Municipal Service Review and Sphere of Influence Study: Carmel Area Wastewater District

LAFCO of Monterey County _ LOCAL AGENCY FORMATION COMMISSION OF MONTEREY COUNTY 2021 Municipal Service Review and Sphere of Influence Study: Carmel Area Wastewater District Adopted by the Commission on March 22, 2021 (blank page for purposes of two-sided copying) MSR & Sphere of Influence Study: Carmel Area Wastewater District 2 2021 Municipal Service Review and Sphere of Influence Study Carmel Area Wastewater District Carmel Area Wastewater District – At a Glance Formation Date July 8, 1908 Legal Authority Sanitary District Act of 1923 (Health and Safety Code section 6400 et seq.) Board of Directors Five-member Board of Directors, elected at-large to four-year terms Existing: 9.75 square miles / 6,240 acres District Area Proposed (Oct. 2020): 925-acre sphere amendment and annexation Total: 11.3 square miles / 7,215 acres Sphere of Influence 95 acres (Odello site) outside existing and proposed District boundaries Area Approximately 11,000 within existing District boundaries; Population 4,500 Pebble Beach residents contractually served for wastewater treatment; 1,800 residents in proposed annexation area Authorized Powers Wastewater collection and treatment, recycled water distribution Budget (FY 2020-21) $17.6 million Carmel Area Wastewater District is a special district dedicated to protecting the District Mission public health and the environment by cost-effective collection and treatment of wastewater and the return of clean water to the environment. General Manager Barbara Buikema P.O. Box 221428 (3945 Rio Road), Carmel, CA 93922 Contact Information 831-624-1248 Website www.cawd.org Background and Purpose of this Review The purpose of a municipal service review and sphere of influence study, or “MSR,” is to provide a comprehensive analysis for improving efficiency, cost-effectiveness, accountability, and reliability of public services provided by cities and special districts. An MSR evaluates the structure and operation of an agency and discusses possible areas for improvement and coordination. An MSR is used by LAFCO when updating a sphere of influence, and can also be used by the subject agencies when considering changes in their operations. A sphere of influence is defined in State law as a plan for the probable physical boundaries and service area of a local agency, as determined by the LAFCO in the county where the agency is based. The sphere of influence is adopted and amended by LAFCO following a public hearing. This study provides information about the services and boundaries of the Carmel Area Wastewater District. The study is for use by LAFCO in conducting a statutorily required review and update process. The Cortese-Knox-Hertzberg Act requires that the Commission conduct periodic reviews and updates of Spheres of Influence of all cities and districts in Monterey County (Government Code section 56425). The CKH Act also requires LAFCO to conduct a review of municipal services before adopting Sphere updates (Government Code section 56430). The last service review of the District was completed in June 2016. LAFCO of Monterey County 3 Executive Summary The main conclusions of this report are: 1. Carmel Area Wastewater District provides critical wastewater collection, treatment, and reclamation (recycled water) services to residents of Carmel-by-the-Sea and nearby unincorporated areas. 2. CAWD partners with the Pebble Beach Community Services District and the Monterey Peninsula Water Management District to distribute recycled water for landscape irrigation, thereby helping reduce annual water extractions from the Carmel River. 3. The District is currently proposing a 925-acre sphere of influence amendment and concurrent annexation (population approximately 1,800) – please see maps on the following pages. 4. The District has adequate capacity to meet existing and projected future wastewater treatment needs in its existing and proposed boundaries. 5. A primary challenge facing the District is the potential for sea level rise to impact the wastewater treatment plant. Potential options for relocation of the plant are being studied, and reserve funds are being set aside. 6. District finances are stable and responsibly managed. The Board and staff adhere to requirements for accountability, transparency and ethics, and are committed to delivery of high-quality services in a cost-efficient manner. 7. Based on the above conclusions, LAFCO staff recommends approval of the District’s proposed sphere amendment and annexation. District Overview Description of District The Carmel Sanitary District was formed in 1908 to serve the community of Carmel-by-the-Sea, and is one of the oldest sanitary districts in the state. Formation preceded incorporation of the City of Carmel-by-the-Sea by ten years. In 1934, the District was reorganized under the Health and Safety Code District Act of 1923. District boundaries include the City of Carmel-by-the-Sea and surrounding unincorporated areas of Carmel, Carmel Valley, Carmel Meadows, and Carmel Highlands. The District provides collection, treatment and disposal of wastewater for 11,000 people within district boundaries, and treatment and disposal services for an “Pre-2021 expansion” District additional 4,500 people in Del Monte boundaries and sphere. Forest under a contractual agreement Note: LAFCO approved the 925- with Pebble Beach Community acre expansion on 3/22/2021). Services District The District is governed by a five- member board of directors who are elected at large for four-year terms. With a budget of $17.6 million (Fiscal Year 2020-21), the District currently employs 25 full-time and two part- time employees. MSR & Sphere of Influence Study: Carmel Area Wastewater District 4 District Services The District collects wastewater from Carmel and surrounding areas, providing advanced treatment to near drinking water standards. Almost all treated wastewater is sent to Del Monte Forest where it is used to irrigate golf courses such as Pebble Beach, Poppy Hills, and Spanish Bay. The basic components of the District’s wastewater system include: 1. Collection system: Wastewater collections is the conveyance of wastewater from a business or residence to the wastewater treatment plant, using underground pipes and lift stations. 2. Wastewater treatment plant: CAWD’s treatment plant has a permitted capacity of 3.0 million gallons per day (MGD) of dry-weather flow. Current average dry-weather flow is approximately 1.1 MGD, of which approximately two-thirds is from CAWD customers and the remaining one-third is from Pebble Beach connections. After primary, secondary, and disinfection/dechlorination treatment processes, the water is safe enough to discharge to the ocean. However, about 90% of the water is conveyed to the District’s on-site reclamation facility for further (“tertiary”) treatment to allow the water to be reused for irrigating golf courses in Pebble Beach. 3. Reclamation treatment facility (recycled water): The District’s 2008 advanced treatment facility treats the water to an even higher level, using microfiltration and reverse-osmosis membranes to filter out dissolved ions (salts) from the water. The District-owned facility is a part of a larger project including storage and conveyance infrastructure that was created in partnership with the Pebble Beach Community Services District and the Monterey Peninsula Water Management District. The overall reclamation project offsets about 1,000 acre feet per year of potable water that would otherwise be drawn from the Carmel River adjudicated basin. This offset amount represents roughly 10% of the total annual water taken from the Carmel River. Agency Structure Largely mirroring the District’s facilities and the steps in the wastewater collection and treatment process, CAWD’s personnel are organized into the following departments: • Engineering and projects • Collections • Treatment operations • Reclamation • Laboratory (sampling, collection, monitoring, analyzing, and reporting on the quality of the wastewater treatment process) • Source control (permitting and enforcement of regulations that limit the type and amount of pollutants businesses can discharge to the sewer system) LAFCO of Monterey County 5 Proposed Sphere of Influence Amendment and Annexation In October 2020, the District submitted a LAFCO application for a 925-acre sphere amendment and annexation. The proposal area consists mostly of developed sites in the Carmel Valley and Carmel Highlands areas. The proposal’s basic objective is to enable property owners within the proposal area to connect to the District’s sanitary sewer system. Over time, an increase in the number of sewer connections will steadily reduce reliance on individual septic systems, thereby improving groundwater quality in the area. The proposed sphere amendment and annexation consists of four areas, as summarized below. Mid-Carmel Valley (Area 1; 372 parcels): North and south of Carmel Valley Road, between Quail Meadows and the Mid- Valley Shopping Center. Includes Carmel Valley Manor, Valley Hills shopping center and surrounding parcels, Cypress lane, Prado del Sol, and Meadows Road parcels, and an area centered on Schulte Road. Larsen property (Area 2): One single-family parcel, across Highway 1 from Point Lobos State Natural Reserve North Carmel Highlands (Area 3; 68 parcels): Includes 50 parcels in the Corona Road area east of Highway 1, plus 18 parcels on the west side of the highway. South Carmel Highlands (Area 4, 268 parcels): Yankee Point and Otter Cove single-family residential neighborhoods Note: In 2016, LAFCO designated Areas 3 and 4 as a Future Study Area for the District. As defined by Monterey LAFCO’s locally adopted Policies and Procedures, a Future Study Area is “territory outside of an adopted Sphere of Influence that may warrant inclusion in the sphere in future years. Further study would have to be completed prior to inclusion.” No additional areas are currently proposed for inclusion in the District’s sphere. In many cases, designating a sphere beyond the current annexation proposal can be beneficial as an indicator of the District’s future expansion plans. For present purposes, the District has not identified any additional areas (beyond the current proposal) where District services have a reasonable certainty of being feasibly expanded in the foreseeable future. The current sphere amendment and annexation area focused on those areas reasonably close to areas that have planned collection line construction (near a major corridor or where the need for septic system replacement was greatest). Future additional expansion areas in the longer-term will require detailed technical and environmental review. MSR & Sphere of Influence Study: Carmel Area Wastewater District 6 LAFCO of Monterey County 7 Amended Sphere of Influence and District Boundaries (Approved by LAFCO, 3/22/2021) Proposed and Staff-Recommended District boundaries and sphere of influence (current boundaries + proposed 925-acre expansion); Expansion areas shown with red cross-hatching LAFCO approved the proposed 925-acre expansion on 3/22/2021. MSR & Sphere of Influence Study: Carmel Area Wastewater District 8 MSR Determinations – per California Government Code section 56430(a) 1. Population and growth: Carmel Area Wastewater District serves the City of Carmel-by-the-Sea and nearby unincorporated areas. Current in-district population is approximately 11,000. The District’s wastewater treatment plant also contractually provides service to about 4,500 residents within the Pebble Beach Community Services District. County staff estimates that about 1,800 residents live in the proposed annexation area, representing about a 12% increase to the total population already served by the District.. Areas served by the District are generally stable or declining in population. For example, the most recent (2018) adopted regional growth forecast published by the Association of Monterey Bay Area Governments projects essentially no population change for the City of Carmel-by-the-Sea, with a 2020 population of about 3,830 projected to increase to 3,876 by the year 2040. The popularity of Carmel and Pebble Beach residences as vacation homes has removed many dwellings from permanent occupancy. While this trend does not decrease the number of sewer connections, it reduces the full-time occupancy of homes and the corresponding volume of wastewater. 2. Disadvantaged unincorporated communities: State law defines DUCs as communities with an annual median household income of less than 80 percent of the statewide annual median household income. No DUCs exist in the District’s existing or proposed boundaries or sphere. 3. Capacity of facilities; adequacy of public services and infrastructure needs: The District has a strong record of successfully providing essential services to its residents, with no unmet needs identified. The District has sufficient capacity and authorization to serve the proposed expanded Sphere of Influence. The treatment plant’s current permitted capacity is 3.0 million gallons per day (MGD). District staff estimates that the average daily dry weather flow is currently about 1.1 MGD. Assuming roughly similar per-capita wastewater flows from the District’s proposed annexation area, with a 12% total served population increase, District staff estimates that the total daily flow would likely increase to about 2.0 MGD if all of the annexation area’s population were to connect to the District’s sewer system. As a result, the annexation’s buildout would not generate wastewater treatment demand beyond the treatment plant’s permitted or operational capacity. Most of the proposed expansion area is developed, with limited undeveloped or undisturbed parcels. Future development of currently undeveloped parcels in the Carmel Valley and Carmel Highlands annexation areas would mostly be residential uses. Potential future wastewater service to these vacant parcels has been accounted for in the District’s estimation of future wastewater treatment demand. A detailed capital improvement program has been adopted and funded to ensure that the District will continue to provide adequate service. Expanded wastewater lines would be funded by property owners before service is extended. As stated in the District’s current budget message, “The District is facing significant challenges in its future and is attempting to position itself to manage the outcome... Sea Level Rise is likely to affect the treatment facility within the next 30-40 years. As such, the plant must make a decision about its future. Specifically, whether to move the facility into Carmel Valley or to connect with Monterey 1 Water or some other option. The estimate is well over $100M for either option. We recognize that even with a combination of loans and grants the District will need to come up with the local match, or 20-25% of that financial requirement.” LAFCO of Monterey County 9 4. Financial ability: The District has the financial ability to provide services within its existing and proposed boundaries. The District maintains a positive balance of revenues over expenses. CAWD staff budgets its revenues and expenses annually and has developed a detailed capital improvement plan. Financial status is reviewed annually by professionally prepared audits, and consistently receives a “clean” audit report. The District receives funding from a variety of sources, including sewer service fees, treatment fees from Pebble Beach CSD, reimbursement from the reclamation project, property tax revenue, interest income, and funds from the participants in a Highlands-area bond issuance. Wastewater service fees – including fees from wastewater coming from Pebble Beach – account for approximately $9.7 million, or about 55.4% of total budgeted revenues for Fiscal Year 2020-21. Financial reserve funds: The District maintains financial reserves to cover projects and unexpected events. CAWD has a strong commitment to funding operations and projects on a "pay-as-you-go" basis; prior to entering any capital project, District policy is to ensure that the project has all necessary funding available. There are three different categories of reserves: 1. Compensated Accruals Reserve: Funds set aside to fund accrued liability due employees for their vacation leave 2. Capital Reserve: Funds for capital rehabilitation and replacement of the treatment plant and the collection system 3. Defend or Managed Retreat Reserve: Established in 2017 to address the future needs of the District in response to potential sea level rise issues. To be reviewed annually by the Board of Directors with a funding goal of $15 million over 15 years. In Fiscal Year 20-21, $3.6 million, or about 19% of District revenues are coming from reserves. The District is planning to reinvest over $3.6 million in sewer line rehabilitation in the collection system, and over $2.2 million at the wastewater treatment facility for electrical/mechanical rehabilitations. Appendix 1 includes a summary of the District’s annual budget and District assets. Pension-related matters: Like many public agencies, CAWD contracts with the California Public Employees’ Retirement System (CalPERS) for pension and health benefits. CalPERS has a chronic and ongoing unfunded liability; i.e., a gap between CalPERS’s estimated obligations to retirees and the current value of CalPERS assets and investment allocated to those obligations. The overall, CalPERS- MSR & Sphere of Influence Study: Carmel Area Wastewater District 10 wide funding gap is currently approximately $160 billion. This shortfall has, in turn, made it increasingly necessary for local agencies to divert additional funds annually to CalPERS to meet their local agency’s proportionate share of current and future payment obligations. CAWD currently has no unfunded CalPERS pension liability. As of the end of fiscal year 2019-2020 (June 30, 2020), the District reported an “overfunding” – i.e. a surplus of pension plan assets – of just over $1 million. The District is exploring funding an Internal Revenue Service Code Section 115 Trust, with an initial amount of $500,000 from the capital reserve account. A 115 trust is a vehicle for segregating agency funds from general assets for the purpose of funding essential governmental functions. For example, a 115 trust can be used to set aside monies to meet future pension contributions or liabilities. Using a 115 investment trust will allow the District to achieve better investment returns than currently earned at the County of Monterey Treasury and the State Treasurer’s Office Local Agency Investment Fund (LAIF). The District offers a post-employment health plan to meet its employees’ postemployment health care needs and expenses. Under the plan, Nationwide Retirement Solutions Company (NRS) provides administrative services in exchange for a fee as agreed upon by the District and NRS. The plan, which is funded by employee contributions during their employment with CAWD, does not establish a long- term liability of the District. 5. Shared facilities: The District works closely with the Pebble Beach CSD, the City of Carmel-by-the-Sea, the Monterey Peninsula Water Management District, and private entities to achieve mutually beneficial provision of public services. In the longer term, as a potential means of addressing sea level rise impacts to the CAWD treatment plant next to the Carmel River lagoon, the District is studying the possibility of connecting to the Monterey One Water treatment facility, located inland near Marina. The District is exploring the possibility of its treatment plant bridge being included in a future recreation corridor, possibly working in partnership with the Monterey Peninsula Regional Parks District. 6. Accountability for community service needs: A five-member Board of Directors, elected at-large by District voters, governs the District. Regular Board meetings occur once per month at the District’s offices, and are publicly noticed in accordance with Brown Act requirements. Annual financial audits are on-time and up to date, as are Board members’ compliance with periodic financial disclosure and ethics training requirements. The District maintains a very high level of openness and public accountability, including a robust and highly informative web site. 7. Matters required by local LAFCO policies: No additional locally adopted LAFCO policies are specifically relevant to this Study. Sphere of Influence Review and Update Determinations – per Govt. Code section 56425(e) 1. The present and planned land uses in the area, including agricultural and open-space lands The District’s boundaries include mostly residential land uses, as well as some commercial uses and significant open spaces. Most lands within the District’s existing and proposed sphere are already developed. No planned development projects or other changes would significantly affect the context of this review. 2. The present and probable need for public facilities and services in the area District facilities and services respond to an established need for wastewater treatment and recycled water. Expansion of the District’s boundaries will incrementally reduce reliance on individual on-site septic systems in the area. No significant needs for new facilities or services are anticipated in the near term. Longer-term, sea level rise may threaten the District’s treatment plant in its present location. LAFCO of Monterey County 11 3. The present capacity of public facilities and adequacy of public services that the agency provides or is authorized to provide The District has consistently demonstrated capacity to serve its residents. District staff maintains and annually updates a detailed 15-year capital improvement program to proactively plan for, and fund, needed future infrastructure investments. 4. The existence of any social or economic communities of interest in the area if the commission determines that they are relevant to the agency There are no District-relevant social or economic communities of interest in the areas served. 5. Present and probable need for those public facilities and services of any disadvantaged communities within the existing sphere of influence No DUCs exist in the District’s existing or proposed sphere. Acknowledgements LAFCO wishes to thank Carmel Area Wastewater District staff for the time and energy they have put into providing essential information in the preparation of the Service Review. In particular we would like to thank General Manager Barbara Buikema, Principal Engineer Rachél Lather, and the District’s consultant team. Photo credits: Sloane Dell’Orto, page 10; CAWD, all others. Appendix: Carmel Area Wastewater District – Budget Summary and District Assets Provided below are: 1. Adopted fiscal year 2020-21 budget summary (two pages) 2. Statements of Net Position as of June 30, 2020 and 2019 (two pages) 3. Statements of Revenue, Expenses, and Change in Net Position as of June 30, 2020 and 2019 (one page) Sources 1. CAWD staff – District’s web site; personal communications and written communications with LAFCO staff 2. District’s adopted budget for fiscal year 2020-21; 3. Annual Financial Report (“audit”) for Year Ended June 30, 2020, prepared by Marcello and Co., CPAs 4. Initial Study and Mitigated Negative Declaration prepared for CAWD by Denise Duffy and Associates – figures showing proposed SOI/annexation areas 1-4 MSR & Sphere of Influence Study: Carmel Area Wastewater District 12 17 I:\Budget\2021 Budget\2020-21 Operating Budget Workpapers VS -· - - - Equipment Purchases Capital Budget Net Income/(Loss) 5,165,640 2,265,856 227.98% 1,233,450 71.45% 2,807,674 227.63% 3,832,123 36.49% Non Operating Expend. 212,310 213,762 99.32% 211,000 215,625 97.86% 223,689 106.01% 219,632 -1.81% Non Operating Revenues 3,989,136 3,701,631 107.77% 2,627,330 3,341,282 78.63% 3,846,892 146.42% 5,208,195 35.39% Operating Gain/(Loss) 1,388,814 (1,222,013) -113.65% (1,182,881) (1,399,446) 84.52% (815,529) 68.94% (1,156,440) 41.80% Amortization Expense 0 4,860 0.00% 4,860 4,860 100.00% 4,860 100.00% 4,860 0.00% Depreciation Expense 2,489,149 2,669,000 93.26% 2,669,000 2,669,000 100.00% 2,669,000 100.00% 2,669,000 0.00% ( exclusive of depreciation) Operating Gain/(Loss) 3,877,963 1,451,847 267.11% 1,490,979 1,274,414 116.99% 1,858,331 124.64% 1,517,420 -18.35% Total Operating Exp 6,221,406 7,828,146 79.47% 7,580,456 8,613,003 88.01% 8,364,625 110.34% 9,147,870 9.36% Brine Disposal 4,624 0 00 6,138 7,910 77.60% 7,884 128.45% 7,385 -6.33% Waste to Energy 7,775 0 00 28,153 9,108 309.10% 23,583 83.77% 25,290 7.24% Reclamation Project 560,639 457,133 122.64% 606,510 471,938 128.51% 541,645 89.31% 560,413 3.47% Collection 998,209 1,237,424 80.67% 1,335,062 1,705,960 78.26% 1,439,868 107.85% 1,729,543 20.12% Administration 996,166 1,572,510 63.35% 1,261,760 1,686,164 74.83% 1,306,814 103.57% 1,463,995 12.03% Maintenance -Field 47,998 100,625 47.70% 0 0 0 0 00 00 00 Maintenance -Plant 1,158,545 1,691,895 68.48% 1,334,827 1,876,166 71.15% 1,861,996 139.49% 1,914,015 2.79% Treatment 2,447,451 2,768,559 88.40% 3,008,006 2,855,757 105.33% 3,182,836 105.81% 3,447,229 8.31% Op Expend. (less deprec.) 10,099,370 9,279,993 108.83% 9,071,435 9,887,417 91.75% 10,222,956 112.69% 10,665,290 4.33% Operating Revenues 10,099,370 9,279,993 108.83% 9,071,435 9,887,417 91.75% 10,222,956 112.69% 10,665,290 4.33% Beginning Fund Balance 26,326,207 26,326,207 32,398,289 32,398,289 34,527,275 106.57% 30,911,398 -10.47% Description Actual Budget Budget Actual Budget Budget Budget Actual Budget Budget %of %of 2020-21 Prior Yr. 2021-22 Prior Yr. 2018-19 Estimated tbru 01-31-20 Proposed %Chg. Projected %Chg. 2020-21 Budget Summary Carmel Area Wastewater District 18 l:\Budget\2021 Budget\2020-21 Operating Budget Workpapers VS Ending Fund Balance 32,379,385 24,393,591 132.74% 34,527,275 29,631,164 116.52% 30,911,398 89.53% 27,331,881 -11.58% Total Capital Budget 1,601,611 6,872,332 23.31% 1,778,324 7,167,196 24.81% 9,097,411 511.57% 10,085,500 10.86% Treatment Long Term Capit: 1,153,763 4,265,331 27.05% 658,238 2,695,000 24.42% 3,667,000 557.09% 7,424,000 102.45% Treatment 195,113 164,001 118.97% 4,370 305,396 1.43% 25,000 572.08% 25,000 0.00% Collections 147,626 2,210,000 6.68% 521,057 3,725,000 13.99% 5,035,445 966.39% 2,340,000 -53.53% Maintenance 0 0 0 0 0 0 00 00 00 00 Administration 0 0 0 0 75,000 0 00 00 00 00 Capital Improvement Projects Treatment 75,820 33,000 229.76% 40,561 17,800 227.87% 116,466 287.14% 176,500 51.55% Collections 12,554 0 554,098 410,000 135.15% 160,000 28.88% 120,000 -25.00% 00 Maintenance 0 200,000 0.00% 0 0 18,500 0 -100.00% 00 00 Administration 16,735 0 00 0 14,000 0.00% 0 00 0 00 Description Actual Budget Budget Actual Budget Budget Budget Actual Budget Budget %of %of 2020-21 Prior Yr. 2021-22 Prior Yr. 2018-19 Estimated thru 01-31-20 Proposed %Chg. Projected %Chg. 2020-21 Budget Summary Carmel Area Wastewater District CARMEL AREA WASTEWATER DISTRICT Statements of Net Position June 30, 2020 and 2019 Page 1 of 2 for comparative purposes only Assets 2020 2019 Current Assets Cash and investments $ 38,005,103 $ 32,398,290 Accounts receivable - trade 148,528 144,013 Accounts receivable - affiliates 816,571 1,209,093 Prepaid expenses 49,251 - Total current assets 39,019,453 33,751,396 Noncurrent Assets Capital assets not being depreciated 2,389,044 2,223,211 Capital assets, net of depreciation 46,882,651 47,533,196 Total noncurrent assets 49,271,695 49,756,407 Total assets 88,291,148 83,507,803 Deferred Outflows of Resources Deferred pension plan inflows 628,060 615,708 Total assets and deferred outflows of resources $ 88,919,208 $ 84,123,511 The accompanying notes are an integral part of these financial statements 12 CARMEL AREA WASTEWATER DISTRICT Statements of Net Position June 30, 2020 and 2019 Page 2 of 2 for comparative purposes only Liabilities and Net Position 2020 2019 Current Liabilities Accounts payable - trade $ 413,424 $ 681,916 Accrued bond interest 12,206 14,306 Deferred revenue 4,210 159,187 Deposit 246,584 - Revenue bonds - current 170,000 160,000 Compensated absences - current 61,369 52,304 Total current liabilities 907,793 1,067,713 Noncurrent Liabilities Amounts due in more than one year: Revenue bonds 760,000 930,000 Compensated absences 184,108 156,912 Net pension liability (overfunded) (414,355) (617,997) Total noncurrent liabilities 529,753 468,915 Total liabilities 1,437,546 1,536,628 Deferred Inflows of Resources Deferred pension plan inflows 213,513 364,168 Total liabilities and deferred inflows of resources 1,651,059 1,900,796 Net Position Net investment in capital assets 48,341,695 48,666,407 Unrestricted 38,926,454 33,556,308 Total net position 87,268,149 82,222,715 Total liabilities, deferred inflows, and net position $ 88,919,208 $ 84,123,511 The accompanying notes are an integral part of these financial statements 13 CARMEL AREA WASTEWATER DISTRICT Statements of Revenue, Expenses, and Change in Net Position Years Ended June 30, 2020 and 2019 for comparative purposes only 2020 2019 Operating Revenue Sewer service fees $ 8,557,816 $ 8,024,240 Treatment fees, PBCSD 1,541,642 1,486,410 Reclamation Project operating reimbursements 642,238 647,245 Liquid Food Waste fees 9,884 3,750 Brine Disposal fees 104,714 121,642 Other operating revenue 100,346 122,263 Total operating revenue 10,956,640 10,405,550 Operating Expenses Maintenance 1,151,754 1,184,825 Collection 1,601,805 1,313,466 Treatment and disposal 5,054,282 4,454,898 Administration 1,117,264 1,012,399 Reclamation Project expenses 573,988 560,640 Waste to Energy costs 25,114 675 Brine Disposal costs 6,922 4,624 Total operating expenses 9,531,129 8,531,527 Operating income (loss) 1,425,511 1,874,023 Nonoperating Revenue (Expenses) Property tax revenue 2,140,553 2,050,675 Investment earnings (loss) 715,611 602,347 Highlands Sewer Project assessment 218,013 215,898 PBSCD capital cost reimbursements 254,606 497,084 Reclamation Project capital cost reimbursements 22,744 195,562 Other nonoperating revenue 323,622 114,464 Interest and fiscal expenses (54,006) (62,310) Other nonoperating expenses (1,220) (9,326) Total nonoperating revenue (expenses) 3,619,923 3,604,394 Change in Net Position 5,045,434 5,478,417 Net Position - beginning 82,222,715 76,744,298 Net Position - end of year $ 87,268,149 $ 82,222,715 The accompanying notes are an integral part of these financial statements 14