_______________________________________________________________________________________________55439 29 Palms Hwy., Yucca Valley, Ca 92284-2503 | 760.365.8333 | www.hdwd.com | email: info@hdwd.com

PUBLIC ADVISORY COMMITTEE (PAC)REGULAR PAC MEETING

AGENDA Monday, January 13, 2020

5:00 PM

Action may be taken on any item listed on the agenda.

“THE MISSION OF THE PUBLIC ADVISORY COMMITTEE IS TO OFFER CITIZEN INPUT ON WATER ANDWASTEWATER POLICIES AND PROGRAMS. MEMBERSHIP IS DESIGNED TO REFLECT THEKNOWLEDGE AND INTEREST OF MAJOR AFFECTED CONSTITUENCIES: RATEPAYERS,BUSINESSES, AND ENGINEERING CONSTRUCTION INDUSTRY, ENVIRONMENTAL ADVOCACY ANDPLANNING.”

COMMITTEE MEMBERSChair Richard Hart, Secretary Michael McBrideJacob Astorian, John Babrowski, Peter Brooks, Jim Byerrum, Thomas Carvellas, Mathew Casey, ValerieDriscoll, Barry Elliott, Scott Gibson, Bill Horne, Emmanuel Lorenzana, Gina Orban, Bill Osgood, MaryJean Puckett, Richard Quinlan, Richard Harlan, Joseph Sabo, and Cathy White.

1. CALL TO ORDER/PLEDGE OF ALLEGIANCE

2. ROLL CALL

3. APPROVAL OF THE AGENDA

4. APPROVAL OF THE MINUTES

4.A. MEETING MINUTES - JULY 8, 2019 AND SEPTEMBER 9, 2019Committee to make a first and second motion for the approval of the July 8, 2019 and September9, 2019 regular meeting minutes.2019 07 08 PAC Meeting Minutes .docx2019 09 09 Regular PAC Meeting Minutes .docx

5. PUBLIC COMMENTThis is the opportunity for members of the public to address the committee on matters within theCommittee’s jurisdiction. Please limit comments to three (3) minutes or less. State law prohibitsCommittee members from discussing or taking action on items not included on the agenda.

6. NOMINATION AND ELECTION OF 2020 OFFICERSCommittee to nominate and elect 2020 officers for the following positions: Chair, Vice-Chair, andSecretary.

7. DISTRICT UPDATES1

55439 29 Palms Hwy., Yucca Valley, Ca 92284-2503 | 760.365.8333 | www.hdwd.com | email: info@hdwd.com

7.A. FINANCIAL STATEMENTS FOR THE MONTH ENDED SEPTEMBER 30, 2019Staff to present information on the District's September 30, 2019 financial statements.September 2019 Financial Statements - Water Fund.pdf

7.B. PRESENTATION ON WATER SERVICE RATES AND CHARGESFOR INFORMATION ONLYHDWD_218 PAC.pdf

7.C. 2018/2019 ANNUAL REPORTStaff to present the Warren Valley Basin Watermaster Annual Report for the period of October 1,2018 to September 30, 2019.warren basin 2019.pptx

7.D. WASTEWATER UPDATEStaff to provide the committee with a wastewater update. For Information Only.1.jpg2.jpg3.jpg4.jpg5.jpg6.jpg7.jpg8.jpg9.jpg10.jpg11.jpg12.jpg13.jpg14.jpg15.jpg16.jpg

8. ROUND TABLE COMMENTS

9. AGENDA ITEMS FOR NEXT MEETING

10. ADJOURNMENT

2

55439 29 Palms Hwy., Yucca Valley, Ca 92284-2503 | 760.365.8333 | www.hdwd.com | email: info@hdwd.com

Materials related to any item on this Agenda submitted to the Board of Directors or Committee Membersafter distribution of the agenda packet are available for public inspection in the Hi-Desert Water Districtoffice at 55439 29 Palms Hwy, Yucca Valley, California during normal business hours. All documentssupporting this agenda are available on the District website at subject to staff’s ability to post thedocuments before the meeting.

Reasonable Accommodation: Upon request, this notice will be made available in appropriate alternativeformats to persons with disabilities. Any person with a disability, who requires a modification oraccommodation to view the agenda or to participate in the public comment portion of the Board meeting,should direct such a request to Ed Muzik, Secretary of the Board of Directors, at 760-365-8333 oredm@hdwd.com. Please allow two business days for your request to be processed.

Disruptive Conduct: If any meeting of the District is willfully disrupted by a person or by a group ofpersons so as to render the orderly conduct of the meeting impossible, a meeting may be recessed or theperson or persons willfully disrupting the meeting may be ordered to leave the meeting. Disruptiveconduct includes addressing the Board or Committee without first being recognized, not addressing thesubject before the Board or Committee, repetitively addressing the same subject, failing to relinquish thepodium when requested to do so, or otherwise preventing the Board or Committee from conducting itsmeeting in an orderly manner. Your cooperation is appreciated.

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Agenda Item No: 4.A

Public Advisory Committee (PAC) Staff ReportMeeting Date: January 13, 2020Submitted by: Codi MixPresented by: Agenda Section:

Subject:MEETING MINUTES - JULY 8, 2019 AND SEPTEMBER 9, 2019

Recommendation:Committee to make a first and second motion for the approval of the July 8, 2019 and September 9, 2019regular meeting minutes.

Fiscal Impact:N/A

Background:N/A

Attachments:2019 07 08 PAC Meeting Minutes .docx

2019 09 09 Regular PAC Meeting Minutes .docx

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MSC1- Motion, seconded and carried. 1

55439 29 Palms Hwy, Yucca Valley, CA 92284 www.hdwd.com

CALL TO ORDERChair Richard Hart called the meeting to order at 5:05 p.m. ROLL CALL:Committee Members Present: Chair Richard Hart, Co-Chair Lois Salzmann-Johnson,Secretary Michael McBride, Jim Byerrum, Thomas Carvellas, Valerie Driscoll, BarryElliott, Scott Gibson, Richard Harlan, Bill Horne, Bill Osgood, Joseph Sabo, Cathy White, Emmanuel LorenzanaCommittee Members Absent: Jacob Astorian, Kenneth Nyquist, Peter Brooks, Gina Orban, Matthew Casey, John Babrowski, Mary Jean Puckett, Richard Quinlan

Staff Present: Ed Muzik, Jonathan Abadesco, and Codi Mix

APPROVAL OF THE AGENDALois Salzmann-Johnson made a motion to approve the agenda.Joseph Sabo seconded the motion.

MSC1 (Johnson/Sabo) motion carried.

Ayes: Chair Richard Hart, Co-Chair Lois Salzmann-Johnson, Secretary Michael McBride, Jim Byerrum, Thomas Carvellas, Valerie Driscoll, Barry Elliott, Scott Gibson, Richard Harlan, Bill Horne, Bill Osgood, Joseph Sabo, Cathy White, Emmanuel LorenzanaNoes:Absent: Jacob Astorian, Kenneth Nyquist, Peter Brooks, Gina Orban, Matthew Casey, John Babrowski, Mary Jean Puckett, Richard QuinlanAbstain:

APPROVAL OF THE MINUTESJoseph Sabo made a motion to approve the minutes from the June 10, 2019 meeting.Michael McBride seconded the motion.

MSC1 (Sabo/McBride) motion carried.

Ayes: Chair Richard Hart, Co-Chair Lois Salzmann-Johnson, Secretary Michael McBride, Jim Byerrum, Thomas Carvellas, Valerie Driscoll, Barry Elliott, Scott Gibson, Richard Harlan, Bill Horne, Bill Osgood, Joseph Sabo, Cathy White, Emmanuel LorenzanaNoes:

Public Advisory Committee Regular Meeting Minutes

Monday, July 8, 20195:00 p.m.

5

MSC1- Motion, seconded and carried. 2

Absent: Jacob Astorian, Kenneth Nyquist, Peter Brooks, Gina Orban, Matthew Casey, John Babrowski, Mary Jean Puckett, Richard QuinlanAbstain:

PUBLIC COMMENTSNone

ITEMSStaff provided an update on the following items:

a. Change Board Meeting Time

Ed Muzik provided a staff report. He provided information on the presented survey. He stated the time change provided opportunity for other public entities to attend.

Richard Hart provided his opinion of the time and input on the suggested time not allowing for public attendance. Joseph Sabo suggested a new time in the morning hours be an option as he felt 7:30 a.m. was too early; however, he stated he didn’t feel Yucca Valley residents would attend during any time option. Scott Gibson stated he was opposed to the time as many meetings are in the evening for public entities. EmmanuelLorenzana brought up weather correlation to the times selected by those other agencies. He also provided information on Director Hough working a regular scheduleand possibly being tired in the evenings after the workday.

Michael McBride stated the time change eliminated potential persons from running for the Board of Directors if they were working individuals. Thomas Carvellas stated that he felt 8 a.m. would be a good suggested time.

Ed Muzik commented on times best for the majority and for staff retention. Joseph Sabostated he was in favor of morning meetings. He said contractors would be able to attend.

The discussion continued with comments regarding younger generation of staff and public; more motivation in morning rather than evening; and public attendance as a whole. Bill Horne stated morning meetings would interrupt his routine. EmmanuelLorenzana requested the Board be considered as they are wonderful and asked for Director Grahams opinion. Director Graham commented on accommodating staff and perhaps an afternoon time be discussed.

Ed Muzik asked preference in daytime and the consensus was between 8:00 a.m. and 3:00 p.m. Consensus stated to change for public and there would still be no public attendance. Lois Johnson stated public attendance hasn’t occurred in as long as she was aware.

PUBLIC COMMENTSNone

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MSC1- Motion, seconded and carried. 3

This item was requested to be brought forth to the committee when more committee members were present.

b. Change of PAC Meeting Time

Jim Byerrum made a motion to change the regularly scheduled meeting time from 5:00 p.m. to 4:00 p.m. Cathy White seconded the motion.

MSC1 (Byerrum/White) motion carried.

Richard Hart made an additional motion to table this item for a future agenda when more members were present. Bill Horne seconded the motion.

MSC1 (Hart/Horne) motion carried.

Ayes: Chair Richard Hart, Secretary Michael McBride, Jim Byerrum, Thomas Carvellas, Barry Elliott, Scott Gibson, Richard Harlan, Bill Horne, Bill Osgood, Joseph Sabo, Cathy White, Valerie DriscollNoes: NoneAbsent: Jacob Astorian, Kenneth Nyquist, Peter Brooks, Gina Orban, Matthew Casey, John Babrowski, Mary Jean Puckett, Richard QuinlanAbstain: Co-Chair Lois Salzmann-Johnson

c. Smart Meter Functionality and Efficiency ReportEd Muzik provided staff report.

PUBLIC COMMENTSNone

For information only.

d. Consideration to Replace Billing and Accounting SoftwareJonathan Abadesco presented the staff report. Richard Hart inquired about what prompted the change, and Jonathan stated overall productivity has been affected as the District has experienced over 30 issues in a two-month period. Ed Muzikadded that issues have continued with software problems; high maintenance fees; and engineering software staff turnover is high. He stated software changes always cost more and takes longer than estimated. Richard Hart stated sounds like a good move. Joseph Sabo asked if a demo has been given. Jonathan stated yes and it was very user friendly. Joseph asked about storage and security. Ed provided storage information and Jonathan added details on banking information being separate from the program. Scott Gibson stated he supports the change. Valerie Driscoll stated she agreed with change however inquired

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MSC1- Motion, seconded and carried. 4

about how we selected these two companies, and Ed stated reputation was considered. He added Caselle had a strong reputation.

PUBLIC COMMENTSNone

For information only.

e. Assessment District Update: Change of UseEd Muzik presented the staff report. Richard Hart asked if the closing of businesses will affect the district. Ed clarified that property owners will be responsible not the leasing business. Emmanuel Lorenzana asked about compacities shared, and Ed responded with the more properties that come in,the more the cost will be shared. The balanced assessed was discussed.

Scott Gibson made a motion to support the Change of Use. Thomas Carvellas seconded the motion.

MSC1 (Gibson/Carvellas) motion carried.

Ayes: Chair Richard Hart, Co-Chair Lois Salzmann-Johnson, Secretary Michael McBride, Jim Byerrum, Thomas Carvellas, Valerie Driscoll, Barry Elliott, Scott Gibson, Richard Harlan, Bill Horne, Bill Osgood, Joseph Sabo, Cathy White, Emmanuel LorenzanaNoes:Absent: Jacob Astorian, Kenneth Nyquist, Peter Brooks, Gina Orban, Matthew Casey, John Babrowski, Mary Jean Puckett, Richard QuinlanAbstain:

A Wastewater Facility update video shown. Scott Gibson commented on the appreciation of the video being done in-house rather than using a consultant.

For information only. ROUND TABLE COMMENTSLois Johnson stated that after 37 years she will be moving to northern California. She was an original PAC member and she was thanked for her time on the committee.

Bill Horne inquired about the estimated cost of plant use, and Ed Muzik stated he would research the information.

Valerie Driscoll asked about PAC getting input from residents, and Ed stated it is thedetermination of the PAC member to speak with others and bring the information and discussions back to the committee. Director Sarann Graham offered taking District brochures or pamphlets to give to residents. Scott Gibson stated this committee is

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MSC1- Motion, seconded and carried. 5

mandated by the State to provide the Board of Directors resident feedback on items as a resident.

Michael McBride commented on Lois Johnson leaving and her time serving on the committee. He also asked about the Chief Plant Operator being a Class 4 certification and inquired to know if there was a requirement for him to get a Grade 5.

AGENDA ITEMS FOR NEXT MEETING1. Revisit the possibility of changing meeting times

Next Meeting: September

ADJOURNMENTThe meeting was adjourned at 6:25 p.m.

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MSC1- Motion, seconded and carried. 1

55439 29 Palms Hwy, Yucca Valley, CA 92284 www.hdwd.com

CALL TO ORDERChair Richard Hart called the meeting to order at 5:00 p.m. ROLL CALL:Committee Members Present: Chair Richard Hart, Secretary Michael McBride, Richard Harlan, Richard Quinlan, Jim Byerrum, Barry Elliott, Gina Orban, Cathy White, Emmanuel Lorenzana, Thomas Carvellas

Committee Members Absent: Bill Horne, Bill Osgood, Jacob Astorian, John Babrowski, Joseph Sabo, Mary Jean Puckett, Matthew Casey, Peter Brooks, Scott Gibson, Valerie Driscoll

Staff Present: Mike Popichak (Interim General Manager), Jennifer Poland, Doug Culbert, and Codi Mix

APPROVAL OF THE AGENDARichard Harlan made a motion to approve the agenda.Richard Quinlan seconded the motion.

MSC1 (Harlan/Quinlan) motion carried.

PUBLIC COMMENTSNone

DISTRICT UPDATESMike Popichak provided the committee with an introduction.

Staff provided an update on the following items:a. Wastewater – Doug Culbert gave an overall on the Wastewater Facility. He

presented the committee with a photo slide show of the facility and the updates.

Michael McBride asked if testing has begun for contamination purposes.

Richard Harlan requested information on stagnate water and aeration and Doug Culbert provided information. A discussion regarding the topic was held.

Thomas Carvellas inquired about the time before start up would occur, and Doug provided information on a flexible date. Jennifer Poland gave information on a comprehensive list of items that need to be performed prior to the start up. It was stated that the tentative October 15, 2019 date will most likely need to be moved out.

Public Advisory Committee Regular Meeting Minutes

Monday, September 9, 20195:00 p.m.

10

MSC1- Motion, seconded and carried. 2

Clean water testing was inquired by the committee, and Doug Culbert stated the testing would start on October 7, 2019. Jennifer Poland said the facility, pump stations, and collection system are all on schedule for completion. She also stated staff is currently working on the expanded use loan and policies.

Illegal connections were discussed. Staff provided information on these findings and fines involving illegal connections.

Jennifer Poland gave details on the prohibition dates revision with the Regional Water Quality Control Board being pushed out to accommodate the schedule. She stated the Board is aware and the formal process will need to be conducted.

Richard Harlan asked if the beginning phase of start-up functionality has been developed. Doug Culbert stated discussions have been had and all factors are being considered. He said a plan is in place and adjustments will be made as necessary. It was stated that different flow charts are being developed and will be used accordingly. Mike Popichak provided information on calculations and stated the District has great staff and there are no foreseeable issues.

The schedule of the Yucca Mesa Rd. and Barron pump station was asked by Richard Quinlan, and Jennifer Poland stated yes, the Barron pump station is on schedule.

Jennifer Poland provided information on sales tax for the assessment district and said assessment engineers should be providing the District information relatively soon. O&M fee information was explained to the committee and the committee’s recommendation was to place this on property taxes. Jennifer stated the interim way of billing on the water bill will be presented to the Finance Committee and then will possibly be placed on the property tax for the next filing year.

Specific water bill asked of Richard Hart, and Jennifer Poland clarified yes, specific. The opinion of the committee was asked by staff. Richard Harlan stated the billing will be confusing but why it is necessary is understood. A discussion of non-payment of a water bill was held, and Jennifer provided information on non-payment of property taxes.

Study of rent increase asked of Emmanuel Lorenzana, and Jennifer Poland stated she is unaware of a rent study.

Richard Harlan asked if the facility would be manned 24 hours, and Doug Culbert stated no. Security was discussed. Doug provided information on motion on fence perimeter for security measures. Mike Popichak said remote monitoring and alarms will also be in place.

Richard Harlan asked about resurfacing of Onaga Trail, and Jennifer Poland gave information on pipeline replaced and waiting for wastewater prior to resurfacing.

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MSC1- Motion, seconded and carried. 3

Richard Quinlan asked about debris in wastewater pipelines, and Jennifer Poland provided information on educational projects and FOG for residents.

Codi Mix supplied the committee with information on the Ribbon Cutting Ceremony for the Wastewater Facility and collection system. Jennifer Poland commented on sponsorships.

Jennifer Poland commented on water rates.

PUBLIC COMMENTSNone

For information only. ROUND TABLE COMMENTSGina Orban asked about Phase 2 and 3, and Jennifer Poland stated Phase 1 information is only available at this time.

Richard Harlan asked about funding for the next phases, and Jennifer Poland stated staff is actively researching grants.

Cathy White commented on fecal transplant and asked if this could be conducted. MikePopichak provided detailed information on the wastewater process versus that done medically.

Richard Quinlan commented on his overall happiness of the District and thanked Districtstaff for the accomplishments and work performed. He also stated Sukut is doing a great job.

Richard Hart thanked staff for the presentation.

Richard Harlan asked about the administrative leave of the General Manager, Ed Muzik, and Jennifer Poland stated staff does not have information on the subject.

Barry Elliott inquired on the time frame of areas 3 and 4. Jennifer Poland stated the schedule is being revised.

Thomas Carvellas said good job and thank you to all staff.

Richard Harlan asked about grants and loans. Staff proved information and stated Zach Frater is the point of contact.

AGENDA ITEMS FOR NEXT MEETING1. Possibly of meeting time changes2. Temporary appointment of Co-Chair

Next meeting scheduled for October 21, 2019.12

MSC1- Motion, seconded and carried. 4

ADJOURNMENTThe meeting was adjourned at 5:46 p.m.

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Agenda Item No: 7.A

Public Advisory Committee (PAC) Staff ReportMeeting Date: January 13, 2020Submitted by: Jonathan AbadescoPresented by: Jonathan P. Abadesco, Chief Financial OfficerAgenda Section:

Subject:FINANCIAL STATEMENTS FOR THE MONTH ENDED SEPTEMBER 30, 2019

Recommendation:Staff to present information on the District's September 30, 2019 financial statements.

Fiscal Impact:TBD

Background:Staff has reviewed the revenues, expenses and changes in net position for the water fund through September2019. Attached is the unaudited Statement of Revenues, Expenses, and Changes in Net Position for threemonths for fiscal year ending June 2020.

The overall results for the three months ending in September 2019 reflect a change in the net position of$(389,663) compared to the budgeted change in net position through September 2019 of $(81,261).

Attachments:September 2019 Financial Statements - Water Fund.pdf

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Variance VarianceBudget Actual Fav / (Unf) Budget Actual Fav / (Unf)

Operating revenues $ 2,330,840 2,492,992 162,152 2,330,840 2,492,992 162,152

Less: Operating expenses (2,609,043) (2,739,170) (130,127) (2,609,043) (2,739,170) (130,127)

Operating income before depreciation & amortization (278,203) (246,178) 32,025 (278,203) (246,178) 32,025

Less: Depreciation & amortization (535,670) (535,670) (0) (535,670) (535,670) (0)

Operating income / (loss) (813,872) (781,848) 32,025 (813,872) (781,848) 32,025

Non-operating revenue / (expense), net 668,432 318,863 (349,569) 668,432 318,863 (349,569)

Net income / (loss) before (145,441) (462,985) (317,544) (145,441) (462,985) (317,544) capital contributions

Capital contributions 64,180 73,322 9,142 64,180 73,322 9,142

Change in net position (81,261) (389,663) (308,402) (81,261) (389,663) (308,402)

Net position, beginning of period 41,090,454 41,090,454

Net position, end of period $ 40,700,790 40,700,790

Hi-Desert Water District

Statement of Revenues, Expenses and Changes in Net Position - Water Fund

For the Quarter Ended September 30, 2019

(UNAUDITED)

QUARTER ENDED SEPTEMBER 2019 YEAR TO DATE - SEPTEMBER 2019

15

Variance VarianceOperating revenues: Budget Actual Fav / (Unf) Budget Actual Fav / (Unf) Notes

1 Water consumption sales $ 1,812,897 2,014,333 201,435 1,812,897 2,014,333 201,435 12 Connection fees & surcharges 398,148 401,589 3,440 398,148 401,589 3,440 3 Readiness to serve fees 45,404 - (45,404) 45,404 - (45,404) 14 Other charges 74,391 77,071 2,680 74,391 77,071 2,680

5 Total operating revenues $ 2,330,840 2,492,992 162,152 2,330,840 2,492,992 162,152

Notes:1 Water consumption sales for the 1st quarter exceeded the budget by $201K.

Standby fees is zero for the 1st quarter primarily due to timing difference of payments received and recorded from the County of San Bernardino

Hi-Desert Water District

Operating Revenues

For the Quarter Ended September 30, 2019

(UNAUDITED)

QUARTER ENDED SEPTEMBER 2019 YEAR TO DATE - SEPTEMBER 2019

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Variance VarianceOperating expenses: Budget Actual Fav / (Unf) Budget Actual Fav / (Unf) Notes

6 Source of supply $ 480,375 314,104 166,271 480,375 314,104 166,271 27 Pumping & water treatment 538,865 633,944 (95,079) 538,865 633,944 (95,079) 38 Transmission & distribution/CRP 411,866 575,615 (163,749) 411,866 575,615 (163,749) 49 Customer service/Billing/Acctg 342,883 420,985 (78,102) 342,883 420,985 (78,102) 5

10 Administrative/Engineering 835,055 794,523 40,533 835,055 794,523 40,533

11 Total operating expenses $ 2,609,043 2,739,170 (130,127) 2,609,043 2,739,170 (130,127)

Notes:2 Source of supply . Actual purchases accounts for 497 AF, where the budget amount is 253 AF more. Less water purchase was made

to control nitrate levels to normal levels.3 Pumping & Water Treatment . Actual amount exceeded budgeted amount due to payment of CalPERS Unfunded amount

(allocated portion of $86K), and increase in radio read meters of $10K.4 Transmission & Distribution . Actual amount exceeded budgeted amount due to payment of CalPERS Unfunded amount

(allocated portion of $118K), increase in leases and rents for 2 months for the excavator, and personnel costs of $30K.5 Customer service/billing/acctg . Actual amount exceeded budgeted amount due to payment of CalPERS Unfunded amount

(allocated portion of $78K).

Hi-Desert Water District

Operating Expenses

For the Quarter Ended September 30, 2019

(UNAUDITED)

QUARTER ENDED SEPTEMBER 2019 YEAR TO DATE - SEPTEMBER 2019

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Variance VarianceNon-operating revenue / (expense): Budget Actual Fav / (Unf) Budget Actual Fav / (Unf) Notes

15 Property taxes and assessments $ 398,241 - (398,241) 398,241 - (398,241) 616 Interest earnings 30,014 18,564 (11,450) 30,014 18,564 (11,450) 17 CRP Surcharge 268,559 267,491 (1,068) 268,559 267,491 (1,068) 18 Morongo Basin Project surcharge - 51,217 51,217 - 51,217 51,217 19 Lease payment - Morongo Basin - - - - - - 20 Interest Exp-Bond, Series 2013 (34,895) (34,362) 533 (34,895) (34,362) 533 21 Other non-operating revenues, net 6,512 15,952 9,440 6,512 15,952 9,440

22 Total non-operating revenues (expenses), net $ 668,432 318,863 (349,569) 668,432 318,863 (349,569)

Notes:6 Property Taxes and Assessment . Payments from the County of San Bernardino are not yet received as of September 2019.

Hi-Desert Water District

Non-Operating Revenues (Expenses), net

For the Quarter Ended September 30, 2019

(UNAUDITED)

QUARTER ENDED SEPTEMBER 2019 YEAR TO DATE - SEPTEMBER 2019

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Variance VarianceCapital contributions: Budget Actual Fav / (Unf) Budget Actual Fav / (Unf)

25 Meter sales $ 54,180 54,180 - 54,180 54,180 - 726 New installations 10,000 19,142 9,142 10,000 19,142 9,142

27 Total capital contributions $ 64,180 73,322 9,142 64,180 73,322 9,142

Notes:7 Meter sales . On target, 10 sold meters for the 1st quarter of FY2019/2020.

Hi-Desert Water District

Capital contributions

For the Quarter Ended September 30, 2019

(UNAUDITED)

QUARTER ENDED SEPTEMBER 2019 YEAR TO DATE - SEPTEMBER 2019

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Assets:

Current assets $ 15,772,661 Non-current assets 37,715,293

Total assets 53,487,954

Deferred outflows of resources 1,603,966

Liabilities and Net Assets:

Current liabilities 2,112,123 Non-current liabilities 12,136,035

Total Liabilities 14,248,158

Deferred inflows of resources 142,971

Net position:

Total net position 40,700,791

Hi-Desert Water DistrictStatement of Net Position - Water Fund

For the Quarter Ended September 30, 2019(UNAUDITED)

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A B C DAssets and Deferred Outflows of Resources:

Current assets:

Cash and cash equivalents $ 5,338,128 Accounts receivable , net 1,483,766 Inventory 717,404 Prepaid - pipeline 720,409 Prepaids - other 149,896 Accounts Rec - Wastewater 7,328,722 Other current assets 34,337

Total current assets 15,772,661

Non-current assetsCapital assets - not being depreciated Construction in process 1,307,691

Depreciable capital assets, net Land 806,803 Easements 337,851 Wells, boosters, tanks, mains, hydrants & meters 55,327,713 Equipment 7,839,255 Recharge ponds & pipeline 3,474,804 Site #3 2,459,164 Blending Facility 792,739 Nitrate facility 2,738,124

Less: accumulated depreciation (37,368,851)

Total depreciable capital assets, net 36,407,601

Total non-current assets 37,715,293

Total assets 53,487,954

Deferred outflows of resourcesDeferred Outflows - CalPERS Pension 1,424,028 Deferred Outflows - OPEB 179,938

Total deferred outflows of resources 1,603,966

Total assets and deferred outflows of resources 55,091,920

Liabilities, Deferred Inflows of Resources and Net Position

Current liabilitiesAccounts payable 678,986 Accrued liabilities 553,313 Loans, bonds and notes payable, current portion 450,000 Customer deposits & prepaid meters 429,824

Total current liabilities 2,112,123

Non-current liabilitiesLoans, bonds and notes payable 2,025,000 Bond Premium 272,739 Net OPEB Liability - GASB 75 4,398,060 Net Pension Liability - CalPERS 5,440,236

Total non-current liabilities 12,136,035

Total Liabilities 14,248,158

Deferred inflows of resources Deferred Inflows - CalPERS 142,971

Net position: Net investment in capital assets 36,407,601 Restricted - Unrestricted 4,293,190

Total net position 40,700,791

Total liabilities, deferred inflows of resources and net position $ 55,091,920

Hi-Desert Water DistrictStatement of Net Position - Water Fund

For the Quarter Ended September 30, 2019(UNAUDITED)

21

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Agenda Item No: 7.B

Public Advisory Committee (PAC) Staff ReportMeeting Date: January 13, 2020Submitted by: Jonathan AbadescoPresented by: Jonathan Abadesco, Chief Financial OfficerAgenda Section:

Subject:PRESENTATION ON WATER SERVICE RATES AND CHARGES

Recommendation:FOR INFORMATION ONLY

Fiscal Impact:TBD

Background:New water service rates and charges will be presented by staff at the Public Advisory Committee.

Attachments:HDWD_218 PAC.pdf

23

PRESENTATION ON WATER SERVICERATES & CHARGES

Public Advisory Committee MeetingJanuary 13, 2019

24

➤ 24,000 people served

➤ 57-square-mile service area

➤ 16 storage tanks

➤ 12 active wells

➤ 308+ miles of pipeline

➤ 100% groundwater, with supplemental water to recharge the basins

ABOUT THE DISTRICT

25

RATE SETTING PROCESS

218 Notice were mailed to customers, explaining the proposed rates

Board of Directors will vote on whether to adopt the rates after considering public comments to ensure what is best for the District

Independent rates expert➤ Conducted a 5-year financial plan➤ Analyzed the cost-of-service to each customer class ➤ Designed rates that are fair and equitable

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1. Rates Notice – mailed to customers in early December 2019

2. Information on District website –www.HDWD.com

3. Online bill estimator tool

4. Staff assistance to determine bill impact

5. Community Meeting – January 9th, 2020

6. Rate Hearing – January 22nd, 2020

CUSTOMER OUTREACH

27

WHY RATES NEED TO CHANGE

Operating expenses have increased but rates remained the

same since 2011

District is paying more for imported water, treatment,

energy, meter service, customer

billing and collection, and

administrative costs

Revenue is not adequate to meet

financial obligations

Must maintain adequate cash reserves for a

strong credit rating and for

emergencies

28

1. Tiered rates would apply to all customers

2. Three tier thresholds for all customer classes, instead of four

3. Decrease in the monthly fixed charge for residential customers

SUMMARY OF CHANGES

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WHAT WOULD CHANGETiered Rate Structure

THREE TIERS, instead of four, for all customer classes

Based on the average monthly indoor and outdoor water use among customers, as determined in the cost-of-service study

Customers who use water efficiently inside their homes and outdoors will fall into the first two, lowest-priced tiers

High water users will see a slight increase in their bills due to revised tier widths

➤

➤

➤

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TIER 1 – Indoor Water UseTIER 2 – Outdoor Water UseTIER 3 – Likely Excessive Use

Condensing tier thresholds encourages conservation

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WHAT WOULD CHANGETiered and Volumetric Rates

Tiered rates would apply to all customersIncluding California Irrigation Management Information System (CIMIS), Irrigation customers and bulk water users whose water use is not currently billed by tier

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Volumetric rates vary; it cover expenses such as purchased water, electricity and chemicals for treatment

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WHAT WOULD CHANGEMonthly Fixed Charge

The monthly fixed charge would decrease for residential customers in 2020 because the Morongo Pipeline surcharge is being eliminated

Irrigation and CIMIS customers would be subject to the monthly fixed charge

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The monthly fixed charge covers non-fluctuating costs such as capital project, meters, billing, and customer service

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BILL IMPACTSEstimated Bill Impact by Customer Class

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Use the online bill estimator tool at www.hdwd.com

Get personalized help from HDWD staff by calling 760-365-8333 or emailing info@hdwd.com

WHAT DO THE RATES MEAN FOR YOU?

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Questions?

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Agenda Item No: 7.C

Public Advisory Committee (PAC) Staff ReportMeeting Date: January 13, 2020Submitted by: Codi MixPresented by: Tony Culver, Director of Water OperationsAgenda Section:

Subject:2018/2019 ANNUAL REPORT

Recommendation:Staff to present the Warren Valley Basin Watermaster Annual Report for the period of October 1, 2018 toSeptember 30, 2019.

Fiscal Impact:N/A

Background:Report presented annually to the Warren Valley Basin Watermaster.

Pursuant to the Judgment in the matter of Hi-Desert Water District vs. Yucca Water Company Ltd., CaseNumber 172103, San Bernardino, California, dated September 16, 1977, (Judgment) Hi-Desert Water District(HDWD) through its Board of Directors was appointed by the Court as Watermaster to administer theprovisions of the Judgment. The Watermaster was directed to formulate a proposal for a physical solution tothe continuing overdraft of the Warren Valley Basin. The Judgment did not specifically require annual reportingof water levels or water production information, but instead required only that a solution to the overdraft bedeveloped. A solution was formulated and presented by Kennedy/Jenks/Chilton as the Warren Valley BasinManagement Plan, dated January 31, 1991 which was adopted by the Watermaster on May 10, 1991. Subsequently, on February 10, 1992, Judge Phillip Schaefer of the West District for the County of SanBernardino Superior Court ordered the Warren Valley Basin Watermaster to report to the Court on an annualbasis the water levels in the basin and any matters that might impact the safe yield of the basin.

In December 1997, the Watermaster petitioned the Court to modify its Order of February 10, 1992, whichrequired the annual determination of the safe yield of the Warren Valley Basin, and instead to require that theWatermaster report to the Court annually on conditions affecting water supply, use and disposal and toimplement a groundwater monitoring program for basin management. The Watermaster undertook this actionbecause, in general, a safe yield determination is made for the purpose of allocating water resources amongcompeting claims of right. In this case, HDWD is solely responsible for purchasing supplemental water. Securing supplemental supplies and monitoring water levels to ensure that there is adequate water in storageto meet the demands of the Basin is consistent with good water management practices and is a better use ofavailable funds than preparing safe yield determinations. The Court subsequently approved the requestedchange.

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Attachments:warren basin 2019.pptx

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WARREN VALLEY BASIN WATERMASTERSummary for the period of:

October 1, 2018 – September 30, 2019

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WATER PRODUCED

Water produced for the 2018-2019 water year from within the Warren Valley Basin totaled:

2,860 AF an increase from the 2017-2018 water year of 2,622 AF.

Increase is due to construction of the sewer project and Well 24 which is in Ames Means Basin was down for about 4 months due to a water quality issue.

Well 24 normally produces close to 700 acre feet per year and this year was only 240 acre ft.

HDWD produced a total of 2787 acre feet which is 107 acre feet less than last year.

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JOSHUA TREE RETREAT CENTER

JTRC produced 39 acre feet which is 28 acre feet less than last year .

JTRC has an allotment of *80 acre feet per year.

They continue to fix leaks and are trying to conserve water.

Our working relationship is really good right now.

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HAWKS LANDING

BLUE SKIES

HLBS produced 274 acre feet this water year.

They produced 37 acre feet less than last year.

HLBS has an 585 ace foot allotment.

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AMES BASIN

Water deliveries from sources outside the Warren Valley Basin were limited to water produced by HDWD Well 24e and totaled:

240 AF which accounted for 9.4% of the water produced by HDWD during water year 2018-19.

HDWD is allotted 703 acre feet from the Ames/Means basin

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TOP PRODUCING WELLS WITHIN THE WARREN VALLEY BASIN

Well ID AF Percent of Warren Basin Total Percent of HDWD Total

11W 303 10.46 11.73

9W 328 11.32 12.69

14E 565 19.50 21.87

HLBS-BS1 274 9.46 N/A

WELL 20W

WELL 12E

407

394

14.05

13.60

15.75

15.25

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STATE WATER PROJECT

Imported supplies of State Water Project (SWP) water for artificial groundwater recharge use totaled:

2,167 AF adjusted by 2% water loss factors = 2,125 AF

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GROUNDWATER SURFACE

ELEVATION CHANGES

All wells have shown a rise is surface elevation of 1 to 12 feet from last year.

Even with Decrease in recharge water the levels still increased.

This is due to more rainfall and percolation factors. USGS studies state the percolation rate is between 1.2 years to 17 years depending on sediment clogging the sites.

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WATER QUALITY

Nitrate levels in most wells stayed consistent well below the MCL.

Well 11’s nitrate level has slowly increased so we are installing a nitrate monitoring probe that will shut off the well if the nitrate level gets close to the MCL

TDS levels remained constant with no significant increases.

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PRECIPITATION The average precipitation for

2018/2018 is 11.07 inches.

Precipitation Water year 2017/2018 was only 6.77 inches.

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QUESTIONS

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Agenda Item No: 7.D

Public Advisory Committee (PAC) Staff ReportMeeting Date: January 13, 2020Submitted by: Doug CulbertPresented by: Doug Culbert, Chief Plant OperatorAgenda Section:

Subject:WASTEWATER UPDATE

Recommendation:Staff to provide the committee with a wastewater update. For Information Only.

Fiscal Impact:None

Background:As of January 8, 2020 there were 250 homes connected to the collection system. The first load of seed, 6000gallons of highly concentrated sludge from Victor Valley, was received on Dec 16 with two more truck loadssince then and a couple more coming over the next two weeks.

The Equalization Tank is full and we are now pumping through the plant everything that comes in and thensome. We began to manually recirculate the sludge in the aeration basins until it was full enough to flow into theMBR tank and recirculate automatically which occurred on January 7. We are receiving approximately25,000-40,000 gallons per day of raw sewage. Both of the plant aeration basins are full. One is used foroperation and one for storage to keep the microorganisms warm and happy in the second aeration basin beforetransferring to treatment side.

We are operating one train of the MBRs and we are returning sludge for treatment automatically. Before flowinginto the MBRs we used a small hose and pump to return as best we could. We were able to nitrify with thatprocess some but anticipate more nitrification with the full basin and designed return activated sludge. Webegan pumping our Permeate (clean finished water) to off-spec pond on December 8th. The turbidity level afterjust two hours of MBR treatment was 0.05 NTU in our effluent. (0.20 is the maximum limit)

We collected our first composite raw sewage samples to be tested at Babcock Laboratory and duplicated thetests in our lab with our personnel for comparison purposes. So far the preliminary results have shown that ourtesting procedures are correct as we are getting very similar results. This will allow for us to have preliminaryresults much quicker before the regulatory results are received. This gives us a more up to date conditionassessment of our treatment process and allows us to make changes if needed. Some results may take aweek to ten days to receive from the Lab where we can have results in less than 24 hours depending on thetest.

The Collections team is busy keeping the flows going and making sure no clogs happen in the system. Barronlift station went online the week of December 9. 51

Operational testing was done on the pumps with potable water on constant flow into the lift station to confirmthat the pumps started and stopped automatically on the set points. The station was put in automatic mode onThursday, December 12 to start the contractual 7-day test for functionality. There is no communication with thelift station until the antenna is installed and SCADA can talk to the computer at the Water Reclamation Facility.Flows aren’t enough for the station to run on a regular basis but staff is checking it daily to make sure pumpsare functional. Collections staff monitor the station during the weekdays and WRF staff monitors on weekendswith daily site visits.

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