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Clean Water Services2550 SW Hillsboro Highway
Hillsboro, Oregon 97123cleanwaterservices.org
COMPREHENSIVEANNUAL FINANCIAL
REPORTA Component Unit of
Washington County, Oregon for thefiscal year ended June 30, 2015.
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
Comprehensive Annual Financial Report
For the fiscal year ended June 30, 2015
Prepared by:
Business Operations Department
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
Table of Contents Page(s)
INTRODUCTORY SECTION: Letter of Transmittal I Board of Directors and Principal Officer XI GFOA Certificate of Achievement for Excellence in Financial Reporting XII Organizational Chart XIII
FINANCIAL SECTION:
REPORT OF INDEPENDENT AUDITOR 1 - 3
MANAGEMENT’S DISCUSSION & ANALYSIS 4 - 15
BASIC FINANCIAL STATEMENTS: Statement of Net Position 16 Statement of Revenues, Expenses and Changes in Net Position 17 Statement of Cash Flows 18 Notes to Basic Financial Statements 19-51
REQUIRED SUPPLEMENTARY INFORMATION: 52 53
Schedule of Funding Progress Other Post-Employment Benefits Schedule of Statutorily Required Employer Contributions Pension Plan Schedule of Proportionate Share of the Collective Net Pension Liability 54
SUPPLEMENTAL INFORMATION: COMBINING SCHEDULES:
Combining Schedule of Net Position 55 Combining Schedule of Revenues, Expenses and Changes in Net Position 56 Combining Schedule of Cash Flows 57
BUDGETARY SCHEDULES: Description of Budgetary Funds 58-59 Schedules of Revenues and Expenditures - Budget and Actual:
General Fund 60 Storm and Surface Water Management Fund 61 Master Plan Update Debt Service Fund 62 Revenue Pension Bond Debt Service Fund 63 Liability Reserve Fund 64 Capital Expenditure Reserve Sanitary Sewer Fund 65 Sanitary Sewer LID Construction Fund 66 Surface Water Management LID Construction Fund 67 Sanitary Sewer Construction Fund 68 Tualatin Basin Water Supply Capital Project Construction Fund 69 Capital Expenditure Reserve Storm and Surface Water Management Fund 70 Surface Water Management Construction Fund 71 Reconciliation of Revenues and Expenditures (Budgetary Basis)
to Increase in Net Position (GAAP Basis) 72
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
Table of Contents Page(s)
STATISTICAL SECTION: Description of Statistical Section 73 FINANCIAL TRENDS
Net Position by Component 74 Changes in Net Position 75 Operating Revenues by Source 76 Operating Expenses 77 Nonoperating Revenues and Expenses 78
REVENUE CAPACITY Monthly Sewer and Storm/Surface Water Rates 79 System Development Charges and Revenues 80 Ten Largest Individual Ratepayers 81
DEBT CAPACITY Ratios of Outstanding Debt by Type 82 Pledged Revenue Coverage 83
DEMOGRAPHICS & ECONOMICS Demographic Statistics 84 Major Employment Industries in Washington County 85
OPERATING Administrative, Support and Operational Staff FTE 86 Summary of Treatment Plant Capacities 87 Operating and Capital Indicators 88
COMPLIANCE REPORT
Independent Auditor’s Report Required by Oregon State Regulations 89-90
INTRODUCTORY
SECTION
I
December 2, 2015
To Board of Directors, Ratepayers and Interested Parties:
We are pleased to submit the Comprehensive Annual Financial Report of Clean Water Services (the District), a component unit of Washington County, Oregon, for the year ended June 30, 2015, together with the report thereon of the District’s independent auditors.
This report was prepared by Clean Water Services’ Business Operations Department in accordance with the provisions of Oregon Revised Statutes Chapter 297. District management assumes full responsibility for the accuracy of the data and the reliability of the presentations and all disclosures contained in this report. To provide a reasonable basis for making these representations, management of the District has established a comprehensive internal control framework that is designed both to protect the District’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the District’s financial statements in conformity with the accounting principles generally accepted in the United States of America. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. We believe the data is accurate and complete in all material respects and that it presents fairly the financial position, results of operations and cash flows of the District for the year ended June 30, 2015. This report should be read in conjunction with Management’s Discussion and Analysis which begins on page 4.
Independent Audit
The provisions of Oregon Revised Statutes Chapter 297, known as the “Municipal Audit Law”, require that an independent audit of the District’s records be made within six months following the close of the fiscal year, with approved extensions. The auditors are appointed by the Board of Directors following a public competitive request for proposal process. The firm of Moss Adams LLP has completed its second audit of the District’s financial statements which is incorporated into the financial section of this report.
The firm of Moss Adams LLP has issued an unmodified opinion on the District’s financial statements for the year ended June 30, 2015. The independent auditor’s report is located at the front of the financial section of this report.
Transmittal Letter To Board of Directors, Ratepayers and Interested Parties: (Continued)
II
DISTRICT PROFILE
Clean Water Services is a county service district, which, in close cooperation with cities within its service area, provides sanitary sewer and surface water management utility services for the urbanized portion of Washington County (County) and small portions of the City of Portland, the City of Lake Oswego, and Multnomah and Clackamas counties. Clean Water Services’ service area encompasses most of the developed part of the Tualatin River watershed, an area of approximately 123 square miles and more than 95 percent of Washington County’s population. Cities located within and served by the District are as follows: Banks, Beaverton, Cornelius, Durham, Forest Grove, Gaston, Hillsboro, King City, North Plains, Sherwood, Tigard, Tualatin, and small portions of Lake Oswego and Portland.
The District began operation as Unified Sewerage Agency of Washington County on February 4, 1970 after its formation was authorized by popular vote. On July 1, 1990 it assumed responsibility for surface water management. Effective June 5, 2001, Unified Sewerage Agency of Washington County changed its name to “Clean Water Services.” The name change was made to better reflect the roles and responsibilities for providing cost-effective, environmentally sensitive management of water resources in the Tualatin River Basin.
The Clean Water Services’ Board of Directors is comprised of the same individuals who are elected to the Board of County Commissioners of Washington County. Although Clean Water Services maintains a close working relationship with Washington County, the District is a separately managed and financed municipal corporation under Oregon Revised Statutes Chapter 451. Administration and management of the District is the responsibility of the General Manager, who is appointed by the Board of Directors. Under the criteria of the Governmental Accounting Standards Board (GASB), the District is considered a component unit of Washington County for financial reporting purposes.
Operational and technical input to the Board is provided by Clean Water Services’ Advisory Commission (CWAC), a Board-appointed commission of 15 members.
Accounting Systems & Budgetary Control
Clean Water Services’ accounting records are maintained by fund on a modified accrual accounting basis for budgetary reporting purposes. For financial reporting purposes, the financial statements are presented on a full accrual basis.
The Board of Commissioners is required to adopt a final budget prior to the beginning of the fiscal year. This annual budget serves as the foundation of the District’s financial planning and control. The legal level of budgetary control is by fund and organizational unit or other specified category, in accordance with Oregon Revised Statutes Local Budget Law.
For budgetary and legal purposes, the activities are accounted for in the funds described below:
• General Fund - accounts for normal recurring sewerage operations (also referred to as theOperating Fund).
• Storm and Surface Water Management Fund - accounts for normal storm and surface watermanagement operations.
Transmittal Letter To Board of Directors, Ratepayers and Interested Parties: (Continued)
III
• Master Plan Update Debt Service Fund - accounts for the redemption of bond principal andinterest.
• Liability Reserve Fund - accounts for the District’s self-insurance programs.
• Capital Expenditure Reserve Funds - (one each for Sanitary and Surface Water Management) -account for the recovery of capital costs for maintenance, upkeep and improvement of thesystems.
• Tualatin Basin Water Supply Capital Project Fund – accounts for the transactions of the TualatinBasin Water Supply Project, which is a joint project to provide additional water volume toenable continued compliance with water quality requirements.
• Sanitary Sewer (LID) Construction Fund, Surface Water Management (LID) Construction Fund,and Sanitary Sewer and Surface Water Management Construction Funds - account for capitalconstruction expenditures by the District, or for capital construction expenditures made for thebenefit of property owners in the case of the Sanitary Sewer and Surface Water ManagementLID Construction Funds.
• Revenue Pension Bond Debt Service Fund - accounts for the payment of the Series 2004Revenue Pension Bonds used to finance the District’s unfunded actuarial liability in Oregon’sPublic Employees Retirement System.
ECONOMIC CONDITION AND OUTLOOK
The economy of the District's service area reflects a diversity of industries including agriculture, high technology, sports apparel and services. Major employment industries in Washington County include professional and business services (19%), wholesale/retail trade (16%), computer and electronic equipment manufacturing (10%), healthcare and social services (10%), government services (8%) and leisure and hospitality (9%). The unemployment rate in Washington County continued a steady decline of about one percent per year with rates falling from a high of 10.3 percent in 2009 to a rate of 5.0 percent in June 2015. Although not immune from the recession, Washington County has experienced a full job recovery from the pre-recession employment levels with 31,000 jobs added between 2009 and 2014, and per capita personal income is showing signs of modest continual growth.
Washington County, the second most populous county in Oregon, continues to be one of the fastest growing counties in the state, adding 31,653 more residents between 2010 and 2014. The region-wide population growth trend has remained steady. Although official population estimates for special districts are not available, Clean Water Services’ estimates the population of its service area at approximately 561,000. Population growth within the District’s service area has consistently outpaced population growth within the region over the past decade or more, and is expected to add an additional 170,000 people by 2030.
Transmittal Letter To Board of Directors, Ratepayers and Interested Parties: (Continued)
IV
LONG RANGE FINANCIAL PLANNING AND RELEVANT FINANCIAL POLICIES
To ensure Clean Water Services is poised for the future to respond to continued economic growth at affordable customer rates, District rate increases are planned to be regular, predictable and relatively affordable, with capital plans that are phased so that revisions can be made to improve operational efficiencies and respond to changes in customer demand. In concert with the above, fund balances shall be kept at levels that provide appropriate working capital, funding for operating contingencies and planned capital improvements, while ensuring favorable credit ratings and maintaining strong coverage ratios. Moreover, financial forecasts are conservatively constructed so the District does not overestimate concomitant revenue growth.
The District’s policies on rates and careful management of resources have allowed the District to limit estimated average annual combined residential sanitary sewer and surface water management fee increases for the last ten years to less than 4.20 percent.
MAJOR NEW AND ONGOING INITIATIVES
Investing in Watershed Health
Clean Water Services has spent more than 40 years pursuing a cohesive strategy to advance the health of the Tualatin River Watershed for 561,000 residents in 12 cities. Through innovation, scientific knowledge and creativity we work to improve environmental health and value for our customers. These efforts have paid dividends for water quality, public health, and our community—the Tualatin River is healthier than it has been in generations and has become a valued recreational asset.
Last September Clean Water Services set the highest bar yet in Tree-For-All with a goal to plant one million trees in one year for “one water”. We did it! Through innovative and collaborative partnerships in urban and agricultural areas we met and exceeded the challenge. And we’re not done. Tree-For-All is using Mother Nature as its guide to develop and implement long-term stewardship strategies while making the Tualatin Watershed a showcase of economic prosperity, ecological health, and community wellness. By implementing community-based restoration and enhancing the benefits that natural resources provide, we are leveraging partnerships to meet Clean Water Services’ goal of beautiful clean water while also meeting our partner’s goals – natural areas for wildlife, cleaner air, noise reduction, and scenic beauty – all at lower cost than if we did it alone.
Investing in Infrastructure, Public Health and the Environment
In the last 10 years, Clean Water Services and our partner Cities have invested more than $100 million to expand, replace and upgrade our community’s four wastewater treatment facilities, 40 pump stations, 839 miles of sewer lines, and 495 miles of storm sewers.
2014-15 Achievements
• Cleaned more than 22.8 billion gallons of wastewater.• Recycled 30 dry tons of biosolids a day onto agricultural fields in the Willamette Valley and
eastern Oregon to improve soil condition and crop production.
Transmittal Letter To Board of Directors, Ratepayers and Interested Parties: (Continued)
V
• Monitored nearly 1,000 strict permit conditions at each treatment facility, including monthly,weekly and daily limits established to protect the Tualatin River.
• Swept more than 12,650 miles of streets collecting almost 1,300 dump truck loads of debris andcleaned more than 16,100 catch basins collecting material equivalent to 150 dump truck loadsto keep pollutants out of our river and streams.
• Replaced 136 sanitary sewer laterals and rehabilitated 10,050 linear feet of sewer mains and456 manholes associated with the Infiltration and Inflow (I/I) reduction program.
• District and member cities retrofitted 75 catch basins to provide additional water qualitytreatment
• Increased area treated by over 125 acres to over 28% of the basin.• Managed over 500 permits issued to industrial customers to monitor and control their
discharges to the wastewater treatment facilities and to stormwater.
Investing in Public Involvement & Education
Clean Water Services reaches out to the community to encourage residents to join our efforts in protecting public health, enhancing the region’s environmental quality of life, and planning for the region’s water future.
2014-15 Achievements
• Maintained and promoted Westside Voices (www.joinwestsidevoices.org ) –an online community engagement panel that allows residents to weigh in on community issues through surveys and focus groups. Just over 2,000 residents participate in the two-year-oldprogram. Westside Voices is a partnership between Clean Water Services, Washington County, other local agencies and nonprofits.
• The award-winning Tualatin River Rangers program reached 3,000 students and an estimated6,000 adults at nearly 60 percent of public elementary schools in the Tualatin Basin.
• Nearly 600 high school science students participated in Sewer Science and got hands oneducation about water treatment followed by a facility tour.
• More than 1,000 people from around the world toured Clean Water Services treatmentfacilities to learn how wastewater is cleaned at a higher level than 98% of the nation’s facilities.
• This year the Fernhill Natural Treatment System project continued to attract thousands ofvisitors including 600 who attended five public events (Birds and Brew, May Day, treeplantings), engaged 300 students from nine Tualatin Basin schools in place-based education,hosted tours and projects by students from Pacific University, Portland Community College(PCC), and Portland State University (PSU), and was the subject of tours or presentations to 10civic and professional groups.
• To engage our community in a discussion about water and how we can make water fit forpurpose the District launched the Pure Water Brew project. The District supplied high puritywater from 100% effluent to local craft brewers. Along with our sponsors, Carollo, the OregonBrew Crew and Evoqua, beer is being brewed for tastings at the national WateReuseSymposium and the Water Environment Federation Conference. The project so far hasgenerated regional, national, and international coverage with more than 150 media stories.
Transmittal Letter To Board of Directors, Ratepayers and Interested Parties: (Continued)
VI
Investing in Resource Recovery
Wastewater treatment has transformed over the last decade, moving from waste disposal to a growing recognition as resource recovery facilities that produce clean water, recover valuable nutrients, and produce clean, renewable energy. Clean Water Services is on the leading edge of this transformation:
2014-15 Achievements
• Provided 86 million gallons of irrigation water to more than 250 acres of athletic fields, golfcourses, wetlands and parks from the Durham Advanced Wastewater Treatment Facility.
• Provided another 21 million gallons of Class A irrigation water from the Rock Creek AdvancedTreatment Facility to the wetlands and Natural Treatment System at Fernhill.
• The Durham and Rock Creek Resource Recovery Facilities recycled phosphorus and ammonia toproduce 450 tons of Crystal Green® fertilizer for sale to the commercial nursery and turfindustry.
• Generated 10.5 million kWh of renewable energy by capturing digester gas from the Rock Creekand Durham facilities to meet approximately 20% of the District’s electrical demands.
• Continued the development of Clean Water Grow™, a slow-release fertilizer that helps reducenutrient runoff to waterways by gently releasing nutrients as plants use them. It’s Clean WaterServices’ opportunity to provide ratepayers with a product—a critical part of which is harvestedfrom our treatment plants—that can help further reduce the amount of phosphorus runoff intostreams. The fertilizer is offered at many retail nurseries around the region as well as nativeplant sales and farmers markets. This product is made possible by the ratepayers’ investmentin building the nation’s most advanced resource recovery facilities at the Durham and RockTreatment Facilities.
Investing in Science
Together with the USGS, DEQ and the Washington County Watermaster, Clean Water Services has conducted comprehensive water quality and flow monitoring of the Tualatin River and its tributaries for more than two decades. This integrated monitoring program has allowed water resource managers to be more responsive to the needs and potential of the watershed.
2014-15 Achievements
• The Water Quality Laboratory collected nearly 28,000 treatment plant, stormwater, surfacewater and industrial samples and performed nearly 110,000 chemical, biological and physicalanalyses to help Clean Water Services assure the health and safety of the Tualatin Riverwatershed and its residents.
• Monitored more than two dozen water quality parameters at 27 sites on the Tualatin River andits tributaries on a twice per month basis.
• Working with the Watermaster and consultants, Clean Water Services managed andmaintained more than 15 stream flow gauging stations to continuously measure the flow in theTualatin River, Dairy, Fanno, Rock, Bronson, Beaverton, Gales, Chicken Creeks, and many otherTualatin River tributaries.
Transmittal Letter To Board of Directors, Ratepayers and Interested Parties: (Continued)
VII
• Working with the USGS, gathered continuous, real-time water quality data in the Tualatin Riverand major tributaries.
Investing in Community and Building Partnerships
Clean Water Services is building innovative partnerships to create a shared vision and strategy to advance the health of the Tualatin River Watershed:
2014-15 Achievements
• Worked with the Tualatin Soil and Water Conservation District, Tualatin Hills Park andRecreation District, U.S. Fish and Wildlife Service, Metro and other partners on over 100 milesof stream corridors that have been restored in agricultural and urban areas. This work providestemperature, water quality, habitat and recreational benefits along the Tualatin River andtributaries.
• Inspired Cities, non-profits, park districts, private landowners and agricultural partners to planta diverse collection of more than 1,000,000 native trees and shrubs along streams, wetlandsand the river to filter pollutants, provide shade and create healthy wildlife habitat as part of theOne Million, One Year, One Water campaign.
• Catalyzed community organizations to rally more than 6,600 volunteers to get their hands dirtyon behalf of Mother Nature. The volunteers donated more than 17,000 hours, an estimatedvalue of $375,000, and they rooted over 50,000 native plants to clean water, purify air, createwildlife habitat and promote Washington County’s scenic beauty.
• Partnered with community restoration organizations to access and deploy advancedtechnologies that increase efficiency of large scale planting operations and reduce staff timeassociated with plant inventory management and site review.
• Partnered with Portland Community College to develop Vegetated Private Water QualityFacilities Management Training modules.
• Partnered with the City of Tigard to restore the confluence of Derry Dell and Fanno Creeks. Thisrestoration project reconnected floodplain to Derry Dell Creek, eliminated three sanitary sewercreek crossings and an existing fish barrier at the Walnut Street culvert.
• Partnered with Washington County to construct Bio-retention Swale using remnant parcelowned by the County, resulting in stormwater treatment to over 65 acres of existing developedarea.
Controlling Costs
Clean Water Services continues to focus on reducing the long-term operating costs of the utility through innovation, using new technology and reorganizing the workforce.
2014-15 Achievements
• Achieved a zero increase in materials and services through investment in renewable electricenergy generation and continuous improvement of our processes.
Transmittal Letter To Board of Directors, Ratepayers and Interested Parties: (Continued)
VIII
• Even with an increased investment in the District’s workforce, the number of employees percustomer served is still less than 6 employees per 10,000; a decrease of more than 35 percentfrom a high of 9 employees per 10,000 residents in 1998.
Regulatory Climate
In February 2004, the Oregon Department of Environmental Quality (DEQ) issued Clean Water Services the nation’s first integrated, municipal, watershed-based permit under the Clean Water Act. This innovative permit integrates the District’s four municipal wastewater treatment facilities and the municipal stormwater system permits into an integrated bundle, which changes the regulatory framework to allow the District greater flexibility to take advantage of creative approaches and new solutions, such as the following:
• Water quality credit trading between the Rock Creek Advanced Waste Water Treatment Plant(WWTP) and the Durham Advanced WWTP for various parameters.
• Water quality credit trading for thermal loads between treatment facilities and the release ofstored water from Hagg Lake and Barney Reservoirs.
• Water quality credit trading for thermal loads between treatment facilities and streamsideshading improvements outside and inside the District’s service boundary.
• Establishes performance benchmarks for the stormwater management activities of the District,its partner cities and Washington County as a whole.
• Consolidation of regulatory reporting requirements.
The watershed-based permit expired in 2009 and is on administrative extension, pending renewal by DEQ. The District is working to extend the advantages of the integrated elements for protecting and enhancing the watershed in the renewed permit. Regulatory changes, including new, more stringent water quality standards for the protection of human health, more aggressive stormwater management requirements, and the stricter controls on wet weather flow management will pose new challenges to the District in maintaining regulatory compliance and meeting the overall ecological objectives for the Tualatin basin.
Water Quality Requirements
The Environmental Quality Commission (EQC) has adopted Total Maximum Daily Loads (TMDLs) for phosphorus and ammonia-nitrogen in the Tualatin River to protect water quality and restore impaired beneficial uses of the river. The TMDLs define the quality of effluent that the District’s treatment plants may discharge to the Tualatin River. Limits are the most restrictive during the dry weather season. The TMDL structure targets in-stream concentration for phosphorus and maintaining adequate dissolved oxygen in the river. Hydraulic loading and mass limits affect compliance during peak wintertime flows.
Limits set on the Durham and Rock Creek Wastewater Treatment Plants’ effluent are some of the most stringent in the United States for phosphorus and ammonia-nitrogen. As a result, the District currently provides a higher level of wastewater treatment than 98 percent of the treatment facilities in the nation.
Transmittal Letter To Board of Directors, Ratepayers and Interested Parties: (Continued)
IX
User Charges
Clean Water Services’ Board of Directors is authorized by state law to set fees and charges for connection to, and use of, the public sewer system and connection to, and/or use of, the public facilities and public services related to surface water management, including storm water drainage. The District is 100 percent fee and charge supported. The District bills for all residential and non-industrial commercial customers in the unincorporated areas and in the smaller “franchise” cities of North Plains, Banks, Gaston, Durham, and King City. The cities of Beaverton, Tigard, Hillsboro, Tualatin, Forest Grove, Cornelius and Sherwood bill for services to residential and non-industrial commercial customers within their respective corporate limits and remit a portion of fees collected to the District by agreement. The cities of Portland and Lake Oswego bill residential and non-industrial customers within the District’s service area and remit a portion of fees collected to the District by agreement. The District directly bills all industrial permit holders.
Clean Water Services establishes a basic schedule of rates and charges annually, and the Cities of Beaverton, Tigard, Hillsboro, Tualatin, Forest Grove, Cornelius and Sherwood bill according to District developed schedules. These seven largest cities may also approve additional supplemental charges. The Cities of Portland and Lake Oswego may bill at different rates but remit funds for District customers based on District rates. The monthly billing rate for residential and commercial sewer customers is calculated by adding a consumption component to a base rate component.
The District’s average residential, commercial and industrial sewer rates for fiscal year 2015 increased by approximately 3 percent from fiscal year 2014.
Industrial customers are billed for domestic wastewater flows in a manner that is essentially identical to the process outlined above for residential and other non-industrial customers. Industrial and commercial customers with high-waste flows and high-strength wastes are monitored for permit compliance (including onsite pretreatment) and billed based on four components: volume, biochemical oxygen demand, suspended solids, and customer service.
Surface Water Management (SWM) fees are based on measured impervious surface areas, including roofs, paved areas such as parking lots and roads, and charged against an average residential measurement (2,640 square feet) or equivalent service unit (ESU). The rate charged for SWM services is $6.75 per month per ESU, an increase of 8% or $.50 per month to the average residential customer’s bill from fiscal year 2014. Residences are typically charged a flat 1.0 ESU rate.
Transmittal Letter To Board of Directors, Ratepayers and Interested Parties: (Continued)
X
AWARDS
The Government Finance Officers Association of the United States of America and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to Clean Water Services for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2014. This was the 28th consecutive year that the District has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized CAFR. The report must satisfy both generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.
In addition, the District’s Adopted Budget Document for the Fiscal Year 2014-15 received the Distinguished Budget Presentation Award from GFOA. This was the 27th consecutive year that the District has achieved this prestigious award. In order to qualify, the budget document must be judged proficient as a policy document, a financial plan, an operations guide and a communications device.
ACKNOWLEDGMENTS
Clean Water Services would like to thank the entire Finance Team whose professionalism, dedication and efficiency are responsible for the preparation of this report.
The District closes with a word of thanks for the continuing support of the Board of Directors in providing District staff with the tools necessary to assist in the careful stewardship of public resources.
Respectfully submitted,
Bill Gaffi Diane Taniguchi-Dennis Mark Poling General Manager Deputy General Manager Business Operations Director
XI
Clean Water Services (A Component Unit of Washington County, Oregon)
Governing Body in accordance with ORS 451.485 Board of Directors
Washington County, Oregon 155 North First Avenue Hillsboro, OR 97124
Directors as of June 30, 2015
ELECTED: Term Expires
Andy Duyck, Chairman December 31, 2018
Dick Schouten, District 1 Director December 31, 2016
Greg Malinowski, District 2 Director December 31, 2018
Roy Rogers, District 3 Director December 31, 2016
Bob Terry, District 4 Director December 31, 2018
APPOINTED:
Bill Gaffi, General Manager
REGISTERED AGENT:
Bill Gaffi, General Manager
REGISTERED OFFICE:
2550 SW Hillsboro Highway Hillsboro, OR 97123
XII
XIII
District Organization Chart
Laboratory Services Division
Treatment Plant Services Division
Finance & Accounting
Information Technology
Government & Public Affairs
Human Resources
Risk & Benefits
Wastewater Treatment
Department
Conveyance Systems
Department
Field Operations Division
Engineering Services Division
Operations Division
Mechanical Maintenance
Division
Source Control
Legal
Fleet & Purchasing
Watershed Management Department
Business Services Department
Clean Water Services Customers
Board of DirectorsClean Water
Services Advisory Commission
General Manager
Deputy General Manager
Regulatory Affairs Department
FINANCIAL SECTION
REPORT OF INDEPENDENT
AUDITOR
1
REPORTOFINDEPENDENTAUDITORS
TotheBoardofCommissionersCleanWaterServices(AcomponentunitofWashingtonCounty,Oregon)Hillsboro,Oregon
ReportontheFinancialStatements
We have audited the accompanying financial statements of Clean Water Services (the District), acomponent unit ofWashington County, Oregon, as of and for the year ended June30, 2015, and therelated notes to the financial statements, which collectively comprise the District’s basic financialstatementsaslistedinthetableofcontents.
Management’sResponsibilityfortheFinancialStatements
Management is responsible for the preparation and fair presentation of these financial statements inaccordancewithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica;thisincludesthe design, implementation, andmaintenance of internal control relevant to the preparation and fairpresentationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.
Auditor’sResponsibility
Our responsibility is to express an opinion on these financial statements based on our audit. Weconductedouraudit inaccordancewithauditing standardsgenerallyaccepted in theUnitedStatesofAmerica.Thosestandardsrequire thatweplanandperformtheaudit toobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreefrommaterialmisstatement.
Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthe financial statements. The procedures selected depend on the auditor’s judgment, including theassessmentof therisksofmaterialmisstatementof the financialstatements,whetherdue to fraudorerror. Inmakingthoseriskassessments, theauditorconsidersinternalcontrolrelevant to theentity’spreparationand fairpresentationof the financial statements inorder todesignauditprocedures thatare appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectivenessof theDistrict’s internal control.Accordingly,weexpressno suchopinion.Anaudit alsoincludes evaluating the appropriateness of accounting policies used and the reasonableness ofsignificantaccountingestimatesmadebymanagement,aswellasevaluatingtheoverallpresentationofthefinancialstatements.
2
REPORTOFINDEPENDENTAUDITORS(continued)
Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinions.
Opinion
In our opinion, the financial statements referred to above present fairly, in allmaterial respects, thefinancialpositionoftheDistrictasofJune30,2015,andtherespectivechangesinfinancialpositionandcashflowsthereof,fortheyearsthenendedinconformitywithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica.
EmphasisofMatter
AsdiscussedinNote1,thefinancialstatementspresentonlytheDistrictanddonotpurportto,anddonot present fairly the financial position ofWashington County, Oregon, as of June 30, 2015 and thechanges in its financial position and its cash flows for the years then ended, in accordance withaccountingprinciplesgenerallyaccepted in theUnitedStatesofAmerica.Ouropinion isnotmodifiedwithrespecttothismatter.
AsdiscussedinNote1tothefinancialstatements,theDepartmentadoptedtheprovisionsofGASB68,AccountingandFinancialReporting forPensions –anamendment ofGASB StatementNo.27, effectiveJuly1,2014.Thebeginningofyearnetpositionhasbeenadjusted for this change.Ouropinion isnotmodifiedwithrespecttothismatter.
OtherMatters
RequiredSupplementaryInformation
AccountingprinciplesgenerallyacceptedintheUnitedStatesofAmericarequirethatthemanagement’sdiscussion and analysis, the schedule of funding progress for other post‐employment benefits, thescheduleofstatutorilyrequiredemployercontributionspensionplan,andthescheduleofproportionateshareofthecollectivenetpositionliabilitybepresentedtosupplementthebasicfinancialstatements.Suchinformation,althoughnotapartofthebasicfinancialstatements,isrequiredbytheGovernmentalAccountingStandardsBoard,whoconsidersittobeanessentialpartoffinancialreportingforplacingthebasicfinancialstatementsinanappropriateoperational,economic,orhistoricalcontext.
Wehaveappliedcertain limitedprocedurestotherequiredsupplementary informationinaccordancewithauditingstandardsgenerallyacceptedintheUnitedStatesofAmerica,whichconsistedofinquiriesofmanagement about themethods of preparing the information, then comparing the information forconsistencywithmanagement’s responses to our inquiries, the basic financial statements, and otherknowledgeweobtainedduringourauditofthebasicfinancialstatements.Wedonotexpressanopinionor provide any assurance on the information because the limited procedures do not provide uswithsufficientevidencetoexpressanopinionorprovideanyassurance.
3
REPORTOFINDEPENDENTAUDITORS(continued)
SupplementaryInformation
Our audit was conducted for the purpose of forming an opinion on the financial statements thatcollectivelycomprisetheDistrict’sbasicfinancialstatements.Thecombiningschedulesandscheduleofrevenuesandexpenditures–budgetandactualandrelatednotes(thebudgetaryschedules)onpages55through72,collectivelyrepresentingsupplementalinformationasprovidedinthetableofcontents,arepresented for purposes of additional analysis and are not a required part of the basic financialstatements.
The supplemental information is the responsibilityofmanagementandwasderived fromand relatesdirectlytotheunderlyingaccountingandotherrecordsusedtopreparethebasicfinancialstatements.Such information has been subjected to the auditing procedures applied in the audit of the basicfinancial statements and certain additional procedures, including comparing and reconciling suchinformationdirectlytotheunderlyingaccountingandotherrecordsusedtopreparethebasicfinancialstatements or to the basic financial statements themselves, and other additional procedures inaccordancewithauditingstandardsgenerallyacceptedintheUnitedStatesofAmerica.Inouropinion,thesupplementalinformationasdescribedaboveisfairlystated,inallmaterialrespects,inrelationtothebasicfinancialstatementsasawhole.
OtherInformation
Our audit was conducted for the purpose of forming an opinion on the financial statements thatcollectivelycomprisetheDistrict’sbasic financialstatements.The introductoryandstatisticalsectionshavenotbeensubjectedtotheauditingproceduresappliedintheauditofthebasicfinancialstatements,andaccordingly,wedonotexpressanopinionorprovideanyassuranceonit.
ReportonOtherLegalandRegulatoryRequirements
In accordance with the Minimum Standards for Audits of Oregon Municipal Corporations, we haveissued our report dated December 2, 2015, on our consideration of the District’s compliance withcertain provisions of laws and regulations, including the provisions of Oregon Revised Statues asspecified in Oregon Administrative Rules. The purpose of that report is to describe the scope of ourtestingofcomplianceandtheresultsofthattestingandnottoprovideanopiniononcompliance.
JulieDesimone,PartnerforMossAdamsLLPDecember2,2015
MANAGEMENT’S
DISCUSSION
AND ANALYSIS
4
CLEAN WATER SERVICES A Component Unit of Washington County, Oregon
MANAGEMENT’S DISCUSSION AND ANALYSIS Fiscal Year Ended June 30, 2015
As management of Clean Water Services (the District), a component unit of Washington County, Oregon, we offer readers of the District’s financial statements this narrative overview and analysis of the financial activities for the fiscal year ended June 30, 2015. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal (which can be found on pages I-X of this report), and in the financial statements and notes to the basic financial statements (which immediately follow this discussion).
Financial Highlights
• The assets and deferred outflows of resources of the District exceeded its liabilities and deferredinflows of resources at the close of the fiscal year by $638.0 million (net position). Of this amount,$103.5 million represents unrestricted net position, which may be used to meet the District’s ongoingobligations to ratepayers and creditors.
• The District’s total net position increased by $34.2 million, including the accumulated adjustment forchange in accounting principle, mainly due to net proceeds from current year operations and capitalcontributions from developers.
• The District’s total net capital assets increased $13.3 million primarily due to capital assets constructedand purchased in the current year totaling $47.6 million, and contributions of infrastructure systemsand easements by developers totaling $11.2 million less District contributions of capital assets and losson disposal totaling $3.7 million and current year depreciation and amortization of $41.8 million.
• Debt service coverage for senior debt was 3.67, which exceeded the 1.2 required by the bondcovenants. The District had no subordinate debt outstanding during the year.
• Operating revenues total $125.4 million, an increase of $5.2 million. This is primarily attributed to arate increase for sanitary and storm service charges during the year.
• Operating expenses total $89.6 million, a decrease of $6.7 million. The primary contributing factor is adecrease in labor costs related to the negative pension expense in the current year.
• Long-term debt decreased by $15.1 million due to payment of outstanding bonds. The District had$244.7 million in net debt outstanding at year-end.
CLEAN WATER SERVICES A Component Unit of Washington County, Oregon
MANAGEMENT’S DISCUSSION AND ANALYSIS (Continued) Fiscal Year Ended June 30, 2015
5
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to Clean Water Services’ basic financial statements. The basic financial statements consist of the Statement of Net Position, Statement of Revenues, Expenses and Changes in Net Position, Statement of Cash Flows and Notes to Basic Financial Statements. The notes explain in more detail some of the information in the financial statements.
Financial Statements
The Statement of Net Position includes all of the District’s assets, liabilities, and deferred inflows/outflows of resources, with the difference reported as net position. This statement provides information about the nature and amounts of investments in resources (assets) and the obligations to the District’s creditors (liabilities). They also provide the basis for computing rate of return, evaluating the capital structure of the District and assessing the liquidity and financial flexibility of the District.
All of the current year’s revenues and expenses are accounted for in the Statement of Revenues, Expenses and Changes in Net Position. This statement measures the success of the District’s operations over the past year and can be used to determine whether the District has successfully recovered all its costs through its user fees and other charges, and its profitability and credit worthiness.
The last financial statement is the Statement of Cash Flows. The primary purpose of this statement is to provide information about the District’s cash receipts and cash payments during the reporting period. The statement reports cash receipts, cash payments and net changes in cash resulting from operations, investing and financing activities and provides answers to such questions as where did the cash come from, what was the cash used for and what was the change in cash balance during the reporting period.
Clean Water Services maintains two operations, Sanitary Sewer and Surface Water Management (SWM), which the District accounts for and discloses separately in the Combining and Individual Schedules on pages 55-57 of this report. These statements offer short and long-term financial information about the activities of the two operations.
Notes to Basic Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the government-wide statements. The Notes to Basic Financial Statements can be found on pages 19-51 of this report.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the District’s other post-employment health benefits, pension plan, and budgetary comparisons. Required supplementary information can be found on pages 52-54 of this report.
CLEAN WATER SERVICES A Component Unit of Washington County, Oregon
MANAGEMENT’S DISCUSSION AND ANALYSIS (Continued) Fiscal Year Ended June 30, 2015
6
Financial Analysis
Financial Position
As noted earlier, net position over time may serve as a useful indicator of financial position. In the case of Clean Water Services, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $638.0 million at the close of the most recent fiscal year, an increase of $34.2 million, including the accumulative adjustment for change in accounting principle. The table below provides a summary of net position at fiscal year-end.
Net Position(in Thousands)
2015 2014 Amount %
ASSETSCurrent assets $ 123,097 $ 99,315 $ 23,782 23.9%Noncurrent assets Cash and investments - restricted 131,231 136,377 (5,146) -3.8% Capital assets, net 643,931 630,676 13,255 2.1% Investment in joint venture 2,568 2,643 (75) -2.8% Other noncurrent assets 10,886 15,555 (4,669) -30.0%
Total assets 911,713 884,566 27,147 3.1%
Deferred outflows of resources 2,410 880 1,530 173.9%
LIABILITIESCurrent liabilities 34,424 36,145 (1,721) -4.8%Noncurrent liabilities 229,938 245,536 (15,598) -6.4%
Total liabilities 264,362 281,681 (17,319) -6.1%
Deferred inflows of resources 11,771 - 11,771 100.0%
NET POSITIONNet investment in capital assets 406,700 383,718 22,982 6.0%Restricted 127,787 119,140 8,647 7.3%Unrestricted 103,503 100,907 2,596 2.6%
Total net position, end of year $ 637,990 $ 603,765 $ 34,225 5.7%
Change
CLEAN WATER SERVICES A Component Unit of Washington County, Oregon
MANAGEMENT’S DISCUSSION AND ANALYSIS (Continued) Fiscal Year Ended June 30, 2015
7
Net investment in capital assets
63.7%
Restricted20.0%
June 30, 2015 Unrestricted
16.2%
Net Position
Net Position
By far the largest portion of Clean Water Services’ net position (63.7 percent) reflects its investment in capital assets (e.g., treatment facilities, collection and conveyance systems, land, sewer lines, stormwater management improvements, buildings, plant and office equipment and automotive equipment), less any related outstanding debt used to acquire or construct those assets. Clean Water Services uses these capital assets to provide services to ratepayers; consequently, these assets are not available for future spending. Although Clean Water Services’ investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from services to customers (ratepayers) or other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
An additional portion of Clean Water Services’ net position (20%) represents resources that are subject to external restrictions on how they may be used. These restricted net assets include System Development Charges (SDC’s) collected from District customers when they connect to the sanitary sewer system to pay the cost of infrastructure expansion as needed to meet demands of population growth and to share cost burdens with existing customers for collection and treatment systems already built, funds restricted for
debt service, and funds restricted for capital asset construction.
The remaining balance of unrestricted net position ($103.5 million or 16.2 percent) may be used to meet the District’s ongoing obligations to ratepayers and creditors.
CLEAN WATER SERVICES A Component Unit of Washington County, Oregon
MANAGEMENT’S DISCUSSION AND ANALYSIS (Continued) Fiscal Year Ended June 30, 2015
8
Results of Operations
In addition to the analysis of net assets provided above it is useful to analyze the financial operations that took place during the year. The following table provides a summary of the changes in net position:
2015 2014 Amount %
REVENUESOperating revenues:
Service fees $ 119,513 $ 113,686 $ 5,827 5.1%Other revenues 5,936 6,488 (552) -8.5%
Total operating revenues 125,449 120,174 5,275 4.4%
Nonoperating revenues:Interest income 1,887 1,653 234 14.2%
Total revenues 127,336 121,827 5,509 4.5%
EXPENSESOperating expenses 89,618 96,281 (6,663) -6.9%Nonoperating expenses:
Interest 9,577 9,229 348 3.8%Loss on disposal of capital assets 76 1,881 (1,805) -96.0%Loss on equity in joint venture 75 78 (3) -3.8%Capital Donations 3,499 5,116 (1,617) -31.6%
Total expenses 102,845 112,585 (9,740) -8.7%Income before contributions 24,491 9,242 15,249 165.0%
Capital contributions 32,503 28,310 4,193 14.8%Change in net position 56,994 37,552 19,442 51.8%
Net position, beginning of year, before adjustment 603,765 566,213 37,552 6.6%Less: Accumulated adjustment for change in accounting principle (22,769) - (22,769) -100.0%Net position, beginning of year, as adjusted 580,996 566,213 14,783 2.6%Net position, end of year $ 637,990 $ 603,765 $ 34,225 5.7%
Change
Changes in Net Position(in Thousands)
CLEAN WATER SERVICES A Component Unit of Washington County, Oregon
MANAGEMENT’S DISCUSSION AND ANALYSIS (Continued) Fiscal Year Ended June 30, 2015
9
Revenues
Total revenues for FY 2015, including operating revenues, non-operating revenues and contributed capital, totaled $159.8 million, an increase of approximately 6.5% over FY 2014. The increase in total revenues was primarily due to an increase in service fees and capital contributions.
Sanitary & SWM Service Charges: Operating revenue consists mainly of user charges for sewage and storm services. Monthly service charge revenues increased by 5.1%, totaling $119.5 million. This increase was primarily related to the sanitary sewer rate increase of 3% and a corresponding rate increase for the SWM service charge of 8% along with customer growth.
Capital Contributions: This revenue source includes System Development Charges (SDC’s), developer donated infrastructure, donated easements and third party contributions for District projects. Capital contributions totaled $32.5 million, an increase of $4.2 million, or 14.8% compared to the prior year, mainly due to an increase in developer donated infrastructure and donated easements as compared to the prior year.
Other Income: This revenue source includes all other fees, grant revenues, subsidy payments and refunds. Other income decreased by $0.6 million, or 8.5%. In FY 2014, the Districted collected over $1.3 million in business income tax credits for energy savings grants, which was a one-time revenue source for the District.
Investment Income: Investment income totaled $1.9 million in 2015, an increase of $0.2 million compared to 2014, attributed to increased cash invested and investment valuation gains at year-end.
CLEAN WATER SERVICES A Component Unit of Washington County, Oregon
MANAGEMENT’S DISCUSSION AND ANALYSIS (Continued) Fiscal Year Ended June 30, 2015
10
Expenses
Total expenses for FY 2015, including operating expenses, non-operating expenses and donated capital, totaled $102.9 million, a decrease of approximately 8.7% over FY 2014.
Operating costs decreased by $6.7 million or 6.9%. This decrease was due to the decrease in labor costs related to the negative pension expense in the current year, which reduced pension expense by $7.2 million in FY 2015. Depreciation and amortization expense increased by $1.2 million in FY 2015 as assets were put into service and transitioned from Construction-in-Process. All other operating costs including utilities, professional services and supplies were relatively flat or decreased during the year.
Non-operating costs decreased by $3.1 million or 18.9%. Bond debt service interest expense increased by $0.3 million mainly due to a decrease in capitalized interested during FY 2015 of $0.7 million, consistent with the decrease in Construction-in-Progress at the beginning of the year. Loss on disposal of capital assets decreased by $1.8 million or 96%. Capital donations to others decreased by $1.6 million. Capital donations include project costs incurred by the District on joint construction projects with other local jurisdictions. Once the project is complete, the asset is donated to the jurisdiction that owns the asset and will continue to maintain it.
The District’s financial condition remains strong, with adequate liquid assets for ongoing operations, treatment plants and collection systems functioning at a level necessary to meet demand and a reasonable level of unrestricted net position. The current financial condition, support staff capabilities and Operating and Capital Improvement Plans (CIP) needed to meet anticipated growth within the service area are well balanced and under control.
$0$5
$10$15$20$25$30$35$40$45
PersonnelExpense
Materials &Services
Depreciation &Amortization
Interest onDebt
Loss onDisposal of
Assets
CapitalDonations
EXPENSES BY TYPE
2015
2014
CLEAN WATER SERVICES A Component Unit of Washington County, Oregon
MANAGEMENT’S DISCUSSION AND ANALYSIS (Continued) Fiscal Year Ended June 30, 2015
11
Capital assets
As of year-end, the District has $643.9 million (net of accumulated depreciation and amortization) invested in capital assets, as reflected in the table below. Capital assets include treatment facilities, collection and conveyance systems, land, sewer lines, stormwater management improvements, buildings, plant and office equipment, automotive equipment and intangible assets including easements and patents. Total additions to capital assets from current year activity, before depreciation and amortization, were $47.6 million. The net change in capital assets from current year activity was an increase of $13.3 million over FY 2014.
2015 2014 Amount %
Land $ 16,575 $ 15,654 $ 921 5.9%Easements 3,925 2,077 1,848 89.0%Construction in progress 80,050 51,804 28,246 54.5%Buildings and improvements 34,367 36,295 (1,928) -5.3%Land improvements 71,604 69,488 2,116 3.0%Treatment plants 250,631 270,876 (20,245) -7.5%Sewer lines 151,263 148,283 2,980 2.0%Plant equipment 29,807 32,741 (2,934) -9.0%Automotive equipment 1,570 1,321 249 18.8%Plans and studies 3,043 868 2,175 250.6%Office equipment 968 1,132 (164) -14.5%Temporary Easements 57 60 (3) -5.0%Patents 71 76 (5) -6.6% Total capital assets $ 643,931 $ 630,675 $ 13,256 2.1%
Change
Capital Assets(Net of Depreciation and Amortization)
(in Thousands)
CLEAN WATER SERVICES A Component Unit of Washington County, Oregon
MANAGEMENT’S DISCUSSION AND ANALYSIS (Continued) Fiscal Year Ended June 30, 2015
12
Capital additions by category during FY 2015 included the following:
Additional information on Clean Water Services’ capital assets can be found in note 5 on page 32 of this report.
Treatment plant facilities $ 30,082,814 Conveyance systems 10,671,575 Pump stations 2,320,903 Watershed 3,002,899 Other (facilities, fleet, IT) 1,484,518
$ 47,562,709
CLEAN WATER SERVICES A Component Unit of Washington County, Oregon
MANAGEMENT’S DISCUSSION AND ANALYSIS (Continued) Fiscal Year Ended June 30, 2015
13
Long-term debt
Debt outstanding at year-end is summarized in the table below. Revenue bonds, which are the District’s principal source of debt financing, are paid from sanitary sewer system operating revenues.
As of year-end, the District had total net bonded debt outstanding of $244.7 million versus $259.8 million at the end of fiscal year 2014, and of that amount $15.6 million is due within one year. All of this debt (i.e., revenue bonds) is secured solely by specified revenue sources of the sanitary sewer operations.
Sewer revenue bonds are expected to be the preferred debt instrument for the District. The District’s revenue bonds issued in August 2011 received excellent bond credit ratings of AA (Standard & Poor’s) and Aa2 (Moody’s). The District’s strong financial position resulted in an upgrade in the rating by Standard & Poor’s from AA to AA+. Historically, District bond credit ratings have been enhanced by funding required debt service reserves with bond surety insurance policies. District bond surety providers experienced significant credit rating downgrades in recent years, which created the need to fund debt service reserve requirements on the District’s most recent issues with cash from bond proceeds. This change in practice will also enhance the District’s capacity to market future bond issues.
Additional information on Clean Water Services long-term debt can be found in note 7 on pages 33-37 of this report.
2015 2014 Amount %
Sewer revenue bonds $ 230,253 $ 244,932 $ (14,679) -6.0%Revenue pension bonds 14,480 14,885 (405) -2.7%
Total $ 244,733 $ 259,817 $ (15,084) -5.8%
Change
Long-term Debt(Net of Premiums and Discounts)
(in Thousands)
CLEAN WATER SERVICES A Component Unit of Washington County, Oregon
MANAGEMENT’S DISCUSSION AND ANALYSIS (Continued) Fiscal Year Ended June 30, 2015
14
Economic Factors and Next Year's Budgets and Rates
• The adopted budget for 2016 reflects a 3.3% increase in operating expenses. This increase is primarily due to increased labor costs of $2.7 million or 7.6%, which reflects an increase of 10 FTE from the prior year. Materials and services are expected to decrease by approximately $669,000, or 2.5% and capital outlay increased by $34,500 or 8.6% for equipment purchases.
• Budgeted positions for fiscal year 2016 increased by 10 FTE, or 3.1% from the prior year.
• Adopted sanitary sewer fee rates increased by 3% for fiscal year 2016. This will add an estimated $1.19 per month to the average residential customer’s bill. Storm water maintenance fees are increasing by 7.4%, which will add an estimated 50 cents per month to the average residential customer’s bill.
• The District has budgeted for an estimated $62.1 million in new sanitary sewer system improvements and $4.0 million in new surface water management system improvements in FY 2016. These investments are planned to increase system capacity, meet regulatory requirements for water quality, and enhance overall watershed health.
• The adopted budget for FY 2016 reflects relatively flat debt service with an increase of just 0.2%.
All of these factors were considered in preparing Clean Water Services’ budget for the 2016 fiscal year.
The District annually prepares a 10-year financial outlook that incorporates capital improvement planning (CIP) with operational planning. The 10-year CIP plans are developed using new project requests and updates to the status of existing projects. The CIP plans are developed by division and program managers and reviewed with recommendations as to projects needing funding incorporated into the financial forecast. Project spending is then matched with either cash reserves or debt financing. Depending upon the reserves needed, the financial plan then becomes a model of integrating productivity improvements, growth projections, rate increases, debt restructuring and debt financing of capital. The first year of the CIP becomes the basis for the next year’s budget with respect to investments in capital improvements.
The current 10-year forecast projects that estimated future sanitary operating revenues will safely cover operating expenses and all current and future debt service requirements. The current 10-year forecast for SWM operations indicates ending reserves will slowly increase if the District manages SWM capital expenditures with modest annual increases going forward and continues to increase the SWM rates annually consistent with the recent trending at $0.50 per ESU. The District will continue to evaluate the need for capital expenditures and options for funding costs in the future.
CLEAN WATER SERVICES A Component Unit of Washington County, Oregon
MANAGEMENT’S DISCUSSION AND ANALYSIS (Continued) Fiscal Year Ended June 30, 2015
15
Requests for Information
The financial report is designed to provide a general overview of Clean Water Services’ finances for all those with an interest in the District’s finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Business Operations Department Director, Clean Water Services, 2550 SW Hillsboro Highway, Hillsboro, Oregon 97123.
BASIC
FINANCIAL STATEMENTS
See notes to basic financial statements16
Current assets:$ 101,138,678
17,101,327 952,833 249,762 269,232
Current assets - unrestricted 119,711,832
2,529,478 259,711 212,470 384,405
Current assets - restricted 3,386,064
Total current assets 123,097,896
Noncurrent assets:131,230,623
4,009,686
Land 16,574,799 Permanent easements 3,925,304 Construction in progress 80,050,342
543,253,121 Intangible assets, net of accumulated amortization 127,437
Net capital assets 643,931,003 2,567,843 5,815,937
Prepaid electricity 466,569 593,812
Total noncurrent assets 788,615,473
Total assets 911,713,369
Deferred outflow of resources:Deferred loss on refunding 616,990 Pension related 1,793,128
Total assets and deferred outflow of resources $ 914,123,487
Current liabilities:$ 3,921,890
4,420,818 60,300
2,744,255 15,595,109
Current liabilities - payable from unrestricted assets 26,742,372
7,602,072 79,519
Current liabilities - payable from restricted assets 7,681,591
Total current liabilities 34,423,963
Noncurrent liabilities:229,137,444
550,800 250,000
Total noncurrent liabilities 229,938,244
Total liabilities 264,362,207
Deferred inflow of resources:Pension related 11,771,295
Total liabilities and deferred inflow of resources 276,133,502
Net position:406,700,471
Restricted for:106,459,002
21,327,933 Unrestricted 103,502,579
Total net position 637,989,985
Total liabilities, deferred inflow of resources and net position $ 914,123,487
Cash and investmentsAccounts receivable (net of allowance for uncollectibles)Materials and supplies inventoryCurrent portion contracts receivable
Assets
June 30, 2015
CLEAN WATER SERVICES(A Component Unit of Washington County, Oregon)
Statement of Net Position
Prepaid expenses
Cash and investments-restricted
Connection fees receivable-restricted
Contributions receivable from local governments-restrictedBuild America Bonds (BABs) subsidy receivable-restricted
Capital assets, not being depreciated or amortized:
Capital assets, net of accumulated depreciation
Investment in joint ventureNet pension asset
Current portion contracts receivable-restricted
Contracts receivable-restricted
Accrued self insurance
Net investment in capital assets
Capital constructionDebt service
Accrued interest payable Current portion of bonds payable, net
Accounts payable - from restricted assetsAccrued interest payable- from restricted assets
Postemployment benefits other than pensions
Contracts receivable
Bonds payable, net
Accounts payableAccrued payrollAccrued self insurance
Liabilities and Net Position
See notes to basic financial statements17
Operating revenues:$ 119,512,576
5,936,221
Total operating revenues 125,448,797
Operating expenses:23,465,196
4,546,965 8,570,149 3,988,488 2,343,960
389,429 829,821
3,682,534 41,801,866
Total operating expenses 89,618,408
Operating income 35,830,389
Nonoperating revenues (expenses):1,847,402
Interest on assessments and contracts 40,426 (76,242) (75,073)
(9,576,883) (3,498,920)
Total nonoperating expense (11,339,290)
Income before contributions 24,491,099
Capital contributions:19,751,932 12,750,690
Total capital contributions 32,502,622
Change in net position 56,993,721
Net position, beginning of year, before adjustment 603,765,176
Less/Add: Accumulated adjustment for change in accounting principle (see Note 1) (22,768,912)
Net position, beginning of year, as adjusted 580,996,264
Net position, end of year $ 637,989,985
System development chargesInfrastructure donated by developers
For the year ended June 30, 2015
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
Statement of Revenues, Expensesand Changes in Net Position
Service feesOther
Labor and fringe benefitsUtilitiesProfessional servicesSuppliesAdministrative costsRepairs and maintenanceInsurance
Loss on equity in joint ventureInterest expenseCapital donations - intergovernmental agreements
ChemicalsDepreciation and amortization expense
Investment income
Net loss on disposal of capital assets
See notes to basic financial statements18
Cash flows from operating activities:$ 119,698,092
(24,291,818) (30,458,512)
5,936,636
Net cash from operating activities 70,884,398
Cash flows from noncapital financing activities:(405,000) (897,678)
(3,498,920)
Net cash from noncapital financing activities (4,801,598)
Cash flows from capital and related financing activities:(44,553,306) (13,410,000) (11,374,462)
39,898 19,744,169
161,399
Net cash from capital and related financing activities (49,392,302)
Cash flows from investing activities:1,847,402
Net increase in cash and cash equivalents 18,537,900
Cash and cash equivalents, beginning of year 213,831,401
Cash and cash equivalents, end of year 232,369,301
101,138,678 131,230,623
Total cash and investments $ 232,369,301
Reconciliation of operating income to net cash from operating activities:
$ 35,830,389
Adjustments to reconcile operating income to net cashfrom operating activities:
41,801,866 27,522
(7,230,852) (2,239)
415
185,516 (62,421) 450,778 246,575
(363,151)
35,054,009
$ 70,884,398
$ 11,231,017 $ (75,073)
CLEAN WATER SERVICES(A Component Unit of Washington County, Oregon)
Statement of Cash Flows
For the year ended June 30, 2015
Received from customersPayments to suppliersPayments to employees for servicesOther operating revenue
Capital donations to others
Principal paid on pension bondsInterest paid on pension bonds
Acquisition and construction of capital assetsPrincipal paid on bondsInterest paid on bondsInterest received on assessments and contractsCapital contributed by customers and citiesProceeds from sale of capital assets
Interest on investments
Unrestricted cash and investmentsRestricted cash and investments
Postemployment benefit costs other than pensionsBABs subsidyChanges in assets and liabilities:
Accounts receivable
Operating income
Depreciation and amortization
Net pension expenseAmortization of prepaid electric
Net cash from operating activities
Schedule of non-cash capital and related financing activities:Contributions of capital assets by developersLoss on equity in joint venture
Materials and supplies inventoryPrepaid expensesAccrued expensesAccounts payable
Total adjustments
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS
Fiscal Year Ended June 30, 2015
19
(1) Summary of Significant Accounting Policies
(a) Reporting Entity
Clean Water Services (the District) (formerly known as the Unified Sewerage Agency of Washington County), a Component Unit of Washington County, Oregon was formed February 4, 1970 under the provisions of Oregon Revised Statutes (ORS) Chapter 451 to operate a sanitary sewer system in the Tualatin River Drainage Basin. Sixteen individual sanitary districts were consolidated to form the District. Subsequently, thirteen municipalities selected the District to perform sewage collection and treatment of waste. On July 1, 1990, the District assumed responsibility for surface water management in the Basin. As required by ORS 451.485, the Washington County Board of Commissioners is the governing body of the District. Principal funding sources are charges to users and system development charges (SDCs).
The District is considered a component unit of Washington County, Oregon (County) because the elected officials of the County also serve as the Board for the District. The District is presented in the Comprehensive Annual Financial Report of the County as a discretely presented component unit to emphasize the District’s separate enterprise operations.
Clean Water Institute
On March 2, 2010, the Clean Water Services Board of Directors instructed the District to form Clean Water Institute (CWI). The General Manager of the District currently serves as the Executive Director for CWI. One of the District’s Board Members currently serves on CWI’s Board.
CWI is a nonprofit 501(c)(3) formed to advance watershed restoration and resource recovery through innovative strategies and to promote scientific research, education, and environmental protection activities that benefit watersheds throughout the country and around the world. For the fiscal year ended June 30, 2015, the transactions between the District and CWI are deemed to be immaterial, and therefore, CWI is not reported as a component unit of the District.
(b) Basis of Presentation and Accounting
The District's financial statements are maintained on a flow of economic resources measurement focus. With this measurement focus, all assets and liabilities are included in the Statement of Net Position. The Statement of Revenues, Expenses and Changes in Net Position presents increases (e.g. revenues) and decreases (e.g. expenses) in total net position.
The District’s financial statements are presented on the accrual basis of accounting. Under the accrual basis of accounting, revenues are recorded at the time they are earned and expenses are recorded at the time liabilities are incurred.
The District reports the following operating segment:
• The sanitary sewer operations segment accounts for the activities of the District which manage the public sanitary system. The District operates 4 sewage treatment plants, 40 pump stations, and maintains responsibility for 760 miles of sanitary gravity mains, 65 miles of force mains, and 14 miles of reuse mains.
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
Fiscal Year Ended June 30, 2015
20
(1) Summary of Significant Accounting Policies (continued)
(c) Operating vs. Nonoperating Revenues and Expenses
The District has defined operating revenues to include all service charges and other applicable charges for services directly attributable to providing either sanitary or surface water management services, plan check, product sales or other related activity.
Operating expenses are defined as those expenses directly related to providing services including administrative expenses and depreciation and amortization, and excludes personnel services utilized directly for capital projects which are charged to capital assets.
Nonoperating revenues and expenses are not directly attributable to the services provided. This includes investment interest, capital donations and contributions, gain (loss) on disposal of capital assets, gain (loss) on equity in joint ventures and non-operating grant revenue. Capital donations relate to infrastructure constructed by the District which is donated to another jurisdiction upon completion. Capital contributions include sewer and storm connections fees collected from customers newly connecting to the system and developer constructed infrastructure donated to the District.
(d) Cash and Investments
The District’s cash and investments are comprised of pooled funds held and invested by 1) the Washington County Department of Support Services, Finance Division, 2) the State of Oregon Treasurer’s Local Government Investment Pool, and 3) Tualatin Valley Water District as a fiscal agent. The District has stated its investments at fair value. Interest earned on investments is allocated monthly by the County based upon the District’s average monthly cash balance.
(e) Cash Equivalents/Statement of Cash Flows
For purposes of the Statement of Cash Flows, cash and cash equivalents include all cash and investments held by the District’s Treasurer, since it has the general characteristics of a demand deposit (i.e. deposits of additional cash may be made at any time and cash may be withdrawn at any time without prior notice or penalty).
(f) Accounts Receivable
Accounts receivable represent user charges which are recognized as earned. An allowance for doubtful accounts is established for amounts deemed to be uncollectible, based on historical collection percentages. At June 30, 2015, the allowance was $310,000.
(g) Materials and Supplies Inventory
Inventories of operating supplies and repair parts are valued at the lower of cost (average cost) or market and are charged against operations as used.
(h) Assessments and Contracts Receivable
Assessments receivable represent amounts assessed against property owners for local sewer improvements. An allowance for doubtful accounts is not deemed necessary as the assessments represent liens against the property. Outstanding assessments are payable over ten to twenty years at interest rates ranging from 3.5% to 6.46%.
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued) Fiscal Year Ended June 30, 2015
21
(1) Summary of Significant Accounting Policies (continued)
(i) Restricted Assets and Liabilities
Assets, the use of which is restricted to specific purposes by state statute, bond indenture, or other outside party, and related liabilities, are segregated on the Statement of Net Position.
(j) Capital Assets
Capital asset items purchased are valued at historical cost or estimated historical cost if actual historical cost is not available. Contributed capital assets are recorded at estimated fair market value at the time received.
Major additions, improvements and replacements including related plans and studies are capitalized. Normal maintenance and repairs are charged to operations as incurred. Gains or losses realized from disposal of capital assets are reflected in the Statement of Revenues, Expenses and Changes in Net Position. Assets costing more than $5,000 with a life of 5 years or more are capitalized and depreciated over their useful lives. One-half year’s depreciation is taken in the year of acquisition and disposal of asset. Depreciation is computed on capital assets placed in service using the straight-line method over their estimated useful lives as follows:
Sewer lines 50 years Treatment plants 25 years Land improvements 25 years Plans and studies 5-25 years Buildings 20 years Plant and office equipment 5-10 years Automotive equipment 5 years
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued) Fiscal Year Ended June 30, 2015
22
(1) Summary of Significant Accounting Policies (continued)
(k) Intangible Capital Assets
Intangible assets, including easements, water rights, patents and internally generated computer software, are reported in the financial statements. Intangible assets purchased are valued at historical cost or estimated historical cost if actual historical cost is not available. Contributed intangible assets are recorded at estimated fair market value at the time received.
Intangible capital assets with an individual cost of $5,000 and a useful life of more than five years are capitalized and amortized over their useful lives. Intangible assets with indefinite lives are not amortized. Additions or improvements and other capital outlays that significantly extend the useful life of an asset, or that significantly increase the capacity of an asset are capitalized. Normal maintenance and repairs are charged to operations as incurred.
Amortization on exhaustible intangible capital assets is reported on the straight-line basis over the estimated useful life of the asset. One-half year’s amortization is taken in the year of acquisition and disposal of the asset. Gains or losses realized from disposal of intangible capital assets are reflected in the Statement of Revenues, Expenses and Changes in Net Position.
(l) Investments in Joint Venture
Investments in joint venture with other governments are reported at cost plus or minus the District’s share of operating income or loss (equity method).
(m) Premium and Discount on Bonds Payable
Premiums and discounts are amortized by the effective interest method over the life of the respective debt instruments. Bonds payable are reported net of the applicable bond premium or discount.
(n) Post-employment Benefits Other than Pensions
The entity’s net Other Post-Employment Benefits (OPEB) Obligation is recognized as a long-term liability in the government-wide financial statements and in the proprietary fund statements, the amount of which is actuarially determined.
The District offers health benefits to retirees under age 65 as well as their qualified dependents, as required by state law. The District’s subsidized retiree health benefits are not pre-funded and are reported on a pay-as-you-go basis.
(o) Contributions Other Than Capital Assets
Contributions which represent non-exchange transactions are comprised of the following:
Customers – Sewer line and storm and surface water management connection fees from sewer patrons and sewer pipe installation fees from developers.
Capital Grants – Funds received from federal and state agencies restricted for acquisition and construction of sewage facilities.
Contributions from Local Governments – Funds received from cities and Washington County for shared construction costs of collection systems owned and maintained by the District, and for other projects with regional benefit undertaken by the District.
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued) Fiscal Year Ended June 30, 2015
23
(1) Summary of Significant Accounting Policies (Continued)
(p) Insurance
The District is insured under a guaranteed cost plan for workers' compensation and for costs in excess of insurance policy retention (deductible) limits on fire loss, property damage, and all risk coverage (theft, vandalism, etc.). The District currently provides for estimated losses from pending claims on all self-insured retention risks which are reported as a current expense and liability.
Incurred but not reported (IBNR) claims for general and employment liability are claims that are incurred through the end of the fiscal year but not reported until after that date and are reported as noncurrent liabilities.
(q) Accrued Compensated Absences
The District allows employees to accumulate earned but unused vacation and sick leave benefits and compensatory time balances. Unused sick pay is not recognized as a liability because it does not vest. Accumulated compensation for overtime and vacation pay accrued at the end of each year is used within one year and is reported as a current expense and liability.
(r) Deferred Outflows/Inflows of Resources
In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period and so will not be recognized as an outflow of resources (expense/expenditure) until then.
In addition to liabilities, the Statement of Net Position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period and so will not be recognized as an inflow of resources (revenue) until then.
Loss on Refunding. The item that qualifies in this category is the deferred loss on refunding reported in the Statement of Net Position. Deferred charges, resulting from the carrying value of refunded debt and its reacquisition price, are deferred and amortized over the shorter of the life of the refunded debt or refunding debt.
Pensions. For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Oregon Public Employees Retirement System (OPERS) and additions to/deductions from OPERS’s fiduciary net position have been determined on the same basis as they are reported by OPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued) Fiscal Year Ended June 30, 2015
24
(1) Summary of Significant Accounting Policies (Continued)
(s) Net Position
Net position comprises various net earnings from operating and nonoperating revenues, expenses and contributions of capital. Net position is classified in the following three components: net investment in capital assets; restricted net position; and unrestricted net position.
Net investment in capital assets consists of all capital assets less accumulated depreciation, and debt less unspent debt proceeds that is attributable to the acquisition, construction and improvement of those assets.
Restricted net position consists of net assets for which constraints are placed thereon by external parties, such as lenders, grantors, contributors, laws, regulations and enabling legislation.
Unrestricted net position consists of all other net assets not included in the above categories.
The District has not established a formal policy regarding the use of its restricted and unrestricted fund balance amounts.
(t) Use of Estimates
The preparation of the financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued) Fiscal Year Ended June 30, 2015
25
(1) Summary of Significant Accounting Policies (Continued)
(u) Adoption of new GASB pronouncements
During the fiscal year ended June 30, 2015, the District implemented the following GASB pronouncements:
GASB Statement No. 68, Accounting and Financial Reporting for Pensions
This statement was issued to improve accounting and financial reporting by state and local governments for pensions. This statement replaces requirements of statement No. 27, Accounting for Pensions by State and Local Governmental Employers as well as requirements of statement No. 50, Pension Disclosures. This statement and statement No. 67 (applicable to Pension Plans) establish a definition of a pension plan that reflects the primary activities associated with the pension arrangement – determining pensions, accumulating and managing assets dedicated for pensions and paying benefits to plan members as they come due. This statement is effective for the fiscal year ended June 30, 2015.
Additional information about the implementation of this statement and statement No. 71 is addressed in the note about a Change in Accounting Principle, as well as in the detailed note for Pensions.
GASB Statement No. 69, Government Combinations and Disposals of Government Operations
This statement establishes accounting and financial reporting standards related to government combinations, including mergers, acquisitions and transfers of operations and disposals of government operations. This statement is effective for the fiscal year ended June 30, 2015.
Management has determined that there is no impact to the District’s current financial accounting and reporting for the types of transactions identified in this statement.
GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date (an amendment of GASB Statement 68)
The objective of this statement is to address an issue regarding application of the transition provisions of Statement No. 68, Accounting and Financial Reporting for Pensions. The issue relates to amounts associated with contributions, if any, made by a state or local government employer or nonemployer contributing entity to a defined benefit pension plan after the measurement date of the government’s beginning net pension liability. The statement requires that, at transition, a government recognize a beginning deferred outflow of resources for its pension contributions, if any, made subsequent to the measurement date of the beginning net pension liability. This statement is effective for the fiscal year ended June 30, 2015.
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
Fiscal Year Ended June 30, 2015
26
(1) Summary of Significant Accounting Policies (Continued)
(v) Change in Accounting Principle
In implementing GASB Statement No. 68 and Statement No. 71, the District has adjusted beginning net position in order to recognize the District’s proportionate share of the Net Pension Liability of the Oregon Public Employees Retirement System (OPERS). The District had previously reported a prepaid asset in the Statement of Net Position in connection with debt the District issued in 2004 to fund the District’s OPERS unfunded actuarial liability. This prepaid asset has been eliminated as part of the implementation of these standards. The adjustment also recognizes a deferred outflow of resources related to pensions for contributions made after the June 30, 2014 measurement date. The District has not restated prior years because the information was not available by the Plan.
(2) Stewardship, Compliance, and Accountability
Oregon Local Budget Law requires the District to prepare and adopt a budget by individual funds prior to July 1 of the budget year. The resolution authorizing appropriations, adopted in the categories of operating expenses, debt service, capital outlay, contingency and operating transfers for each fund sets the level by which expenditures cannot legally exceed appropriations. Appropriations lapse at the end of the fiscal year. The District’s budget is prepared on the modified accrual basis of accounting.
Unexpected additional resources may be added to the original budget through the use of a supplemental budget and appropriation resolution. A supplemental budget, greater than 10% of the fund’s original budget, requires hearings before the public, publications in newspapers and approval by the Board of Directors. Original and supplemental budgets may be modified by the use of appropriation transfers between the levels of control. Such transfers require approval by the Board of Directors. During the fiscal year ended June 30, 2015, the Board approved one appropriation transfer.
Net PositionJune 30, 2014
Net position - beginning of year, before adjustment 603,765,176$
Beginning Net Pension Liability (NPL) (13,093,654) Pension asset removed (11,375,830) Deferred outflow - prior period contributions 1,700,572 Accumulative adjustment for change in accounting period (22,768,912)
Net position - beginning of year as adjusted 580,996,264$
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
Fiscal Year Ended June 30, 2015
27
(3) Cash and Investments
Washington County, Oregon maintains a common cash and investment pool for all County funds including those of the District. The types of investments in which the County and District may invest are restricted by State of Oregon Statutes and a Board adopted investment policy. Authorized investments include general obligations of the United States Government and its agencies, certain bonded obligations of Oregon municipalities, banker’s acceptances, certain high-grade commercial paper, repurchase agreements, and the State of Oregon Treasurer's Local Government Investment Pool (LGIP), among others. The District also maintains restricted cash in reserves with the Tualatin Valley Water District as a fiscal agent for the District.
Cash and investments for the District at June 30, 2015 are as follows: Petty cash $ 3,850 Cash with fiscal agent 578,697 Payments in transit (1) (35,920) Investments 231,822,674 $ 232,369,301
(1) Payments in transit at year-end remain investments with the County until payments clear the bank.
Cash and investments are reflected on the statement of net position as follows: Cash and investments $ 101,138,678 Restricted cash and investments 131,230,623 $ 232,369,301
Investments at June 30, 2015 were as follows: State of Oregon Treasurer's Local Government Investment Pool $ 46,813,142 Washington County investment pool 185,009,532 Total investments $ 231,822,674
(a) Investment in the Oregon State Treasurer’s Local Government Investment Pool
The State of Oregon Local Government Investment Pool (LGIP) is not registered with the U.S. Securities and Exchange Commission as an investment company. The Oregon Revised Statutes and the Oregon Investment Council govern the Pool’s investment policies. The State Treasurer is the investment officer for the Pool and is responsible for all funds in the Pool. These funds must be invested and the investments managed, as a prudent investor would, exercising reasonable care, skill and caution. Investments in the fund are further governed by portfolio guidelines issued by the Oregon Short Term Fund Board.
The table below outlines the LGIP’s investment maturity limitations and the actual maturities at June 30, 2015:
Allowableper Policy
LGIP Maturity: Up to 93 days Minimum of 50% 74%
94 days to 1 year Maximum of 25% 6%
1 to 3 years Maximum of 25% 20%
Actual
Cost approximates the District’s fair value and its value of pool share in the LGIP. (Cash and investments include pooled cash and investments held by Washington County, Oregon, on behalf of
the District)
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
Fiscal Year Ended June 30, 2015
28
(3) Cash and Investments (Continued)
Disclosures relating to Custodial Credit Risk: This is the risk that in the event of bank failure, the District deposits may not be returned to them. As required by Oregon Revised Statues, deposits in excess of federal depository insurance were held at a qualified depository for public funds. All qualified depositories for public funds are included in the multiple financial institution collateral pool that is maintained by and in the name of the Office of the State Treasurer. As a result, the District’s remaining deposits in excess of Federal Depository Insurance Corporation (FDIC) insurance are considered to be fully collateralized.
Disclosures relating to Interest Rate Risk: Interest rate risk is the risk that would adversely affect the fair value of an investment should market interest rates change. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. District management believes the liquidity in the portfolio is sufficient to meet cash flow requirements and preclude the District from having to sell investments below original cost for that purpose. The District relies upon their treasurer, Washington County, to monitor the interest rate risk inherent in its portfolio by comparing the maturity dates of its investments to the minimum maturity dates outlined in the investment policy.
The table below outlines the investment maturity limitations and the actual maturities of the Washington County investment pool at June 30, 2015:
Maturity: Less than 30 days 10% 18% Less than 1 year 25% 29% 5 years or less 100% 100%Weighted Average Maturity 2.5 years 1.3 years
MinimumAllowed Actual
Disclosures relating to Credit Risk: This is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. Credit risk is measured by the assignment of a rating by a nationally recognized rating organization and is minimized by purchasing only those securities, which are rated by three of the nationally recognized credit rating agencies, at the time of purchase. The District’s investment policy specifies ratings – Standard & Poor’s = minimum AA-, and Moody’s Investors Services = minimum Aa3.
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
Fiscal Year Ended June 30, 2015
29
(3) Cash and Investments (Continued)
(b) Cash and investments include pooled cash and investments held by Washington County, Oregon, on behalf of the District (continued)
Presented below is the actual rating at year-end for each investment type in which the District’s funds are invested by Washington County (dollars in thousands):
Rating by Standard & Poor'sInvestment Service AA Not Rated
Federal agency coupon securities X - 56%Corporate notes X - 2%Treasury coupon securities X - 25%State of Oregon Local Government Investment Pool (LGIP) - X 17%
100%
Allocation%
For more detailed information, reference should be made to the Washington County Comprehensive Annual Financial Report for June 30, 2015.
(4) Receivables
SANI SWM TOTALService receivable 15,689,033$ 1,680,140$ 17,369,173$ Interest receivable 23,844 - 23,844 Other 18,310 - 18,310
Unrestricted Accounts Receivable 15,731,187 1,680,140 17,411,327 Allowance for doubtful accounts (274,000) (36,000) (310,000)
Net Unrestricted Accounts Receivable 15,457,187 1,644,140 17,101,327
Connection fees receivable 2,529,478 - 2,529,478 Contributions receivable from local governments 212,470 - 212,470 Build America Bonds subsidy receivable 384,405 - 384,405
Restricted Accounts Receivable 3,126,353 - 3,126,353
Total Net Accounts Receivable 18,583,540$ 1,644,140$ 20,227,680$
ACCOUNTS RECEIVABLE - CURRENT
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued) Fiscal Year Ended June 30, 2015
30
(4) Receivables (Continued)
Washington County Fleet
The District brought fleet service in-house and entered into an intergovernmental agreement between the District and Washington County dated September 18, 2001. The District paid Washington County the marginal cost the County incurred $510,700 in constructing additional capacity in the fleet facility at Walnut Street to accommodate District vehicles and equipment. The County agreed to make payments to the District totaling $51,070, beginning on December 31, 2008, annually for ten years, coinciding with the County’s future capacity needs.
City of Forest Grove Notes Receivable
Intergovernmental agreement between the District and City of Forest Grove for construction of public sanitary sewer lines and private sanitary sewer laterals in the area around Hawthorn Street and B Street in the City of Forest Grove, dated Novermber 11, 2005. The City agreed to reimburse the District for the cost of construction. On February 28, 2007, Forest Grove entered into a 10 year note with a beginning balance of $777,152, annual interest rate of 3.77% and semi-annual payments of $47,002.
Intergovernmental agreement between the District and City of Forest Grove for construction of sanitary sewer lines on Sunset Drive, dated September 19, 2006. The City agreed to reimburse the District for cost of construction. On July 15, 2008, Forest Grove entered into a 10 year note with a beginning balance of $987,835, annual interest rate of 4.20% and semi-annual payments of $60,997.
Tualatin Valley Water District Notes Receivable
The District has an Intergovernmental Agreement with Tualatin Valley Water District as a partner in the Tualatin Basin Water Supply Study. The receivable due relates to costs incurred by the District maintaining land owned by the partners.
CURRENT NON-CURRRENT TOTALWashington County Fleet 51,070$ 102,140$ 153,210$ City of Forest Grove Rehab, Phase 3B 89,780 44,564 134,344 City of Forest Grove Sunset Drive Sanitary Sewer 108,912 229,430 338,342 Tualatin Valley Water District - Tualatin Basin Water Supply - 5,408 5,408 Clean Water Instittute Operating Loan - 217,678 217,678 Local Improvement District Assessments - 283,393 283,393
Unrestricted Contracts Receivable 249,762 882,613 1,132,375
City of Hil lsboro - WRAP 117,446 1,111,143 1,228,589 City of Hil lsboro Central Podium 46,333 490,827 537,160 City of Hil lsboro - East Podium 95,932 1,086,726 1,182,658 City of Hil lsboro West Podium - 1,032,189 1,032,189
Restricted Contracts Receivable 259,711 3,720,885 3,980,596
Total Contracts Receivable 509,473$ 4,603,498$ 5,112,971$
CONTRACTS RECEIVABLE
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued) Fiscal Year Ended June 30, 2015
31
(4) Receivables (Continued)
Clean Water Institute Loan
On October 26, 2010, the District entered into a loan agreement with CWI. The agreement allows for loans and/or advances from the District to CWI of up to $400,000 over the next four fiscal years. Interest on outstanding loan balances due from CWI to the District are calculated monthly and based on 1.1 times the average monthly Oregon Local Government Investment Pool (LGIP) rates.
City of Hillsboro Notes Receivable
Intergovernmental Agreement between the District and City of Hillsboro financing connections for a multi-family development in Orenco Station called the WRAP, dated November 19, 2013. The connections financed totaled $1,295,719, interest rate of 3.67%, ten-year note with semi-annual payments of $80,775 beginning November 1, 2014.
Financing agreement between the District and Holland Group financing connections for a multi-family development in Orenco Station called the Central Podium, dated April 10, 2014. The connections financed totaled $542,918, interest rate of 4.50%, ten-year note with semi-annual payments of $34,999 beginning June 1, 2015. The City of Hillsboro is administering this loan and remitting payments to the District.
Financing agreement between the District and Holland Group financing connections for a multi-family development in Orenco Station called the East Podium, dated May 12, 2014. The connections financed totaled $1,124,325 plus accrued interest, interest rate of 4.50%, ten-year note with semi-annual payments of $74,084 beginning January 1, 2016. The City of Hillsboro is administering this loan and remitting payments to the District.
Financing agreement between the District and Holland Group financing connections for a multi-family development in Orenco Station called the West Podium, dated January 27, 2015. The connections financed totaled $1,028,006 plus accrued interest, interest rate of 4.50%, ten-year note with semi-annual payments of $68,359 beginning December 1, 2016. The City of Hillsboro is administering this loan and remitting payments to the District.
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued) Fiscal Year Ended June 30, 2015
32
(5) Capital Assets Activity in capital assets for the year ended June 30, 2015 is as follows:
Non-depreciable capital assets:Land $ 15,654,246 $ - $ 920,553 $ - $ 16,574,799 Easements 2,077,029 1,496,518 351,757 - 3,925,304 Construction in progress 51,803,672 47,562,709 (15,579,478) (3,736,561) 80,050,342
Total non-depreciable capital assets 69,534,947 49,059,227 (14,307,168) (3,736,561) 100,550,445
Depreciable capital assets:Buildings and improvements 67,270,549 - 1,214,705 - 68,485,254 Land improvements 164,376,409 7,231,536 1,040,560 - 172,648,505 Treatment plants 616,632,073 - 637,995 - 617,270,068 Sewer lines 223,603,268 2,502,963 5,016,926 - 231,123,157 Plant equipment 82,838,781 - 2,633,209 - 85,471,990 Automotive equipment 10,492,862 - 847,298 (270,753) 11,069,407 Plans and studies 13,012,034 - 2,710,370 - 15,722,404 Office equipment 18,054,450 - 206,105 (1,761,879) 16,498,676
Total depreciablecapital assets 1,196,280,426 9,734,499 14,307,168 (2,032,632) 1,218,289,461
Less accumulated depreciation for:Buildings and improvements (30,975,862) (3,141,915) - - (34,117,777) Land improvements (94,888,286) (6,156,174) - - (101,044,460) Treatment plants (345,755,797) (20,882,839) - - (366,638,636) Sewer lines (75,319,909) (4,540,183) - - (79,860,092) Plant equipment (50,098,232) (5,566,721) - - (55,664,953) Automotive equipment (9,171,966) (598,433) - 270,753 (9,499,646) Plans and studies (12,143,761) (535,992) - - (12,679,753) Office equipment (16,922,189) (370,713) - 1,761,879 (15,531,023)
Total accumulated depreciation (635,276,002) (41,792,970) - 2,032,632 (675,036,340)
Total depreciable assets, net 561,004,424 (32,058,471) 14,307,168 - 543,253,121
Amortizable capital assets:Temporary easements 64,905 - - - 64,905 Patents 113,031 - - - 113,031
Total amortizablecapital assets 177,936 - - - 177,936
Less accumulated amortization for:Temporary easements (4,868) (3,245) - - (8,113) Patents (36,734) (5,652) - - (42,386)
Total accumulated amortization (41,602) (8,897) - - (50,499)
Total amortizable assets, net 136,334 (8,897) - - 127,437
Total capital assets, net $ 630,675,705 $ 16,991,859 $ - $ (3,736,561) $ 643,931,003
Balance06/30/14 Retirements
Ending
06/30/15Balance
Additions Transfers
Capitalized Interest
Total interest costs incurred in fiscal year 2015 was $11,127,570 of which $1,550,687 was capitalized for a net interest expense of $9,576,883.
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued) Fiscal Year Ended June 30, 2015
33
(6) Joint Venture
The Barney Reservoir Joint Ownership Commission (the Commission) was formed to own, operate, and expand the J.W. Barney Reservoir. Ownership of the joint venture is comprised of the District (10%), Tualatin Valley Water District (35%), and the cities of Hillsboro (31%), Forest Grove (2.5%), and Beaverton (21.5%). The Commission is governed by one member from each entity. The operating costs of the joint venture are shared by the participating agencies and are reported as an operating expense in the District’s Sanitary Sewer Fund. The net position of the Commission continues to decline due to depreciation expense, which is not funded by the joint venture partners. There are no significant projects identified in the 10 year capital plan for the Commission. If future projects are identified by the Commission, the District will include its proportionate share of costs in the annual Capital Improvement Plan. The District’s year-end equity investment in the Commission was $2,567,843.
Financial statements for the Commission may be obtained from the City of Hillsboro, Finance Department at 150 East Main Street, Hillsboro, Oregon, 97123.
(7) Bonds Payable
The District has issued revenue bonds in accordance with ORS 451.545. The District’s revenue bonds are payable exclusively from the District’s net sewer revenue as defined in the bond indenture agreements. The District’s tax-exempt debt remains in compliance with all Internal Revenue Service arbitrage regulations.
Legal Debt Margin The District’s legal debt limitation, as defined by Oregon Revised Statutes 451.545, shall not exceed 13 percent of the true cash value of all property assessed within the District’s boundaries. The limitation applies to the aggregate of all outstanding General Obligation Bonds. The legal debt limit and debt margin for the District are both $10.032 billion at June 30, 2015, because the District had no outstanding general obligation debt.
Investment in joint venture at June 30, 2014 2,642,916$ Investment - Income (loss ) for the year (75,073) Investment in joint venture at June 30, 2015 2,567,843$
INVESTMENT IN JOINT VENTURE
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued) Fiscal Year Ended June 30, 2015
34
(7) Bonds Payable (Continued)
The details of the individual bond issues are as follows:
Bond principal and interest transactions for the year ended June 30, 2015 are as follows:Outstanding Outstanding Due
June 30, Matured and June 30, within Long-termBonds 2014 Issued Paid 2015 one year portion
Sewer Revenue:2004 Series 11,000,000$ -$ 3,480,000$ 7,520,000$ 3,660,000$ 3,860,000$ 2009 Series A 56,220,000 - 2,625,000 53,595,000 2,735,000 50,860,000 2010 Series A 6,045,000 - 2,965,000 3,080,000 3,080,000 - 2010 Series B 90,260,000 - - 90,260,000 - 90,260,000 2011 Series A 25,235,000 - 2,640,000 22,595,000 2,775,000 19,820,000 2011 Series B 48,345,000 - 1,700,000 46,645,000 1,755,000 44,890,000
Revenue Pension: 2004 Series 14,885,000 - 405,000 14,480,000 480,000 14,000,000
Unamortized premiumand discounts 7,826,787 1,269,234 6,557,553 1,110,109 5,447,444
$ 259,816,787 -$ 15,084,234$ 244,732,553$ 15,595,109$ 229,137,444$
Is sue Origina l Insta l lment Pledged for InterestBonds Date Issue Payments Repayment Purpose Rates
Sewer Revenue Bonds :
2004 SeriesSenior Lien 07/01/04 26,455,000$ Annual ly Net sewer Refunding 2.0-5.25%
through 2017 revenue2009 Series ASenior Lien 03/25/09 58,755,000 Annual ly Net sewer Sewer capi ta l 3.0-5.25%
through 2028 revenue improvement2010 Series ASenior Lien 04/28/10 8,895,000 Annual ly Net sewer Sewer capi ta l 3.0-5.0%
through 2016 revenue improvement2010 Series BSenior Lien 04/28/10 90,260,000 Annual ly Net sewer Sewer capi ta l 3.97-5.801%
through 2036 revenue improvement2011 Series ASenior Lien 08/24/11 30,255,000 Annual ly Net sewer Refunding 2.0-5.0%
through 2022 revenue2011 Series BSenior Lien 08/24/11 50,000,000 Annual ly Net sewer Sewer capi ta l 2.5-5.0%
through 2033 revenue improvementRevenue Pens ion Bonds :2004 Series 05/27/04 15,990,000 Annual ly Gross sewer Pens ion 4.596-6.095%
through 2028 revenue l iabi l i ty280,610,000$
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued) Fiscal Year Ended June 30, 2015
35
(7) Bonds Payable (Continued)
Future maturities of bond principal and interest at June 30, 2015 are as follows:2004
Total Sewer RevenueRevenue Pension
Fiscal Year 2004 2009A 2010A 2010B 2011A 2011B Bonds Bonds Total Principal
Principal
2016 3,660,000$ 2,735,000$ 3,080,000$ -$ 2,775,000$ 1,755,000$ 14,005,000$ 480,000$ 14,485,000$ 2017 3,860,000 2,845,000 - 3,300,000 2,915,000 1,815,000 14,735,000 565,000 15,300,000 2018 - 2,975,000 - 3,385,000 3,060,000 1,890,000 11,310,000 660,000 11,970,000 2019 - 3,130,000 - 3,475,000 3,210,000 1,965,000 11,780,000 760,000 12,540,000 2020 - 3,290,000 - 3,575,000 3,375,000 2,060,000 12,300,000 870,000 13,170,000 2021-2025 - 19,235,000 - 19,565,000 7,260,000 11,885,000 57,945,000 6,380,000 64,325,000 2026-2030 - 19,385,000 - 23,085,000 - 14,835,000 57,305,000 4,765,000 62,070,000 2031-2035 - - - 27,695,000 - 10,440,000 38,135,000 - 38,135,000 2036 - - - 6,180,000 - - 6,180,000 - 6,180,000
7,520,000 53,595,000 3,080,000 90,260,000 22,595,000 46,645,000 223,695,000 14,480,000 238,175,000
Bond discount and premium, net 38,418 1,155,525 - - 2,360,511 3,003,099 6,557,553 - 6,557,553
Bonds payable, net 7,558,418$ 54,750,525$ 3,080,000$ 90,260,000$ 24,955,511$ 49,648,099$ 230,252,553$ 14,480,000$ 244,732,553$
2004Total Sewer Revenue
Revenue PensionFiscal Year 2004 2009A 2010A 2010B 2011A 2011B Bonds Bonds Total Interest
Interest
2016 298,725$ 2,607,513$ 77,000$ 4,791,823$ 1,060,375$ 1,940,075$ 10,775,511$ 874,711$ 11,650,222$ 2017 101,325 2,495,913 - 4,726,318 918,125 1,877,450 10,119,131 847,010 10,966,141 2018 - 2,364,638 - 4,591,082 768,750 1,803,350 9,527,820 813,839 10,341,659 2019 - 2,212,013 - 4,444,415 612,000 1,726,250 8,994,678 774,628 9,769,306 2020 - 2,051,513 - 4,286,540 447,375 1,635,450 8,420,878 728,914 9,149,792 2021-2025 - 7,465,645 - 18,756,570 367,500 6,583,250 33,172,965 2,703,296 35,876,261 2026-2030 - 1,972,988 - 13,174,127 - 3,633,325 18,780,440 536,665 19,317,105 2031-2035 - - - 5,924,747 - 637,600 6,562,347 - 6,562,347 2036 - - - 179,251 - - 179,251 - 179,251
400,050 21,170,223 77,000 60,874,873 4,174,125 19,836,750 106,533,021 7,279,063 113,812,084
Tota l Principa land Interest 7,920,050$ 74,765,223$ 3,157,000$ 151,134,873$ 26,769,125$ 66,481,750$ 330,228,021$ 21,759,063$ 351,987,084$
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued) Fiscal Year Ended June 30, 2015
36
(7) Bonds Payable (Continued)
Sewer revenue bond indenture agreements require the District to maintain net operating revenues, as defined in the indenture agreements, in each fiscal year at least equal to 1.2 times annual debt service on the Senior Lien Bonds and 1.1 times annual debt service on the Subordinate Lien Bonds and to maintain adequate insurance on the facilities. Additionally the bond indenture agreements establish that bonds are secured by a pledge from the District to maintain separate Senior Lien and Subordinate Lien reserve accounts in an amount equal to annual debt service for each class of bonds. The District has fulfilled the reserve requirements by obtaining surety bonds as allowed by the bond indenture agreements for the Series 2004 issues and funded reserves with debt proceeds for the Series 2009A issued in fiscal year 2009, the Series 2010A and 2010B issued in fiscal year 2010, and the Series 2011B issued in fiscal year 2011, of $5.3 million, $0.6 million, $5.8 million, and $1.8 million, respectively.
Pledged revenues net of related expenses for the current year are $91,026,296. Future pledged revenues for outstanding revenues bonds are as follows:
Build America Bonds The District issued $99,155,000 in Senior Lien Sewer Revenue Bonds in fiscal year 2010 including $8,895,000 in tax exempt Series 2010A and $90,260,000 in federally taxable Series 2010B. The Series 2010B Bonds are issued as “Build America Bonds” (BABs) and are eligible under current federal law for a 35% interest subsidy. The District is not able to reduce the annual debt service or maximum annual debt service by the amount of the interest subsidies received for purposes of determining compliance with the District’s rate covenant and the tests for issuing additional Senior Lien Parity Obligations.
The federal interest subsidy was reduced by 7.2% and 7.3% for the October 1, 2014 and April 1, 2015 bond interest payments, respectively, which reduced the subsidy by approximately $121,592. The total reduction in subsidy payments to-date has been $254,925. This was in response to the requirements of the Balanced Budget and Emergency Deficit Control Act of 1985. The District will receive Federal subsidy payments totaling approximately $21,300,000 over the remaining life of the issue. This subsidy may be reduced in the future based on federal balanced budget constraints.
For the YearFor the Year Ended JuneEnding June Future Pledged 30, 2015 Debt30, of Final Revenue Debt (P&I)
Issue Purpose Revenue Stream Payments Outstanding Payments2004 Series Refunding Refunding Net sewer revenue 2017 7,520,000$ 3,961,800$ 2009 Series A Sewer capital improvement Net sewer revenue 2029 53,595,000 5,339,713 2010 Series A Sewer capital improvement Net sewer revenue 2016 3,080,000 3,163,475 2010 Series B Sewer capital improvement Net sewer revenue 2036 90,260,000 4,791,823 2011 Series A Refunding Net sewer revenue 2022 22,595,000 3,835,750 2011 Series B Sewer capital improvement Net sewer revenue 2033 46,645,000 3,691,900
223,695,000$ 24,784,461$
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued) Fiscal Year Ended June 30, 2015
37
(7) Bonds Payable (Continued)
Pension related debt The revenue pension bond agreement issued in May 2004 requires debt service to be paid from gross sewer revenues. Accordingly, debt service for these bonds will be treated as operating expenses in determining debt service coverage in future periods.
Prior year defeased debt In prior years, the District defeased certain bonds by placing the proceeds of refunding bonds in an irrevocable trust to provide for all future debt service on the defeased bonds. Accordingly, the trust account assets and the related liability for those defeased bonds are not included in the District's financial statements. As of June 30, 2015, $33,710,000 of defeased bonds remain outstanding.
(8) Deferred Compensation Plan
During 1977 the District adopted, and has made subsequent amendments to, the Clean Water Services Deferred Compensation Plan. This plan is created in accordance with IRS code section 457(b), and was most recently amended and restated effective June 26, 2012. The General Manager, and the Risk and Benefits Manager of the District are the Trustee and Administrators of the plan. Plan contributions and assets are set aside in trust, with the custodial trustee and administrator, Empower Retirement (formerly Great West Life), for the exclusive benefit of participants and beneficiaries.
The plan generally covers any full-time employee working 37.5 or more hours per week, and any regular part-time employee working fewer than 40 hours per week. The plan permits participating employees to contribute up to 100% of gross pay or the statutorily prescribed annual dollar limit whichever is smaller. The District may, at its discretion, make employer contributions. The District’s plan as currently adopted does not provide for employer contributions. Plan contributions and earnings thereon are available to participating employees upon termination of employment, retirement, death, or unforeseen emergency.
Contributions from plan members during fiscal year 2015 were $1,259,344.
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued) Fiscal Year Ended June 30, 2015
38
(9) Pension Plan
Plan Description
Substantially all District employees are members in the Oregon Public Employees Retirement System (OPERS); a cost-sharing multiple-employer defined benefit pension plan that acts as a common investment and administrative agent for government units in the State of Oregon. Employees hired before August 29, 2003 belong to the Tier One/Tier Two Retirement Benefit Program (established pursuant to ORS Chapter 238), while employees hired on or after August 29, 2003 belong to the OPSRP Pension Program (established pursuant to ORS Chapter 238A). OPERS produces an independently audited CAFR which can be found at: http://www.oregon.gov/pers/Pages/section/financial_reports/financials.aspx.
Benefits Provided
Tier One/Tier Two Retirement Benefit
Pension Benefits. The PERS retirement allowance is payable monthly for life. It may be selected from 13 retirement benefit options. These options include survivorship benefits and lump-sum refunds. The basic benefit is based on years of service and final average salary. A percentage (2.0% for police and fire employees, 1.67% for general service employees) is multiplied by the number of years of service and the final average salary. Benefits may also be calculated under either a formula plus annuity (for members who were contributing before August 21, 1981) or a money match computation if a greater benefit results.
A member is considered vested and will be eligible at a minimum retirement age for a service retirement allowance if he or she has had contribution in each of five calendar years or has reached at least 50 years of age before ceasing employment with a participating employer (age 45 for police and fire members). General service employees may retire after reaching age 55. Police and fire members are eligible after reaching age 50. Tier One general service employee benefits are reduced if retirement occurs prior to age 58 with fewer than 30 years of service. Police and fire member benefits are reduced if retirement occurs prior to age 55 with fewer than 25 years of service. Tier Two members are eligible for full benefits at age 60. The ORS Chapter 238 Defined Benefit Pension Plan is closed to new members hired on or after August 29, 2003.
Death Benefits. Upon the death of a non-retired member, the beneficiary receives a lump-sum refund of the member’s account balance (accumulated contributions and interest). In addition, the beneficiary will receive a lump-sum payment from employer funds equal to the account balance, provided one or more of the following conditions are met:
• the member was employed by a PERS employer at the time of death,
• the member died within 120 days after termination of PERS-covered employment,
• the member died as a result of injury sustained while employed in a PERS-covered job, or
• the member was on an official leave of absence from a PERS-covered job at the time of death.
Disability Benefits. A member with 10 or more years of creditable service who becomes disabled from other than duty-connected causes may receive a non-duty disability benefit. A disability resulting from a job-incurred injury or illness qualifies a member for disability benefit regardless of the length of PERS-covered service. Upon qualifying for either a non-duty or duty disability, service time is computed to age 58 (55 for police and fire members) when determining the monthly benefit.
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued) Fiscal Year Ended June 30, 2015
39
(9) Pension Plan (Continued)
Benefit Changes After Retirement. Members may choose to continue participation in a variable equities investment account after retiring and may experience annual benefit fluctuations due to changes in the market value of equity investments. Under ORS 238.360 monthly benefits are adjusted annually through cost-of-living changes. Under current law, the cap on the COLA in fiscal year 2015 and beyond will vary based on 1.25% on the first $60,000 of annual benefit and 0.15% on annual benefits above $60,000.
OPSRP Pension Program
Pension Benefits. The Pension Program (ORS Chapter 238A) provides benefits to members hired on or after August 29, 2003. This portion of OPSRP provides a life pension funded by employer contributions. Benefits are calculated by formula for members who attain normal retirement age. For general service members, 1.5% is multiplied by the number of years of service and the final average salary. Normal retirement age for general service members is age 65, or age 58 with 30 years of retirement credit. For police and fire members, 1.8% is multiplied by the number of years of service and the final average salary. Normal retirement age for police and fire members is age 60 or age 53 with 25 years of retirement credit. To be classified as a police and fire member, the individual must have been employed continuously as a police and fire member for at least five years immediately preceding retirement.
A member of the OPSRP Pension Program becomes vested on the earliest of the following dates: the date the member completes 600 hours of service in each of five calendar years, the date the member reaches normal retirement age, and if the pension program is terminated, the date on which termination becomes effective.
Death Benefits. Upon the death of a non-retired member, the spouse or other person who is constitutionally required to be treated in the same manner as the spouse, receives for life 50 percent of the pension that would otherwise have been paid to the deceased member.
Disability Benefits. A member who has accrued 10 or more years of retirement credits before the member becomes disabled or a member who becomes disabled due to job-related injury shall receive a disability benefit of 45 percent of the member’s salary determined as of the last full month of employment before the disability occurred.
Benefit Changes After Retirement. Under ORS 238A.210 monthly benefits are adjusted annually through cost-of-living changes. Under current law, the cap on the COLA in fiscal year 2015 and beyond will vary based on 1.25% on the first $60,000 of annual benefit and 0.15% on annual benefits above $60,000.
Contributions
PERS funding policy provides for monthly employer contributions at actuarially determined rates. These contributions, expressed as a percentage of covered payroll, are intended to accumulate sufficient assets to pay benefits when due. Employer contribution rates for the period were based on the December 31, 2011 actuarial valuation as subsequently modified by 2013 legislated changes in benefit provisions. The rates based on a percentage of payroll, first became effective July 1, 2013. The District’s contribution rates for the period were 8.01% for Tier One/Tier Two member and 6.87% for OPSRP General Service members. The District’s total contributions were $1,793,128. Covered employees are required to contribute 6% of their annual covered salary to the Plan.
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
Fiscal Year Ended June 30, 2015
40
(9) Pension Plan (Continued)
Pension Assets, Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions
At June 30, 2015, the District reported an asset of $5,815,937 for its proportionate share of the OPERS net pension asset. The net pension asset was measured as of June 30, 2014, and the total pension liability used to calculate the net pension asset was determined by an actuarial valuation as of December 31, 2012 rolled forward to June 30, 2014. The District’s proportion of the net pension asset was based on a projection of the District’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. At June 30, 2014, the District’s proportion was 0.25658%, which is unchanged from its proportion measured as of June 30, 2013.
The Oregon Supreme Court (Court) ruled on April 30, 2015 that certain provisions of Senate Bill (SB) 861, signed into law in October 2013, were unconstitutional. Benefits could be modified prospectively, but not retrospectively. As a result, those who retired before the bills were passed will continue to receive a COLA tied to the Consumer Price Index that normally results in a 2% increase annually. Restoration payments will be made to those benefit recipients. OPERS members who have accrued benefits before and after the effective dates of the 2013 legislation will have a blended COLA rate when they retire. This is a change in benefit terms subsequent to the measurement date, and is not included in the net pension asset. This change will be reflected in the next measurement period.
For the year ended June 30, 2015, the District recognized negative pension expense of $(5,458,198). At June 30, 2015, the District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Deferred Outflows Deferred Inflowsof Resources of Resources
Net difference between projected and actual earnings on investments -$ 11,222,402$
Changes in proportion and differences between employer contributions and proportionate share of contributions - 548,893
Contributions subsequent to the measurement date 1,793,128 -
Total 1,793,128$ 11,771,295$
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
Fiscal Year Ended June 30, 2015
41
(9) Pension Plan (Continued)
Deferred outflows of resources related to pensions of $1,793,128 resulting from the District’s contributions subsequent to the measurement date will be recognized as either a reduction of the net pension liability or an increase in the net pension asset in the year ended June 30, 2016. Other amounts reported as deferred inflows of resources related to pensions will be recognized in pension expense as follows:
2016 (2,924,924)$ 2017 (2,924,924) 2018 (2,924,924) 2019 (2,924,924) 2020 (71,599) Total (11,771,295)$
Year ended June 30:
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued) Fiscal Year Ended June 30, 2015
42
(9) Pension Plan (Continued)
Actuarial Methods and Assumptions
The total pension liability in the December 31, 2012 actuarial valuation was determined using the following actuarial methods and assumptions:
Actuarial Cost Method Entry Age Normal
Amortization Method Amortized as a level percentage of payroll as layered amortization bases over a closed period; Tier One/Tier Two UAL is amortized over 20 years and OPSRP pension UAL is amortized over 16 years
Asset Valuation Method Market value of assets
Actuarial Assumptions:
Inflation Rate 2.75%
Investment Rate of Return 7.75%
Projected Salary Increases 3.75% overall payroll growth; salaries for individuals are assumed to grow at 3.75% plus assumed rates of merit/longevity increases based on service
Mortality Healthy retirees and beneficiaries:
RP-2000 Sex-distinct, generational per Scale AA, with collar adjustments and set-backs as described in the valuation.
Active members:
Mortality rates are a percentage of healthy retiree rates that vary by group, as described in the valuation.
Disabled retirees:
Mortality rates are a percentage (65% for males, 90% for females) of the RP-2000 static combined disabled mortality sex-distinct table.
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued) Fiscal Year Ended June 30, 2015
43
(9) Pension Plan (Continued)
Actuarial valuations of an ongoing plan involve estimates of the value of projected benefits and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. Experience studies are performed as of December 31 of even numbered years. The methods and assumptions shown above are based on the 2012 experience study which reviewed experience for the four-year period ending on December 31, 2012.
Long-Term Expected Rate of Return
To develop an analytical basis for the selection of the long-term expected rate of return assumption, in July 2013 the PERS Board reviewed long-term assumptions developed by both Milliman’s capital market assumptions team and the Oregon Investment Council’s (OIC) investment advisors. The table below shows Milliman’s assumptions for each of the asset classes in which the plan was invested at that time based on the OIC long-term target asset allocation. The OIC’s description of each asset class was used to map the target allocation to the asset classes shown below. Each asset class assumption was based on a consistent set of underlying assumptions, and includes adjustment for the inflation assumption. These assumptions are not based on historical returns, but instead are based on a forward-looking capital market economic model.
Asset ClassTarget
Allocation
Compounded Annual Return
(Geometric)
Core Fixed Income 7.20% 4.50%Short-Term Bonds 8.00% 3.70%Intermediate -Term Bonds 3.00% 4.10%High Yield Bonds 1.80% 6.66%Large Cap US Equities 11.65% 7.20%Mid Cap US Equities 3.88% 7.30%Small Cap US Equities 2.27% 7.45%Developed Foreign Equities 14.21% 6.90%Emerging Foreign Equities 5.49% 7.40%Private Equities 20.00% 8.26%Opportunity Funds/Absolute Return 5.00% 6.01%Real Estate (Property) 13.75% 6.51%Real Estate (REITS) 2.50% 6.76%Commodities 1.25% 6.07%
Total 100.00%
Assumed Inflation - Mean 2.75%
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
Fiscal Year Ended June 30, 2015
44
(9) Pension Plan (Continued)
Discount Rate
The discount rate used to measure the total pension liability was 7.75% for the Defined Benefit Pension Plan. The projection of cash flows used to determine the discount rate assumed that contributions from plan members and those contributing employers are made at the contractually required rates, as actuarially determined. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments for the Defined Benefit Pension Plan was applied to all periods of projected benefit payments to determine the total pension liability.
Sensitivity of the District’s proportionate share of the net pension liability to changes in the discount rate
The following presents the District’s proportionate share of the net pension liability (asset) calculated using the discount rate of 7.75%, as well as what the District’s proportionate share of the net pension liability (asset) would be if it were calculated using a discount rate that is 1-percentage-point lower (6.75%) or 1-percentage-point higher (8.75%) than the current rate:
1% Decrease
(6.75%)
Current Discount Rate
(7.75%) 1% Increase
(8.75%) District's proportionate share of the net pension liability (asset) $ 12,316,053 $ ( 5,815,937) $ (21,151,347)
Pension Plan Fiduciary Net Position
Detailed information about the pension plan’s fiduciary net position is available in the separately issued OPERS financial report.
The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing relative to the actuarial accrued liability for benefits.
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
Fiscal Year Ended June 30, 2015
45
(10) Other Post-Employment Benefits (OPEB)
(a) Post-Employment Healthcare Plan
Plan Description The District offers health benefits to retirees under age 65 as well as their qualified dependents at the same rate provided to current employees, as required by Oregon Revised Statutes 243.303. Retirees electing to remain on the District sponsored health plans pay the entire premium for that coverage in order to maintain coverage. Even though the District does not pay any portion of the retiree premium, there is an implicit rate subsidy with respect to retired employees because the medical premium rates charged are less than they would be if the retirees were in a separately rated health plan. Actual medical premium rates are determined by blending both active employee and retiree experience. This “plan” is a single-employer plan and is not a stand-alone plan, and therefore, does not issue its own financial statements. No formal/legal trust has been established for the handling of resources used to fund this benefit.
The number of plan participants are as follows:
Active participants 307Retired employees 20
Total participants 327
Funding Policy The District collects insurance premiums from all retirees each month. The District then pays the health insurance premiums for all retirees at the blended rate for each family classification. The required contributions to the plan include the entity’s pay-as-you-go amount, an amount paid by retirees and an additional amount calculated to pre-fund future benefits as determined by the actuary.
For fiscal year 2014/2015, the District contributed $115,530 consisting of retiree payments. The District has elected to not pre-fund the actuarially determined future cost amount of $550,800.
The required monthly contributions of the plan members were as follows for the year ended June 30, 2015:
Health InsuranceProvidence Kaiser
Employee $ 469.48 $ 683.67 Employee + 1 $ 953.15 $ 1,394.69 Full Family $ 1,338.32 $ 1,948.46
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued) Fiscal Year Ended June 30, 2015
46
(10) Other Post-Employment Benefits (OPEB) (Continued)
(a) Post-Employment Healthcare Plan (Continued)
Annual OPEB Cost and Net OPEB Obligation The District’s annual other post-employment benefit (OPEB) cost is calculated based on the annual required contribution (ARC) of the District, an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities over a thirty year period.
The annual OPEB cost and net OPEB obligation at June 30, 2015 was as follows:
Annual required contribution $ 137,885Interest on net OPEB Obligation 22,121 Adjustment to annual required contribution (46,715)Annual OPEB cost 113,291Contributions made 115,530Decrease in net OPEB obligation (2,239)Net OPEB obligation, beginning of year 553,039 Net OPEB obligation, end of year $ 550,800
The District’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB obligation for the last three fiscal years ended were as follows:
Fiscal Annual Percent of
Annual Net Year OPEB OPEB Cost OPEB
Ended Cost Contribution Obligation 6/30/2015 $ 113,291 102% $ 550,800 6/30/2014 $ 110,342 100% $ 553,039 6/30/2013 $ 133,992 87% $ 553,343
Funding status and Funding Progress As of July 1, 2013, the most recent actuarial valuation date, the plan was funded on a pay-as-you-go basis, and therefore, had no assets. The actuarial accrued liability for benefits was $1,369,136 and also equaled the unfunded actuarial accrued liability (UAAL). The annual payroll of active employees covered by the plan (covered payroll) was $23,362,845 and the ratio of the UAAL to the covered payroll was 5.9%.
Actuarial valuations of the ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revisions as actual results are compared with past expectations and new estimates are made about the future.
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
Fiscal Year Ended June 30, 2015
47
(10) Other Post-Employment Benefits (OPEB) (Continued)
(a) Post-Employment Healthcare Plan (Continued)
Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial results consistent with the long-term perspective of the calculations.
In the July 1, 2013 valuation, the projected unit credit actuarial cost method was used, with accrued benefits allocated in equal proportion over the participant’s years of service from hire to expected retirement. The actuarial assumptions included (a) a 4 percent accrued liability discount rate, (b) a 3.5 percent inflation component, and (c) healthcare cost trend rate of 7.5 percent for 2014 grading down over nineteen years to 5 percent. The Unfunded Actuarial Accrued Liability (UAAL) is being amortized over an open period of thirty years as a level percentage of payroll for Non-Represented Retirees, and over a closed period of six years as a flat dollar amount for Represented Retirees.
Actuarial Actuarial Actuarial Unfunded AnnualValuation Value of Accrued Liability Funded Covered UAAL as
Date Assets Liability (AAL) (UAAL) Ratio Payroll % of Payroll7/1/2013 $ - $ 1,369,136 $ 1,369,136 0.0% $ 23,362,845 5.9%
(b) Retirement Health Insurance Account (RHIA)
Plan Description As a member of Oregon Public Employees Retirement System (OPERS), the District contributes to the Retirement Health Insurance Account (RHIA) for each of its eligible employees. RHIA is a cost-sharing multiple-employer defined benefit other post-employment benefit plan administered by OPERS. RHIA pays a monthly contribution toward the cost of Medicare companion health insurance premiums of eligible retirees. Oregon Revised Statute (ORS) 238.420 established this trust fund. Authority to establish and amend the benefit provisions of RHIA reside with the Oregon Legislature. The plan is closed to new entrants after January 1, 2004. OPERS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to the Oregon Public Employees Retirement System, P.O. Box 23700, Tigard, OR 97281-3700, by calling 1-888-320-7377, or by accessing the PERS web site at http://oregon.gov/PERS/.
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued) Fiscal Year Ended June 30, 2015
48
(10) Other Post-Employment Benefits (OPEB) (Continued)
(b) Retirement Health Insurance Account (RHIA) (continued)
Funding Policy Because RHIA was created by enabling legislation (ORS 238.420), contribution requirements of the plan members and the participating employers were established and may be amended only by the Oregon Legislature. ORS require that an amount equal to $60 or the total monthly cost of Medicare companion health insurance premiums coverage, whichever is less, shall be paid from the RHIA established by the employer, and any monthly cost in excess of $60 shall be paid by the eligible retired member in the manner provided in ORS 238.410. To be eligible to receive this monthly payment towards the premium cost the member must: (1) have eight years or more of qualifying service in PERS at the time of retirement or receive a disability allowance as if the member had eight years or more of creditable service in PERS, (2) receive both Medicare Part A and B coverage, and (3) enroll in a PERS-sponsored health plan. A surviving spouse or dependent of a deceased PERS retiree who was eligible to receive the subsidy is eligible to receive the subsidy if he or she (1) is receiving a retirement benefit or allowance from PERS or (2) was insured at the time the member died and the member retired before May 1, 1991.
Participating employers are contractually required to contribute to RHIA at a rate assessed each year by OPERS, currently 0.59% of annual covered payroll. The OPERS Board of Trustees sets the employer contribution rate based on the annual required contribution of the employers (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) of the plan over a closed period not to exceed thirty years. The District’s contributions to RHIA for the years ended June 30, 2015, 2014, and 2013 were $126,000, $143,000, and $142,000 which equaled the required contributions each year.
(11) Risk Management/Insured Risks
It is the policy of the District to periodically assess the proper combination of commercial insurance and retention of risk to cover losses to which it may be exposed. The District currently utilizes two government entity self-insured risk pools through Special Districts Association of Oregon (SDAO) for its workers’ compensation and liability insurance. The District purchases a commercial insurance policy for all-risk property coverage. A self-insurance reserve is maintained to pay the retained amount (deductible) of any insured loss and payments for those losses that are either uninsured or uninsurable. The District maintains retention levels of $50,000 per occurrence on its liability insurance coverage and $1,000,000 per occurrence on its property coverage. The District has earmarked approximately $5.35 million of its unrestricted net assets for future uninsured risks at June 30, 2015.
The District’s liabilities are reported when it is both probable that a loss has occurred and the amount of that loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported. Liabilities are reevaluated periodically to consider current settlements, frequency of claims, past experience and economic factors. During the past three fiscal years, there were no settlements which exceeded insurance coverage.
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued) Fiscal Year Ended June 30, 2015
49
(11) Risk Management/Insured Risks (Continued)
Changes in the balances of the District’s claims liabilities during fiscal years 2015 and 2014 were as follows:
Fiscal year
Beginning of fiscal year
liability
Current claims and changes in estimates
Claims payments
Balance at fiscal
year-end
2014-2015 $ 303,500 $ 111,914 $ (105,114) $ 310,300 2013-2014 $ 260,500 $ 125,665 $ (82,665) $ 303,500
(12) Net Position
Net position represents the difference between assets and liabilities. The components of net position at June 30, 2015 were as follows:
(13) Related Party Transactions
Washington County performs certain fiscal and accounting services, partnering in capital projects and provides certain facility related services, for which the District was charged approximately $891,750 during fiscal 2015.
On April 16, 2013, the District entered into a new Operating Agreement with the Clean Water Institute (CWI). Under the Operating Agreement, the District may provide resources to conduct work for CWI. Upon mutual agreement, the District and CWI may enter into agreements which shall describe the particular scope of services to be performed by the District for CWI. The District may also provide staff and resources to provide administrative support to CWI and charge CWI for such support. The District has billed CWI $15,261 for such services under the Operating Agreement for fiscal year ended June 30, 2015.
Net Investment in Capital Assets: Net capital assets in service $ 643,931,003 Less: Revenues bonds payable, net (229,635,564) Accounts payable for capital assets (7,594,968)
$ 406,700,471
Restricted for Capital Acquisition and Debt Service: Total Restricted Net Position-due to enabling legislation $ 48,353,971 Total Restricted Net Position-other 89,858,810 Total Restricted Net Position 138,212,781 Deductions Liabilities payable from restricted net position proceeds-enabling legislation (7,104) Liabilities payable from restricted net position proceeds-other (10,418,742) Liabilities payable from restricted net position proceeds (10,425,846)
Restricted Net Position-due to enabling legislation 48,346,867 Restricted Net Position-other 79,440,068 Restricted Net Position $ 127,786,935
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued) Fiscal Year Ended June 30, 2015
50
(13) Related Party Transactions (continued)
On October 26, 2010, the District entered into a loan agreement with CWI. The agreement allows for loans and/or advances from the District to CWI of up to $400,000 over the next four fiscal years. Interest on outstanding loan balances due from CWI to the District are calculated monthly and based on 1.1 times the average monthly Oregon Local Government Investment Pool (LGIP) rates. As of June 30, 2014 the loan balance with CWI was $264,174. During fiscal year 2015, CWI was charged $1,511 in interest and made payments totaling $47,993 leaving a loan balance of $217,692 as of June 30, 2015.
On September 21, 2010, the District entered into an Assignment Agreement with CWI, which assigned certain intellectual property rights to CWI. The agreement requires CWI to share future revenues generated from the licensing of these intellectual property rights with the District. Per this agreement, all revenues associated with the agreement received by CWI shall first be applied to repay the loan amounts to the District and any revenues in excess of the loan amount will be shared equally between CWI and the District. In accordance with the agreement, CWI has remitted proceeds of $47,993 to the District in fiscal year 2015 which were applied against the loan balance referenced above.
Clean Water Institute billed the District approximately $32,600 for professional services during fiscal year 2015.
(14) Commitments and Contingencies
The District is involved as a defendant in several claims and disputes which, for the most part, are normal to the District’s activities. Management intends to vigorously contest these matters and does not believe their ultimate resolution will have a material effect upon the District’s financial position or results of operations.
The District is committed for approximately $43.5 million for various construction projects at June 30, 2015.
(15) Operating Leases
The District leases various equipment, buildings and land under cancelable and non-cancelable operating leases. Total costs for such leases were approximately $66,000 for the year ended June 30, 2015. The future approximate minimum lease payments for these leases are as follows:
Fiscal Year Amount2016 $ 45,000
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
NOTES TO BASIC FINANCIAL STATEMENTS (continued) Fiscal Year Ended June 30, 2015
51
(16) Segment Information
The Sanitary Sewer Segment accounts for the provision of sanitary sewer services within the Tualatin River Drainage Basin.
Segment information as of and for the year ended June 30, 2015 is as follows:
Sanitary Sewer Assets:
Current assets 116,051,875$ Noncurrent assets 704,764,280
Total assets 820,816,155 Deferred outflow of resources 2,410,118
Total assets and deferred outflow of resources 823,226,273
Liabilities:Current liabilities 34,234,704 Noncurrent liabilities 229,938,244
Total liabilities 264,172,948 Deferred inflow of resources 11,771,295
Total liabilities and deferred inflow of resources 275,944,243
Net position:Net investment in capital assets 327,747,996 Restricted net assets 123,264,021 Unrestricted 96,270,013
Total net position 547,282,030$
Operating revenues 112,638,917$ Depreciation and amortization (35,280,418) Other operating expenses (39,076,467)
Operating income (loss) 38,282,032
Nonoperating revenues (expenses):Investment income 1,773,600 Interest on assessment and contracts 40,426 Net loss on disposal of capital assets (101,192) Loss on equity in joint venture (75,073) Interest expense (9,576,883) Capital donations - intergovernmental agreements (3,498,920) Total nonoperating revenues (expenses) (11,438,042)
Capital contributions 22,847,508 Change in net position 49,691,498
Net position, beginning of year, before adjustment 520,359,444 Less accumulated adjustment for change in accounting principle (see Note 1) (22,768,912) Net position, beginning of period, as adjusted 497,590,532 Net position, end of year 547,282,030$
Cash flows from:Operating activities 66,886,611$ Non-capital financing activities (4,801,598) Capital and related financing activites (48,132,194) Investment activities 1,773,600
Net increase 15,726,419 Beginning cash and investments 206,530,185 Ending cash and investments 222,256,604$
Condensed Statements of Net Position
Condensed Statements of Revenues, Expenses and Changes in Net Position
Condensed Statements of Cash Flows
REQUIRED
SUPPLEMENTARY
INFORMATION
52
CLEAN WATER SERVICES(A Component Unit of Washington County, Oregon)
Required Supplementary Information
Schedule of Funding ProgressOther Post Employment Benefits
Unfunded ActuarialUnfunded Accrued Liability
Actuarial Actuarial Actuarial Actuarial (Asset) as a PercentValuation Value of Accrued Accrued Funded Covered of Covered
Date Assets Liability Liability (Asset) Ratio Payroll Payroll7/1/2013 -$ 1,369,136$ 1,369,136$ 0 % 23,362,845$ 5.9 %7/1/2011 -$ 1,548,140$ 1,548,140$ 0 % 21,608,777$ 7.2 %7/1/2009 -$ 1,884,808$ 1,884,808$ 0 % 20,314,357$ 9.3 %
53
(b) (b/c)(a) Contributions in (a-b) (c) Contributions
Year Statutorily relation to the Contribution District's as a percentEnded required statutorily required deficiency covered of covered
June 30, contribution contribution (excess) payroll payroll
2015 1,793,128$ 1,793,128$ -$ 25,570,409$ 7.01%
*
(A Component Unit of Washington County, Oregon)CLEAN WATER SERVICES
Schedule of Statutorily Required Employer ContributionsPension Plan
Required Supplementary Information
Last One Fiscal Year*
Fiscal year 2015 was the first year that the new reporting requirements of GASB 68 were implemented at the District. This schedule is required to illustrate 10-years of information. However, until a full 10-year trend has been compiled, information is presented only for the years for which the required supplementary information is available.
54
CLEAN WATER SERVICES(A Component Unit of Washington County, Oregon)
Required Supplementary Information
Schedule of Proportionate Share of the CollectiveNet Pension Liability
(b/c)District's
(a) (b) Plan fiduciaryDistrict's District's (c) net position as
Year proportion of proportionate share District's a percentage of Ended the net pension of the net pension covered the total pension
June 30, liability (asset) liability (asset) payroll liability
2015 0.25658001% (5,815,937)$ 25,570,409$ -22.74% 103.60%
*
proportionate share of the net pension liability
(asset) as a percentage of its
Last One Fiscal Year*
Fiscal year 2015 was the first year that the new reporting requirements of GASB 68 were implemented at the District. This schedule is required to illustrate 10-years of information. However, until a full 10-year trend has been compiled, information is presented only for the years for which the required supplementary information is available.
SUPPLEMENTAL
INFORMATION Combining Schedules
55
Combining Schedule of Net Position
June 30, 2015
Sanitary Surface WaterAssets Sewer Management Total
Current assets:$ 95,736,797 $ 5,401,881 $ 101,138,678
15,457,187 1,644,140 17,101,327 952,833 - 952,833 249,762 - 249,762 269,232 - 269,232
Current assets - unrestricted 112,665,811 7,046,021 119,711,832
2,529,478 - 2,529,478 259,711 259,711 212,470 - 212,470 384,405 - 384,405
Current assets - restricted 3,386,064 - 3,386,064
Total current assets 116,051,875 7,046,021 123,097,896
Noncurrent assets:126,519,807 4,710,816 131,230,623
4,009,686 4,009,686
Land 16,574,799 - 16,574,799 Permanent easements 1,120,257 2,805,047 3,925,304 Construction in progress 77,117,421 2,932,921 80,050,342
469,907,504 73,345,617 543,253,121 Intangible assets, net of accumulated amortization 70,645 56,792 127,437
Net capital assets 564,790,626 79,140,377 643,931,003 2,567,843 - 2,567,843 5,815,937 - 5,815,937
Prepaid electricity 466,569 - 466,569 593,812 - 593,812
Total noncurrent assets 704,764,280 83,851,193 788,615,473
Total assets 820,816,155 90,897,214 911,713,369
Deferred outflow of resources:Deferred loss on refunding 616,990 - 616,990 Pension related 1,793,128 - 1,793,128
Total assets and deferred outflow of resources $ 823,226,273 $ 90,897,214 $ 914,123,487
Current liabilities:Accounts payable $ 3,920,533 $ 1,357 $ 3,921,890 Accrued payroll 4,420,818 - 4,420,818 Accrued self insurance 60,300 - 60,300 Accrued interest payable 2,744,255 - 2,744,255 Current portion of bonds payable, net 15,595,109 - 15,595,109
Current liabilities - payable from unrestricted assets 26,741,015 1,357 26,742,372
Accounts payable- from restricted assets 7,414,170 187,902 7,602,072 Accrued interest payable-from restricted assets 79,519 - 79,519
Current liabilities - payable from restricted assets 7,493,689 187,902 7,681,591
Total current liabilities 34,234,704 189,259 34,423,963
Noncurrent liabilities:Bonds payable, net 229,137,444 - 229,137,444 Postemployment benefits other than pensions 550,800 - 550,800 Accrued self insurance 250,000 - 250,000
Total noncurrent liabilities 229,938,244 - 229,938,244
Total liabilities 264,172,948 189,259 264,362,207
Deferred inflow of resources:Pension related 11,771,295 - 11,771,295
Total liabilities and deferred inflow of resources 275,944,243 189,259 276,133,502
Net position:Net investment in capital assets 327,747,996 78,952,475 406,700,471 Restricted net assets 123,264,021 4,522,914 127,786,935 Unrestricted 96,270,013 7,232,566 103,502,579
Total net position 547,282,030 90,707,955 637,989,985 Total liabilities, deferred inflow of resources and net position $ 823,226,273 $ 90,897,214 $ 914,123,487
Liabilities and Net Position
Capital assets, net of accumulated depreciation
Net pension asset
Contracts receivable
Investment in joint venture
Cash and investments-restricted
Connection fees receivable-restricted
Contributions receivable from local governments-restrictedBABs subsidy receivable-restricted
Capital assets, not being depreciated or amortized:
Current portion contracts receivable-restricted
Contracts receivable-restricted
Materials and supplies inventoryCurrent portion contracts receivablePrepaid expenses
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
Cash and investmentsAccounts receivable (net of allowance for
uncollectibles)
56
(A Component Unit of Washington County, Oregon)
Combining Schedule of Revenues, Expenses
For the year ended June 30, 2015
Sanitary Surface WaterSewer Management Total
Operating revenues:$ 107,658,777 $ 11,853,799 $ 119,512,576
4,980,140 956,081 5,936,221
Total operating revenues 112,638,917 12,809,880 125,448,797
Operating expenses:17,254,548 6,210,648 23,465,196
4,391,294 155,671 4,546,965 7,488,054 1,082,095 8,570,149 3,627,717 360,771 3,988,488 1,597,198 746,762 2,343,960
292,129 97,300 389,429 758,030 71,791 829,821
3,667,497 15,037 3,682,534 35,280,418 6,521,448 41,801,866
74,356,885 15,261,523 89,618,408
38,282,032 (2,451,643) 35,830,389
1,773,600 73,802 1,847,402 Interest on assessments and contracts 40,426 - 40,426
(101,192) 24,950 (76,242) (75,073) - (75,073)
(9,576,883) - (9,576,883) (3,498,920) - (3,498,920)
(11,438,042) 98,752 (11,339,290)
26,843,990 (2,352,891) 24,491,099
System development charges 18,658,680 1,093,252 19,751,932 Infrastructure donated by developers 4,188,828 8,561,862 12,750,690
22,847,508 9,655,114 32,502,622
49,691,498 7,302,223 56,993,721
520,359,444 83,405,732 603,765,176
(22,768,912) - (22,768,912)
497,590,532 83,405,732 580,996,264
$ 547,282,030 $ 90,707,955 $ 637,989,985
Insurance
CLEAN WATER SERVICES
and Changes in Net Position
Service feesOther
Labor and fringe benefitsUtilitiesProfessional servicesSuppliesAdministrative costsRepairs and maintenance
Total nonoperating revenues (expenses)
ChemicalsDepreciation and amortization
Total operating expenses
Operating income (loss)
Nonoperating revenues (expenses):Investment income
Net gain/(loss) on disposal of capital assetsLoss on equity in joint venture
Net position, end of year
Net position, beginning of year, as adjusted
Capital contributions:
Total capital contributions
Interest expenseCapital donations - intergovernmental agreements
Income (loss) before contributions
Change in net position
Net position, beginning of year, before adjustment
principle (see Note 1)Less/Add: Accumulated adjustment for change in accounting
57
CLEAN WATER SERVICES(A Component Unit of Washington County, Oregon)
Combining Schedule of Cash Flows
For the year ended June 30, 2015
Sanitary Surface WaterSewer Management Total
$ 107,916,035 $ 11,782,057 $ 119,698,092 (21,762,115) (2,529,703) (24,291,818) (24,247,864) (6,210,648) (30,458,512)
4,980,555 956,081 5,936,636
Net cash from operating activities 66,886,611 3,997,787 70,884,398
(405,000) - (405,000) (897,678) - (897,678)
Capital donations to others (3,498,920) - (3,498,920)
Net cash from noncapital financing activities (4,801,598) - (4,801,598)
(42,039,440) (2,513,866) (44,553,306) (13,410,000) - (13,410,000) (11,374,462) - (11,374,462)
39,898 - 39,898 18,515,361 1,228,808 19,744,169
136,449 24,950 161,399
financing activities (48,132,194) (1,260,108) (49,392,302)
1,773,600 73,802 1,847,402
15,726,419 2,811,481 18,537,900
206,530,185 7,301,216 213,831,401
222,256,604 10,112,697 232,369,301
95,736,797 5,401,881 101,138,678 126,519,807 4,710,816 131,230,623
$ 222,256,604 $ 10,112,697 $ 232,369,301
$ 38,282,032 $ (2,451,643) $ 35,830,389
35,280,418 6,521,448 41,801,866 27,522 - 27,522
(7,230,852) - (7,230,852) (2,239) - (2,239)
415 - 415
257,258 (71,742) 185,516 (62,421) - (62,421) 450,778 - 450,778 246,575 - 246,575
(362,875) (276) (363,151)
28,604,579 6,449,430 35,054,009
$ 66,886,611 $ 3,997,787 $ 70,884,398
$ 2,732,005 $ 8,499,012 $ 11,231,017 $ (75,073) $ - $ (75,073)
Cash flows from capital and related financing activities:
Cash flows from noncapital financing activities:
Cash flows from operating activities:Received from customersPayments to suppliersPayments to employees for servicesOther operating revenue
Principal paid on pension bondsInterest paid on pension bonds
from operating activities:
Acquisition and construction of capital assets
Total cash and investments
Reconciliation of operating income (loss) to net cash fromoperating activities:
Interest on investments
Principal paid on bonds Interest paid on bonds
Proceeds from sale of capital assets
Net cash from capital and related
Cash flows from investing activities:
Interest received on assessments and contractsCapital contributed by customers and cities
Operating income (loss)
Adjustments to reconcile operating income (loss) to net cash
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
Unrestricted cash and investmentsRestricted cash and investments
Loss on equity in joint venture
Depreciation and amortization
Total adjustments
Net cash from operating activities
Schedule of non-cash capital and related financing activities:Contributions of capital assets by developers
Accounts payable
Net pension expensePostemployment benefit costs other than pensionsBABs subsidyChanges in assets and liabilities:
Accounts receivableMaterials and supplies inventoryPrepaid expensesAccrued expenses
Amortization of prepaid electric
SUPPLEMENTAL
INFORMATION Budgetary Schedules
CLEAN WATER SERVICES (A Component Unit Of Washington County, Oregon)
DESCRIPTION OF BUDGETARY FUNDS
June 30, 2015
58
Legal requirements set forth in Oregon Budget Law require the District to prepare and adopt a budget by individual funds. Therefore, activities of the District, for budgetary and legal purposes, are accounted for in the funds described below.
General Fund
This fund accounts for the District’s normal recurring sanitary sewer operations. The primary source of revenue is sewer service fees.
Storm and Surface Water Management (SWM) Fund
The SWM Fund provides for storm and surface water management in the Tualatin River Basin. Its primary source of revenue is SWM service fees.
Master Plan Update Debt Service Fund
The Master Plan Update Debt Service Fund accounts for the redemption of sewer revenue bonds and interest thereon. The primary resource is sewer revenues transferred from the General Fund.
Revenue Pension Bond Debt Service Fund
The Revenue Pension Bond Debt Service Fund accounts for the redemption of sewer revenue pension related bonds and interest thereon. The primary resource is sewer revenues transferred from the General Fund.
Liability Reserve Fund
The Liability Reserve Fund accounts for the District’s expense incurred under its self-insurance programs for:
• Fire loss, property damage, and all risks (theft, vandalism, etc.) up to a self-insured retention limit of $1.0 million.
• Workers’ compensation claims relating to job injuries.
The primary resources are interest earnings, insurance settlements and transfers from other funds.
Capital Expenditure Reserve (Sanitary Sewer) Fund
The Capital Expenditure Reserve (Sanitary Sewer) Fund accounts for the recovery of capital costs for maintenance and upkeep of the sewerage system. The primary resources are connection fees and earnings on investments.
CLEAN WATER SERVICES (A Component Unit Of Washington County, Oregon)
DESCRIPTION OF BUDGETARY FUNDS (Continued)
June 30, 2015
59
Sanitary Sewer LID Construction Fund
The LID Construction Fund accounts for sanitary sewer capital construction expenditures for benefited property owners. The primary resources are from the sale of bonds or bond anticipation notes and assessment collections.
Surface Water Management LID Construction Fund
The LID Construction Fund accounts for surface water management construction expenditures for benefited property owners. The primary resources are from the sale of bonds or bond anticipation notes and assessment collections.
Sanitary Sewer Construction Fund
The Sanitary Sewer Construction Fund provides for the construction of projects financed from a combination of revenue bond proceeds, sanitary system development charges and transfers from the General Fund.
Tualatin Basin Water Supply Capital Project Construction Fund
The Tualatin Basin Water Supply Capital Project Construction Fund provides financing for capital improvements to provide additional water volume in the Tualatin River, enabling continued compliance with the water quality requirements. The partners funding the project include the District, the Cities of Hillsboro and Beaverton, the Tualatin Valley Water District and the US Bureau of Reclamation.
Capital Expenditure Reserve Storm and Surface Water Management Fund
The Capital Expenditure Reserve Storm and Surface Water Management Fund provides for the construction and extension of storm water systems and facilities. Primary revenue resources are connection fees and interest earnings.
Surface Water Management Construction Fund
The Surface Water Management Construction Fund provides for the construction of projects primarily financed by system development charges and transfers from the SWM operating fund.
60
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
General Fund 101
Schedule of Revenues and Expenditures - Budget and Actual
For the year ended June 30, 2015
VarianceInitial Final from
Budget Budget Actual budget
Revenues:Sewer service fees $ 109,211,700 $ 109,211,700 $ 107,502,738 $ (1,708,962) Interest earned 263,900 263,900 630,375 366,475 Septage charges 629,400 629,400 776,456 147,056 Plan check fees 178,900 178,900 383,353 204,453 Grants, contributions, & assessments 300,000 300,000 662,223 362,223 Other 665,900 665,900 2,200,754 1,534,854
Total revenues 111,249,800 111,249,800 112,155,899 906,099
Expenditures:Personnel Services 35,731,400 35,731,400 30,202,646 5,528,754 Materials and services 26,306,600 26,926,600 23,896,290 3,030,310 Capital outlay 2,862,700 2,862,700 1,281,047 1,581,653 Contingency 9,734,000 9,114,000 - 9,114,000
Total expenditures 74,634,700 74,634,700 55,379,983 19,254,717
Excess of revenues over expenditures 36,615,100 36,615,100 56,775,916 20,160,816
Other financing sources (uses):Transfers from other funds 8,907,500 8,907,500 8,703,592 (203,908) Transfers to other funds (44,349,200) (44,349,200) (44,331,800) 17,400
Total other financing sources (uses) (35,441,700) (35,441,700) (35,628,208) (186,508)
Net change in fund balance 1,173,400 1,173,400 21,147,708 19,974,308
Fund balance, beginning of year 76,765,545 76,765,545 77,944,671 1,179,126 Fund balance, end of year $ 77,938,945 $ 77,938,945 99,092,379 $ 21,153,434
Reconciliation to net postion - GAAP BasisAdjust for accrued performance bonus (1,324,211) Adjust for CWI loan receivable 217,678 Adjust for prepaid electricity - current 27,522 Adjust for prepaid electricity - long term 466,569 Adjust for net pension asset 5,815,937 Adjust for deferred outflows - pension 1,793,128 Adjust for deferred inflows - pension (11,771,295) Adjust for OPEB liability being accrued (550,800) Adjust for investment in joint venture 2,567,843 Adjust for capital assets not being depreciated 18,169,150 Adjust for capital assets , net of accumulated depreciation 469,978,149
Net position - GAAP Basis $ 584,482,049
61
CLEAN WATER SERVICES(A Component Unit of Washington County, Oregon)
Storm and Surface Water Management Fund 201
Schedule of Revenues and Expenditures - Budget and Actual
For the year ended June 30, 2015
VarianceInitial Final from
Budget Budget Actual budget
Revenues:Stormwater service fees $ 11,318,400 $ 11,318,400 $ 11,516,179 $ 197,779 Regional stormwater management charge - - 641,800 641,800 Erosion control fees 230,400 230,400 272,168 41,768 Plan check fees 155,300 155,300 383,203 227,903 Interest earned 48,700 48,700 37,076 (11,624) Other 484,200 484,200 811,027 326,827
Total revenues 12,237,000 12,237,000 13,661,453 1,424,453
Expenditures:Other 213,000 213,000 45,582 167,418 Contingency 448,000 448,000 - 448,000
Total expenditures 661,000 661,000 45,582 615,418
Excess of revenues over expenditures 11,576,000 11,576,000 13,615,871 2,039,871
Other financing (uses):Transfers to other funds (12,157,500) (12,157,500) (11,953,592) 203,908
Net change in fund balance (581,500) (581,500) 1,662,279 2,243,779
Fund balance, beginning of year 3,705,921 3,705,921 4,706,751 1,000,830
Fund balance, end of year $ 3,124,421 $ 3,124,421 6,369,030 $ 3,244,609
Reconciliation to net postion - GAAP BasisAdjust for capital assets not being depreciated 2,805,047 Adjust for capital assets , net of accumulated depreciation 73,402,409
Net position - GAAP Basis $ 82,576,486
62
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
Master Plan Update Debt Service Fund 111
Schedule of Revenues and Expenditures - Budget and Actual
For the year ended June 30, 2015
VarianceInitial Final from
Budget Budget Actual budgetRevenues:
Interest earned $ 152,400 $ 152,400 $ 156,436 $ 4,036 Build America Bonds subsidy 1,557,100 1,557,100 1,555,131 (1,969)
Total revenues 1,709,500 1,709,500 1,711,567 2,067
Expenditures:Debt payments 24,784,461 24,784,461 24,784,461 - Bond issuance costs 200,000 200,000 - 200,000 Contingency 1,239,200 1,239,200 - 1,239,200
Total expenditures 26,223,661 26,223,661 24,784,461 1,439,200
Excess of expenditures over revenues (24,514,161) (24,514,161) (23,072,894) 1,441,267
Other financing sources:Transfers from other funds 30,714,180 30,714,180 28,714,180 (2,000,000)
Total other financing sources 30,714,180 30,714,180 28,714,180 (2,000,000)
Net change in fund balance 6,200,019 6,200,019 5,641,286 (558,733)
Fund balance, beginning of year 18,068,724 18,068,724 17,919,356 (149,368)
Fund balance, end of year $ 24,268,743 $ 24,268,743 23,560,642 $ (708,101)
Reconciliation to net postion - GAAP BasisAdjust for prepaid bond discount - current 273,998 Adjust for prepaid bond discount - long term 354,014 Adjust for bond premium - current (1,121,131) Adjust for bond premium - long term (5,447,445) Adjust for interest payable being accrued (2,744,255) Adjust for bonds payable - due within one year (14,005,000) Adjust for long term bonds payable (209,690,000)
Net position - GAAP Basis $ (208,819,177)
63
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
Revenue Pension Bond Debt Service Fund 114
Schedule of Revenues and Expenditures - Budget and Actual
For the year ended June 30, 2015
VarianceInitial Final from
Budget Budget Actual budget
Revenues:Interest earned $ 3,000 $ 3,000 $ 4,426 $ 1,426
Expenditures:Debt payments 1,302,678 1,302,678 1,302,678 - Contingency 65,100 65,100 - 65,100
Total expenditures 1,367,778 1,367,778 1,302,678 65,100
Excess of expenditures over revenues (1,364,778) (1,364,778) (1,298,252) 66,526
Other financing sources:Transfers from other funds 1,302,700 1,302,700 1,302,700 -
Net change in fund balance (62,078) (62,078) 4,448 66,526
Fund balance, beginning of year 585,180 585,180 586,618 1,438
Fund balance, end of year $ 523,102 $ 523,102 591,066 $ 67,964
Reconciliation to net postion - GAAP BasisAdjust for interest payable being accrued (79,519) Adjust for bonds payable - due within one year (480,000) Adjust for long term bonds payable (14,000,000)
Net position - GAAP Basis $ (13,968,453)
64
CLEAN WATER SERVICES(A Component Unit of Washington County, Oregon)
Liability Reserve Fund 102
Schedule of Revenues and Expenditures - Budget and Actual
For the year ended June 30, 2015
VarianceInitial Final from
Budget Budget Actual budget
Revenues:Interest earned $ 32,500 $ 32,500 $ 39,486 $ 6,986 Payments from third parties 5,900 5,900 93 (5,807) Insurance reimbursement - - 49,766 49,766 Worker's compensation refunds 27,900 27,900 - (27,900)
Total revenues 66,300 66,300 89,345 23,045
Expenditures:Claim costs 810,000 810,000 105,114 704,886 Contingency 335,000 335,000 - 335,000
Total expenditures 1,145,000 1,145,000 105,114 1,039,886 Excess of expenditures over revenues (1,078,700) (1,078,700) (15,769) 1,062,931
Other financing sources:Transfers from other funds 300,000 300,000 300,000 -
Net change in fund balance (778,700) (778,700) 284,231 1,062,931
Fund balance, beginning of year 5,049,534 5,049,534 5,067,991 18,457
Fund balance, end of year $ 4,270,834 $ 4,270,834 $ 5,352,222 $ 1,081,388
65
CLEAN WATER SERVICES
Capital Expenditure Reserve Sanitary Sewer Fund 107
Schedule of Revenues and Expenditures - Budget and Actual
For the year ended June 30, 2015
VarianceInitial Final from
Budget Budget Actual budget
Revenues:Connection fees $ 16,620,500 $ 16,620,500 $ 18,658,680 $ 2,038,180 Interest earned 65,000 65,000 450,768 385,768
Total revenues 16,685,500 16,685,500 19,109,448 2,423,948
Expenditures:Contingency 2,118,150 2,118,150 - 2,118,150
Excess of revenues over expenditures 14,567,350 14,567,350 19,109,448 4,542,098
Other financing uses:Transfers to other funds (14,121,000) (14,121,000) (14,121,000) -
Net change in fund balance 446,350 446,350 4,988,448 4,542,098
Fund balance, beginning of year 28,691,796 28,691,796 42,767,287 14,075,491
Fund balance, end of year $ 29,138,146 $ 29,138,146 $ 47,755,735 $ 18,617,589
(A Component Unit of Washington County, Oregon)
66
CLEAN WATER SERVICES
Sanitary Sewer LID Construction Fund 108
Schedule of Revenues and Expenditures - Budget and Actual
For the year ended June 30, 2015
VarianceInitial Final from
Budget Budget Actual budget
Revenues:Assessment liens, principal $ 166,300 $ 166,300 $ - $ (166,300) Interest earned 69,700 69,700 34,556 (35,144)
Total revenues 236,000 236,000 34,556 (201,444)
Expenditures:Capital outlay 50,000 50,000 216 49,784 Other 50,000 50,000 - 50,000 Contingency 100,000 100,000 - 100,000
Total expenditures 200,000 200,000 216 199,784
Excess (deficiency) of revenues over expenditures and net change in fund balance 36,000 36,000 34,340 (1,660)
Fund balance, beginning of year 1,655,436 1,655,436 1,616,211 (39,225)
Fund balance, end of year $ 1,691,436 $ 1,691,436 $ 1,650,551 $ (40,885)
(A Component Unit of Washington County, Oregon)
67
CLEAN WATER SERVICES
Surface Water Management LID Construction Fund 208
Schedule of Revenues and Expenditures - Budget and Actual
For the year ended June 30, 2015
VarianceInitial Final from
Budget Budget Actual budget
Revenues:Interest earned $ 4,500 $ 4,500 $ 5,049 $ 549
Expenditures:Contingency 100,000 100,000 - 100,000
Total expenditures 100,000 100,000 - 100,000
Excess (deficiency) of revenues over expenditures and net change in fund balance (95,500) (95,500) 5,049 100,549
Fund balance, beginning of year 669,959 669,959 670,585 626
Fund balance, end of year $ 574,459 $ 574,459 $ 675,634 $ 101,175
(A Component Unit of Washington County, Oregon)
68
CLEAN WATER SERVICES
Sanitary Sewer Construction Fund 112
Schedule of Revenues and Expenditures - Budget and Actual
For the year ended June 30, 2015
VarianceInitial Final from
Budget Budget Actual budget
Revenues:Interest earned $ 685,100 $ 685,100 $ 494,460 $ (190,640) Contributions from developers 1,445,000 1,445,000 1,323,356 (121,644) Other 50,000 50,000 50,237 237
Total revenues 2,180,100 2,180,100 1,868,053 (312,047)
Expenditures:Capital outlay 55,821,000 55,821,000 43,511,357 12,309,643 Other 1,100,000 1,100,000 - 1,100,000 Contingency 5,582,100 5,582,100 - 5,582,100
Total expenditures 62,503,100 62,503,100 43,511,357 18,991,743
Excess of expenditures over revenues (60,323,000) (60,323,000) (41,643,304) 18,679,696
Other financing sources (uses):Bond sale proceeds 53,500,000 53,500,000 - (53,500,000) Transfers from other funds 28,130,920 28,130,920 28,130,920 - Transfers to other funds (2,000,000) (2,000,000) - 2,000,000
Total other financing sources (uses) 79,630,920 79,630,920 28,130,920 (51,500,000)
Net change in fund balance 19,307,920 19,307,920 (13,512,384) (32,820,304)
Fund balance, beginning of year 66,487,066 66,487,066 67,322,672 835,606
Fund balance, end of year $ 85,794,986 $ 85,794,986 53,810,288 $ (31,984,698)
Reconciliation to net postion - GAAP BasisAdjust for capital assets not being depreciated 76,115,560
Net position - GAAP Basis $ 129,925,848
(A Component Unit of Washington County, Oregon)
69
CLEAN WATER SERVICES
Tualatin Basin Water Supply Capital Project Construction Fund 115
Schedule of Revenues and Expenditures - Budget and Actual
For the year ended June 30, 2015
VarianceInitial Final from
Budget Budget Actual budget
Revenues:Interest earned $ 2,600 $ 2,600 $ 3,519 $ 919 Rental income 27,560 27,560 - (27,560) Contributions from partners - - 1,891 1,891
Total revenues 30,160 30,160 5,410 (24,750)
Expenditures:Capital outlay 40,000 40,000 2,746 37,254 Other 10,000 10,000 - 10,000 Contingency 10,000 10,000 - 10,000
Total expenditures 60,000 60,000 2,746 57,254
Excess (deficiency) of revenues over expenditures (29,840) (29,840) 2,664 32,504
Other financing sources:Transfers from other funds 22,400 22,400 5,000 (17,400)
Net change in fund balance (7,440) (7,440) 7,664 15,104
Fund balance, beginning of year 390,245 390,245 367,808 (22,437)
Fund balance, end of year $ 382,805 $ 382,805 375,472 $ (7,333)
Reconciliation to net postion - GAAP BasisAdjust for capital assets not being depreciated 527,768
Net position - GAAP Basis $ 903,240
(A Component Unit of Washington County, Oregon)
70
CLEAN WATER SERVICES
Capital Expenditure Reserve Storm and SurfaceWater Management Fund 207
Schedule of Revenues and Expenditures - Budget and Actual
For the year ended June 30, 2015
VarianceInitial Final from
Budget Budget Actual budget
Revenues:Connection fees $ 211,800 $ 211,800 $ 349,290 $ 137,490 Interest earned 6,100 6,100 3,970 (2,130) Other 75,000 75,000 - (75,000)
Total revenues 292,900 292,900 353,260 60,360
Expenditures:Contingency 30,000 30,000 - 30,000
Excess of revenues over expenditures 262,900 262,900 353,260 90,360
Other financing (uses):Transfers to other funds (200,000) (200,000) (200,000) -
Net change in fund balance 62,900 62,900 153,260 90,360
Fund balance, beginning of year 411,556 411,556 437,872 26,316
Fund balance, end of year $ 474,456 $ 474,456 $ 591,132 $ 116,676
(A Component Unit of Washington County, Oregon)
71
CLEAN WATER SERVICES
Surface Water Management Construction Fund 212
Schedule of Revenues and Expenditures - Budget and Actual
For the year ended June 30, 2015
VarianceInitial Final from
Budget Budget Actual budget
Revenues:Other $ 50,000 $ 50,000 $ - $ (50,000) Interest 32,500 32,500 27,705 (4,795) Reimbursement from developers 356,000 356,000 62,850 (293,150)
Total revenues 438,500 438,500 90,555 (347,945)
Expenditures:Capital outlay 4,540,000 4,540,000 2,038,235 2,501,765 Other 50,000 50,000 - 50,000 Contingency 229,500 229,500 - 229,500
Total expenditures 4,819,500 4,819,500 2,038,235 2,781,265
Excess of expenditures over revenues (4,381,000) (4,381,000) (1,947,680) 2,433,320
Other financing sources:Transfers from other funds 3,450,000 3,450,000 3,450,000 -
Net change in fund balance (931,000) (931,000) 1,502,320 2,433,320
Fund balance, beginning of year 1,830,892 1,830,892 2,429,462 598,570
Fund balance, end of year $ 899,892 $ 899,892 3,931,782 $ 3,031,890
Reconciliation to net postion - GAAP BasisAdjust for capital assets not being depreciated 2,932,921
Net position - GAAP Basis $ 6,864,703
(A Component Unit of Washington County, Oregon)
72
CLEAN WATER SERVICES
Reconciliation of Revenues and Expenditures(Budgetary Basis) to Increase in Net Position (GAAP Basis)
For the year ended June 30, 2015
Fund Revenues Expenditures Net
101 General Fund $ 112,155,899 $ 55,379,983 $ 56,775,916 201 Storm and Surface Water Management Fund 13,661,453 45,582 13,615,871 111 Master Plan Update Debt Service Fund 1,711,567 24,784,461 (23,072,894) 114 Revenue Pension Bond Debt Service Fund 4,426 1,302,678 (1,298,252) 102 Liability Reserve Fund 89,345 105,114 (15,769) 107 Capital Expenditure Reserve (Sanitary Sewer) Fund 19,109,448 - 19,109,448 108 Sanitary Sewer LID Construction Fund 34,556 216 34,340 208 Surface Water Management LID Construction Fund 5,049 - 5,049 112 Sanitary Sewer Construction Fund 1,868,053 43,511,357 (41,643,304) 115 Tualatin Basin Water Supply Capital Project Construction Fund 5,410 2,746 2,664 207 Capital Expenditure Reserve Storm and Surface Water
Management Fund 353,260 - 353,260 212 Surface Water Management Construction Fund 90,555 2,038,235 (1,947,680)
$ 149,089,021 $ 127,170,372 21,918,649
Reconciliation to change in net postion - GAAP BasisExpenditures capitalized 46,012,022 Interest capitalized 1,550,687 Bond principal paid 13,815,000 Contributions of capital assets 9,734,499 Contributions of intangible assets 1,496,518 Donation of Capital Assets (3,498,920) Loss on disposal of capital assets (237,641) Loss on equity in joint venture (75,073) Net postemployment benefits costs other than pension 2,239 Net accrued performance bonus (223,796) Depreciation (41,792,969) Amortization of intangibles (8,897) Amortization of prepaid bond discount (273,999) Amortization of prepaid bond premium 1,280,257 Net pension expense 7,230,852 Accrued bond interest payable 138,312 Contract receivable from CWI (46,497) Amoritization of prepaid electric (27,522)
Increase in net position - GAAP Basis $ 56,993,721
(A Component Unit of Washington County, Oregon)
STATISTICAL SECTION
CLEAN WATER SERVICES (A Component Unit of Washington County, Oregon)
STATISTICAL SECTION June 30, 2015
73
This part of Clean Water Services’ Comprehensive Annual Financial Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the District’s overall financial health. This section contains the following tables and information:
Financial Trends
These schedules contain trend information to help the reader understand how the District’s financial performance and well-being have changed over time.
Revenue Capacity
These schedules contain trend information to help the reader assess the District’s most significant local revenue source, the District sewer rate.
Debt Capacity
These schedules present information to help the reader assess the affordability of the District’s current levels of outstanding debt and the District’s ability to issue additional debt in the future.
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the environment within which the District’s financial activities take place.
Operating Information
These schedules contain service and infrastructure data to help the reader understand how the information in the District’s financial report relates to the services the District provides and the activities it performs.
Sources
Unless otherwise noted, the information in these schedules is derived from the Comprehensive Annual Financial Reports for the relevant year. The District implemented GASB Statement No. 34 in 2001; schedules presenting government-wide information include information beginning in that year.
FINANCIAL TRENDS
CLEA
N W
ATER
SER
VICE
S (A
Com
pone
nt U
nit o
f Was
hing
ton
Coun
ty, O
rego
n)
Net
Pos
ition
by
Com
pone
ntLa
st T
en F
isca
l Yea
rs
Prim
ary
gove
rnm
ent
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
(as r
esta
ted)
(as r
esta
ted)
Net
inve
stm
ent i
n ca
pita
l ass
ets
$40
6,70
0,47
138
3,71
7,73
7$
391,
885,
915
$38
8,94
1,07
0$
381,
066,
548
$39
0,67
0,16
7$
385,
725,
001
$39
0,80
5,70
3$
357,
300,
700
$32
2,49
1,15
5Re
stric
ted
127,
786,
935
119,
140,
360
96,4
40,9
0068
,909
,370
61,7
75,6
7549
,038
,025
42,1
78,0
0823
,253
,984
27,2
82,6
2156
,394
,449
Unr
estr
icte
d10
3,50
2,57
978
,138
,167
79,6
30,0
9764
,776
,264
54,6
90,3
3149
,053
,092
54,3
31,4
5151
,809
,458
59,1
80,3
3547
,433
,620
Tota
l prim
ary
gove
rnm
ent n
et p
ositi
on$
637,
989,
985
580,
996,
264
$56
7,95
6,91
2$
522,
626,
704
$49
7,53
2,55
4$
488,
761,
284
$48
2,23
4,46
0$
465,
869,
145
$44
3,76
3,65
6$
426,
319,
224
Sour
ce: D
istr
ict f
inan
cial
reco
rds
74
Fisc
al Y
ear
CLEA
N W
ATER
SER
VICE
S (A
Com
pone
nt U
nit o
f Was
hing
ton
Coun
ty, O
rego
n)
Chan
ges i
n N
et P
ositi
onLa
st T
en F
isca
l Yea
rs
Fisc
al
Year
Ope
ratin
g Re
venu
esO
pera
ting
Expe
nses
Ope
ratin
g In
com
e
Tota
l N
onop
erat
ing
Reve
nues
/ (E
xpen
ses)
Inco
me/
(Los
s)
befo
re C
apita
l Co
ntrib
utio
nsCa
pita
l Co
ntrib
utio
nsCh
ange
in N
et
Posi
tion
2015
$12
5,44
8,79
7$
89,6
18,4
08$
35,8
30,3
89$
(11,
339,
290)
$24
,491
,099
$32
,502
,622
$56
,993
,721
2014
120,
174,
299
96,2
80,6
4223
,893
,657
(14,
651,
481)
9,24
2,17
628
,309
,974
37,5
52,1
5020
1311
7,09
8,32
194
,068
,352
23,0
29,9
69(1
4,42
0,16
6)8,
609,
803
36,7
20,4
0545
,330
,208
2012
107,
029,
050
90,5
54,0
1416
,475
,036
(6,5
98,3
45)
9,87
6,69
115
,217
,459
25,0
94,1
5020
1110
3,37
3,53
589
,766
,997
13,6
06,5
38(1
4,08
7,71
5)(4
81,1
77)
9,25
2,44
78,
771,
270
2010
96,3
29,0
8088
,092
,976
8,23
6,10
4(7
,809
,866
)42
6,23
86,
100,
586
6,52
6,82
4
75
2009
89,5
84,5
5582
,966
,612
6,61
7,94
3(6
,014
,792
)60
3,15
115
,762
,164
16,3
65,3
1520
0884
,753
,809
78,2
82,3
006,
471,
509
(6,0
36,8
86)
434,
623
21,6
70,8
6622
,105
,489
2007
81,6
52,0
8674
,018
,632
7,63
3,45
4(5
,780
,687
)1,
852,
767
17,5
27,0
7619
,379
,843
2006
77,6
17,0
4270
,575
,112
7,04
1,93
0(6
,005
,316
)1,
036,
614
17,4
63,7
1918
,500
,333
Sour
ce: D
istric
t fin
anci
al re
cord
s
CLEA
N W
ATER
SER
VICE
S (A
Com
pone
nt U
nit o
f Was
hing
ton
Coun
ty, O
rego
n)
Ope
ratin
g Re
venu
es b
y So
urce
Last
Ten
Fis
cal Y
ears
Fisc
al Y
ear
Serv
ice
Fees
Oth
erSu
btot
alSe
rvic
e Fe
esO
ther
Subt
otal
Dist
rict T
otal
2015
$10
7,65
8,77
7$
4,98
0,14
0$
112,
638,
917
$11
,853
,799
$95
6,08
1$
12,8
09,8
80$
125,
448,
797
2014
102,
996,
729
5,68
0,91
410
8,67
7,64
310
,689
,684
806,
972
11,4
96,6
5612
0,17
4,29
920
1310
0,51
9,13
46,
084,
818
106,
603,
952
9,78
6,43
070
7,93
910
,494
,369
117,
098,
321
2012
92,4
98,3
595,
031,
139
97,5
29,4
988,
759,
882
739,
670
9,49
9,55
210
7,02
9,05
020
1190
,102
,698
4,75
1,45
694
,854
,154
7,90
0,10
861
9,27
38,
519,
381
103,
373,
535
2010
85,9
56,6
602,
612,
125
88,5
68,7
857,
137,
108
623,
187
7,76
0,29
596
,329
,080
2009
80,4
39,2
841,
752,
735
82,1
92,0
196,
623,
154
769,
382
7,39
2,53
689
,584
,555
76
2008
76,2
46,3
571,
049,
813
77,2
96,1
706,
803,
780
653,
859
7,45
7,63
984
,753
,809
2007
71,5
64,6
702,
290,
158
73,8
54,8
286,
958,
589
838,
669
7,79
7,25
881
,652
,085
2006
68,3
79,6
301,
515,
735
69,8
95,3
656,
836,
082
885,
595
7,72
1,67
777
,617
,043
Sour
ce: D
istric
t fin
anci
al re
cord
sSani
tary
Sew
er F
unds
Stor
m/S
urfa
ce W
ater
Man
agem
ent F
unds
CLEA
N W
ATER
SER
VICE
S (A
Com
pone
nt U
nit o
f Was
hing
ton
Coun
ty, O
rego
n)
Ope
ratin
g Ex
pens
esLa
st T
en F
isca
l Yea
rs
Fisc
al
Year
Labo
r &
Bene
fits
Util
ities
Prof
essi
onal
Se
rvic
esCh
emic
als
Oth
er
Ope
ratin
g Ex
pens
es(1
)
Subt
otal
, be
fore
De
prec
iatio
n/Am
ortiz
atio
nDe
prec
iatio
n/Am
ortiz
atio
nTo
tal O
pera
ting
Expe
nses
2015
$23
,465
,196
$4,
546,
965
$8,
570,
149
$3,
682,
534
$7,
551,
698
$47
,816
,542
$41
,801
,866
$89
,618
,408
2014
30,0
75,1
635,
086,
259
9,07
2,82
43,
761,
027
7,73
9,70
955
,734
,982
40,5
45,6
6096
,280
,642
2013
29,8
44,6
954,
738,
941
7,94
3,52
43,
607,
150
8,08
9,57
454
,223
,884
39,8
44,4
6894
,068
,352
2012
29,9
97,5
094,
775,
989
7,54
7,52
63,
274,
779
7,67
7,18
853
,272
,991
37,2
81,0
2390
,554
,014
2011
29,2
37,2
124,
648,
207
7,74
6,57
53,
062,
877
7,11
9,11
251
,813
,983
37,9
53,0
1489
,766
,997
2010
28,5
74,2
944,
751,
022
8,28
8,03
23,
161,
181
7,95
3,64
252
,728
,171
35,3
64,8
0588
,092
,976
2009
27,7
11,8
384,
633,
182
7,73
5,52
63,
018,
492
7,19
7,13
450
,296
,172
32,6
70,4
4082
,966
,612
77
2008
24,5
73,2
185,
032,
352
7,18
5,84
92,
803,
784
7,26
1,23
346
,856
,436
31,4
25,8
6478
,282
,300
2007
22,9
37,5
044,
581,
058
7,09
3,83
62,
331,
916
6,32
9,67
043
,273
,985
30,7
44,6
4874
,018
,633
2006
21,9
00,0
824,
151,
257
6,15
8,02
62,
255,
501
5,23
7,36
839
,702
,233
30,8
72,8
7870
,575
,111
(1) O
ther
Ope
ratin
g Ex
pens
es in
clud
e su
pplie
s, a
dmin
istra
tive
cost
s, re
pairs
and
mai
nten
ance
, ins
uran
ce a
nd a
mor
tizat
ion
of p
repa
id b
ond
cost
s.
Sour
ce: D
istric
t fin
anci
al re
cord
s
CLEA
N W
ATER
SER
VICE
S (A
Com
pone
nt U
nit o
f Was
hing
ton
Coun
ty, O
rego
n)
Non
oper
atin
g Re
venu
es a
nd E
xpen
ses
Last
Ten
Fis
cal Y
ears
Fisc
al
Year
Inve
stm
ent
Inco
me
Gai
n/Lo
ss o
n di
spos
al o
f as
sets
Oth
erIn
tere
st
Expe
nse
Tota
l N
onop
erat
ing
Expe
nses
2015
$1,
847,
402
$(7
6,24
2)$
(3,5
33,5
67)
$(9
,576
,883
)$
(11,
339,
290)
2014
1,65
3,02
9(1
,880
,762
)(5
,194
,139
)(9
,229
,609
)(1
4,65
1,48
1)20
1351
7,15
1(3
,773
,629
)(2
,922
,353
)(8
,241
,335
)(1
4,42
0,16
6)20
121,
562,
181
(115
,549
)(9
94,7
50)
(7,0
50,2
27)
(6,5
98,3
45)
2011
1,49
7,43
354
,443
(4,4
64,3
23)
(11,
175,
268)
(14,
087,
715)
2010
1,38
6,56
732
,256
(70,
163)
(9,1
58,5
26)
(7,8
09,8
66)
2009
2,29
1,29
975
,584
(70,
066)
(8,3
11,6
09)
(6,0
14,7
92)
78
2008
3,08
2,02
1(5
36)
(81,
703)
(9,0
36,6
68)
(6,0
36,8
86)
2007
4,64
2,64
3(3
42,0
09)
98,9
10(1
0,18
0,23
1)(5
,780
,687
)20
063,
323,
195
1,55
5,03
513
0,02
3(1
1,01
3,56
9)(6
,005
,316
)
Sour
ce: D
istric
t fin
anci
al re
cord
s
REVENUE CAPACITY
CLEA
N W
ATER
SER
VICE
S (A
Com
pone
nt U
nit o
f Was
hing
ton
Coun
ty, O
rego
n)
Mon
thly
Sew
er a
nd S
torm
/Sur
face
Wat
er R
ates
Last
Ten
Fis
cal Y
ears
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
Sew
er R
ates
Re
side
ntia
l Cus
tom
ers
Base
Cha
rge
$25
.85
$25
.10
$24
.37
$23
.52
$22
.46
$21
.30
$20
.12
$19
.14
$18
.46
$17
.81
(p
er E
quiv
alen
t Dw
ellin
g U
nit)
Usa
ge C
harg
e $
1.72
$1.
67
$1.
62
$1.
56
$1.
50
$1.
42
$1.
35
$1.
31
$1.
27
$1.
23
(p
er C
CF =
748
gal
lons
)
Tota
l Ave
rage
Mon
thly
Cha
rge
$39
.61
$
38.4
6
$37
.33
$
36.0
0
$34
.46
$
32.6
6
$30
.95
$
29.6
2
$28
.62
$
27.6
5
(a
t 8,0
00 g
allo
ns a
vera
ge)
In
dust
rial C
usto
mer
sU
sage
Cha
rge
$2.
900
$2.
820
$2.
740
$2.
640
$2.
530
$2.
400
$2.
273
$2.
175
$2.
101
$2.
030
(per
100
cu.
ft. o
f met
ered
disc
harg
e)
Chem
ical
Oxy
gen
Dem
and
Char
ge$
0.14
9
$
0.14
5
$
0.14
1
$
0.13
6
$
0.13
0
$
0.12
3
$
0.11
7
$
0.11
2
$
0.10
8
$
0.10
4
(p
er p
ound
ove
r 800
mg/
L)
Susp
ende
d So
lids C
harg
e$
0.22
8
$
0.22
1
$
0.21
5
$
0.19
9
$
0.19
0
$
0.19
0
$
0.18
0
$
0.17
2
$
0.16
6
$
0.16
0
(p
er p
ound
ove
r 400
mg/
L)
Surf
ace
/ St
orm
Wat
er R
ates
Serv
ice
Char
ge
$6.
75$
6.25
$
5.75
$
5.25
$
4.75
$
4.25
$
4.00
$
4.00
$
4.00
$
4.00
(p
er E
quiv
alen
t Ser
vice
Uni
t)
The
Dist
rict's
Boa
rd o
f Dire
ctor
s is a
utho
rized
und
er st
ate
stat
ute
to fi
x fe
es a
nd c
harg
es fo
r con
nect
ion
to a
nd u
se o
fth
e pu
blic
sew
er sy
stem
by
prop
ertie
s tha
t are
serv
ed b
y, o
r are
cap
able
of b
eing
serv
ed b
y th
e Di
stric
t's se
wag
edi
spos
al sy
stem
.
Sour
ce:
Dist
rict r
ecor
ds
79
Fisc
al Y
ear
CLEA
N W
ATER
SER
VICE
S (A
Com
pone
nt U
nit o
f Was
hing
ton
Coun
ty, O
rego
n)
Syst
em D
evel
opm
ent C
harg
es a
nd R
even
ues
Last
Ten
Fis
cal Y
ears
Fisc
al y
ear
Perc
ent
Perc
ent
Perc
ent
ende
dCo
nnec
tion
Tota
lin
crea
seCo
nnec
tion
Tota
lin
crea
seCo
nnec
tion
Tota
lin
crea
seJu
ne 3
0fe
eam
ount
(dec
reas
e)fe
eam
ount
(dec
reas
e)fe
eam
ount
(dec
reas
e)
2015
$50
0$
304,
290
51.9
1%
$4,
900
$18
,658
,680
(10.
85)
%$
5,40
0$
18,9
62,9
70(1
0.26
)%
2014
500
200,
315
16.0
94,
800
20,9
30,1
15(3
3.87
)5,
300
21,1
30,4
30(3
3.60
)20
1350
017
2,55
87.
004,
665
31,6
49,9
8517
1.17
5,16
531
,822
,543
168.
9320
1250
016
1,26
957
.76
4,50
011
,671
,613
61.0
95,
000
11,8
32,8
8261
.04
2011
500
102,
221
(1.8
9)4,
100
7,24
5,46
2(2
0.65
)4,
600
7,34
7,68
3(2
0.44
)20
1050
010
4,19
318
.46
3,60
09,
131,
098
20.2
94,
100
9,23
5,29
120
.26
2009
500
87,9
57(6
7.12
)3,
100
7,59
1,18
5(3
.52)
3,60
07,
679,
142
(5.6
1)20
0850
026
7,52
7(2
.55)
2,80
07,
868,
133
(8.1
6)3,
300
8,13
5,66
0(7
.99)
2007
500
274,
522
(9.8
0)2,
700
8,56
7,66
2(2
6.16
)3,
200
8,84
2,18
4(2
5.74
)20
06 (1
)50
030
4,33
6(3
6.41
)2,
600
11,6
02,4
94(2
2.22
)3,
100
11,9
06,8
30(2
2.66
)
(1) A
s res
tate
d
Sour
ce:
Dist
rict r
ecor
ds
80
Stor
m/S
urfa
ce W
ater
Man
agem
ent
Sani
tary
Sew
erCo
mbi
ned
CLEA
N W
ATER
SER
VICE
S(A
Com
pone
nt U
nit o
f Was
hing
ton
Coun
ty, O
rego
n)
Ten
Larg
est I
ndiv
idua
l Rat
epay
ers
Curr
ent Y
ear a
nd T
en Y
ears
Ago
Cust
omer
Amou
nt%
Cust
omer
Amou
nt%
Inte
l Cor
pora
tion
- Ron
ler A
cres
Cam
pus
$
7,
335,
213
6.14
%In
tel C
orpo
ratio
n - R
onle
r Acr
es $
2,8
46,0
56
3.78
%In
tel C
orpo
ratio
n - A
loha
Cam
pus
775,
754
0.65
%Re
sers
Fin
e Fo
ods -
Jenk
ins R
d41
7,76
6 0.
56%
Max
im In
tegr
ated
Pro
duct
s70
8,90
7 0.
59%
Max
im In
tegr
ated
Pro
duct
s40
6,84
6 0.
54%
Rese
rs F
ine
Food
s - Je
nkin
s Rd
685,
707
0.57
%Be
aver
ton
Scho
ol D
istric
t34
0,58
4 0.
45%
Paci
fic F
oods
of O
rego
n65
1,16
2 0.
54%
Inte
grat
ed D
evic
e Te
chno
logy
, Inc
.31
5,71
4 0.
42%
Sola
rWor
ld In
dust
ries A
mer
ica
Inc.
515,
008
0.43
%Pr
ovid
ence
St.
Vinc
ent
220,
260
0.29
%Jir
eh S
emic
ondu
ctor
, Inc
.42
0,18
9 0.
35%
Mer
ix C
orpo
ratio
n - P
opla
r Lan
e20
8,39
2
0.28
%Vi
asys
tem
s Tec
hnol
ogie
s Cor
p.22
3,36
5 0.
19%
Paci
fic F
oods
of O
rego
n16
5,97
0 0.
22%
Hills
boro
Lan
dfill
, Inc
.15
4,23
5 0.
13%
Ceda
r Mill
Cro
ssin
g Ap
ts.
129,
087
0.17
%Tr
iqui
nt S
emic
ondu
ctor
154,
095
0.13
%Gr
ay a
nd C
ompa
ny12
4,94
5 0.
17%
Subt
otal
(10
larg
est i
ndus
tria
l rat
epay
ers)
11,
623,
635
9.73
%Su
btot
al (1
0 la
rges
t ind
ustr
ial r
atep
ayer
s)5,
175,
620
6.88
%
Bala
nce
from
oth
er c
usto
mer
s(1)
1
07,8
88,9
41
90.2
7%Ba
lanc
e fr
om o
ther
cus
tom
ers(1
)
70,0
40,0
92
93.1
2%
Gran
d To
tals
$
1
19,5
12,5
76
100.
00%
Gran
d To
tals
$
75
,215
,712
10
0.00
%
(1)
Incl
udes
Res
iden
tial C
usto
mer
s and
Who
lesa
le C
usto
mer
s (ot
her c
ities
).
Sour
ce:
Dist
rict f
inan
cial
reco
rds
Fisc
al Y
ear 2
015
Fisc
al Y
ear 2
006
81
DEBT CAPACITY
CLEA
N W
ATER
SER
VICE
S(A
Com
pone
nt U
nit o
f Was
hing
ton
Coun
ty, O
rego
n)
Ratio
s of O
utst
andi
ng D
ebt b
y Ty
peLa
st T
en F
isca
l Yea
rs
Fisc
al y
ear
Gen
eral
Banc
roft
As a
Sha
reen
ded
Obl
igat
ion
Impr
ovem
ent
Reve
nue
Pens
ion
Per
of P
erso
nal
June
30
Bond
sBo
nds
Bond
sBo
nds
Cont
ract
sAm
ount
Capi
taIn
com
e20
15$
- $
- $
223,
695,
000
$
14,4
80,0
00
$-
$23
8,17
5,00
0
$42
5
N/A
2014
- -
237,
105,
000
14
,885
,000
-
251,
990,
000
45
7
1.02
%20
13-
- 25
0,04
5,00
0
15,2
15,0
00
- 26
5,26
0,00
0
489
1.
10%
2012
- -
272,
385,
000
15
,480
,000
-
287,
865,
000
53
7
1.26
%20
11-
- 24
8,16
0,00
0
15,6
85,0
00
- 26
3,84
5,00
0
497
1.
24%
2010
- -
268,
425,
000
15
,835
,000
-
284,
260,
000
53
7
1.37
%20
09-
- 18
8,44
5,00
0
15,9
35,0
00
- 20
4,38
0,00
0
393
0.
96%
2008
- -
147,
830,
000
15
,990
,000
-
163,
820,
000
32
1
0.80
%20
07-
- 16
5,20
5,00
0
15,9
90,0
00
196,
282
18
1,39
1,28
2
362
0.
95%
2006
- -
181,
880,
000
15
,990
,000
38
5,86
5
198,
255,
865
40
5
1.12
%
N/A
- In
form
atio
n no
t ava
ilabl
e as
of p
rintin
g
Sour
ce: D
istric
t fin
anci
al re
cord
s, P
ortla
nd S
tate
Pop
ulat
ion
Rese
arch
Cen
ter,
and
Bure
au o
f Eco
nom
ic A
naly
sis
Tota
l
82
CLEA
N W
ATER
SER
VICE
S(A
Com
pone
nt U
nit o
f Was
hing
ton
Coun
ty, O
rego
n)
Pled
ged-
Reve
nue
Cove
rage
Last
Ten
Fis
cal Y
ears
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
OPE
RATI
NG
REVE
NU
ES(1
) : R
ate
reve
nue
$
107,
658,
777
$
10
2,99
6,72
9
$
100,
519,
134
$
92
,498
,359
$
90,1
02,6
98
$
85
,956
,660
$
80,4
39,2
84
$
76
,246
,357
$
71
,564
,670
$
68
,379
,630
Sys
tem
dev
elop
men
t cha
rges
18,6
58,6
80
20
,930
,115
31,6
49,9
85
11
,671
,613
7,24
5,46
2
9,
131,
098
7,59
1,18
7
7,
868,
133
8,56
7,73
8
11
,681
,298
Oth
er re
venu
e3,
375,
150
3,93
5,53
4
2,
660,
567
1,65
6,81
5
2,
219,
722
1,58
1,27
8
1,
453,
554
1,00
9,19
4
1,
865,
116
1,29
0,86
1
To
tal O
pera
ting
reve
nues
129,
692,
607
12
7,86
2,37
8
134,
829,
686
10
5,82
6,78
7
99,5
67,8
82
96
,669
,036
89,4
84,0
25
85
,123
,684
81
,997
,524
81
,351
,789
OPE
RATI
NG
EXPE
NSE
S(1) :
Lab
or a
nd fr
inge
ben
efits
18,5
57,2
26
25
,240
,700
24,9
58,0
15
24
,860
,163
23,5
57,9
17
23
,104
,049
23,6
17,0
07
20
,810
,508
19
,885
,823
18
,881
,855
Util
ities
4,39
1,29
4
4,
961,
727
4,58
8,51
7
4,
610,
517
4,50
7,90
6
4,
603,
445
4,48
7,20
4
4,
917,
736
4,48
0,36
2
4,
063,
985
Pro
fess
iona
l ser
vice
s7,
488,
054
7,98
2,17
9
7,
007,
149
6,50
4,01
4
6,
591,
481
6,84
8,29
5
6,
010,
866
6,34
4,71
9
6,
569,
665
4,57
5,40
6
S
uppl
ies
3,62
7,71
7
3,
745,
608
4,11
1,53
6
3,
584,
252
3,09
9,88
7
3,
610,
806
3,73
6,09
3
3,
749,
776
2,48
6,24
7
2,
012,
162
Adm
inist
rativ
e co
sts
1,59
7,19
8
1,
588,
969
1,36
5,53
6
1,
266,
169
1,21
6,90
5
1,
264,
781
1,45
1,81
8
1,
365,
570
2,06
5,49
7
1,
618,
274
Rep
air a
nd m
aint
enan
ce29
2,12
9
39
3,19
3
45
4,72
7
41
5,94
6
27
8,91
2
34
9,03
2
18
7,26
5
15
6,21
4
94,2
61
13
7,24
6
Ins
uran
ce75
8,03
0
71
0,44
8
57
5,89
9
58
4,02
7
53
7,17
8
61
8,00
5
71
4,41
7
66
5,87
8
654,
102
52
5,06
8
Che
mic
als
3,66
7,49
7
3,
748,
437
3,59
3,94
8
3,
269,
986
3,06
1,66
0
3,
155,
413
3,01
1,12
8
2,
794,
825
2,32
4,55
4
2,
255,
501
Tota
l ope
ratin
g ex
pens
es40
,379
,145
48,3
71,2
61
46
,655
,327
45,0
95,0
74
42
,851
,846
43,5
53,8
26
43
,215
,798
40,8
05,2
26
38,5
60,5
11
34,0
69,4
98
Net
ope
ratin
g in
com
e89
,313
,462
79,4
91,1
17
88
,174
,359
60,7
31,7
13
56
,716
,036
53,1
15,2
10
46
,268
,227
44,3
18,4
58
43,4
37,0
13
47,2
82,2
91
NO
NO
PERA
TIN
G IN
COM
E (E
XPEN
SE)(1
) : I
nter
est i
ncom
e1,
814,
026
1,59
5,79
1
50
6,96
4
1,
523,
061
1,44
5,82
2
1,
324,
665
1,91
7,02
3
2,
334,
393
3,73
1,95
6
2,
705,
026
Oth
er in
com
e (e
xpen
se)
(101
,192
)
(1,5
85,8
58)
(3,6
95,8
22)
19,3
56
54
,443
45,1
58
59
,480
- 21
,489
- To
tal n
onop
erat
ing
inco
me
1,71
2,83
4
9,
933
(3
,188
,858
)
1,
542,
417
1,50
0,26
5
1,
369,
823
1,97
6,50
3
2,
334,
393
3,75
3,44
5
2,
705,
026
Tota
l ava
ilabl
e fo
r deb
t sev
ice
$
91,0
26,2
96
$
79
,501
,050
$
84,9
85,5
01
$
62
,274
,130
$
58,2
16,3
01
$
54
,485
,033
$
48,2
44,7
30
$
46
,652
,851
$
47
,190
,458
$
49
,987
,318
DEBT
SER
VICE
SEN
IOR
BON
DS
199
2 Re
venu
e Bo
nds-
Serie
s A $
-
$
- $
-
$
- $
-
$
- $
3,
093,
000
$
7,77
6,00
0
$
2,
322,
212
$
7,46
8,42
5
199
6 Re
venu
e Bo
nds-
Serie
s 199
6-
- -
- -
- 2,
620,
152
2,61
5,93
0
2,
619,
305
2,61
5,83
3
199
7 Re
venu
e Bo
nds-
Serie
s A-
- 10
,205
,200
10,1
99,5
00
10
,202
,750
10,2
06,9
63
7,
112,
181
2,42
3,63
1
7,
878,
594
2,73
3,50
0
200
1 Re
venu
e Bo
nds-
Serie
s 200
1-
- -
2,65
4,75
0
4,
393,
600
4,38
5,05
6
4,
377,
488
4,38
3,18
8
4,
382,
688
4,38
3,88
7
200
4 Re
venu
e Bo
nds-
Serie
s 200
43,
961,
800
3,96
1,55
0
3,
952,
800
3,96
6,30
0
3,
958,
614
3,95
3,30
3
1,
336,
177
1,33
1,97
8
1,
332,
577
1,33
3,07
7
200
9 Re
venu
e Bo
nds-
Serie
s 200
9A5,
339,
713
5,34
0,23
8
2,
843,
263
2,84
3,26
3
2,
843,
263
2,89
0,65
0
-
- -
-
201
0 Re
venu
e Bo
nds-
Serie
s 201
0A3,
163,
475
3,14
9,95
0
35
6,95
0
35
6,95
0
33
0,17
9
-
- -
- -
2
010
Reve
nue
Bond
s-Se
ries 2
010B
4,79
1,82
3
4,
791,
823
4,79
1,82
3
4,
791,
823
4,43
2,43
7
-
- -
- -
2
011
Reve
nue
Bond
s-Se
ries 2
011A
3,83
5,75
0
3,
877,
650
3,76
7,85
0
79
4,58
8
-
- -
- -
-
201
1 Re
venu
e Bo
nds-
Serie
s 201
1B3,
691,
900
3,69
3,08
7
2,
058,
775
1,20
0,95
2
-
- -
- -
-
Tota
l Sen
ior D
ebt S
ervi
ce $
24
,784
,461
$
24,8
14,2
98
$
27
,976
,661
$
26,8
08,1
26
$
26
,160
,843
$
21,4
35,9
72
$
18
,538
,998
$
18,5
30,7
27
$
18,5
35,3
76
$
18,5
34,7
22
Seni
or D
ebt S
ervi
ce C
over
age
3.67
3.20
3.04
2.32
2.23
2.54
2.60
2.52
2.55
2.70
JU
NIO
R BO
NDS
1
997
Rev
enue
Bon
ds-S
erie
s One
$
- $
-
$
7,04
6,93
8
$
7,
049,
888
$
7,05
1,56
3
$
7,
053,
112
$
7,05
0,54
4
$
7,
049,
862
$
7,05
2,21
9
$
7,
053,
025
Tota
l Jun
ior D
ebt S
ervi
ce $
-
- $
7,
046,
938
$
7,04
9,88
8
$
7,
051,
563
$
7,05
3,11
2
$
7,
050,
544
$
7,04
9,86
2
$
7,
052,
219
$
7,05
3,02
5
Ju
nior
Deb
t Ser
vice
Cov
erag
e0.
000.
007.
304.
273.
804.
083.
693.
463.
543.
93
(1) A
s def
ined
in R
esol
utio
ns a
nd O
rder
s No.
87-
53, 8
9-58
, 92-
55, a
nd 0
9-7.
Rev
enue
s and
exp
ense
s rep
orte
d ar
e fo
r San
itary
Sew
er
ac
tiviti
es o
nly.
Sour
ce: D
istric
t rec
ords
83
DEMOGRAPHICS AND ECONOMICS
84
CLEAN WATER SERVICES(A Component Unit of Washington County, Oregon)
Demographic StatisticsLast Ten Fiscal Years
Fiscal year Personalended Population income Per capita Unemployment
June 30 (estimated) (in thousands) income rate2015 560,465 N/A N/A 5.0%2014 550,990 24,839,911$ 44,757$ 5.8%2013 542,845 24,320,584 44,418 6.5%2012 536,370 22,973,448 42,585 7.2%2011 531,070 21,288,161 40,065 7.9%2010 529,710 20,508,708 39,087 9.0%2009 519,925 21,121,197 40,947 10.3%2008 511,075 20,301,335 39,897 5.0%2007 500,585 19,141,094 38,113 4.4%2006 489,785 17,660,623 35,985 4.5%
N/A - Information not available as of printing
Source - Portland State Population Research Center, Bureau of Economic Analysis, and Oregon Employment Department
85
CLEAN WATER SERVICES(A Component Unit of Washington County, Oregon)
Major Employment Industries in Washington CountyCurrent Year and Ten Years Ago
% of Total % of TotalManufacturing:
Wood and Lumber 1,047 1,664Metals 3,024 3,071Food 1,791 1,608Rubber/Plastic 1,650 2,232Computer and Electronic Equipment/Instruments 26,826 28,036Machinery 4,017 3,505Other 6,790 7,847
Total Manufacturing 45,145 17% 47,963 19%Trade, Transportation, and Utilities:
Wholesale Trade 12,757 17,602Retail Trade 30,177 29,090Transportation and Utilities 4,214 4,194
Total Trade, Transportation, and Utilities 47,148 18% 50,886 21%Information:
Publishing 3,169 3,681Telecommunications 2,120 2,032Other (broadcasting, ISP's, etc.) 2,180 1,629
Total Information 7,469 3% 7,342 3%Financial Activities:
Finance and Insurance 10,908 10,866Real Estate 3,230 3,867
Total Financial Activities 14,138 5% 14,733 6%Professional and Business Services 49,995 19% 34,282 14%Construction 13,322 5% 15,298 6%Educational Services 4,912 2% 4,662 2%Healthcare and Social Assistance 26,798 10% 19,655 8%Leisure and Hospitality 22,502 9% 19,424 8%Other Services (agriculture, repairs, private homes, misc.) 11,737 4% 11,439 5%Government (federal, state, and local) 21,789 8% 20,339 8%
TOTAL EMPLOYMENT 264,955 100% 246,023 100%
* Fiscal Year 2015 information includes data through 12/31/14
Source: Oregon Employment Department Labor Market Information System (OLMIS)
Annual Average 2015 * 2006
Annual Average
OPERATING
CLEA
N W
ATER
SER
VICE
S (A
Com
pone
nt U
nit o
f Was
hing
ton
Coun
ty, O
rego
n)Ad
min
istr
ativ
e, S
uppo
rt a
nd O
pera
tiona
l Sta
ff F
TELa
st T
en F
isca
l Yea
rs
Fisc
al y
ear
ende
dJu
ne 3
0N
umbe
rPe
rcen
tN
umbe
rPe
rcen
tN
umbe
rPe
rcen
tN
umbe
rPe
rcen
tN
umbe
rPe
rcen
t
2015
3611
%49
15%
191
60%
4414
%32
010
0%20
1435
11%
5016
%18
760
%41
13%
313
100%
2013
3110
%57
18%
192
61%
3210
%31
210
0%20
1234
11%
5217
%18
157
%49
15%
316
100%
2011
4013
%53
17%
175
55%
4815
%31
610
0%20
1042
13%
4915
%17
856
%49
16%
319
100%
2009
4213
%49
15%
178
56%
4916
%31
910
0%20
0838
12%
4916
%17
256
%48
16%
308
100%
2007
3411
%49
16%
164
54%
5418
%30
110
0%20
0644
15%
5819
%15
251
%44
15%
298
100%
Sour
ce:
Dist
rict r
ecor
ds
86
Adm
inis
trat
ive
staf
fTo
tal s
taff
Supp
ort s
taff
Ope
ratio
ns st
aff
Capi
tal s
taff
CLEA
N W
ATER
SER
VICE
S (A
Com
pone
nt U
nit o
f Was
hing
ton
Coun
ty, O
rego
n)
Sum
mar
y of
Tre
atm
ent P
lant
Cap
aciti
esFi
scal
Yea
r End
ing
June
30,
201
5
Annu
alAv
erag
eD
ry w
eath
erAv
erag
eW
et w
eath
erav
erag
edr
y w
eath
erde
sign
wet
wea
ther
desi
gnPe
ak d
ayPe
ak d
esig
nflo
w (M
GD
)flo
w (M
GD
)ca
paci
ty (M
GD
)1
flow
(MG
D)
capa
city
(MG
D)
1flo
w (M
GD
)flo
w (M
GD
)2
Durh
am21
.8
19
.1
33
.0
24
.4
49
.0
55
.1
14
0.0
Rock
Cre
ek33
.6
28
.5
45
.0
32
.8
70
.0
83
.8
15
0.0
Fore
st G
rove
3.8
2.
5
—
5.
2
20.0
20.3
20.0
Hills
boro
4.1
3.
2
—
5.
1
20.0
15.0
20.0
Dist
rict t
otal
s63
.3
53
.3
78
.0
67
.5
15
9.0
17
4.2
33
0.0
MG
D –
Mill
ion
Gal
lons
Per
Day
1Th
e de
sign
capa
city
stat
istic
s rep
ort s
yste
m fl
ows t
hat a
re tr
eate
d in
the
plan
ts a
nd re
flect
per
mit
requ
irem
ents
bas
ed o
n th
e tim
e of
the
year
.Th
e Di
stric
t ope
rate
s und
er se
para
te p
erm
its fo
r the
dry
wea
ther
and
wet
wea
ther
seas
ons.
The
dry
wea
ther
seas
on h
as m
ore
rest
rictiv
e pe
rmit
requ
irem
ents
and
requ
ires h
ighe
r qua
lity
trea
tmen
t of f
low
s. T
his r
esul
ts in
low
er sy
stem
cap
acity
in d
ry w
eath
er m
onth
s as c
ompa
red
to w
et w
eath
erca
paci
ty.
The
Fore
st G
rove
and
Hill
sbor
o tr
eatm
ent p
lant
s are
clo
sed
and
non-
perm
itted
dur
ing
the
dry
wea
ther
seas
on a
nd fl
ows a
re d
iver
ted
toRo
ck C
reek
.2
The
peak
des
ign
flow
refle
cts m
axim
um h
ydra
ulic
flow
thro
ugh
the
plan
ts.
Thes
e flo
ws m
ay n
ot b
e fu
lly tr
eate
d.
Sour
ce-D
istric
t rec
ords
Plan
t
87
CLEA
N W
ATER
SER
VICE
S(A
Com
pone
nt U
nit o
f Was
hing
ton
Coun
ty, O
rego
n)
Ope
ratin
g an
d Ca
pita
l Ind
icat
ors
Last
Ten
Fis
cal Y
ears
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
Was
tew
ater
Tre
atm
ent
Num
ber o
f Tre
atm
ent P
lant
s4
44
44
44
44
4N
umbe
r of P
ump
Stat
ions
4040
4041
4141
4040
3939
Dry
Wea
ther
Des
ign
Capa
city
(MG
D)78
7875
7571
.371
.371
.371
.370
.269
Aver
age
Dry
Wea
ther
Flo
w (M
GD)
53.3
55.5
56.3
54.1
56.4
56.7
51.9
53.1
51.3
51.4
Unu
sed
capa
city
(mill
ions
of g
allo
ns)
2523
1921
1515
1918
1918
Perc
enta
ge o
f cap
acity
util
ized
68%
71%
75%
72%
79%
80%
73%
74%
73%
74%
Conv
eyan
ce S
yste
ms
Num
ber o
f Sys
tem
Dev
elop
men
t per
mits
8478
5934
2544
5492
100
102
Num
ber o
f Con
nect
ions
1,17
61,
033
793
804
640
703
663
1,00
41,
203
1,55
0To
tal m
iles o
f sew
er li
ne83
984
083
283
782
681
179
679
179
077
0To
tal m
iles o
f sto
rm w
ater
line
495
503
491
490
487
474
469
464
453
440
Dis
tric
t-W
ide
Estim
ated
Num
ber o
f EDU
's se
rvic
ed28
5,49
528
1,67
027
7,03
227
1,22
326
9,13
026
7,23
726
4,54
026
1,30
525
8,47
125
4,93
6
Oth
er P
rogr
ams
Rive
r Ran
gers
pro
gram
#
of S
tude
nts
2,02
43,
673
4,25
83,
251
3,78
73,
883
3,72
54,
071
3,11
12,
531
#
of S
choo
ls33
4958
4754
4041
4836
15St
orm
dra
in S
tenc
iling
#
of d
rain
s ste
ncile
d93
610
560
31,
191
1,11
31,
338
1,47
71,
049
2,43
72,
128
N/A
- in
form
atio
n no
t ava
ilabl
eM
GD -
Mill
ion
Gallo
ns P
er D
ayED
U -
Equi
vale
nt D
wel
ling
Uni
t
Sour
ce-D
istric
t Rec
ords
88
Fisc
al Y
ear
COMPLIANCE
REPORT
89
REPORTOFINDEPENDENTAUDITORSONCOMPLIANCEANDINTERNALCONTROLOVERFINANCIALREPORTINGBASEDONANAUDITOFFINANCIAL
STATEMENTSPERFORMEDINACCORDANCEWITHOREGONAUDITINGSTANDARDS
TotheBoardofCommissionersCleanWaterServices(AcomponentunitofWashingtonCounty,Oregon)Hillsboro,OregonWehaveauditedtheaccompanyingfinancialstatementsoftheCleanWaterServices,acomponentunitofWashingtonCounty,Oregon(theDistrict),asofandfortheyearendedJune30,2015,andhaveissuedour report thereon dated December 2, 2015. We conducted our audit in accordance with auditingstandardsgenerallyacceptedintheUnitedStatesofAmerica.Thosestandardsrequirethatweplanandperform the audit to obtain reasonable assurance aboutwhether the financial statements are free ofmaterialmisstatement.ComplianceAspartofobtainingreasonableassuranceaboutwhethertheDistrict’sfinancialstatementsarefreeofmaterial misstatement, we performed tests of its compliance with certain provisions of laws,regulations,contractsandgrants,includingprovisionsofOregonRevisedStatutesasspecifiedinOregonAdministrative Rules (OAR) 162‐010‐000 to 162‐010‐330, as set forth below, noncompliance withwhichcouldhaveadirectandmaterialeffectonthedeterminationoffinancialstatementamounts:
Theaccountingrecordsandrelatedinternalcontroloverfinancialreporting. Theamountandadequacyofcollateralpledgedbydepositoriestosecurethedepositofpublic
funds. Therequirementsrelatingtodebt. Therequirementsrelatingtoinsuranceandfidelitybondcoverage. Theappropriatelaws,rules,andregulationspertainingtoprogramsfundedwhollyorpartially
byothergovernmentalagencies. Thestatutoryrequirementspertainingtotheinvestmentofpublicfunds. Therequirementspertainingtotheawardingofpubliccontractsandtheconstructionofpublic
improvements.
90
REPORTOFINDEPENDENTAUDITORSONCOMPLIANCEANDINTERNALCONTROLOVERFINANCIALREPORTINGBASEDONANAUDITOFFINANCIAL
STATEMENTSPERFORMEDINACCORDANCEWITHOREGONAUDITINGSTANDARDS(continued)
TheresultsofourtestsdisclosednomattersofnoncompliancewiththoseprovisionsthatarerequiredtobereportedunderMinimumStandardsforAuditsofOregonMunicipalCorporations,prescribedbytheSecretaryofState.However,providinganopiniononcompliancewiththoseprovisionswasnotanobjectiveofourauditand,accordingly,wedonotexpresssuchanopinion.InternalControloverFinancialReportingIn planning and performing our audit, we considered the District’s internal control over financialreportingasabasisfordeterminingourauditingproceduresforthepurposeofexpressingouropiniononthefinancialstatements,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheDistrict’s internal control over financial reporting. Accordingly,we do not express an opinion on theeffectivenessoftheDistrict’sinternalcontroloverfinancialreporting.A control deficiency existswhen the design or operation of a control doesnot allowmanagement oremployees, in the normal course of performing their assigned functions, to prevent or detectmisstatements on a timely basis. A significant deficiency is a control deficiency, or combination ofcontroldeficiencies, thatadverselyaffect theDistrict’sability to initiate,authorize, record,process,orreport financial data reliably in accordance with generally accepted accounting principles such thatthereismorethanaremotelikelihoodthatamisstatementoftheDistrict’sfinancialstatementsthatismore than inconsequential will not be prevented or detected by the District’s internal controls. Amaterialweakness isa significantdeficiency,orcombinationof significantdeficiencies, that results inmore than a remote likelihood that a material misstatement of the financial statements will not bepreventedordetectedbytheDistrict’sinternalcontrol.Ourconsiderationoftheinternalcontroloverfinancialreportingwasforthelimitedpurposedescribedin the first paragraph of this section and would not necessarily identify all deficiencies in internalcontrol that might be significant deficiencies or material weaknesses. We did not identify anydeficiencies in internalcontroloverfinancialreportingthatweconsidertobematerialweaknessesasdefinedabove.PurposeofthisReportThis report is intended solely for the informationanduseof theDistrict’smanagement, theBoardofCommissioners,andtheSecretaryofState,DivisionofAuditsoftheStateofOregonandisnotintendedtobeandshouldnotbeusedbyanyoneotherthanthesespecifiedparties.JulieDesimone,PartnerforMossAdamsLLPDecember2,2015
2550 SW Hillsboro HighwayHillsboro, Oregon 97123cleanwaterservices.org