Mayor and City Council
May 1, 2024

5 �liguel J. Guerrero

February 16, 2024
Subject: PRESENTATION OF THE RESULTS OF THE FISCAL YEAR 2022-23 AUDIT, ANNUAL

COMPREHENSIVE FINANCIAL REPORT, SINGLE AUDIT REPORT ON FEDERAL AWARDS RECOMMENDATION:

It is recommended that the Water Board make the following motions:
• Approve the Annual Comprehensive Financial Report for the City of San Bernardino Municipal Water Department for the fiscal year ending June 30, 2023. • Direct staff to file the annual audit and Annual Comprehensive Financial Report with the Mayor and City Council.

Respectfully submitted,
Cynthia Mouser
Director of Finance
Attachments:
• Annual C omprehensive Financial Report, Fiscal Year Ended June 30, 2023 • Single Audit
• Audit Communications Letter
• Report on Internal Controls
• ACFR PowerPoint Presentation

OF THE CITY OF SAN BERNARDINO

WATER DEPARTMENT

A COMPONENT UNIT OF THE CITY

OF SAN BERNARDINO
San Bernardino, CA

FOR THE FISCAL YEAR
ENDED JUNE 30, 2023
ANNUAL

COMPREHENSIVE

FINANCIAL REPORT
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A Certificate of Achievement is valid for a period of one year only. We believe our current annual comprehensive financial report continues to meet the Certificate of Achievement program requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.

Preparation of this report was accomplished by the combined efforts of Department staff. We appreciate the dedicated efforts and professionalism that these staff members contribute to the service of the Department’s customers. The contributions made by Andrea Parker, Senior Accountant, and Garrett Van Leuven, Accountant I, deserve special recognition. We would also like to thank and recognize the members of the Board for their continued support in planning and implementation of the Department’s fiscal policies.

Respectfully submitted,

___________________________________ ___________________________________ Miguel J. Guerrero, P.E., General Manager Cynthia J. Mouser, Director of Finance

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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Statement of Net Position
June 30, 2023
Total
ASSETS
Current:

Cash and investments 50,441,661$ 82,943,540 $ 133,385,201 $ Receivables:

Accounts, net 6,794,648 5, 467,366 12, 262,014 Accrued interest 197,960 290,795 488,755 Lease 216,671 - 216,671
Due from other entities - 138,691 138,691 Inventories 1,446,423 - 1,446,423 Prepaid expenses 320,024 539,808 859,832 Total current assets 59,417,387 89,380,200 148,797,587 Noncurrent:

Lease receivables 3,463,692 - 3,463,692 Investment in joint venture - RIX - 21,208,582 21, 208,582 Restricted assets:

Net OPEB asset 1,152,463 1, 069,283 2,221,746 Cash and cash equivalents:

Restricted for capital 13,173,577 6, 734,572 19, 908,149 Investments:

Restricted for consent decree 23,565,710 - 23,565,710 Accrued interest - consent decree 83,555 - 83,555 Prepaid Insurance - consent decree 17,255,919 - 17,255,919 Capital assets:

Land and easements 5,989,563 17,603,413 23, 592,976 Construction in progress 14,799,410 34,557,818 49, 357,228 Capital assets - being depreciated/amortized, net 186,369,184 50,956,570 237,325,754 Total noncurrent assets 265,853,073 132,130,238 397,983,311 Total assets 325,270,460 221,510,438 546,780,898

DEFERRED OUTFLOWS OF RESOURCES
Pension-related 9,669,705 9, 324,020 18, 993,725 OPEB-related 2,311,185 2, 144,371 4,455,556 Total deferred outflows of resources 11,980,890 11,468,391 23,449,281

LIABILITIES
Current:

Accounts payable 2,470,685 1, 547,130 4,017,815 Related parties payable 1,123,260 1, 203,518 2,326,778 Accrued compensation 625,391 569,039 1,194,430 Claims payable 7,051,451 1, 304,226 8,355,677 Consumer deposits 325,747 - 325,747 Due to other governments 23,996 - 23,996 Current portion of compensated absences 1,070,590 468,522 1,539,112 Current portion of bonds, leases, and subscriptions 1,363,500 776,403 2,139,903 Accrued interest 843,244 505,638 1,348,882 Total current liabilities 14,897,864 6, 374,476 21, 272,340 Noncurrent:

Consumer deposits 3,239,794 - 3,239,794 Compensated absences 267,648 117,130 384,778 Unearned revenue - consent decree 40,905,184 - 40,905,184 Bonds, leases, and subscriptions payable 46,550,913 29,883,538 76,434,451 Net pension liability 35,709,206 34,432,625 70, 141,831 Total noncurrent liabilities 126,672,745 64,433,293 191,106,038 Total liabilities 141,570,609 70,807,769 212,378,378

DEFERRED INFLOWS OF RESOURCES
Pension-related 444,954 429,047 874,001 OPEB-related 5,219,673 4, 842,970 10, 062,643 Lease-related 3,555,374 - 3,555,374 Total deferred inflows of resources 9,220,001 5,272,017 14,492,018

NET POSITION
Net investment in capital assets 172,417,321 79,192,432 251,609,753 Restricted:

Restricted for postemployment benefits 1,152,463 1,069,283 2,221,746 Unrestricted 12,890,956 76,637,328 89, 528,284 Total net position 186,460,740$ 156,899,043 $ 343,359,783 $ Water Utility Sewer Utility
See accompanying notes to financial statements.
15 DRAFT

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Statement of Revenues, Expenses, and Changes in Net Position For the Year Ended June 30, 2023
Interfund
Eliminations Total

OPERATING REVENUES
Sales and service charges 43,545,629$ 44,519,998$ (522,717)$ 87,542,910$ Other operating revenues 546,204 1,024,262 - 1,570,466 Total operating revenues 44,091,833 45,544,260 (522,717) 89,113,376

OPERATING EXPENSES
Administration and customer service 7,538,744 6,490,936 (180,012) 13,849,668 Utility administration 1,447,526 608,386 (1,734) 2,054,178 Sewer collection and lift stations - 1,676,351 - 1,676,351 Plant operations 9,926,415 13,489,293 (196,633) 23,219,075 Maintenance 3,138,031 4,434,120 (132,776) 7,439,375 Environmental control - 826,161 - 826,161
Distributio
n 5,448,156 - - 5,448,156
Engineering and water quality c
ontrol 2,976,680 1,657,022 (11,562) 4,622,140 General, administration and overhead 8,937,245 5,297,009 - 14,234,254 Share of joint venture payments -
1,757,244 - 1,757,244
Depreciation and amortization 7,298,095 5,360,819 - 12,658,914 Total operating expenses 46,710,892 41,597,341 (522,717) 87,785,516 Operating income (loss) (2,619,059) 3,946,919 - 1,327,860

NONOPERATING REVENUES (EXPENSES)
Investment income (loss) 1,126,039 1,251,526 - 2,377,565 Rental income 267,668 - - 267,668
Noncapital grant funds 1,684,006 - - 1,684,006 Interest expense and fiscal charges (1,841,859) (1,219,167) - (3,061,026) Gain (loss)
on disposal of capital assets 4,859 - - 4,859
Other 140,266 (15,420) - 124,846
Total nonoperating revenues (expenses) 1,380,979 16,939 - 1,397,918 Net income (loss) before capital contributions (1,238,080) 3,963,858 - 2,725,778

CAPITAL CONTRIBUTIONS
Acquisition fees 1,701,909 - - 1,701,909
Capacity fees 2,262,695 2,356,198 - 4,618,893 EPA grants 95,994 - - 95,994
Capital contributions 1,915,588 280,701 - 2,196,289 Total capital contributions 5,976,186 2,636,899 - 8,613,085 Changes in net position 4,738,106 6,600,757 - 11,338,863 Net Position - Beginning, Restated 181,722,634 150,298,286 - 332,020,920 Net Position - Ending 186,460,740$ 156,899,043$ -$ 343,359,783$ Water Utility Sewer Utility
See accompanying notes to financial statements.
16 DRAFT

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Statement of Cash Flows
For the Year Ended June 30, 2023
Total

CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers 46,147,758$ 46,584,509 $ 92,732,267 $ Cash paid to employees for services (19,052,305) (14, 207,594) (33,259,899) Cash paid to suppliers for goods and services (18,855,176) (23, 437,257) (42,292,433) Cash paid to RIX joint venture operations - (905,421) (905,421) Net cash provided by (used for) operating activities 8,240,277 8,034,237 16,274,514

CASH FLOWS FROM NON-CAPITAL

FINANCING ACTIVITIES
Consent decree insurance drawdowns 1,709,241 - 1,709,241 Net cash provided by (used for) noncapital
financing activities 1,709,241 - 1,709,241

CASH FLOWS FROM CAPITAL AND

RELATED FINANCING ACTIVITIES
Capital fees received 3,964,604 2,356,198 6,320,802 Proceeds from sales of capital assets 30,855 - 30,855 Cash paid to acquire capital assets (8,560,339) (3, 323,858) (11,884,197) Principal paid on capital-related debt (1,121,464) (735,000) (1,856,464) Interest paid on capital-related debt (1,998,019) (1, 240,880) (3,238,899) Capital grant proceeds 95,994 - 95,994 Net cash provided by (used for) capital
and related financing activities (7,588,369) (2, 943,540) (10,531,909)

CASH FLOWS FROM INVESTING ACTIVITIES
Cash received from rental income 275,263 - 275,263 Cash received from investment income 960,511 1,125,668 2,086,179 Net cash provided by (used for) investing activities 1,235,774 1,125,668 2,361,442 Net change in cash and cash equivalents 3,596,923 6,216,365 9,813,288 Cash and cash equivalents, July 1 56,381,161 70,105,146 126,486,307 Cash and cash equivalents, June 30 59,978,084$ 76,321,511 $ 136,299,595 $

RECONCILIATION OF CASH AND CASH EQUIVALENTS

TO AMOUNTS REPORTED ON THE STATEMENT OF

NET POSITION
Cash and investments 50,441,661$ 82,943,540 $ 133,385,201 $ Restricted cash and investments 13,173,577 6,734,572 19,908,149 Less those not meeting the definition of a cash equivalent (3,63 7,154) (13, 356,601) (16,993,755) Cash and cash equivalents, June 30 59,978,084$ 76,321,511 $ 136,299,595 $

RECONCILIATION OF OPERATING INCOME TO NET CASH

PROVIDED BY (USED FOR) OPERATING ACTIVITIES
Operating income (loss) (2,619,059)$ 3,946,919 $ 1,327,860$ Depreciation and amortization 7,298,095 5,360,819 12,658,914 Adjustments to reconcile operating income (loss) to
net cash provided by (used for) operating activities:
(Increase) decrease in RIX joint venture - 851,823 851,823 (Increase) decrease in accounts receivable 1,328,684 596,623 1,925,307 (Increase) decrease in due from other entities - 443,626 443,626 (Increase) decrease in inventory 311,334 - 311,334 (Increase) decrease in prepaid expense (74,741) 89,777 15,036 Increase (decrease) in accounts payable (68,690) (1, 465,928) (1,534,618) Increase (decrease) in related parties payable (669,494) (196,482) (865,976) Increase (decrease) in accrued compensation (171,034) (179,041) (350,075) Increase (decrease) in compensated absences (76,296) 40,036 (36,260) Increase (decrease) in claims payable 3,135,697 218,323 3,354,020 Increase (decrease) in consumer deposits 727,241 - 727,241 Increase (decrease) in OPEB obligation (1,753,203) (1, 770,774) (3,523,977) Increase (decrease) in pension obligation 871,743 98,516 970,259 Total adjustments 3,561,241 (1, 273,501) 2,287,740 Net cash provided by (used for) operating activities 8,240,277 $ 8,034,237 $ 16,274,514 $

SCHEDULE OF NON-CASH ACTIVITIES
Capital contributions 1,915,588$ 280,701 $ 2,196,289 $ Capital assets acquired through leases/subscriptions 98,074 - 98 ,074 Amortization of bond premiums 197,638 6,403 204,041
Water Utility Sewer Utility
See accompanying notes to financial statements.
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49 DRAFT
7+,63$*(,17(17,21$//</()7%/$1.
50 DRAFT
5(48,5('6833/(0(17$5<,1)250$7,21
51 DRAFT

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Schedule of Proportionate Share of the Net Pension Liability As of June 30, for the Last Ten Fiscal Years (1)
2023 2022 2021
Measurement Date 6/30/2022 6/30/2021 6/30/2020
Proportion of the Net Pension Liability 36% 36% 36%
Proportionate Share of the Net Pension Liability 70,141,831$ 40,743,630 $ 64,101,577$ Covered Payroll 20,821,422$ 20,103,974 $ 18,770,894$
Proportionate Share of the Net Pension Liability as
Percentage of Covered Payroll 337% 203% 341%
Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 70% 82% 71%
Notes to Schedule of Proportionate Share of the Net Pension Liability 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, 2020 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: Effective for 2023, the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long- term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was

7.15% for measurement dates 2018 through 2022, 7.65% for measur ement dates 2016 through 2017, and 7.50% for measurement date 2015.
(1) Historical information is required only for measurement for which GA SB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only nine years are shown.
52 DRAFT
2020 2019 2018 2017 2016 2015
6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015 6/30/2014 36% 36% 36% 36% 36% 36%
60,531,689$ 56,856,346$ 58,595,075$ 53,652,216$ 44,917,863$ 40,932,398$ 17,169,126$ 15,357,635$ 14,876,739$ 14,177,779$ 14,087,004$ 14,017,065$ 353% 370% 394% 378% 319% 292%
72% 72% 71% 72% 76% 78%
53 DRAFT

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Schedule of Pension Plan Contributions
As of June 30, for the Last Ten Fiscal Years (1)
2023 2022 2021 2020
Actuarially Determined Contribution 7,304,613$ 6,656,656 $ 6,492,199 $ 5,814,288$ Contribution in Relation to the Actuarially
Determined Contribution (7,304,613) (6,656,656) (6,492,199) (5,814,288) Contribution Deficiency (Excess) -$ -$ -$ -$
Covered Payroll 22,022,839$ 20,821,422 $ 20,103,974 $ 18,770,894$ Contributions as a Percentage of Covered Payroll 33% 32% 32% 31% Actuarial Cost Method:

Amortization Method/Period: For details, see June 30, 2020 Funding Valuation Report Asset Valuation Method:

Inflation:

Salary Increases:

Payroll Growth:

Investment Rate of Return:

Retirement Age:

Mortality:

Notes to Schedule of Plan Contributions:

Entry Age Normal

2.500%
Varies by Entry Age and Service

2.750%
The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2022-23 were derived from the June 30, 2020 funding valuation report.

Funding Valuation Report.

Fair Value of Assets. For details, see June 30, 2020
Expenses; includes Inflation.

7.0% Net of Pension Plan Investment and Administrative
The probabilities of Retirement are based on the 2017 CalPERS Experience Study for the period of 1997 to 2015.

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 mortal ity improvement using Scale BB published by the Society of Actuaries. (1) Historical information is required only for measurement for which GA SB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only nine years are shown.
54 DRAFT
2019 2018 2017 2016 2015
5,251,737$ 4,467,847 $ 3,886,888 $ 3,607,950$ 2,979,160$ (5,251,737) (4,467,847) (3,886,888) (3,607,950) (2,979,160) -$ - $ - $ -$ -$ 17,169,126$ 15,357,635$ 14,876,739$ 14,177,779$ 14,087,004$ 31% 29% 26% 25% 21%
55 DRAFT

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Schedule of Changes in the Net OPEB Liability/(Asset) and Related Ratios As of June 30, for the Last Ten Fiscal Years (1)
2023 2022 2021
Measurement Date 6/30/2022 6/30/2021 6/30/2020
Total OPEB Liability:

Service cost 984,915$ 956,228 $ 1,352,161$ Interest 2,336,141 2,240,570 2,651,878
Changes of benefit terms - - - Actual vs. expected experience (3,119,394) - (6,747,960) Assumption changes (2,619,432) - (1,784,735) Benefit payments (1,738,412) (1,654,270) (1,658,421) Net changes (4,156,182) 1,542,528 (6,187,077) Total OPEB Liability (beginning of year) 37,262,554 35,720,026 41,907,103 Total OPEB Liability (end of year) (a) 33,106,372 37,262,554 35,720,026 Plan Fiduciary Net Position:

Contributions - employer 1,738,412 2,737,270 2,602,421 Net investment income (4,469,586) 7,886,756 1,564,423 Benefit payments (1,738,412) (1,654,270) (1,658,421) Administrative expenses (11,068) (10,052) (8,657) Net changes (4,480,654) 8,959,704 2,499,766 Plan Fiduciary Net Position - beginning 39,808,772 30,849,068 28,349,302 Plan Fiduciary Net Position - ending (b) 35,328,118 39,808,772 30,849,068 Net OPEB Liability/(Assets) - ending (a) - (b) (2,221,746)$ (2,546,218)$ 4,870,958$ Plan fiduciary net position as a percentage
of the total OPEB liability 107% 107% 86%
Covered-employee payroll (2) 25,597,944$ 21,203,035$ 19,691,462$ Net OPEB liability/(asset) as a percentage
of covered-employee payroll -9% -12% 25%
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 2021 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. 56 DRAFT
2020 2019 2018
6/30/2019 6/30/2018 6/30/2017
1,312,778$ 1,067,080 $ 1,036,000 $
2,512,269 2,449,681 2,322,000
- (640,849) -
- 523,834 -
- (1,065,369) -
(1,602,932) (1,554,389) (1,118,000)
2,222,115 779,988 2,240,000
39,684,988 38,905,000 36,665,000
41,907,103 39,684,988 38,905,000
2,615,932 2,673,389 2,602,000
2,036,956 1,848,262 2,204,000
(1,602,932) (1,554,389) (1,118,000)
(8,061) (7,855) (7,000)
3,041,895 2,959,407 3,681,000
25,307,407 22,348,000 18,667,000
28,349,302 25,307,407 22,348,000
13,557,801$ 14,377,581$ 16,557,000$
68% 64% 57%
17,981,957$ 16,768,495$ 19,132,000$
75% 86% 87%
57 DRAFT

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Schedule of OPEB Plan Contributions
As of June 30, for the Last Ten Fiscal Years (1)
2023 2022 2021
Actuarially Determined Contribution 1,559,000$ 1,572,000 $ 1,652,000$ Contribution in Relation to the Actuarially
Determined Contribution (2,327,743) (1,738,412) (2,737,270) Contribution Deficiency (Excess) (768,743)$ (166,412)$ (1,085,270)$ Covered-employee payroll 28,172,331$ 25,597,944$ 21,203,035$ Contributions as a percentage of 8% 7% 13%
covered-employee payroll
Notes to Schedule of Employer Contribution:

Valuation Date:

Actuarial Cost Method:

Amortization Method:

Amortization Period:

Asset Valuation Method:

Discount Rate:

General Inflation:

Medical Trend:

Mortality:

Mortality Improvement:

Entry Age Normal, level percentage of payroll
Level % of pay
Investment gains and losses spread over 5-year rolling period.

Fair value
Methods and Assumptions for 2020/21 Actuarially Determined Contribution June 30, 2022
CalPERS 2021 Experience Study
80% of Scale MP-2020
of 3.9% in 2076.
of 3.9% in 2076
(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 - 6.8% for 2023, decreasing to an ultimate rate Medicare - 5.4% for 2023, decreasing to an ultimate rate

6.25%

2.50%
58 DRAFT
2020 2019 2018
2,728,000$ 2,760,000 $ 2,592,000 $
(2,602,421) (2,615,932) (2,673,000)
125,579$ 144,068 $ (81,000) $
19,691,462$ 17,981,957$ 16,768,495$
13% 15% 16%
59 DRAFT

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
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
2023 -11.23%
2022 29.08%
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. 60 DRAFT
67$7,67,&$/6(&7,21
61 DRAFT
7+,63$*(,17(17,21$//</()7%/$1.
62 DRAFT

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.
63 DRAFT
City of San Bernardino Municipal Water Department
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
6/30/2014 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 (1,980,043) 6,605,556 8,209,552 6/30/2022 83,517,341 72,109,935 11,407,406 (2,315,279) 8,071,944 17,164,071 6/30/2023 89,113,376 87,785,516 1,327,860 1,397,918 8,613,085 11,338,863 Source: Department's annual reports
*Fiscal Years 2014-2016 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
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

THOUSANDS
Changes in Net Position- Combined Funds
Changes in Net Position
64 DRAFT
City of San Bernardino Municipal Water Department
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
6/30/2014 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 6/30/2022 43,150,124 37,626,046 5,524,078 483,961 4,718,864 10,726,903 6/30/2023 44,091,833 46,710,892 (2,619,059) 1,380,979 5,976,186 4,738,106 Source: Department's annual reports
(3,000)
(1,000)
1,000
3,000
5,000
7,000
9,000
11,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

THOUSANDS
Changes in Net Position-Water Fund
Changes in Net Position
65 DRAFT
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
6/30/2014 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 (2,782,481) 2,502,263 3,094,513 6/30/2022 34,171,160 26,794,390 7,376,770 (2,288,006) 2,294,541 7,383,305 6/30/2023 * 45,544,260 41,597,341 3,946,919 16,939 2,636,899 6,600,757 Source: Department's annual reports
* The FY 2023 budget has combined the Sewer Treatment Fund and the Sewer Collection Fund into one fund. Now called the Sewer Fund.
(2,000)
-
2,000
4,000
6,000
8,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

THOUSANDS
Changes in Net Position-Sewer Fund
Changes in Net Position
66 DRAFT
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
6/30/2014 n/a n/a n/a n/a n/a n/a
6/3/2015 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 6/30/2022 6,394,623 7,888,065 (1,493,442) (511,234) 1,058,539 (946,137) 6/30/2023 ** - - - - - - ** The FY 2023 budget has combined the Sewer Treatment Fund and the Sewer Collection Fund into one fund. Now called the Sewer Fund.

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
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

THOUSANDS
Changes in Net Position-Sewer Collection Fund
Changes in Net Position
67 DRAFT
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
6/30/2014 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 - 61,350,525 314,639,257 6/30/2022 250,324,366 - 81,696,554 332,020,920 6/30/2023 251,609,753 2,221,746 89,528,284 343,359,783 Source: Department's annual reports
* Fiscal Years 2014-2016 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
400,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

THOUSANDS

NET POSITION BY COMPONENT
COMBINED (IN 1000S)
Net Investment in Capital Assets Restricted Net Position Unrestricted Net Position 68 DRAFT
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
6/30/2014 163,797,283 n/a 11,728,071 175,525,354 6/30/2015 166,963,238 n/a (15,152,937) 151,810,301 6/30/2016 169,730,998 n/a (17,657,766) 152,073,232 6/30/2017 169,569,746 n/a (19,564,464) 150,005,282 6/30/2018 171,794,031 n/a (20,699,066) 151,094,965 6/30/2019 177,158,535 n/a (16,391,858) 160,766,677 6/30/2020 168,992,121 n/a (2,926,264) 166,065,857 6/30/2021 168,553,917 n/a 2,441,814 170,995,731 6/30/2022 168,172,810 n/a 13,549,824 181,722,634 6/30/2023 172,417,321 1,152,463 12,890,956 186,460,740 Source: Department's annual reports
(50,000)
-
50,000
100,000
150,000
200,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

THOUSANDS
NET POSITION BY COMPONENT:

WATER FUND (IN 1000S)
Net Investment in Capital Assets Restricted Net Position Unrestricted Net Position 69 DRAFT
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
6/30/2014 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 n/a 40,040,285 103,283,318 6/30/2020 66,906,874 n/a 42,845,276 109,752,150 6/30/2021 64,650,540 n/a 48,196,123 112,846,663 6/30/2022 60,853,472 n/a 59,251,320 120,104,792 6/30/2023 * 79,192,432 1,069,283 76,637,328 156,899,043 Source: Department's annual reports
* The FY 2023 budget has combined the Sewer Treatment Fund and the Sewer Collection Fund into one fund. Now called the Sewer Fund. -
50,000
100,000
150,000
200,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

THOUSANDS
NET POSITION BY COMPONENT:

SEWER FUND (IN 1000S)
Net Investment in Capital Assets Restricted Net Position Unrestricted Net Position 70 DRAFT
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
6/30/2014 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 6/30/2022 21,298,084 n/a 8,895,410 30,193,494 6/30/2023 ** - - - -
** The FY 2023 budget has combined the Sewer Treatment Fund and the Sewer Collection Fund into one fund. Now called the Sewer Fund.

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
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023

THOUSANDS
NET POSITION BY COMPONENT: SEWER
COLLECTION FUND (IN 1000S)
Net Investment in Capital Assets Restricted Net Position Unrestricted Net Position 71 DRAFT
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
6/30/2014 34,777,112 1,754,614 140,176 36,671,903 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 6/30/2022 42,175,623 905,674 68,828 43,150,124 - 347,849 530,326 28,846 1,910,435 2,817,456 6/30/2023 42,635,542 1,427,234 29,057 44,091,833 1,126,039 267,668 140,266 4,859 1,684,006 3,222,838 Source: Department's annual reports
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000Thousands
Operating Revenue by Type-Water Fund
Other Services
Service Charges/Fees
Water Sales
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500Thousands
Non-Operating Revenue by Type: Water Fund
Noncapital grant funds
Gain on asset disposition
Other Income
Rental Income
Interest Income
72 DRAFT
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
6/30/2014 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 6/30/2
022 33,347,882 823,278 34,171,160 - - - - - 6/30/2
023 * 44,519,998 1,024,262 45,544,260 1,251,526 (15,420) 1,236,106 Source
: Department's annual reports
* The FY 2023 budget has combined the Sewer Treatment Fund and the Sewer Collection Fund into one fund. Now called the Sewer Fund.
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000Thousands
Operating Revenue by Type-Sewer Fund
Other Operating Revenue
Industrial Waste
Sewer Treatment Revenue
(200)
-
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
73 DRAFT
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/Cont
ribution from
City
Total Non
Operating
Income
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 6/30/2022 6,
306,843 87,780 - 6,394,623 - - - 6/30/2023 ** - - - - - - - - - ** The FY 2023 budget has combined the Sewer Treatment Fund and the Sewer Collection Fund into one fund. Now called the Sewer Fund.

Source: Department's annual reports
* The Sewer Collection Utility was transferred to the Water D epartment 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
9,000
6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/20206/30/2021 6/30/2022 6/30/2023 Thousands
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
74 DRAFT
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
6/30/2014 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 6/30/2022 11,921,394 14,603,130 3,001,100 2,846,997 5,253,425 37,626,046 1,877,325 456,170 2,333,495 6/30/2023 17,923,515 15,374,571 2,976,680 3,138,031 7,298,095 46,710,892 1,841,859 1,841,859 Source: Depart
ment's annual reports
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000Thousands
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
6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 Thousands
Non-Operating Expense by Type: Water Fund
Other Non-operating expense
Loss on asset disposition
Interest Expense
75 DRAFT
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
6/30/2014 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 24,866,681 1,367,375 1,553,261 - 2,920,635 6/30/2020 5,702,973 10,470,501 369,422 3,508,534 4,596,980 24,648,411 1,313,151 1,546,396 - 2,859,546 6/30/2021 6,292,313 11,986,858 387,932 3,811,413 4,507,869 26,986,385 1,283,861 1,479,729 38,363 2,801,953 6/30/2022 * 3,666,547 14,648,530 385,517 3,764,618 4 ,329,178 26,794,390 1,249,715 - * 1,038,291 2,288,006 6/30/2023 ** 12,396,331 17,749,049 1,657,022 4,434,120 5 ,360,819 41,597,341 1,219,167 * 1,219,167

Source: Department's annual reports
* Joint Venture expense relating to RIX operations are now classified as Operations beginning in 2022. ** The FY 2023 budget has combined the Sewer Treatment Fund and the Sewer Collection Fund into one fund. Now called the Sewer Fund.
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000Thousands
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
76 DRAFT
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
6/30/2014 * - -
6/30/2015 * - -
6/30/2016 * - -
6/30/2017 * 314,265 492,675 - - 247,926 1,054,866 - - 6,9 51 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 - - - - 6/30/2022 2,535,314 590,600 3,333,804 - 1,428,347 7,888,065 - - 511,234 511,234 6/30/2023 ** - - - - - - - - - -

** The FY 2023 budget has combined the Sewer Treatment Fund and the Sewer Collection Fund into one fund. Now called the Sewer Fund.

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. -
2,000
4,000
6,000
8,000
10,000
12,000
14,000Thousands
Operating Expenses by Type-Sewer Collection Fund
Depreciation and Amortization
Maintenance
Engineering
Plant Operations
Administration & Customer Service
-
100
200
300
400
500
600Thousands
Non-Operating Expense by Type: Sewer Collection Fund
Other Non-operating expense
Loss on Asset Disposition
Interest Expense
77 DRAFT
7+,63$*(,17(17,21$//</()7%/$1.
78 DRAFT

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. 79 DRAFT
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
6/30/2014 36,671,903 30,069,978 6,601,925 2,504,705 9,106,630 1,658,265 660,85 4 2,319,119 3.93 6/30/2015 33,121,128 30,139,458 2,981,670 2,702,953 5,684,623 1,748,054 570,43 4 2,318,488 2.45 6/30/2016 30,001,871 29,025,031 976,840 2,283,230 3,260,070 1,813,594 523,2 74 2,336,868 1.40 6/30/2017 33,358,907 30,596,620 2,762,287 2 ,584,468 5,346,755 246,887 218,8 19 465,706 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 ,636,039 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 ,633,978 10,750,202 860,000 2,130,088 2,990,088 3.60 6/30/2022 43,150,124 32,372,621 10,777,503 2,332,440 13,109,943 900,000 2,090,388 2,990,388 4.38 6/30/2023 44,091,833 39,412,797 4,679,036 3,217,979 7,897,015 950,000 2,044,13 8 2,994,138 2.64 Source: Department's annual reports
80 DRAFT
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
6/30/2014 24,734,425 16,749,778 7,984,647 (1,129,169) 6,855,478 4,424,090 747,4 60 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 1 32,659 432,659 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 1,356,12 5 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 1,30 1,900 1,966,900 4.02 6/30/2022 34,171,160 22,465,212 11,705,948 (1,021,981) 10,683,967 700,000 1,267,775 1,967,775 5.43 6/30/2023 45,544,260 36,236,522 9,307,738 1,251,526 10,559,264 735,000 1,231,90 0 1,966,900 5.37 Source: Department's annual reports
81 DRAFT
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 Notes/Loans
Payable
Certificates of
Participation
Leases and
Subscriptions Total
Percentage of
Personal
Income
Debt Per
Capita
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 - - - 83,814 1.0% 0.39 6/30/2021 82,085 - - - 82,085 1.1% 0.38 6/30/2022 80,221 - - - 80,221 1.7% 0.36 6/30/2023 78,391 - - 183 78,574 1.7% 0.35 Source: Department's annual reports
82 DRAFT

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.
83 DRAFT
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)
6/30/2014 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% 6/30/2022 220,840 4,596,122 20,812 4.80% 6/30/2023 223,230 4,608,807 20,646 6.30% (1) California Department of Finance
(2) U.S. Department of Commerce, Bureau of Economic Analys for 2018-2022; City of San Bernardino Economic Development Dept (3) State of California, Economic Development Department; City of San Bernardino Economic Development Dept 206,000
208,000
210,000
212,000
214,000
216,000
218,000
220,000
222,000
224,000
226,000
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%
Unemployment
84 DRAFT
City of San Bernardino Municipal Water Department
Major Employers
Current Year and Nine Years Ago
Fiscal Year 2023 Fiscal Year 2014
Employer Ranking Number of Employees Ranking Number of Employees* County of San Bernardino 1 25,897 1 1,000+
Stater Brothers 2 18,000 2 1,000+
San Bernardino City Unified School Disrict 3 5,024 3 1,000+ San Bernardino County Human Services 4 4,825 4 1,000+
San Bernardino County Sheriff 5 4,208 5 1,000+
San Bernardino County Superintendent of Schools 6 2,500 6 1,000+ California State Unversity- San Bernardino 7 2,255 7 1,000+ Saint Bernadines Medical Center 8 2,202 8 1,000+
San Bernardino Community Hospital 9 1,800 9 1,000+
Amazon 10 1,000+ * 10 0
* Actual employment figures not available
Source: Economic Development Department Labor Market Information, Agency Websites and City's Annual Financial Report. 85 DRAFT
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
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
2022 199.0 84.5 12.0 295.5
2023 202.0 85.0 12.0 299.0
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
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Authorized Position History
Water Fund Sewer Treatment Fund Sewer Collection Fund
86 DRAFT

REVENUE CAPACITY
These schedules contain information to help the reader assess the Department's significant revenue sources.
87 DRAFT
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"
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 * 4/1/2022 20.49 20.49 28.17 43.51 81.87 127.91 388.77 772.38 1,232.72 2,153.40 4,224.92 4,224.92 7/1/2022 21.72 21.72 29.87 46.13 86.79 135.59 412.10 818.73 1,306.69 2,282.61 4,478.42 4,478.42 Source: Department's Records
($/month)
* Information not reported.
88 DRAFT
7+,63$*(,17(17,21$//</()7%/$1.
89 DRAFT
City of San Bernardino Municipal Water Department
Water Connections and Revenues by User Type
Last Ten Fiscal Years
User Type Connections Revenue Connections Revenue Connections Revenue Connections Revenue Single family 36,063 21, 652,852$ 35,744 23, 761,145$ 35,995 23, 875,761$ 36,042 22, 909,054$ Multiple family 2,916 5,835, 444 2,905 5,562, 012 2,908 5, 569,436 2,907 5, 222,345 Commercial 3,164 8,454, 199 3,151 6,976, 893 3,154 6, 579,373 3,117 6, 482,560 Landscape 1,196 6,742, 399 1,184 5,515, 046 1,192 5, 277,114 1,181 4, 542,108 Other 2,574 860, 736 2,296 811, 219 2,241 811, 833 2,174 781,428 Total all users 45,913 43,545,629$ 45,280 42,626,315 $ 45,490 42,113,517 $ 45,421 39,937,495 $ Connections Revenue Connections Revenue Connections Revenue Connectio ns Revenue Single family 36,006 21, 579,693$ 35,824 20, 476,866$ 35,825 17, 346,414$ 35,729 15, 688,749$ Multiple family 2,903 5,157, 997 2,904 4,944, 978 2,899 4, 449,204 2,873 4, 225,832 Commercial 3,104 6,320, 900 3,111 6,117, 493 3,131 5, 750,672 3,092 4, 913,942 Landscape 1,150 4,256, 390 1,159 4,694, 704 1,121 3, 789,527 1,129 3, 203,907 Other 2,056 808, 227 2,018 748, 141 1,956 557, 392 1,905 677,180 Total all users 45,220 38,123,207$ 45,016 36,982,182 $ 44,932 31,893,209 $ 44,728 28,709,610 $ Connections Revenue Connections Revenue
Single family 35,695 16,775,834$ 35,012 18,583,708$ Multiple family 2,869 4,349,601 2,824 4,591,290
Commercial 3,097 6,332,882 3,085 6,566,344
Landscape 1,130 3,079,610 1,140 3,616,135
Other 1,791 679,606 1,703 913,810
Total all users 44,582 31,217,533$ 43,764 34,271,287$ Source: Department's records
2020
2019 2018 2017 2016
2015 2014
2023 2022 2021
50%
13%
19%
16%
2%
Water Service Revenue by User Type FY 2022
Single family
Multiple family
Commercial
Landscape
Other
36,063 , 78%
2,916 , 6%
3,164 , 7%
1,196 , 3%
2,574 , 6%
Water Service Connections per Customer Type
FY 2022
Single family
Multiple family
Commercial
Landscape
Other
90 DRAFT
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 07/01/14 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
4/1/2022* N/A N/A N/A N/A N/A N/A
7/1/2022* N/A N/A N/A N/A N/A N/A
Source: Department's records
* Elevation charge was eliminated with the rate adoption on 04/01/22. 91 DRAFT
City of San Bernardino Municipal Water Department
Top Ten Water Customers
Fiscal Year 2023
City of San Bernardino 1,579,052$
San Bernardino City Unified School District 1,419,699
California State University 580,180
County of San Bernardino 355,809
Housing Authority of the County of San Bernardino 235,197 Cott Beverages 223,457
W. Dean Weidner 195,108
Rialto School District 193,582
Lido Condominiums 162,311
San Bernardino Community College District 162,070
Top Ten Customers Total 5,106,465$
Total Water Revenue 43,545,629$

Top Ten Customers Percent of Total 11.73%
2023 Top 10 Customers
92 DRAFT
City of San Bernardino Municipal Water Department
Sewer Treatment Rate History
Last Ten Fiscal Years
1/1/2014 10/1/2015 7/1/2016 7/1/2017 7/1/2018 7/1/2019 7/1/2020 7/1/20 21 4/1/2022* 7/1/2022* Residential (monthly per EDU)
Residential 18.50 20.65 22.38 23.10 23.10 23.10 23.10 23.10 37.83 41.99 Multi-Family (2 units) 37.00 41.31 44.76 46.20 ` 66.05 66.05 66.05 75.66 83.98 Multi-family (3 units) 55.50 61.96 67.14 69.29 99.04 99.04 99.04 99.04 113.49 125.98 All Non-Residential (including multi-family (4 or
more units) and mobile home parks) 2.40 3.18 3.42 3.52 6.62 6. 62 6.62 6.62 16.56 18.38 Industrial 1.00 1.67 1.78 1.83 4.93 4.93 4.93 4.93 16.56 18.38 * The Sewer Collection rate was combined with the Sewer Treatment rate to become the sewer rate that was effective 04/01/22.

Source: Department's records
93 DRAFT
City of San Bernardino Municipal Water Department
Sewer Treatment Rate History
Last Ten Fiscal Years
1/1/2014 10/1/2015 7/1/2016 7/1/2017 7/1/2018 7/1/2019 7/1/2020 7/1/20 21 4/1/2022* 7/1/2022* Commodity Charge (per HCF):

Low Strength Non-Residiential
Laundromats 1.50 1.63 1.77 1.83 1.83 1.83 1.83 1.83 2.15 2.39 Schools, churches, nursery schools 1.10 1.19 1.29 1.33 1.33 1.33 1.33 1.33 2.15 2.39 Medium Strength Non-Residiential
Multi-family, mobile home parks 1.25 1.36 1.48 1.53 1.53 1.53 1.53 1.53 2.71 3.01 Retail, commercial, light industrial 2.10 2.28 2.47 2.55 2.55 2.55 2.55 2.55 2.71 3.01 Auto repair, car wash 1.30 1.41 1.53 1.58 1.58 1.58 1.58 1.58 2.71 3.01 Offices, motels (w/o restaurants) 1.50 1.63 1.77 1.83 1.83 1.83 1.83 1.83 2.71 3.01 Hospitals, convalescent homes 1.35 1.46 1.58 1.63 1.63 1.63 1.63 1.63 2.71 3.01 High Strength Non-Residiential
Restaurants, hotels 2.70 2.93 3.18 3.28 3.28 3.28 3.28 3.28 6.42 7.13 Domecstic Liquid Waste (per gallon) 0.0400 0.0430 0.0470 0.0490 0.0490 0.0490 0.0490 0.0490 0.0714 0.0793 Industrial:

Discharge Flow (per million gallons) 900.00 977.00 1,060.00 1,094.00 1,094.00 1,094.00 1,094.00 1,094.00 1,4 20.83 1,577.12 Biological Oxygen demand (per 1,000 lbs) 360.00 391.00 424.00 438.00 438. 00 438.00 438.00 438.00 648.28 719.59 Suspended Solids (per 1,000 lbs) 640.00 694.00 753.00 778.00 778. 00 778.00 778.00 778.00 648.50 719.84 * The Sewer Collection rate was combined with the Sewer Treatment rate to become the sewer rate that was effective 04/01/22.

Source: Department's records
94 DRAFT
City of San Bernardino Municipal Water Department
Sewer Treatment Connections and Revenue by User Type
Last Ten Fiscal Years
Loma Linda -06/22 East Valley 6/22
User Type Connections Revenue Connections Revenue Connections Revenue Connections Revenue San Bernardino Residential 33,050 $30,834,983 33,230 $14,359,415 32,365 $10,165,765 31,828 $10,191,482 San Bernardino Nonresidential 5,576 2,113,002 5,566 7,279,215 5,436 8,292,874 5,340 8,463,554 East Valley Residential 18,735 5,003,034 18,636 5,011,215 18,710 4,797,833 18,477 4,778,152 East Valley Nonresidential 1,089 3,329,085 1,106 3,805,558 1,087 3,456,827 1,050 3,483,724 Loma Linda Residential 3,185 1,239,524 3,039 1,219,034 3,010 1,232,048 2,856 1,163,501 Loma Linda Nonresidential 170 2,000,370 169 1,673,445 169 1,642,250 168 1,622,872 Total all users 61,805 $44,519,998 61,746 $33,347,882 60,777 $29,587,596 59,719 $29,703,284 Connections Revenue Connections Revenue Connections Revenue Connections Revenue San Bernardino Residential 33,051 $10,146,660 32,945 $10,135,132 32,960 $9,756,592 32,889 $8,746,617 San Bernardino Nonresidential 5,531 8,645,032 5,526 8,834,641 5,471 8,010,240 5,377 7,125,053 East Valley Residential 18,477 4,778,152 18,477 4,765,218 18,477 4,622,944 18,477 4,008,039 East Valley Nonresidential 1,050 3,550,973 1,050 3,579,348 1,050 3,083,475 1,060 2,825,971 Loma Linda Residential 2,799 1,171,706 4,824 1,167,823 4,723 1,107,201 5,948 1,008,071 Loma Linda Nonresidential 345 1,557,119 703 1,548,574 593 1,441,807 591 1,308,474 Total all users 61,253 $29,849,643 63,525 $30,030,737 63,274 $28,022,259 64,342 $25,022,225 Connections Revenue Connections Revenue
San Bernardino Residential 32,874 $8,056,827 32,537 $8,111,634 San Bernardino Nonresidential 5,344 7,240,533 5,410 8,033,072 East Valley Residential 18,480 4,093,625 18,404 4,149,836 East Valley Nonresidential 1,051 2,571,813 1,115 2,725,075 Loma Linda Residential 5,040 997,242 4,656 991,387
Loma Linda Nonresidential 588 1,294,612 592 1,330,102
Total all users 63,377 $24,254,651 62,714 $25,341,106
Source: Department's records
2015 2014
2023 2022 2021 2020
2019 2018 2017 2016
33,050, 54%
5,576, 9%
18,735, 30%
1,089, 2%
1,,0
3,185, 5%
,
,11185185
,
5%5%170, 0%
Sewer Utility Connections per Customer Type FY 2023
San Bernardino Residential
San Bernardino Nonresidential
East Valley Residential
East Valley Nonresidential
Loma Linda Residential
Loma Linda Nonresidential
69%
5%
11%
7%
%%%%%
3%
3%%%%%5%
Sewer Utility Revenue by User Type
FY 2023
San Bernardino Residential
San Bernardino Nonresidential
East Valley Residential
East Valley Nonresidential
Loma Linda Residential
Loma Linda Nonresidential
95 DRAFT
City of San Bernardino Municipal Water Department
Top Ten Sewer Treatment Customers
Fiscal Year 2023
County of San Bernardino 654,640$
San Bernardino City Unified School District 362,545
Housing Authority 215,500
PAMA Management Company 213,316
Saint Bernardine Hospital 195,040
City of San Bernardino 156,209
Lido Condominiums 149,099
W. Dean Weidner 146,611
State of California - AOC 140,633
Broadstone Investors LLC 138,749
Top Ten Customers Total 2,372,342$
Total Sewer Revenue 44,519,998$
Top Ten Customers Percent of Total 5.33%
Source: Department's records
2023 Top 10 Customers
96 DRAFT
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 4/1/2022* 7/1/2022* Residential (monthly per EDU) 9.00 9.45 9.90 9.90 9.90 9.90 9.90 N/A N/A Multi-Family
Multi-family, 2 units 18.00 18.90 19.85 19.85 19.85 19.85 19.85 N/A N/A Multi-family, 3 units 27.00 28.35 29.75 29.75 29.75 29.75 29.75 N/A N/A Multi-family, 4 or more units, Non-res.

Monthly Charge 2.80 2.95 3.10 3.10 3.10 3.10 3.10 N/A N/A Usage Charge (per HCF) 0.79 0.83 0.87 0.87 0.87 0.87 0.87 N/A N/A * The Sewer Collection rate was combined with the Sewer Treatment rate to become the sewer rate that was effective 04/01/22.

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. 97 DRAFT
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 Revenue Connections Consumption Revenue Connections Consumption Revenue Residential-Single Family 42 0 $0 27,748 0 $3,061,513 32,418 0 $3,997,513 31,889 $4,054,020 Residential-Multi Family 1,345 0 356,051 1,576 0 418,545 1,555 412,095 Residential- Multi Family 4 Units + 18 78,494 68,975 19 80,400 70,647 18 63,529 55,921 Comm/Land/Lt. Industrial/Non-Res. 37 0 0 2,670 2,594,640 2,310,986 3,138 3,051,177 2,726,198 3,069 2,893,01 8 2,588,912 Education-Public 2 0 0 43 127,279 110,588 49 124,047 109,205 37 54,207 48,082 Education-Private 124 58,932 55,859 149 72,141 68,086 150 63,715 60,941 Hospital/Convalescent Homes 29 164,836 144,462 35 197,360 172,771 35 197,787 173,367 Office/Motel-No Restaurant 10 0 0 85 76,768 57,800 93 78,338 59,307 92 79,321 61,027 Restaurant/ Hotel w/ Restaurant 1 0 0 51 43,587 39,632 51 36,181 33,232 52 38,762 35,480 Auto Repair/Car Wash 197 78,293 75,390 226 81,945 78,971 221 75,027 73,487 Laundromat 4 29,232 25,587 5 28,349 24,843 5 24,821 21,771 CS Irrigation 0 0 0 0 0 0 21 255,400 71,571
0 0 49 62,340 0 48 65,559 0 48 56,072 0
Total all users 92 0 $ - 32,363 3, 314,401 6,306,843$ 37,806 3,815,497 7,759,318$ 37,192 3,801,659 7,656,675$ Connections Consumption Revenue Connections Consumption Revenue Conne ctions Consumption Revenue Connections Consumption Revenue Residential-Single Family 33,127 $3,927,784 32,939 $3,916,946 32,899 $3,719,798 Residential-Multi Family 1,606 424,665 1,607 424,024 1,609 405,007 Residential- Multi Family 4 Units + 17 50,331 44,420 16 51,092 44,945 15 45,146 41,351 Comm/Land/Lt. Industrial/Non-Res. 3,180 2,904,054 2,601,804 3,198 2, 997,422 2,668,497 3,204 2,626,645 2,467,470 Education-Public 27 24,293 21,700 27 29,478 26,118 27 29,586 27,420 Education-Private 152 64,643 61,858 150 72,936 67,985 150 61,381 61,779 Hospital/Convalescent Homes 35 190,191 166,768 35 194,560 170,063 35 17 5,241 161,182 Office/Motel-No Restaurant 94 88,632 69,280 94 85,397 66,015 96 71,092 58,587 Restaurant/ Hotel w/ Restaurant 47 41,583 37,750 41 39,909 35,963 37 34 ,788 32,509 Auto Repair/Car Wash 229 76,587 74,854 231 93,474 89,565 229 73,436 75,4 21 Laundromat 5 26,639 23,362 5 26,464 23,160 5 24,091 21,824 CS Irrigation 43 423,688 115,905 45 540,444 145,737 46 503,780 158,834 Totals IVDA 50 54,387 0 49 57,057 0 51 54,874 0
Total all users 38,613 3,945,028 7,570,150$ 38,438 4,188,233 7,679,020$ 38,402 3,700,060 $7,231,183 0 $0 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 0 0 $0 0 $0
Source: Department's records
2015 2014
* 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.
2023 2022 2021 2020
2019 2018 2017 2016
46%
40%
2%
11%
1%
Sewer Collection Connections by User Type 2023
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
0%
0%
0%
0% 0%
00%0%0%
Sewer Collection Revenu
98 DRAFT
City of San Bernardino Municipal Water Department
Top Ten Sewer Collection Customers
Fiscal Year 2022
San Bernardino County Unified School District
County of San Bernardino
Saint Bernardine Hospital
PAMA Management Company
Housing Authority of the County of San Bernardino
City of San Bernardino
Lido Condominiums
Broadstone Investors LLC
San Bernardino Community Hospital
W. Dean Weidner
Top Ten Customers Total -$
Total Sewer Collections Revenue* -$
Top Ten Customers Percent of Total #DIV/0!
Source: Department's records
2023 Top 10 Customers
99 DRAFT
Municipal Water Department
Water Rates: Commodity Charges
Last Ten Fiscal Years
1/1/2014 10/1/2015 7/1/2016 7/1/2017 7/1/2018 7/1/2019 7/1/2020 Customer Class
Single Family Residential
Tier 1 (0-13 HCF) 1.35 1.35 1.37 1.40 1.43 1.43 1.43 Tier 2 (14-23 HCF) 1.35 1.35 1.37 1.40 1.43 1.43 1.43 Tier 3 (24+ HCF) 1.70 1.70 1.86 1.89 1.92 1.92 1.92 Multi-Faimly Residential 1.35 1.35 1.37 1.40 1.43 1.43 1.43 Commercial 1.35 1.35 1.37 1.40 1.43 1.43 1.43 Irrigation 1.35 1.35 1.37 1.40 1.43 1.43 1.43 Institutional 1.35 1.35 1.37 1.40 1.43 1.43 1.43 Other 1.35 1.35 1.37 1.40 1.43 1.43 1.43 * Prior years (07/01/14 - 07/01/21) commodity charges reflect rates including conservation, replenishment and elevation zone charges which were consolidated with the rates adopted on 04/01/22. 100
DRAFT
Municipal Water Department
Water Rates: Commodity Charges
Last Ten Fiscal Years
7/1/2021 4/1/2022 7/1/2022

1.43 1.35 1.44

1.43 1.83 1.94

1.92 2.33 2.47

1.43 1.51 1.61

1.43 1.65 1.75

1.43 2.32 2.46

1.43 2.06 2.19

1.43 3.82 4.05
* Prior years (07/01/14 - 07/01/21) commodity charges reflect rates including conservation, replenishment and elevation zone charges 101
DRAFT
7+,63$*(,17(17,21$//</()7%/$1.
102
DRAFT

CITY OF

SAN BERNARDINO

MUNICIPAL WATER DEPARTMENT
Single A
udit Report
For the Year
Ended June 30, 2023
DRAFT

CITY OF SAN BERNARDINO

MUNICIPAL WATER DEPARTMENT
Single
Audit Report
For t
he Year Ended June 30, 2023
DRAFT

CITY OF SAN BERNARDINO

MUNICIPAL WATER DEPARTMENT
Single
Audit Report
For t
he Year Ended June 30, 2023
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 Schedul
e of Expenditures of Federal Awards for the
Fiscal Year Ended June 30, 2023 ....................................................................................................................... 6 Notes
to the Schedule of Expenditures of Federal Awards .................................................................................... 7 Schedul
e of Findings and Questioned Costs for the
Fiscal Year Ended June 30, 2023 ....................................................................................................................... 8 Summar
y Schedule of Prior Year Findings and Questioned Costs for the Fiscal Year Ended June 30, 2022 ..................................................................................................................... 10 DRAFT

INDEPEN
DENT 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
San Bernardino Municipal Water Department
San Bernardino, California
We hav
e 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 San Bernardino Municipal Water Department (the “Department”), component unit of the City of San Bernardino, California (the “City”), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the Department’s basic financial statements, and have issued our report thereon dated February 21, 2024.

Report
on Internal Control over Financial Reporting
In planni
ng and performing our audit of the financial statements, we considered the Department’s internal control over the Department’s 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 defici
ency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements, on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our con
sideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.

Report
on Compliance and Other Matters
As part
of obtaining reasonable assurance about whether the Department’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the 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 are required to be reported under Government Auditing Standards.

DRAFT
To the
Water Board
San Bernardino Municipal Water Department
San Bernardino, California
Purpose of This Report
The pur
pose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the 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 compliance. Accordingly, this communication is not suitable for any other purpose.

Brea,
California
February 21, 2024
DRAFT
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
To the
Water Board
San Bernardino Municipal Water Department
San Bernardino, California
Report
on Compliance for Each Major Federal Program
Opinion on
Each Major Federal Program
We hav
e audited the San Bernardino Municipal Water Department (the “Department”), a component unit of the City of San Bernardino, California (the “City”)’s compliance 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, 2023. 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 opi
nion, 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, 2023.

Basi
s for Opinion on Each Major Federal Program
We condu
cted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in 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 that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the Department’ s compliance with the compliance requirements referred to above.

Resp
onsibilities of Management for Compliance
Manageme
nt is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the Department’s federal programs.

DRAFT
To the
Water Board
San Bernardino Municipal Water Department
San Bernardino, California
Auditor’s Responsibilities for the Audit of Compliance
Our obj
ectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, 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 generally accepted auditing standards, Government Auditing Standards , and the Uniform Guidance will always 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 each major federal program as a whole.

In perf
orming an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance, we:
• Exerc
ise professional judgment and maintain professional skepticism throughout the audit. • Identif
y and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures 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 over 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 the Uniform Guidance, but not for the purpose of expr essing 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 defici
ency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with 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 compliance, 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 with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our con
sideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant 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 material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.

DRAFT

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

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.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance.

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

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

We have audited the financial statements of the business- type activities, each major fund, and the aggregate remaining fund information of the Department, as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the Department’s basic financial statements. We issued our report thereon dated February 21, 2024 which contained unmodified opinions on those financial statements. Our audit was performed 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 required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance 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.

Brea, California
February 21, 2024
DRAFT

SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2023
Federal
Assistance Program
Federal Grantor/Pass-Through Grantor/Program Title Listing Number Expenditures Environmental Protection Agency
Consent Decree * 66.000
Operations and maintenance:

Newmark 778,696$
Muscoy 669,182
Site wide monitoring 129,556
Project management 119,217
Subtotal - Consent Decree 1,696,651
Direct Award:

Superfund State, Political Subdivision, and Indian Tribe Site-Specific Cooperative Agreements 66.802 64,538
Total Environmental Protection Agency 1,761,189
Total Federal Expenditures 1,761,189$
* Major Program
Note a: Refer to Note 1 to the schedule of expenditures of federal awards for a description of significant accounting policies used in preparing this schedule.

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

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

DRAFT

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Notes To The Schedule Of Expenditures of Federal Awards For The Fiscal Year Ended June 30, 2023
NOTE
1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES APPLICABLE TO 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 Water 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, 2023. 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 all federal programs of the City of San Bernardino as a whole.

B. Basis of Accounting
Expend
itures reported on the Schedule ar e reported on the accrual basis of accounting. Such expendit ures are recognized following the cost principles contained in the Uniform Guidance. Under the accrual basis of accounting, expenditures are recognized when incurred. Expenditures reported include any property or equipment 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 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 Departm ent Court, Central Department, entere d 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 U nit and the Muscoy Operable Unit. The Newmark Operable Unit was declared operational and functional in 1998.

The Con
sent Decree provided for a payment of $69 million from the Army to the City for performance of the work outlined in the consent decree. Upon entry of the Consent Decree, the City, through the Department, received title to all facilities constructed by the United States Environmental Protection Age ncy (EPA) for the Site and agreed to operate and maintain the groundwater extraction and treatmen t system for a period of 50 years. The $69 million payment consisted of $59 million for operation and maintenance and $10 million for the construction of certain capital facilities that would be required in the fu ture. The funds are subject to strict limit ations, contained in the Consent Decree, as to how they may be spent.

Pursu
ant 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 sy stems 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.

DRAFT

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Schedule of Findings and Questioned Costs
For the Fiscal Year Ended June 30, 2023
SECTI

ON I - SUMMARY OF AUDITORS' RESULTS
Financial Statements
Type
of auditors' report issued: Unmodified Opinion
Intern
al control over financial reporting:
• Material weaknesses identified? yes X none reported • Significant deficiencies identified? yes X no
Noncom
pliance material to financial
statements noted? yes X no
Federal Awards
Internal
control over major programs:
• Material weaknesses identified? yes X none reported • Significant deficiencies identified? yes X no Type o
f 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
Ident
ification of major programs:

Assistance Listing Number(s) Name of Federal Program or Cluster

66.000 Consent Decree
Dolla
r threshold used to distinguish
between type A and type B program $ 750,000
Auditee qualified as low risk auditee? X yes no DRAFT

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Schedule of Findings and Questioned Costs
For the Fiscal Year Ended June 30, 2023

SECTION II
- FINANCIAL STATEMENT FINDINGS
No matters
were reported.

SECT

ION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matt
ers were reported.

DRAFT
1350 South “E” Street, San Bernardino, California 92408 P.O. Box 710, 92402 Phone: (909) 384-5141 FACSIMILE NUMBERS: Administration: (909) 453-6399 Customer Service: (909) 453-6396 Finance: (909) 453-6383 Engineering: (909) 453-6385 Corporate Yards: (909) 453-6389 Water Reclamation Plant: (909) 453-6395 Environmental & Regulatory Compliance: (909) 453-6391 Environmental Control: (909) 453-6394

CITY OF SAN BERNARDINO

MUNICIPAL WATER DEPARTMENT

CITY OF SAN BERNARDINO

WATER BOARD
TONI C

ALLICOTT
President
Comm
issioners

WAYNE HENDRIX
DAVID E. MLYNARSKI
RIKKE V. JOHNSON

THOMAS BRICKLEY
MIGUEL J. GUERRERO, P.E.

General Manager
ROBIN L. OHAMA
Deputy General Manager
STEVE R. MILLER
Director of Water Utility
KEVIN T. STEWART, P.E.

Director of Water Reclamation
JENNIFER L. SHEPARDSON
Director of Environmental &
Regulatory Compliance
CYNTHIA J. MOUSER
Director of Finance
“Trusted, Quality Service since 1905”

SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS FOR THE FISCAL YEAR ENDED JUNE 30, 2022
No mat
ters were reported.

DRAFT
February
21, 2024
To the
Water Board
City of San Bernardino Municipal Water Department
San Bernardino, California
We have au
dited the financial statements each major fund of the City of San Bernardino Municipal Water Department (the “Department”), a department of the City of San Bernardino, California (the “City”) for the year ended June 30, 2023. Professional standards require that we provide 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 April 28, 2023. Professional sta ndards also require that we communicate to you the following information related to our audit.

Significant Audit Matters
Qualit
ative Aspects of Accounting Practices
Manageme
nt is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the Department are described in Note 1 to the financial statements. As described in Note 1 and 14 to the financial statements, the Department changed accounting policies related to subscription-based information technology arrangements by adopting Statement of Governmental Accounting Standards (GASB Statement) No. 96, in fiscal year 2022 -2023. Accordingly, the cumulative effect of the accounting change as of the beginning of the year is reported in the statement of revenues, expenses, and changes in net position. 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.

Acco
unting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events.

Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City’s financial statements were:

Manageme
nt’s estimates of the net pension liability, net other postemployment benefits asset, and claims and judgments liability are based on actuarial valuation estimates. We evaluated the methods, assumptions, and data used to develop the actuarial valuation estimates in determining that they are reasonable in relation to the financial statements taken as a whole.

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

The dis
closure of the Consent Decree in Note 13 to the financial statements provides information on the 1996 compliant filed by the City against the U.S. Department of the Army to recover damages, response costs, and other available remedies relating to contamination alleged to have originated at a World War II army installation known as Camp Ono.

DRAFT
To the
Water Board
City of San Bernardino Municipal Water Department
San Bernardino, California
The financial statement disclosures are neutral, consistent, and clear.

Diff
iculties Encountered in Performing the Audit
The compl
etion of our audit was delayed due to difficulties encountered by management in reconciling capital assets due to the ERP implementation of Tyler Munis in the current year . Delays and difficulties are not unexpected or unusual during years when organizations implement a new ERP system, and our opinion was not modified with respect to this matter. As a result, our audit was not able to finalize until after December 31, 2023.

Corre
cted and Uncorrected Misstatements
Profes
sional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management.

Management has corrected all such misstatements.

Disagr
eements with Management
For pu
rposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit.

Manageme
nt Representations
We hav
e requested certain representations from management that are included in the management representation letter dated February 21, 2024.

Manageme
nt Consultations with Other Independent Accountants
In som
e cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the Department’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.

DRAFT
To the
Water Board
City of San Bernardino Municipal Water Department
San Bernardino, California
Other Audit Findings or Issues
We gene
rally discuss a variety of matters, including the application of accounting principles and auditing standards, 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 appli
ed certain limited procedures to management’s discussion and analysis and the required pension and other postemployment benefits schedules, which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI.

We were n
ot engaged to report on other information included in the annual report which is comprised of the introductory and statistical sections, 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, we do not express an opinion or provide any assurance on it.

Future GASB Pronouncements
The fol
lowing Government Accounting Standards Board (GASB) pronouncements will be effective for the following fiscal years’ audits and should be reviewed for proper implementation by management:

Fisc
al Year 2023-2024
GASB Sta
tement No. 99, Omnibus 2022.

Fisc
al Year 2024-2025
GASB Sta
tement No. 101, Compensated Absences.

Future
Projects
Compr
ehensive Project, Financial Reporting Model.

Compr
ehensive Project, Revenue and Expense Recognition.

Majo
r Project, Going Concern Uncertainties and Severe Financial Stress.

Majo
r Project, Infrastructure Assets.

Pract
ice Issue, Classification of Nonfinancial Assets.

Pract
ice Issue, Risks and Uncertainties Disclosures.

Pre-Agend
a Research Activities, Subsequent Events.

DRAFT
To the
Water Board
City of San Bernardino Municipal Water Department
San Bernardino, California
Restriction on Use
This i
nformation is intended solely for the information and use of the Water Board and management of the Department and is not intended to be, and should not be, used by anyone other than these specified parties.

Very
truly yours,
Brea,
California
DRAFT
INDEPENDENT AUDITORS’ REPORT ON INTE

RNAL 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 Bernar
dino Municipal Water Department
San Bernardino, California
We have audited, in accordance with the auditing standards gene rally 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 “Department”), a department of the City of San Bernardino, California (the “City”), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the Department’s basic financial statements, and have issued our report thereon dated February 21, 2024.

Report on Internal C
ontrol 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 desi gning 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 allo w management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements, on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely b asis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less s evere than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal contr ol that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.

Report on 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 compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a dir ect and material effect on the financial statements. However, providing an opinion on complian ce with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

DRAFT
2023 Financial Audit
Presented by:

Ryan Domino, CPA, Partner
February 27, 2024
Scope of Engagement
•LSL has been engaged by the Department to perform a financial statement audit in accordance with generally accepted auditing standards and Government Auditing for the year ended June 30, 2023.
• Objective is to render an opinion on reliability and compliance of financial statements with generally accepted accounting principles. • Objective is not to opine on operational performance, although severe financial strain would be reported.
• Objective is not to hunt for fraud, although we do consider risks of fraud, perform certain tests for fraud, and would report it if encountered. •Interim Fieldwork
• Examined internal controls
• Provided feedback to
management
• Performed our audit risk
assessment
• Planned year-end audit
procedures to respond to risk
•Year-End Fieldwork
• Detailed testing of account
balances and transactions
• Compliance testing with laws,
regulations, grant agreements,
contracts
• Other procedures necessary to
obtain sufficient, appropriate
audit evidence
Scope of Engagement
Results of Audit
•We issued an unmodified auditor’s opinion on the financial statements.
• Financial statements are accurate and reliable as of June 30, 2023. •We issued the Report on Internal Control and Compliance • No significant deficiencies in internal control noted. • No material weaknesses in internal control noted.
• No material noncompliance with laws, regulations, grants, etc. noted.

Results of Audit
•We identified no going concern doubts as of June 30, 2023. •We identified no fraud, waste, or abuse during the fiscal year ended June 30, 2023.
•We had no disagreements with management about application of accounting principles.
•We determined that all estimates used by management in preparing the financial statements were reasonable.

Questions
www.lslcpas.com
[email protected]
CALIFORNIA: Brea | Santa Ana | Laguna Hills | Sacramento TEXAS: The Woodlands
To the Water Board
City of San Bernar
dino Municipal Water Department
San Bernardino, California
Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the 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 compliance. Accordingly, this communication is not suitable for any other purpose.

Brea, California
February 21, 2024
DRAFT