Agenda packet — Mayor and City Council, January 19, 2022 (part 2 of 3)

Consent Calendar

City of San Bernardino
Request for Council Action

Date: January 19, 2022

To: Honorable Mayor and City Council Members

From: Robert D. Field, City Manager
By: David Green, Interim Chief of Police

Subject: Accept the 2021 Emergency Management Performance Grant (All Wards)

Recommendation
Adopt Resolution No. 2022 -14 of the Mayor and City Council of the City of San Bernardino, California, authorizing the acceptance of the Fiscal Year 2021 Emergency Management Performanc e Grant and increasing the Fiscal Year 2021/22 Adopted Budget grant revenue and expenditures by $31,330.

Background
The City of San Bernardino has participated in the Emergency Management Performance Grant (EMPG) Program for several years. The purpose of this grant program is the support of emergency management at the local, tribal, and state levels to prepare for, mitigate, respond to, and recover from emergencies or disaster incidents.

The Police Department currently has the responsibility for this grant and has previously used EMPG funds to improve its response capabilities during disasters and emergency events. For the 2021 Fiscal Year, the City received $31,330 in funds from the EMPG Program.

Discussion
The San Bernardino Police Department receives n on-competitive formulary grant funds from the EMPG Program as a sub -recipient of the County of San Bernardino. The County charges an administrative fee of 5% and distributes the remaining grant funds among the cities and towns within the County. Each city’s portion is determined on a per capita basis. The City of San Bernardino’s portion of this award for 2021 was $31,330.

The EMPG Program is designed to aid the funding of projects related to preparing for, responding to, mitigating, and recovering from e mergencies or disasters, both natural and man -made. This is a reimbursement grant that is awarded each year and has a two-year performance period. For the FY 2021 EMPG funds, the performance period will last from July 1, 2021, through June 30, 2023. During that period, the Police Department will be responsible for the completion of grant projects and the compliance with grant terms.

2021-2025 Key Strategic Targets and Goals
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The request to authorize the receipt and expenditure of FY 2021 EMPG funds aligns with Key Target No. 1: Financial Stability: Implement, maintain, and update a fiscal accountability plan.

Fiscal Impact
The fiscal impact to the city is a budget amendment of $31,330 to revenue and expenditures in the FY 2021/22 adopted budget. Grant acc ount numbers will be established after the approval of this item. This grant does include a match requirement of $31,330 and that match will be fulfilled through in -kind salary and benefits costs of the employees assigned to manage this grant program.

Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California, adopt Resolution No. 2022 -14, authorizing the acceptance of the FY 2021 Emergency Management Performance Grant and increasing the FY 2021/22 Adopted Budget grant revenue and expenditures by $31,330.

Attachments
Attachment 1 Resolution 2022-14 - EMPG Acceptance Resolution Attachment 2 EMPG Grant Agreement Documents

Ward: All

Synopsis of Previous Council Actions:

July 2, 2021 Mayor and City Council ad opted Resolution No. 2021 -134, authorizing the receipt, obligation, and expenditure of the FY2020 EMPG grant and authorizing the Director of Finance to amend the FY2021/22 adopted budget.

July 15, 2020 Mayor and City Council adopted Resolution No. 2020 -168, authorizing the receipt, obligation, and expenditure of the FY2019 EMPG grant and authorizing the Director of Finance to amend the FY2020/21 adopted budget.

March 6, 2019 Mayor and City Council adopted Resolution No. 2019 -36, authorizing the receipt , obligation, and expenditure of the FY2018 EMPG grant and authorizing the Director of Finance to amend the FY2018/19 adopted budget.

March 7, 2018 Mayor and City Council adopted Resolution No. 2018 -63, authorizing the receipt, obligation, and expenditur e of the FY2017 EMPG grant.

January 9, 2017 Mayor and City Council adopted Resolution No. 2017 -02 approving the receipt, obligation, and expenditure of the FY2016 EMPG grant of $38,549.
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Resolution No. 2022-14

Resolution 2022-14

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RESOLUTION NO. 2022-14

RESOLUTION OF THE MAYOR AND CITY COUNCIL OF

THE CITY OF SAN BERNARDINO, CALIFORNIA,

AUTHORIZING THE ACCEPTANCE OF THE F ISCAL
YEAR 2021 EMERGENCY MANAGEMENT

PERFORMANCE GRANT AND INCREASING THE FISCAL
YEAR 2021/22 ADOPTED BUDGET GRANT REVENUE
AND EXPENDITURES BY $31,330

WHEREAS, the City of San Bernardino has been awarded the 2021 Emergency Management Performance Grant in the amount of $31,330; and WHEREAS, the City will use the funding to improve its ability to prepare for, mitigate, respond to, and recover from disaster or emergency events.

BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:

SECTION 1. The above recitals are true and correct and are incorporated herein by this reference.

SECTION 2 . The City Manager is hereby authorized to accept the 2021 Emergency Management Performance Grant (EMPG) in the amount of $31,330 for the grant period of July 1, 2021, through June 30, 2023.

SECTION 3 . The D irector of Finance is hereby authorized to amend the FY 2021/22 Adopted Budget, appropriating $31,330 in both revenue and expenditures.

SECTION 4. The Mayor and City Council finds this Resolution is not subject to the California Environmental Quality Act (CEQA) in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty, as in this case, that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

SECTION 5. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and to this end the provisions of this Resolution are declared to be severable.

SECTION 6. Effective Date. This Resolution shall become effective immediately.

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Attachment: Attachment 1 - Resolution 2022-14 - EMPG Grant Acceptance Resolution [Revision 1] (8699 : Accept the 2021 Emergency Resolution No. 2022-14

Resolution 2022-14

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APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the City Clerk this ___ day of __________ 2022.

John Valdivia, Mayor
City of San Bernardino

Attest:

Genoveva Rocha, CMC, City Clerk

Approved as to form:

Sonia Carvalho, City Attorney

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Attachment: Attachment 1 - Resolution 2022-14 - EMPG Grant Acceptance Resolution [Revision 1] (8699 : Accept the 2021 Emergency Resolution No. 2022-14

Resolution 2022-14

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CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO) ss

CITY OF SAN BERNARDINO )

I, Genoveva Rocha, CMC, City Clerk, hereby certify that the attached is a true copy of Resolution No. 2022-14, adopted at a regular meeting held on the ___ day of _______ 2022 by the following vote:

Council Members: AYES NAYS ABSTAIN ABSENT
SANCHEZ _____ _____ _______ _______
IBARRA _____ _____ _______ _______
FIGUEROA _____ _____ _______ _______
SHORETT _____ _____ _______ _______
REYNOSO _____ _____ _______ _______
CALVIN _____ _____ _______ _______
ALEXANDER _____ _____ _______ _______

WITNESS my hand and official seal of the City of San Bernardino this ___ day of ____________ 2022.

Genoveva Rocha, CMC, City Clerk

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Attachment: Attachment 1 - Resolution 2022-14 - EMPG Grant Acceptance Resolution [Revision 1] (8699 : Accept the 2021 Emergency

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Attachment: Attachment 2 - EMPG Grant Agreement Documents (8699 : Accept the 2021 Emergency Management Performance Grant (All

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Consent Calendar

City of San Bernardino
Request for Council Action

Date: January 19, 2022

To: Honorable Mayor and City Council Members

From: Robert D. Field, City Manager
By: Alex Qishta, Interim Director of Public Works

Subject: Construction Contract Award for Traffic Signal Upgrades (Wards 1 and 3)

Recommendation
Adopt Resolution No. 2022 -01 of the Mayor and City Council of the City of San Bernardino, California:

1. Approving the award of a construction contract with Alfaro Commu nication Construction Company, Inc. , in the amount of $856,430 to provide the construction of traffic signal upgrades (Project);

2. Authorizing the appropriation of funds in the amount of $828,022.73 from Measure I Fund (Fund 129) to fund the Project;

3. Authorizing project construction, construction contingencies, and inspection costs in the total amount of $977,430 for construction of the traffic signal upgrades; and

4. Authorizing the City Manager or designee to expend the contingency fund, if necessary, to complete the project.

Background
The City of San Bernardino Public Works Department is responsible for maintaining and operating over 300 traffic signals throughout the City. On an annual basis, the Operations and Maintenance division conducts traffic signal inspections on various traffic signals. After inspections, they provide recommendations to the Engineering Division on a replacement program for locations that outlived their design life and/or show signs of deterioration , which poses operational challenges to maintain. There are two traffic signal locations within the City that require upgrades to current Federal and State design guideline as follows:

• Mill Street and K Street; and
• Mill Street and Arrowhead Avenue.

In anticipation of this work, the traffic signal upgrade project was included in the FY 2019/20 Capital Improvement Plan (CIP) adopted on June 19, 2019, by the Mayor and 9 Packet Pg. 232
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City Council.

Plans and specifications were prepared for the project by KOA Corporation; the design included upgrading all the traffic signal poles, ADA push buttons and ramps, and installation of countdown pedestrian head indications to meet current California Manual on Uniform Traffic Control Devices standards.

Discussion
The project was advertised for p ublic bidding on November 1, 2021, and November 8, 2021, in the San Bernardino County Sun Newspaper, Construction Bid Board, ebid, Bid America Online, and on the City’s website.

Sealed bids were received and opened on November 18, 2021 and are shown in t he table below:

Bidder City Base Bid
Alfaro Communication Construction Compton, CA $856,430.00 Belco Elecnor Group Chino, CA $876,851.00
DBX, Inc.** Temecula, CA $885,393.00
Calpromax Engineering Placentia, CA $1,019,200.00
**Contractor did not provide bid bond at bid opening, City rejected bid as non-responsive

The City has reviewed the bid package and confirmed that Alfaro Communication Construction Company of Compton, California, is the lowest responsible and responsive bidder, with a to tal bid amount of $856,430. If awarded by the Mayor and City Council, construction is anticipated to begin in February 2022 and be completed by November 2022.

2020-2025 Key Strategic Targets and Goals
This project is consistent with Key Target No.1d: Financial Stability - Minimize risk and litigation exposure. Approval of this resolution will result in public improvements being constructed that minimize risk and litigation exposure through upgrading the existing traffic signals on various arterials within the City.

Fiscal Impact
There is no General Fund impact associated with this action. Project budget for the proposed work was previously established in the Local Circulation Fund 263 through the adopted FY 2019/20 Capital Improvement Plan in the following funds:

Location Bid Amount
Mill & K $423,360.00
Mill & Arrowhead $433,070.00
TOTAL $856,430.00

A supplemental appropriation in the amount of $828,022.73 is required from the Measure I Fund to fully fund the project below:
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Mill Street & K Street signal
Account No. 263-160-8715 $ 15,385.93
Additional Fund Allocation (Measure I Fund) $ 407,974.07 Mill Street & K Street Total $ 423,360.00

Mill Street & Arrowhead Ave Signal
Account No. 263-160-8716 $ 13,021.34
Additional Fund allocation (Measure I Fund) $ 420,048.66 Mill Street & Arrowhead Ave Total $ 433,070.00

Total Project Funding $ 856,430.00

The overall construction costs of the project are as follows:

Construction Bid Amount $ 856,430.00
Construction Contingency $ 86,000.00
Engineering and Inspections $ 35,000.00
Total Project Cost $ 977,430.00

Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California, adopt Resolution No. 2022-01:

1. Approving the award of a construction contract with Alfaro Communication Construction Company, Inc., in the amount of $856,430 to provide construction of traffic signal upgrades (Project);

2. Authorizing the appropriation of funds in the amount of $828,02 2.73 from Measure I Fund (Fund 129) to fund the Project;

3. Authorizing project construction, construction contingencies, and inspections costs in the total amount of $977,430 for construction of the traffic signal upgrades; and

4. Authorizing the City Manager or designee to expend the contingency fund, if necessary, to complete the project.

Attachments
Attachment 1 Resolution No. 2022- 01;
Attachment 2 Resolution No. 2022-01; Exhibit A - Contract Agreement Attachment 3 Bid Tabulation
Attachment 4 Bid Proposal
Attachment 5 Location Map-Mill St and K St
Attachment 6 Location Map-Mill St and Arrowhead Ave

Wards: 1 and 3
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Synopsis of Previous Council Actions:

June 19, 2019 Mayor and City Council adopted Resolution No. 2019-168 approving Capital Improvement Program FY 2019/2020
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Resolution No. 2022-01

Resolution 2022-01
January 19, 2022

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RESOLUTION NO. 2022-01

RESOLUTION OF THE MAYOR AND CITY COUNCIL OF

THE CIT Y OF SAN BERNARDINO, CALIFORNIA

APPROVING THE AWARD OF A CONSTRUCTION

CONTRACT WITH ALFARO COMMUNICATION
CONSTRUCTION COMPANY, INC., IN THE AMOUNT OF
$856,430 FOR THE CONSTRUCTION OF TRAFFIC SIGNAL
UPGRADES; AUTHORIZING THE APPROPRIATION OF
FUNDS IN THE AMOUNT OF $828,022.73 FROM MEASURE
I FUND (FUND 129) TO FUND THE PROJECT;

AUTHORIZING CONSTRUCTION CONTINGENCIES AND

INSPECTION COSTS IN THE TOTAL AMOUNT OF
$977,430 FOR THE CONSTRUCTION OF TRAFFIC SIGNAL
UPGRADES; AND AUTHORIZING THE CITY MANAGER

OR DESIGNEE TO EXPEND THE CONTINGENCY FUND,

IF NECESSARY, TO COMPLETE THE PROJECT

WHEREAS, The City of San Bernardino is responsible for maintaining and operating over 300 traffic signals throughout the City; there are three traffic signalized intersections locations within the City that require major upgrade to be in compliance with Federal and State standards; and

WHEREAS, on June 19, 2019 , the Mayor and City Council adopted the FY 2019/20 Capital Improvement Plan (CIP) , establishing the funding for the design and construction of the traffic signal upgrades project; and

WHEREAS, in October 2021 staff administered a competitive bid process for Construction of Traffic Signal Upgrades Project 13470 (TC20 -001, TC20 -002) (“Project”) resulting in four construction cost submittals; and

WHEREAS, Alfaro Communication Construction Company, Inc ., of Compton, California, has been determined to be the lowest responsive and responsible bidder; and

WHEREAS, the City now wishes to enter into a Construction Agreement with Alfaro Communication Construction Company, Inc., of Compton, California in the amount of $856,430 to complete the Project.

BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:

SECTION 1. The above recitals are true and correct and are incorporated herein by this reference.

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Attachment: Attachment 1 - Resolution No. 2022-01 Construction Contract Award for Traffic Signal Upgrades [Revision 1] (8702 : Construction Resolution No. 2022-01

Resolution 2022-01
January 19, 2022

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SECTION 2. Mayor and City Council hereby authorize the City Manager, or designee, to execute a ll documents for the construction of traffic signal upgrades project with Alfaro Communication Construction Company, Inc ., of Compton, California Project No 13470 (TC20- 001, TC20-002) on behalf of the City and to expend contingency funds, if necessary, to complete the project
SECTION 3. Mayor and City Council hereby authorize the Director of Finance to appropriate funds in the amount of $828,022.73 from Measure I Fund ($407,974.07 to account No. 263-160-8715 and $420,048.66 to account No. 263-160-8716) to fund the project.

SECTION 4. Mayor and City Council hereby authorize the Director of Finance to issue a purchase order in the amount of $856,430 to Alfaro Communication Construction Company, Inc., of Compton, California in support of the Construction Agreement.

SECTION 5. As the decision-making body for the project, the City Council has reviewed and considered the information contained in the administrative record for the proposed project.

Based upon the facts and information contained in the administrative record, including all written and oral evidence presented to the City Council, the City Council finds, as follows:
(1) The administrative record has been completed in compliance with CEQA, the State CEQA Guidelines, and the City’s Local CEQA Guidelines;
(2) The proposed project is exempt from the requirements of the California Environmental Quality Act pursuant to Section 15301 (Class 1 – Existing Facilities) of the CEQA Guidelines because it involves the removal and replacement of Traffic Signal poles and signal light upgrade.

Additionally, the City Council finds this Resolution is not subject to the California Environmental Quality Act (CEQA) in that the activity is covered by the general rule that CEQA applies o nly to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty, as in this case, that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. (3) The application of the Class 1 categorical exemption is not barred by one of the exceptions set forth in the CEQA Guidelines Section 15300.2 because removal and replacement of Traffic Signal poles and signal light upgrade does not present any unusual circumstances; would not damage scenic resources, including any resources in the area of a Scenic Highway; would not be utilized on a hazardous waste site; and would not impact historic resources of any kind; and (4) The determination of CEQA exemption reflects the independent judgment of the City Council.

SECTION 6. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and to this end the provisions of this Resolution are declared to be severable.

SECTION 7. Effective Date. This Resolution shall become effective immediately.

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Attachment: Attachment 1 - Resolution No. 2022-01 Construction Contract Award for Traffic Signal Upgrades [Revision 1] (8702 : Construction Resolution No. 2022-01

Resolution 2022-01
January 19, 2022

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APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the City Clerk this ___ day of __________ 2022.

John Valdivia, Mayor
City of San Bernardino

Attest:

Genoveva Rocha, CMC, City Clerk

Approved as to form:

Sonia Carvalho, City Attorney

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Resolution 2022-01
January 19, 2022

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CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO) ss

CITY OF SAN BERNARDINO )

I, Genoveva Rocha, CMC, City Clerk, hereby certify that the attached is a true copy of Resolution No. 2022-01, adopted at a regular meeting held on the ___ day of _______ 2022 by the following vote:

WITNESS my hand and official seal of the City of San Bernardino this ___ day of ____________ 2022.

Genoveva Rocha, CMC, City Clerk

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Attachment: Attachment 1 - Resolution No. 2022-01 Construction Contract Award for Traffic Signal Upgrades [Revision 1] (8702 : Construction

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BID TABULATION FOR

CONSTRUCTION OF TRAFFIC SIGNAL

AT MILL STREET AND K STREET

AT MILL ST AND ARROWHEAD AVE
BID OPENING: November 18, 2021 2:00PM
FILE: PROJECT NO. TC20-001 & TC20-002 Item
No.

BID ITEM

DESCRIPTION
Estimated
Quantity Unit
TC20-001 BID SCHEDULE Unit Price Total Unit Price Total Unit Price Total Unit Price Total 1 MOBILIZATION 1 LS 3,000.00 3,000.00 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00 2 CLEARING, GRUBBING, MISCELLANEOUS REMOVALS, AND LANDSCAPE RESTORATION 1 LS 5,500.00 5,500.00 3,000.00 3,000.00 6,000.00 6,000.00 19,000.00 19,000.00 3 WATER POLLUTION CONTROL BEST MANAGEMENT PRACTICES 1 LS 1,600.00 1,600.00 2,000.00 2,000.00 1,500.00 1,500.00 1,800.00 1,800.00 4 TEMPORARY TRAFFIC CONTROL
1 LS 3,200.00 3,200.00 4,500.00 4,500.00 6,000.00 6,000.00 7,000.00 7,000.00 5 ADJUST UTILITY TO GRADE
2 EA 500.00 1,000.00 910.00 1,820.00 500.00 1,000.00 900.00 1,800.00 6 CONSTRUCT PCC CURB RAMP OVER COMPACTED SUBGRADE PER SPPWC 111-5.

CASE A, TYPE 1. INCLUDE DETECTABLE WARNING SURFACE 2 EA 5,700.00 11,400.00 9,000.00 18,000.00 6,200.00 12,400.00 9,200.00 18,400.00 7 CONSTRUCT PCC CURB RAMP OVER COMPACTED SUBGRADE PER SPPWC 111-5.

CASE A, TYPE 6. INCLUDE DETECTABLE WARNING SURFACE 2 EA 5,700.00 11,400.00 9,000.00 18,000.00 6,200.00 12,400.00 9,200.00 18,400.00 8 CONSTRUCT 8” TYPE A CURB PER CITY OF SAN BERNARDINO PLAN 200 100 LF 70.00 7,000.00 52.00 5,200.00 65.00 6,500.00 60.00 6,000.00 9 CONSTRUCT 8” TYPE B CURB AND GUTTER PER CITY OF SAN BERNARDINO PLAN 200 100 LF 70.00 7,000.00 91.10 9,110.00 68.00 6,800.00 60.00 6,000.00 10 CONSTRUCT 4” PCC SIDEWALK PER CITY OF SAN BERNARDINO PLAN 202, CASE B. 300 SF 8.50 2,550.00 17.10 5,130.00 8.50 2,550.00 12.00 3,600.00 11 CONSTRUCT 8" PCC SPANDREL PER CITY OF SAN BERNARDINO STANDARD PLAN 201, OVER 95% COMPACTED NATIVE 560 SF 20.00 11,200.00 29.60 16,576.00 12.50 7,000.00 21.00 11,760.00 12 CONSTRUCT RETAINING CURB
30 LF 37.00 1,110.00 28.50 855.00 30.00 900.00 36.00 1,080.00 13 CONSTRUCT 1’ FULL DEPTH AC SLOT PATCH
40 TON 290.00 11,600.00 456.00 18,240.00 255.00 10,200.00 480.00 19,200.00 14 SIGNING AND STRIPING
1 LS 13,800.00 13,800.00 12,865.00 12,865.00 11,500.00 11,500.00 14,000.00 14,000.00 15 TRAFFIC SIGNAL
1 LS 332,000.00 332,000.00 308,000.00 308,000.00 344,949.00 344,949.00 364,000.00 364,000.00 TC20-002 BID SCHEDULE
1 MOBILIZATION
1 LS 3,000.00 3,000.00 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00 2 CLEARING, GRUBBING, MISCELLANEOUS REMOVALS, AND LANDSCAPE RESTORATION 1 LS 5,500.00 5,500.00 3,000.00 3,000.00 6,000.00 6,000.00 16,800.00 16,800.00 3 WATER POLLUTION CONTROL BEST MANAGEMENT PRACTICES
1 LS 1,300.00 1,300.00 2,000.00 2,000.00 1,500.00 1,500.00 1,800.00 1,800.00 4 TEMPORARY TRAFFIC CONTROL
1 LS 3,200.00 3,200.00 4,500.00 4,500.00 6,000.00 6,000.00 7,000.00 7,000.00 5 CONSTRUCT PCC CURB RAMP OVER COMPACTED SUBGRADE PER SPPWC 111-5 CASE A, TYPE 6. INLCUDE DETECTABLE WARNING SURFACE 4 EA 5,700.00 22,800.00 9,000.00 36,000.00 6,200.00 24,800.00 9,200.00 36,800.00 6 CONSTRUCT 8” TYPE B CURB AND GUTTER PER SAN BERNARDINO PLAN 200. 150 LF 97.00 14,550.00 91.10 13,665.00 68.00 10,200.00 60.00 9,000.00 7 CONSTRUCT 4” PCC SIDEWALK PER BITY OF SAN BERNARDINO PLAN 202, CASE B 1,000 SF 10.00 10,000.00 17.10 17,100.00 8.50 8,500.00 12.00 12,000.00 8 CONSTRUCT RETAINING CURB
300 LF 20.00 6,000.00 28.50 8,550.00 32.00 9,600.00 36.00 10,800.00 9 RECONSTRUCT 6” DRIVEWAY WING PER CITY OF SAN BERNADINO STANDARD PLAN 204 40 SF 18.00 720.00 29.60 1,184.00 13.00 520.00 24.00 960.00 10 CONSTRUCT 1’ FULL DEPTH AC SLOT PATCH
50 TON 250.00 12,500.00 456.00 22,800.00 255.00 12,750.00 480.00 24,000.00 11 SIGNING AND STRIPING
1 LS 16,500.00 16,500.00 14,756.00 14,756.00 13,000.00 13,000.00 15,000.00 15,000.00 2,450.00 2,450.00 12 TRAFFIC SIGNAL
1 LS 337,000.00 337,000.00 320,000.00 320,000.00 352,824.00 352,824.00 383,000.00 383,000.00 TOTAL BID SCHEDULE $856,430.00

LOW BIDDER
ACCI
$2,450.00
3RD LOW

DBX (NON RESPONSIVE BID

BOND WAS NOT ATTACHED)
2ND LOW
BELCO
$876,851.00
4TH LOW

CALPROMAX
$885,393.00 $1,019,200.00

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BID TABULATION FOR

CONSTRUCTION OF TRAFFIC SIGNAL

AT MILL STREET AND K STREET

AT MILL ST AND ARROWHEAD AVE

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Consent Calendar

City of San Bernardino
Request for Council Action

Date: January 19, 2022

To: Honorable Mayor and City Council Members

From: Genoveva Rocha, City Clerk

Subject: Notice and Call of the Primary Municipal Election (All Wards)

Recommendation
It is recommended that the Mayor and City Council of the City of San Bernardino, California, take the following actions to conduct the Primary Municipal Election on June 7, 2022:

1. Adopt Resolution No. 2022 -02 calling for the holdin g of a Primary Municipal Election to be held on Tuesday June 7, 2022 , for the election of certain officers as required by the provisions of the San Bernardino City Charter;

2. Adopt Resolution No. 2022 -03 Requesting the Board of Supervisors of the County of San Bernardino consolidate a Primary Municipal Election to be held on June 7, 2022, with the Statewide Primary Election to be held on the date pursuant to 10403 of the Elections Code;

3. Adopt Resolution No. 2022 -04 adopting regulations for Candidate s for elective office pertaining to candidate statements submitted to the voters at an election to be held on Tuesday, June 7, 2022.

Background
Pursuant to Article 8, Section 800, of the City Charter, the primary and general Election shall be held in sai d City in consolidation with the State Primary Election and the State General Election and every two (2) years thereafter. City elections shall follow the provisions and procedures of the State Elections Code as applicable to general law cities.

In accor dance with the City Charter, the City will participate in the statewide Primary Election on June 7, 2022, and the statewide General Election on November 8, 2022, if a run-off election is necessary.

The following offices are subject to election in 2022:

• Office of the Mayor of the City of San Bernardino
• Member of the City Council from the First Ward
• Member of the City Council from the Second Ward
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• Member of the City Council from the Fourth Ward

Discussion
Pursuant to Section 10400 of the Elections Code, the Mayor and City Council of the City of San Bernardino must request that the Board of Supervisors of the County of San Bernardino consolidate the City’s primary election with the consolidated election to be held on Tuesday, June 7, 2022. Further, th e County requires a resolution from the City of San Bernardino authorizing the San Bernardino County Registrar of Voters to conduct the election and canvass the returns. The County will provide most of the election services. The City Clerk will be responsi ble for providing and transmitting the necessary documents to the County to hold the election and provide for receipt of all candidates' statements and related documents, including dissemination of information to prospective candidates. The candidate nomin ation period will begin on Monday, February 14, 2022, and will end on Friday, March 11, 2022 . Results of the primary election shall be certified to the Mayor and City Council of the City of San Bernardino.

Pursuant to section 1033 07 of the California El ections Code each candidate for nonpartisan elective office in any local agency, including any city, county, city and county, or district, may prepare a candidate’s statement on an appropriate form provided by the election’s official. The statement may inc lude the name, age, and occupation of the candidate and a brief description, of no more than 200 words, of the candidate’s education and qualifications expressed by the candidate himself or herself.

However, the governing body of the local agency may autho rize an increase in the limitations on words for the statement from 200 to 400 words. The statement shall not include the party affiliation of the candidate, nor membership or activity in partisan political organizations. The Mayor and City Council can dir ect staff to increase the numbers of words in the statement from 200 to 400 words.

Approval from the Mayor and City Council will result in the scheduling of the Primary Municipal Election on Tuesday, June 7, 2022, for four (4) Members of the City Council for Wards 1, 2, and 4 and the Mayoral seat, to the voters of the City.

As the City’s Election Officer, the City Clerk is to be directed to publish a notice of the primary election which shall contain the following:

A. The time of the election.

B. The offices to be filled, specifying full or short term.

C. The hours the polls will be open.

2021-2025 Key Strategic Targets and Goals
Noticing and Calling the Election aligns with Key Target No. 2 : Focused, Aligned Leadership and Unified Community.

Fiscal Impact
The San Bernardino County Registrar of Voters provided a cost estimate for four (4) contests for the Primary Municipal Election. The cost estimate is $53,000; however, they have also stated that the amount provided above is an estimate of election cos ts 10 Packet Pg. 267
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based on historical costs for comparable elections. The actual cost may be higher or lower than the estimate provided. No two elections are the same in part because statutory requirements are ever -evolving. The final invoice with actual costs will be provided by the Registrar of Voters approximately one -hundred-twenty days (120) after the election is certified. The Mayor and City Council allocated funds for the Primary Election when they approved the 2021/22 Fiscal Year Budget.

Conclusion
It is recomme nded that the Mayor and City Council of the City of San Bernardino, California, take the following actions to conduct the Primary Municipal Election on June 7, 2022:

1. Adopt Resolution No. 2022 -02 calling for the holding of a Primary Municipal Election to be held on Tuesday June 7, 2022 , for the election of certain officers as required by the provisions of the San Bernardino City Charter;

3. Adopt Resolution No. 2022 -04 adopting regulations for Candidates for elective office pertaining to candidate statements submitted to the voters at an election to be held on Tuesday, June 7, 2022.

Attachments
Attachment 1 Resolution No. 2022 -02 - Noticing and Calling the Primary Municipal Election
Attachment 2 Resolution No. 2022 -03 - Requesting to C onsolidate the Primary Election with the County Board of Supervisors Statewide Election Attachment 3 Resolution No. 2022 -04 - Establishing a Candidate Statement Policy

Ward: All

Synopsis of Previous Council Action: None
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Resolution No. 2022-02

Resolution 2022-02
January 19, 2022

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RESOLUTION NO. 2022-02

RESOLUTION OF THE MAYOR AND CITY COUNCIL OF

THE CITY OF SAN BERNARDINO, CALIFORNIA,

CALLING FOR THE HOLDING OF A PRIMARY

MUNICIPAL ELECTION TO BE HELD ON TUESDAY,
JUNE 7 , 20 22, FOR THE ELECTION OF CERTAIN

OFFICERS AS REQUIRED BY THE PROVISIONS OF THE

SAN BERNARDINO CITY CHARTER

WHEREAS, under the provisions of the San Bernardino City Charter, a Primary Municipal Election shall be held on June 7, 2022, for the election of Municipal Officers for the purpose of electing a Mayor for the full term of four years; Members of the City Council from Wards 1, 2, and 4 for the full term of four years.

BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:

SECTION 1. The above recitals are true and correct and are incorporated herei n by this reference.

SECTION 2. That pursuant to the requirements of the San Bernardino City Charter, there is called and ordered to be held in the City of San Bernardino, California, on Tuesday , June 7 , 2022, a Primary Municipal Election for the purpose o f electing a Mayor for the full term of four years; Members of the City Council from Wards 1, 2, and 4 for the full term of four years.

SECTION 3. That the City Clerk is authorized, instructed, and directed to coordinate with the County of San Bernardino to procure and furnish any and all official ballots, notices, printed matter and all supplies, equipment and paraphernalia that may be necessary in order to properly and lawfully conduct the election.

SECTION 6. Effective Date. This Resolution shall become effective immediately.

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January 19, 2022

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APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the City Clerk this ___ day of __________ 2022.

John Valdivia, Mayor
City of San Bernardino

Attest:

Genoveva Rocha, CMC, City Clerk

Approved as to form:

Sonia Carvalho, City Attorney

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CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO) ss

CITY OF SAN BERNARDINO )

I, Genoveva Rocha, CMC, City Clerk, hereby certify that the attached is a true copy of Resolution No. 2022-02, adopted at a regular meeting held on the ___ day of _______ 2022 by the following vote:

WITNESS my hand and official seal of the City of San Bernardino this ___ day of ____________ 2022.

Genoveva Rocha, CMC, City Clerk

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Resolution 2022-03
January 19, 2022

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RESOLUTION NO. 2022-03

RESOLUTION OF THE MAYOR AND CITY COUNCIL OF

THE CITY OF SAN BERNARDINO, CALIFORNIA,

REQUESTING THE BOARD OF SUPERVISORS OF THE

COUNTY OF SAN BERNARDINO CONSOLIDATE A

PRIMARY MUNICIPAL ELECTION TO BE HELD ON
JUNE 7 , 20 22, WITH THE STATEWIDE PRIMARY

ELECTION TO BE HELD ON THE DATE PURSUANT TO
§ 10403 OF THE ELECTIONS CODE

WHEREAS, the City Council of the City of San Bernardino called a Primary Municipal Election to be held on June 7, 2022, for the purpose of the election of a Mayor, and three (3) Members of the City Council, for the full term of four (4) years; and;

WHEREAS, it is desirable that the Primary municipal election be consolidated with the Statewide Primary election to be held on the same date and that within the city the precincts, polling places (vote centers) and election officers of the two elections be the sa me, and that the county election department of the County of San Bernadino canvass the returns of the Primary Municipal Election and that the election be held in all respects as if there were only one election;

BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:

SECTION 1. The above recitals are true and correct and are incorporated herein by this reference.

SECTION 2. That pursuant to the requirements of § 10403 of the Elections Code, the Board of Supervisors of the County of San Bernardino is hereby requested to consent and agree to the consolidation of a Primary Municipal Election with the Statewide Primary election on Tuesday, June 7, 2022, for the purpose of the election of a Mayor, and three (3) Members of the City Council, for the full term of four (4) years.

SECTION 3. That the county election department is authorized to canvass the returns of the Primary Municipal Election. The election shall be held in all respects as if there were only one election, and only one form of ballot shall be used. The election will be held and conducted in accordance with the provisions of law regulating the statewide or special election.

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SECTION 4. That the Board of Supervisors is requested to issue instructions to the county election department to take any and all steps necessary for the holding of the consolidated election.

SECTION 5. That the City of San Bernardino recognizes that additional costs will be incurred by the County by reason of this consolidation and agrees to reimburse the County for any costs.

SECTION 6. That the City Clerk is hereby directed to file a certified copy of this resolution with the Board of Supervisors and the county election department of the County of San Bernardino.

SECTION 7. That the City Clerk shall certify to the passage a nd adoption of this resolution and enter it into the book of original resolutions.

SECTION 8. The Mayor and City Council finds this Resolution is not subject to the California Environmental Quality Act (CEQA) in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty, as in this case, that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

SECTION 9. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and to this end the provisions of this Resolution are declared to be severable.

SECTION 10. Effective Date. This Resolution shall become effective immediately.

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APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the City Clerk this ___ day of __________ 2022.

John Valdivia, Mayor
City of San Bernardino

Attest:

Genoveva Rocha, CMC, City Clerk

Approved as to form:

Sonia Carvalho, City Attorney

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CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO) ss

CITY OF SAN BERNARDINO )

I, Genoveva Rocha, CMC, City Clerk, hereby cert ify that the attached is a true copy of Resolution No. 2022-03, adopted at a regular meeting held on the ___ day of _______ 2022 by the following vote:

WITNESS my hand and official seal of the City of San Bernardino this ___ day of ____________ 2022.

Genoveva Rocha, CMC, City Clerk

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RESOLUTION NO. 2022-04

RESOLUTION OF THE MAYOR AND CITY COUNCIL OF

THE CITY OF SAN BERNARDINO, CALIFORNIA,

ADOPTING REGULATIONS FOR CANDIDATES FOR

ELECTIVE OFFICE PERTAINING TO CANDIDATE

STATEMENTS SUBMITTED TO THE VOTERS AT AN
ELECTION TO BE HELD ON TUESDAY, JUNE 7, 2022

WHEREAS, §13307 of the Elections Code of the State of California provides that the governing body of any local agency adopt regulations pertaining to materials prepared by any candidate for a municipal election, including costs of the optional candidate statement; and

WHEREAS, Section 13307(b) of the California Elections Code states that the Statement of each candidate shall be printed in type of uniform size and darkness, and with uniform spacing; and
WHEREAS, the City Clerk is responsible for enforcing formatting requirement s that exceed those acceptable by the County and wishes to streamline the review process by imposing limits relating to the format of candidate statements to block format, and prohibit Bolding, Capitalized Words, Italics, and Underlining. The City Clerk has final sign-off and approval of all candidate statements for elected city offices in accordance with state and local law.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE, AND ORDER AS FOLLOWS:

SECTION 1. General Provisions. That pursuant to §13307 of the Elections Code of the State of California, each candidate for elective office to be voted for at an Election to be held in the City of San Bernardino on Tuesday, June 7, 2022, may prepare a candidate’s statement on an appropriate form provided by the City Clerk. The statement may include the name, age and occupation of the candidate and a brief description of no more than 200 words of the candidate’s education and quali fications expressed by the candidate himself or herself. The statement shall not include party affiliation of the candidate, nor membership or activity in partisan political organizations. The statement shall be filed in typewritten form in the office of the City Clerk at the time the candidate’s nomination papers are filed. The statement may be withdrawn, but not changed, during the period for filing nomination papers and until 5:00 p.m. of the next working day after the close of the nomination period.

The City Clerk shall require each candidate filing a statement to pay a deposit in advance, as a condition of having his or her statement included in the voters' pamphlet.

SECTION 2. Foreign Language Policy.

A. Pursuant to the Federal Voting Rights Act, candidate statements will be translated into all languages required by the County of San Bernardino. The County is required to translate candidate’s statements into the following languages: Spanish.

B. The County will print and mail sample ballots and candidate statements to all voters in English and Spanish. The County will make the sample ballots and candidates

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statements in the required languages available at all polling places, on the County’s website, and in the City Clerk’s Department for the City of San Bernardino.

SECTION 3 Endorsements

It is the policy of the San Bernardino County Registrar of Voters that any named individual or specific organization listed as an endorsement in a candidate statement must be verified as endorsing the candidate prior to printing in the Voter Information Gu ide and Sample Ballot.

Verification of the endorsement must be in the form of a copy of a letter of endorsement, or in a direct communication from the endorser to the Registrar of Voters in the form of email or facsimile correspondence. All endorsements or verification of endorsements from an individual or organization of a candidate must be submitted no later than five days after the end of the filing period.

SECTION 4. Payment.

A. Translations:

1. The candidate shall be required to pay for the cost of translating the candidate’s statement into any required foreign language as specified in (A) and/or (B) of Section 2 above pursuant to Federal and\or State law.

2. The candidate shall be required to pay for the cost of translating the candidate’s statement into any foreign language that is not required as specified in (A) and/or (B) of Section 2 above, pursuant to Federal and\or State law, but is requested as an option by the candidate.

B. Printing:

1. The candidate shall be required to pay for the cost of printing the candidate’s statement in English in the main voter pamphlet.

2. The candidate shall be required to pay for the cost of printing the candidate’s statement in a foreign language required in (A) of Section 2 above , in the main voter pamphlet.

3. The candidate shall be required to pay for the cost of printing the candidate’s statement in a foreign language requested by the candidate per (B) of Section 2 above, in the main voter pamphlet.

4. The candidate shall be required to pay for the cost of printing the candidate’s statement in a foreign language required by (A) of Section 2 above, in the facsimile voter pamphlet.

The City Clerk shall estimate the total cost of printing, ha ndling, translating, and mailing the candidate’s statements filed pursuant to this section, including costs incurred as a result of complying with the Voting Rights Act of 1965 (as amended), and require each candidate filing a statement to pay in advance t o the local agency his or her estimated pro rata share

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as a condition of having his or her statement included in the voter’s pamphlet. An estimated payment is required, and the estimate is just an approximation of the actual cost that varies from one election to another election and may be significantly more or less than the estimate, depending on the actual number of candidates filing statements. Accordingly, the City Clerk is not bound by the estimate and may, on a pro rata basis, bill the candidate for additional actual expense or refund any excess paid depending on the final actual cost. In the event of underpayment, the City Clerk may require the candidate to pay the balance of the cost incurred. In the event of overpayment, the City Clerk shall prorate the excess amount among the candidates and refund the excess amount paid within 30 days of the election.

SECTION 5. Miscellaneous.

A) All translations shall be provided by professionally certified translators.

B) The City Clerk shall comply with all recommendations and standards set forth by the California Secretary of State regarding occupational designations and other matters relating to elections.

SECTION 6 . Additional Materials. No candidate will be permitted to include additional materials in the sample ballot package.

SECTION 7. That the City Clerk shall provide each candidate or the candidate’s representative a copy of this Resolution at the time nominating petitions are issued.

SECTION 8. That all previous resolut ions establishing council policy on payment for candidate statements are repealed.

SECTION 10. That the City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions.

SECTION 11. The Mayor and City Council finds this Resolution is not subject to the California Environmental Quality Act (CEQA) in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty, as in this case, that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

SECTION 12. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and to this end the provisions of this Resolution are declared to be severable.

SECTION 13. Effective Date. This Resolution shall become effective immediately.

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APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the City Clerk this ___ day of __________ 2022.

John Valdivia, Mayor
City of San Bernardino

Attest:

Genoveva Rocha, CMC, City Clerk

Approved as to form:

Sonia Carvalho, City Attorney

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CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO) ss

CITY OF SAN BERNARDINO )

I, Genoveva Rocha, CMC, City Clerk, hereby certify that the attached is a true copy of Resolution No. 2022-04, adopted at a regular meeting held on the ___ day of _______ 2022 by the following vote:

WITNESS my hand and official seal of the City of San Bernardino this ___ day of ____________ 2022.

Genoveva Rocha, CMC, City Clerk

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Consent Calendar

City of San Bernardino
Request for Council Action

Date: January 19, 2022

To: Honorable Mayor and City Council Members

From: Robert D. Field, City Manager
By: Alex Qishta, Interim Director of Public Works

Subject: Issuance of a PO to Penske Chevrolet for Animal Service Vehicles (All Wards)

Recommendation
Adopt Resolution No. 2022 -05 of the Mayor and City Council of the City of San Bernardino, California, to authorize the Director of Finance to issue a purchase order to Penske Chevrolet Sales in an amount not to exceed $450,000 to purchase four 2023 Chevy Silverado 2500HD Trucks with Animal Control Bodies; and to a uthorize the Director of Finance to appropriate $215,000 from the General Fund to the Animal Services Moto r Vehicle Expense Account to cover the additional cost of vehicle replacement.

Background
In Fiscal Year 2019/20, the Department purchased two animal control vehicles. The remainder of vehicles in the Department’s fleet have been in use for 19 years and , despite regular service and repair by the City, are now in dire need of replacement.

Discussion
Reliable equipment, vehicles, and technology are critical for the Department to respond to public requests for service and assistance with stray and injured a nimals. New equipment will ensure that staff are able to perform safely and efficiently.

Fleet Services worked with the Finance Department during the procurement process for the requested equipment. Penske Chevrolet was selected as the lowest bidder throu gh bid RFQ F-22-17.

The Mayor and City Council previously approved the purchase of two animal control vehicles in the FY 2020/21 midyear budget update on March 3, 2021, in the amount of $160,000.

Additionally, $225,000 from the $1.5 million in grant fu nding received from the San Manuel Band of Mission Indians and approved by the Mayor and City Council on April 7, 2021, is designated for vehicle purchases, allowing the department to purchase a total of four trucks.

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Because the grant funds are being distributed over three years, only $75,000 of the total was included in the initial distribution in May 2021. This provides a total of $235,000 .

The department expects the second $500,000 distribution check from the grant to be deposited in April or May of 20 22, at which time, $160,000 can be transferred back to the general fund to cover the increased cost of the vehicle purchase.

2021-2025 Key Strategic Targets and Goals
The purchase of the four vehicles aligns with Key Target No. 1: Financial Stability. The purchase of these vehicles will provide the Animal Services Department with reliable equipment that will allow them to respond to public requests for service and assistance with stray and injured animals.

Fiscal Impact
The General Fund impact associate d with this action is $215,000. The cost of vehicles has increased significantly due to supply chain shortages; therefore, an additional $215,000 from the General Fund is required to fulfill this purchase at this time.

However, when the department receive s the second distribution of grant funding, $160,000 originally allocated for vehicles, can be transferred to the general fund to cover the cost of this purchase.

FINANCIAL
DATA
Budgeted Amount Fund Balance Request Total Cost:

COST $ 235,000 $ 215,000 $ 450,000

GENERAL FUND
SHARE
$ 0 $ 0 $ 0
Budget Adjustment: Yes
For Fiscal Year: 21/22

Staff is requesting $215,000 to be appropriated from the General Fund to the Animal Services Motor Vehicle expense account.

Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California, adopt Resolution No. 2022-05 authorizing the Director of Finance to issue a purchase order to Penske Chevrolet Sales in an amount not to exceed $450,000 to purchase four 2023 Chevy Silverado 2500HD Trucks with Animal Control Bodies; and authorizing the Director of Finance to appropriate $215,000 from the General Fund to the Animal Services Motor Vehicle Expense Account to cover the additional cost of vehicle replacement.

Attachments
Attachment 1 Resolution No. 2022-05
Attachment 2 RFQ F-22-19

Ward: All

Synopsis of Previous Council Actions:
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March 3, 2021 The Mayor and City Council approved the Mid -Year budget adjustments, including $160,000 for the purchase o f two Animal Control vehicles.
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Page 1 of 3 ends

RESOLUTION NO. 2022-05

RESOLUTION OF THE MAYOR AND CITY COUNCIL OF

THE CITY OF SAN BERNARDINO, CALIFORNIA,

AUTHORIZING THE DIR ECTOR OF FINANCE TO ISSUE

A PURCHASE ORDER TO PENSKE CHEVROLET SALES
IN AN AMOUNT NOT TO EXCEED $450,000 TO
PURCHASE FOUR 2023 CHEVY SILVERADO 2500HD
TRUCKS WITH ANIMAL CONTROL BODIES ; AND

AUTHORIZING THE DIRECTOR OF FINANCE TO
APPROPRIATE $215,000 FROM THE GENERAL FUND TO

THE ANIMAL SERVICES MOTOR VEHICLE EXPENSE

ACCOUNT TO COVER THE ADDITIONAL COST OF

VEHICLE REPLACEMENT

WHEREAS, the Animal Control Department is responsible for respon ding to numerous animal control calls and complaints; and
WHEREAS, the availability of reliable equipment and new technology are critical for the Department to respond to public requests for service and assistance with stray and injured animals; and
WHEREAS, Penske Chevrolet Sales was selected as the lowest bidder for four 2023 Chevy Silverado 2500HD trucks with animal control bodies through formal bid RFQ F 22-19.

BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:

SECTION 1. The above recitals are true and correct and are incorporated h erein by this reference.

SECTION 2. Mayor and City Council authorize the Director of Finance to issue a purchase order to Penske Chevrolet Sales in the amount not to exceed $450,000 for four 2023 Chevy Silverado 2500HD trucks with Animal Control Bodies.

SECTION 3. Mayor and City Council hereby authorize the Director of Finance to appropriate funds in the amount of $2 15,000 from General Fund Balance to the Animal Services Motor Vehicle account.

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Resolution 2022-05
January 19, 2022

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SECTION 6. Effective Date. This Resolution shall become effective immediately.

APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the City Clerk this 19th day of January, 2022.

John Valdivia, Mayor
City of San Bernardino

Attest:

Genoveva Rocha, CMC, City Clerk

Approved as to form:

Sonia Carvalho, City Attorney

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Resolution 2022-05
January 19, 2022

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CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO) ss

CITY OF SAN BERNARDINO )

I, Genoveva Rocha, CMC, City Clerk, hereby certify that the attached is a true copy of Resolution No. 2022-05, adopted at a regular meeting held on the 5th day of January 2022 by the following vote:

WITNESS my hand and official seal of the City of San Bernardino this ___ day of ____________ 2022.

Genoveva Rocha, CMC, City Clerk

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Consent Calendar

City of San Bernardino
Request for Council Action

Date: January 19, 2022

To: Honorable Mayor and City Council Members

From: Robert D. Field, City Manager
By: Oliver Mujica, Planning Division Manager

Subject: Imposing Liens to Recover Costs for Code Enforcement (All Wards)

Recommendation
Adopt Resolution No. 2022 -06 of the Mayor and City Council of the City of San Bernardino, California, imposing liens on certain real property located within the City of San Bernardino of the costs of public nuisance abatements.

Background
On October 5, 2015, the Mayor and City Council adopted Ordinance MC -1418, thereby repealing San Bernardino Municipal Code Chapters 3.68 and 8.27 and amending Chapter 8.30. On September 18, 2019, the Mayor and City Council adopted Ordinance MC-1521, revising Chapter 8.30. These changes streamline the process of abating public nuisances on properties and imposing liens to enable the City to recover costs for abating nuisances.

Discussion
San Bernardino Municipal Code Section 8.30.050 requires a Resolution be adopted to assess unpaid costs of abatements as liens on the respective property tax bill. The Abatement Assessments List is attached hereto as Exhibit A.

The first section consists of properties with Administrative Hearing Orders. All property owners listed on the ‘Abatement Assessments’ List have been notified of the abatement costs by way of written notice of an Administrative Hearing. Administrative Hearings were held and resulted in Hearing Orders.

The second section ‘Other Abatement Assessments’ are for public nuisance abatements performed by the Code Division which includes properties that were either secured and/or cleaned via administrative inspection warrants. Also, included in this section are emergency board -ups requested by the Police and Fire Departments.

Emergency board -ups were requested after a break -in has occurred or after fire suppression activities when no responsible parties could be reached.

All property owners listed on the ‘Other Abatement Assessments’ list have been notified of the abatement costs . These property owners were issued a Notice of Summary 12 Packet Pg. 307
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Abatement with the option to schedule a hearing per SBMC 8.30.045. Property owners were advised of their right to appeal said costs within ten days, or to pay the costs within 45 days of notice per San Bernardino Municipal Code Section 8.30.030 and

8.30.040. Hearings were not requested, and the costs are currently outstanding. To date, no responses have been received. Theref ore, staff recommends adopting the Resolution to assess such unpaid costs of abatement.

The total of outstanding fees for ‘Abatement Assessments’ resulting from Administrative Hearing Officer Orders is $2,500. The total for ‘Other Abatement Assessments’, including emergency abatements is $15,021.73 The grand total of all abatements is $17,521.73. If property owners come forward to pay their costs prior to the Mayor and City Council meeting, their properties will be removed from Exhibit A.

2021-2025 Key Strategic Targets and Goals
The request to impose liens to recover costs for Code Enforcement abatements aligns with Key Target No. 1: Financial Stability and Key Target No. 4: Economic Growth & Development. Imposing liens to resolve public nuisances would ensure revenue back into the Department and that the City is clean and attractive.

Fiscal Impact
The anticipated amount to be collected is $17,521.73. The amount will be collected incrementally as individual properties are sold and/or liens are paid thr ough the escrow process.

Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California, adopt Resolution No. 2022-06 imposing liens on certain real property located within the City of San Bernardino of the costs of public nuisance abatements.

Attachments
Attachment 1 Resolution 2022-06
Attachment 2 Resolution 2022-06; Exhibit A- Abatement Assessments

Ward: All

Synopsis of Previous Council Actions:

August 1, 2018 Mayor and City Council adopted Resolution No. 2 018-222, imposing liens on certain real property located within the City of San Bernardino for the cost of public nuisance abatements.

April 18, 2018 Mayor and City Council adopted Resolution 2018 -106, imposing liens on certain real property located with in the City of San Bernardino for the costs of public nuisance. abatements. 12 Packet Pg. 308
Resolution No. 2022-06
Resolution No. 2022-06

RESOLUTION NO. 2022-06

RESOLUTION OF THE MAYOR AND CITY COUNCIL OF

THE CITY OF SAN BERNARDINO, CALIFORNIA,

IMPOSING LIENS ON CERTAIN REAL PROPERTY

LOCATED WITHIN THE CITY OF SAN BERNARDINO OF

THE COSTS OF PUBLIC NUISANCE ABATEMENTS

WHEREAS, the City of San Bernardino, pursuant to it s authority under Chapter 8.30 o f the San Bernardino Municipal Code, did lawfully cause public nuisances to be abated on the properties described in the Abatement Assessments List, a copy of wh ich is attached hereto and incorporated herein as Exhibit A, in this Resolution; and WHEREAS, notice of the abatement costs were given to the owners of record of said properties, and any timely requested hearing has heretofore been held to hear protests of the costs of said abatement before the Administrative Hearing Office, who determined the owner of record is responsible for the costs.

BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:

SECTION 1. The above recitals are true and correct and are incorporated herein by this reference.

SECTION 2. Said costs are found to have been incurred by the City pursuant to proceedings under the San Bernardino Municipal Code, and the final statement of costs on file with the City Clerk is hereby confirmed and adopted as special assessments against the properties lists in Exhibit A.

SECTION 3. Said sum shall become a lien on said property pursuant to San Bernardino Municipal Code 8.30.050 and shall be collected as a special assessment.

SECTION 4. The City Clerk is hereby directed to file a certified copy of this Resolutio n, including Exhibit A, showing such sums as remained unpaid, to the Recorder and the Auditor of the County of San Bernardino, State of California, directing that each sum be entered as a lien charged against the property as it appears on the current asses sment rolls, to be collected at the said time and in the same manner, subject to the same penalties and interest upon delinquencies, as the general taxes for the City of San Bernardino are collected.

SECTION 5. The City Council finds this Resolution is not subject to the California Environmental Quality Act (CEQA) in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with c ertainty, as in this case, that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

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Resolution No. 2022-06

SECTION 7. Effective Date. This Resolution shall become effective immediately.

APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the City Clerk this ___ day of __________, 2022.

John Valdivia, Mayor
City of San Bernardino

Attest:

__________________________________
Genoveva Rocha, CMC, City Clerk

Approved as to form:

Sonia Carvalho, City Attorney

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Resolution No. 2022-06

CERTIFICATION

STATE OF CALIFORNIA)
COUNTY OF SAN BERNARDINO) ss

CITY OF SAN BERNARDINO)

I, Genoveva Rocha, CMC, City Clerk, hereby certify that the attached is a true copy of Resolution No. 2022-06, adopted at a regular meeting held at the ___ day of _______, 2022 by the following vote:

WITNESS my hand and official seal of the City of San Bernardino this ___ day of ____________ 2022.

___________________________________
Genoveva Rocha, CMC, City Clerk

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ABATEMENT ASSESSMENTS
ADDRESS OWNER Hearing Order WARD COST
479 W. Magnolia Ave. JINDAL, NIKHIL 21-000065 Appeal Upheld 2 $400.00 1401 N. E St. JINDAL, NIKHIL 21-000063 Appeal Upheld 2 $400.00 1443 N. E St. JINDAL, NIKHIL 20-000064 Appeal Upheld 2 $400.00 3104 N. F St. WARF, JOE 21-000118 Appeal Upheld 5 $600.00 164 E. 11th St. SCHMITT, MATHIEU 21-000086 Appeal Upheld 2 $700.00 Total: $2,500.00

OTHER ABATEMENT ASSESSMENTS

ADDRESS OWNER DATE ABATED WARD COST
1135 E. Devonshire Rd. HANSON, PHILLIP L 03/16/21 4 $519.10 1225 E. Lynwood Dr. E & I LYNGOLD CENTER LLC 05/06/21 7 $1,905.42 1595 N. D St. DPND PROPERTY INVESTMENTS LLC 05/12/21 & 05/20/21 2 $1,820.09 824 Campus Way ORTIZ, DARLENE 06/02/21 2 $1,402.28
2210 E. Highland Ave. NOVALK LLC, A CALIF LIMITED LIABILITY CO. 08/09/21 7 $2,398.74 480 Court St. CHASE FINANCIAL SERVICE LLC 07/16/21 1 $1,501.10 571 W. Highland Ave. #567 MANSURI, IMTIAZ 08/05/21 2 $687.00 466 W. 5th St. JADI COMMUNITY RESOURCE DEVELOPMENT 08/23/21 1 $402.45 1385 Orchid Dr. SWH 2017-1 BORROWER LP 07/13/21 & 07/28/21 7 $4,385.55 Total: $15,021.73
Grand Total: $17,521.73

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Consent Calendar

City of San Bernardino
Request for Council Action

Date: January 19, 2022

To: Honorable Mayor and City Council Members

From: Miguel Guerrero, P.E., General Manager

Subject: Receive and File the SBMWD Audited Annual Comprehensive Financial Report

Recommendation
It is recommended that the Mayor and City Council of the City of San Bernardino, California, receive and file the San Bernardino Municipal Water Department’s audited Annual Comprehensive Financial Report for wat er, sewer treatment, and sewer collection utilities for Fiscal Year ended June 30, 2021.

Background
Section 603(e) of the City of San Bernardino Charter requires that the Water Board provide for an “annual, independent audit of all water and wastewater ac counts" and that “copies of all auditors’ reports shall be filed with the City Clerk and Council.”

The audit firm of Lance, Soll & Lunghard, LLP completed the Water Department’s annual audit and produced the attached Annual Comprehensive Financial Report (ACFR) for Fiscal Year ending June 30, 2021. This report includes the financial statements, the Independent Auditor’s Report, Management’s Discussion and Analysis, as well as a statistical section containing historical information and data. The ACFR was presented to the City Water Board at its December 14, 2021, regular meeting, and it was approved unanimously.

For the fifth straight year, the Water Department received the Government Finance Officers Association Certificate of Achievement for Excellenc e in Financial Report for its Fiscal Year 2019/2020 ACFR. The Certificate of Achievement is the highest form of recognition in governmental accounting and financial reporting, and its attainment represents a significant accomplishment for the Water Department.

Discussion
N/A

2021-2025 Key Strategic Targets and Goals
This action aligns with the Key Target No. 1: Financial Stability. The information in these reports is useful to the Water Board in making operational and financial decisions to meet the Water Department’s goals and objectives.

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Fiscal Impact
No fiscal impact to the City.

Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California, receive and file the San Bernardino Municipal Water Department’s audit ed Annual Comprehensive Financial Report for water, sewer treatment, and sewer collection utilities for Fiscal Year ended June 30, 2021.

Attachments
Attachment 1 Water Board Staff Report including Annual Comprehensive Financial Report of the City of San B ernardino Municipal Water Department, Fiscal Year Ended June 30, 2021.

Wards: N/A

Synopsis of Previous Council Actions:

Similar action taken each year following completion of the annual audit. 13 Packet Pg. 314

CIT Y OF SAN BE RNA RDINO

MUNICIPAL WATER DEPARTMENT

WATER BOARD

STAFF REPORT
TO:

FROM:

SUBJECT:

DATE:

Miguel]. Guerrero, P.E., General Manager
Cynthia Mouser, Director of Finance
PRESENTATION OF THE RESULTS OF THE FISCAL YEAR 2020-21

AUDIT, ANNUAL COMPREHENSIVE FINANCIAL REPORT, SINGLE

AUDIT REPORT ON FEDERAL AWARDS
December 7, 2021
BACKGROUND:

On December 14, 2021, Bryan Gruber, Partner in the firm of Lance Soll & Lunghard LLP (LSL), will present and distribute to the Water Board the Annual Comprehensive Financial Report (ACFR) for the City of San Bernardino Municipal Water Department (the Department) for the fiscal year ended June 30, 2021. The Department entered a three-year contract with LSL in May of 2019 to perform the \Vater Department's annual financial audit of the Department's three enterprise funds, RIX, and the Department's Federal programs (Single Audit).

The ACFR reflects the Department's results of financial operations as of June 30, 2021. An unqualified opinion has been issued from LSL. All three enterprise funds, Water, Sewer and Sewer Collection, reported a positive net income after capital contributions. A summary of the department's finances can be found in the Management's Discussion and Analysis section of the Annual Comprehensive Financial Report, with additional details throughout the report.

GOALS AND OBTECTIVES -
This proposed June 30, 2021 ACFR aligns with the Department's Strategic Plan under Target# 5:

Fiscal Responsibility. This supports key values that exercise responsible financial management, provide responsible stewardship of public funds, and ensure transparency.

FISCAL IMP ACT:

There is no fiscal impact associated with this item.

Agenda Item __ _
Received 12-07-21
SBMWD
General Manager

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ANNUAL COMPREHENSIVE

FINANCIAL REPORT

San Bernardino, California

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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

ANNUAL COMPREHENSIVE FINANCIAL REPORT

FOR FISCAL YEAR ENDED JUNE 30, 2021

TABLE OF CONTENTS

Page(s)

INTRODUCTORY SECTION

Letter of Transmittal ................................................................................................................................. i GFOA Certificate of Achievement ........................................................................................................ viii Organizational Chart .............................................................................................................................. ix List of Elected and Appointed Officials ................................................................................................... x

FINANCIAL SECTION

Independent Auditors’ Report ................................................................................................................. 1 Management’s Discussion and Analysis ................................................................................................. 5 Basic Financial Statements:

Statement of Net Position ............................................................................................................... 14 Statement of Revenues, Expenses and Changes in Net Position ................................................. 17 Statement of Cash Flows ............................................................................................................... 18 Notes to the Basic Financial Statements ........................................................................................ 21

REQUIRED SUPPLEMENTARY INFORMATION

Schedule of Proportionate Share of the Net Pension Liability .............................................................. 50 Schedule of Pension Plan Contributions ............................................................................................... 52 Schedule of Changes in Net OPEB Liability and Related Ratios ......................................................... 54 Schedule of OPEB Plan Contributions .................................................................................................. 55 Schedule of OPEB Plan Investment Returns........................................................................................ 56

STATISTICAL SECTION

Changes in Net Position – Combined Funds ........................................................................................ 60 Changes in Net Position – Water Funds ............................................................................................... 61 Changes in Net Position – Sewer Fund ................................................................................................ 62 Changes in Net Position – Sewer Collection Fund ............................................................................... 63 Net Position by Component – Combined .............................................................................................. 64 Net Position by Component – Water Fund ........................................................................................... 65 Net Position by Component – Sewer Fund ........................................................................................... 66 Net Position by Component – Sewer Collection Fund .......................................................................... 67 Water Fund Revenue by Type .............................................................................................................. 68 Sewer Fund Revenue by Type ............................................................................................................. 69 Sewer Collection Fund Revenue by Type
............................................................................................. 70 Water Fund Expenses by Type ............................................................................................................. 71 Sewer Fund Expenses by Type ............................................................................................................ 72 Sewer Collection Fund Expense by Type ............................................................................................. 73 Water Fund Debt Service Coverage ..................................................................................................... 74 Sewer Fund Debt Service Coverage .................................................................................................... 75 Ratios of Outstanding Debt by Type ..................................................................................................... 76 Demographic Statistics ......................................................................................................................... 77 Major Employers ................................................................................................................................... 78

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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

ANNUAL COMPREHENSIVE FINANCIAL REPORT

FOR FISCAL YEAR ENDED JUNE 30, 2021

TABLE OF CONTENTS

Page(s)

STATISTICAL SECTION (CONTINUED)

Authorized Positions History ................................................................................................................. 79 Water Rates: Minimum Monthly Charge ............................................................................................... 80 Water Connections and Revenues by User Types ............................................................................... 81 Water Rates – Elevation Charges per HCF .......................................................................................... 82 Top Ten Water Consumers ................................................................................................................... 83 Sewer Treatment Rate History .............................................................................................................. 84 Sewer Treatment Connections and Revenue by User Type ................................................................ 85 Top Ten Sewage Treatment Customers ............................................................................................... 86 Sewer Collection Rate History .............................................................................................................. 87 Sewer Collection Connections and Revenue by User Type ................................................................. 88 Top Ten Sewer Collection Customers .................................................................................................. 89

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The first water distribution system of San Bernardino included water supply for approximately six thousand citizens within a one square mile service area. Today, the Department’s service area is approximately 50 square miles and the water supply distribution network now encompasses over 45,000 service connections and 750 miles of water mains. Although the number of connections has in creased during the past one hundred years, our commitment to providing trusted, quality service remains the same.

The City of San Bernardino receives the majority of its water supply from an underground aquifer called Bunker Hill Groundwater Basin which is part of the San Bernardino Basin. The water contained in the Bunker Hill Basin is replenished with rain and snowmelt that filters through our local San Bernardino Mountains. This local water supply ensures that San Bernardino Municipal Water Department customers receive high quality, relatively inexpensive water as compared to other communities. Many other communities in Southern California must import their water supplies from remote locations via the Colorado River and State Water Project systems which adds cost. Many water supplies imported from distant locations can be impacted by certain man-made and natural contaminants as the water is transported to the custome r. Imported supplies are also impacted by drought conditions.

The Department has operated the Water Reclamation Plant (WRP) since 1973. The WRP is a 33 million gallons per day (MGD) Regional Secondary Treatment facility that provides trusted, quality wastewater treatment services for the City of San Bernardino, City of Loma Linda, East Valley Water District, San Bernardino International Airport, Patton State Hospital, and unincorporated areas of San Bernardino County. The WRP serves over 60,000 customers, of which 38,000 are located within the City’s boundaries.

In May of 2017, management and operations of the Sewer Collecti on System were transferred from the City of San Bernardino Public Works Department to the San Bernardino Mu nicipal Water Department. The system encompasses approximately 38,000 connections and conveys over 5 billion gallons of sewage annually to the Department’s Water Reclamation Plant for treatment.

Fiscal Management:

The Board annually adopts an operating and capital budget prior to the new fiscal year. The budget authorizes and provides the basis for reporting and control of financial operations and accountability for the Department’s functions, including the Water Utility, Sewer Treatment and Sew er Collection Funds. The budget and reporting treatment applied to a fund is consistent with the accrual basis of accounting and the financial statement basis.

Each year the Department adopts a balanced budget.

Local Economy:

The Department’s offices are located in the City of San Bernardino in San Bernardino County. According to the California Department of Finance, San Bernardino’s population as of June 30, 2021, was 216,291. San Bernardino County offers affordable housing and available space as compared to the surrounding counties, which makes the area attractive for new homeowners and commercial development. Growth remains strong in the Inland Empire and neighboring regions. The economic outlook for the City of San Bernardino is forward moving considering the ongoing Coronavirus Pandemic (“Pandemic” ). The region’s labor force is experiencing growth but not to pre-pandemic levels. The County of San Bernardino, along with the City of San Bernardino has experienced job growth according to the State of California Employment Development Department. The current unemployment rate for the City of San Bernardino is 8.0% while the County of San Bernardino is at 8.1% compared to the average national unemployment rate of 6.1%. The City of San Bernardino unemployment rate decreased by 5.5% from 13.5% since the end of fiscal year 2020. Leisure and Hospitality sectors are still below in job recoveries; however, the retail trade, transportation, u tilities, warehousing, and service sectors have accounted for job gains since June 2020. This is a positive indicator that the economic recovery is underway.

The Department continues to monitor the effects of the Pandemic on economic conditions and adjust the FY 2021-2022 budget and spending as needed. The Pandemic’s most adverse effect on the Department has been an increase in delinquent accounts over the last sixteen months. Furthermore, the Department has been staying well-informed of several Federal and State programs aimed at curbing financial impact to municipalities to ensure ii

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proactive participation for potential award. Earlier this year, the Department applied for and recently received award approval from the California Water and Wastewat er Arrears Payment Program to help customers pay overdue water bills incurred during the pandemic. Our executive leadership efforts have also secured $5.16 million from the City’s allocation of Federal American Rescue Plan Act (ARPA) Act to replace lead service lines in the water system.

California’s water supply continues to be a concern due to projected population increases and dwindling, unreliable supplies from traditional sources. The Department has expanded and will continue to expand its conservation efforts in order to respond to the state-wide water use efficiency regulations. Department staff members continue to seek various methods to decrease its dependence on imported water and to increase water supply reliability, including increasing production of recycled water. The Department’s latest conservation standard as imposed by the State was 0%, however, t he Department maintains a self-imposed conservation standard of 15% as compared to 2013. This self-imposed standard will assist in supporting recovery of the local basin. Currently, the Department’s cumulative conserva tion standard is at 11% for the past year (September 2020 - September 2021).

In May of 2018 California’s governor signed two bills - SB 606 and AB 1668 - to establish long-term conservation goals. This legislation supports the State’s initiative to “Make Water Conservation a California Way of Life” by emphasizing water use efficiency and stretching existing water supplies in California cities and farms. It lays out a timeline for local agencies to adopt standards, calculate objectives, and meet calculated objectives. It will allow the State Water Board to adopt standardized efficiencies for residential indoor and outdoor use and water losses, with appropriate variances for unique local conditions. The State will make local water agencies responsible for enforcement of the mandates and regulations, not individual customers.

For the Department, the goal of water use efficiency rema ins paramount. Efficient water use is the most cost- effective and immediate way to achieve long-term conservation goals. As such, the Department is committed to sharing information, programs, and incentives to encourage and support water use efficiency for our customers.

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Major Initiatives:

Fuel Cell

In July 2021, the Department commenced operation of a fuel cell facility at the San Bernardino Water Reclamation Plant (WRP) site. The fuel cell allows the Department to continue beneficially use of methane produced from wastewater treatment digesters (“digester gas”) to produce electricity for the WRP.

Historically, the Department used digester gas beneficially to fuel engines that operated generators, aeration blowers, and pumps that were part of the wastewater treatment process. The Department must meet several stringent regulations to ensure the health and safety of the community it serves and to protect the environment.

This includes new and revised air quality standards for operation of wastewater plants such as the WRP.

The facility was conceived as part of the Department’s ongoing response to the new and revised regulations and supports the Department’s plans to improve operations and continue to beneficially utilize biogas generated from the WRP digesters. The fuel cell facility was developed in a public/private partnership between SBMWD and FuelCell Energy, Inc. (FCEL), a leading US manufacturer of fuel cell power plants with several facilities at wastewater treatment plants in California. FCEL was responsible for construction, installation, commissioning of the entire facility and will also provide long-term operation, maintenance, and service.

Advanced Metering Infrastructure

The Department has been selected to receive a $500,000 grant from the U.S. Bureau of Reclamation to start phase one of the Department’s Advanced Metering Infrastructure (AMI) project. The first phase of the AMI project will install and connect approximately one quarter of the Department’s water meters to an advanced communications network to gather water consumption data in real time. This water use data will reduce water waste by enabling the Department to identify and notify customers of leaks and abnormally high-water use more quickly.

22,071,533
20,366,117
20,178,260
15,698,545
15,828,607
16,863,706
16,866,892
15,859,342
16,108,824
18,082,220
‐
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Water Production
In Hundred Cubic Feet
Water Production
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Water Resource Management

The Department recently completed a joint planning effort to develop the Integrated Regional Urban Water Management Plan with several agencies within the Upper Santa Ana River Watershed. This effort developed a comprehensive guide for water resource management including actions to ensure adequate supplies to meet future demands within a range of water supply conditions including water shortages.

Regional Recycled Water

Lastly, the Department continues to develop its recycled water project. While the design for the initial phase of the project is complete, certain environmental and permitting prerequisites remain. The Department anticipates resolving outstanding prerequisites and commencing construction in 2022. At the same, the Department is working with its regional partners to develop a regional recycled water system that involves connecting recycled water systems in the region and will provide flexibility to apply produce recycled water were it is most needed in the San Bernardino Basin.

Long Term Financial Planning:

In August of 2019, the Department adopted a Strategic Plan that created a roadmap for the Department’s long- term financial goals and objectives. As part of the Strategic Plan, long-term financial plans were developed for all three of the Department’s enterprises: Water, Sewer Treatment and Sewer Collection. These financial plans assisted the Department with determining the need to conduct a cost of service study for all three enterprises.

The cost-of-service study will take place in FY 2022. The co st of service study will assist the Department in developing alternative water sources, replacing aging infrastructure and addressing increasing costs.

The Department’s financial plan includes the revision of the existing Reserve Policy. The Department’s current Reserve policy was revised and adopted by the Board in September 2021.

 Operating Reserve: This reserve is established to ensure adequate cash flow is available to meet day- to-day expenses. The target balance is 45 days of the operating expenses budgeted for each respective fund.

 Rate Stabilization Reserve: This reserve is established to offset revenue risk associated with low service demands years. The minimum target balance for each fund is twenty percent (20%) of their respective budgeted sales.

 Emergency Replacement Reserve: The purpose of this reserve is to minimize the impact of unforeseen capital asset and operating expenses. The target balance for each fund shall be two percent (2%) of the total recorded value of capital assets as of the previous fiscal year.

 Capital Replacement Reserve: The Capital Replacement Reserve was set up in order to provide funding support of the Department’s capital program. The basis for calculating the target balance for this reserve is a rolling five-year average of the Department’s Capital Improvement Program projects, excluding those with external funding. The target balance will be assessed on an annual basis as part of the budgeting process.

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Debt Administration:

The Department’s outstanding debt as of June 30, 2021 consists of one Revenue Bond in the Water Utility Fund, and one Revenue Bond in the Sewer Utility Fund, as shown in the table below:

Water Fund Long-Term Debt Activity
Year of Issuance/Description Use of Proceeds
2016 California Municipal Finance Authority
Revenue Bond
Funding for facility construction, seismic retrofit
of reservoirs and other capital improvement
projects.

Sewer Fund Long-Term Debt Activity
Year of Issuance/Description Use of Proceeds
2016 California Municipal Finance Authority
Revenue Bond
Funding for primary influent flow equalization
project, facility construction, and recycled water
project.

Relevant Financial Policies:

Internal Control Structure

Department management is responsible for the establishment and maintenance of the internal control structure that ensures that the assets of the Department 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 Department’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.

Major Initiatives and Key Values:

The activities of the Board and Department staff are driven by our key value statements as outlined below:

1. Provide the highest level of customer service to our community.

2. Responsibly establish necessary rates in the most cost-effective manner.

3. Provide the highest quality water and wastewater services.

4. Provide responsible stewardship of our resources and our environment.

5. Require ethical business practices.

6. Foster a strong, positive organizational culture and promote staff development.

Awards and Acknowledgements:

The Government Finance Officers Association (GFOA) of the United States and Canada awarded a Certificate of Achievement for Excellence in Financial Reporting to the Department for its annual comprehensive financial report for the fiscal year ended June 30, 2020. To be aw arded a Certificate of Achievement, the Department must publish an easily readable and efficiently organized annual comprehensive financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements.

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Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of San Bernardino Municipal Water Department
California
For its Comprehensive Annual
Financial Report
For the Fiscal Year Ended
June 30, 2020
Executive Director/CEO
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Robin L. Ohama

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

ORGANIZATION
Rate Payers
City Council
Water Board
General Manager
Miguel J. Guerrero, P.E.

Water Utility
Steve R. Miller
Distribution
Operations
Maintenance
Engineering
Finance and Accounting
Cynthia J. Mouser
Finance
Accounting
Payroll
Purchasing
Water Reclamation
Kevin T. Stewart, P.E.

Operations
Processing
Maintenance
Electrical/SCADA
RIX Facility
Sewer
Collection
Environmental &
Regulatory Compliance
Jennifer L. Shepardson
Evironmental &
Regulatory
Compliance
Safety
Risk Mgmt
Environmental
Control
Water Quality
Human Resources
Customer Service
Field & Meter Svcs
Fleet
Information Technology
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203 N. Brea Blvd., Suite 203
Brea, CA 92821 Lance, Soll & Lunghard, LLP Phone: 714.672.0022

INDEPENDENT AUDITORS’ REPORT

To the Water Board
City of San Bernardino Municipal Water Department
San Bernardino, California

Report on the Financial Statements

Opinions

We have audited the accompanying financial statements of each major fund of the City of San Bernardino Municipal Water Department (the “Department”), a component unit of the City of San Bernardino, California (the “City”), as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the Department’s basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of each major fund of the Department as of June 30, 2021, and the respective changes in financial position and cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions

We conducted our audit in accordance with auditing standards ge nerally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our re sponsibilities under those standards are further described in the Auditor’s Responsibiliti es for the Audit of the Financial Statements section of our report. We are required to be independent of th e Department and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Emphasis of Matter

As discussed in Note 1 to the financial statements, the financial statements present only the Department and do not purport to, and do not, present fairly the financial position of the City as a whole, as of June 30, 2021, and the changes in its financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinions are not modified with respect to this matter.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presenta tion of these financial statements in accordance with accounting prin ciples generally accepted in the United States of America; and for the design, implementation, and maintenance of internal control rel evant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Department’s ability to continue as a going concern for twelve months beyond the date of the financial statements.

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To the Water Board
City of San Bernardino Municipal Water Department
San Bernardino, California

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with G AAS and Government Auditing Standards will always detect a material misstatement when it exists. Th e risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the over ride of internal control. Misstatements are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users made on the basis of these financial statements.

In performing an audit in accordance with GAAS and Government Auditing Standards, we:

 Exercise professional judgment and maintain professional skept icism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsible to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
 Obtain an understanding of internal control relevant to the au dit in order to design audit procedures that are appropriate to the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Department’s internal control. Accordingly, no such opinion is expressed.  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate th e overall presentation of the financial statements.
 Conclude whether, in our judgment, there are conditions or eve nts, considered in the aggregate, that raise substantial doubt about the Department’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governan ce regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Other Reporting Responsibilities

Required Supplementary Information

Accounting principles generally accepted in the United States o f America require that the management’s discussion and analysis, the schedule of proportionate share of the net pension liability, the schedule of changes in net OPEB liability and related ratios, the schedules of plan contributions, and the schedule of OPEB plan investment returns as listed in the table of contents be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied c ertain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about th e methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements.

We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

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To the Water Board
City of San Bernardino Municipal Water Department
San Bernardino, California

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Department’s basic financial statements. The intro ductory section and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements and have not been subjected to the auditing procedures applied in the audit of the basic financial statements. Accordingly, we do not express an opinion or provide any assurance on them.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards , we have also issued our report dated December 1, 2021 on our consideration of the Department’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Department’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Department’s internal control over financial reporting and compliance.

Brea, California
December 1, 2021
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MANAGEMENT’S DISCUSSION AND ANALYSIS

The City of San Bernardino Municipal Water Department (Departme nt) is a water, sewer collection and treatment utility responsible for delivering high quality, econ omically priced water, sewer treatment and sewer collections services to a quarter of a million customers in and around the City of San Bernardino, California. This section of the Department’s annual financial report presents management’s analysis of the Department’s financial performance during the fiscal year that ended on June 30, 2021. Please read it in conjunction with the basic financial statements, which follow this section.

All amounts in the Management’s Discussion and Analysis within text areas are in thousands unless otherwise noted.

Financial Highlights:
 The Department’s overall net position increased by $8.1 million or 2.0%.  Operating revenues increased $2.6 million, 3.4% from the prior fiscal year. Revenues had a modest increase. The last rate increases were implemented July 1, 2018 and the Department is currently undergoing a rate study.
 Operating expenses increased $6.4 million, 9.1% from the prior fiscal year. The most significant variances were noted in the categories of electricity, chemical s, contracted services, and the R.O.W maintenance agreement between the City and the Department.  Net income/loss before capital contributions decreased by $6.7 million.  The Department’s current ratio (the ability to pay short-term obligations) was 8.0.  Cash available (the ability to cover current expenses with cash) was 615 days.

Overview of the Financial Statements
The discussion and analysis are intended to serve as an introduction to the Department’s basic financial statements. The Department’s basic financial statements are co mprised of two components: the Financial Statements and the Notes to the Basic Financial State ments. This report also contains other supplementary information in addition to the basic financial statements themselves. Information providing citywide financial results is available in the City’s Comprehensive Annual Financial Report.

Required Financial Statements
The financial statements of the Department report information a bout the Department using accounting methods similar to those used by private sector companies. The se statements offer short-term and long-term financial information about its activities. The Statement of Net Position (pages 14-15) includes all of the Department’s investments in resources (assets) and the obligations to creditors (liabilities). It also provides the basis for evaluating the capital structure of the Department and assessing the liquidity and financial flexibility of the Department. All of the current year’s revenues and expenses are accounted for in the Statement of Revenues, Expenses and Changes in Net P osition. (page 17) This statement measures the success of the Department’s operations over the past year and can be used to determine whether the Department has successfully recovered all its costs through its user fees and other charges, profitability, and credit worthiness. The final required financial statement is the Statement of Cash Flows (pages 18-19). The primary purpose of this statement is to prov ide information about the Department’s cash receipts and cash payments during the reporting period. The statement reports cash receipts, cash payments, and net changes in cash resulting from operations, in vesting, and financing activities and provides answers to questions such as “where did cash come from , what was cash used for, and what was the change in cash balance during the reporting period?” 5 13.a
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Financial Analysis of the Department
Our analysis of the Department begins on page 14 of the financial statements. One of the most important questions to ask about the Department’s finances is “Whether the Department, as a whole, is better off or worse off as a result of the year’s activities?” The Statem ent of Net Position, and the Statement of Revenues, Expenses and Changes in Net Position report information about the Department’s activities in a way that will help answer this question. These two statements report the net position of the Department and changes in them. Measuring the change in the Department’s net position - the difference between assets and liabilities - is one way to measure financial health or financial position.

Over time, increases or decreases in the Department’s net assets are indications 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, population growth, and zoning and new or changed government legislation.

Water Utility Fund
To begin our analysis, a summary of the Water Utility Fund’s St atement of Net Position is presented in Table A-1.
2021 2020 $ Change % Change
Current and noncurrent assets 104,853$ 105,586$ (733)$ -0.7% Capital assets 204,921 203,799 1,122 0.6% Total assets 309,774 309,385 389 0.1% Deferred outflows of resources 5,407 5,029 378 7.5% Current liabilities 7,950 9,260 (1,310) -14.1% Noncurrent liabilities 132,008 137,704 (5,696) -4.1% Total liabilities 139,958 146,964 (7,006) -4.8% Deferred inflows of resources 4,227 1,384 2,843 205.4% Net inv estment in capital assets 168,554 168,992 (438) -0.3% Unrestricted 2,442 (2,926) 5,368 183.5% Total net position 170,996$ 166,066$ 4,930$ 3.0% TABLE A-1
Condensed Statement of Net Position - Water Ut ility
(amounts expressed in thousands of dollars)

As can be seen from the table above, the Water Utility total ne t position increased 3.0% or $4.9 million in fiscal year 2021. The favorable increase in net position is related to the decrease in total liabilities of

4.8% or $7.0 million. The decrease is largely due to expenses a ssociated with the City’s right-of-way maintenance agreement ($1.2 million) paid before the end of the fiscal year reflected in the decrease in current liabilities. The decrease in noncurrent liabilities rel ates to the decrease of the net OPEB liability ($4.4 million) due to advantageous investment earnings in the O PEB trust and the steady health insurance premiums.
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2021 2020 $ Change % Change
Operating revenue 42,758$ 40,267$ 2,491$ 6.2% Capital contributions 3,861 2,003 1,858 92.8% Other nonoperating revenue 2,718 3,636 (918) -25.2% Total revenues 49,337 45,906 3,431 7.5% Operating expenses 42,481 38,626 3,855 10.0% Nonoperating expenses 1,926 1,980 (54) -2.7% Total expenses 44,407 40,606 3,801 9.4% Change in net position 4,930 5,300 (370) 7.0% Net position, beginning balance 166,066 160,766 5,300 3.3% Total net position 170,996$ 166,066$ 4,930$ 3.0% TABLE A-2
Condensed Statement of Revenues, Expenses and Changes in Net Position - Water Utility (amounts expressed in thousands of dollars)

Total revenues increased by 7.5% or $3.4 million. Water operating revenues increased due to higher demand as customers stayed at home due to the Pandemic. Capital contributions also increased as development in the City increased due to COVID restrictions lifting during FY 21. Total expenses increased 9.4% or $3.8 million. Significant variances were noted in electricity ($1.2 million), activated carbon chemicals ($0.4 million), contracted services ($0.5 million), and expenses associated with the Right of Way Maintenance (R.O.W.) agreement with the City. Expe nses increased overall in the water fund, and depreciation expense increased ($0.3 million) over the prior year.

2021 2020 $ Change % Change
Land and easements 5,611$ 5,611$ -$ 0.0% Construction in progress 9,808 10,928 (1,120) -10.2% Wells and pumping 101,989 101,989 - 0.0% Distribution 159,997 159,892 105 0.1% Plant and facilities 7,543 6,716 827 12.3% Other capital assets 43,030 34,141 8,889 26.0% Total capital assets 327,978 319,277 8,701 2.7% Less: accumulated depreciation (123,057) (115,478) (7,579) 6.6% Total capital assets, net 204,921$ 203,799$ 1,122$ 0.6% TABLE A-3
Capital Assets - Water Utility
(amounts expressed in thousands of dollars)

Total capital assets increased by 2.7% or $8.7 million in fiscal year 2021. The Water fund capitalized $8.9 million in various annual repairs and maintenance capital projects completed and placed in service during the fiscal year. Projects included the Systemwide Pipeline Replacement ($4.8 million) and the Enhancement of San Bernardino Basin Area Groundwater Flow Model ($1.3 million). Additional information on capital assets is presented in Note 4 of the Notes to the Basic Financial Statements. 7 13.a
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2021 2020 $ Change % Change
Bonds Payable 44,970$ 45,830$ (860)$ -1.9% Bond Premium 5,007 5,204 (197) -3.8% Compensated absences 1,413 1,187 226 19.0% Total long-term debt 51,390$ 52,221$ (831)$ -1.6% TABLE A-4
Long-term Debt - Water Utility
(amounts expressed in thousands of dollars)

Total long-term debt decreased by 1.6% or $0.8 million due to annual debt service payments. Additional information on long-term debt is presented in Note 5 of the Notes to Basic Financial Statements.

Sewer Utility Fund
2021 2020 $ Change % Change
Current and noncurrent assets 91,573$ 106,406$ (14,833)$ -13.9% Capital assets 83,932 68,817 15,115 22.0% Total assets 175,505 175,223 282 0.2% Deferred outflow of resources 3,973 3,685 288 7.8% Current liabilities 6,577 8,536 (1,959) -22.9% Noncurrent liabilities 57,095 59,611 (2,516) -4.2% Total liabilities 63,672 68,147 (4,475) -6.6% Deferred inflow of resources 3,085 1,009 2,076 205.7% Net inv estment in capital assets 64,651 66,907 (2,256) -3.4% Unrestricted 48,070 42,845 5,225 12.2% Total net position 112,721$ 109,752$ 2,969$ 2.7% TABLE B-1
Condensed Statement of Net Position - Sewer Utility
(amounts expressed in thousands of dollars)

As can be seen from the table above, the Sewer Utility net position increased 2.7% or $3.0 million to $112.7 million in fiscal year 2021. The favorable increase in net position is related to the decrease in total liabilities of 6.6% or $4.4 million. The decrease in noncurrent liabilities relates to the decrease of the net OPEB liability ($3.2 million) due to advantageous investment earnings in the OPEB trust and the steady health insurance premiums.
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2021 2020 $ Change % Change
Operating revenue 30,361$ 30,397$ (36)$ -0.1% Capital contributions 2,502 2,257 245 10.9% Other nonoperating revenue 19 1,322 (1,303) -98.6% Total revenues 32,882 33,976 (1,094) -3.2% Operating expenses 26,986 24,648 2,338 9.5% Nonoperating expenses 2,927 2,859 68 2.4% Total expenses 29,913 27,507 2,406 8.7% Change in net position 2,969 6,469 (3,500) -54.1% Net position, beginning balance 109,752 103,283 6,469 6.3% Total net position 112,721$ 109,752$ 2,969$ 2.7% TABLE B-2
Condensed Statement of Revenues, Expenses and Changes in Net Po sition - Sewer Utility (amounts expressed in thousands of dollars)

During fiscal year 2021, total revenues for the Sewer Utility decreased 3.2% or $1.1 million, from the prior year, primarily due to unfavorable investment income earnings ($19 thousand) when compared ($1.3 million) to prior year. Total expenses increased 8.7% or $2.4 million in fiscal year 2021 largely due to increased operating expenses. Significant variances were noted in electricity ($0.3 million), chemicals ($0.3 million), professional services ($0.3 million), and expen ses associated with sludge removal and brine line maintenance ($0.4 million).
2021 2020 $ Change % Change
Land and easements 17,603$ 17,603$ -$ 0.0% Construction in progress 26,024 8,068 17,956 222.6% Pumping 4,750 4,750 - 0.0% Buildings, plants and stores 143,371 143,371 - 0.0% Field and office equipment 10,543 8,876 1,667 18.8% Total capital assets 202,291 182,668 19,623 10.7% Less: accumulated depreciation (118,359) (113,851) (4,508) 4.0% Total net assets 83,932$ 68,817$ 15,115$ 22.0% TABLE B-3
Capital Assets - Sewer Utility
(amounts expressed in thousands of dollars)

Total capital assets increased by 10.7% or $19.6 million in fiscal year 2021, primarily due to construction in progress expenditures related to the Blower Decentralization Project ($12.0 million) and the Digester Gas Storage Project ($2.5 million). More information relating t o capital assets can be found in Note 4 of the Notes to the Basic Financial Statements.
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2021 2020 $ Change % Change
Bonds Payable 31,945$ 32,610$ (665)$ -2.0% Bond Premium 163 169 (6) -3.6% Compensated absences 539 483 56 11.6% Total long-term debt 32,647$ 33,262$ (615)$ -1.8% TABLE B-4
Long-term Debt - Sewer Ut ility
(amounts expressed in thousands of dollars)

During the year, the Sewer Utility’s long-term debt decreased 1.8% or $0.6 million which can be attributed to the annual debt service payments. Additional information on long-term debt is presented in Note 5 of the Notes to Basic Financial Statements.

Sewer Collections Utility
2021 2020 $ Change % Change
Current and noncurrent assets 19,839$ 21,569$ (1,730)$ -8.0% Capital assets 20,084 19,372 712 3.7% Total assets 39,923 40,941 (1,018) -2.5% Deferred outflow of resources 1,335 1,248 87 7.0% Current liabilities 792 1,891 (1,099) -58.1% Noncurrent liabilities 8,651 9,351 (700) -7.5% Total liabilities 9,443 11,242 (1,799) -16.0% Deferred inflow of resources 1,018 335 683 203.9% Net inv estment in capital assets 20,084 19,372 712 3.7% Unrestricted 10,713 11,240 (527) -4.7% Total net position 30,797$ 30,612$ 185$ 0.6% TABLE C-1
Condensed Statement of Net Position - Sewer Collections Utility (amounts expressed in thousands of dollars)

As can be seen from the table above, the Sewer Collections Utility net position increased slightly, approximately 0.6% or $0.1 million, to $30,797 million in fiscal year 2021. Total liabilities decreased 16% or $1.8 million. The decrease is largely due to expenses associ ated with the City’s right-of-way maintenance agreement ($1.1 million) paid before the end of the fiscal year reflected in the decrease in current liabilities.
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2021 2020 $ Change % Change
Operating revenue 7,794$ 7,666$ 128$ 1.7% Capital contributions 242 345 (103) -29.9% Other nonoperating revenue 11 630 (619) -98.3% Total revenues 8,047 8,641 (594) -6.9% Operating expenses 7,862 7,650 212 2.8% Total expenses 7,862 7,650 212 2.8% Change in net position 185 991 (806) -81.3% Net position, beginning balance 30,612 29,621 991 Total net position 30,797$ 30,612$ 185$ 0.6% TABLE C-2
Condens ed Statement of Revenues , Expens es and Changes in Net Position - Sewer Collections Utility (amounts expressed in thousands of dollars)

During fiscal year 2021, total revenues for the Sewer Collectio n Utility decreased 6.9% or $0.6 million from the prior year, primarily due unfavorable investment incom e earnings ($1.6 thousand) when compared ($.6 million) to prior year. Total expenses increased 2.8% or $0.2 million in fiscal year 2021.

2021 2020 $ Change % Change
Construction in progress 1,683$ 1,676$ 7$ 100.0% Buildings, plants and stores 17,252 17,252 - 0.0% Field and office equipment 7,379 5,393 1,986 36.8% Sewer Pipelines 19,112 19,112 - 0.0% Total capital assets 45,426 43,433 1,993 4.6% Less: accumulated depreciation (25,342) (24,061) (1,281) 5.3% Total net assets 20,084$ 19,372$ 712$ 3.7% TABLE C-3
Capital Assets - Sewer Collections Utility
(amounts expressed in thousands of dollars)

Total capital assets increased by 4.6% or $0.2 million in fisca l year 2021, due to extensive repairs and rehabilitation of sewer collection mains and manhole repairs dur i n g t h e f i s c a l y e a r . M o r e i n f o r m a t i o n relating to capital assets can be found in Note 4 of the Notes to the Basic Financial Statements. The Sewer Collections Utility does not have any outstanding debt.

Economic Factors and Next Year’s Budgets and Rates
The Service Area (Service Area) economy served by the Departmen t is steadily recovering from the impact of the Coronavirus pandemic during the entire fiscal yea r 2021. The Department was granted minor pass-through funds from the County of San Bernardino to offset equipment and coronavirus related expenses. The Department is currently participating in the Federal Covid-19 payroll tax relief and coordinating with the City to allocate part of the Federal American Rescue Plan Act (ARPA) Act funds for lead service lines in the water system. Most recently, the depa rtment received award approval from the California Water and Wastewater Arrears Payment Program to offset the impact the Pandemic has had on the Department’s delinquent accounts.

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The Department adopted a balanced budget for Fiscal Year 2021-2022. The Fiscal Year 2021-2022 budget takes into consideration the effects of the Pandemic, rising operational expenses and funding our capital program to address aging infrastructure. Additional de tails regarding the Department’s budget can be found on the Department’s website. Questions or requests for information regarding the Adopted Budget should be directed to the Finance Department.

The Department is currently undergoing a rate study and a cost-of-service study for the water, sewer treatment, and sewer collection utilities. The department plans to present the results of the rate study and rate structure proposal during fiscal year 2021-2022. As part o f the Department’s strategic plan, a long- term financial plan was completed for each enterprise fund.

Contacting the Department’s Director of Finance
This financial report is designed to provide our customers and creditors with a general overview of the Department’s finances and to demonstrate the Department’s accou ntability for the money it receives. If you have questions about this report or need additional financi al information, please contact the Department’s finance department at (909) 453-6009.

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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

STATEMENT OF NET POSITION
JUNE 30, 2021
Total
Assets:

Current:

Cash and investments 37,101,334$ 51,290,605$ 18,730,192$ 107,122,131$ Receivables:

Accounts, net 6,902,075 3,594,312 1,012,343 11,508,730 Accrued interest 48,946 108,647 46,466 204,059 Due from other entities - 511,838 - 511,838 Inventories 1,588,030 - - 1,588,030 Prepaid expenses 286,949 577,422 49,807 914,178 Total Current Assets 45,927,334 56,082,824 19,838,808 121,848,966 Noncurrent:

Investment in joint venture - RIX - 22,663,748 - 22,663,748 Restricted assets:

Cash and cash equivalents:

Restricted for capital 13,609,131 12,825,440 - 26,434,571 Investments:

Restricted for consent decree 24,690,738 - - 24,690,738 Accrued interest - consent decree 42,824 - - 42,824 Prepaid Insurance - consent decree 20,582,128 - - 20,582,128 Capital assets:

Land and easements 5,610,559 17,603,413 - 23,213,972 Construction in progress 9,808,392 26,024,300 1,683,773 37,516,465 Depreciable capital assets 312,560,167 158,663,831 43,742,987 514,966,985 Less: accumulated depreciation and amortization (123,057,499) (118,358,697) (25,342,485) (266,758,681) Total Capital Assets, Net 204,921,619 83,932,847 20,084,275 308,938,741 Total Noncurrent Assets 263,846,440 119,422,035 20,084,275 403,352,750 Total Assets 309,773,774 175,504,859 39,923,083 525,201,716 Deferred Outflows of Resources:

Deferred outflows - pension related 3,877,620 2,857,193 966,517 7,701,330 Deferred outflows - OPEB related 1,530,089 1,116,664 368,803 3,015,556 Total Deferred Outflows of Resources 5,407,709 3,973,857 1,335,320 10,716,886 Water Utility Sewer Utility
Sewer
Collection
Utility
The notes to financial statements are an integral part of this statement. 14 13.a
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

STATEMENT OF NET POSITION
JUNE 30, 2021
Total Water Utility Sewer Utility
Sewer
Collection
Utility
Liabilities:

Current:

Accounts payable 1,747,478 3,703,951 419,543 5,870,972 Related parties payable 23,612 - - 23,612 Accrued compensation 723,600 549,558 171,520 1,444,678 Claims payable 1,780,876 649,934 160,969 2,591,779 Consumer deposits 565,870 - - 565,870 Current portion of compensated absences 1,130,655 431,963 40,080 1,602,698 Current portion of bonds payable 1,097,638 706,404 - 1,804,042 Accrued interest 880,370 535,531 - 1,415,901 Total Current Liabilities 7,950,099 6,577,341 792,112 15,319,552 Noncurrent:

Consumer deposits 2,784,072 - - 2,784,072 Accrued compensated absences 282,664 107,991 10,020 400,675 Unearned revenue - consent decree 45,315,690 - - 45,315,690 Bonds payable 48,879,195 31,401,343 - 80,280,538 Net OPEB Liability 2,471,525 1,803,715 595,718 4,870,958 Net pension liability 32, 275,144 23,781,685 8,044,748 64,101,577 Total Noncurrent Liabilities 132,008,290 57,094,734 8,650,486 197,753,510 Total Liabilities 139,958,389 63,672,075 9,442,598 213,073,062 Deferred Inflows of Resources:

Deferred inflows - OPEB related 4,227,363 3,085,154 1,018,942 8,331,459 Total Deferred Inflows of Resources 4,227,363 3,085,154 1,018,942 8,331,459 Net Position:

Net investment in capital assets 168,553,917 64,650,540 20,084,275 253,288,732 Unrestricted 2,441,814 48,070,947 10,712,588 61,225,349 Total Net Position 170,995,731$ 112,721,487$ 30,796,863$ 314,514,081$ The notes to financial statements are an integral part of this statement. 15 13.a
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

STATEMENT OF REVENUES, EXPENSES

AND CHANGES IN FUND NET POSITION
FOR THE YEAR ENDED JUNE 30, 2021
Interfund
Eliminations Total
Operating Revenues:

Sales and service charges 42,113,517$ 29,587,597 $ 7,759,318 $ (82,259) $ 79,378,173$ Other operating revenues 644,675 773,519 35,100 - 1,453,294 Total Operating Revenues 42,758,192 30,361,116 7,794,418 (82,259) 80,831,467 Operating Expenses:

Administration and customer service 6,702,762 3,970,170 1,654,388 264,599 12,591,919 Utility administration 2,410,770 366,666 202,983 (501,547) 2,478,872 Plant operations 9,037,367 11,242,168 533,619 97,484 20,910,638 Maintenance 3,126,556 3,811,413 - (55,205) 6,882,764 Environmental control - 744,690 - 112,410 857,100 Distribution 5,007,865 - - - 5,007,865 Engineering and water quality control 3,064,623 387,932 2,549,257 - 6,001,812 General, administration and overhead 5,292,025 1,955,477 1,640,598 - 8,888,100 Depreciation and amortization 7,838,887 4,507,869 1,281,602 - 13,628,358 Total Operating Expenses 42,480,855 26,986,385 7,862,447 (82,259) 77,247,428 Operating Income (Loss) 277,337 3,374,731 (68,029) - 3,584,039 Nonoperating Revenues (Expenses):

Investment income 29,541 19,472 1,605 - 50,618 Rental income 286,553 - - - 286,553 Noncapital grant funds 2,011,099 - - - 2,011,099 Share of joint venture income (loss) - (1,604,905) - - (1,604,905) Interest expense and fiscal charges (1,926,133) (1,283,861) - - (3,209,994) Gain (loss) on disposal of capital assets 83,682 - - - 83,682 Other 306,785 (38,363) 9,306 - 277,728 Total Nonoperating Revenues (Expenses) 791,527 (2,907,657) 10,911 - (2,105,219) Net Income (Loss) Before Capital Contributions 1,068,864 467,074 (57,118) - 1,478,820 Capital Contributions:

Acquisition fees 1,117,555 - - - 1,117,555 Capacity fees 1,563,864 1,238,590 242,283 - 3,044,737 EPA grants 197,756 - - - 197,756 Capital contributions 981,835 1,263,673 - - 2,245,508 Total Capital Contributions 3,861,010 2,502,263 242,283 - 6,605,556 Changes in Net Position 4,929,874 2,969,337 185,165 - 8,084,376 Net Position at the Beginning of the Year 166,065,857 109,752,150 30,611,698 - 306,429,705 Net Position at the End of the Year 170,995,731$ 112,721,487$ 30,796,863$ -$ 314,514,081$ Water Utility Sewer Utility
Sewer
Collection
Utility
The notes to financial statements are an integral part of this statement. 17 13.a
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2021
Total
Cash Flows from Operating Activities:

Cash received from customers 41,513,916$ 30,970,468 $ 7,653,016 $ 80,137,400$ Cash paid to employees for services (14,524,115) (6,188,758) (3,573,423) (24,286,296) Cash paid to suppliers for goods and services (21,450,829) (18,331,434) (4,226,489) (44,008,752) Net Cash Provided by (Used for)
Operating Activities 5,538,972 6,450,276 (146,896) 11,842,352 Cash Flows from Noncapital Financing Activities:

Consent decree insurance drawdowns 2,039,491 - - 2,039,491 Net Cash Provided by
Noncapital Financing Activities 2,039,491 - - 2,039,491 Cash Flows from Capital and
Related Financing Activities:

Capital fees received 2,681,419 1,238,590 242,283 4,162,292 Proceeds from sales of capital assets 105,693 - - 105,693 Cash paid to acquire capital assets (8,002,027) (18,360,235) (1,994,152) (28,356,414) Principal paid on capital-related debt (860,000) (665,000) - (1,525,000) Interest paid on capital-related debt (2,138,105) (1,304,119) - (3,442,224) Capital grant proceeds 197,756 - - 197,756 Net Cash (Used for) Capital and
Related Financing Activities (8,015,264) (19,090,764) (1,751,869) (28,857,897) Cash Flows from Investing Activities:

Cash received from rental income 286,553 - - 286,553 Cash received from investment income 47,870 29,219 3,053 80,142 Cash paid to RIX joint venture operations - (146,439) - (146,439) Net Cash Provided by Investing Activities 334,423 (117,220) 3,053 220,256 Net Increase in Cash and Cash Equivalents (102,378) (12,757,708) (1,895,712) (14,755,798) Cash and Cash Equivalents, July 1 45,118,758 57,655,191 9,852,525 112,626,474 Cash and Cash Equivalents, June 30 45,016,380$ 44,897,483$ 7,956,813$ 97,870,676$ Reconciliation of Cash and Cash Equivalents to
Amounts Reported on the Statement of Net Position:

Cash and investments 37,101,334$ 51,290,605$ 18,730,192$ 107,122,131$ Restricted cash and investments 13,609,131 12,825,440 - 26,434,571 Less those not meeting the definition of a cash equivalent (5,69 4,085) (19,218,562) (10,773,379) (35,686,026) Cash and Cash Equivalents, June 30 45,016,380$ 44,897,483$ 7,956,813$ 97,870,676$ Water Utility Sewer Utility
Sewer
Collection
Utility
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2021
Total Water Utility Sewer Utility
Sewer
Collection
Utility
Reconciliation of Operating Income to Net Cash
Provided by (Used for) Operating Activities:

Operating income (loss) 277,337$ 3,374,731 $ (68,029) $ 3,584,039$ Depreciation and amortization 7,838,887 4,507,869 1,281,602 13,628,358 Adjustments to reconcile operating income (loss) to
net cash provided (used) by operating activities:
(Increase) decrease in accounts receivable (985,151) 591,484 (141,402) (535,069) Decrease in due from other entities 20,044 17,868 - 37,912 Decrease in inventory 226,948 - - 226,948 (Increase) in prepaid expense (199,926) (39,227) (17,167) (256,320) (Decrease) in accounts payable (755,468) (2,215,012) (198,553) (3,169,033) (Decrease) in related parties payable (1,113,820) - (1,004,425) (2,118,245) Increase (decrease) in accrued compensation (218,584) 80,620 11,253 (126,711) Increase in compensated absences 226,626 57,245 20,880 304,751 Increase in claims payable 627,848 109,008 76,532 813,388 (Decrease) in consumer deposits (279,169) - - (279,169) (Decrease) in OPEB obligation (1,112,823) (784,825) (232,096) (2,129,744) Increase in net pension liability 986,223 750,515 124,509 1,861,247 Total Adjustments (2,577,252) (1,432,324) (1,360,469) (5,370,045) Net Cash Provided by (Used for)
Operating Activities 5,538,972$ 6,450,276$ (146,896)$ 11,842,352$ Non-Cash Investing, Capital, and Financing Activities:

Capital contributions 981,835$ 1,263,673$ -$ 2,245,508$ Unrealized gain in fair value of investments (169,410) (427,585) ( 230,183) (827,178) Amortization of bond premiums 197,638 6,403 - 204,041
The notes to financial statements are an integral part of this statement. 19 13.a
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2021

Note 1: Reporting Entity and Summary of Significant Accounting Policies

a. Organization and Operations of the Reporting Entity

The San Bernardino Municipal Water Department (Department) is g overned under the Charter of the City of San Bernardino (City). A Water Board ap pointed by the Mayor and approved by City Council, has Charter defined powers, with full authority for administration of the water utility and delegated authority for the sewer treatment utility. The Department has served the community since 1905.

b. Basis of Accounting and Measurement Focus

The Department reports its activities as enterprise funds, whic h are used to account for operations that are financed and operated in a manner similar t o a private business enterprise, where the intent of the Department is that the costs (including depreciation) of providing goods or services to the general public on a continui ng basis be financed or recovered primarily through user charges. Revenues and expenses are recognized on the accrual basis. Revenues are recognized in the accounting period in which they are earned, and expenses are recognized in the period incurred, regardless of when the related cash flow takes place.

Operating revenues, such as charges for services (water sales, sewer services and water services) result from exchange transactions associated with the principal activity of the Department. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as proper ty taxes and investment income, result from nonexchange tran sactions or ancillary activ ities in which the Department gives (receives) value without directly receiving (g iving) equal value in exchange.

When both restricted and unrestricted resources are available f or use, the Department uses restricted resources and then unrestricted resources.

The major funds of the Department are described below:

Water Utility Fund – The Water Utility Enterprise Fund (Water Utility) is used to account for the operations of the Department’s water system and related revenues.

Sewer Utility Fund – The Sewer Utility Enterprise Fund (Sewer Utility) is used to account for the operations of the City’s wastewater treatment s ystem and related revenues. The Sewer conveyance system is under the direction o f the City’s Public Works Department.

Sewer Collection Utility Fund – The Sewer Collection Enterprise Fund (Sewer Collection) is used to account for the operations of the City’s sewer collection system and related revenues.

Administrative and engineering services are provided by the Water Utility to the Sewer and Sewer Collection Utilities.
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2021

Note 1: Reporting Entity and Summary of Significant Accounting Policies (Continued)

c. Financial Reporting

The Department’s basic financial statements are presented in co nformance with the provisions of Governmental Accounting Standards Board (GASB) St atement No. 34, “Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments” (GASB No. 34). This statement established revised financial reporting requirements for state and local governments throughout the United States for the purpose of enhancing the understandability and usefulness of financial reports.

GASB Statement No. 34 and its related GASB pronouncements provide for a revised view of financial information and restructure the format of financial information provided prior to its adoption. A statement of net position replaces the balance sheet and reports assets, liabilities, and the difference between them as net position, not equity. A statement of revenues, expenses and changes in net position replaces both the income statement and the statement of changes in retained earnings and contributed c apital. GASB Statement No. 34 also requires that the statement of cash flows be prepared using the direct method.

Under the direct method, cash fl ows from operating activities a re presented by major categories.

d. Assets, Liabiliti es and Net Position

1. Use of Estimates

The preparation of the basic financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported changes in net position during the reporting period. Actual results could differ from those estimates.

2. Cash and Investments

For the purpose of the statement of cash flows, cash and cash e quivalents include highly liquid investments (including restricted assets) with a maturity of three months or less when purchased.

Investments are reported in the accompanying balance sheet at f air value, except for certain certificates of deposit and investment contracts that are reported at cost as they are not transferable and have terms that are not affected by changes in market interest rates.

Changes in fair value that occur during a fiscal year are recog nized as investment income reported for that fiscal year. Investment income includes interest earnings, changes in fair value and any gains or losses realized upon the liquidation of investments.

Fair Value Measurements

Certain assets and liabilities are required to be reported at fair value. The fair value framework provides a hierarchy that prioritizes the inputs to v aluation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabili ties (Level 1 measurements) and the lowest priority to unobservable inputs

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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2021

Note 1: Reporting Entity and Summary of Significant Accounting Policies (Continued)

(Level 3 measurements). The three levels of fair value hierarchy are described as follows:

Level 1 - Inputs to the valuation methodology are unadjusted qu oted prices for identical assets or liabilities in active markets.

Level 2 - Inputs other than quoted prices included within Level 1 t h a t a r e observable for the asset or liab ility, either directly or indir ectly and fair value is determined through the use of models or other valuation methodologies including:

 Quoted prices for similar assets or liabilities in active mark ets;  Quoted prices for identical or similar assets or liabilities i n markets that are inactive;
 Inputs other than quoted prices that are observable for the as set or liability;  Inputs that are derived principally from or corroborated by ob servable market data by correlation or other means.

Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement. These unobservable inputs reflect t he Department’s own assumptions about the inputs market participants would use in pri cin g th e asset or liability (including assumptions about risk). These unobservable inputs are developed based on the best information available in the circumstances and may include the Department’s own data.

3. Accounts Receivable

Customer or trade receivables are shown net of an allowance for uncollectible accounts based on historical and management estimates. Transac tions between funds that are representative of lending or borrowing arrangements outstanding at the end of the fiscal year are referred to as “interfund receivables / payables” or “advances to/from” other funds. All interfund transactions are eliminated for financial reporting.

4. Inventory

Materials and supplies inventory consist primarily of water meters, pipe and pipefittings for construction and repair to the Department’s water transmiss ion and distribution system and items necessary for maintenance at the sewer treatment facilities.

Inventory is valued at cost using a weighted average method. In ventory items are charged to expense at the time that individual items are withdr awn from inventory or consumed.

Water inventory is stated at its purchase cost using the first in, first out method.

Inventory is recorded when purchased and expensed at the time t he inventory is consumed.

5. Prepaid Expense and Deposit

Certain payments to vendors reflect costs or deposits applicabl e to future accounting periods and are recorded as prepaid items in the basic financial statements. 23 13.a
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2021

Note 1: Reporting Entity and Summary of Significant Accounting Policies (Continued)

6. Capital Assets

Capital assets acquired or constructed are capitalized at histo ric cost. Department policy has set the capitalization threshold for reporting capit al assets at $5,000 and a life expectancy of at least 3 years. Overhead is capitalized at the rate of 28.9% of labor and benefits, 10% of material and supplies and 2% of significan t contracts.

Depreciation is recorded on a straight-line basis over the estimated useful lives of the assets as follows:

Source of supply plant 8 to 50 years
Disposal plant and interceptor lines 35 to 50 years
Other facilities (shops, leasehold & yards) 5 to 25 years Tools, office equipment & communications 4 to 20 years
Computer equipment 3 to 5 years
Automotive and fleet equipment 3 to 15 years

7. Compensated Absences

Department policy is to permit e mployees to accumulate a limite d amount of earned vacation and sick leave. Various negotiation groups have different sell-back and cash out options. Additionally, cash out options upon retirement or death of the employee vary based on the negotiation group. Employees’ vacation and sick leave benefits are recognized as a liability of the Department.

8. Restricted Assets and Amounts Payable from Restricted Assets

Amounts shown as restricted assets have been restricted by bond indentures or are to be used for specified purposes b ased on contract provisions, su ch as bonded debt service. Certain liabilities which are currently payable have been classified as current liabilities payable from restric ted assets since assets have be en restricted for their payment.

9. Pensions

For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources r elated to pensions, and pension expense, information about the fiduciary net position and additions to/deductions fr om the fiduciary net position have been determined on the same basis as they are rep orted by the Department. For this purpose, benefit payments (including refun ds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.

GASB 68 requires that the reported results must pertain to liab ility and asset information within certain defined timeframes. For this report, the following timeframes are used:

Valuation Date (VD) June 30, 2019
Measurement Date (MD) June 30, 2020
Measurement Period (MP) June 30, 2019 to June 30, 2020
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2021

Note 1: Reporting Entity and Summary of Significant Accounting Policies (Continued)

10. Other Post-Employment Benefits (OPEB)

For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the Department’s plan (OPEB Plan) , the assets of which are held by US Bank in an irrevocable trust, and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined by an independent actuary.

For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.

Generally accepted accounting principles require that the reported results must pertain to liability and fiduciary net position information within certain defined timeframes. For this report, the following timeframes are used:

Valuation Date June 30, 2020
Measurement Date June 30, 2020
Measurement Period July 1, 2019 to June 30, 2020

11. Deferred Outflows/Inflows

In addition to assets, the Statement of Net Position will somet imes report a separate section of deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents consumption of net position that applies to a future period and so will not be recognized as an outflow of resources (expenses/expenditures) until then. The Department has two ite m s t h a t q u a l i f y f o r reporting in this category: the deferred outflows related to pensions and OPEB.

In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separa te financial statement element, deferred inflows of resources, represents an acquisiti on of net position that applies to a future period and will not be recognized as inflow of resources (revenue) until that time. The Department has two items that qualify for reporting in this category, deferred inflows related to pensions and OPEB.

12. Interfund Eliminations

The interfund eliminations colum n represents entries made to el iminate interfund income and expenditure transactions between the water utility f und and the sewer utility fund for the purposes of consolidated financial statements.

13. Net Position

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

 Net Investment in Capital Assets – This component of net position consists of capital assets, net of accumulated depreciation and reduced by any debt outstanding against the acquisition, construction or improvemen t of those assets.
 Restricted Net Position – This component of net position consists of constraints placed on net position use through external constra ints imposed 25 13.a
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2021

Note 1: Reporting Entity and Summary of Significant Accounting Policies (Continued)

by creditors, grantors, contributors, or laws or regulations of other governments or constraints imposed by law through constitutiona l provisions or enabling legislation.
 Unrestricted Net Position – This component of net position consists of net position that does not meet the definition of restricted or net investment in capital assets.

14. Capital Contributions

Contributions in aid of constru ction represent cash and utility plant additions contributed to the Department by property owners or developers desiring services that require capital expenditures or capacity commitment. In accorda nce with Governmental Accounting Standards Board Statement No. 33, the capital contributions are recorded on the Statement of Revenues, Expenses and Changes in Net position.

15. Budgetary Policies

The Department adopts an annual budget for planning, control, a nd evaluation purposes. Budgetary control and evaluation are affected by comp arisons of actual revenues and expenses with planned revenues and expenses for th e period.

Encumbrance accounting is not used to account for commitments r elated to outstanding contracts for construction and services.

Note 2: City of San Bernardino Bankruptcy

Without reserves and facing a $45.8 million budget deficit, in July of 2012, the City determined that it was no longer able to meet its contractual obligations and declared a fiscal emergency.

On August 1, 2012, the City filed a petition under Chapter 9 of the United States Bankruptcy Code in Riverside seeking to adjust its debts. The City has si nce proposed a Chapter 9 plan of adjustment, and that plan of adjustment was confirmed on February 7, 2017. The City’s plan of adjustment became effective on June 15, 2017. No revenues of the Department were used to pay general claims during the pendency of the City’s bankruptcy case or pursuant to its confirmed plan. In addition, no general claims of the City wer e successfully asserted against the Department or its revenues during the pendency of the City’ s bankruptcy case. The plan of adjustment does not impair or affect the revenues of the Department. The Department continues to hold its revenues in segregated accounts and uses them only for the purposes provided for under state law and the City Charter.

Note 3: Cash and Investments

Cash and investments are reported in the accompanying statement of net position as follows:

Water Utility Sewer Utility
Sewer
Collection
Utility Total
Cash and investments 37,101,334 $ 51,290,605 $ 18,730,192 $ 107,122,131 $ Restricted inv estments:

Restricted for Consent Decree 24,690,738 - - 24,690,738 Proceed from Bond Issuance 13,609,131 12,825,440 - 26,434,571 Total Cash and Investments 75,401,203$ 64,116,045 $ 18,730,192 $ 158,247,440 $ 26 13.a
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2021

Note 3: Cash and Investments (Continued)

Cash and investments at June 30, 2021, consisted of the following:

Water Utility Sewer Utility
Sewer
Collection
Utility Total
Cash on Hand 7,000$ 200$ -$ 7,200$ Deposits with Financial Institutions 12,814,561 16,288,433 2,308,253 31,411,247 Investments 24,279,773 35,001,972 4,593,676 63,875,421 Restricted investments 38,299,869 12,825,440 11,828,263 62,953,572 Total Cash and Investments 75,401,203$ 64,116,045$ 18,730,192$ 158,247,440$

a. Investments Authorized by the California Government Code and the Department’s Investment Policy

The table below identifies the investment types that are authorized by the Department and Consent Decree (see note 12) in accordance with the California Government Code (or the City’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City’s investment policy, where more restrictive) that addresses interest rate risk, credit risk, an d concentration of credit risk.

Due to its long-term nature, the Consent Decree has been explic itly exempted from maximum maturity requirements of the California Government Code, which limits maturity of most investments to five years. All other aspects of the Co nsent Decree investment policy are consistent with the City’s investment policy.

Investment Type* Department
Consent
Decree
Maximum %
of Portfolio
Maximum %
of Portfolio
US treasury 5 years 5 years None None
US agency 5 years 5 years None None
Bankers acceptances 180 days 180 days 40% 40%
Commercial paper 270 days 270 days 25% 25%
Negotiable CDs 5 years 5 years 30% 30%
Medium-term notes 5 years 5 years 30% 30%
Money market mutual funds N/A N/A 20% 20%
Mortgage pass through 5 years 5 years 20% 20%
Local Agency Investment Fund N/A N/A $40,000,000 $40,000,000 Guaranteed investment N/A N/A None None
Maximum Maturity

b. Investments Authorized by Debt Agreements

Investments of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the Californi a Government Code or the City’s investment policy. Investments authorized for funds held by bond trustee include, U.S. Treasury Obligations, U.S. Government Sponsored Enterprise Securities, the California Local Agency Investment Fund, Guaranteed Investment Contracts, Commercial Paper, Local Agency Bonds, Banker’s Acceptance and Money Market Mutual Funds. There are no limitations on the maximum amount that can be invested in one issuer, maximum percentage allowed or the maximum maturity of an invest ment, except for the maturity of Banker’s Acceptance which are limited to one year. 27 13.a
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2021

Note 3: Cash and Investments (Continued)

c. Custodial Credit Risk

Custodial credit risk for deposits is the risk that, in the eve nt of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The Ca lifornia Government Code requires that a financial institution secure deposits made by a state or local governmental unit by pledging securities in an undivided collateral pool held by a depository regulated under state law.

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. Californ ia law also allows financial institutions to secure the Department’s deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.

For investment identified herein as held by bond trustee, the bond trustee selects the investment under the terms of the applicable trust agreement, a cquires the investment, and holds the investment on behalf of the reporting government.

d. Investment in State Investment Pool

The Department is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the Department’s investment in this pool is reported in the accompanying financial statements at amounts based upon the Department’s pro-rata share of the fair value provided by LAIF for the entire LAIF po rtfolio (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.

LAIF is not rated by a nationally recognized statistical rating organization, but as stated previously, it is regulated by the California Government Code, and is therefore exempt from rating requirements.

e. Interest Rate Risk

Interest rate risk is the possib ility that fluctuations in market interest rates will adversely affect the fair value of an investment. Generally, the longer t he maturity of an investment, the greater the sensitivity of its fair value will be to change s in market interest rates.

One method that the Department uses to manage its exposure to i nterest 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 mature s or comes close to maturity evenly over time as necessary to provide requirements for cash flow and liquidity needed for operations.

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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2021

Note 3: Cash and Investments (Continued)

Information about the sensitivity of the fair values of the Dep artment’s investments to market interest rate fluctuations is provided by the following table that shows the distribution of the Department’s investments by maturity date:

Less than 12 13-24 25-60 More than
Investment Type months months months 60 months Total
U.S. Agency Securities 2,228,174$ 9,012,881$ 6,917,559$ -$ 18,158,614$ U.S. Treasuries 2,145,707 6,668,216 8,110,776 - 16,924,699 Medium Term Corporate Notes 760,449 1,837,348 - - 2,597,797 Non - U.S. Government and Supranational Bonds - - 1,906,506 - 1,906,506 Asset Backed Securities 8,267 150,707 1,575,668 - 1,734,642 Money Market Funds 321,834 - - - 321,834 Local Agency Investment Fund 34,059,592 - - - 34,059,592 Consent Decree:

U.S. Treasuries - 2,412,055 7,775,305 956,414 11,143,774 U.S. Agency Asset Backed Securities 6,063 - - 491,847 497,910 U.S. Agency Collateralized Mortgage Obligations - - 170,232 303,128 473,360 U.S. Agency Securities - - 3,880,327 1,159,308 5,039,635 Commercial Paper 499,949 - - - 499,949 Corporate Notes - 204,185 1,086,887 946,193 2,237,265 Certificates of Deposit 456,057 887,024 - - 1,343,081 Asset Backed Securities - 54,175 1,715,918 1,391,384 3,161,477 Money Market Funds 294,287 - - - 294,287 Inv estments with Fiscal Agent:

Money Market Funds 26,434,571 - - - 26,434,571 Total Investments 67,214,950$ 21,226,591$ 33,139,178$ 5,248,274$ 126,828,993$ Maturities

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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2021

Note 3: Cash and Investments (Continued)

f. Credit Risk

Generally, credit risk is the possibility that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code, the Department’s investment policy, or debt agreements, and the actual rating as of year-end for each investment type.

Minimum
Investment Type Rating Rating Total
U.S. Agency Securities None AA+ 18,158,614 $
U.S. Treasuries Exempt Exempt 16,924,699
Medium Term Corporate Notes AA- AAA 2,597,797
Non - U.S. Government and Supranational Bonds AA AAA 1,906,506 Asset Backed Securities AA- AAA 1,734,642
Money Market Funds AA+ AAA 321,834
Local Agency Investment Fund Not Rated Not Rated 34,059,592 Consent Decree:

U.S. Treasuries No Limit Exempt 11,143,774
U.S. Agency Asset Backed Securities No Limit AA+ 497,910 U.S. Agency Collateralized Mortgage Obligations AA AA+ 473,360 U.S. Agency Securities No Limit AA+ 5,039,635
Commercial Paper A-1 A-1 499,949
Corporate Notes A AA- 2,237,265
Certificates of Deposit A A+ 1,343,081
Asset Backed Securities AA AAA 3,161,477
Money Market Funds AA+ AA+ 294,287
Inv estments with Fiscal Agent:

Money Market Funds AA+ AA+ 26,434,571
Total Inv estments 126,828,993 $

g. Fair Value Measurement

The Department categorizes its fa ir value investments within th e fair value hierarchy established by generally accepted accounting principles. The Department has the following recurring fair value measurements as of June 30, 2021:

Investment Type Level 1 Level 2 Total
U.S. Agency Securities -$ 18,158,614$ 18,158,614$ U.S. Treasuries - 16,924,699 16,924,699 Medium Term Corporate Notes - 2,597,797 2,597,797 Non - U.S. Government and Supranational Bonds - 1,906,506 1,906,506 Asset Backed Securities - 1,734,642 1,734,642 Consent Decree:

U.S. Treasuries 11,143,774 - 11,143,774 U.S. Agency Asset Backed Securities - 497,910 497,910 U.S. Agency Collateralized Mortgage Obligations - 473,360 473,360 U.S. Agency Securities - 5,039,635 5,039,635 Commercial Paper - 499,949 499,949 Corporate Notes - 2,237,265 2,237,265 Asset Backed Securities - 3,161,477 3,161,477 Subtotal - Investments Subject to Fair Value 11,143,774$ 53,231,854$ 64,375,628 Investments Not Subject to Fair Value 62,453,365
Total Investments 126,828,993$
Fair Value Hierarchy

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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2021

Note 4: Capital Assets

a. Water Utility Fund

Capital asset activity for the water utility for the fiscal year ended June 30, 2021:

Balance
July 1, 2020 Additions
Deletions/
Transfers
Balance
June 30, 2021
Non-depreciable assets:

Land and easements 5,610,559 $ - $ - $ 5, 610,559$ Construction in progress 10,927,775 8, 496,203 (9,615,586) 9,808,392 Total non-depreciable assets 16,538,334 8, 496,203 (9,615,586) 15,418,951 Depreciable assets:

Water rights, wells and pumping 101,989,289 - - 101, 989,289 Distribution system 159,891,784 105,446 - 159, 997,230 Buildings, plants, and stores 6,716,160 827,055 - 7, 543,215 Field and office equipment 34,141,096 9, 170,744 (281,407) 43, 030,433 Total depreciable assets 302,738,329 10,103,245 (281,407) 312, 560,167 Less: accumulated depreciation
Water rights, wells and pumping (44,636,037) (2, 168,842) - (46, 804,879) Distribution system (53,112,373) (3, 229,760) - (56, 342,133) Buildings, plants, and stores (2,644,292) ( 186,008) - (2, 830,300) Field and office equipment (15,085,306) (2, 254,277) 259,396 (17, 080,187) Total accumulated depreciation (115,478,008) (7,838,887) 259,396 (123, 057,499) Total depreciable assets, net 187,260,321 2,264,358 (22,011) 189, 502,668 Total capital assets, net 203,798,655$ 10,760,561 $ (9,637,597)$ 204,921,619$

b. Sewer Utility Fund

Capital asset activity for the sewer utility for the fiscal year ended June 30, 2021:

Balance
July 1, 2020 Additions
Deletions/
Transfers
Balance
June 30, 2021
Non-depreciable assets:

Land and easements 17,603,413 $ - $ - $ 17, 603,413$ Construction in progress 8,067,423 19,557,035 (1, 600,158) 26, 024,300 Total non-depreciable assets 25,670,836 19,557,035 (1, 600,158) 43, 627,713 Depreciable assets:

Pumping 4,750,002 - - 4, 750,002 Buildings, plants, and stores 143,371,367 - - 143,371,367 Field and office equipment 8,875,431 1,667,031 - 10, 542,462 Total depreciable assets 156,996,800 1,667,031 - 158,663,831 Less: accumulated depreciation
Pumping (3,398,514) (376,468) - (3, 774,982) Buildings, plants, and stores (104,998,844) (3,374,076) - ( 108,372,920) Field and office equipment (5,453,470) (757,325) - (6, 210,795) Total accumulated depreciation (113,850,828) (4,507,869) - ( 118,358,697) Total depreciable assets, net 43,145,972 (2,840,838) - 40, 305,134 Total capital assets, net 68,816,808 $ 16,716,197 $ (1,600,158) $ 83,932,847 $

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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2021

Note 4: Capital Assets (Continued)

c. Sewer Collection Utility Fund

Capital asset activity for the sewer collection utility for the fiscal year ended June 30, 2021:

Balance
July 1, 2020 Additions
Deletions/
Transfers
Balance
June 30, 2021
Non-depreciable assets:

Construction in progress 1,675,564 $ 1,442,446 $ (1,434,237) $ 1,683,773 $ Total non-depreciable assets 1,675,564 1,442,446 (1,434,237) 1,683,773 Depreciable assets:

Buildings, plants, store yards 17,251,604 - - 17,251,604 Field and office equipment 5,393,053 1,985,943 - 7,378,996 Sewer Pipelines 19,112,387 - - 19,112,387 Total depreciable assets 41,757,044 1,985,943 - 43,742,987 Less: accumulated depreciation
Buildings, plants, store yards (12,847,549) (492,098) - (13,339,647) Field and office equipment (2,363,708) (419,675) - (2,783,383) Sewer Pipelines (8,849,626) (369,829) - (9,219,455) Total accumulated depreciation (24,060,883) (1,281,602) - (25,342,485) Total depreciable assets, net 17,696,161 704,341 - 18,400,502 Total capital assets, net 19,371,725 $ 2,146,787 $ (1,434,237) $ 20,084,275 $

Note 5: Long-term Liabilities

a. Water Utility Fund

Changes in long-term liabilities in the water utility fund for the year ended June 30, 2021, are as follows:

Balance
July 1, 2020 Additions Reductions
Balance
June 30, 2021 Current Portion
Long-term
Portion
Bonds Payable:
2016 Water Revenue Bond 45,830,000$ -$ ( 860,000)$ 44,970,000$ 900,000$ 44,070,000$ Bond Premium 5,204,471 - ( 197,638) 5,006,833 197,638 4,809,195 Total 51,034,471$ -$ (1, 057,638)$ 49,976,833$ 1,097,638$ 48,879,195$

1. 2016 Water Revenue Bonds

On November 3, 2016, the water utility issued $48,225,000 Water Revenue Bonds to finance the acquisition and construction of certain water system capital improvements and to refund outstanding obligations. The Water Revenue Bonds have interest rates ranging from 3% to 5% with maturities through August 2036. The bonds are secured by revenues pledged for the payment of debt service. In additi on, a provision that in the event of default, the bond trustee may take whatever action, at law or in equity, as may appear necessary or desirable to collect the payments of the debt. 32 13.a
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2021

Note 5: Long-term Liab ilities (Continued)

Debt service requirements on the 2016 Water Revenue Bond are as follows:

Year Ending
June 30 Principal Interest Total
2022 900,000$ 2,090,388 $ 2,990,388 $
2023 950,000 2,044,138 2,994,138
2024 995,000 1,995,513 2,990,513
2025 1,050,000 1,944,388 2,994,388
2026 1,100,000 1,890,638 2,990,638
2027-31 6,400,000 8,560,187 14,960,187
2032-36 7,915,000 7,041,494 14,956,494
2037-41 9,990,000 4,964,124 14,954,124
2042-46 12,745,000 2,209,249 14,954,249
2047 2,925,000 67,687 2,992,687
Total 44,970,000$ 32,807,806 $ 77,777,806 $

2. Debt Service Coverage

The Water Utility Fund is required to maintain net revenues ade quate to cover 110% of annual debt service. Net Revenues means the Revenues for the Fiscal Year less Operation and Maintenance Costs for such Fiscal Year. Debt service coverage for the Water Utility Fund for the year ended June 30, 2021, was as follows:

Gross revenue 42,758,192$
Operating expenses 42,480,855
Less: depreciation expense (7,838,887)
Net operating expenses 34,641,968
Non-operating income,
less gain on disposal 2,633,978
Net revenues 10,750,202$
Annual debt service 2,990,088$
Actual coverage ratio 3.60

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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2021

Note 5: Long-term Liab ilities (Continued)

b. Sewer Utility Fund

Changes in long-term liabilities in the sewer utility fund for the year ended June 30, 2020, are as follows:

Balance
July 1, 2020 Additions Reductions
Balance
June 30, 2021
Current
Portion
Long-term
Portion
Bonds Payable:
2016 Sewer Revenue Bond 32,610,000$ - $ ( 665,000)$ 31,945,000 $ 700,000 $ 31,245,000$ Bond Premium 169,150 - (6,403) 162,747 6,404 156,343 Total 32,779,150 $ - $ ( 671,403)$ 32,107,747 $ 706,404 $ 31,401,343$

1. 2016 Sewer Revenue Bonds

On December 8, 2016, the sewer utility issued $34,445,000 of Se wer Treatment Revenue Bonds to finance the acquisition and construction of ad ditional capital improvements to the sewer utility. The Sewer Treatment Revenue Bonds have interest rates ranging from 3% to 5% with maturities through August 2033 . The bonds are secured by revenues pledged for the payment of debt service. In addition, a provision that in the event of default, the bond trustee may take whateve r action, at law or in equity, as may appear necessary or desirable to collect the payments of the debt.

Debt service requirements on the 2016 Sewer Revenue Bond are as follows:

Year Ending
June 30 Principal Interest Total
2022 700,000$ 1,267,775 $ 1,967,775 $
2023 735,000 1,231,900 1,966,900
2024 770,000 1,194,275 1,964,275
2025 810,000 1,154,775 1,964,775
2026 855,000 1,113,150 1,968,150
2027-31 4,820,000 5,015,538 9,835,538
2032-36 5,755,000 4,077,700 9,832,700
2037-41 7,005,000 2,821,900 9,826,900
2042-46 8,565,000 1,269,500 9,834,500
2047 1,930,000 38,600 1,968,600
Total 31,945,000$ 19,185,113 $ 51,130,113 $

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Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2021

Note 5: Long-term Liab ilities (Continued)

2. Debt Service Coverage

The Sewer Utility Fund is required to maintain net revenues ade quate to cover 110% of annual debt service. Gross revenue is defined as Operating Revenue combined with non-operating revenue. Debt service coverage for the Sewer Util ity Fund for the year ended June 30, 2021, was as follows:

Gross revenue 30,361,116$
Operating expenses 26,986,385
Less: depreciation expense (4,507,869)
Net operating expenses 22,478,516
Non-operating income,
less gain on disposal 19,472
Net revenues 7,902,072$
Annual debt service 1,966,900$
Actual coverage ratio 4.02

Note 6: Compensated Absences

Compensated absences represent the amount of the accumulated vacation, which is expected to be liquidated with future re sources. The water utility fund, sewer utility fund and sewer collection fund liquidate 100 percent of the compensated absences for business-type activities.

There is no fixed payment schedule for unpaid compensated absen ces; see Note 1 for additional information.

Balance
July 1, 2020 Additions Reductions
Balance
June 30, 2021 Current Portion
Long-term
Portion
Water Utility Fund 1,186,693$ 1,525,397$ (1,298,771)$ 1,413,319$ 1,130,655$ 282,664$ Sewer Utility Fund 482,709 768,417 (711,172) 539,954 431,963 107,991 Sewer Collection Fund 29,220 236,853 (215,973) 50,100 40,080 10,020 Total 1,698,622$ 2,530,667$ (2,225,916)$ 2,003,373$ 1,602,698$ 400,675$

Note 7: Pension Plan

The Department is considered to be part of the City of San Bern ardino PERS pension plan, therefore all related information included in this note refers to the City as a whole unless specifically indicating otherw ise. All qualified permanent and probationary employees are eligible to participate in the Department’s Miscellaneous Plan, an agent multiple employer defined benefit pension plan administered by the California Pub lic Employees’ Retirement System (CalPERS), which acts as a common investment and adminis trative agent for its participating member employers. Benefit provisions under the P lan are established by State statute and Local Government res olution. CalPERS issues public ly available reports that include a full description of the pension plans regarding benef it provisions, assumptions and membership information that can be found on the CalPERS website . Additional disclosures and required supplementary information regarding the City’s plan can be found in the City’s audited financial statements.
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2021

Note 7: Pension Plan (Continued)

a. Benefits provided

CalPERS provides service retir ement and disability benefits, an nual cost of living adjustments and death benefits to plan members, who must be pub lic employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. The Plans’ provisions and benefits in effect at the measurement date, are summarized as follows:

Hire date
Prior to
January 1, 2013
On or after
January 1, 2013
Benefit formula 2.7% @ 55 2% @ 60
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50-55 52-67
Monthly benefits, as a % of eligible
compensation 2.0% to 2.7% 1.0% to 2.5%
Required employee contribution rates 10% 10%
Required employer contribution rates 35% 35%
Miscellaneous

b. Employees Covered

As of the June 30, 2020 measurement date, the following employees were covered by the benefit terms of the Plan:

City-wide Department
Inactive employees or beneficiaries currently receiving benefits 1,728 197 Inactiv e employees entitled to but not yet receiv ing benefits 5 55 49 Activ e employees 394 240
Total 2,677 486

c. Contribution Description

Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate.

The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The employer is required to con tribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended. Pa yments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions. 36 13.a
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2021

Note 7: Pension Plan (Continued)

d. Actuarial Methods and Assumpti ons used to determine Total Pension Liability

For the measurement period ended June 30, 2020 (the measurement date), the total pension liability was determined by rolling forward the June 30, 2019 total pension liability determined in the June 30, 2019 valuation. The June 30, 2020 total pension liabilities were based on the following actuarial methods and assumptions:

Actuarial Cost Method: Entry Age Normal in accordance with the requirements of GASB 68 Actuarial Assumptions:

Discount Rate: 7.15%
Inflation: 2.50%
Salary Increases: Varies by Entry Age and Service
Mortality Rate Table1: Derived using CalPERS' Membership Data for all Funds Post Retirement Benefit Increase: The lesser of contract COLA or 2.5% until Purchasing Power Protection Allowance Floor on purchasing power applies, 2.5% thereafter 1 The mortality table used was developed based on CalPERS-specific data. The table includes 15 years of mortality improvements using the Society of Actuaries Scale 90% of scale MP 2016. For more details on this table, please refer to the December 2017 experience study report (based on CalPERS demographic data from 1997 to 2015) that can be found on the CalPERS website.

All other actuarial assumptions used in the June 30, 2019 valuation were based on the results of an actuarial experience study for the period from 1997 to 2015, including updates to salary increase, mortality and retirement rates. The Experience Study report can be obtained at the CalPERS website under Forms and Publications.

e. Discount Rate

The discount rate used to measure the total pension liability w as 7.15 percent. To determine whether the municipal bond rate should be used in the calculation of the discount rate for each plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. The tests revealed the assets would not run out. Therefore, the current 7.15 perce nt discount rate is appropriate, and the use of the municipal bond rate calculation is not deemed necessary.

The long-term expected discount rate of 7.15 percent is applied to all plans in the Public Employees’ Retirement Fund (PERF). The cash flows used i n the testing were developed assuming that both mem bers and employers will make th eir required contributions on time and as scheduled in all future years. The s t r e s s t e s t r e s u l t s a r e presented in a detailed report ca lled “GASB Crosso ver Testing Report” that can be obtained at CalPERS website under the GASB 68 section.

The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

In determining the long-term expected rate of return, staff took into account both short-term and long-term market return expe ctations as well as the expecte d pension fund (PERF) cash flows. Taking into account historical returns of all the P ublic Employees Retirement 37 13.a
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2021

Note 7: Pension Plan (Continued)

Funds’ asset classes (which includes the agent plan and two cos t-sharing plans or PERF A, B, and C funds), expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11-60 years) using a building-block approach.

Using the expected nominal returns for both short-term and long -term, the present value of benefits was calculated for each PERF fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns.

The expected rate of return was then set equal to the single eq uivalent rate calculated above and rounded down to the nearest one quarter of one percent.

The table below reflects long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions appl ied to determine the discount rate and asset allocation. The target allocation shown was adopted by the Board effective on July 1, 2014.

Asset Class
Current Target
Allocation
Real Return
Years 1 - 10
1 Real Return
Years 11+
2 Global Equity 50.00% 4.80% 5.98%
Global Fixed Income 28.00% 1.00% 2.62%
Inflation Sensitive 0.00% 0.77% 1.81%
Private Equity 8.00% 6.30% 7.23%
Real Estate 13.00% 3.75% 4.93%
Liquidity 1.00% 0.00% -0.92%
1 An expected inflation of 2.0% used for this period.
2 An expected inflation of 2.92% used for this period.

f. Pension Plan Fiduciary Net Position

The plan fiduciary net position disclosed in the GASB 68 accounting valuation report may differ from the plan assets reported in the funding actuarial valuation report due to several reasons. First, for the accounting valuations, CalPERS must keep items such as deficiency reserves, fiduciary self-insurance and OPEB expense included as assets. These amounts are excluded for rate setting purposes in the funding actuarial valuation. In addition, differences may result from early Comprehensive Annual Financial Report closing and final reconciled reserves.

g. Changes in Net Pension Liability

The following table shows the Department’s proportionate share of the net pension liability of the City’s plan over the measurement period:

Total Pension
Liability (a)
Plan Fiduciary
Net Position (b)
Net Pension
Liability
(c) = (a) - (b)
Balance at: 6/30/2019 (VD) 213,742,290$ 153,210,601$ 60,531,689$ Balance at: 6/30/2020 (MD) 219,048,159 154,946,582 64,101,577 Net Changes during 2019-20 5,305,869 1,735,981 3,569,888 Increase (Decrease)
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Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2021

Note 7: Pension Plan (Continued)

The net pension liability of the plan is measured as of June 30, 2020, and the total pension liability for the plan used to calculate the net pension liability was determined by an actuarial valuation of June 30, 2019 rolled forward to June 30, 2020, using standard update procedures. The proportion of the net pension lability was base d on a projection of the Department’s long-term share of contributions to the pension plan relative to the projected contributions of all participati ng employers, actuarially deter mined. The Department’s proportionate share of the net pension lability for the plan as of June 30, 2020 and 2021 was as follows:

Miscellaneous Plan
Proportion – June 30, 2020 36%
Proportion – June 30, 2021 36%
Change – Increase (Decrease) -

h. Sensitivity of the Net Pension Liability to Changes in the Discount Rate

The following presents the net pension liability of the Plan as of the Measurement Date, calculated using the discount rate of 7.15 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (6.15 percent) or 1 percentage-point higher (8.15 percent) than the current rate:

Discount Rate - Current Discount Discount Rate +
1% (6.15%) Rate (7.15%) 1% (8.15%)
Plan's Net Pension Liability
-Department Allocation
(36%)
$91,749,183 $64,101,577 $41,243,772

i. Recognition of Gains and Losses

Under GASB 68, gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time.

The first amortized amounts are recognized in pension expense f or the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recogniz ed in future pension expense.

The amortization period differs depending on the source of the gain or loss:

Difference between projected and
actual earnings
5 year straight-line amortization
All other amounts Straight-line amortization over the expected remaining service lives of all members that are provided with
benefits (active, inactive, and retired) as of the beginning of the measurement period.

The expected average remaining service lifetime (EARSL) is calculated by dividing the total future service years by the total number of plan participants (active, inactive, and retired). 39 13.a
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2021

Note 7: Pension Plan (Continued)

The EARSL for the Plan for the measurement period ending June 3 0, 2020 is 2.1 years, which was obtained by dividing the total service years of 6,618 (the sum of remaining service lifetimes of the active employees) by 3,163 (the total number of participants: active, inactive, and retired). Note that inactive employees and retire es have remaining service lifetimes equal to 0. Also note that total future service is based on the members’ probability of decrementing due to an event other than receiving a cash refund.

j. Pension Expense and Deferred Outflows and Deferred Inflows o f Resources Related to Pensions

For the fiscal year ended June 30, 2021, the Department recogni zed a pension expense of $8,353,445 for the Plan.

As of June 30, 2021, the Department reports other amounts for the Plan as deferred outflow and deferred inflow of resources related to pensions as follows:

Deferred Outflows of
Resources
Deferred Inflows of
Resources
Pension contributions subsequent to
measurement date 6,492,199 $ - $
Differences between Expected and Actual
Experience 204,085 -
Changes of Assumptions - -
Net Difference between Projected and Actual
Earnings on Pension Plan Investments 1,005,046 - Total 7,701,330 $ - $

The $6,492,199 reported as deferre d outflows of resources relat ed to employer contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2022. That and other amounts reported as deferred outflows of r esources and deferred inflows of resource s related to pensions will be recognized as pension expense as follows:

Fiscal Year Ended
June 30:

Deferred
Outflows/(Inflows) of
Resources
2022 (552,170) $
2023 364,320
2024 771,381
2025 625,600

Note 8: Other Post-Employment Benefits (OPEB)

a. Plan Description

The Department provides health benefits to all qualifying retir ees and their spouses in accordance with Memorandums of Understanding under various labo r agreements. The other post-employment benefits pl an is a single-employer plan a dministered by the Department.
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2021

Note 8: Other Post-Employment Benefits (OPEB) (Continued)

b. Employees Covered

Employees are eligible for ret iree health benefits if they reti re from the Department on or after age 50 with at least 10, 12, or 15 years of service, depending on bargaining unit, and are eligible for a PERS pension.

As of the June 30, 2020 measurement date, the following current and former employees were covered by the benefit terms under the OPEB Plan:

Active employees 241
Inactive employees or beneficiaries currently receiving benefits1 5 9 Inactive employees entitled to, but not yet receiving benefits - Total 400

c. Contributions

The contribution requirements of plan members and the Departmen t are established and may be amended by the Board. The required contribution is based on projected pay-as-you-go financing requirements, with an additional amount to prefund benefits as may be determined annually by the Board. The Department has established an irrevocable trust to which pre-funding contributions are made. For the fiscal year ended June 30, 2021, the Department’s cash contributions were $2,234,270, and the amount of contributions in the form of an implied subsidy were $503,000.

d. Net OPEB Liability

The Department’s net OPEB liab ility was measured as of June 30, 2020, and the total OPEB liability used to calculate the net OPEB liability was det ermined by an actuarial valuation dated June 30, 2019 that was rolled forward to determine the June 30, 2020, total OPEB liability, based on the following actuarial methods and assumptions:

Actuarial Cost Method: Entry Age Normal
Actuarial Assumptions:

Discount Rate 6.25%
Inflation 2.75%
Mortality Rate
(1) CalPERS 1997-2015 Experience Study
Non-Medicare - 7.0% for 2022, decreasing to an ultimate rate of 4.0% in 2076.

Medicare - 6.1% for 2022, decreasing to an ultimate rate of 4.0% in 2076.

Healthcare Trend Rate

The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class.

These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset al location percentage and by adding expected inflation.

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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2021

Note 8: Other Post-Employment Benefits (OPEB) (Continued)

The target allocation and best estimates of arithmetic real rat es of return for each major asset class are summarized in the following table:

Asset Class
Target
Allocation
Expected Real Rate
of Return
Fixed income 40% 1.47%
Global Equity 60% 4.82%
Assumed long-term rate of inflation - 2.75% Expected long-term net rate of return - 6.25% Total 100%

e. Discount Rate

The discount rate used to measure the total OPEB liability was 6.25 percent. The projection of cash flows used to determine the discount rate assumed that Department’s contributions will be made at rates equal to the actuarially determined contribution rates.

Based on those assumptions, the OPEB plan’s fiduciary net posit ion was projected to be available to make all projected OPEB payments for current active and inactive employees and beneficiaries. Therefore, the long-term expected rate of re turn on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability.

f. Changes in the N et OPEB Liability

The changes in the net OPEB liability are as follows (in thousands):

Total OPEB Fiduciary Net Net OPEB
Liability Position Liability
Balance at 6/30/20 41,907,103$ 28,349,302$ 13,557,801$ (6/30/19 measurement date)
Changes for the year
Service cost 1,352,161 - 1,352,161 Interest 2,651,878 - 2,651,878 Changes of benefit terms - - - Actual vs. expected experience (6,747,960) - (6,747,960) Assumption changes (1,784,735) - (1,784,735) Contributions - employer - 2,602,421 (2,602,421) Contributions - employee - - - Net investment income - 1,564,423 (1,564,423) Benefit payments (1,658,421) (1,658,421) -
Administrative expenses - (8,657) 8,657 Net Changes (6,187,077) 2,499,766 (8,686,843) Balance at 6/30/21 35,720,026$ 30,849,068$ 4,870,958$ (6/30/2020 measurement date)
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2021

Note 8: Other Post-Employment Benefits (OPEB) (Continued)

g. Sensitivity of the Net OPEB L iability to Changes in the Discount Rate

The following presents the net OPEB liability of the Department if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2020:

1% Decrease
(5.25%)
Current
Discount Rate
1% Increase
(7.25%)
Net OPEB Liability 9,941,973$ 4,870,958 $ 719,431 $

h. Sensitivity of the Net OPEB Liability to Changes in the Heal th Care Cost Trend Rates

The following presents the net OPEB liability of the Department if it were calculated using health care cost trend rates that are one percentage point lowe r or one percentage point higher than the current rate, for measurement period ended June 30, 2020:

1% Decrease 6.0% Pre-
Medicare 5.1%
Medicare
Current Healthcare Cost
Trend Rates 7.0% Pre-
Medicare

6.1% Medicare
1% Increase 8.0%
Pre-Medicare 7.1%
Medicare
Net OPEB Liability 476,632$ 4,870,958 $ 10,296,610 $

i. Recognition of Deferred Outflo ws and Deferred Inflows of Resources

Gains and losses related to ch anges in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time.

Amounts are first recognized in OPEB expense for the year the g ain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense.

The recognition period differs depending on the source of the g ain or loss. The net difference between projected and actual earnings on OPEB plan i nvestments are amortized over 5 years, while all other deferred outflows and inflows are amortized over the average expected remaining service life of plan participant s. For the June 30, 2020 measurement date, the average expected remaining service life is 7.0 years.

j. OPEB Expense and Deferred Outflows/Inflows of Resources Rela ted to OPEB

For the fiscal year ended June 30, 2021, the Department recogni zed OPEB expense of $607,321. As of fiscal year-ended June 30, 2021, the Department reported deferred outflows of resources related to OPEB from the following sources:

Deferred Outflows
of Resources
Deferred Inflows
of Resources
OPEB contributions subsequent to measurement date 2,737,270$ -$ Differences between expected and actual experience 278,286 5,797,543 Changes in assumptions - 2,099,341 Net difference between projected and actual earnings on OPEB plan investments - 434,575
Total 3,015,556$ 8,331,459$
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2021

Note 8: Other Post-Employment Benefits (OPEB) (Continued)

The $2,737,270 reported as deferred outflows of resources relat ed to contributions subsequent to the June 30, 2020, measurement date will be recognized as a reduction of the net OPEB liability during the fiscal year ending June 30, 2022. Other amounts reported as deferred outflows of resourc es related to OPEB will be recog nized as expense as follows:

Fiscal Year Ended
June 30:

Deferred
Outflows/(Inflows) of
Resources
2022 (1,607,472)$
2023 (1,408,473)
2024 (1,324,693)
2025 (1,188,779)
2026 (1,201,788)
Thereafter (1,321,968)

Note 9: Joint Ventures

a. Colton/San Bernardino Regional Tertiary Treatment and Water Reclamation Authority

On August 2, 1994, the City of San Bernardino, through the Depa rtment formed a joint powers authority with the City of Colton to construct, operate, use and maintain tertiary wastewater treatment, disposal and water reclamations systems, including the Regional Rapid Infiltration and Extraction Facility (RIX). This authority is governed by a separate board consisting of four members; two appointed by the City of San Bernardino through the Department’s BOWC and two appointed by the City Cou ncil of the City of Colton. Construction of RIX was administered by the Santa Ana Watershed Project Authority and was substantially completed during 1996. Administration and operation was turned over at that time. The cities of San Bernardino and Colton each have a measurable equity interest in the net position of RIX in proportion to its contributions, which are based on an 80% / 20% split, respectively. Substantially all of the assets of RIX are in the form of capital assets. Annual revenues (in the form of contributions from the two member cities) are equal to annual expenses. The Department's equity interest in this joint venture has been reported as an investment in joint venture in the accompan ying statement of net position. Below are the most currently available condensed aud ited financial statements of RIX as of June 30, 2021. The RIX complete financial stateme nts may be obtained at City of San Bernardino Municipal Water Department at 1350 South E. Street, San Bernardino, California 92418.

Total
Assets 29,237,574 $
Liabilities 907,889
Net Position 28,329,685 $
Revenues 3,956,739 $
Expenses 5,776,588
Change in Net Position (1,819,849)
Net Position - Beginning of Year 30,149,534
Net Position - End of Year 28,329,685 $
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2021

Note 9: Joint Ventures (Continued)

b. West End Water Development, Treatment and Conservation Joint Powers Authority

On August 15, 1990, the City of San Bernardino joined the West End Water Development, Treatment and Conservation Joint Powers Authority (WEJPA) as a financing vehicle for construction of water facilities. A three-member board consisting of one representative from each agency’s governing body governs the WEJPA. This join t venture was formed to provide a financing vehicle for the three member agencies. This joint venture is currently inactive.

Note 10: Commitments and Contingencies

a. Risk Management

Risk management activities are recorded in all utility funds. Significant losses are covered by insurance for all major events except workers’ compensation, for which the Department retains risk of loss in conjunction with the City of San Bernar dino’s risk management program for workers compensation. Settlement amounts have not e xceeded insurance coverage for the current year or the prior three years. Insuran ce coverage has been increased over the past several years.

The Department records an estimated liability for workers’ compensation. Claims liabilities are based on estimates of the ultimate cost of reported claims and an estimate for claims incurred but not reported based upon historical experience. Workers’ compensation claims liability is not discounted.

The following are the changes in approximate aggregate liabilit ies for the year ended June 30, 2020 and June 30, 2021. During the past three fiscal (claims) years, the Department had no settlements or judgments that exceeded pooled or insured coverage.

There were also no significant reductions in pooled or insured liability coverage in fiscal year 2021.

Claims Liabilities Water Utility Sewer Utility
Sewer
Collection Total
Balance, June 30, 2019 1,883,552$ 666,160$ 140,220$ 2,689,932$ Claims and changes in estimates (730,524) (125,234) (55,783) (911,541) Balance, June 30, 2020 1,153,028 540,926 84,437 1,778,391 Claims and changes in estimates 627,848 109,008 76,532 813,388 Balance, June 30, 2021 1,780,876$ 649,934$ 160,969$ 2,591,779$

b. Litigation

In the ordinary course of operations, the Department is subject to claims and litigation from outside parties. After consultation with legal counsel, the Department believes the ultimate outcome of such matters, if any, will not materially affect its financial condition. 45 13.a
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2021

Note 10: Commitments and Contingencies (Continued)

c. Construction Commitments

The following schedule summarizes the major contractual commitm ents as of June 30, 2021:

Project Name Contract Amount
Expenses to date
as of
June 30, 2021
Remaining
Commitments
SBMWD Water Facilities Relocation 1,133,614$ 888,570$ 245,044$ Resultant Projects Construction Project 14,930,000 13,228,152 1,701,848 Digester B Project 2,441,242 387,688 2,053,554 WRP Electrical Infrastructure Improvement Project 3,049,450 1,422,472 1,626,978

Note 11: Federal and State Grants

Grant funds received by the Department are subject to audit by the grantor agencies. Such audit could lead to requests for reimbursements to the grantor agencies for expenditures disallowed under terms of the grant. Management of the Departm ent believes that such disallowances, if any, would not be significant. The Department produces a Single Audit that details the use of grant and Consent Decree funds (see note 12 for information on the Consent Decree).

Note 12: Consent Decree

In 1996, the City of San Bernardino filed a complaint against the United States of America, Department of the Army to recover damages, response costs and o ther available remedies relating to contamination alleged to have originated at a World War II army installation known as Camp Ono. In March 2005, the United States District Court, Central Division entered judgment, in the form of a consent decree, in the matter of City of San Bernardino v.

United States of America. The Consent Decree settles the City’s and the State’s claims arising from the groundwater contamination allegedly caused by the Army . The Consent Decree contains a number of provisions obligating the City (through th e Department) to operate and maintain the Newmark Groundwater Superfund Site (Site). The Site consists of two operable units, the Newmark Operable Unit and the Muscoy Operable Unit. The Newmark Operable Unit was declared operational and functional in 1998. The Muscoy Operable unit was declared operational and functional in 2007.

The Consent Decree provided for a payment of $69 million from t he Army to the City for performance of the work outlined in the Consent Decree. Upon a cceptance of the Consent Decree, the Department received title to all facilities constructed by the United States Environmental Protection Agency (EPA) of the Site and agreed to operate and maintain the groundwater extraction and treatment system for a period of 50 years. The $69 million payment consisted of $59 million for operations and maintenance and $10 million for the construction of certain capital facilities that would be required in the future; the funds are subject to strict limitations, contained in the Consent Decree, as to how the money may be spent.

These capital facility funds may not be used for costs incurred to operate, maintain, repair or retrofit components of the site extraction of treatment systems constructed by EPA. 46 13.a
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2021

Note 12: Consent Decree (Continued)

In March 2006, the Department entered into a Guaranteed Investment Contract with AIG Match Funding Corporation. The Department invested $16,482,039 of excess Consent Decree funds into an interest-bearing Escrow Fund investment with an interes t rate of 4.95% per annum.

These funds were invested to pay costs associated with the wate r facilities defined in the Consent Decree for years 2035-2056. An additional $50 million was used to purchase a blended insurance policy to provide a financial vehicle that provides cost gap coverage for the first 30 years of expenses.

The terms of the Guaranteed Investment Contract only provided t he Department with the position of a secured creditor with respect to an AIG bankruptcy. As concerns arose regarding AIG’s financial credibility, in October 2009, the Department negotiated and accepted a “payout” in the amount of $18,661,876 which represented the principal an d accrued interest as of that date. These funds are currently i nvested in a diversified portf olio managed by PFM Asset Management and present in more detail in Note 3.
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

REQUIRED SUPPLEMENTARY INFORMATION

SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1)
2021 2020 2019 2018
Measurement Date 6/30/2020 6/30/2019 6/30/2018 6/30/2017 Proportion of the Net Pension Liability 36% 36% 36% 36% Proportionate Share of the Net Pension Liability 64,101,577$ 60,531,689$ 56,856,346$ 58,595,075$ Covered Payroll 18,770,894$ 17,169,126$ 15,357,635$ 14,876,739$ Proportionate Share of the Net Pension Liability as
Percentage of Covered Payroll 341% 353% 370% 394%
Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 71% 72% 72% 71%
Notes to Schedule of Proportionate Share of the Net Pension Lia bility Benefit Changes: The figures above include any liability impact that may have resulted from voluntary benefit changes that occurred after the June 30, 2019 valuation. However, offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes) that occurred after the June 30, 2019 valuation date are not included in the figures above, unless the liability impact is deemed to be material by the plan actuary.

Changes of Assumptions: None in 2019 or 2020. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Assumptions December 2017. There were no changes in the discount rate. In 2017, the discount rate was reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense).

In 2014, amounts reported were based on the 7.5 percent discount rate. (1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only seven years are shown.
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6/30/2016 6/30/2015 6/30/2014
36% 36% 36%
53,652,216$ 44,917,863 $ 40,932,398 $
14,177,779$ 14,087,004 $ 14,017,065 $
378% 319% 292%
72% 76% 78%
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

REQUIRED SUPPLEMENTARY INFORMATION

SCHEDULE OF PENSION PLAN CONTRIBUTIONS
AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1)
2021 2020 2019 2018
Actuarially Determined Contribution 6,492,199 $ 5,814,288 $ 5,251,737 $ 4,467,847 $ Contribution in Relation to the Actuarially
Determined Contribution (6,492,199) (5,814,288) (5,251,737) (4,467,847) Contribution Deficiency (Excess) -$ -$ -$ -$ Covered Payroll 20,103,974$ 18,770,894$ 17,169,126$ 15,357,635$ Contributions as a Percentage of Covered Payroll 32% 31% 31% 29% Actuarial Cost Method: Entry Age Normal
Amortization Method/Period:

Asset Valuation Method:

Inflation: 2.500%
Salary Increases: Varies by Entry Age and Service
Payroll Growth: 2.750%
Investment Rate of Return:

Retirement Age:

Mortality:
(1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only seven years are shown.

7.0% Net of Pension Plan Investment and Administrative
Expenses; includes Inflation.

The probabilities of Retirement are based on the 2017 CalPERS Experience Study for the period of 1997 to 2015.

Notes to Schedule of Plan Contributions:

For details, see June 30, 2018 Funding Valuation Report.

The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2020-21 were derived from the June 30, 2018 funding valuation report.

Market Value of Assets. For details, see June 30, 2018 Funding Valuation Report.

The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015.

Pre-retirement and Post-retirement mortality rates include 20 years of projected mortality improvement using Scale BB published by the Society of Actuaries.
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3,886,888$ 3,607,950 $ 2,979,160 $
(3,886,888) (3,607,950) (2,979,160)
-$ - $ - $
14,876,739$ 14,177,779 $ 14,087,004 $
26% 25% 21%
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

REQUIRED SUPPLEMENTARY INFORMATION

SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1)
2021 2020 2019 2018
Measurement Date 6/30/2020 6/30/2019 6/30/2018 6/30/2017 Total OPEB Liability:

Service cost 1,352,161$ 1,312,778 $ 1,067,080 $ 1,036,000$ Interest 2,651,878 2,512,269 2,449,681 2,322,000 Changes of benefit terms - - (640,849) - Actual vs. expected experience (6,747,960) - 523,834 - Assumption changes (1,784,735) - (1,065,369) - Benefit payments (1,658,421) (1,602,932) (1,554,389) (1,118,000) Net changes (6,187,077) 2,222,115 779,988 2,240,000 Total OPEB Liability (beginning of year) 41,907,103 39,684,988 38,905,000 36,665,000 Total OPEB Liability (end of year) (a) 35,720,026 41,907,103 39,684,988 38,905,000 Plan Fiduciary Net Position:

Contributions - employer 2,602,421 2,615,932 2,673,389 2,602,000 Net investment income 1,564,423 2,036,956 1,848,262 2,204,000 Benefit payments (1,658,421) (1,602,932) (1,554,389) (1,118,000) Administrative expenses (8,657) (8,061) (7,855) (7,000) Net changes 2,499,766 3,041,895 2,959,407 3,681,000 Plan Fiduciary Net Position - beginning 28,349,302 25,307,407 22,348,000 18,667,000 Plan Fiduciary Net Position - ending (b) 30,849,068 28,349,302 25,307,407 22,348,000 Net OPEB Liability/(Assets) - ending (a) - (b) 4,870,958$ 13,557,801$ 14,377,581$ 16,557,000$ Plan fiduciary net position as a percentage of the total OPEB liability 86% 68% 64% 57% Covered-employee payroll (2) 19,691,462$ 17,981,957 $ 16,768,495 $ 19,132,000 $ Net OPEB liability as a percentage of covered-employee payroll 25% 75% 86% 87% Notes to the Schedule of Changes in the Net OPEB Liability and Related Ratios (2) Contributions are not based on employee compensation; therefore , covered-employee payroll is used.

Benefit Changes: New hires after 7/1/2019 receive no Department contributions.

Changes of Assumptions: Demographic assumptions were updated to CalPERS 1997-2015 Exp erience Study; assumed Medical Plan in retirement updated to: (1) Participation percent at retirement lowered; ( 2) Kaiser Medicare trend lowered; (3) Mortality improvement scale was updated to Scale MP-2020; (4) Current medical plan assumed at retirement; (5) AC A high premium excise tax removed. (1) Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available. 54 13.a
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

REQUIRED SUPPLEMENTARY INFORMATION

SCHEDULE OF OPEB PLAN CONTRIBUTIONS
AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1)
2021 2020 2019 2018
Actuarially Determined Contribution 1,652,000$ 2,728,000 $ 2,760,000 $ 2,592,000$ Contribution in Relation to the Actuarially
Determined Contribution (2,737,270) (2,602,421) (2,615,932) (2,673,000) Contribution Deficiency (Excess) (1,085,270)$ 125,579$ 144,068$ (81,000)$ Covered-employee payroll 21,203,035$ 19,691,462 $ 17,981,957 $ 16,768,495$ Contributions as a percentage of 13% 13% 15% 16%
covered-employee payroll
Notes to Schedule of Employer Contribution:

Valuation Date: June 30, 2020
Actuarial Cost Method:

Amortization Method: Level % of pay
Amortization Period:

Asset Valuation Method:

Discount Rate: 6.25%
General Inflation: 2.75%
Medical Trend:

Mortality:

Mortality Improvement:

11.4-year average remaining fixed period for 2020/21.

Methods and Assumptions for 2019/20 Actuarially Determined Contribution Entry Age Normal, level percentage of payroll
CalPERS 1997-2015 experience study.
(1) Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available.

Non-Medicare - 7.5% for 2022, decreasing to an ultimate rate of 4.0% in 2076.

Medicare (Non-Kaiser) - 6.1% for 2022, decreasing to an ultimate rate of 4.0% in 2076
Medicare (Kaiser) - 5.0% for 2022, decreasing to an ultimate rate of

4.0% in 2076.

Post-retirement mortality projected fully generational with Scale MP-2020.

Investment gains and losses spread over 5-year rolling period. 55 13.a
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

REQUIRED SUPPLEMENTARY INFORMATION

SCHEDULE OF OPEB PLAN INVESTMENT RETURNS
AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1)
Fiscal Year Ending June 30
Net Money-Weighted Rate of
Return
2021 8.83%
2020 7.92%
2019 8.11%
2018 11.81%
Notes to Schedule:
(1) GASB Statement No. 75, which requires ten years of history for this schedule, was implemented during Fiscal Year 2017-18. Additional years will be added as they become available in the future.
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FINANCIAL TRENDS
These schedules contain trend informaton to help the
reader understand how the Department's financial performance and well-being have changed over time.
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Changes in Net Position
Last Ten Fiscal Years
Fiscal Year
Ended
Total
Operating
Revenue
Total
Operating
Expense
Operating
Income
Total Non-
Operating
Income
(Expense)
Total
Contributed
Capital
Changes in
Net Position
6/30/2012 60,756,697$ 58,971,535 $ 1,785,162 $ 1,974,266 $ 3,055,921 $ 6,815,349 $ 6/30/2013 61,883,615 57,327,537 4,556,078 1,861,758 4,896,921 11,314,757 6/30/2014 62,292,428 57,965,395 4,327,033 1,375,536 7,510,777 13,213,346 6/30/2015 57,805,304 55,074,661 2,730,643 3,801,830 4,977,945 11,510,418 6/30/2016 55,376,650 53,529,824 1,846,826 2,059,111 4,271,325 8,177,262 6/30/2017 * 64,488,587 61,895,872 2,592,715 8,431,207 21,995,016 33,018,938 6/30/2018 76,620,620 68,734,958 7,885,662 (1,872,712) 4,854,784 10,867,734 6/30/2019 77,094,723 66,921,125 10,173,598 (7,553,171) 10,121,344 12,741,771 6/30/2020 78,184,698 70,778,987 7,405,711 748,213 4,604,699 12,758,623 6/30/2021 80,831,467 77,247,428 3,584,039 (2,105,219) 6,605,556 8,084,376 Source: Department's annual reports
*Fiscal Years 2009-2016 contain only the Sewer Treatment and Water Utility Funds. The Sewer Collections Fund was transferred to the Department on May 1, 2017.
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

THOUSANDS
Changes in Net Position- Combined Funds
Changes in Net Position
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Water Fund
Changes in Net Position
Last Ten Fiscal Years
Fiscal Year
Ended
Total
Operating
Revenue
Total
Operating
Expense
Operating
Income
Total Non-
Operating
Income
(Expense)
Total
Contributed
Capital
Changes in
Net Position
6/30/2012 37,106,217$ 39,155,830 $ (2,049,613) $ 2,436,449 $ 2,384,710 $ 2,771,546 $ 6/30/2013 37,868,846 37,430,224 438,622 2,492,448 3,421,521 6,352,591 6/30/2014 36,671,903 36,041,616 630,287 2,504,705 6,521,601 9,656,593 6/30/2015 33,121,128 35,504,582 (2,383,454) 2,702,953 3,905,104 4,224,603 6/30/2016 30,001,871 34,834,362 (4,832,491) 2,283,230 2,812,192 262,931 6/30/2017 33,358,907 37,074,670 (3,715,763) (546,280) 2,194,093 (2,067,950) 6/30/2018 38,280,016 34,446,105 3,833,911 1,198,161 3,323,031 8,355,103 6/30/2019 39,099,960 33,995,037 5,104,923 1,829,448 2,737,031 9,671,402 6/30/2020 40,267,376 38,626,151 1,641,225 1,655,628 2,002,637 5,299,490 6/30/2021 42,758,192 42,480,855 277,337 791,527 3,861,010 4,929,874 Source: Department's annual reports
(3,000)
(1,000)
1,000
3,000
5,000
7,000
9,000
11,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

THOUSANDS
Changes in Net Position-Water Fund
Changes in Net Position
61 13.a
Packet Pg. 393
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the City of San Bernardino Municipal Water Department
Sewer Fund
Changes in Net Position
Last Ten Fiscal Years
Fiscal Year
Ended
Total
Operating
Revenue
Total
Operating
Expense
Operating
Income
Total Non-
Operating
Income
(Expense)
Total
Contributed
Capital
Changes in
Net Position
6/30/2012 25,888,729$ 22,053,954 $ 3,834,775 $ (462,183) $ 671,211 $ 4,043,803 $ 6/30/2013 26,414,653 22,297,197 4,117,456 (630,690) 1,475,400 4,962,166 6/30/2014 25,670,774 21,974,028 3,696,746 (1,129,169) 989,176 3,556,753 6/30/2015 24,734,425 19,620,328 5,114,097 1,098,877 1,072,841 7,285,815 6/30/2016 25,410,740 18,731,423 6,679,317 (224,119) 1,459,133 7,914,331 6/30/2017 28,612,019 24,139,878 4,472,141 (3,624,658) 1,355,494 2,202,977 6/30/2018 30,733,453 22,697,491 8,035,962 (3,275,704) 1,280,280 6,040,538 6/30/2019 30,546,181 24,866,681 5,679,500 (9,967,309) 7,092,785 2,804,976 6/30/2020 30,397,092 24,648,411 5,748,681 (1,537,179) 2,257,330 6,468,832 6/30/2021 30,361,116 26,986,385 3,374,731 (2,907,657) 2,502,263 2,969,337 Source: Department's annual reports
(2,000)
-
2,000
4,000
6,000
8,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

THOUSANDS
Changes in Net Position-Sewer Fund
Changes in Net Position
62 13.a
Packet Pg. 394
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the City of San Bernardino Municipal Water Department
Sewer Collection Fund
Changes in Net Position
Last Ten Fiscal Years
Fiscal Year
Ended
Total
Operating
Revenue
Total
Operating
Expense
Operating
Income
Total Non-
Operating
Income
(Expense)
Total
Contributed
Capital
Changes in
Net Position
6/30/2012 n/a n/a n/a n/a n/a n/a
6/30/2013 n/a n/a n/a n/a n/a n/a
6/30/2014 n/a n/a n/a n/a n/a n/a
6/30/2015 n/a n/a n/a n/a n/a n/a
6/30/2016 n/a n/a n/a n/a n/a n/a
6/30/2017 * 2,891,203$ 1,054,866 $ 1,836,337 $ 12,602,145 $ 18,445,429 $ 32,883,911 $ 6/30/2018 7,682,946 11,667,157 (3,984,211) 204,831 251,473 (3,527,907) 6/30/2019 7,562,097 8,172,922 (610,825) 584,690 291,528 265,393 6/30/2020 7,666,309 7,650,504 15,805 629,764 344,732 990,301 6/30/2021 7,794,418 7,862,447 (68,029) 10,911 242,283 185,165 Source: Department's annual reports
* The Sewer Collection Utility was transferred to the Water Department on May 1, 2017 so prior year data is unavailable.
(5,000)
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

THOUSANDS
Changes in Net Position-Sewer Collection Fund
Changes in Net Position
63 13.a
Packet Pg. 395
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the City of San Bernardino Municipal Water Department
Net Position by Component
Last Ten Fiscal Years
Fiscal Year
Ended
Net Investment in
Capital Assets
Restricted Net
Position
Unrestricted Net
Position Total Net Position
6/30/2012 212,490,593$ 7,389,246 $ 43,545,621 $ 263,425,460 $ 6/30/2013 200,072,942 7,799,773 69,315,171 277,187,886 6/30/2014 206,663,567 7,515,658 66,524,589 280,703,814 6/30/2015 223,053,269 7,633,049 12,510,969 243,197,287 6/30/2016 235,670,073 7,814,086 7,890,390 251,374,549 6/30/2017 * 250,399,481 7,944,758 26,049,248 284,393,487 6/30/2018 248,653,963 8,363,037 23,912,311 280,929,311 6/30/2019 259,671,498 - 33,999,894 293,671,392 6/30/2020 255,270,720 - 51,158,985 306,429,705 6/30/2021 253,288,732 - 61,225,349 314,514,081 Source: Department's annual reports
* Fiscal Years 2009-2016 contain only Sewer Treatment and Water Utility Funds. The Sewer Collections Fund was transferred to the Department on May 1, 2017.
$-
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

THOUSANDS

NET POSITION BY COMPONENT
COMBINED (IN 1000S)
Net Investment in Capital Assets Restricted Net Position Unrestricted Net Position 64 13.a
Packet Pg. 396
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the City of San Bernardino Municipal Water Department
Net Position by Component - Water Fund
Last Ten Fiscal Years
Fiscal Year
Ended
Net Investment in
Capital Assets
Restricted Net
Position
Unrestricted Net
Position
Total Net
Position
6/30/2012 148,063,104$ 41,320 $ 13,658,195 $ 161,762,619 $ 6/30/2013 156,758,127 - 12,133,904 168,892,031 6/30/2014 163,797,283 - 11,728,071 175,525,354 6/30/2015 166,963,238 - (15,152,937) 151,810,301 6/30/2016 169,730,998 - (17,657,766) 152,073,232 6/30/2017 169,569,746 - (19,564,464) 150,005,282 6/30/2018 171,794,031 - (20,699,066) 151,094,965 6/30/2019 177,158,535 - (16,391,858) 160,766,677 6/30/2020 168,992,121 - (2,926,264) 166,065,857 6/30/2021 168,553,917 - 2,441,814 170,995,731 Source: Department's annual reports
$(50,000)
$-
$50,000
$100,000
$150,000
$200,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

THOUSANDS
NET POSITION BY COMPONENT:

WATER FUND (IN 1000S)
Net Investment in Capital Assets Restricted Net Position Unrestricted Net Position 65 13.a
Packet Pg. 397
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the City of San Bernardino Municipal Water Department
Net Position by Component - Sewer Fund
Last Ten Fiscal Years
Fiscal Year
Ended
Net Investment in
Capital Assets
Restricted Net
Position
Unrestricted Net
Position
Total Net
Position
6/30/2012 64,427,489$ 7,347,926 $ 29,887,426 $ 101,662,841 $ 6/30/2013 43,314,815 7,799,733 57,181,267 108,295,815 6/30/2014 42,866,284 7,515,658 54,796,518 105,178,460 6/30/2015 56,090,031 7,633,049 27,663,906 91,386,986 6/30/2016 65,939,075 7,814,086 25,548,156 99,301,317 6/30/2017 62,633,783 7,944,758 30,925,753 101,504,294 6/30/2018 59,011,109 8,363,037 33,041,181 100,415,327 6/30/2019 63,243,033 - 40,040,285 103,283,318 6/30/2020 66,906,874 - 42,845,276 109,752,150 6/30/2021 64,650,540 - 48,070,947 112,721,487 Source: Department's annual reports
$-
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

THOUSANDS
NET POSITION BY COMPONENT: SEWER
FUND (IN 1000S)
Net Investment in Capital Assets Restricted Net Position Unrestricted Net Position 66 13.a
Packet Pg. 398
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the City of San Bernardino Municipal Water Department
Net Position by Component - Sewer Collection Fund
Last Ten Fiscal Years
Fiscal Year
Ended
Net Investment in
Capital Assets
Restricted Net
Position
Unrestricted Net
Position
Total Net
Position
6/30/2012 n/a n/a n/a n/a
6/30/2013 n/a n/a n/a n/a
6/30/2014 n/a n/a n/a n/a
6/30/2015 n/a n/a n/a n/a
6/30/2016 n/a n/a n/a n/a
6/30/2017 * 18,195,952$ n/a 14,687,959$ 32,883,911 $ 6/30/2018 17,848,823 n/a 11,507,181 29,356,004 6/30/2019 19,269,930 n/a 10,351,467 29,621,397 6/30/2020 19,371,725 n/a 11,239,973 30,611,698 6/30/2021 20,084,275 n/a 10,712,588 30,796,863 Source: Department's annual reports
* The Sewer Collection Utility was transferred to the Water Department on May 1, 2017 so prior year data is unavailable.
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021

THOUSANDS
NET POSITION BY COMPONENT: SEWER
COLLECTION FUND (IN 1000S)
Net Investment in Capital Assets Restricted Net Position Unrestricted Net Position 67 13.a
Packet Pg. 399
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the City of San Bernardino Municipal Water Department
Water Fund Revenue by Type
Last Ten Fiscal Years
Fiscal Year
Ended Water Sales Service
Charges/Fees
Other
Services
Total Operating
Revenue
Interest
Income
Rental
Income Other Income Gain on asset
disposition
Noncapital
grant funds
Total Non
Operating
Income
6/30/2012 33,315,084$ 3,665,354 $ 125,779 $ 37,106,217 $ 219,027 $ 133,400 $ 1,041,667 $ - $ 1,838,223$ 3,232,317 $ 6/30/2013 34,252,357$ 3,476,061 140,429 37,868,847 - 122,826 211,032 - 3,110,201 3,444,059 6/30/2014 34,777,112 1,754,614 140,176 36,671,902 93,428 160,089 478,512 4,446 2,030,066 2,766,541 6/30/2015 31,217,534 1,789,654 113,940 33,121,128 54,786 181,809 545,840 - 2,089,637 2,872,072 6/30/2016 28,293,790 1,604,472 103,609 30,001,871 63,566 134,845 495,298 - 1,696,219 2,389,928 6/30/2017 31,893,209 1,347,993 117,705 33,358,907 31,504 203,186 301,833 - 2,047,946 2,584,469 6/30/2018 36,825,634 1,350,623 103,753 38,280,010 975,144 208,925 206,645 46,356 1,776,883 3,213,953 6/30/2019 37,775,285 1,237,903 86,772 39,099,960 903,399 206,360 867,763 12,669 1,891,729 3,881,920 6/30/2020 39,162,485 1,020,818 84,073 40,267,376 747,477 245,784 651,031 - 1,991,747 3,636,039 6/30/2021 41,760,745 910,628 86,819 42,758,192 29,541 286,553 306,785 83,682 2,011,099 2,717,660 Source: Department's annual reports
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000Thousands
Operating Revenue by Type-Water Fund
Other Services
Service Charges/Fees
Water Sales
-
500
1,000
1,500
2,000
2,500
3,000
3,500Thousands
Non-Operating Revenue by Type: Water Fund
Noncapital grant funds
Gain on asset disposition
Other Income
Rental Income
Interest Income
68 13.a
Packet Pg. 400
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the City of San Bernardino Municipal Water Department
Sewer Fund Revenue by Type
Last Ten Fiscal Years
Fiscal Year
Ended
Sewer Treatment
Revenue Industrial Waste
Other
Operating
Revenue
Total Operating
Revenue
Interest
Income
Rental
Income Other Income
Gain on Asset
Disposition
/Joint Venture
Total Non
Operating
Income
6/30/2012 24,250,417$ 376,550 $ 1,261,762 $ 25,888,729 $ 812,885 $ 21,907 $ -$ -$ 834,792$ 6/30/2013 25,261,792 296,153 856,708 26,414,653 340,689 22,574 - - 363,263 6/30/2014 25,350,988 319,786 - 25,670,774 443,836 20,669 202,078 - 666,583 6/30/2015 24,399,415 335,010 - 24,734,425 481,211 700 498,247 345,884 1,326,042 6/30/2016 25,030,569 380,171 - 25,410,740 658,456 41,498 359,800 - 1,059,754 6/30/2017 28,022,259 589,760 - 28,612,019 23,391 15,908 - - 39,299 6/30/2018 30,039,110 694,342 - 30,733,452 - 12,481 - 6,063 18,544 6/30/2019 29,861,192 684,989 - 30,546,181 1,361,936 - - 9,417 1,371,353 6/30/2020 29,712,734 684,358 - 30,397,092 1,322,367 - - - 1,322,367 6/30/2021 29,587,597 773,519 - 30,361,116 19,472 - - - 19,472 Source: Department's annual reports
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
6/30/20126/30/20136/30/20146/30/20156/30/20166/30/20176/30/20186/30/20196/30/20206/30/2021 Thousands
Operating Revenue by Type-Sewer Fund
Other Operating Revenue
Industrial Waste
Sewer Treatment Revenue
-
200
400
600
800
1,000
1,200
1,400
1,600Thousands
Non-Operating Revenue by Type - Sewer Treatment Fund
Gain on Asset Disposition /Joint
Venture
Other Income
Rental Income
Interest Income
69 13.a
Packet Pg. 401
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the City of San Bernardino Municipal Water Department
Sewer Collection Fund Revenue by Type
Last Ten Fiscal Years
Fiscal Year
Ended
Sewer Collection
Revenue
Service
Charges/Fees
Other
Operating
Revenue
Total Operating
Revenue
Interest
Income Rental Income Other
Income
Gain on asset
disposition/Con
tribution from
City
Total Non
Operating
Income
6/30/2012 n/a n/a n/a n/a n/a n/a n/a n/a n/a
6/30/2013 n/a n/a n/a n/a n/a n/a n/a n/a n/a
6/30/2014 n/a n/a n/a n/a n/a n/a n/a n/a n/a
6/30/2015 n/a n/a n/a n/a n/a n/a n/a n/a n/a
6/30/2016 n/a n/a n/a n/a n/a n/a n/a n/a n/a
6/30/2017* 2,860,627$ 30,576 $ - $ 2, 891,203$ 28,315 $ - $ - $ 12, 580,781$ 12,609,096$ 6/30/2018 7,679,020 3,926 - 7,682,946 201,663 - 251,473 3,168 456,304 6/30/2019 7,555,960 6,137 - 7,562,097 584,685 - 5 - 584,690 6/30/2020 7,656,675 9,634 - 7,666,309 626,761 - - 3,003 629,764 6/30/2021 7,759,318 35,100 - 7,794,418 1,605 - 9,306 - 10,911 Source: Department's annual reports
* The Sewer Collection Utility was transferred to the Water Department on May 1, 2017 so prior year data is unavailable.
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000Thousands
Operating Revenue by Type-Sewer Collection
Fund
Other Operating Revenue
Service Charges/Fees
Sewer Collection Revenue
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000Thousands
Non-Operating Revenue by Type - Sewer Collections Fund
Gain on asset
disposition/Contribution
from City
Other Income
Rental Income
70 13.a
Packet Pg. 402
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the City of San Bernardino Municipal Water Department
Water Fund Expenses by Type
Last Ten Fiscal Years
Fiscal Year
Ended
Administration &
Customer Service
Plant Operations
and Distribution Engineering Maintenance
Depreciation
and
Amortization
Total Operating
Expense
Interest
Expense
Loss on asset
disposition
Other Non-
operating
expense
Total Non-
Operating
Expense
6/30/2012 16,304,830$ 12,959,507$ 2,492,056$ 1,628,764$ 5,770,673$ 39,155,830$ 526,915$ 268,953$ -$ 795,868$ 6/30/2013 16,149,788 11,073,338 2,813,459 1,888,236 5,505,403 37,430,224 689,665 261,946 - 951,611 6/30/2014 14,410,400 11,395,305 2,426,717 1,837,556 5,971,638 36,041,616 261,836 - - 261,836 6/30/2015 13,244,552 12,467,017 2,439,170 1,988,719 5,365,124 35,504,582 169,119 - - 169,119 6/30/2016 13,313,085 11,406,861 2,326,551 1,978,534 5,809,331 34,834,362 106,698 - - 106,698 6/30/2017 13,971,106 12,436,501 2,329,142 1,859,871 6,478,050 37,074,670 3,130,749 - - 3,130,749 6/30/2018 11,300,091 12,337,763 1,943,659 2,292,625 6,571,957 34,446,095 2,015,792 - - 2,015,792 6/30/2019 9,987,198 12,853,400 2,253,333 2,387,889 6,512,907 33,994,727 1,993,624 - - 1,993,624 6/30/2020 13,418,886 12,472,633 2,641,641 2,528,441 7,564,550 38,626,151 1,955,317 25,094 - 1,980,411 6/30/2021 14,405,557 14,045,232 3,064,623 3,126,556 7,838,887 42,480,855 1,926,133 - - 1,926,133 Source: Department's annual reports
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000Thousands
Operating Expenses by Type-Water Fund
Depreciation and Amortization
Maintenance
Engineering
Plant Operations and Distribution
Administration & Customer Service
-
500
1,000
1,500
2,000
2,500
3,000
3,500
6/30/20126/30/20136/30/20146/30/20156/30/20166/30/20176/30/20186/30/20196/30/20206/30/2021 Thousands
Non-Operating Expense by Type: Water Fund
Other Non-operating expense
Loss on asset disposition
Interest Expense
71 13.a
Packet Pg. 403
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the City of San Bernardino Municipal Water Department
Sewer Fund Expenses by Type
Last Ten Fiscal Years
Fiscal Year
Ended
Administration &
Customer Service Plant Operations Engineering Maintenance Depreciation
and
Amortization
Total Operating
Expense
Interest
Expense
Loss on Asset
Disposition
/Joint Venture
Other Non-
operating
expense
Total Non-
Operating
Expense
6/30/2012 3,823,627$ 10,328,073$ -$ 3,257,127$ 4,645,127$ 22,053,954$ 1,147,810$ 34,114$ 118,051$ 1,299,975$ 6/30/2013 4,454,713 10,040,895 - 3,392,868 4,408,721 22,297,197 828,129 11,644 154,180 993,953 6/30/2014 5,345,726 9,528,218 527,294 3,146,275 3,426,515 21,974,028 557,049 16,244 1,238,703 1,811,996 6/30/2015 4,016,198 9,292,501 534,226 2,906,853 2,870,550 19,620,328 227,165 - - 227,165 6/30/2016 4,299,808 9,800,283 464,554 2,874,352 1,292,426 18,731,423 167,795 1,116,078 - 1,283,873 6/30/2017 6,799,639 9,620,639 480,951 3,135,686 4,102,963 24,139,878 1,300,263 2,321,485 42,209 3,663,957 6/30/2018 5,690,507 9,056,518 500,009 3,281,446 4,157,550 22,686,030 1,376,009 1,247,670 733,583 3,357,262 6/30/2019 6,775,552 10,118,506 617,855 3,041,620 4,313,147 24,866,680 1,367,375 1,553,261 - 2,920,636 6/30/2020 5,702,973 10,470,501 369,422 3,508,534 4,596,980 24,648,410 1,313,151 1,546,396 - 2,859,547 6/30/2021 6,292,313 11,986,858 387,932 3,811,413 4,507,869 26,986,385 1,283,861 1,604,905 38,363 2,927,129

Source: Department's annual reports
-
5,000
10,000
15,000
20,000
25,000
30,000Thousands
Operating Expenses by Type-Sewer Fund
Depreciation and Amortization
Maintenance
Engineering
Plant Operations
Administration & Customer Service
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000Thousands
Non-Operating Expense by Type: Sewer Fund
Other Non-operating expense
Loss on Asset Disposition /Joint Venture
Interest Expense
72 13.a
Packet Pg. 404
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the City of San Bernardino Municipal Water Department
Sewer Collection Fund Expenses by Type
Last Ten Fiscal Years
Fiscal Year
Ended
Administration &
Customer Service Plant Operations Engineering Maintenance Depreciation and Amortization
Total Operating
Expense
Interest
Expense
Loss on Asset
Disposition
Other Non-
operating
expense
Total Non-
Operating
Expense
6/30/2012 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 6/30/2013 - - - - - - - - - - 6/30/2014 - - - - - - - - - - 6/30/2015 - - - - - - - - - - 6/30/2016 - - - - - - - - - - 6/30/2017 314,265 492,675 - - 247,926 1,054,866 - - 6,951 6,951 6/30/2018 2,211,188 354,423 8,071,891 - 1,029,648 11,667,150 - - - - 6/30/2019 1,608,074 439,660 5,051,773 - 1,073,415 8,172,922 - - - - 6/30/2020 1,898,461 483,316 4,124,631 - 1,144,096 7,650,504 - - - - 6/30/2021 3,497,969 533,619 2,549,257 - 1,281,602 7,862,447 - - - -

Source: Department's annual reports
* The Sewer Collection Utility was transferred to the Water Department on May 1, 2017 so prior year data is unavailable.
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000Thousands
Operating Expenses by Type-Sewer Collection Fund
Depreciation and Amortization
Maintenance
Engineering
Plant Operations
Administration & Customer Service
-
1 2
3 4
5 6
7 8
Thousands
Non-Operating Expense by Type: Sewer Collection Fund
Other Non-operating expense
Loss on Asset Disposition
Interest Expense
73 13.a
Packet Pg. 405
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the

THIS PAGE INTENTIONALLY LEFT BLANK
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Packet Pg. 406
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the

DEBT CAPACITY INFORMATION
These schedules contain information to help the reader assess the affordability of the Department's current level of
outstanding debt and ability to issue debt in the future. 75 13.a
Packet Pg. 407
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the City of San Bernardino Municipal Water Department
Water Fund Debt Service Coverage
Last Ten Fiscal Years
Fiscal Year
Ended
Total
Operating
Revenue
Net Operating
Expenses
(Excluding)
Depreciation
Net Operating
Income (Loss)
Net Non-
Operating
Income/
(Expense)
Amount
Available for
Debt Service
Principal Interest Total Debt
Service
Coverage
Ratio
6/30/2012 $ 37,106,217 $ 33,385,157 $ 3,721,060 $ 2,436,44 9 $ 6,157,509 $ 974,027 $ 505,819 1,479,846$ 4.16 6/30/2013 37,868,846 31,924,821 5,944,025 2,49 2,448 8 ,436,473 1,227,491 547,616 1,775,107 4.75 6/30/2014 36,671,903 30,069,978 6,601,925 2,50 4,705 9 ,106,630 1,658,265 660,854 2,319,119 3.93 6/30/2015 33,121,128 30,139,458 2,981,670 2,70 2,953 5 ,684,623 1,748,054 570,434 2,318,488 2.45 6/30/2016 30,001,871 29,025,031 976,840 2,2 83,230 3,260,070 1, 813,594 523,274 2,336,868 1.40 6/30/2017 33,358,907 30,596,620 2,762,287 2,58 4,468 5 ,346,755 246,887 218,819 465,706 11.48 6/30/2018 38,280,016 27,874,148 10,405,868 3,167 ,597 13,573,465 770,000 2 ,223,838 2,993,838 4.53 6/30/2019 39,099,960 27,482,130 11,617,830 3,810 ,403 15,428,233 795,000 2 ,196,388 2,991,388 5.16 6/30/2020 40,267,376 31,061,601 9,205,775 3,63 6,039 12,841,814 830,000 2 ,163,888 2,993,888 4.29 6/30/2021 42,758,192 34,641,968 8,116,224 2,63 3,978 10,750,202 860,000 2 ,130,088 2,990,088 3.60 Source: Department's annual reports
76 13.a
Packet Pg. 408
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the City of San Bernardino Municipal Water Department
Sewer Fund Debt Service Coverage
Last Ten Fiscal Years
Fiscal Year
Ended
Total
Operating
Revenue
Net Operating
Expenses
(Excluding)
Depreciation
Net Operating
Income (Loss)
Net Non-
Operating
Income/
(Expense)
Amount
Available for
Debt Service
Principal Interest Total Debt
Service
Coverage
Ratio
6/30/2012 $ 26,414,654 $ 17,888,476 $ 8,526,178 $ (46 2,183) $ 8,063,995 $ 4,417,731 $ 1,166,496 5,584,227$ 1.44 6/30/2013 25,670,774 18,547,513 7,123,261 (630,690) 6,492,571 4,724,227 757,010 5,481,237 1.18 6/30/2014 24,734,425 16,749,778 7,984,647 (1 ,129,169) 6,855,478 4,424,090 747,460 5,171,550 1.33 6/30/2015 25,410,740 16,749,778 8,660,962 1 ,098,877 9,759,839 4,629,425 568,888 5,198,313 1.88 6/30/2016 25,410,740 17,438,997 7,971,743 (224,119) 7,747,624 300,000 - 300,000 25.83 6/30/2017 28,612,019 20,036,916 8,575,103 39,299 8,614,402 300,000 132 ,660 432,660 19.91 6/30/2018 30,733,453 18,539,941 12,193,512 (721,103) 11,472,409 890,000 1,382,782 2,272,782 5.05 6/30/2019 30,546,181 20,841,699 9,704,482 1 ,361,935 11,066,417 910,000 1,356,125 2,266,125 4.88 6/30/2020 30,397,092 20,051,431 10,345,661 1, 322,367 11,668,028 935,000 1,331,225 2,266,225 5.15 6/30/2021 30,361,116 22,478,516 7,882,600 19,472 7,902,072 665,000 1,301,900 1,966,900 4.02 Source: Department's annual reports
77 13.a
Packet Pg. 409
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the City of San Bernardino Municipal Water Department
Ratios of Outstanding Debt by Type (In Thousands of Dollars) Last Ten Fiscal Years
Fiscal Year
Ended Revenue Bonds Bonds Notes/Loans
Payable
Certificates of
Participation Capital Leases Total
Percentage of
Personal
Income
Debt Per
Capita

6/30/2012 $ - $ 15 $ 31,547 $ 14,795 $ - $ 46, 357 0.7% 0.22 6/30/2013 - - 29, 452 12,145 - 41, 597 0.6% 0.20 6/30/2014 - - 26, 174 9,340 - 35, 514 0.5% 0.17 6/30/2015 - - 22, 826 6,375 - 29, 201 0.4% 0.14 6/30/2016 - - 20, 569 - - 20,569 0.3% 0.10 6/30/2017 88,656 - 900 - - 89,556 1.0% 0.39 6/30/2018 87,092 - 600 - - 87,692 1.0% 0.37 6/30/2019 85,483 - 300 - - 85,783 1.0% 0.39 6/30/2020 83,814 - - - - 8 3,814 1.0% 0.39 6/30/2021 82,085 - - - - 8 2,085 1.0% 0.38 Source: Department's annual reports
78 13.a
Packet Pg. 410
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the

DEMOGRAPHIC AND ECONOMIC INFORMATION
These schedules offer demographic and economic indicators to help the reader understand the environment within which the Department's financial activities take place.
79 13.a
Packet Pg. 411
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the City of San Bernardino Municipal Water Department
Demographic Statistics
Last Ten Fiscal Years
Fiscal Year
Ended
Estimated
Population (1)
Personal
Income (In
Thousands) (2)
Per Capita
Personal
Income (2)
Unemployment
Rate (3)
6/30/2012 210,753 6,807,533$ $ 32,301 11.50% 6/30/2013 211,994 7,001,102 33,025 9.80% 6/30/2014 212,584 7,070,119 33,258 10.10% 6/30/2015 213,933 7,645,879 35,740 6.80% 6/30/2016 215,491 7,931,577 36,807 6.30% 6/30/2017 216,972 8,459,304 38,988 5.50% 6/30/2018 221,130 8,523,677 38,546 5.70% 6/30/2019 219,233 8,509,748 38,816 4.10% 6/30/2020 217,671 8,159,289 37,485 11.30% 6/30/2021 216,291 7,723,319 35,708 8.10% (1) California Department of Finance
(2) U.S. Department of Commerce, Bureau of Economic Analys for 2006-2013 (Riverside-San Bernardino MSA) (3) State of California, Economic Development Department; City of San Bernardino Economic Development Dept 204,000
206,000
208,000
210,000
212,000
214,000
216,000
218,000
220,000
222,000
Population
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
Personal Income
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
Per Capita Personal Income

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%
Unemployment
80 13.a
Packet Pg. 412
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the City of San Bernardino Municipal Water Department
Major Employers
Current Year and Ten Years Ago
Fiscal Year 2021 Fiscal Year 2012*
Employer Ranking Number of Employees Ranking Number of Employees County of San Bernardino 1 22,719 9 1000+ Stater Brothers 2 18,000
San Bernardino City Unified School Disrict 3 6,400 5 1000+ Kaiser Permanente - Fontana Med 4 1,000-4,999
Arrowhead regional Medical Center 5 1,000-4,999 1 1000+ Environmental Systems Research 6 1,000-4,999 10 1000+
California State Unversity- San Bernardino 7 1,000-4,999 4 1000+ LEHP Health Services 8 1,000-4,999 2 1000+
San Bernardino County Sheriff 9 1,000-4,999 6 1000+
City of San Bernardino 10 750 3 1000+ San Bernardino County Superintendent of Schools 7 1000+ San Manuel Band of Mission Indians 8 1000+
* Actual employment figures not available
Source: Economic Development Department Labor Market Information, Agency Websites and City's Annual Financial Report. 81 13.a
Packet Pg. 413
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the City of San Bernardino Municipal Water Department
Authorized Positions History
Last Ten Fiscal Years
Year End Water Fund
Sewer Treatment
Fund
Sewer Collection
Fund Total
2012 173.5 82.0 0.0 255.5
2013 173.5 82.0 0.0 255.5
2014 185.5 72.5 0.0 258.0
2015 183.5 74.5 0.0 258.0
2016 188.5 83.5 0.0 272.0
2017 216.8 70.3 13.0 300.0
2018 215.0 72.0 12.0 299.0
2019 215.0 72.0 12.0 299.0
2020 215.0 72.0 12.0 299.0
2021 199.0 85.0 12.0 296.0
Source: Department's records
Note: The Sewer Collection Utility was transferred to the Department on May 1, 2017. Prior year data is unavailable.

0.0 50.0
100.0
150.0
200.0
250.0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Authorized Position History
Water Fund Sewer Treatment Fund Sewer Collection Fund
82 13.a
Packet Pg. 414
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the

REVENUE CAPACITY
These schedules contain information to help the reader assess the Department's significant revenue sources.

83 13.a
Packet Pg. 415
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the City of San Bernardino Municipal Water Department
Water Rates: Minimum Monthly Charge
Last Ten Fiscal Years
Effective
Date 1/2" 5/8" 3/4" 1" 1-1/2" 2" 3" 4" 6" 8" 10" 12"
1/1/2012 12.90 12.90 16.15 22.60 38.80 58.20 103.50 168.20 330.00 524.15 7 50.65 * 7/1/2013 12.90 12.90 16.15 22.60 38.80 58.20 103.50 168.20 330.00 524.15 7 50.65 * 7/1/2014 12.90 12.90 16.15 22.60 38.80 58.20 103.50 168.20 330.00 524.15 7 50.65 * 7/1/2015 12.90 12.90 16.15 22.60 38.80 58.20 103.50 168.20 330.00 524.15 7 50.65 * 10/1/2016 16.09 16.09 20.15 28.19 48.40 72.60 129.12 197.36 411.68 653.88 936.44 * 7/1/2017 19.58 19.58 24.51 34.30 58.88 88.32 157.06 240.07 500.78 795.40 1,139.12 * 7/1/2018 23.39 23.39 29.28 40.98 70.35 105.52 187.66 286.63 598.33 950.34 1,361.01 * 7/1/2019 23.39 23.39 29.28 40.98 70.35 105.52 187.66 286.63 598.33 950.34 1,361.01 * 7/1/2020 23.39 23.39 29.28 40.98 70.35 105.52 187.66 286.63 598.33 950.34 1,361.01 * 7/1/2021 23.39 23.39 29.28 40.98 70.35 105.52 187.66 286.63 598.33 950.34 1,361.01 * Source: Department's Records
All water usage, except municipal, will be billed at the rate of $0.94 and $0.97 per 100 cubic feet effective July 1, 2007 and July 1, 2008, respectively, with no minimum allowance.
($/month)
* Information not reported
84 13.a
Packet Pg. 416
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the City of San Bernardino Municipal Water Department
Water Connections and Revenues by User Type
Last Ten Fiscal Years
User Type Connections Revenue Connections Revenue Connections Revenue Connections Revenue Single family 35,995 23,875,761$ 36,042 22,909,054$ 36,006 21,579,693$ 35,824 20,476,866$ Multiple family 2,908 5,569,436 2,907 5,222,345 2,903 5,157,997 2,904 4,944,978 Commercial 3,154 6,579,373 3,117 6,482,560 3,104 6,320,900 3,111 6,117,493 Landscape 1,192 5,277,114 1,181 4,542,108 1,150 4,256,390 1,159 4,694,704 Other 2,241 811,833 2,174 781,428 2,056 808,227 2,018 748,141 Total all users 45,490 42,113,517$ 45,421 39,937,495$ 45,219 38,123,207$ 45,016 36,982,182$ Connections Revenue Connections Revenue Connections Revenue Connectio ns Revenue Single family 35,825 17,346,414$ 35,729 15,688,749$ 35,695 16,775,834$ 35,012 18,583,708$ Multiple family 2,899 4,449,204 2,873 4,225,832 2,869 4,349,601 2,824 4,591,290 Commercial 3,131 5,750,672 3,092 4,913,942 3,097 6,332,882 3,085 6,566,344 Landscape 1,121 3,789,527 1,129 3,203,907 1,130 3,079,610 1,140 3,616,135 Other 1,956 557,392 1,905 677,180 1,791 679,606 1,703 913,810 Total all users 44,932 31,893,209$ 44,728 28,709,610$ 44,582 31,217,533$ 43,764 34,271,287$ Connections Revenue Connections Revenue
Single family 34,913 18,741,773$ 34,716 18,094,052$ Multiple family 2,820 4,704,384 2,801 4,510,962 Commercial 3,082 6,800,310 3,117 5,790,427
Landscape 1,104 3,591,678 1,151 3,321,846
Other 1,663 599,210 1,626 1,597,791
Total all users 43,582 34,437,355$ 43,411 33,315,078$ Source: Department's records
2018
2017 2016 2015 2014
2013 2012
2021 2020 2019
57%
13%
16%
12%
2%
Water Service Revenue by User Type
FY 2021
Single family
Multiple family
Commercial
Landscape
Other
35,995
2,908
3,154
1,192 2,241
Water Utility: Average # of
Connections per Customer Type
FY 2021
Single family
Multiple family
Commercial
Landscape
Other
85 13.a
Packet Pg. 417
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the City of San Bernardino Municipal Water Department
Water Rates: Elevation Charges $ per HCF
Last Ten Fiscal Years
Effective Date Zone 1 Zone 2 Zone 3 Zone 4 Zone 5 Zone 6 07/01/12 0.11 0.19 0.17 0.14 0.23 0.23
07/01/13 0.11 0.19 0.17 0.14 0.23 0.23
07/01/14 0.11 0.19 0.17 0.14 0.23 0.23
07/01/15 0.11 0.19 0.17 0.14 0.23 0.23
10/01/16 0.11 0.19 0.17 0.14 0.23 0.23
07/01/17 0.11 0.19 0.17 0.14 0.23 0.23
07/01/18 0.11 0.19 0.17 0.14 0.23 0.23
07/01/19 0.11 0.19 0.17 0.14 0.23 0.23
07/01/20 0.11 0.19 0.17 0.14 0.23 0.23
07/01/21 0.11 0.19 0.17 0.14 0.23 0.23
Source: Department's records
86 13.a
Packet Pg. 418
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the City of San Bernardino Municipal Water Department
Top Ten Water Customers
Fiscal Year 2021
CITY OF SAN BERNARDINO 1,235,401$
SBCUSD 793,861
CAL STATE UNIVERSITY 340,822
COUNTY OF SAN BERNARDINO 251,958
HOUSING AUTHORITY 242,952
COTT BEVERAGES 186,825
W DEAN WEIDNER 171,564
LIDO CONDOMINIUMS 135,509
ST. BERNARDINE HOSPITAL 130,573
ACACIA PARK APARTMENTS 127,432
Top Ten Customers Total 3,616,897
Total Water Revenue 42,113,517$

Top Ten Customers Percent of Total 8.59%
Customer-2021
87 13.a
Packet Pg. 419
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the City of San Bernardino Municipal Water Department
Sewer Treatment Rate History
Last Ten Fiscal Years
1/1/2012 1/1/2013 1/1/2014 10/1/2015 7/1/2016 7/1/2017 7/1/2018 7/1/20 19 7/1/2020 7/1/2021 Residential (monthly per EDU) 18.50 18.50 18.50 20.65 22.38 23.10 23.10 23.10 23.10 23.10 Commercial:

Commodity Charge (per HCF):

Multi-family, mobile home parks 1.25 1.25 1.25 1.36 1.48 1.53 1.53 1.53 1.53 1.53 Retail, commercial, light industrial 2.10 2.10 2.10 2.28 2.47 2.55 2.55 2.55 2.55 2.55 Auto repair, car wash 1.30 1.30 1.30 1.41 1.53 1.58 1.58 1.58 1.58 1.58 Offices, motels (w/o restaurants) 1.50 1.50 1.50 1.63 1.77 1.83 1.83 1.83 1.83 1.83 Restaurants, hotels 2.70 2.70 2.70 2.93 3.18 3.28 3.28 3.28 3.28 3.28 Laundromats 1.50 1.50 1.50 1.63 1.77 1.83 1.83 1.83 1.83 1.83 Hospitals, convalescent homes 1.35 1.35 1.35 1.46 1.58 1.63 1.63 1.63 1.63 1.63 Schools, churches, nursery schools 1.10 1.10 1.10 1.19 1.29 1.33 1.33 1.33 1.33 1.33 Industrial:

Discharge Flow (per million gallons) 900.00 900.00 900.00 977.00 1,060.00 1,094.00 1,094.00 1,094.00 1,094.0 0 1,094.00 Biological Oxygen demand (per 1,000 lbs) 360.00 360.00 360.00 391.00 424.00 438.00 438.00 438.00 438.00 438.00 Suspended Solids (per 1,000 lbs) 640.00 640.00 640.00 694.00 753.00 778.00 778.00 778.00 778.00 778.00 Source: Department's records
88 13.a
Packet Pg. 420
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the City of San Bernardino Municipal Water Department
Sewer Treatment Connections and Revenue by User Type
Last Ten Fiscal Years
User Type Connections Revenue Connect ions Revenue Connections Revenue Connections Revenue San Bernardino Residential 32,365 10,165,765$ 31,828 10,191,482$ 33,051 10,146,660$ 32,945 10,135,132$ San Bernardino Nonresidential 5,436 8,292,874 5,340 8,463,554 5,531 8,645,032 5,526 8,834,641 East Valley Residential 18,710 4,797,833 18,477 4,778,152 18,477 4,778,152 18,477 4,765,218 East Valley Nonresidential 1,087 3,456,827 1,050 3,483,724 1,050 3,550,973 1,050 3,579,348 Loma Linda Residential 3,010 1,232,048 2,856 1,163,501 2,799 1,171,706 4,824 1,167,823 Loma Linda Nonresidential 169 1,642,250 168 1,622,872 345 1,557,119 703 1,548,574 Total all users 60,777 29,587,597$ 59,719 29,703,285$ 61,253 29,849,642$ 63,525 30,030,736$ Connections Revenue Connections Reve nue Connections Revenue Connectio ns Revenue San Bernardino Residential 32,960 9,756,592$ 32,889 8,746,617$ 32,874 8,056,827$ 32,537 8,111,634$ San Bernardino Nonresidential 5,471 8,010,240 5,377 7,125,053 5,344 7,240,533 5,410 8,033,072 East Valley Residential 18,477 4,622,944 18,477 4,008,039 18,480 4,093,625 18,404 4,149,836 East Valley Nonresidential 1,050 3,083,475 1,060 2,825,971 1,051 2,571,813 1,115 2,725,075 Loma Linda Residential 4,723 1,107,201 5,948 1,008,071 5,040 997,242 4,656 991,387 Loma Linda Nonresidential 593 1,441,807 591 1,308,474 588 1,294,612 592 1,330,102 Total all users 63,274 28,022,259$ 64,342 25,022,225$ 63,377 24,254,652$ 62,714 25,341,106$ Connections Revenue Connections Revenue
San Bernardino Residential 32,563 7,922,936$ 32,571 7,650,142$ San Bernardino Nonresidential 5,447 8,332,214 5,412 7,877,416 East Valley Residential 18,925 4,188,434 18,813 4,019,127 East Valley Nonresidential 1,126 2,434,118 1,128 2,492,375 Loma Linda Residential 4,663 1,063,124 4,443 933,648 Loma Linda Nonresidential 585 1,549,643 589 1,258,747 Total all users 63,309 25,490,469$ 62,956 24,231,455$
Source: Department's records
2013 2012
2021 2020 2019 2018
2017 2016 2015 2014
32,365
5,436
18,710
1,087
3,010
169
Sewer Utility: Average # of Connections per
Customer Type FY 2021
San Bernardino Residential
San Bernardino Nonresidential
East Valley Residential
East Valley Nonresidential
Loma Linda Residential
Loma Linda Nonresidential
34%
28%
16%
12%
4%
6%
Sewer Utility Revenue by User Type
FY 2021
San Bernardino Residential
San Bernardino Nonresidential
East Valley Residential
East Valley Nonresidential
Loma Linda Residential
Loma Linda Nonresidential
89 13.a
Packet Pg. 421
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the City of San Bernardino Municipal Water Department
Top Ten Sewer Treatment Customers
Fiscal Year 2021
COUNTY OF SAN BERNARDINO 342,277$
SBCUSD 167,152
HOUSING AUTHORITY 119,826
ST. BERNARDINE HOSPITAL 118,853
CITY OF SAN BERNARDINO 114,598
PAMA MANAGEMENT CO. 102,380
LIDO CONDOMINIUMS 82,363
VILLAGE GREEN CHESTNUT, LP 80,299
BROADSTONE INVESTORS LLC 78,528
W DEAN WEIDNER 69,981
Top Ten Customers Total 1,276,257
Total Sewer Revenue 29,587,597$
Top Ten Customers Percent of Total 4.31%
Source: Department's records
Customers -2021
90 13.a
Packet Pg. 422
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the City of San Bernardino Municipal Water Department
Sewer Collection Rate History
Last Ten Fiscal Years
10/1/2015 7/1/2016 7/1/2017 7/1/2018 7/1/2019 7/1/2020 7/1/2021 Residential (monthly per EDU) 9.00 9.45 9.90 9.90 9.90 9.90 9.90 Multi-Family
Multi-family, 2 units 18.00 18.90 19.85 19.85 19.85 19.85 19.85 Multi-family, 3 units 27.00 28.35 29.75 29.75 29.75 29.75 29.75 Multi-family, 4 or more units, Non-res.

Monthly Charge 2.80 2.95 3.10 3.10 3.10 3.10 3.10 Usage Charge (per HCF) 0.79 0.83 0.87 0.87 0.87 0.87 0.87 Source: Department's records
The Sewer Collection Utility was transferred to the Water Department on May 1, 2017 so details for prior years is unavailable. 91 13.a
Packet Pg. 423
Attachment: Attachment 1 - Water Board Staff Report and ACFR for Fiscal Year Ended June 30, 2021 - 01-05-21 (8723 : Receive and File the City of San Bernardino Municipal Water Department
Sewer Collection
Connections and Revenue by User Type
Last Ten Fiscal Years
User Type Connections Consumption Revenue Connections Consumption Rev enue Connections Consumption Revenue Connections Consumption Revenue Residential-Single Family 32,418 - 3, 997,513$ 31,889 - 4, 054,020$ 33,127 - 3, 927,784$ 32,939 - 3,916,946$ Residential-Multi Family 1,576 - 418,545 1,555 - 412,095 1,606 - 424,665 1,607 - 424,024 Residential- Multi Family 4 Units + 19 80,400 70,647 18 63,529 55,921 17 50,331 44,420 16 51,092 44,945 Comm/Land/Lt. Industrial/Non-Res. 3,138 3, 051,177 2,726,198 3,069 2, 893,018 2,588,912 3,180 2, 904,054 2,601,804 3,198 2, 997,422 2,668,497 Education-Public 49 124,047 109,205 37 54,207 48,082 27 24,293 21,700 27 29,478 26,118 Education-Private 149 72,141 68,086 150 63,715 60,941 152 64,643 61,858 150 72,936 67,985 Hospital/Convalescent Homes 35 197,360 172,771 35 197,787 173,367 35 190,191 166,768 35 194,560 170,063 Office/Motel-No Restaurant 93 78,338 59,307 92 79,321 61,027 94 88,632 69,280 94 85,397 66,015 Restaurant/ Hotel w/ Restaurant 51 36,181 33,232 52 38,762 35,480 47 41,583 37,750 41 39,909 35,963 Auto Repair/Car Wash 226 81,945 78,971 221 75,027 73,487 229 76,587 74,854 231 93,474 89,565 Laundromat 5 28,349 24,843 5 24,821 21,771 5 26,639 23,362 5 26,464 23,160 CS Irrigation - - - 21 255,400 71,571 43 423,688 115,905 45 540,444 145,737 Totals IVDA 48 65,559 - 48 56,072 - 50 54,387 - 49 57,057 - Total all users 37,807 3,815,497 7,759,318$ 37,192 3,801,659 7,656,674$ 38,612 3,945,028 7,570,150$ 38,437 4,188,233 7,679,018$ Connections Consumption Revenue Connections Consumption Revenue Conne ctions Consumption Revenue Connections Consumption Revenue Residential-Single Family 32,899 - 3, 719,798$ - - - $ - - - $ - - -$ Residential-Multi Family 1,609 - 405,007 - - - - - - - - - Residential- Multi Family 4 Units + 15 45,146 41,351 - - - - - - - - - Comm/Land/Lt. Industrial/Non-Res. 3,204 2, 626,645 2,467,470 - - - - - - - - - Education-Public 27 29,586 27,420 - - - - - - - - - Education-Private 150 61,381 61,779 - - - - - - - - - Hospital/Convalescent Homes 35 175,241 161,182 - - - - - - - - - Office/Motel-No Restaurant 96 71,092 58,587 - - - - - - - - - Restaurant/ Hotel w/ Restaurant 37 34,788 32,509 - - - - - - - - - Auto Repair/Car Wash 229 73,436 75,421 - - - - - - - - - Laundromat 5 24,091 21,824 - - - - - - - - - CS Irrigation 46 503,780 158,834 - - - - - - - - - Totals IVDA 51 54,874 - - - - - - - - - - Total all users 38,403 3,700,060 7,231,182$ - - -$ - - -$ - - -$ Connections Consumption Revenue Connections Consumption Revenue Residential-Single Family - - - $ - - - $ Residential-Multi Family - - - - - - Residential- Multi Family 4 Units + - - - - - - Comm/Land/Lt. Industrial/Non-Res. - - - - - - Education-Public - - - - - - Education-Private - - - - - - Hospital/Convalescent Homes - - - - - - Office/Motel-No Restaurant - - - - - - Restaurant/ Hotel w/ Restaurant - - - - - - Auto Repair/Car Wash - - - - - - Laundromat - - - - - - CS Irrigation - - - - - - Totals IVDA - - - - - - Total all users - - -$ - - -$ Source: Department's records
2013 2012
* The Sewer Collection Utility was transferred to the Water Department on May 1, 2017 so prior year data is unavailable. Data provided for 2017 represents the entire year.
2021 2020 2019 2018
2017 2016 2015 2014
86%
4%
0% 8%
0%
1%
0%
0%
0%
1%
0%
0% 0%
Sewer Collection Connections by User Type 2021
Residential-Single Family
Residential-Multi Family
Residential- Multi Family 4 Units +
Comm/Land/Lt. Industrial/Non-Res.

Education-Public
Education-Private
Hospital/Convalescent Homes
Office/Motel-No Restaurant
Restaurant/ Hotel w/ Restaurant
Auto Repair/Car Wash
Laundromat
CS Irrigation
Totals IVDA
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Top Ten Sewer Collection Customers
Fiscal Year 2021
COUNTY OF SAN BERNARDINO 123,508$
SBCUSD 109,716
ST. BERNARDINE HOSPITAL 63,448
PAMA MANAGEMENT CO. 56,593
HOUSING AUTHORITY 55,186
CITY OF SAN BERNARDINO 49,930
LIDO CONDOMINIUMS 46,860
VILLAGE GREEN CHESTNUT, LP 45,687
BROADSTONE INVESTORS LLC 44,666
W DEAN WEIDNER 39,909
Top Ten Customers Total 635,503
Total Sewer Collections Revenue* 7,759,318$
Top Ten Customers Percent of Total 8.19%
Source: Department's records
Customers -2021
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CITY OF SAN BERNARDINO

MUNICIPAL WATER DEPARTMENT
JUNE 30, 2021 SINGLE AUDIT REPORT

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CITY OF SAN BERNARDINO

MUNICIPAL WATER DEPARTMENT

SINGLE AUDIT REPORT

JUNE 30, 2021

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SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

SINGLE AUDIT REPORT

JUNE 30, 2021

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 the Uniform Guidance ........................................................................................ 3

Schedule of Expenditures of Federal Awards for the
Fiscal Year Ended June 30, 2021 ........................................................................................................ 6

Notes to the Schedule of Expenditures of Federal Awards .................................................................... 7

Schedule of Findings and Questioned Costs for the
Fiscal Year Ended June 30, 2021 ........................................................................................................ 8

Summary Schedule of Prior Year Findings and Questioned Costs for the Fiscal Year Ended June 30, 2020 ...................................................................................................... 10

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203 N. Brea Blvd., Suite 203
Brea, CA 92821 Lance, Soll & Lunghard, LLP Phone: 714.672.0022

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

To the Water Board
City of San Bernardino Municipal Water Department
San Bernardino, 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 each major fund of the City of San Bernardino Municipal Water Department (the “Departm ent”), a component unit of the City of San Bernardino, California, as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the Departmen t’s basic financial statements, and have issued our report thereon dated December 1, 2021.

Internal Control over Financial Reporting

In planning and performing our audit of the financial statement s, we considered the Department’s internal control over financial reporting (internal control) as a basis for designing 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 Department’s internal control.

Accordingly, we do not express an opinion on the effectiveness of the Department’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 ther e is a reasonable possibility t hat a material misstatement of the entity’s financial statements will not be prevented or detected and corr ected on a timely basis. A significant deficiency is a deficiency, or a combinati on 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 c ontrol was for the limited purpo se described in the first paragraph of this section and was not designed to i dentify all deficiencies in internal control that might be material weaknesses or, significant defic iencies. Given these limitation s, 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 Dep artment’s financial statements are free from material misstatement, we performed tests of its complianc e with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. 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 a re required to be reported under Government Auditing Standards.

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To the Water Board
City of San Bernardino Municipal Water Department
San Bernardino, California

Purpose of this Report

The purpose of this report is solely to describe the scope of o ur testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Department’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Department’s internal control and complianc e.

Accordingly, this communication is not suitable for any other purpose.

Brea, California
December 1, 2021

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203 N. Brea Blvd., Suite 203
Brea, CA 92821 Lance, Soll & Lunghard, LLP Phone: 714.672.0022 INDEPENDENT AUDITORS’ REPORT ON CO

MPLIANCE FOR EACH MAJOR PROGRAM

AND ON INTERNAL CONTROL OVER COMPLIANCE AND REPORT ON SCHEDULE OF

EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE To the Water Board
City of San Bernardino Municipal Water Department
San Bernardino, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited the City of San Bernardino Municipal Water Department (the “Department”), a component unit of the City of San Bernardino, California (the “City”)’s c ompliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the Department’s major federal programs for the year ended June 30, 2021. The Department’s major federal programs are identified in the summary of auditor ’s results section of the accompanying schedule of findings and questioned costs.

In our opinion, the Department, complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2021.

Basis for Opinion
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to fi nancial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.

We are required to be independent of the Department and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our audit does not provide a legal determination of the Department’s compliance with the compliance requirements referred to above.

Emphasis of Matter
As discussed in Note 1 to the Schedule of Expenditures of Federal Awards (the “Schedule”), the Schedule presents only the federal awards administered by the Department and does not purport to, and does not, present fairly the total federal expenditures of the City as a whole as of June 30, 2021, or nor does this report on compliance extend to those federal award programs not administered by the Department.

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To the Water Board
City of San Bernardino Municipal Water Department
San Bernardino, California

Responsibilities of Management for Compliance

Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control o ver compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the Department’s government programs.

Auditor’s Responsibilities for the Audit of Compliance

Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above, whether due to fraud or error, and express an opinion on the Department’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will al ways detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the Department’s compliance with the requirements of the government program as a whole.

In performing an audit in accordance with GAAS, Government Auditing Standards, and Uniform Guidance, we:

 Exercise professional judgment and maintain professional skept icism throughout the audit.

 Identify and assess the risks of material noncompliance, wheth er due to fraud or error, and design and perform audit procedures responsive to those risks. Such p rocedures include examining, on a test basis, evidence regarding the Department’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.

 Obtain an understanding of the Department’s internal control o ver compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the Department’s internal control over compliance.

Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.

Report on Internal Control over Compliance

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the norma l course of performing their assigned functions, to prevent, or detect and correct, noncompliance wit h a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over comp liance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
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To the Water Board
City of San Bernardino Municipal Water Department
San Bernardino, California

Our consideration of internal cont rol over compliance was for t he limited purpose described in the Auditor’s Responsibilities for t he Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be a material weakness, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that have not been identified.

Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.

Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance

We have audited the financial stat ements of each major fund of the Department, as of and for the year ended June 30, 2021, and the related notes to the financial sta tements, which collectively comprise the Department’s basic financial statements. We issued our report t hereon dated December 1, 2021, which contained unmodified opinions on those financial statements. Ou r audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements.

The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a requi red part of the basic financial statements.

Such information is the respon sibility of management and was de rived from and relates directly to the underlying accounting and other records used to prepare the bas ic financial statements. The information has been subjected to the auditing procedures applied in the au dit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financia l statements or to the basic financial statements themselves, and other additional procedures in accor dance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over complia nce and the results of that tes ting based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

Brea, California
December 1, 2021

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SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
Federal Program
Assistance Identification Program
Federal Grantor/Pass-Through Grantor/Program Title Listing No. Nu mber Expenditures U.S. Department of Interior
Direct Award:

Title XVI Water Reclamation and Reuse 15.504 R10AC35282 361,596$ Total U.S. Department of the Interior 361,596
Environmental Protection Agency
Consent Decree * 66.000 #
Operations and maintenance:

Newmark 831,438
Muscoy 936,227
Site wide monitoring 141,129
Project management 91,712
Subtotal - Consent Decree 2,000,506
Direct Award:

Superfund State, Political Subdivision, and Indian Tribe Site-Specific Cooperative Agreements 66.802 V-00T73801-8 197,756 Total Environmental Protection Agency 2,198,262
Total Federal Expenditures 2,559,858$
* Major Program
# A PIN number has not been assigned
Note a: Refer to Note 1 to the schedule of expenditures of feder al 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 nonc ash assistance and insurance in effect during the year.

Note c: Total amount provided to subrecipients during the year w as $0. 6 13.a
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE FISCAL YEAR ENDED JUNE 30, 2021

Note 1: Summary of Significant Accounting Policies Applicable t o the Schedule of Expenditures of Federal Awards

a. Scope of Presentation

The accompanying Schedule of Expenditures of Federal Awards (the “Schedule”) includes the federal grant activity of the San Bernardino Municipal Wate r Department (the "Department"), a component unit of the City of San Bernardino, California (the “City”), under programs of the federal government for the year ended June 30, 2021. The information in this Schedule is presented in accordance with the requirements of the Uniform Guidance. Because the Schedule presents only a selected portion of the operations of the Department, it is not intended to and does not present the financial position, changes in net position or cash flows of the Department, nor does it present a ll federal programs of the City of San Bernardino as a whole.

b. Basis of Accounting

Expenditures reported on the Schedule are reported on the accru al basis of accounting.

Such expenditures are recognized following the cost principles contained in the Uniform Guidance. Under the accrual basis of accounting, expend itures are recognized when incurred. Expenditures reported include any property or eq uipment acquisitions incurred under the federal program. The Department did not use the 10% de minimis indirect cost rate as covered in section 200.414 of the Uniform Guidance.

Note 2: Background of the Consent Decree

In 1996, the City filed a complaint against the United States of America, Department of the Army (Army) to recover damages, response costs and other available r emedies relating to contamination alleged to have originated at a World War II Army installation known as Camp Ono. In March 2005, the United States Department Court, Central Department, entered judgment, in the form of a consent decree (Consent Decree), in the matter of City of San Bernardino v. United States of America. The consent decree settles the City’s and the State’s claims arising from the groundwater contamination allegedly caused by the Army. The Consent Decree contains a number of provisions obligating the City (through the Municipal Water Department) to operate and maintain the Newmark Groundwater Superfund site (Site). The Site consists of two operable units, the Newmark Operable Unit and the Muscoy Operable Unit. The Newmark Operable Unit was declared operational and functional in 1998.

The Consent Decree provided for a payment of $69 million from t he Army to the City for performance of the work outlined in the consent decree. Upon entry of the Consent Decree, the City, through the Depa rtment, received title to all facilities constructed by the United States Environmental Protection Agency (EPA) for the Site and agreed t o operate and maintain the groundwater extraction and treatment system for a period of 50 years. The $69 million payment consisted of $59 million for oper ation and maintenance and $10 million for the construction of certain capital facilities that would be required in the future . The funds are subject to strict limitations, contained in the Consent Decree, as to how they may be spent.

Pursuant to the Consent Decree, $10 million, including interest earned, has been set aside to be used only for (i) funding construction of treatment and directly related transmission systems that expanded the Department’s capacity to deliver potable water, and (ii) funding work performed by the Department to complete construction of the Muscoy Operable Unit extraction system. These “capital facility” funds may not be used for costs incurred to operate, maintain, repair or retrofit components of the Site extraction or treatment systems constructed by EPA. In September 2007, the Muscoy Operable Unit was declared operational and functional. 7 13.a
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021

SECTION I - SUMMARY OF AUDITORS' RESULTS

Financial Statements

Type of auditors' report issued: Unmodified Opinion

Internal control over financial reporting:

 Significant deficiencies identified? yes X none r eported

 Material weaknesses identified? yes X no

Noncompliance material to financial
statements noted? yes X no

Federal Awards

Internal control over major programs:

 Significant deficiencies identified? yes X none r eported

 Material weaknesses identified? yes X no

Type of auditors' report issued on compliance for major programs: Unmodified Opinion

Any audit findings disclosed that are required to be
reported in accordance with Title 2 U.S. Code of
Federal Regulations (CFR) Part 200, Uniform
Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards (Uniform
Guidance)? yes X no

Identification of major programs:

CFDA Number(s) Name of Federal Program or Cluster

66.000 Consent Decree

Dollar threshold used to distinguish
between type A and type B program $750,000

Auditee qualified as low risk auditee? X yes no 8 13.a
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10 13.a
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203 N. Brea Blvd., Suite 203
Brea, CA 92821 Lance, Soll & Lunghard, LLP Phone: 714.672.0022 December 1, 2021

To the Water Board
City of San Bernardino Municipal Water Department
San Bernardino, California

We have audited the financial statements of each major fund the City of San Bernardino Municipal Water Department (the “Department”), a component unit of the City of San Bernardino, California, for the year ended June 30, 2021. Professional standards require that we pro vide you with information about our responsibilities under generally accepted auditing standards, Government Auditing Standards and the Uniform Guidance, 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 May 10, 2021. Professional standards also require that we communicate to you the following information related to our audit.

Significant Audit Findings and Other Issues

Qualitative Aspects of Significant Accounting Practices

Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the Department are described in the notes to the financial statements. No new accounting policies were adopted , and the application of existi ng policies was not changed during fiscal year 2020-2021. We noted no transactions entered into by the Department 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 stat ements 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 se nsitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimate(s) affecting the Department’s financial statements were:

Management’s estimates of its net pension liability, net other post-employment benefits liability, and self-insurance liability are based on actuarial valuation specialist assumptions.

We evaluated the key factors and assumptions used to develop th e net pension liability, net other post-employment benefits liability, and self-insuranc e liability to determine that they are reasonable in relation to the financial statements taken as a whole.

Certain financial statement disclosures are particularly sensit ive because of their significance to financial statement users. The most sensitive disclosure affecting the financial statements was:

The disclosure of the Consent Decree in Note 12 to the financial statements identifies the provisions of the settlement regarding a complaint filed by the City of San Bernardino against the Department of the Army to recover damages, response costs, and other available remedies relating to contamination alleged to have or iginated at a WWII army installation.

The financial statement disclosures are neutral, consistent, and clear.

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To the Water Board
City of San Bernardino Municipal Water Department
San Bernardino, California

Significant Unusual Transactions

Management is responsible for the policies and practices used t o account for significant unusual transactions. No significant unusual transactions have occurred during fiscal year 2020-2021.

Difficulties Encountered in Performing the Audit

We encountered no significant difficulties in dealing with mana gement in performing and completing our audit.

Corrected and Uncorrected Misstatements

Professional standards require u s to accumulate all known and l ikely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management.

Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were mat erial, either individually or in the aggregate, to the financial statements taken as a whole.

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 dis agreements arose during the course of our audit.

Circumstances that Affect the Form and Content of the Auditor’s Report

New auditing standards were implemented in fiscal year 2020-202 1 related to Statement of Auditing Standards 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements. T his standard updated the form and content of the financial statement auditor’s report. The purpose of the change was to present an easier format for users to understand the results of the audit and management’s responsibilities.

Management Representations

We have requested certain representations from management that are included in the management representation letter dated December 1, 2021.

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 sit uations. If a consultation involves application of an accounting principle to the Department’s financial statem ents or a determination of the type of auditor’s opinion that may be expr essed on those statements, ou r professional standards require the consulting accountant to check with us to determine that the co nsultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.

Other Audit Findings or Issues Discussed with Management

We generally discuss a variety of matters, including the signif icant events or transactions that occurred during the year, business conditions affecting the Department and business plans and strategies that may affect the risks of material misstatements, the application of accounting principles and auditing standards,

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To the Water Board
City of San Bernardino Municipal Water Department
San Bernardino, California

with management each year prior to retention as the Department’ s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.

Other Matters

We applied certain limited procedures to management’s discussio n and analysis, the schedule of proportionate share of the net pension liability, the schedule of changes in net OPEB liability and related ratios, the schedules of plan contributions, and the schedule o f OPEB plan investment returns which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of manag ement regarding the methods of p reparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI.

We were not engaged to report on the introductory and statistic al section, which accompany the financial statements but are not RSI. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, w e do not express an opinion or provide any assurance on it.

The following new Governmental Accounting Standards Board (GASB) pronouncements were effective for fiscal year 2020-2021 audit:

GASB Statement No. 84, Fiduciary Activities.

GASB Statement No. 90, Majority Equity Interests - an Am endment of GASB Statement Nos. 14 and 61.

GASB Statement No. 98, the Annual Comprehensive Financial Report

The following GASB pron ouncements are effect ive in the followin g fiscal years’ audits and should be reviewed for proper implementation by management:

Fiscal year 2022

GASB Statement No. 87, Leases.

GASB Statement No. 89, Accounting for Interest Cost Incurr ed before the End of a Construction Period.

Fiscal year 2023

GASB Statement No. 91, Conduit Debt Obligations.

GASB Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangement.

GASB Statement No. 96, Subscription-Based Information Technology Arrangements.

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To the Water Board
City of San Bernardino Municipal Water Department
San Bernardino, California

Restriction on Use

This information is intended solely for the use of the Water Bo ard and management of City of San Bernardino Municipal Water Department and is not intended to be, and should not be, used by anyone other than these specified parties.

Very truly yours,

Brea, California

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203 N. Brea Blvd., Suite 203
Brea, CA 92821 Lance, Soll & Lunghard, LLP Phone: 714.672.0022

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

To the Water Board
City of San Bernardino Municipal Water Department
San Bernardino, California

Internal Control over Financial Reporting

Accordingly, we do not express an opinion on the effectiveness of the Department’s internal control.

Compliance and Other Matters

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City of San Bernardino Municipal Water Department
San Bernardino, California

Purpose of this Report

Accordingly, this communication is not suitable for any other purpose.

Brea, California
December 1, 2021

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Mayor and City CouncilJanuary 19, 2022

Mayor and City Council
January 19, 2022