provider Citibank, N.A. (counterparty), which were subsequently amended and restated as of April 1, 2008, to hedge debt service cost on a portion of the District’s 2003A Adjustable Rate Refunding Certificates of Participation by achieving a synthetic fixed rate. Details on the swap agreements are as follows:

Notional Amount

Fixed Rate

COP Issue

Termination Date

Initial Effective

Date58,800,000$ 3.314 2003A 07/25/2037 02/07/200723,750,000 3.314 2003A 08/01/2029 05/16/2007

82,550,000$

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Note 7: Derivative Instruments Interest Rate Swap Agreements (Continued) Terms Under the swap agreements, the District will make a fixed rate payment to the swap counterparty, at a rate of 3.314%, and then receive a variable rate payment of 56% of the monthly LIBOR rate plus 23 basis points from the swap counterparty that would effectively offset the payment on the underlying variable rate Certificates. The swaps are for a total notional amount of $82,550,000 and terminate on various dates. A portion of the 2003A Certificates maturity dates matches the maturity of the related swap agreements. The swaps notional amount is equal to a portion of the principal amounts of the 2003A Certificates issued and will decline as the principal amount of the associated proportion debt declines. Summary of Activities in Cash Flow Hedging Derivative Instruments

Notional AmountFair Value at July 1,2011

Change in Fair Value

Fair Value at July 1,2012

Change in Fair Value

Fair Value at June 30,2013

58,800,000$ (7,816,476)$ (9,681,880)$ (17,498,356)$ 6,352,311$ (11,146,045)$ 23,750,000 (3,017,856) (3,214,885) (6,232,741) 2,122,645 (4,110,096)

82,550,000$ (10,834,332)$ (12,896,765)$ (23,731,097)$ 8,474,956$ (15,256,141)$

As of June 30, 2013 and 2012, the fair value of $(15,256,141) and $(23,731,097) respectively, is reported as a noncurrent asset and deferred inflows of resources in the Statements of Net Position. Credit Risk As of June 30, 2013 and 2012, the District was not exposed to credit risk because the swap had a negative fair value. However, should interest rates change and the fair value of the swap becomes positive, the District would be exposed to credit risk in the amount of the derivative’s fair value. The swaps counterparty, Citibank N.A., has the following credit ratings:

Standard & Poor's Moody's

Citibank N.A. A A3

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Note 7: Derivative Instruments Interest Rate Swap Agreements (Continued) Basis Risk The swaps do expose the District to basis risk, which refers to a mismatch between the interest rate received from the swap contract and the interest paid on the variable rate payments to be made on the debt. The District pays the counterparty a fixed rate and receives a variable rate based on 56% of the 1 month UDS-LIBOR-BBA plus a spread of .23% which may be different than the variable rate payments to be made on the debt. The District is at risk that the variable interest rate payments received from the counterparty will be less than the variable rate payments owed on the debt.

Termination Risk

The swaps may be terminated by the District or the counterparty if the other party fails to perform under the terms of the swap agreements. In addition, the District has the option to terminate the swaps upon proper notification to the counterparty. If the swaps are terminated, the District would prospectively pay the variable rates on the portion of 2003A Certificates related to the swap agreements rather than a fixed rate. The termination of the swap agreements could therefore increase the District’s total debt service. Also, if at the time of the termination, the swaps have a negative fair value, the District would be liable to the counterparty for a payment equal to such negative fair value. As of June 30, 2013 and 2012 and the swap had a negative fair value of $15,256,141 and $23,731,097, respectively.

Swap Payments and Associated Debt Using a variable rate of 0.07% for the 2003A COP as of June 30, 2013, debt service requirements of the Certificates and the swap payments, assuming current interest rates remain the same for their term are as follows. As rates vary, the variable rate interest payments and net swap payments will vary.

Year Ending June 30, Principal Interest Total

Interest Rate Swap, Net

Fixed Debt Service

2014 -$ 57,785$ 57,785$ 2,460,066$ 2,517,851$ 2015 - 57,785 57,785 2,460,066 2,517,851 2016 - 57,785 57,785 2,460,066 2,517,851 2017 - 57,785 57,785 2,460,066 2,517,851 2018 - 57,785 57,785 2,460,066 2,517,851

2019-2023 - 288,925 288,925 12,300,330 12,589,255 2024-2028 11,225,000 275,800 11,500,800 22,966,562 23,242,362 2029-2033 34,900,000 148,855 35,048,855 41,237,166 41,386,021 2034-2038 36,425,000 48,055 36,473,055 38,470,833 38,518,888

Total 82,550,000$ 1,050,560$ 83,600,560$ 127,275,221$ 128,325,781$

Variable Rate Debt

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Note 8: Joint Ventures

The District is a participant in the Santa Ana Watershed Project Authority (SAWPA). SAWPA is a joint venture of water districts that provides for the construction, ownership, operation, and maintenance of facilities involved in the collection, transmission, treatment, disposal, and reclamation of sewage, wastewater, groundwater, and storm water in the Santa Ana River Watershed area. Each participating district appoints two commissioners to SAWPA to form a governing Board of Authority. Equal contributions are made by each member district for administration and contributions are based on capacity use rights for project agreements under which capital construction is accomplished. Special projects or studies are funded by equal contributions from each district.

As of June 30, 2012, the SAWPA has total assets of $192,136,326 and total net assets of $66,819,735. Audited financial statements for fiscal year ended June 30, 2013 are not currently available. The District does not have a measurable equity interest in SAWPA. The District is also a participant in other joint ventures in which the District does not have a material equity interest or material ongoing financial interest or responsibility. Separate financial statements of SAWPA can be obtained at 11615 Sterling Avenue, Riverside, California 92503.

Note 9: Defined Contribution Pension Plan

The Money Purchase Plan for employees of Orange County Water District (Money Purchase Plan) is a defined contribution pension plan administered by a committee of the Board of Directors. The Money Purchase Plan covers all employees, except part-time or temporary employees, immediately upon date of hire. For the first layer, the Money Purchase Plan requires each employee, upon date of hire, to contribute monthly to a mandatory contributions account, by payroll deduction, an amount equal to the current FICA rate not limited to the FICA wage cap. For the first layer, the District may elect in any year to contribute any portion or all of the participant’s first layer contribution and the participant’s first layer contribution shall be reduced by the amount so contributed by the District. The District is required to make a contribution in an amount equal to the then current Social Security contribution requirement (7.65% for the years ended December 31, 2013 and 2012) for the employer contribution. In addition, the District may elect in any year to contribute any portion or all of the participant's first layer contribution and the participant's first layer contribution shall be reduced by the amount so contributed by the District. The District elected to contribute 3% for the years ended December 31, 2013 and 2012, of the participant's mandatory contribution.

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Note 9: Defined Contribution Pension Plan (Continued) Each eligible employee becomes a participant in the second layer of contribution as of the first day of the month following completion of twelve months of covered service. The District is required to contribute 6% of the participant’s total monthly compensation each month. Employees are required to make a mandatory contribution of 4.65% of compensation. Employees may elect to contribute to a voluntary contribution account in the Money Purchase Plan. Voluntary contributions may be an amount not less than 2% of compensation, nor more than an amount that would cause all contributions to exceed the lesser of $51,000 or 25.00% of his or her paid compensation for the year. In addition, the District may elect in any year to contribute any portion or all of each employee’s Money Purchase Plan contribution, thereby reducing the employee’s Money Purchase Plan contribution by the amount contributed by the District.

The Money Purchase Plan may be amended by resolution of the Board of Directors, subject to limitations obtained in the Plan document. Total contributions to the Money Purchase Plan for the years ended June 30, 2013 and 2012 were $3,232,710 and $3,133,600, respectively. Separate audited financial statements of the Money Purchase Plan can be obtained from the District offices at 18700 Ward Street, Fountain Valley, California 92708.

Note 10: Other Post Employment Benefits (OPEB)

Plan Description The District contributes to a single-employer defined benefit plan to provide post-employment health care benefits. Specifically, the District provides health insurance for its retired employees and directors, their dependent spouses (if married and covered on the District’s plan at time of retirement), or survivors in accordance with Board resolutions. Medical coverage is provided for retired employees who are age 55 or over and who have a minimum of 12 years service with the District. The District pays a flat dollar cap towards the premium for the retiree and the dependent coverage. Medical coverage is provided for the surviving spouse of retired employees and the surviving spouse of active employees who upon death had attained age 55 and who had a minimum of 12 years of service with the District. The District will pay the flat dollar amount premium cap until the surviving spouse remarries, becomes enrolled under another group health plan, or cancels coverage. Employees who qualify for post retirement health coverage must designate Medicare as their primary insurance coverage provider at the time they become eligible for Medicare (the District’s coverage will then become secondary). Retiree and survivor medical coverage for employees hired on or after July 1, 2009 will terminate upon eligibility for Medicare. The plan does not provide a publicly available financial report.

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Note 10: Other Post Employment Benefits (OPEB) (Continued)

Funding Policy The contribution requirements of plan members and the District are established and may be amended by the District, District’s Board of Directors, and/or the employee associations. Currently, contributions are not required from plan members. During the fiscal year ended June 30, 2013 and 2012, the District elected to fund 100% of the annual required contribution (ARC) of the employer an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed thirty years. The ARC totaled $1,153,546 and $1,153,546 for the year ended June 30, 2013 and 2012, respectively.

Annual OPEB Cost and Net OPEB Obligation The following table shows the component of the District’s annual OPEB costs for the year, the amount actually contributed to the plan, and changes in the District’s net OPEB asset as of June 30, 2013 and 2012.

2013 2012Annual required contribution (ARC) 1,153,146$ 1,153,146$ Interest on Net OPEB asset (12,527) (12,729) Amortization of Net OPEB obligations 12,527 12,729 Annual OPEB cost 1,153,146 1,153,146 Contribution made 1,153,146 1,153,146 Increase in Net OPEB obligation (asset) - - Beginning Net OPEB obligation (asset) (231,655) (231,655) Ending Net OPEB obligation (asset) (231,655)$ (231,655)$

The net OPEB asset is included as part of other noncurrent assets in the District’s Statement of Net Position.

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Three Year Trend Information Information on the annual OPEB cost, percentage of Annual OPEB Cost contributed, and Net OPEB Obligation for the past three fiscal years is presented below.

Fiscal Year

Ended

Annual OPEB Cost

Actual Contribution

(Net of Adjustments)

Percentage of Annual

OPEB Cost Contributed

Net OPEB Obligation

(Asset)06/30/2011 1,318,892$ 1,318,892$ 100.00% (231,655)$ 06/30/2012 1,153,146 1,153,146 100.00% (231,655) 06/30/2013 1,153,146 1,153,146 100.00% (231,655)

Funded Status and Funding Progress As of July 1, 2011, the most recent actuarial date, the actuarial accrued liability was $12,204,844. The Plan has an asset value of $3,458,552 resulting in an unfunded accrued liability (UAL) of $8,746,292 and a 28.34% funded ratio. The covered payroll (annual payroll of active employees covered by the plan) was $20,113,287 and the ratio of the UAL to the covered payroll was 43.49%. 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 future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the District 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 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.

52




Actuarial Methods and Assumptions 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 the plan members at 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. In the July 1, 2011, actuarial valuation, the projected unit credit cost method was used. The actuarial assumptions included a 5.50% investment rate of return (net of administrative expenses), 5% inflation rate and the District’s share of premium cost will increase at a rate of 8% for the year 2011, 7% for the year 2012, 6% for the year 2013 and 5% for each year thereafter. The healthcare trend rates range from 8% in year one decreasing annually by 1% until holding constant at 5% for future years. The District’s unfunded actuarial accrued liability will be amortized by level dollar contributions over thirty years as a level dollar amount. The remaining closed amortization period at June 30, 2012, was twenty-six years.

Note 11: Risk Management

The District is a member of the Association of California Water Agencies Joint Powers Insurance Authority (Insurance Authority). The Insurance Authority is a risk-pooling self-insurance authority, created under provisions of California Government Code Sections 6500 et. seq. The purpose of the Authority is to arrange and administer programs of insurance for the pooling of self-insured losses and to purchase excess insurance coverage. At June 30, 2013 and 2012, the District participated in the self-insurance programs of the Insurance Authority as follows:

Property Loss - The Insurance Authority has pooled self-insurance up to $50,000 per occurrence and has purchased excess insurance coverage up to $100,000,000 (total insurable value of $303,482,892). The District has a $25,000 deductible for buildings, personal property and fixed equipment and a $25,000 deductible for mobile equipment and licensed vehicles. General Liability - The Insurance Authority has pooled self-insurance up to $2,000,000 per occurrence and has purchased excess insurance coverage up to $20,000,000.

53



Note 11: Risk Management (Continued)

Auto Liability - The Insurance Authority has pooled self-insurance up to $2,000,000 per occurrence and has purchased excess insurance coverage up to $20,000,000.

Public Officials’ Liability - The Insurance Authority has pooled self-insurance up to $2,000,000 per occurrence and has purchased excess insurance coverage up to $20,000,000.

Fidelity Bond - The Insurance Authority has pooled self-insurance up to $100,000 per occurrence and the District has purchased excess insurance coverage up to $4,000,000. The District has a $1,000 deductible. Workers’ Compensation - Insured up to the statutory limit; the Insurance Authority is self-insured up to $2,000,000 and excess insurance coverage has been purchased up to the statutory limit. Employer’s liability is insured up to a $4,000,000 limit. The Insurance Authority has pooled self-insurance up to $2,000,000 and has purchased excess insurance coverage up to $2,000,000.

Fiduciary Liability - Purchased coverage up to $1,000,000. The District pays annual premiums for coverage. There were no instances in the past three years when a settlement exceeded the District’s coverage.

Note 12: Commitments and Contingencies

The District has entered into various contracts for the purchase of material and construction of the utility plant. The amounts contracted for are based on the contractor’s estimated cost of construction. At June 30, 2013 and 2012, the total unpaid amount on these contracts are approximately $77,990,746 and $120,573,888, respectively. These commitments may be funded from restricted assets. Legal claims and lawsuits arise from time to time in the normal course of business which, in the opinion of management, will have no material effect on the District’s financial position.

54



Note 13: Leasing Arrangements

The District leases land and unused pipelines to several commercial and government entities.

The following is a schedule of future minimum rentals under leases at June 30, 2013, not including renewal option increases.

Year Ending Amount2013-2014 947,153$ 2014-2015 888,923 2015-2016 748,090 2016-2017 513,391

Total 3,097,557$

55

56

Required Supplementary Information

Other Post Employment Benefits Schedule of Funding Progress


REQUIRED SUPPLEMENTARY INFORMATIONFOR THE YEAR ENDING JUNE 30, 2013 AND 2012

OTHER POST-EMPLOYMENT BENEFIT PLANSCHEDULE OF FUNDING PROGRESS

Retiree Health Plan

Actuarial Valuation

Date

Accrued Liability

(a)

Actuarial Value of Assets (AVA)

(b)

Unfunded liability

(UL) (a)-(b)

Funded Ratio (b)/(a)

Annual Covered Payroll

( c )

UL as a Percentage of

Payroll [(a)-(b)]/( c )

1/1/2007 11,206,023$ -$ 11,206,023$ 0.00% 15,880,684$ 70.56%7/1/2009 12,185,213 1,218,052 10,967,161 10.00% 17,292,114 63.42%7/1/2011 12,204,844 3,458,552 8,746,292 28.34% 20,113,287 43.49%

57

58

Statistical Section

Financial Trends Revenue Capacity

Debt Capacity Demographic and Economic Information

Operating Information


DESCRIPTION OF STATISTICAL SECTION CONTENTS

June 30, 2013

This part of the District’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements and the note disclosures say about the government’s overall financial health. Contents: Pages

Financial Trends schedules contain trend information to help the reader understand how the District’s financial performance and well-being have changed over time. 60 Revenue Capacity schedules contain information to help the reader assess the District’s most significant local revenue source, the property tax. 64 Debt Capacity schedules present information to help the reader assess the affordability of the District’s current levels of outstanding debt and the District’s ability to issue additional debt in the future. 67 Demographic and Economic Information schedules offer demographic and economic indicators to help the reader understand the environment within which the District’s financial activities take place. 71 Operating Information schedules contain service and infrastructure data to help the reader understand how the information in the District’s financial report relates to the services the District provides and the activities it performs. 73

59

Orange County Water District

Fiscal Year

Net Investment

in Capital Assets Restricted Unrestricted

Total Net

Position

2004 (55,804,377)$ -$ 130,543,193$ 74,738,816$ 2005 41,967,773 - 110,995,810 152,963,583 2006 147,855,980 - 100,602,678 248,458,658 2007 192,018,083 - 127,538,276 319,556,359 2008 219,850,233 2,438,010 165,421,027 387,709,2702009 147,140,291 466,011 237,737,869 385,344,171 2010 125,709,435 50,790,670 205,481,065 381,981,170 2011 116,111,449 43,270,828 207,082,254 366,464,531 2012 111,571,069 39,078,897 193,794,385 344,444,351 2013 99,650,065 31,583,247 214,617,916 345,851,228

Source: OCWD Finance Department

Net Position by ComponentLast Ten Fiscal Years

-$10$0

$10$20$30$40$50$60$70$80$90

$100

2006 2007 2008 2009 2010

Millions

Fiscal Year

CHANGES IN NET ASSETS

$-

$50

$100

$150

$200

$250

$300

$350

$400

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Millions

Fiscal Year

TOTAL NET POSITION

60


Fiscal YearOperating Revenues

Operating Expenses

Operating Income (Loss)

Total Non-Operating Revenues

(Expenses)

Net Income (Loss) Before

Capital Contributions

and Special Items

Capital Contributions

and Special Items

Change in Net Position

2004 57,242,782$ 57,620,116$ (377,334)$ 6,968,180$ 6,590,846$ 57,909,738$ 64,500,584$ 2005 61,422,421 61,555,197 (132,776) (1,879,105) (2,011,881) 80,236,648 78,224,767 2006 72,364,659 73,508,860 (1,144,201) 3,194,977 2,050,776 90,358,151 92,408,927 2007 83,082,421 67,398,010 15,684,411 12,734,800 28,419,211 42,678,490 71,097,701 2008 91,669,760 64,258,149 27,411,611 18,959,831 46,371,442 21,781,469 68,152,9112009 87,831,679 95,052,735 (7,221,056) (1,561,521) (8,782,577) 6,417,475 (2,365,102) 2010 83,794,246 96,157,265 (12,363,019) 7,103,633 (5,259,386) 1,896,385 (3,363,001) 2011 78,110,405 98,315,531 (20,205,126) 3,522,527 (16,682,599) 1,165,960 (15,516,639) 2012 86,014,152 115,240,940 (29,226,788) 12,864,561 (16,362,227) 778,674 (15,583,553) 2013 93,756,691 98,781,253 (5,024,562) 6,372,002 1,347,440 59,437 1,406,877


Changes in Net PositionLast Ten Fiscal Years

-$20

$0

$20

$40

$60

$80

$100

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Millions

Fiscal Year

CHANGES IN NET POSITION

61


Fiscal YearReplenishment

AssessmentsBasin Equity Assessments

Reclaimed Water Revenue Total

Percent Change

2004 52,570,711$ 4,672,071$ -$ 57,242,782$ - 2005 54,825,606 4,467,124 2,129,691 61,422,421 7.3%2006 68,041,279 2,330,442 1,992,938 72,364,659 17.8%2007 79,983,287 793,177 2,305,957 83,082,421 14.8%2008 87,541,655 961,516 3,166,589 91,669,760 10.3%2009 79,167,471 852,787 7,811,421 87,831,679 -4.2%2010 71,682,764 2,292,388 9,819,094 83,794,246 -4.6%2011 66,799,060 1,771,328 9,540,017 78,110,405 -6.8%2012 72,961,431 2,219,153 10,833,568 86,014,152 10.1%2013 80,694,951 2,082,761 10,978,979 93,756,691 9.0%


Operating Revenues By SourceLast Ten Fiscal Years

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Millions

Fiscal Year

TOTAL OPERATING REVENUES

Replenishment Assessments Basin Equity Assessments Reclaimed Water Revenue

62


Fiscal YearWater

PurchasesWater

Production

Depreciation and

AmortizationGeneral and

Administrative

Replacement and/or

Refurbishment TotalPercent Change

2004 27,584,436$ 15,770,201$ 6,162,286$ 7,602,696$ 500,497$ 57,620,116$ - 2005 25,847,020 16,467,678 10,457,881 8,415,008 367,610 61,555,197 6.8%2006 30,310,056 19,066,679 15,149,700 8,276,197 706,228 73,508,860 19.4%2007 24,451,766 17,061,821 16,474,892 8,943,107 466,424 67,398,010 -8.3%2008 4,462,320 25,487,715 23,576,893 9,996,039 735,182 64,258,149 -4.7%2009 12,945,102 24,497,498 32,651,566 24,958,569 - 95,052,735 47.9%2010 10,892,330 27,041,080 32,878,812 25,345,043 - 96,157,265 1.2%2011 15,708,425 26,116,735 33,069,585 23,420,786 - 98,315,531 2.2%2012 29,139,553 27,222,877 33,346,141 25,532,369 - 115,240,940 17.2%2013 13,825,244 27,242,617 31,453,784 26,259,608 - 98,781,253 -14.3%


Operating Expenses by FunctionLast Ten Fiscal Years

$0

$20

$40

$60

$80

$100

$120

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Millions

Fiscal Year

OPERATING EXPENSES

Water Purchases Water Production Depreciation and Amortization

General and Administrative Replacement and/or Refurbishment

63


Fiscal Year

Irrigation (Acre-Feet)

Domestic (Acre-Feet)

In-Lieu Delivery (Acre-

Feet) Revenue2004 6,668.0 277,953.0 52,168.0 52,570,711$ 2005 3,392.0 240,978.0 69,617.0 54,825,606 2006 1,893.0 226,265.0 89,239.0 68,041,279 2007 3,301.6 295,816.0 50,740.3 79,983,287 2008 1,992.8 364,192.1 0.0 87,541,655 2009 2,515.6 321,631.2 0.0 79,167,471 2010 1,222.6 284,352.3 0.0 71,682,764 2011 3,684.2 256,176.3 10,435.4 66,799,060 2012 4,553.6 236,338.2 41,253.9 72,961,431 2013 4,181.7 305,132.3 0.0 80,694,951


Total Sales Acre-Feet and Revenue by Water TypeLast Ten Fiscal Years

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Millions

Fiscal Year

Total Groundwater Revenue

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Millions

Fiscal Year


$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Millions

Fiscal Year


$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Millions

Fiscal Year


64


Fiscal Year Irrigation Domestic2004 74.50$ 149.00$ 2005 86.00 172.00 2006 102.50 205.00 2007 111.50 223.00 2008 118.50 237.002009 124.50 249.002010 124.50 249.002011 124.50 249.002012 127.00 254.002013 133.00 266.00


Water Rates by Water TypeLast Ten Fiscal Years

($ per Acre-Foot)

$0.00

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Rat

es

Fiscal Year

Ten-Year Historical Water Rates by Water Type

Irrigation Domestic

65


Member Cities & Agencies

Acre Feet Produced in

FY 2013

% of Water Produced in

FY 2013

Acre Feet Produced in

FY 2004

% of Water Produced in

FY 2004Irvine Ranch Water District 47,246.3 19.20% 36,213.0 13.97%City of Anaheim 45,487.9 18.49% 57,982.0 22.36%City of Santa Ana 26,753.6 10.87% 35,835.0 13.82%City of Orange 21,127.0 8.59% 25,401.0 9.80%City of Huntington Beach 20,343.7 8.27% 19,582.0 7.55%City of Fullerton 19,493.8 7.92% 23,894.0 9.22%City of Garden Grove 18,924.9 7.69% 22,937.0 8.85%Golden State Water Company 18,601.6 7.56% 21,161.0 8.16%Mesa Consolidated Water District 16,830.5 6.84% 10,391.0 4.00%City of Newport Beach 11,254.5 4.57% 5,898.0 2.27%

Totals 246,063.8 100% 259,294.0 100%


Changes In Top Ten Customer's Groundwater Production Current Fiscal Year and Ten Years Ago

0

10000

20000

30000

40000

50000

60000

70000

Irvi

ne R

anch

Wat

er D

istri

ct

City

of A

nahe

im

City

of S

anta

Ana

City

of O

rang

e

City

of

Hun

tingt

onB

each

City

of F

ulle

rton

City

of G

arde

nG

rove

Gol

den

Stat

eW

ater

Com

pany

Mes

aC

onso

lidat

edW

ater

Dis

trict

City

of N

ewpo

rtB

each

Wat

er P

rodu

ctio

n

Top Ten Water Customer Changes Between 2004 and 2013

Acre FeetProduced inFY 2013


0

10000

20000

30000

40000

50000

60000

70000

Irvi

ne R

anch

Wat

er D

istri

ct

City

of A

nahe

im

City

of S

anta

Ana

City

of O

rang

e

City

of

Hun

tingt

onB

each

City

of F

ulle

rton

City

of G

arde

nG

rove

Gol

den

Stat

eW

ater

Com

pany

Mes

aC

onso

lidat

edW

ater

Dis

trict

City

of N

ewpo

rtB

each

Wat

er P

rodu

ctio

n

Top Ten Water Customer Changes Between 2004 and 2013



66


Fiscal Year Real Secured Real Unsecured Total

Total Direct Tax Rate Percent (1)

2004 144,129,788,717$ 2,926,176,867$ 147,055,965,584$ 1.002005 155,736,725,870 3,161,356,890 158,898,082,760 1.002006 169,617,298,463 3,538,186,651 173,155,485,114 1.002007 186,687,569,533 4,612,164,881 191,299,734,414 1.002008 202,161,581,329 2,952,885,446 205,114,466,775 1.002009 209,272,754,630 3,946,106,787 213,218,861,417 1.002010 206,556,983,619 4,066,318,613 210,623,302,232 1.002011 206,226,283,216 4,108,102,919 210,334,386,135 1.002012 208,722,653,628 3,972,740,372 212,695,394,000 1.002013 213,779,477,681 3,899,614,817 217,679,092,498 1.00

(1) In 1978, the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of 1% based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property is only reassessed at the time that it is sold to a new owner. At that point, the new assessed value is reassessed at the purchase price of the property sold.

Source: County of Orange Office of Auditor/Controller-Property Tax Unit

Ten-Year Real Secured and Real Unsecured Assessed Tax ValuesLast Ten Fiscal Years

$0

$50,000

$100,000

$150,000

$200,000

$250,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Millions

Fiscal Year

Ten-Year Real Secured and Real Unsecured Tax Values

Unsecured

Secured

67


Fiscal Year

Total Real Secured & Real Unsecured Assessed Value (1)

Legal Debt Limit (2)

Net Bonded Debt (3)

Legal Debt Margin (4)

2004 147,055,965,584$ 7,352,798,279$ 0 7,352,798,279$ 2005 158,898,082,760 7,944,904,138 0 7,944,904,138 2006 173,155,485,114 8,657,774,256 0 8,657,774,256 2007 191,299,734,414 9,564,986,721 0 9,564,986,721 2008 205,114,466,775 10,255,723,339 0 10,255,723,339 2009 213,218,861,417 10,660,943,071 0 10,660,943,071 2010 210,623,302,232 10,531,165,112 0 10,531,165,112 2011 210,334,386,135 10,516,719,307 0 10,516,719,307 2012 212,695,394,000 10,634,769,700 0 10,634,769,700 2013 217,679,092,498 10,883,954,625 0 10,883,954,625

Source: County of Orange Office of Auditor/Controller-Property Tax Unit

(4) Legal Debt Margin is computed by subtracting Net Bonded Debt from the Legal Debt Limit.

Ten-Year Computation of Legal Debt MarginFiscal Year 2004 Through 2013

(1) Assessed Value is stated at taxable full cash value.(2) Legal Debt Limit is 5% of Assessed Value.(3) Net Bonded Debt is zero for the District.

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Millions

Fiscal Year

Ten-Year Legal Debt Margin

68


Fiscal

Year

Water Revenue

(1)

Less Operating

& Maintenance

Expenses (2)

Net Available

Revenue Principal

Interest &

Fiscal Charges

Total Debt

Service (3) Coverage

2004 68,783,144$ 23,873,394$ 44,909,750$ 2,557,064$ 9,552,591$ 12,109,655$ 3.712005 66,516,689 25,250,296 41,266,393 7,545,522 14,841,105 22,386,627 1.842006 81,213,499 29,070,663 52,142,836 4,455,371 19,434,913 23,890,284 2.182007 107,770,539 28,259,427 79,511,112 5,836,925 20,626,937 26,463,862 3.002008 121,264,159 36,218,936 85,045,223 6,566,994 17,684,895 24,251,889 3.512009 114,711,344 49,456,067 65,255,277 9,769,930 12,460,704 22,230,634 2.942010 107,482,921 52,386,123 55,096,798 8,193,691 15,654,827 23,848,518 2.312011 100,119,488 49,537,521 50,581,967 8,099,461 16,227,198 24,326,659 2.082012 114,655,795 52,755,246 61,900,549 8,520,320 (4) 15,904,798 24,425,118 2.532013 115,998,840 53,502,225 62,496,615 8,663,895 (5) 15,681,765 24,345,660 2.57

(1)

(2)(3)

(4) Commercial paper principal of $15,050,000 was paid off on August 10, 2011 but was not included in total principal payment since thiswas not a scheduled District debt service payment.

(5) COP 2003B principal of $63,170,000 was defeased on June 4, 2013 but was not included in total principal payment since thiswas not a scheduled District debt service payment.


Pledged-Revenue CoverageLast Ten Fiscal Years

refinanced with the help of the State loans and current COP's.

Revenues include replenishment assessment, reclaimed water revenues, property tax revenue, investment income, rentalincome, and other revenues.Expenses are net of depreciation, amortization, water purchases, and interest expenses.

are outstanding (2003A, 2005B, 2009A, & 2013A) as of June 30, 2013. Other COP's are either current, advanced refunded, defeased, orThe District has executed, in total, fourteen Certificate of Participation issuance since 1989. Only four Certificate of Participation

Debt Service

69


Fiscal

Year COP Debt (2)

Commercial

Paper (2)

State of

California

Loans (2)

Total

Outstanding

Debt (2)

Per Capita

(1) (3)

Percentage of

Personal Income

(1) (3)

2004 334,792,631$ 3,600,000$ 8,497,909$ 346,890,540$ 118$ 0.266%2005 491,762,998 2,800,000 7,072,387 501,635,385 170 0.360%2006 489,398,630 2,000,000 12,818,212 504,216,842 171 0.335%2007 474,192,144 2,100,000 25,486,649 501,778,793 169 0.327%2008 344,702,736 1,450,000 133,965,158 480,117,894 161 0.308%2009 341,627,148 1,450,000 131,382,154 474,459,302 159 0.327%2010 351,597,368 15,050,000 124,893,464 491,540,832 163 0.334%2011 350,269,778 15,050,000 118,439,002 483,758,780 160 0.314%2012 357,673,503 - 136,313,916 493,987,419 162 0.319%2013 355,731,085 - 171,706,235 527,437,320 172 0.339%

(1) See the Schedule of Demographic Statistics on page 71 for personal income and population data. Data is for the entire County of Orange. The Orange County Water District services 358 square miles or 45% of the total 799 square miles that make up the boundaries of the County of Orange.(2) Data Source: Orange County Water District - Finance Department(3) Data Source: Refer to Orange County Water District, CAFR Schedule - Demographic Statistics


Ratios of Outstanding DebtLast Ten Fiscal Years

$0

$100,000,000

$200,000,000

$300,000,000

$400,000,000

$500,000,000

$600,000,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

$

Fiscal Year

TOTAL OUTSTANDING DEBT

70


Total

Personal Per Capita Median

Fiscal Population Income Personal Family Unemployment

Year Estimates (2) (in Thousands) Income Income (4) Rate (5)

2004 2,948,135 130,321,396$ (3) 44,205$ 70,900$ 4.5%2005 2,956,847 139,408,948 (3) 47,148 73,545 3.9%2006 2,956,334 150,598,354 (3) 50,941 80,193 3.6%2007 2,960,659 153,446,641 (3) 51,829 83,664 4.0%2008 2,974,321 155,925,156 (3) 52,424 63,366 5.2%2009 2,990,805 145,247,447 (3) 48,565 61,082 9.3%2010 3,008,855 147,138,449 (3) 48,902 60,609 9.5%2011 3,017,327 154,131,535 (3) 51,082 61,455 9.1%2012 3,047,120 154,881,535 (6) 50,829 62,055 (6) 8.0%2013 3,071,933 155,631,535 (6) 50,662 62,655 (6) 6.1%

Notes and Data Sources

(1) The Orange County Water District services 358 square miles or 45% of the total 799 square miles that make up the boundaries of the County of Orange.(2) Data Source: Demographic Research Unit, California Department of Finance.(3) Data Source: Bureau of Economic Analysis, U.S. Department of Commerce.(4) Data Source: Center for Demographic Research, California State University, Fullerton.(5) Data Source: State of California, Employment Development Department as of June 30 of each fiscal year.(6) Forecasted number.


Demographic StatisticsCovering The Entire County of Orange (1)

Last Ten Fiscal Years

71


EmployerNumber of Employees Rank

Percentage of Total County Employment

Walt Disney Company 25,000 1 1.68%University of California, Irvine 21,800 2 1.46%County of Orange 17,321 3 1.16%St. Joseph Health System 11,679 4 0.78%Boeing Co. 6,873 5 0.46%Kaiser Permanente 6,300 6 0.42%Bank of America Corp. 6,000 7 0.40%MemorialCare Health System 5,545 8 0.37%Target Corp. 5,400 9 0.36%Cedar Fair LP 5,200 10 0.35%

EmployerNumber of Employees Rank

Percentage of Total County Employment

Walt Disney Company 21,000 1 1.40%County of Orange 17,751 2 1.18%University of California, Irvine 15,500 3 1.03%Boeing Co. 11,160 4 0.74%St. Joseph Health System 8,975 5 0.60%Albertson's Inc. 8,700 6 0.58%Tenet Healthcare Corp. 8,389 7 0.56%Yum Brands 6,500 8 0.43%SBC Communications Inc. 5,658 9 0.38%Target Corp. 5,436 10 0.36%

Source: Orange County Business Journal, Book of Lists 2012 and 2004, County of Orange, Final Budget FY2003-04 and FY2011-2012, Position Summary

2004

Principal EmployersLast Year and Nine Years Ago

2012

72


Fiscal Year Administration Operations Technical Total2004 45.0 65.0 75.0 185.02005 44.0 69.0 71.5 184.52006 46.0 69.0 69.0 184.02007 48.0 85.0 70.5 203.52008 51.5 86.0 78.5 216.02009 51.5 86.0 78.5 216.02010 50.5 87.0 79.5 217.02011 50.5 87.0 79.5 217.02012 51.0 87.0 79.0 217.02013 50.0 86.0 80.0 216.0


Personnel TrendsLast Ten Fiscal Years

FUNCTIONS

0.0

25.0

50.0

75.0

100.0

125.0

150.0

175.0

200.0

225.0

2004 2005 2006 2007 2008 2009 2010 2011

Num

ber

of E

mpl

oyee

s

Fiscal Year

Administrative Operational Techincal

0

25

50

75

100

125

150

175

200

225

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Num

ber

of E

mpl

oyee

s

Fiscal Year

Administration Operational Techincal

73


City/Agency Irrigation Domestic Total% of water

soldAnaheim, City of 45,487.9 45,487.9 14.71%Buena Park, City of 9,938.0 9,938.0 3.21%County of Orange 122.9 122.9 0.04%E.O.C.W.D. 605.5 605.5 0.20%Fountain Valley, City of 6,804.3 6,804.3 2.20%Fullerton, City of 9.8 19,484.0 19,493.8 6.30%Garden Grove, City of 18,924.9 18,924.9 6.12%Golden State Water Company 18,601.6 18,601.6 6.01%Huntington Beach, City of 20,343.7 20,343.7 6.58%Irvine Ranch Water District 2,506.2 44,740.1 47,246.3 15.27%La Palma, City of 1,685.5 1,685.5 0.54%Mesa Consolidated W.D. 60.0 16,770.5 16,830.5 5.44%Newport Beach, City of 11,254.5 11,254.5 3.64%Orange, City of 21,127.0 21,127.0 6.83%Orange County Water Dist. 1,091.3 1,091.3 0.35%Santa Ana, City of 26,753.6 26,753.6 8.65%Seal Beach, City of 2,562.9 2,562.9 0.83%Serrano Water District 1,941.5 1,941.5 0.63%Tustin, City of 9,174.2 ` 9,174.2 2.97%Westminster, City of 8,471.1 8,471.1 2.74%Yorba Linda Water District 78.7 10,893.4 10,972.1 3.55%All Operations Other Than Above 1,527.0 8,353.9 9,880.9 3.19%

Totals 4,181.7 305,132.3 309,314.0 100%


Fiscal Year 2012-13 Groundwater ProductionBy Agency(Acre-Feet)

74


2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

Demographics Service Area (Square Miles) 358 358 358 358 358 358 358 358 358 358 Population Estimate (1), (2) 3,071,933 3,047,120 3,017,327 3,008,855 2,990,805 2,974,321 2,960,659 2,956,334 2,956,847 2,948,135 Median Family Income (1), (3) 62,655$ (6) 62,055$ 61,455$ 60,609$ 61,082$ 63,366$ 83,664$ 80,193$ 73,545$ 70,900$

Production Data (A.F.) (4)

Groundwater Non-Irrigation Pumping 305,132.3 (6) 236,626.1 256,176.3 284,352.3 321,631.2 364,192.1 295,816.0 226,265.0 240,978.0 277,953.0 In-lieu Delivery - (6) 40,563.5 10,435.4 - - - 50,740.3 89,239.0 69,617.2 52,168.0 Irrigation Pumping 4,181.7 (6) 4,455.5 3,684.2 1,222.6 2,515.6 1,992.8 3,301.6 1,893.0 3,392.0 6,668.0 Supplemental Water Non-Irrigation Delivery 111,005.2 (6) 119,864.6 123,854.9 127,535.0 118,770.1 96,627.4 139,919.8 139,562.0 136,867.0 142,293.0 Conservation Credit 1,314.0 (6) 1,386.8 1,372.0 1,383.4 1,191.8 1,271.7 1,726.0 2,055.0 2,416.0 2,189.0 Irrigation Delivery - (6) - - 0.0 19.3 6,391.9 2,765.2 7,663.0 7,071.0 10,374.0

Non-Local Water Purchased by OCWD (A.F.) (5)

Western Municipal Water District - (6) - - 0.0 3,663.5 2,882.4 1,745.0 - - 3,605.0 Alamitos Barrier 1,721.8 (6) 1,198.7 1,689.1 1,321.9 2,094.2 1,505.7 534.1 833.0 1,914.9 1,938.3 Talbert Barrier - Fountain Valley - (6) - - - - - 143.9 1,079.9 2,451.8 1,703.3 Talbert Barrier - Mesa Consolidated Wtr Dist. 3.7 (6) 1.9 100.5 176.9 4,140.3 4,581.4 7,394.7 5,431.1 8,368.6 3,380.6 Forebay Recharge 39,926.9 (6) 48,940.4 27,538.6 20,535.7 18,100.0 - 42,173.0 7,256.7 3,810.8 17,294.7 In-lieu Program - (6) 40,563.5 10,435.4 - - - 50,740.3 89,216.0 69,617.2 52,168.4 Basin Water Supply Management Program - (6) - - - - - - - - - Arlington Desalter - (6) - - 106.2 428.2 1,266.6 227.6 - 567.5 4,087.3 San Bernardino Valley MWD - (6) - - - - - - - - -

Notes and Data Sources:(1) The Orange County Water District services 358 square miles or 45% of the total 799 square miles that make up the boundaries of the County of Orange.(2) Data Source: Demographic Research Unit, California Department of Finance.(3) Data Source: Bureau of Economic Analysis, U.S. Department of Commerce.(4) Data Source: Appendix I, OCWD Engineer's Reports, from WY 2004 to WY 2012.(5) Data Source: Appendix 4, OCWD Engineer's Reports, from WY 2004 to WY 2012.(6) Preliminary data for WY 2013


Demographic and Production IndicatorsLast Ten Fiscal Years

75


2013 2012 2011 2010 2009

Water TreatmentFacilities (million gallons per day)Water Factory 21 - - - - -Groundwater Replenishment System (GWRS) 70 70 70 70 70 Pipeline (miles)Green Acre Project Pipeline 33 33 33 33 33 GWRS Pipeline 15 15 15 15 15

RechargeRecharge Facilities 25 25 24 24 24 Recharge System Storage (acre feet) 26,278 26,278 26,000 26,000 26,000

Basin ManagementGroundwater Monitoring Wells 391 401 398 398 393 Injection Wells 61 62 61 61 61 Soil Gas Monitoring Wells 10 10 21 21 21 Other Wells 16 4 4 4 3

2008 2007 2006 2005 2004

Water TreatmentFacility (million gallons per day)Water Factory 21 - - 15 15 15 Groundwater Replenishment System (GWRS) 70 70 - - -Pipeline (miles)Green Acre Project Pipeline 33 33 33 33 33 GWRS Pipeline 15 15 2 2 2

RechargeRecharge Facilities 24 23 23 23 23 Recharge System Storage (acre feet) 26,000 26,000 26,000 26,000 26,000

Basin ManagementGroundwater Monitoring Wells 378 376 353 340 329 Injection Wells 61 61 61 61 48 Soil Gas Monitoring Wells 21 21 21 21 21 Other Wells 3 3 3 3 3

Function

Capital Asset Statistics by FunctionLast Ten Fiscal Years

Function

76

77

Photo by Andre Casasola

Orange County Water District Finance Department

P.O. Box 8300 Fountain Valley, CA 92728

Phone: 714-378-3200 Fax: 714-378-3373

www.ocwd.com

ORANGE COUNTY WATER DISTRICT, CALIFORNIA

SINGLE AUDIT REPORT

JUNE 30, 2013

ORANGE COUNTY WATER DISTRICT, CALIFORNIA

SINGLE AUDIT REPORT

JUNE 30, 2013


JUNE 30, 2013

TABLE OF CONTENTS

Page Number

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 ..................................................................... 1

Independent Auditors’ Report on Compliance for Each Major Program and on Internal

Control Over Compliance; And Report on Schedule of Expenditures of Federal Awards Required by OMB Circular A-133 ....................................................................................................................... 3

Schedule of Expenditures of Federal Awards for the Fiscal Year Ended June 30, 2013 ........................................................................................................ 5

Notes to the Schedule of Expenditures of Federal Awards .................................................................... 6 Schedule of Findings and Questioned Costs for the

Fiscal Year Ended June 30, 2013 ........................................................................................................ 7

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 Directors Orange County Water District Fountain Valley, California We have audited, in accordance with the 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 Orange County Water District (the “District”) as of and for the year ended June 30, 2013, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated October 10, 2013.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered the District’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 opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’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.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the District’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.

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2

INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON SCHEDULE OF EXPENDITURES OF

FEDERAL AWARDS REQUIRED BY OMB CIRCULAR A-133

Board of Directors Orange County Water District Fountain Valley, California Report on Compliance for Each Major Federal Program We have audited the Orange County Water District (the “District”)’s compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of the District’s major federal programs for the year ended June 30, 2013. The District’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility for the Financial Statements Management is responsible for compliance with the requirements of law, regulations, contracts, and grants applicable to its federal programs. Auditor’s Responsibility Our responsibility is to express opinions on compliance for each of the District’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in the Government Auditing Standards, issued by the Comptroller General of the United States, and OMB A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the District’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide legal determination of the District’s compliance. Opinion on Each Major Federal Program In our opinion, the District complied, in all material respects, with the types of compliance requirements referred to above that could have a material effect on each of its major federal programs for the year ended June 30, 2013.

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4


SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFOR THE FISCAL YEAR ENDED JUNE 30, 2013

Federal Pass-ThroughCFDA Grantor's

Federal Grantor/Pass-Through Grantor/Program Title Number Number Expenditures

Environmental Protection AgencyPassed through the State of California,

Office of Water:Capitalization Grants for Clean Water State Revolving Funds* 66.458 11-821-550 22,947,292$

Total Environmental Protection Agency 22,947,292

Total Federal Expenditures 22,947,292$

* Major Program

Note a: Refer to Note 1 to the schedule of expenditures of federal awards for a description of significant accounting policies used in preparing this schedule.

Note b: There was no federal awards expended in the form of noncash assistance and insurance in effectduring the year.

Note c: Total amount provided to subrecipients during the year was $0.

5

ORANGE COUNTY WATER DISTRICT NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2013 Note 1: Summary of Significant Accounting Policies Applicable to the Schedule of Expenditures of

Federal Awards

a. Scope of Presentation

The accompanying schedule presents only the expenditures incurred by Orange County Water District, California, that are reimbursable under federal programs of federal financial assistance. For the purposes of this schedule, federal awards include both federal financial assistance received directly from a federal agency, as well as federal funds received indirectly by the District from a non-federal agency or other organization. Only the portion of program expenditures reimbursable with such federal funds is reported in the accompanying schedule. Program expenditures in excess of the maximum federal reimbursement authorized or the portion of the program expenditures that were funded with state, local or other non-federal funds are excluded from the accompanying schedule.

b. Basis of Accounting

The expenditures included in the accompanying schedule were reported on the accrual basis of accounting. Under the accrual basis of accounting, expenditures are recorded when the District becomes obligated for payment. Expenditures reported included any property or equipment acquisitions incurred under the federal program.

6


SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013

SECTION I - SUMMARY OF AUDITORS' RESULTS

Financial Statements Type of auditors' report issued: Unqualified Opinion Internal control over financial reporting: � Significant deficiencies identified? yes X no � Material weaknesses identified? yes X none reported Noncompliance material to financial

statements noted? yes X no Federal Awards Internal control over major programs: � Significant deficiencies identified? yes X no � Material weaknesses identified? yes X none reported Type of auditors' report issued on compliance for major programs: Unqualified Opinion Any audit findings disclosed that are required to be

reported in accordance with Section 510(a) of Circular A-133? yes X no

Identification of major programs:

CFDA Number(s) Name of Federal Program or Cluster

CFDA # 66.458 Capitalization Grants for Clean Water State Revolving Funds

Dollar threshold used to distinguish between type A and type B program $688,419

Auditee qualified as low-risk auditee? yes X no

7

ORANGE COUNTY WATER DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013

SECTION II - FINANCIAL STATEMENT FINDINGS

No matters were reported.

SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

No matters were reported.

8


Independent Accountants’ Report on Agreed-Upon Procedures for Calculating Ratios for Financial Analysis

For Years Ended June 30, 2010 through June 30, 2013

INDEPENDENT ACCOUNTANTS’ REPORT ON APPLYING AGREED-UPON PROCEDURES

Board of Directors Orange County Water District Fountain Valley, California We have performed the procedures enumerated below which were agreed to by the management of the Orange County Water District (District), solely to assist the District in calculating ratios for financial analysis for the years ended June 30, 2010 through June 30, 2013. This engagement to apply agreed-upon procedures was performed in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of the procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below, either for the purpose for which this report has been requested, or for any other purpose. The procedures performed and the results obtained from the performance thereof were as follows:

1. Procedure Performed: We calculated the District’s current ratio, quick ratio, debt to

equity ratio, operating margin percentage, day’s cash ratio, and all-in ADS coverage ratio. We also included comparison information for Fitch medians from the 2013 water and wastewater medians published December 5, 2012, by rating category. Finding: The results of our calculations are detailed in the attached worksheet.

Conclusion

We were not engaged to, and did not conduct an audit, the objective of which would be the expression of an opinion on the specified elements, accounts or items. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to the District. This report is intended solely for the use of the District and is not intended to be, and should not be, used by anyone other than this specified party.

Brea, California October 10, 2013

2013 2012 2011 2010 AAA AA A

RATIO # 1

UNRESTRICTED CURRENT ASSETS 224,303,209$ 197,492,596$ 224,924,552$ 211,272,872$

UNRESTRICTED CURRENT LIABILITIES 19,607,785 18,854,221 47,199,583 36,253,118

CURRENT RATIO 11.4 10.5 4.8 5.8 4.2 3.8 2.8

RATIO # 2

UNRESTRICTED CASH & CASH EQUIVALENTS 15,485,995$ 45,921,522$ 44,368,915$ 31,106,676$ UNRESTRICTED INVESTMENTS 126,800,045 95,352,763 141,075,165 140,063,618 UNRESTRICTED RECEIVABLES DUE WITHIN 30 DAYS 63,009,850 43,897,089 35,661,336 36,525,557

UNRESTRICTED CURRENT LIABILITIES 19,607,785 18,854,221 47,199,583 36,253,118

QUICK RATIO 10.5 9.8 4.7 5.7 3.4 3.0 2.6

RATIO # 3

TOTAL LONG-TERM DEBT 524,214,162$ 490,120,936$ 483,758,780$ 491,540,832$

TOTAL UNRESTRICTED NET ASSETS 214,617,916 193,794,385 207,082,254 203,603,855

DEBT TO EQUITY RATIO 2.4 2.5 2.3 2.4 2.5 3.8 9.5

RATIO # 4

OPERATING REVENUES 116,253,804$ 105,397,292$ 96,703,017$ 102,527,247$

OPERATING EXPENSES LESS DEPRECIATION 53,502,225 52,755,246 49,537,521 52,386,123

OPERATING MARGIN % 54% 50% 49% 49% 37% 39% 45%

Operating revenues minus operating expenditures less depreciation, divided by operating revenues. Indicates financial margin to pay operating expenses.

Current assets divided by current liabilities. Indicates financial flexibility to pay near-term obligations.

Current cash plus current receivables divided by current liabilities. Indicates financial flexibility to pay near-term obligations.

(For purposes of this calculation, the District considers property tax revenues as operating revenues and water purchases to be a nonoperating expense)

Total amount of utility long-term debt, net of deferred charges on refunding, divided by unrestricted net assets. Indicates existing debt leverage relative to system equity.


FitchMedians relative to Rating Category **Orange County Water District

JUNE 30, 2010 THROUGH JUNE 30, 2013

RATIOS FOR FINANCIAL ANALYSIS

2013 2012 2011 2010 AAA AA A

RATIO # 5

Days Cash Ratio 678 668 916 823 427 418 285

Current unrestricted cash and investments plus any restricted cash and investments (if available for general system purposes), divided byoperating expenditures minus depreciation.

RATIO # 6

Replenishment assessments 80,694,951$ 72,961,431$ 66,799,060$ 71,682,764$ Property tax 22,497,113 19,383,140 18,592,612 18,733,001 Reclaimed water revenue 10,978,979 10,833,568 9,540,017 9,819,094 Rental income, net of expenses 1,628,627 1,128,904 1,190,357 1,093,508 Interest earnings (1,372,396) 3,035,882 2,814,104 5,023,504 Other revenues 1,571,566 1,394,442 1,183,337 1,131,050

Total Revenues 115,998,840 108,737,367 100,119,487 107,482,921

Operating Expenses 53,502,225 52,755,246 49,537,521 52,386,123 Total Expenditures 53,502,225 52,755,246 49,537,521 52,386,123

Net Revenues 62,496,615 55,982,121 50,581,966 55,096,798

Annual Debt Service 23,059,032 24,108,221 24,326,659 23,547,978

All-in ADS Coverage Ratio 2.7 2.3 2.1 2.3 2.7 1.9 1.5

Current year revenues available for debt service divided by current-year total debt service. Indicates the financial margin to meet current total ADS with currentrevenues available for debt service.

**Fitch medians were obtained from the 2013 Water and Wastewater Medians published December 5, 2012.

FitchMedians relative to Rating Category **Orange County Water District

RATIOS FOR FINANCIAL ANALYSIS

(CONTINUED)

JUNE 30, 2010 THROUGH JUNE 30, 2013


18

Backup materials for Committee items are available in the Committee packet.

Materials distributed at Committee meetings are attached hereto


Meeting Date: October 10, 2013 Budgeted: N/A Budgeted Amount: N/A To: Administration/Finance Issues Cte. Cost Estimate: N/A Board of Directors Funding Source: N/A Program/Line Item No: N/A From: Mike Markus General Counsel Approval: N/A Engineers/Feasibility Report: N/A Staff Contact: R. Fick/V. Sharma CEQA Compliance: N/A Subject: INVESTMENT PORTFOLIO HOLDINGS REPORT SUMMARY The District’s monthly Investment Portfolio Holdings Report will be discussed with the Committee. Attachment(s): Investment Portfolio Holdings Report dated September 30, 2013. RECOMMENDATION Agendize for October 16 Board meeting: Receive and file Investment Portfolio Holdings Report dated September 30, 2013. BACKGROUND/ANALYSIS The Investment Portfolio Holdings Report is a list of each of the District’s fixed income investments and provides the market value at the end of each month. All securities within the District’s Investment Portfolio are in compliance with the District’s Statement of Investment Policy. The District’s portfolio maturities provide cash liquidity sufficient to meet the District’s projected six-month expenditures (as required by Government Code Section 53646). Highlights since the previous report include: The yield on the one-year Treasury note as of the month end is at 0.10%; two-

year at 0.33% and the five-year at 1.39% The last Federal Open Market Committee (FOMC) meeting was held on

September 17-18, 2013. The FOMC concerned by current market conditions left the Federal funds rate unchanged to a range of 0% to 0.25%. This is the rate prime banks lend to each other.

The District’s total rate of return on investments is 0.882%.

19



Meeting Date: October 10, 2013 Budgeted: No Budgeted Amount: N/A To: Administration/Finance Issues Cte

Board of Directors Cost Estimate: $181,718 Funding Source: General Fund Reserves

Program/ Line Item No. N/A From: Mike Markus General Counsel Approval: Yes Engineers/Feasibility Report: N/A Staff Contact: S. Dosier/P. Bouyounes CEQA Compliance: N/A Subject: AGREEMENT TO BUREAU VERITAS FOR HEALTH & SAFETY

CONSULTING SERVICES SUMMARY In September of last year, staff approached the Board to request hiring a limited-term employee to assist with the District’s Health & Safety Programs. The Committee directed staff to take another approach and consider working with a health and safety consulting firm to obtain assistance in the development and update of our safety programs. Staff issued a Request for Proposals (RFP) for Health & Safety Consulting Services in May and brings a recommendation to hire a consulting firm to assist staff with updating the safety programs to meet all regulatory requirements. Attachment(s): Bureau Veritas proposal Health & Safety Consulting Services Presentation

RECOMMENDATION Agendize for the October 16 Board meeting: Authorize Agreement to Bureau Veritas for an amount not to exceed $181,718 to provide health and safety consulting services BACKGROUND/ANALYSIS The Environmental, Health and Safety management systems is a continuous improvement process. It includes on-going risk and compliance assessment; reviewing and revising policies and procedures; developing and conducting training programs; auditing and evaluating programs; partnering with management to review deficiencies and action needed; implementing corrective action items; and completing and submitting required annual regulatory reports (i.e. Hazard Disclosure reports for three locations). Currently, the District’s Health, Safety, Environmental, and Security programs are all handled by one staff person (Risk & Safety Manager) with the assistance of a part-time student intern. Additionally, the Human Resources staff has been engaged to provide additional support when possible. The current staffing resources may not provide

adequate resources to address the issues and keep up on the extensive day to day activities for three locations. With the GWRS (and expansion) plant, the laboratory and its chemical inventory, the Forebay heavy equipment operations, ergonomic issues, monitoring, training, etc… the risks are significant. The District’s safety and environmental programs must meet regulations which include specific requirements and the ongoing program management Having a strong safety program reduces the risk of injuries (employees, visitors, and contractors); reduces liability and regulatory citations; and has been proven to be cost effective. According to Occupational Safety and Health Administration (OSHA) (based on many surveys including one conducted by Liberty Mutual); “Employers that implement effective safety and health management systems may expect to significantly reduce injuries, illnesses, and reduce the costs

associated with these injuries & illnesses, including workers' compensation payments, medical expenses, and lost productivity. In addition, employers often

find that process and other changes made to improve workplace safety and health may result in significant improvements to their organization's productivity and profitability.”

The District’s Risk & Safety Manager, Paula Bouyounes, was hired in January 2012. One of Ms. Bouyounes first priorities was to conduct an audit of existing safety and environmental procedures and programs. While the District has many procedures and programs in place, the audit identified a number of deficiencies and gaps. Back in September of last year, staff approached the Committee and requested an additional staff person to assist in the workload to get all the programs up to compliance and further, to maintain the District’s vast health and safety programs. The Committee instead recommended that staff issue a Request for Proposals (RFP) for health & safety consulting services. The suggestion was to have a consulting firm work with staff and provide a group of subject matter professionals who had expertise in different areas of health and safety to assist the District to get the programs in place and ensure full compliance. Prior to the issuance of that RFP, an additional assessment of the District’s safety programs was conducted by an outside consultant to ensure all critical gaps and deficiencies were identified and a list of the priority issues determined to include in the Scope of Work within the RFP document. The RFP was then issued in May of this year. The Scope of Work includes (in summary):

On-site Consultant to review and update up to 18 Health and Safety Programs. This will include reviewing and updating written procedures, recommendations to gaps/deficiencies, and facility specific training presentations/material for each program. The programs include:

o Hazardous Communication Program o Ergonomics o Contractor Safety o Compliance Calendar o Biosafety/Exposure Control Program o Electrical Safety o Fire Prevention Plan o Heavy Equipment Procedures

o Hot Works o Crane Safety o Machine Shop Safety o Emergency Action Plan o Public Roadway Safety and Traffic Control o Respirator Protection Program o Powered Industrial Vehicle Program o Excavation & Trench Safety o Water Craft Safety o Workers Compensation Program Review

Job Hazard Analysis for up to 25 job tasks for risk analysis and the development

of written safety protocols Review and audit of the District’s newly updated Confined Space Program (a

high priority issue with Cal-OSHA and one that Paula has been focused on for the past year)

Review and development of equipment and/or task specific Lockout-Tagout (LOTO) procedures, forms and training materials

Development of a Vehicle Safety Program to meet all required compliance standards.

Development of a Fall Protection Program to include audit, procedures and training materials. The District is considered high risk in this area due to the type of structures and operations we have.

While the District’s safety, environmental and risk programs are vast, the scope of work above represent the most critical to attend to at this time. Four firms submitted proposals to provide health & safety consulting services to the District. The firms included EORM, Keenan & Associates, Bureau Veritas and EHS International. A team of five OCWD staff were organized to review the proposals. The team included the District’s Risk & Safety Manager, Director of Human Resources, Director of Water Production, Maintenance Manager and the Assistant Director of Engineering. The proposals were reviewed using the following criteria:

1. Firm and Staff Qualifications & Experience 20%: Experience of consulting firm and proposed staff; capabilities of staff to perform tasks as described in the scope of work; any subcontractors and their staff capabilities of performing tasks as assigned by consulting firm; staff experience with performance similar work; record of completing services and projects on schedule; strength and stability of the firm; technical experience and assessment by client references.

2. Company/Staff availability 10%: Availability of sufficiently qualified and

experienced staff to perform tasks as described in the scope of work; adequate organizational structure and financial stability; adequate resources to provide the level of support described in the scope of work.

3. Understanding of Work to be Performed 30%: Consultant’s demonstrated

knowledge of environmental, health and safety related work; thorough

understanding to OCWD’s expectations of the work to be performed; statement of why the consulting firm is qualified to help OCWD in this endeavor.

4. Scope of Work/Project Schedule 35%: Consultant’s understanding of the project

objectives; scope of work; clear expression of deliverable requirements for each of the outlined tasks; clear process outlined for quality review; schedule developed with reasonable timeframes that include the entire project.

5. Consultant’s Quality 5%: Consultant’s adherence to the format of the proposal

as outlined in the proposal; well written and responses that are clear and understandable; logical, organized, and well thought out concepts.

Based on the initial review of the written proposals, it was determined that staff would ask the top two rated firms to come in and make a presentation to the group. Those firms were Bureau Veritas and EORM. The presentations took place on August 20, 2013. Since staff had continued to work on some of the items outlined in the original Scope of Work in the RFP, after the presentations, both firms were provided with an updated scope of work and asked to provide a final cost proposal taking into consideration that several of the deliverables had been modified or removed entirely. The review group subsequently met again to review the final proposals and ranked the two firms as follows: Firm Name Overall

Ranking Total Project Hours

Average Hourly Rate

Total Cost Proposal

Bureau Veritas 1 1440 $126 $181,718 EORM 2 963 $146 $141,176

Both of the firms did lower their original cost proposals, however, Bureau Veritas provided a very clear explanation of how they determined their cost decrease and how their original proposal was modified based on the updated scope of work they were provided by OCWD. EORM in contrast only provided an updated cost sheet but no explanation of how they determined their lowered costs and decreased project hours. While EORM came in with a lower total cost proposal, staff is recommending entering into an agreement with Bureau Veritas for the following reasons:

Bureau Veritas provided a very clear and specific scope of work which outlined in detail how they would approach each task requested within the RFP. It was obvious that they fully understood OCWD’s needs and expectations.

They were able to outline their work tasks in detail as well as their expectations for OCWD on the deliverables and how long each task would take in work hours.

Their proposed project hours appear to be more realistic and in line with what we would expect for the scope of work requested.

The qualification of the consulting staff that will work with the District is impressive and specific to the different types of expertise required for this project.

Bureau Veritas’s references were very good (including OCSD, Water Replenishment District of Southern California and The Boeing Company).

In addition to the scope of work presented in the RFP, Bureau Veritas has committed to provide, at no additional charge:

Access to their training webinars for District staff for a period of one year. The necessary tools to enable staff to implement the long-term sustainability of

the new safety and health programs by developing and delivering a customized auditing tool.

An assessment and recommendations for ongoing OCWD staffing needs to maintain the District’s health, environmental and safety programs after the programs have been updated to compliance.

The staffing assessment will be provided at the end of the contract with Bureau Veritas. The complexity of the regulations that govern our safety and environmental programs generate a significant amount of work and oversight. Water and sewage agencies are on Cal OSHA’s “Highest Hazard Industry List”. In evaluating other agencies (i.e. IRWD, OCSD), staff found that safety, workers’ compensation and environmental responsibilities are managed by different individuals specializing in each area of compliance. Other agencies employ several staff to handle the extensive workload required on an ongoing basis. Staff will return to the Board at a later date to discuss the results of the staffing assessment and to provide ongoing staffing recommendations to ensure the District’s health, environmental and safety programs meet compliance and the District is providing the most complete and comprehensive program to ensure the safety of all District employees Staff is recommending that the District enter into an Agreement with Bureau Veritas to provide Health & Safety Consulting Services to assist with the development and the update of safety programs and to ensure compliance. PRIOR RELEVANT BOARD ACTION(S)

20


1

Administration and Finance Issues Committee meeting October 10, 2013 CITY OF ANAHEIM’S NOTICE TO APPRAISE PROPERTY LOCATED ON BALL ROAD AND PHOENIX CLUB DRIVE IN ANAHEIM COMMITTEE RECOMMENDATION: Transmit letter to the City of Anaheim that clarifies the District is granting access to District property due to historical interagency cooperation; requesting the property appraisal results and objecting to any potential condemnation process that may damage the interagency relationship


2

AGENDA ITEM SUBMITTAL Meeting Date: October 10, 2013 Budgeted: N/A Budgeted Amount: N/A To: Administration/Finance Issues Cte Cost Estimate: N/A

Board of Directors Funding Source: N/A Program/Line Item No.: N/A From: Mike Markus General Counsel Approval: N/A Engineers/Feasibility Report: N/A Staff Contact: B. Dosier/D.Jackson CEQA Compliance: N/A Subject: CITY OF ANAHEIM’S NOTICE TO APPRAISE PROPERTY LOCATED ON

BALL ROAD AND PHOENIX CLUB DRIVE IN ANAHEIM SUMMARY Staff received a letter from the City of Anaheim advising that the City intends to appraise the District’s Ball Road Basin Property. The City is considering acquiring the Property in fee for park purposes. Attachment(s): Letter from City of Anaheim Community Services Department RECOMMENDATION Agendize for October 16 Board meeting: Take action as appropriate. DISCUSSION/ANALYSIS Staff received a letter from the City of Anaheim Community Services Department advising that the City intends to appraise the District’s Ball Road Basin Property, located on Ball Road and South Phoenix Club Drive. The City states that it is considering acquiring the Property in fee for park purposes and that the appraisal will be the basis for any offer made by the City to purchase the Property; however, no decision has been made by the City at this time to acquire the Property. Per the letter, the District will be contacted by an independent appraiser retained on behalf of the City, who will request access to the Property to conduct a physical inspection. Contact with the appraiser by the District is voluntary; however, the appraiser will not be able to enter onto the Property unless the appraiser obtains the District’s consent to conduct the physical inspection. After the appraisal is completed, the City will review and approve the appraisal. The City will then make a decision as to whether to extend an offer to purchase the Property. If the City decides to make an offer, the offer will be based on the fair market value of the Property and the City will negotiate with the District and attempt to reach an agreement. PREVIOUS BOARD ACTION ITEM(S)

21

AGENDA ITEM SUBMITTAL MEETING DATE: October 16, 2013 Budgeted: No

Budgeted Amount: N/A TO: Board of Directors Cost Estimate: $12.6 Million Maximum

Funding Source: Water Fund Reserves Program/Line Item No.:

FROM: Mike Markus General Counsel Approval: N/A Engineers/Feasibility Report: N/A

Staff Contact: J. Kennedy/B. Hunt CEQA Compliance: N/A SUBJECT: ACCESSING WATER RESERVE FUND TO PURCHASE ADDITIONAL

METROPOLITAN WATER DISTRICT SUPPLIES SUMMARY The District budgeted $13.3 million to purchase 20,000 acre-feet of Metropolitan Water District (MWD) untreated full service water this year. The District will have received and recharged all of this water by approximately the end of October assuming conditions remain relatively dry. Staff recommends continuing to purchase water in November and December utilizing cash reserves from the water reserve fund until appreciable precipitation occurs this winter. RECOMMENDATION Authorize staff to access cash reserves from the water reserve fund to purchase up to 18,900 acre feet of additional MWD imported water at a maximum cost of $12.6 million. DISCUSSION As of June 30, 2013 the District had $21.8 million in the water reserve fund as shown in Figure 1. This amount is expected to grow to approximately $28 million by the end of the fiscal year. The cost of MWD untreated full service water is $596.25/acre-foot after adding the $3.25/acre-foot Municipal Water District of Orange County incremental charge. An additional approximately $70/acre-foot is incurred due to the MWD readiness-to-serve charge which brings the total approximate net cost of this water to $666/acre-foot. Therefore about 42,000 acre-feet of water could be purchased. Staff recommends using these funds to purchase additional imported water for the following reasons:

1. The groundwater basin accumulated overdraft has increased to 242,000 acre-feet as shown on Figure 2 as of June 30, 2013. The overdraft increases to 290,000 acre-feet if the water stored in the MWD Conjunctive Use Program (CUP) is removed;

2. If no significant rainfall occurs in October, the District will spend all of the funds

budgeted in FY2013-14 to purchase MWD untreated full service water by the end of the month;

3. Recharge capacity will be available in November and December assuming no

significant rainfall occurs.

4. These reserve funds have been set aside for this specific purpose.

The District is currently receiving 150 cubic feet per second (cfs) of water from MWD which is approximately 300 acre-feet per day. The water the District is receiving is State Project Water which has a relatively low total dissolved solids concentration under 300 mg/l. This water is primarily being sent to Anaheim Lake, Kraemer, Miller and La Jolla recharge basins. Because flows in the Santa Ana River continue to be at low levels compared to recent history, recharge facilities such as Warner basin, the off-river and river system, Burris and Santiago basins are relatively dry and receiving low amounts of water. With the staff recommendation, if the weather patterns remain dry, on a weekly basis, the District could receive about 2,100 acre-feet of additional water at a cost of about $1.4 million. The maximum amount of purchases for November and December (nine weeks) would be about 18,900 acre-feet or $12.6 million. Staff will also generally work to match the rate of MWD water being received with the recharge rate the water is being percolated into the groundwater basin. With this type of operation storage space in the existing recharge basins will not be utilized and will remain available to capture runoff from the first storms of the winter. Actual weather patterns in November and December would determine how much if any additional water can be purchased. Additionally, depending upon conditions and recharge facility issues, the 150/cfs rate of water received could be reduced. At this time staff is seeking board approval to access the water reserve funds. Staff would discontinue buying the extra water when appreciable amounts of rainfall are predicted to avoid losing any Santa Ana River flows. This issue was also discussed with the Groundwater Producers at their October 9, 2013 meeting and they were in agreement with the suggested strategy.

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Historical Accumulated Overdraft

Overdraft

Overdraft w/o MWD Storage

PRIOR RELEVANT BOARD ACTION(S) – N/A

Consideration to Purchase Additional Imported Water

Board of Directors Meeting

October 16, 2013

Available Basin Capacity77% Available Capacity – 17,272 af

Santiago 10,000

Kraemer 850

Miller 200

Anaheim 1,800

Warner 1,750

Burris 2,600

Santiago ‐ 10,000/13,000 Kraemer ‐ 850/1,000 Miller ‐ 200/225

Miraloma ‐ 26/34 Anaheim ‐ 1,800/2,300 Warner ‐ 1,750/3,000

Burris ‐ 2,600/2,700 Riverview ‐ 10/10 La Jolla ‐ 36/36

Placentia ‐ 0 Raymond ‐ 0

October 16, 2013

Percolation Capacity300 – 500 CFS

Santiago 100

Kraemer 90

Miller 50

Miraloma 60

Anaheim 100

Warner 60

Burris 30

Riverview 10

La Jolla 20 Placentia 15

Santiago 10 ‐ 100 Kraemer 10 ‐ 90 Miller 10 ‐ 50Miraloma 20 ‐ 60 Anaheim 10 ‐ 100 Warner 5 ‐ 60Burris 10 ‐ 30 Riverview 2 ‐ 10 La Jolla 5 ‐ 20Placentia 5 ‐ 10 Raymond 5 ‐ 15

October 16, 2013

Current MWD Purchase150 CFS

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MWD DeliveriesMaximum Percolation Capacity

Background

OCWD budgeted to purchase 20,000 af of MWD full service untreated water in FY13-14

Currently receiving about 150 cubic feet per second or 300 acre-feet/day

Expect to have received and recharged entire 20,000 af by end of October assuming no appreciable rainfall

Background

If conditions remain dry – recharge capacity will exist in November and December to take additional water

Expect approximately $28 million in water reserve fund by end of fiscal year.

Equivalent to about 42,000 af of water at $666/af rate

Water Reserve Fund Balance

Enough $ to purchase about

42,000 af of MWD untreated full service water

6‐30‐14 Projection

Background

Staff recommends continuing to buy water in November and December assuming dry conditions continue using cash reserves

Every week of continued purchases 2,100 af or $1.4 million

Requesting board authority for up to 9 weeks 18,900 af or $12.6 million

Recommendations

Authorize staff to access cash reserves from the water reserve fund to purchase up to 18,900 acre feet of additional imported water at a maximum amount of $12.6 million.

End

OCWD Groundwater Basin Accumulated Overdraft

Basin

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MWD Untreated Full Service Rate

Item Amount

MWD volumetric rate $593/af

MWDOC Increment $3.25/af

Approximate RTS (paid over 4 year period)

$70/af

Approximate total $666/af

MWD Volumetric Water Rates

$/af

Savings by OCWD Purchasing Untreated Full Service MWD Water

$/af

Water Fund Reserves Relation to Basin Overdraft

6/30/13 Basin Overdraft 242,000 af

Exclude MWD Storage water 48,000 af

Total Basin Overdraft 290,000 af

Basin Overdraft target 125,000 af

Difference 165,000 af

50% of Difference 82,500 af

MWD Full Service Untreated Rate $666/af Maximum Water Fund Balance $54.9 million

MWD Rate Components Treated Full Service Water

Rate Components 1/1/2013 1/1/2014

Tier 1 Supply Rate $140 $148

System Access Rate $223 $243

Water Stewardship Rate $41 $41

System Power Rate $189 $161

Total Tier I untreated $593 $593

Treatment Surcharge $254 $297

Total Tier I $847 $890

Tier II Supply Rate Increase $150 $142

Total Tier II $997 $1,032

Additional Imported Water Charges

Readiness To Serve Charge– $142 million collected by MWD – Equivalent to ~ $70/af

Capacity Charge– $6,400 per cfs during summer months– Equivalent to ~ $15/af

MWDOC Increment Charge– $3.25/af

22

Total for Month This Year Last Year

BASIN SUPPLIES

Water Purchases from MWD (excludes In Lieu) 0 0 0

Water into MWD Storage Account (excludes In Lieu) 0 0 15,425

SAR & Santiago Creek Flows 4,000 12,293 15,186

GWRS Water to Forebay 2,772 9,172 9,706

GWRS Water to Talbert Barrier 3,381 9,573 7,774

OC-44 Water to Talbert Barrier 0 2 1

Alamitos Barrier Water 162 519 558

Incidental Recharge (estimated) 1,650 4,950 4,939

Evaporation from Recharge Basins (246) (846) (754)

River Flow Lost to Ocean 0 0 0

Water Storage Change in Recharge Facilities (409) (3,346) (10,006)

Total Groundwater Recharge 12,128 39,009 62,842

WATER PRODUCTION

Groundwater Production 31,180 94,157 90,234

MWD Storage Program Withdrawals 0 0 0

Total Groundwater Production 31,180 94,157 90,234

BASIN STATUSChange in Groundwater Storage (19,052) (55,147) (27,393)Change in Groundwater Storage excluding MWD Stored Water (19,052) (55,147) (42,818)Accumulated Overdraft ------ 297,146 206,394Accumulated Overdraft excluding MWD Storage ------ 346,251 255,308

IN LIEU WATEROCWD In Lieu Purchases 0 0 0MWD In Lieu Storage 0 0 0

Total In Lieu 0 0 0

OTHER KEY INFORMATION1. MWD Water Deliveries to Producers 11,036 35,198 39,1312. Basin Production Percentage 73.9% 72.8% 69.8%3. Total Water Demand 43,672 133,547 134,0724. Total GWRS Production 6,153 18,745 17,4805. Green Acres Project Water 694 1,813 2,0336. SAR Water Quality

- Total Dissolved Solids (TDS) of SAR below Prado Dam (ppm) 662 ------ 668- Total Nitrogen of SAR below Prado Dam (ppm) 6.3 ------ 4.8

7. Month-End Water Storage Behind Prado Dam 0 ------ 58. Month-End Water Storage in Deep Basins 4,976 ------ 8,4849. Total Artificial Recharge 10,478 34,060 57,90110. Monthly Mean Tempertature at Santa Ana Fire Station (°F) 74.6 ------ 76.811. Rainfall at FHQ (inches) 0.00 0.00 0.05

10/11/2013

WATER RESOURCES SUMMARYSeptember 2013

INFLOWS & OUTFLOWS Year to Date - (acre-feet)

Page 2 of 9

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WATER Ground- In YTD YTD 2013 YTD YTDAGENCY water Lieu Demand Demand BPP BPP BPP

Anaheim 5,594 0 0 0 1,322 6,917 20,207 20,096 80.9% 79.3% 77.5%

Buena Park 1,201 0 0 0 335 1,536 4,611 4,555 78.2% 80.0% 71.0%

East Orange County 111 0 0 0 0 111 323 339 100.0% 99.5% 40.0%

Fountain Valley 806 0 0 209 187 1,203 3,621 3,426 81.2% 81.6% 80.8%

Fullerton 2,186 0 0 0 740 2,925 9,014 9,049 74.7% 75.1% 64.8%

Garden Grove 1,848 0 0 0 836 2,684 7,634 7,754 68.8% 67.0% 62.0%

Golden State 1,839 0 0 0 831 2,670 8,213 8,455 68.9% 69.7% 62.2%

West OC System 1,524 0 0 0 62 1,587 4,846 4,922 96.1% 95.1% 83.9%

East OC System 314 0 0 0 769 1,083 3,367 3,533 29.0% 33.1% 31.9%

Huntington Beach 1,535 0 0 0 1,247 2,782 8,790 9,081 55.2% 53.1% 68.5%

Irvine Ranch 5,528 0 0 1,020 42 6,591 19,526 20,028 99.2% 95.0% 77.0%

DRWF Clear 3,095 0 0 0 -- 3,095 8,502 7,855 -- na na

DRWF Color 709 0 0 0 -- 709 2,152 2,180 -- na na

La Palma 72 0 0 0 144 216 658 675 33.4% 41.2% 45.7%

Mesa Water (MW) 1,311 0 0 155 407 1,873 5,844 6,023 76.3% 81.8% 67.4%

MW Clear 654 0 0 0 -- 654 2,277 3,599 -- na na

MW Color 657 0 0 0 -- 657 2,232 259 -- na na

Newport Beach 965 0 0 32 571 1,568 6,178 5,165 62.8% 50.9% 79.7%

Orange 1,985 0 0 0 1,069 3,053 9,367 9,566 65.0% 63.5% 60.2%

OCWD (GAP) 53 0 0 0 0 53 182 624 100.0% 100.0% 100.0%

Santa Ana 2,461 0 0 39 1,166 3,665 11,396 11,468 67.9% 68.4% 69.4%

Seal Beach 88 0 0 0 290 378 1,174 1,219 23.2% 23.2% 20.7%

Serrano 218 0 0 0 141 358 1,062 1,052 60.7% 73.9% 37.5%

Tustin 653 0 0 0 529 1,182 3,699 3,821 55.2% 53.9% 75.8%

Westminster 872 0 0 0 279 1,152 3,576 3,624 75.7% 77.8% 74.8%

Yorba Linda 761 0 0 0 891 1,652 5,135 4,853 46.1% 55.9% 47.5%

SUBTOTAL: 30,086 0 0 1,456 11,027 42,568 130,210 130,871 73.9% 72.8% 69.8%

Other Producers 1,094 na na 2 9 1,105 3,337 3,201

(Est 4% of Subtotal)

TOTAL: 31,180 0 0 1,457 11,036 43,672 133,547 134,072 73.9% 72.8% 69.8%

OCWD (Talbert Barrier) 0 na na 3,381 0 3,381 9,575 7,775

OCSD (GAP) na na na 257 na 257 686 1,091

Estimated

Page 3 of 9

PRODUCERS WATER USAGE SUMMARYSeptember 2013

(AF except BPP)

DemandMWD CUP Reclaimed Total Total

10/11/2013 9:42

In Lieu Water Import

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07-0

8

08-0

9

09-1

0

10-1

1

11-1

2

12-1

3

13-1

4

Rec

harg

e (T

AF

)

Water Year

YTD Artificial Recharge by OCWD

SAR & Santiago Purchases CUP Direct GWRS

RIVER SYSTEM Average perc 62 cfs (river not totally used)

DESILTING SYSTEM Not used

OFF-RIVER SYSTEM Not used

WARNER SYSTEM Dropped level for projects

OLIVE BASIN Empty

ANAHEIM LAKE Empty

MINI-ANA LAKE Not used

MILLER BASIN GWR inflow

KRAEMER BASIN Not used

MIRA LOMA GWR inflow

LA JOLLA BASIN Not used

PLACENTIA BASIN Not used

RAYMOND BASIN Not used

FIVE COVES BASIN Empty

BURRIS BASIN

RIVER VIEW BASIN Empty

SANTIAGO BASINS

SANTIAGO CREEK Not used

TOTALS

5-YR AVERAGE

Imperial Headgates (estimated) 4,000 Est'd SAR flow past Chapman Ave. 0

GWRS 2,772

OC-28 (MWD) 0 Est'd Santiago Cr. flow to SAR 0

OC-28a (MWD) 0 Est'd flows past Raymond Basin 0

CB-11 0

CB-18 0

Est'd local Forebay inflow below Imperial 0 Calc'd evap (inches) Estimated 5.9

Est'd local Santiago inflow (estimated) 0 Est'd evaporative losses 246

Irvine lake releases (OC-13 MWD) 0

Villa Park Dam releases (estimated) 0

Precip at Warner Basin (inches) 0

Precip direct to open water surfaces 0

TOTAL INFLOW 6,772 TOTAL LOSSES

Facility Begin End Net

Deep basins 1,855 1,721 -134 TOTAL INFLOW 6,772

Santiago Pits 3,530 3,255 -275 TOTAL LOSSES 246

River 0 STORAGE CHANGE -409

Off-river 0 CALC'D PERCOLATION 6,935

Irvine Lake

TOTAL 5,385 4,976 -409

STORAGE CHANGES (AF) SUMMARY (AF)

FLOWS TO RECHARGE AREAS (AF) LOSSES FROM RECHARGE AREAS (AF)

246

0

0

275

0

6,935

14,778

0

2,177

0

0

20

0

0

88

0

0

0

694

RECHARGE AREAS REPORTSeptember 2013

Percolation (AF) Remarks

3,681

0

Page 6 of 9

Facility Storage Storage Maximum Total Max Avg Avg W.S.

Start End Storage Perc Perc Perc Elev

Desilting Ponds 0 0 230 0 na na na

Fos-Huckleberry 78 78 630 0 na na na

Conrock Basin 188 176 1,060 0 na na na

Warner Basins 1,293 1,217 2,810 88 na na na

Olive Pit 0 0 183 0 na na na

Anaheim Lake 0 0 2,300 0 0 0 168

Mini-Anaheim Lk 0 0 21 0 na na na

Miller Basin 44 15 340 694 47 23 204

Kraemer Basin 0 0 1,050 0 na na 164

Mira Loma 7 10 62 2,177 94 73 215

La Jolla Basin 0 0 36 0 na na na

Placentia Basin 120 120 350 0 na na na

Raymond Basin 25 5 370 20 na na na

Five Coves Basins 0 0 700 0 na na na

Burris Pit 100 100 2,670 0 na na na

River View Basin 0 0 12 0 na na na

Santiago (Bond) 2,508 2,272 8,690 275 na na 0

Santiago (Blu Dia) 1,022 983 5,240 na na na 0

Totals 5,385 4,976 26,754 3,254

Prado Dam 4 0 25,000

DEEP BASINS MONTHLY STATUS

September 2013

(values in acre-feet)

Page 7 of 9

Page 8 of 9

0

5

10

15

20


Rai

nfal

l (In

ches

)Cumulative Forebay Rainfall

25-Yr Avg. Rain 2012-13 2013-14

55

60

65

70

75

80


Tem

pera

ture

(F

˚)

Temperature at Santa Ana Fire Station

15-yr. Avg. 2012-13 2013-14

Page 9 of 9

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014-40

-30

-20

-10

0

10

20

30

40W

ater

Lev

el E

leva

tion

(Fee

t MS

L)

0

1,000

2,000

3,000

Tal

bert

Bar

rier

Inje

ctio

n (A

-ft)

Talbert/Lambda Aquifer Mergence ZonePerforated Interval: 71 - 135 ft. bgs

Talbert Barrier Injection

Protective Level to Prevent Seawater Intrusion

TALBERT BARRIER MONITORING WELL OCWD-M26

9,000

6,000

3,000

0

Gro

undw

ater

Pro

duct

ion

(A-f

t)

Fountain Valley Groundwater Production

IRWD Groundwater Production

Mesa Water Groundwater Production

Huntington Beach Groundwater Production

Newport Beach Groundwater Production

S AWPA

COMMISSION MEETING TUESDAY, OCTOBER 15, 2013 - 9:30 A.M.

AGENDA

1. CALL TO ORDER/PLEDGE OF ALLEGIANCE (PhD Anthony, Chair)

2. ROLLCALL

3. PUBLIC COMMENTS

Members of the public may address the Commission on any item that is \loithin the jurisdiction of the Commission; however, no action may be taken on any item not appearing on the agenda unless the action is othawise authorized by Subdivision (b) Section 54954.2 of the Government Code.

4. NEW BUSINESS

A. lNLA.l\ID EMPIRE BRINE LINE ORDINA.~CE NO.7 (CM#8814) .. .... .. ..... . ... .... .... . ...... ...... ... .. 5 Presenter: Rich Haller

• StaffPn:s(!utatiou • Open Public Hearing • Close Public Hearing

Recommendation: Consider the adoption of Ordinance No.7.

B. MULTIJURISDICTIONAL PRETREATMENT AGREEMENT (CM#8816) ... ... ............... .. ...... 107 Presenter: Rich Haller Recommendation: Approve the Multijurisdictional Pretreatment Agreement and request that each member agency notice the appmval of the Multijurisdictional Pretreatment Agreement on their next Board of Directors meeting agenda.

C. L"aAND EMPIRE BRINE LINE PRETREAThiENT PROGRAM DOCUJVIENTS (CM#8815) .. .. 123 Presenter: Rich Haller Recommendation: Approve the Policy Manual, which includes the Enforcement Response PI!Ul, and authorize staff to make any administrative, clerical, or non-substantive changes as appropriate.

D. BASIN MONITORING PROGRAM TASK FORCE -· CONSULTANT SUPPORT (CM#88ll) .... .. l8l P1·esenter: Mark Norton Recommendation: Approve Task Order No. RISK3 74-04 with Risk Sciences fOr the amoUrifriot~to~exceed

$49,950 for regulatory support activities for the Basin Monitoring Program Task Force.

1

E. EMPLOYEE COMPENSATION

L CaiPERS RETIREMENT PROGRAM (CM#8817). ................................. 189 Presenter: Larry McKenney Recommendation: Considering SA WP A's costs, low benefit formula, and the number of pre-2013 employees, take no action at this time.

2. COLA/MERIT INCREASES FY 2013/14 {CM#8812) ................................................... 191 Presenter: Celeste CantU RKommendation: Approve a 1.93% COLA increase and a 4% merit increase pool for FY 2013/14.

3. 2014 MEDICAL INSURANCE CAP (CM#8813) ......................................................... 193 Presenter: Celeste CantU RKOmmendation: Direct staff to adjust the medical insurance cap to $1,466, which reflects ACWA's annual Kaiser Family Plan rate.

5. OLD BUSINESS

A. PRETREATMENTPROGRAMSTATUSUPDATE • Remedial Plan • Staffmg Presenter: Rich Haller Recommendation: Receive and file the update.

6. CONSENT CALENDAR

All matters listed in the Consent Calendar are considered routine and non-controversial and will be acted upon by the Commifu:e by one motion in the form listed below. There will be no separate discussion on the items prior to the time the Committee votes, unless Committee members, staff, or the public requem that specific items be discussed and/or removed from the Consent Calendar for separate action.

A. APPROVAL OF THE MINUTES FROM THE MEETING HELD ON 10-1-13 .......................... 195 Recommendation: Approve as mailed.

B. INJURY AND ILLNESS PREVENTION PLAN (CM#8806) ................................................ 199 Recommendation: Adopt Resolution No. 2013-10, establishing an Injury and Illness Prevention Plan.

C. ADOPTION OF RESOLUTIONS- INLA.~D EMPIRE BRINE LINE REACH V REP AIRS AND REHABILITATION PROJECT (CM#8807) ...................................................................... 535 RecommendAtion: Adopt:

1. Resolution No. 2013-11, establishing a Dedicated Source of Net Revenue from the Brine Line Enterprise Fund for repayment of the State Revolving Fund (SFR) Financing Agreement from the State Water Board for the Inland Empire Brine Line Reach V Repairs and Rehabilitation Project; and

2. Resolution No. 2013-12, establishing SAWPA's intention to reimburse itself from State Water Board proceeds for any costs incurred prior to the approval of a financing agreement.

D. ADOPTION OF COMMENDATORY RESOLUTION NO. 2013-13, HONORING RWQCB DIRECTOR CAROLE BESWICK ................................................................................ 541 Recommendation: Adopt Resolution No. 2013-13, commending Carole Beswick for her leadership on the Regional Water Quality Control Board, and for her support of the Santa Ana River Watershed.

2

7. INFORMATIONAL REPORTS Recommendation: Receive and file the following oral/written reports/updates.

A. OWOW UPDATE Presenter: Mark Norton

B. LEGISLATIVE REPORT ............................................................................................. 543 Presenter: Celeste CantU

C. CASH TRANSACTION REPORT~ AUGUST 2013 ............................................................ 555 Presenter: Karen Williams

D. FINAi~CIAL REPORT FOR THE .FOURTH QUARTER ENDING JUNE 30-2013 ..................... 563 • SAWPA • Inland Empire Brine Line Enterprise Presenter: Karen Williams

E. FYE 2013 FOURTH QUARTER BUDGET VS. ACTUAL VARIANCE REPORT (CM#8810) ....... 583 Presenter: Karen Williams

F. INTER-FUND BORROWING- AUGUST 2013 (CM#8809) .................................................. 593 Presenter: Karen Williams

G. PERFORMANCE INDICATORS/FINANCIAL REPORT-· AUGUST 2013 (CM#8808) ............... 595 Presenter: Karen Williams

H. GENERAL MANAGER'S REPORT ............................................................................... 617

I. CHAIR'S COMMENTS/REPORT

J. COMWSSIONERS' COMMENTS

K. CURRENT EVENTS/ARTICLES OF INTEREST

8. CLOSED SESSION

A. PURSUANT TO GOVERNMENT CODE SECTION 54956.9 (a) CONFERENCE WITH LEGAL COUNSEL- EXISTING LITIGATION • OCSD Arbitration

9. ADJOURNMENT

Any person with a disability who requires accommodation in order to participate in this meeting should contact Commission Secretary Patti Bonawitz at 951.354.4230, at least 48 hoW'S prior to the meeting to request for a disability-related modification or accommodation.

PLEASE NOTE: Materials related to an item on this agenda submitted to the Commission after distribution of the agenda packet are available for public inspection in the Authority's office at 11615 Sterling Avenue, Riverside, during regular business hours. Such documents also are available on the Authority's website at www.sawpaorg, subject to staff's ability to post documents before the meeting.

3

Dedaratioo oCPostiog I, Patti Bonawitz, Clerk of the Board of the Santa Ana Watershed Project Authority certifY that a copy of this agenda has been posted in the Aaency's office at 11615 Sterlin~t Avenue, Riverside, California by 5:30p.m. on Wednesday, October 9, 2013.

<, CI..:.:\:.L~__ ~~_x-::+AO' l <:;t f~ Patti Bonawitz )

2013 - SA WP A Commission Upcoming Meetings/Events

November 11-5-13 11-19-13

December 12-3-13 12-3/6-13 12-17-13

Conunission Workshop Commission Meeting

Dark ACWA Fall Conference- Los Angeles Commission Meeting

4

Draft Minutes GROUNDWATER PRODUCERS MEETING

Sponsored by the ORANGE COUNTY WATER DISTRICT

(714) 378-3200 Wednesday, October 9, 2013, 9:30 a.m.

Meeting held in OCWD Boardroom

1. Water Quality Issues

Nira discussed: (1) the CA DPH proposed chromium 6 MCL of 10 ppb and how public comments are due this Friday; and (2) the planned 2014-16 activities with the CA DPH Vulnerability Supply Assessments.

2. Official June 30, 2013 Accumulated Overdraft

Tim Sovich presented on the official overdraft calculations for June 30th . John Kennedy then described how the District will consider using Water Reserve Fund monies at the October 16 Board meeting to buy additional MWD water this November and December. The Producers concurred with this plan.

3. Update on North and South Basin lawsuits

Roy Herndon gave an update on both lawsuits. The group wants to generally be more involved in these issues. Specific issues included reviewing the District Act and how it was interpreted; reviewing the judge’s rulings for both cases; and how do these projects fit within the OCWD long-term CIP.

4. Annexation update

Staff informed everyone that the annexations were approved by the board on October 2nd.

5. Summary of September 26th Seawater Intrusion meeting.

District staff will include on the November agenda a discussion to consider adoption of an OCWD policy to provide protective groundwater levels to prevent seawater intrusion.

6. Burris Basin – Potential lease for power plant

OCWD staff mentioned the issues with considering a power plant at this recharge basin in the City of Anaheim. This topic will be continued to November.

7. Consolidation discussions with MWDOC update

OCWD staff gave a brief update on the consolidation issue. How the two agencies could be structured is currently being reviewed.

8. Ocean desalination update

John Kennedy indicated a draft report will be coming out in about a month answering OCWD Board member questions from July.

9. Other

None

The Producers’ meetings are scheduled the second Wednesday of each month. The next regular monthly meeting is Wednesday, November 13, 2013 at 9:30 a.m.

NAME

ORANGE COUNTY WATER DISTRICT Groundwater Producer Meeting

October 9, 2013

rint)

Hv

AFFILIATION

The Orange County Water District appreciates your signing this Attendance Sheet to provide an accurate record of attendance at this meeting. While signing this sheet is neither mandatory nor a condition of attending this meeting, your cooperation in enabling the District to maintain full and complete records of these proceedings is greatly appreciated.

1

MINUTES OF MEETING COMMUNICATION AND LEGISLATIVE LIAISON COMMITTEE MEETING

Thursday, October 3, 2013

ROLL CALL ACTIONS Harry Sidhu Kathryn Barr Cathy Green (not present) Vincent Sarmiento (not present) Steve Sheldon ALTERNATES Roger Yoh (not present) Shawn Dewane (not present) Bruce Whitaker Denis Bilodeau Phil Anthony (arrived 8:15 am)

Quorum of Cte: Yes Quorum of Board: Yes

1. MINUTES OF COMMUNICATIONS AND LEGISLATIVE LIAISON COMMITTEE MEETING HELD SEPTEMBER 5, 2013 RECOMMENDATION: Approve minutes as presented

Approved

MATTERS FOR CONSIDERATION

2. FEDERAL LEGISLATIVE UPDATE RECOMMENDATION: Agendize for October 16 Board meeting: Receive and file

Receive and file

3. STATE LEGISLATIVE UPDATE RECOMMENDATION: Agendize for October 16 Board meeting: Receive and file

Receive and file

INFORMATIONAL ITEMS

4. PUBLIC AFFAIRS OUTREACH REPORT: SEPTEMBER Informational

DETERMINATION OF ITEMS TO BE PLACED ON CONSENT CALENDAR FOR OCTOBER 16 BOARD

Items No. 2-3

DIRECTOR’S ANNOUNCEMENTS/REPORTS Discussion on hiring a

Media Specialist for PA department Request by S. Sheldon to hold large printed agenda packets Staff commended for the passing of Annexation at 10/2 Bod mtg

GENERAL MANAGER’S ANNOUNCEMENT/REPORT Exec Cte will discuss hiring

personnel and other issues ADJOURNMENT

ACTION AGENDA WATER ISSUES COMMITTEE MEETING

Wednesday, October 9, 2013 ` CALL TO ORDER– ESTABLISH QUORUM ACTIONS Cathy Green Denis Bilodeau (arrived 8:15) Vincent Sarmiento Shawn Dewane Philip Anthony

Alternates: Steve Sheldon Kathryn Barr Harry Sidhu (arrived 8:05) Roger Yoh (arrived 8:10) Bruce Whitaker (arrived 8:20)

Quorum of Cte: Yes Quorum of Board: Yes

CONSENT CALENDAR (ITEMS NO. 1 -5) 1. MINUTES OF WATER ISSUES COMMITTEE MEETING HELD SEPTEMBER 11,

2013 RECOMMENDATION: Approve minutes as presented

Approved

2. CONTRACT GBM-2012-2: DESTRUCTION OF MONITORING WELL OCWD-SA22

AND CONSTRUCTION OF REPLACEMENT MONITORING WELL OCWD-SA22R – CHANGE ORDERS AND FILE NOTICE OF COMPLETION (CASCADE DRILLING)

RECOMMENDATION: Agendize for October 16 Board meeting 1. Ratify Change Order No. 1 to Cascade Drilling in the amount of $37,800 and Change

Order No. 2 to Cascade Drilling in the amount of $4,750; and 2. Accept completion of work and authorize filing of Notice of Completion for Contract

No. GBM-2012-3. 3. Destruction of Monitoring Well OCWD-SA22 and Construction of Replacement

Monitoring Well OCWD-SA22R

Approved

3. CONTRACT NO. GA-2013-1, GREEN ACRES PROJECT JAMBOREE ROAD

BRIDGE CROSSING SAN DIEGO CREEK REPAIR PROJECT- CHANGE ORDER AND FILE NOTICE OF COMPLETION (ATLAS-ALLIED, INC.)

RECOMMENDATION: Agendize for October 16 Board meeting: 1. Ratify Change Order No. 1 to Atlas Allied, Inc. in the amount of $8,240; and 2. Accept completion of work and authorize filing a Notice of Completion for Contract

No. GA-2013-1, Green Acres Project Jamboree Road Bridge Crossing San Diego Creek Repair Project

Approved

4. CONTRACT NO. FV-2013-2, REPLACEMENT OF ADMINISTRATION BUILDING

WINDOWS PROJECT - CHANGE ORDERS AND REVISED BUDGET RECOMMENDATION: Agendize for October 16 Board meeting: 1. Ratify Change Order No. 1 to CC Construction & Development, Inc. in the amount of

$1,500 to modify door glass; 2. Authorize issuance of Change Order No. 2 to CC Construction& Development, Inc. in

the amount of $10,176 for replacement of 13 MWDOC windows; and 3. Authorize a revised project budget of $81,176

Approved

5. CONTRACT NO. LAB-2013-1: ADVANCED WATER Q/A LABORATORY LABS 222 & 223 HVAC MODIFICATIONS PROJECT- NOTICE INVITING BIDS RECOMMENDATION: Agendize for October 16 Board meeting: Authorize publication of Notice Inviting Bids for Contract No. LAB-2013-1: Advanced Water Q/A Laboratory Labs 222 & 223 HVAC Modifications Project

Approved

MATTER FOR CONSIDERATION 6. MEMORANDUM OF UNDERSTANDING WITH THE CITY OF SANTA ANA FOR

FUTURE MID BASIN INJECTION SITES RECOMMENDATION: Agendize for October 16 Board meeting Board meeting: Authorize the General Manager to negotiate the Memorandum of Understanding with the City of Santa Ana for four injection well sites and pipeline

Approved

INFORMATIONAL ITEMS 7. GWRS ANNUAL UNIT COST FOR FISCAL YEAR 2012-13 Informational 8. BASIN STORAGE UPDATE FOR WATER YEAR 2012-13 Informational DETERMINATION OF ADDITIONAL ITEMS TO BE PLACED ON CONSENT CALENDAR FOR OCTOBER 16 BOARD MEETING

Items No. 2-6

DIRECTORS’ ANNOUNCEMENTS/REPORTS GENERAL MANAGER’S ANNOUNCEMENTS/REPORTS ADJOURNMENT

ACTION AGENDA ADMINISTRATION/FINANCE ISSUES COMMITTEE MEETING

Thursday, October 10, 2013 CALL TO ORDER – ESTABLISH QUORUM ACTIONS Kathryn Barr - Chair Roger Yoh - Vice Chair Steve Sheldon (not present) Harry Sidhu (not present) Bruce Whitaker

Alternates: Vincent Sarmiento (not present) Philip Anthony Denis Bilodeau (not present) Cathy Green Shawn Dewane

Quorum of Cte:Yes

Quorum of Board:Yes

CONSENT CALENDAR (ITEMS NO. 1 – 6) 1. MINUTES OF ADMINISTRATION/FINANCE ISSUES COMMITTEE MEETING HELD SEPTEMBER 12, 2013 RECOMMENDATION: Approve minutes as presented

Approved

2. MONTHLY CASH CONTROL REPORT RECOMMENDATION: Agendize for October 16 Board meeting: Receive and file Summary Cash and Cash Equivalents Control Report dated September 30, 2013

Approved

3. MONTHLY CASH DISBURSEMENTS DETAIL REPORT RECOMMENDATION: Agendize for October 16 Board meeting: Receive and file the Cash Disbursements Detail Report for the period of August 29 through September 25, 2013

Approved

4. DISTRICT TRAVEL / EXPENSE REPORTS - FY 2012–13 RECOMMENDATION: Agendize for October 16 Board meeting: Receive and file District Travel and Expense reports for FY 2012-2013

Approved

5. AMENDMENT TO AGREEMENT WITH ALSTON & BIRD FOR ADDITIONAL LEGAL REGULATORY COMPLIANCE ISSUES FOR COGENERATION FACILITY RECOMMENDATION: Agendize for October 16 Board meeting: Authorize execution of Amendment No. 1 to Engagement Agreement with Alston & Bird for $20,000 for additional legal work on regulatory compliance issues, bringing the total contract amount to $40,000 ANALYSIS ON

Approved

6. AGREEMENT TO AMARMARK UNIFORM SERVICES FOR DISTRICT UNIFORMS RECOMMENDATION: Agendize for October 16 Board meeting: Authorize execution of Agreement to Aramark Uniform Services for an amount not to exceed $35,000 for uniform services, for the period of November 1, 2013 through October 31, 2016, with an option to renew for an additional two year period based upon performance

Approved

2

MATTERS FOR CONSIDERATION 7. INDEPENDENT AUDITORS REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2013 RECOMMENDATION: Agendize for October 16 Board meeting: Receive and file Audit Reports prepared by Lance, Soll and Lunghard, LLP for the period ended June 30, 2013

Approved

8. INVESTMENT PORTFOLIO HOLDINGS REPORT RECOMMENDATION: Agendize for October 16 Board meeting: Receive and file Investment Portfolio Holdings Report dated September 30, 2013

Approved

9. AGREEMENT TO BUREAU VERITAS FOR HEALTH & SAFETY CONSULTING SERVICES RECOMMENDATION: Agendize for October 16 Board meeting: Authorize execution of an Agreement to Bureau Veritas for an amount not to exceed $181,718 to provide health and safety consulting services

Approved

10. CITY OF ANAHEIM’S NOTICE TO APPRAISE PROPERTY LOCATED ON BALL ROAD AND PHOENIX CLUB DRIVE IN ANAHEIM RECOMMENDATION: Agendize for October 16 Board meeting: Take action as appropriate

Committee Recommendation

Transmit letter to the City of Anaheim that clarifies the District is granting

access to District property due to historical

interagency cooperation, and requesting the

property appraisal results and objecting to a potential condemnation process that

may damage the interagency relationship.

INFORMATIONAL ITEM 10. EMPLOYMENT STATUS REPORT Informational DETERMINATION OF ADDITIONAL ITEMS TO BE PLACED ON CONSENT CALENDAR FOR OCTOBER 16 BOARD MEETING

Items No. 2-10

DIRECTORS' ANNOUNCEMENTS/REPORTS President to appoint a

Director to attend the SAWPA Commission

meeting on 10/15 GENERAL MANAGER’S ANNOUNCEMENTS/REPORTS ADJOURNMENT

Documents

AGENDA REGULAR MEETING BOARD OF DIRECTORS ORANGE … · 2013. 10. 16. · AGENDA REGULAR MEETING BOARD OF DIRECTORS ORANGE COUNTY WATER DISTRICT 18700 Ward Street, Fountain Valley,