2010 - Monterey Regional Water Pollution Control Agency

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MONTEREY REGIONAL WATER 

POLLUTION CONTROL AGENCY 

MONTEREY, CA 

COMPREHENSIVE ANNUAL FINANCIAL REPORT 

JUNE 30, 2010 and 2009 

WITH 

INDEPENDENT AUDITOR’S REPORT


TABLE OF CONTENTS 

INTRODUCTORY SECTION 

Letter of Transmittal 

GFOA Certificate of Achievement 

Board of Directors 

Organization Chart 

i 

vi 

vii 

viii 

FINANCIAL SECTION 

Independent Auditor’s Report 1 

Management’s Discussion and Analysis 3 

Financial Statements 

Statement of Net Assets 13 

Statement of Revenues, Expenses and Changes in Net Assets 14 

Statement of Cash Flows 15 

Notes to Financial Statements 17 

Other Supplementary Information 

Budgetary Comparison 32 

Schedule of Federal Financial Assistance 33 

Notes to Budgetary Comparison Schedule 34 

STATISTICAL SECTION 

Financial Trends – Changes in Net Assets 35 

Revenue Capacity – Revenue Base and Revenue Rates 36 

Revenue Capacity – 10 Largest Rate Payers 38 

Debt Capacity – Ratios of Outstanding Bonds 39 

Debt Capacity – Bonded Debt and Legal Debt Limit 40 

Debt Capacity – Direct and Overlapping Debt 41 

Debt Capacity – Pledged Revenue Coverage 42 

Demographics and Economic Information – Population and Income 43 

Demographics and Economic Information – Number of Employees by Major Industry 45 

Operating Information – Agency Employees by Function 47 

Operating Information – Operating Indicators 48 

Operating Information – Capital Assets 51 

INTERNAL CONTROL AND COMPLIANCE SECTION 

Independent Auditor’s Report on Internal Control Over Financial Reporting and in 

Compliance and Other Matters Based on an Audit of Financial Statements 

Performed in Accordance with Governmental Auditing Standards 52


Section I 

INTRODUCTORY 

 

 

 

Letter of Transmittal 


Organization Chart

December 30, 2010 


Monterey Regional Water Pollution Control Agency 

Monterey, CA 

Comprehensive Annual Financial Report 

Year Ended June 30, 2010 

It is a pleasure to submit the Monterey Water Pollution Control Agency’s Comprehensive Annual 

Financial Report (CAFR) for the fiscal year ended June 30, 2010. Responsibility for both the accuracy of 

presented data and the completeness and fairness of the presentation, including all disclosures, rests with 

the Agency. To the best of our knowledge and belief, the enclosed data are accurate in all material 

respects and are reported in a manner designed to present fairly the financial position and results of 

operations of the Agency. All disclosures necessary to enable the reader to gain the maximum 

understanding of the Agency’s financial activities have been included. 

The CAFR is presented in accordance with Generally Accepted Accounting Principles (GAAP) as 

promulgated by the Governmental Accounting Standards Board (GASB). 

The Reporting Entity 

Joint-Powers Agency 

In 1972, MRWPCA was formed as a Joint Powers Agency to seek joint solutions to the wastewater 

treatment needs of its member entities: Del Rey Oaks, Monterey, Pacific Grove, Salinas, Sand City, 

Seaside, Boronda, Castroville, Moss Landing, Fort Ord, Monterey County, and Marina. MRWPCA is 

governed by a Board of Directors representing each of the jurisdictions served. 

i 

Joint Powers Authority Member Entities: 

Boronda County Sanitation District, Castroville Community Services Water District, County of Monterey, Del Rey Oaks, Fort Ord, Marina Coast Water District, Monterey, Moss 

Landing County Sanitation District, Pacific Grove, Salinas, Sand City, and Seaside.

In 1977, MRWPCA began consolidating wastewater operations through the acquisition of several 

treatment plants. By 1990, construction on the Regional Wastewater Treatment Plant (RTP) was 

completed, replacing eight overloaded and outdated facilities. In addition, MRWPCA operates and 

maintains 25 pump stations, 35 pressure-vacuum stations and approximately 35 miles of pipeline (from 

each pump station to the treatment plant). Each locality is responsible for moving wastewater from 

businesses and residences in its area to the pump stations. From the stations, MRWPCA moves the 

wastewater to Marina for treatment. 

Each day, 21 million gallons of wastewater, serving a population of nearly 250,000 people, are processed 

at the plant. 

MRWPCA’s treatment of wastewater exceeds state and federal standards for safety and quality. This 

assures the treated water discharged through an outfall pipe two miles off the Monterey coast is safe for 

the marine environment. 

In 1995, MRWPCA began construction of the $33 million Salinas Valley Reclamation Project (SVRP). 

Completed in 1998, the tertiary treatment facility located in Marina next to the RTP provides irrigation 

water for approximately 12,000 acres of farmland in northern Monterey County. The use of recycled 

water also plays an important part in supporting the local environment by alleviating water shortages 

resulting from lack of adequate water storage facilities, droughts, and seawater intrusion. 

Using highly treated wastewater to irrigate landscaping has been practiced for years. However, using 

recycled water for food crops is relatively new. The Monterey Wastewater Reclamation Study for 

Agriculture (MWRSA), for instance, was an 11-year study begun in 1976 to determine the safety of using 

reclaimed water for irrigation in the Castroville area. It consisted of full-scale field tests using reclaimed 

wastewater on various food crops, including artichokes, celery, broccoli, lettuce, and cauliflower. Crops 

irrigated with reclaimed water were found to be safe for human consumption. In fact, they produced 

higher yields with better quality and appearance than those grown with well water. The conclusions were 

published in 1987 and confirmed that tertiary treated wastewater could be safely used for uncooked food 

crops. Since 1998, 40 billion gallons MRWPCA’s of recycled water have been used to irrigate 

agriculture produce in Monterey County. 

The Organization 

Now employing approximately 75 employees, MRWPCA is made up of the following sections/units 

consisting of: Administration, Accounting, Customer Service, Engineering Services, Field Maintenance, 

Maintenance, Operations, Utilities, Laboratory, Safety, Source Control, Co-Generation, Reclamation, and 

Distribution. 

The Agency Mission Statement includes the following: “The Monterey Regional Water Pollution Control 

Agency is dedicated to meeting the wastewater and reclamation needs of our member agencies while 

protecting the environment.” 

The Board of Directors annually adopts three year goals and objectives and then monitors staff 

implementation of programs and policies. This strategic planning process also provides the basis for the 

operating budget. The current three year goals (not in priority order) include: 

 

 

 

Be a leader in solving the water shortage problem in the area 

Develop the use of replenishment water 

Develop and implement a biosolids and biogas management plan 

ii

Develop and begin implementation of a long-term CIP, including funding program 

Achieve sufficient pump station and conveyance capacity to meet the needs of the Salinas area 

Major Initiatives 

During the fiscal 2009/10 year, the Agency completed or initiated a number of significant projects, which 

include the following: 

Reclamation – This is our eleventh year of successful reclamation operations without problems, 

producing 122,557 AF of recycled water. Since 1998, 45 billion gallons of recycled water have been 

produced for agricultural irrigation. We have operated this project under budget for five consecutive 

years. 

Community Relations – Partnering allows member entities to comply with regulatory requirements at a 

low cost, assures agency staff is fully utilized, and provides revenue. MRWPCA provides contract 

services for the following: commercial grease pretreatment inspections for most member entities; City of 

Salinas stormwater program compliance inspections; City of Salinas industrial wastewater pond system 

and pretreatment program including permitting, monitoring and inspecting; grease reduction media 

campaign for the Southern Monterey Bay Waste Discharge Requirement Group; City of Salinas pump 

station maintenance, city-specific sewer spill prevention public outreach, and partnering with the 

Monterey Peninsula Water Management District (MPWMD). We also chair the Water Awareness Day 

celebration in May. 

Salt Reduction Activities – Recycled water salt content is a concern to agricultural growers. The 

Agency has participated in a national salt study performed by the American Water Works Association 

Research Foundation. The report provides guidance for future salt control strategies. Commercial and 

industrial source control, public outreach, industry recognition, and brine hauling programs continue to 

significantly reduce salt loadings at the regional treatment plant. 

Seaside Basin Ground Water Replenishment Project (GRP) – The proposed Seaside Basin 

Groundwater Replenishment Project (GRP) involves the purification and conveyance of recycled water 

from MRWPCA’s Salinas Valley Reclamation Plant (SVRP) for recharge of the Seaside aquifer. 

Recycled water has been produced by the SVRP since 1998. That water has been delivered to 12,000 

acres of farmland in the Castroville region of the lower Salinas Valley, where numerous non-processed 

food crops such as lettuce, broccoli, cauliflower, celery, artichokes, and strawberries are grown. This 

same reclamation plant could produce additional water, which would be treated to drinking water quality 

and either percolated or injected into the Seaside groundwater basin to help recharge that basin. A 

feasibility study was completed in FY 05/06; currently a model of the aquifer is being designed and 

further testing will be conducted. This project is included in the second phase of the California Public 

Utilities Commission (CPUC) Draft EIR released in June 2010. 

Regional Urban Water Augmentation Project – The RUWAP agreement has been signed with Marina 

Coast Water District (MCWD) and Monterey County Water Resources Agency (MCWRA). This 

agreement will allow for reclaimed water to be transported to the former Ft. Ord and Monterey Peninsula. 

Salinas River Diversion Facility (SDRF) – MRWPCA is operating the SDRF which opened in April 

2010. This project diverts water from the Salinas River to our reclamation pond to help with reducing 

groundwater pumping for crop irrigation. In the first year of operation, 3800 AF was diverted. 

iii

Solar Energy – MRWPCA contracted with Solar City to install a 1.12 megawatt solar power facility to 

provide power to our water recycling plant. It is estimated that the carbon footprint for the plant energy 

needs will be reduced by 65%. 

Capital Improvement/Long-term Financing – In early 2010 an Asset Management Plan was completed 

and 5 to 10 year projects were identified to be addressed with an estimated cost of approximately $40m. 

Working with consultants, we are developing a funding plan that will include user rates, capacity fees, 

and debt financing to ensure adequate funding. 

Financing Highlights – More financial information is available under Management Discussion and 

Analysis included in the Financial Section. 

Revenue Sources – MRWPCA received nearly 90% of its operating revenue from user fees via direct 

billing to our customers who send wastewater to our treatment plant. The Agency has revised user rates 

only four times in the past fifteen years. 

Other sources of revenue included biosolid waste fees received from companies that haul liquid waste to 

our plant. In addition, we received approximately $3.8 million from the Monterey County Water 

Resources Agency to operate their water reclamation, distribution system, and Salinas River diversion 

water. 

Expenses and Expenditures - All expenses and expenditures are classified into ten major categories: 

Wages and Benefits, Training and Administration, Office Expenses, Information Systems, Professional 

Services, Operating Supplies, Contract Services, Chemicals, Utilities, and Maintenance and Repairs. 

Capital Program - The major capital projects over the next five years will include the completion of the 

biosolids expansion, cogeneration facility replacement, Salinas capacity enhancement, and urban reuse 

and recycled water. 

Other Information 

Internal Controls 

Internal accounting controls are designed to provide reasonable assurance regarding the safeguarding of 

assets against loss from unauthorized use or disposition, and the reliability of financial records for 

preparing financial statements and accounting for assets. The concept of reasonable assurance recognizes 

that (1) the cost of control should not exceed the benefits likely derived; and (2) the evaluation of the 

costs and benefits requires estimates and judgments by management. 

All internal control evaluations of the Agency occur within the above framework. We believe that 

MRWPCA’s internal accounting controls adequately safeguard assets and provide reasonable assurance 

of proper recording of financial transactions. 

Risk Management 

The Agency is a member of the California Sanitation Risk Management Authority (CSRMA), a joint 

powers authority established for the operation of common risk management and loss prevention 

programs. CSRMA provides the Agency with coverage for workers’ compensation, general liability and 

property loss. 

iv

Independent Audit 

California state statutes and bond covenants require an annual independent audit of the books of accounts 

and financial records of the Agency. The firm of Vavrinek, Trine, Day, & CO., LLP was contracted to 

conduct this year’s audit. Their opinion is included in the Financial Section of this report. 

Awards - GFOA Certificate of Achievement 

The Government Finance Officers Association of the United States and Canada (GFOA) awarded a 

Certificate of Achievement for Excellence in Financial Reporting to the Monterey Regional Water 

Pollution Control Agency for its Comprehensive Annual Financial Report for the fiscal year ended June 

30, 2009. This is the fifth time the Agency has received the award. The Certificate of Achievement is a 

prestigious national award, recognizing conformance with the highest standards for preparation of state 

and local government financial reports. 

In order to be awarded a Certificate of Achievement, a government unit must publish an easily-readable 

and efficiently-organized Comprehensive Annual Financial Report. This 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 

Comprehensive Annual Financial Report 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. 

Acknowledgements 

In submitting this 2009/10 Comprehensive Annual Financial Report, sincere appreciation is expressed to 

the Agency staff for their cooperation and assistance. Recognition is also given to the Agency 

management and the governing board for its continuing support of long-range fiscal planning. 

Respectfully submitted, 

Susan Salunga 

Accounting Supervisor 

MRWPCA 

John Tiernan 

Director of Administrative Services/ 

Deputy General Manager 

MRWPCA 

v


Board of Directors* 

2009/2010 

Lou Calcagno, Chair 

Monterey County, Supervisor 

Gloria De La Rosa, Vice-Chair 

Salinas, Mayor Pro Tem 

Ramiro Cortez 

Boronda County Sanitation District 

Ron Stefani 

Castroville Community Services District, Vice-President 

Dennis Allion 

Del Rey Oaks, Council Member 

Kenneth Nishi 

Marina Coast Water District, Director 

Libby Downey 

Monterey, Council Member 

Chris Orman 

Moss Landing County Sanitation District 

Carmelita Garcia 

Pacific Grove, Mayor 

Dave Pendergrass 

Sand City, Mayor 

Ralph Rubio 

Seaside, Mayor 

Vacant Seat – Ex-Officio 

United States Army 

*Note: MRWPCA Board Members are appointed from their respective jurisdictions. 

Executive Staff 

Keith Israel 

Brad Hagemann 

Robert Wellington 

John Tiernan 

Tom Buell 

Betty Nebb 

General Manager 

Assistant General Manager 

Legal Counsel 

Director of Administrative Services/Deputy General Manager 

Director of Finance 

Executive Assistant to General Manager/Board 

 

Mission Statement 

The Monterey Regional Water Pollution Control Agency is dedicated to 

meeting the wastewater and reclamation needs of our member agencies 

while protecting the environment. 

Vision Statement 

The Monterey Regional Water Pollution Control Agency will be a model 

customer service provider for the efficient, innovative utilization of wastewater. 

Three-Year Goals 

Be a leader in solving the water shortage problem in the area 

Develop the use of replenishment water 

Manage biosolids, chemicals and power in the most cost-effective manner 

Develop and begin implementation of a long-term CIP, including a funding program 

Achieve sufficient pump station and conveyance capacity to meet the needs of the Salinas area 

vii

viii

Section II 

FINANCIAL SECTION 

Independent Auditor’s Report 

Management’s Discussion and Analysis 

Financial Statements 

Statement of Net Assets 

Statement of Revenues, Expenses and Changes in Net Assets 

Statement of Cash Flows 

Notes to Financial Statements 

Required Supplementary Information 

Miscellaneous Plan of the California Public Employee-Retirement System Schedule of Funding 

Progress 

Other Supplementary Information 

Budgetary Comparison 

Schedule of Federal Financial Assistance 

Notes to Budgetary Comparison Schedule

INDEPENDENT AUDITOR’S REPORT 

To the Board of Directors 


Monterey, California 

We have audited the accompanying statements of net assets of the Monterey Regional Water Pollution Control 

Agency (the Agency) as of June 30, 2010 and 2009, and the related statements of revenues, expenses and changes in 

net assets and cash flows for the years then ended. These financial statements are the responsibility of the Agency's 

management. Our responsibility is to express an opinion on these financial statements based upon our audits. 

We conducted our audits in accordance with auditing standards generally accepted in the United States of America 

and the standards applicable to financial audits contained in Government Auditing Standards, issued by the 

Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain 

reasonable assurance about whether the financial statements are free of material misstatement. An audit includes 

examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit 

also includes assessing the accounting principles used and significant estimates made by management, as well as 

evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our 

opinion. 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position 

of the Monterey Regional Water Pollution Control Agency as of June 30, 2010 and 2009, and the results of its 

operations and cash flows for the years then ended in conformity with accounting principles generally accepted in 

the United States of America. 

In accordance with Government Auditing Standards, we have also issued a report dated November 15, 2010, on 

our consideration of the Agency’s internal control over financial reporting and on our tests of its compliance with 

certain provisions of laws, regulations, and contracts and other matters. The purpose of that report is to describe 

the scope of our testing of internal control over financial reporting and compliance and the results of that testing, 

and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an 

integral part of an audit performed in accordance with Government Auditing Standards and should be considered 

in conjunction with this report in considering the results of our audit. 

1

The required supplementary information, such as management’s discussion and analysis on pages 3 through 12, 

and budgetary comparison on page 32, is not a required part of the financial statements, but is supplementary 

information required by the accounting principles generally accepted in the United States of America. We have 

applied certain limited procedures, which consisted principally of inquiries of management regarding the methods 

of measurement and presentation of the required supplementary information. However, we did not audit the 

information and express no opinion on it. 

The supplementary information listed in the table of contents, including the Schedule of Federal Financial 

Assistance is presented for purposes of additional analysis and is not a required part of the financial statements. 

Such information has been subjected to the auditing procedures applied in the audit of the basic financial 

statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements 

taken as a whole. The introductory section and statistical section have not been subjected to the auditing 

procedures applied in the audit of the financial statements and, accordingly, we express no opinion on them. 

Palo Alto, California 

November 15, 2010 

2

MONTEREY REGIONAL WATER POLLUTION CONTROL AGENCY 

MANAGEMENT’S DISCUSSION AND ANALYSIS 

JUNE 30, 2010 

This section of Monterey Regional Water Pollution Control Agency’s (MRWPCA) annual financial statements 

presents our discussion and analysis of MRWPCA’s financial performance during the fiscal year that ended on 

June 30, 2010. The intent of the management’s discussion and analysis is to provide highlights of the Agency’s 

financial activities. Please read it in conjunction with the Independent Auditor’s Report that precedes this section 

and MRWPCA’s financial statements, which follow this section. 

Agency’s Financial Statements 

The Agency functions in a self-supporting governmental enterprise capacity and accounts for the financing of 

services to the general public on a continuing basis with operating and other costs recovered primarily through 

user charges. Because of the nature of the Agency’s business, all funds are classified as enterprise or proprietary 

funds, using full accrual accounting, which recognizes business transactions when they occur, regardless of when 

cash is exchanged. 

MRWPCA’s financial statements consist of the following parts: Independent Auditor’s Report, Management 

Discussion and Analysis (this section), the basic financial statements (statements of net assets, statements of 

revenues, expenses, and changes in net assets, statements of cash flows, and notes to financial statements). For 

comparative purposes, the basic financial statements are presented for the two most recent fiscal years ending 

June 30, 2010 and June 30, 2009. 

The Agency’s Operations – an Overview 

MRWPCA collects, treats, and recycles wastewater that is discharged from residential, military, commercial, and 

industrial customers within its service area. MRWPCA is governed by a Board consisting of representatives 

appointed from its member entities: Del Rey Oaks, Marina, Monterey, Pacific Grove, Salinas, Sand City, 

Seaside, three County Sanitation Districts or Service Areas, and Monterey County. 

Wastewater flows to the MRWPCA’s Regional Treatment Plant (RTP) in Marina average approximately 21 

million gallons a day. This wastewater is treated to remove solids, is tested for compliance with discharge 

requirements, and then is either discharged to the Monterey Bay or diverted to a Recycled Water Plant at the same 

location for further treatment. 

The Recycled Water Treatment Plant was constructed adjacent to the RTP and began operation in 1997. The 

County of Monterey has contracted with the MRWPCA to operate the Recycled Water Treatment Plant as well as 

the recycled water distribution system. The County of Monterey reimburses the MRWPCA for all operational 

costs of the Recycled Water Treatment Plant and the distribution system. In addition, the County of Monterey 

reimburses MRWPCA for the debt service on the two loans (Bureau of Reclamation and State Revolving Loan 

Fund) which funded the construction of the facility, thus making the two projects cost and revenue neutral for 

MRWPCA. 

During the growing season, nearly all of the water treated at the RTP is diverted to the Recycled Water Plant. 

Approximately 13,000-acre feet of recycled water suitable for irrigating crops is delivered annually to growers in 

the Castroville area, which reduces the use of potable (drinking) water. 

Through a program of education and inspection, MRWPCA has taken the lead in assisting its member entities in 

reducing the amount of grease that is discharged through the sewer system. The buildup of grease in sewer lines 

is a major contributing factor to sewage back-ups and spills. 

3




MRWPCA is currently working with member entities to formulate a regional solution to meet requirements of 

State mandated storm water regulations. In cooperation with a number of the member entities, MRWPCA is 

working on a joint urban reclamation project to use recycled water for irrigation of landscaped areas and golf 

courses within its service area. 

MAP OF MRWPCA’S CURRENT SERVICE AREA 

MOSS LANDING 

CASTROVILLE 

SALINAS, BORONDA 

PACIFIC GROVE, 

MONTEREY, DEL REY OAKS, 

SAND CITY, SEASIDE, 

MARINA,, FT. ORD 

FINANCIAL HIGHLIGHTS 

Operating revenues for the fiscal year ended June 30, 2010 were $154,192 more than operating revenues for 

the fiscal year ended June 30, 2009. Operating revenues for the fiscal year ended June 30, 2009 were 

$432,045 more than operating revenues for the fiscal year ended June 30, 2008. 

Total revenues were $118,030 less for the fiscal year ended June 30, 2010 when compared to the fiscal year 

ended June 30, 2009. Total revenues were $1,117,954 less for the fiscal year ended June 30, 2009 when 

compared to the fiscal year ended June 30, 2008. 

MRWPCA’s operating expenses before depreciation for the fiscal year ended June 30, 2010 were 

approximately $354,979 less than for the fiscal year ending June 30, 2009. Operating expenses before 

depreciation for the fiscal year ended June 30, 2009 were approximately $618,143 more than for the fiscal 

year ending June 30, 2008. 

Total expenses were $890,141 less for the fiscal year ended June 30, 2010, when compared to the fiscal year 

ended June 30, 2009. Total expenses were $222,697 more for the fiscal year ended June 30, 2009 when 

compared to the fiscal year ended June 30, 2008. 

MRWPCA’s operating costs and debt-service for the Recycled Water Plant as well as costs for operating the 

Recycled Water Distribution System were reimbursed by the County of Monterey. 

4




Unrestricted cash, cash equivalents, and investments as of June 30, 2010, decreased by $2,491,054 over the 

amount reported at June 30, 2009. 

As of June 30, 2010, MRWPCA had long-term debt outstanding totaling $36,680,155 as compared with 

$39,151,934 in long-term debt outstanding at June 30, 2009. 

MRWPCA’s total net assets were $81,790,849 at June 30, 2010, vs. $83,759,089 at June 30, 2009. Total net 

assets were $86,521,055 at June 30, 2008. 

REVENUES 

Revenues for the fiscal year totaled $17,970,851, a decrease of $118,030 from the prior year. The following table 

presents a comparison of revenues by category for the three fiscal years 2009/10, 2008/09, and 2007/08 and the 

amount and percentage of change between fiscal years 2009/10 and 2008/09: 

REVENUES BY CATEGORY 

For the Fiscal Year Ended June 30, 2010 

(With Comparative Totals for the Fiscal Years Ended June 30, 2009 and June 30, 2008) 

2007/08 

Increase/ 

(Decrease) 

2008/09 2009/10 from 2008/09 

Revenues by Category % of % of % of % of 

Amount Total Amount Total Amount Total Amount Change 

OPERATING REVENUE 

User Fees 

Residential $ 10,738,549 55.9% $ 11,107,806 61.4% $ 11,150,033 62.0% $ 42,227 0.4% 

Commercial 2,904,920 15.1% 3,048,019 16.9% 3,031,172 16.9% (16,847) -0.6% 

Industrial 278,494 1.4% 287,797 1.6% 289,802 1.6% 2,005 0.7% 

Military 369,403 1.9% 252,360 1.4% 487,553 2.7% 235,193 93.2% 

Liquid Waste Haulers-User Fees 405,440 2.1% 357,880 2.0% 362,210 2.0% 4,330 1.2% 

Grease Haulers-User Fees 149,516 0.8% 129,988 0.7% 138,980 0.8% 8,992 6.9% 

Diluted Oily Wastes-User Fees 106,800 0.6% 208,621 1.2% 88,240 0.5% (120,381) -57.7% 

Brine Receiving-User Fees 392,382 2.0% 468,839 2.6% 408,683 2.3% (60,156) -12.8% 

Penalty and Transfer Fees 245,781 1.3% 295,665 1.6% 351,723 2.0% 56,058 19.0% 

Total User Fees 15,591,285 16,156,975 16,308,396 151,421 

Other Operating Revenue 900,024 4.7% 766,379 4.2% 769,150 4.3% 2,771 0.4% 

Total Operating Revenue 16,491,309 16,923,354 17,077,546 154,192 

NON-OPERATING REVENUE 

Interest Revenue 821,667 4.3% 323,919 1.8% 70,761 0.4% (253,158) -78.2% 

Capacity Charges 1,691,420 8.8% 639,974 3.5% 588,530 3.3% (51,444) -8.0% 

Other 202,439 1.1% 201,634 1.1% 234,014 1.3% 32,380 16.1% 

Total Non-Operating 2,715,526 1,165,527 893,305 (272,222) 

Revenue 

TOTAL REVENUES $ 19,206,835 100% $ 18,088,881 100% $ 17,970,851 100% $ (118,030) -0.7% 

5




Revenues by Category for Fiscal Year 2009/10 

Capacity Charges 

3.3% Other 

1.3% 

Interest Revenue 

0.4% 

Other Operating 

Revenue 

4.3% 

User Fees 

90.7% 

Changes in Revenue between 09/10, 08/09 and 07/08: 

 

 

 

Operating revenue increased $154,192 in 09/10 and $432,045 in 08/09 due to the back-billing of 

military fees in 2009-10 and the Agency increasing user rates in 2008/09.. 

Interest revenue decreased 78.26% or $253,158 in 09/10. This was the result of a decrease in interest 

earning cash balances during the year. Interest revenue decreased 60.58% or $497,748 in 08/09. This 

was a result of declining interest rates and a decrease in interest earning cash balances. 

Capacity charges collected decreased by $51,444 in 09/10. Capacity charges collected decreased by 

$1,051,446 in 08/09. MRWPCA bills a capacity charge to customers for new construction, remodels, 

and category changes. Amounts collected vary from year to year based upon the number of business 

changes and construction permits issued within our service area. Growth restraints within the area 

served by MRWPCA, including the availability of water for future development, may have impacts 

on the collection of capacity charges in the future. 

EXPENSES 

Total expenses for 2009/10 were $19,939,091, a decrease of $911,756 over the prior year. The following tables 

present a comparison of expenses by category and by department for the three fiscal years 2009/10, 2008/09 and 

2007/08, and the amount and percentage of change between fiscal years 2009/10 and 2008/09: 

6




EXPENSES BY CATEGORY 



2007/08 

2008/09 2009/10 

Increase/(Decrease) 

from 2008/09 

Expenses by Category % of % of % of % of 


OPERATING EXPENSES 

Wages & benefits $ 8,225,949 39.9% $ 8,802,854 42.2% $ 8,911,826 44.7% $ 108,972 1.2% 

Training & administration 121,551 0.6% 122,848 0.6% 111,869 0.6% (10,979) -8.94% 

Office expense 294,171 1.4% 276,239 1.3% 235,515 1.2% (40,724) -14.74% 

Information systems 182,346 0.9% 187,517 0.9% 220,502 1.1% 32,985 17.59% 

Professional services 556,485 2.7% 504,483 2.4% 527,477 2.6% 22,994 4.56% 

Operating supplies 270,447 1.3% 360,600 1.7% 301,230 1.5% (59,370) -16.46% 

Contract services 427,992 2.1% 402,947 1.9% 465,990 2.3% 63,043 15.65% 

Chemicals 847,983 4.1% 1,233,715 5.9% 1,107,464 5.6% (126,251) -10.23% 

Utilities 2,506,534 12.2% 2,483,615 11.9% 2,244,831 11.3% (238,784) -9.61% 

Maintenance & repairs 850,444 4.1% 794,952 3.8% 910,083 4.6% 115,131 14.48% 

Major maintenance & repairs 691,988 3.4% 439,407 2.1% 209,116 1.0% (230,291) -52.41% 

Billable services 29,473 0.1% 14,329 0.1% 22,624 0.1% 8,295 57.89% 

Total Operating Expenses before 

Depreciation 15,005,363 15,623,506 15,268,527 (354,979) 

DEPRECIATION 4,666,624 22.6% 4,331,821 20.8% 3,822,747 19.2% (509,074) -11.75% 

NON-OPERATING EXPENSES 

Interest expense 927,297 4.5% 887,760 4.3% 840,311 4.2% (47,449) -5.34% 

Amortization of bond issuance costs 7,251 0.0% 7,760 0.0% 7,506 0.0% (254) -3.27% 

Total Non-Operating Expenses 934,548 895,520 847,817 (47,703) 

TOTAL EXPENSES $ 20,606,535 100% $ 20,850,847 100% $ 19,939,091 100% $ (911,756) -4.37% 

7




Expenses by Category for Fiscal Year 2009/10 

Professional 

Services 

2.6% 

Chemicals 

5.6% 

Amortization of 

Bond Issuance Costs 

0.0% 

Interest Expense 

4.2% 

Depreciation 

19.2% 

Major Maintenance 

& Repairs 

1.0% 

Maintenance & 

Repairs 

4.6% 

Contract Services 

2.3% 

Billable services 

0.1% 

Wages & Benefits 

44.7% 

Training & 

administration 

0.6% 

Office expense 

1.2% 

Information systems 

1.1% 

EXPENSES BY DEPARTMENT 



2007/08 


2008/09 2009/10 from 2008/09 

Expenses by Dept. % of % of % of % of 



Administration $ 1,447,346 7.0% $ 1,591,497 7.6% $ 1,471,053 7.4% $ (120,444) -7.6% 

Finance/Human Resources 1,811,822 8.8% 1,849,227 8.9% 1,996,228 10.0% 147,001 7.9% 

Environmental Services 1,410,376 6.8% 1,443,842 6.9% 1,330,963 6.7% (112,879) -7.8% 

RTP - Administration 358,319 1.7% 557,118 2.7% 617,151 3.1% 60,033 10.8% 

Field Maintenance 3,118,647 15.1% 3,312,200 15.9% 3,367,567 16.9% 55,367 1.7% 

Cogeneration 965,046 4.7% 1,099,069 5.3% 1,049,699 5.3% (49,370) -4.5% 

RTP - Maintenance & Operations 5,201,819 25.2% 5,331,146 25.6% 5,226,750 26.2% (104,396) -2.0% 

Major Maintenance & Operations 691,988 3.4% 439,407 2.1% 209,116 1.0% (230,291) -52.4% 

Total Operating Expenses before 

Depreciation 15,005,363 15,623,506 15,268,527 (354,979) 

DEPRECIATION 4,666,624 22.6% 4,331,821 20.8% 3,822,747 19.2% (509,074) -11.8% 

NON-OPERATING EXPENSES 

Interest expense 927,297 4.5% 887,760 4.3% 840,311 4.2% (47,449) -5.3% 

Amortization of bond issuance costs 7,251 0.0% 7,760 0.0% 7,506 0.0% (254) -3.3% 

Total Non-Operating Expenses 934,548 895,520 847,817 (47,703) 

TOTAL EXPENSES $ 20,606,535 100% $ 20,850,847 100% $ 19,939,091 100% $ (911,756) -4.4% 

8




Interest Expense 

and Amortization 

4.3% 

Depreciation 

19.2% 

Major Maintenance 

& Operations 

1.0% 

Expenses by Department for Fiscal Year 2009/10 

RTP - Maintenance 

& Operations 

26.2% 

Administration 

7.4% 

Cogeneration 

5.3% 

Finance/Human 

Resources 

10.0% 

Environmental 

Services 

6.7% 

RTP - 

Administration 

3.0% 

Field Maintenance 

16.9% 

Changes in Expenses between 09/10, 08/09 and 07/08 

 

Operating expenses before depreciation decreased 2.27% or $354,979 in 09/10. Operating expenses 

before depreciation increased 4.12% or $618,143 in 08/09. The following categories were 

responsible for the change from the prior years: 

Wages & Benefits – There was an increase of $108,792 in 09/10 due mostly to step increases, and 

cost of benefits increases. In 2008/09, there was an increase of $579,905 due to cost of living 

adjustments, step increases, and cost of benefits increases. 

Utility costs decreased by $238,784 in 09/10. Utility Costs increased $22,919 in 08/09. The 

decrease in 09/10 is due to the decreased cost of natural gas. Cogeneration engine repair 

shutdowns in 2008/09 contributed to the increase in utilities costs for that period over the prior 

period. 

Chemical costs decreased by $126,251 or 10.23% in 09/10 because of a change in chemical use 

optimization. Chemical costs increased by $385,732 or 45.49% in 08/09 over 07/08 because of 

price increases on the chemicals and higher shipping costs. 

Major Maintenance & Repairs – This category was established in fiscal year 05/06. Project costs 

that are not capitalized are now expensed on a fiscal year basis under this category. Fiscal year 

09/10 costs decreased by $230,291 due to a decreased amount of major maintenance and repair 

projects approved during the Agency’s Budget process for the fiscal year. 

 

Depreciation Expense charged to operations in 09/10 decreased 11.75% or $509,074, due a large 

number of assets becoming fully depreciated, which more than offset the increase in depreciation 

expense on new assets put in service. 

9




TOTAL NET ASSETS 

Total Net Assets at June 30, 2010 totaled $81,790,849, a decrease of $1,968,240 from the prior year. 

The following table presents a comparison of assets, liabilities, and total net assets for the three fiscal years ended 

June 30, 2010, 2009 and 2008 and the amount and percentage of change between fiscal years 2010 and 2009. 

10




TOTAL NET ASSETS 




2007/08 2008/09 2009/10 from 2008/09 

ASSETS 

Non-Restricted 

Current $ 9,137,420 $ 7,468,700 $ 5,486,341 $ (1,982,359) -26.54% 

Other Non-Restricted Assets 10,721,585 10,715,102 10,694,432 (20,670) -0.19% 

Restricted 

Current 15,496,809 15,113,113 15,321,453 208,340 1.38% 

Capital Assets net of Acc. Depr. 103,566,370 101,272,352 98,594,269 (2,678,083) -2.64% 

Total Assets 138,922,184 134,569,267 130,096,495 (4,472,772) -3.32% 

LIABILITIES 

Current Liabilities 6,114,522 6,839,899 6,438,257 (401,642) -5.87% 

Current Liabilities Payable from 

Restricted Assets 4,640,984 4,818,345 5,187,234 368,889 7.66% 

Other Liabilities 

Long-Term Debt 41,645,623 39,151,934 36,680,155 (2,471,779) -6.31% 

Total Liabilities 52,401,129 50,810,178 48,305,646 (2,504,532) -4.93% 

NET ASSETS 

Invested in Capital Assets 

net of Related Debt 69,728,636 69,931,077 69,765,250 (165,827) -0.24% 

Restricted 10,855,825 10,294,768 10,134,219 (160,549) -1.56% 

Unrestricted 5,936,594 3,533,244 1,891,380 (1,641,864) -46.47% 

TOTAL NET ASSETS $ 86,521,055 $ 83,759,089 $ 81,790,849 $ (1,968,240) -2.35% 

Total Assets at June 30, 2010 were $130,096,495 vs. $134,569,267 at June 30, 2009, a decrease of $4,472,772 or 

3.32%. 

 

Current non-restricted assets decreased by $1,982,359 due to the Board’s approval to designate funds 

for urban reclamation projects and for the decrease in prepaid user fees collected during the fiscal 

year. 

Total Capital assets increased $2,045,613 while accumulated depreciation increased $4,723,696 

resulting in a decrease of Capital assets net of depreciation by $2,678,083. See Note 4 of the Notes 

to Financial Statements for more detail. 

Total Liabilities at June 30, 2010 were $48,305,646 at June 30, 2010 vs. $50,810,178 at June 30, 2009, a decrease 

of $2,504,532 or 4.93%. 

 

The decrease in total liabilities at June 30, 2010 over the prior year is primarily the result of the 

reduction in Long-Term Debt, inclusive of current maturities, of approximately $2.5 million. Of the 

total decrease in long-term debt, approximately $1.12 million represents amounts paid by Monterey 

County on debt recorded on the Agency’s books as a result of the Water Reclamation Project. See 

Notes 5and 6 of the Notes to Financial Statements for further detail on the Project and the related 

debt. 

11




The following table presents a comparison of the changes in net assets for the three fiscal years 2009/10, 2008/09 

and 2007/08 and the amount and percentage of change between fiscal years 2009/10 and 2008/09: 

CHANGES IN NET ASSETS 



Increase/ 

(Decrease) 

2007/08 2008/09 2009/10 from 2008/09 

TOTAL REVENUES $ 19,206,835 $ 18,088,881 $ 17,970,851 $ (118,030) 

TOTAL EXPENSES 20,606,535 20,850,847 19,939,091 (911,756) 

CHANGE IN NET ASSETS (1,399,700) (2,761,966) (1,968,240) 793,726 

BEGINNING NET ASSETS 87,920,755 86,521,055 83,759,089 (2,761,966) 

ENDING NET ASSETS $ 86,521,055 $ 83,759,089 $ 81,790,849 $ (1,968,240) 

CONTACTING MRWPCA’S FINANCIAL MANAGEMENT 

This financial report is designed to provide MRWPCA’s Board members, customers, ratepayers, investors and 

creditors with a general overview of MRWPCA’s finances and to demonstrate MRWPCA’s accountability for the 

money it receives. If you have questions about this report or need additional financial information, contact the 

Finance Department, Monterey Regional Water Pollution Control Agency, 5 Harris Court, Bldg. D, Monterey, 

CA 93940. 

12


STATEMENTS OF NET ASSETS 

YEARS ENDED JUNE 30, 

2010 2009 

CURRENT ASSETS 

Unrestricted cash and cash equivalents $ 2,466,038 $ 4,957,092 

Restricted cash and cash equivalents 15,146,900 14,844,013 

Accounts receivable-trade 124,468 371,238 

Accounts receivable-MCWRA 2,437,058 1,842,511 

Inventory of materials and supplies 175,556 139,993 

Prepaid expenses and other current assets 283,221 157,866 

Other restricted assets 174,553 269,100 

Total current assets 20,807,794 22,581,813 

NONCURRENT ASSETS 

Receivable from Monterey County 10,290,691 10,272,123 

Debt issuance costs, net of accumulated amortization 403,741 442,979 

Subtotal noncurrent assets 10,694,432 10,715,102 

CAPITAL ASSETS 

Land and easements 2,097,827 2,097,827 

Buildings 96,679,989 96,390,355 

Improvements other than buildings 51,640,199 51,640,199 

Equipment 76,910,307 75,679,717 

Construction in progress 7,345,409 6,820,020 

Subtotal capital assets 234,673,731 232,628,118 

Less accumulated depreciation (136,079,462) (131,355,766) 

Total capital assets 98,594,269 101,272,352 

Total noncurrent assets 109,288,701 111,987,454 

Total Assets 130,096,495 134,569,267 

CURRENT LIABILITIES 

Current portion of long-term debt 2,439,555 2,461,464 

Accounts payable and accrued expenses 2,169,881 3,417,958 

Deferred user fees revenue 598,556 581,656 

Utility taxes due to other governmental agencies 1,230,265 378,821 

Accounts and deposits payable from restricted assets 5,187,234 4,818,345 

Total current liabilities 11,625,491 11,658,244 

NONCURRENT LIABILITIES 

Long-term debt, net of amortized premium, less current portion 36,680,155 39,151,934 

Total Liabilities 48,305,646 50,810,178 

NET ASSETS 

Invested in capital assets, net of related debt 69,765,250 69,931,077 

Restricted for capital projects 10,134,219 10,294,768 

Unrestricted 1,891,380 3,533,244 

Total net assets $ 81,790,849 $ 83,759,089 

13


STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS 

FOR THE YEARS ENDED JUNE 30, 


OPERATING REVENUES 

User fees $ 16,308,396 $ 16,156,975 

Other operating revenues 769,150 766,379 

Total operating revenues 17,077,546 16,923,354 


Administrative 1,471,053 1,591,497 

Finance 1,996,228 1,849,227 

Laboratory 1,330,963 1,443,842 

Regional Treatment Plant-Administrative 617,151 557,118 

Field Maintenance 3,367,567 3,312,200 

Cogeneration 1,049,699 1,099,069 

Regional Treatment Plant - Maintenance and Operations 5,226,750 5,331,146 

Major Maintenance and Operations Non Capital Projects 209,116 439,407 

Total operating expenses before depreciation 15,268,527 15,623,506 

Depreciation expense 3,822,747 4,331,821 

Total operating expenses 19,091,274 19,955,327 

OPERATING LOSS (2,013,728) (3,031,973) 

NONOPERATING REVENUES (EXPENSES) 

Interest revenue 70,761 323,919 

Interest expense (840,311) (887,760) 

Amortization of bond issuance cost (7,506) (7,760) 

Capacity charges 588,530 639,974 

Other revenue 216,920 180,019 

Miscellaneous 17,094 21,615 

Total nonoperating revenues 45,488 270,007 

Decrease in net assets (1,968,240) (2,761,966) 

Beginning Net Assets 83,759,089 86,521,055 

Ending Net Assets $ 81,790,849 $ 83,759,089 

14


STATEMENTS OF CASH FLOWS 


CASH FLOWS FROM OPERATING ACTIVITIES 2010 2009 

Cash received from customers for services $ 17,341,216 $ 17,247,341 

Cash paid to vendors for services (9,996,316) (9,090,791) 

Cash paid to employees (5,366,326) (5,589,529) 

Other 226,660 219,836 

Cash provided by operating activities 2,205,234 2,786,857 

CASH FLOWS FROM NON-CAPITAL FINANCING AND 

INVESTING ACTIVITIES 

Capacity charges 588,530 639,974 

Cash provided by non capital financing and investing activities 588,530 639,974 

CASH FLOWS FROM CAPITAL AND RELATED 

FINANCING ACTIVITIES 

Interest expense (840,311) (887,760) 

Advance on SRDD project (594,547) (1,842,511) 

Acquisition and construction of property and equipment (2,280,605) (3,210,776) 

Proceeds from sale of capital assets 5,600 17,075 

Principal payments on long-term debt (2,461,957) (2,431,719) 

Debt service funding from Monterey County 1,119,128 1,104,687 

Cash provided by/(used in) capital and related financing activities (5,052,692) (7,251,004) 

CASH FLOWS FROM INVESTING ACTIVITIES 

Interest income 70,761 323,919 

INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (2,188,167) (3,500,254) 

Cash and cash equivalents at beginning of year 19,801,105 23,301,359 

Cash and cash equivalents at end of year $ 17,612,938 $ 19,801,105 

15


STATEMENTS OF CASH FLOWS 


RECONCILIATION OF OPERATING LOSS TO NET CASH 

PROVIDED BY OPERATING ACTIVITIES 2010 2009 

Operating Loss $ (2,013,728) $ (3,031,973) 

Adjustments to reconcile operating loss to net 

cash provided by operating activities: 

Other income 226,660 219,836 

Depreciation 3,822,747 4,331,821 

Effect of changes in: 

Other current assets 180,399 394,673 

Accounts payable and accrued expenses (862,288) 759,807 

Due other governmental agencies 851,444 112,693 

Net cash provided by operating activities $ 2,205,234 $ 2,786,857 

16


NOTES TO FINANCIAL STATEMENTS 

JUNE 30, 2010 AND 2009 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES & OTHER MATTERS 

Organization, Purpose and Basis of Accounting 

In November 1971, the city of Pacific Grove and the Seaside County Sanitation District executed a joint powers 

agreement (JPA), thus forming the Monterey Peninsula Water Pollution Control Agency (“Monterey Peninsula 

WPCA”), with Fort Ord as an ex-officio member. In February 1972, the city of Monterey became a signatory of the 

JPA. The Monterey Peninsula WPCA was responsible for proceeding with the design and construction of a regional 

wastewater treatment and disposal system for communities adjoining the Southern Monterey Bay area in Monterey 

County, which were designated by the Environmental Protection Agency ("EPA”), and the State Water Resources 

Control Board (SWRCB), as Clean Water Projects 748 and 1066. The Monterey Peninsula WPCA expanded its 

membership to include the city of Salinas and Monterey County in April 1975. In March 1976, the cities of Seaside, 

Sand City and Del Rey Oaks (cities which comprise the Seaside County Sanitation District), became individual 

signatories to the JPA. In January 1977, the Monterey County Board of Supervisors formed the Monterey Regional 

County Sanitation District (“Monterey Regional CSD”) to provide sewage treatment and disposal services to the 

sewered portions of the North Monterey County. Monterey Regional CSD was established to own and operate the 

existing and proposed project facilities, and to establish, collect and enforce sewer user charges. In June 1979, the 

present Monterey Regional Water Pollution Control Agency (the “Agency”), superseded the Monterey Peninsula 

WPCA. Also, in June 1979, Monterey Regional CSD transferred all its properties and assets to the Agency. In 

April 1985, Fort Ord became a full voting member of the Agency, and Castroville County Sanitation District 

became a member of the Agency. The Boronda County Sanitation District became a member of the Agency in June 

1987. The Agency has all of the broad powers of the older entities and has assumed all of their obligations. In April 

1989, the Agency entered into an Annexation Agreement with the Marina County Water District (“MCWD”) 

enabling the MCWD to become a full voting member of the Agency and establishing the terms and conditions by 

which the MCWD would become a member entity. In November 1999, due to the closure of Fort Ord, Fort Ord’s 

representation changed to that of a non-voting member. The Agency functions as a self-supporting governmental 

enterprise activity and, accordingly, the financial statements have been prepared on the accrual basis. 

Reporting Entity 

The Agency operates in an enterprise capacity. An enterprise fund is used to account for the financing of services to 

the general public on a continuing basis with operating and other costs recovered primarily through user charges. 

As required by generally accepted accounting principles, the financial statements of the reporting entity include 

those of the Agency (the primary government) and its component unit. The component unit discussed below is 

included in the Agency’s financial statements because of the significance of its financial relationship with the 

Agency. 

The Monterey Regional Wastewater Finance Authority (the “Authority”), an entity legally separate from the 

Agency, is governed by substantially all the board members of the Agency. The Authority is reported as if it were 

part of the Agency’s operations (blended component unit) because its purpose is to finance certain capital projects 

for the Agency (see Note 4.) 

17




Basis of Accounting 

The Agency is a single enterprise fund and maintains its records on the accrual basis of accounting. Under this 

method, revenues are recorded when earned and expenses are recorded when the related liability is incurred. The 

Agency has elected under Governmental Accounting Standards Board (GASB) Statement No. 20, Accounting and 

Financial Reporting for Proprietary Funds and Other Governmental Entities That Use Proprietary Fund 

Accounting, to apply all applicable GASB pronouncements, as well as any applicable pronouncements of the 

Financial Accounting Standards Board, the Accounting Principles Board, or any Accounting Research Bulletins 

issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB 

pronouncements. 

Accounts Receivable and User Fee Revenue Recognition 

The Agency has made no provisions for uncollectible user fee receivables as all significant accounts are considered 

to be collectible as of June 30, 2010 and 2009. 

All user fee revenue is recognized when the related services are provided. Billings are on a bimonthly basis and, as 

such, revenues reflected in the financial statements include accruals based on estimates for the period between 

termination of the billing cycle and the end of the fiscal year. User service charges are based on wastewater strength 

criteria as set forth by the EPA and Agency determined flow. 

Cash and Cash Equivalents 

The Agency's cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term 

investments with original maturities of three months or less from the date of acquisition. Cash equivalents also 

include cash with county treasury, state pooled fund, and other pooled investment fund balances for purposes of 

the statement of cash flows. 

Investments 

Investments are recorded at amortized cost, which approximates market value. Adjustments are made to cost for 

any premium/discount, which is amortized/accreted over the life of the investment. Gains or losses on 

investments are recognized under the specific identification method only when and if the related security is sold, 

or if permanent impairment of value occurs. 

Inventory 

Materials and supplies inventories are stated at the lower of cost (first-in, first-out) or market. 

Restricted Assets 

Assets required to be segregated pursuant to bond covenants or for other reasons are identified as restricted assets. 

Debt Issuance Costs 

Debt issuance costs are capitalized and amortized over the term of the related debt instrument on a straight-line 

basis. 

18




Capital Assets 

Capital assets acquired through purchase or internal constructions are recorded at cost. Property contributions 

received from municipalities are recorded at a negotiated value. Property donations received from other sewage 

agencies are recorded at estimated market value on the date donated. The Agency’s capital asset capitalization 

threshold is $2,500. 

Depreciation is computed using the straight-line method. Estimated useful lives of the various classes of 

depreciable capital assets are as follows: buildings, 20 to 40 years; improvements, 10 to 20 years; equipment, 3 to 

10 years 

Construction in Progress 

The cost of acquisition and construction of major plant and equipment is recorded as construction in progress 

(CIP). As facilities are constructed by the Agency and become operative, they are transferred from CIP to the 

plant and equipment accounts, or are expensed if determined that the cost does not meet the requirements of the 

capitalization policy. 

Capitalization of Interest 

Interest is capitalized on cumulative expenditures for all major construction projects. Interest earned on interestbearing 

investments acquired with proceeds of related tax-exempt borrowings is offset against interest cost in 

determining the amount of interest cost to be capitalized. No interest was capitalized for fiscal years 2010 and 

2009. 

Compensated Absences 

Accumulated unpaid vacation and compensatory time are accrued when earned and are included in accounts 

payable and accrued expenses. 

Accounts Payable for Construction Services 

Accounts payable for construction services and unpaid retainage for construction services are included in accounts 

and deposits payable from restricted assets. 

Capital Grants and Capacity Charges 

Funding for the property, plant and equipment of the Agency has been provided primarily from capital grants by 

the EPA, the SWRCB, the Monterey County Water Resources Agency (MCWRA) and the Department of the 

Army and Navy. When eligible costs are incurred, a corresponding grant payment receivable is recognized, less 

an allowance for costs that may be subsequently ruled ineligible. All capital grant funds and capacity charge fees 

are recognized in the statements of revenues, expenses and changes in net assets. 

19




Net Assets 

Net assets represent the difference between assets and liabilities. Net assets invested in capital assets, net of 

related debt consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any 

borrowings used for the acquisition, construction or improvement of those assets. Net assets are reported as 

restricted when there are limitations imposed on their use either through the enabling legislation adopted by the 

Agency or through external restrictions imposed by creditors, grantors, or laws or regulations of other 

governments. The Agency first applies restricted resources when an expense is incurred for purposes for which 

both restricted and unrestricted net assets are available. 

Operating Revenues and Expenses 

Operating revenues are those revenues that are generated directly from the primary activity of the enterprise fund. 

For the Agency, these revenues are user fees. Operating expenses are necessary costs incurred to provide the 

good or service that are the primary activity of the fund. 

Pension Plan 

Contributions to the California Public Employees Retirement System (“PERS”) are expensed as incurred. 

Income Taxes 

The Agency is a municipal entity as defined in the Internal Revenue Code, Section 115, and the corresponding 

California Revenue and Taxation provisions. Accordingly, the Agency is not subject to income taxes. 

Use of Estimates 

In preparing financial statements in conformity with generally accepted accounting principles, management is 

required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the 

disclosure of contingent assets and liabilities at the date of the financial statements, as well as revenues and 

expenses during the reporting period. Actual results could differ from those estimates. 

New Accounting Pronouncements 

In June 2008, GASB issued GASBS No. 53, Accounting and Financial Reporting for Derivative Instruments. 

This Statement is intended to improve how State and local governments report information about derivative 

instruments—financial arrangements used by governments to manage specific risks or make investments—in 

their financial statements. The Statement specifically requires governments to measure most derivative 

instruments at fair value in their financial statements that are prepared using the economic resources measurement 

focus and the accrual basis of accounting. The guidance in this Statement also addresses hedge accounting 

requirements and is effective for financial statements for reporting periods beginning after June 15, 2009, with 

earlier application encouraged. The adoption of this statement had no impact on the Agency’s financial position 

or results of operations. 

In March 2009, the GASB issued GASB Statement No. 54, Fund Balance Reporting and Governmental Fund 

Type Definitions. The objective of this Statement is to enhance the usefulness of fund balance information by 

providing clearer fund balance classifications that can be more consistently applied and by clarifying the existing 

governmental fund type definitions. This Statement establishes fund balance classifications that comprise a 

hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the 

20




use of the resources reported in governmental funds. The requirements of this Statement are effective for the 

financial statements for periods beginning after June 15, 2010. Early implementation is encouraged. 

In April 2009, the GASB issued GASB Statement No. 55, The Hierarchy of Generally Accepted Accounting 

Principles for State and Local Governments. The objective of this Statement is to incorporate the hierarchy of 

generally accepted accounting principles (GAAP) for State and local governments into the GASB authoritative 

literature. The "GAAP hierarchy" consists of the sources of accounting principles used in the preparation of 

financial statements of State and local governmental entities that are presented in conformity with GAAP, and the 

framework for selecting those principles. GASB Statement No. 55 is effective immediately and has no impact on 

the Agency’s financial statements. 

In April 2009, the GASB issued GASB Statement No. 56, Codification of Accounting and Financial Reporting 

Guidance Contained in the AICPA Statements on Auditing Standards. The objective of this Statement is to 

incorporate into the GASB's authoritative literature certain accounting and financial reporting guidance presented 

in the American Institute of Certified Public Accountants' Statements on Auditing Standards. This Statement 

addresses three issues not included in the authoritative literature that establishes accounting principles – related 

party transactions, going concern considerations, and subsequent events. The presentation of principles used in 

the preparation of financial statements is more appropriately included in accounting and financial reporting 

standards rather than in the auditing literature. GASB Statement No. 56 is effective immediately and has no 

impact on the Agency’s financial statements. 

NOTE 2 – CASH, CASH EQUIVALENTS AND INVESTMENTS 

The Agency maintains deposits and investments in separate restricted and unrestricted accounts with various 

safekeeping agents and financial institutions. Restricted deposits and investments are held to meet debt service 

and capital expansion requirements. 

For the purpose of the statement of cash flows, the Agency considers all investments with original maturities of 

less than three months to be cash equivalents. 

21




Cash is recorded in the accompanying statement of net assets, as follows: 


Unrestricted $ 1,748,252 $ 813,542 

Restricted 6,192,592 6,575,045 

$ 7,940,844 $ 7,388,587 

Investments in pooled funds, also reflected as cash and cash equivalents, are recorded at amortized cost, which 

approximated fair value, at June 30, 2010 and 2009, are summarized as follows: 


California Asset Management Program (CAMP) 

Pooled Investment Fund $ 8,981 $ 8,957 

Subtotal 8,981 8,957 

County Pooled Investment Funds 27,144 879 

State of California Local Agency Investment Fund 9,635,969 12,402,682 

$ 9,672,094 $ 12,412,518 

The above cash and cash equivalents are classified in the accompanying statement of net assets as follows: 


Unrestricted $ 2,466,038 $ 4,957,092 

Restricted 15,146,900 14,844,013 

$ 17,612,938 $ 19,801,105 

Policies and Practices 

The Agency is authorized under the Agency’s investment policy to make direct investments in local agency bonds, 

notes, or warrants within the State; U.S. Treasury instruments; registered State warrants or treasury notes; securities 

of the U.S. Government, or its agencies; bankers acceptances; commercial paper; certificates of deposit placed with 

commercial banks and/or savings and loan companies; repurchase or reverse repurchase agreements; medium term 

corporate notes; shares of beneficial interest issued by diversified management companies, certificates of 

participation, obligations with first priority security; and collateralized mortgage obligations. 

Investment in the State Investment Pool 

The Agency is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California 

government code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the 

Agency's investment in the pool is reported in the accompanying financial statement at amounts based upon the 

Agency's pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized 

cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, 

which is recorded on the amortized cost basis. 

22




California Asset Management Program (CAMP) 

The Agency participates in the California Asset Management Program (CAMP), a joint powers authority established 

in 1989 under the provisions of the California Government Code Sections 6500 et. seq., to meet local government 

investment needs in a manner and cost determined by the members of the program. The Agency maintains its own 

separate account and directs its investments in conjunction with an investment advisor. Safekeeping of all securities 

is maintained by Bank of New York. 

General Authorizations 

Limitations as they relate to interest rate risk, credit risk, and concentration of credit risk are indicated in the 

schedules below: 

Maximum Maximum Maximum 

Authorized Remaining Percentage Investment 

Investment Type Maturity of Portfolio In One Issuer 

State/Local Agency Debt Issues 5 years 25% None 

U.S. Treasury Obligations 5 years None None 

Federal Agency Obligations 5 years None None 

Banker's Acceptance 180 days 25% 10% 

Commercial Paper 270 days 20% 10% 

Negotiable Certificates of Deposit 5 years 20% 10% 

Time Certificates of Deposit 1 year 10% 10% 

Money Market Mutual Funds N/A 20% 10% 

County Pooled Investment Funds N/A None None 

Local Agency Investment Fund (LAIF) N/A None None 

Authorized Under Debt Agreements 

Debt resolutions stipulate only federal securities may be invested in for debt service requirements. 

Interest Rate Risk 

Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. 

Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market 

interest rates. The Agency manages its exposure to interest rate risk by investing substantially all of its cash with 

LAIF and CAMP. 

23




At June 30, 2010, the Agency, through the CAMP program, had the following investments: 

Carrying Fair Maturity 

Investment Type Value Value Date 

Money Market Mutual Funds $ 8,981 $ 8,981 07/01/10 - 07/02/10 

County Pool 27,144 27,164 07/01/10 - 02/12/11 

State Investment Pool 9,635,969 9,793,999 07/01/10 - 5/23/11 

Total $ 9,672,094 $ 9,830,144 

Credit Risk 

Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. 

This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented 

below is the minimum rating required by the California Government Code, the Agency's investment policy, or debt 

agreements, and the actual rating as of the year-end for each investment type. 

Not Required 

Carrying Fair To Be 

Investment Type Value Value A-1 Rated 

Money Market Mutual Funds $ 8,981 $ 8,981 $ 8,981 $ 

- 

County Pooled Investment Funds 27,144 27,164 - 27,164 

Local Agency Investment Fund 9,635,969 9,793,999 - 9,793,999 

$ 9,672,094 $ 9,830,144 $ 8,981 $ 9,821,163 

Custodial Credit Risk - Deposits 

This is the risk that in the event of a bank failure, the Agency's deposits may not be returned to it. The Agency does 

not have a policy for custodial credit risk for deposits. However, the California Government Code requires that a 

financial institution secure deposits made by state or local governmental units by pledging securities in an undivided 

collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The 

market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited 

by the public agencies. California law also allows financial institutions to secure public deposits by pledging first 

trust deed mortgage notes having a value of 150% of the secured public deposits and letters of credit issued by the 

Federal Home Loan Bank of San Francisco having a value of 105% of the secured deposits. As of June 30, 2010, 

the Agency's bank balances of $2,350,862 were exposed to custodial credit risk to the extent that the balances are 

uninsured. The bank balances reported by the Agency are collateralized with securities held by the pledging 

financial institution's trust department or agent, but not in the name of the Agency. 

Custodial Credit Risk - Investments 

This is the risk that, in the event of the failure of the counterparty, the Agency will not be able to recover the value of 

its investments or collateral securities that are in possession of an outside party. The Agency’s investments policy 

requires delivery of securities to a safekeeping agent in the name of the Agency. The Agency believes it has no 

significant custodial credit risk. 

24




NOTE 3 – RESTRICTED ASSETS AND LIABILTIES 

Details of restricted assets and liabilities as of June 30, 2010 and 2009, are as follows: 


Construction Other Total Construction Other Total 

Current restricted assets: 

Cash and cash equivalents $ 8,999,278 $ 6,147,622 $ 15,146,900 $ 8,212,893 $ 6,631,120 $ 14,844,013 

Interest receivable 36,762 - 36,762 85,710 - 85,710 

Reclamation receivable - 132,099 132,099 - 177,698 177,698 

Grant receivable 5,692 - 5,692 5,692 - 5,692 

$ 9,041,732 $ 6,279,721 $ 15,321,453 $ 8,304,295 $ 6,808,818 $ 15,113,113 

Current liabilities payable from 

restricted assets: 

Construction services payable $ 4,657,890 $ 529,344 $ 5,187,234 $ 4,207,492 $ 610,853 $ 4,818,345 

Restricted Net Assets $ 4,383,842 $ 5,750,377 $ 10,134,219 $ 4,096,803 $ 6,197,965 $ 10,294,768 

25




NOTE 4 - CAPITAL ASSETS 

Capital asset activity for the fiscal year ended June 30, 2010, was as follows: 

Balance 

Balance 

July 1, 2009 Additions Deductions June 30, 2010 

Capital Assets Not Being Depreciated: 

Land and easements $ 2,097,827 $ - $ - $ 2,097,827 

Construction in Progress 6,820,020 6,552,753 6,027,364 7,345,409 

Total Capital Assets 

Not Being Depreciated 8,917,847 6,552,753 6,027,364 9,443,236 

Capital Assets Being Depreciated: 

Improvements 51,640,199 - - 51,640,199 

Buildings 96,390,355 297,130 7,496 96,679,989 

Equipment 75,679,717 1,465,154 234,564 76,910,307 

Total Capital Assets Being 

Depreciated 223,710,271 1,762,284 242,060 225,230,495 

Total Capital Assets 232,628,118 8,315,037 6,269,424 234,673,731 

Less Accumulated Depreciation: 

Improvements 21,375,715 861,345 - 22,237,060 

Buildings 47,701,909 2,465,913 5,743 50,162,079 

Equipment 62,278,142 1,633,185 231,004 63,680,323 

Less Accumulated Depreciation: 131,355,766 4,960,443 236,747 136,079,462 

Capital Assets, Net $ 101,272,352 $ 3,354,594 $ 6,032,677 $ 98,594,269 

NOTE 5 – LONG-TERM DEBT 

Summary 

The changes in the District's long-term obligations during the year consisted of the following: 

Balance Balance Due in 

July 1, 2009 Additions Deductions June 30, 2010 One Year 

General obligation bonds $ 17,305,000 $ - $ 1,150,000 $ 16,155,000 $ 1,075,000 

Premiums 495,819 - 31,731 464,088 31,732 

Construction loans 1,025,811 - 192,830 832,981 198,808 

Construction loans-Guaranteed 22,786,768 - 1,119,127 21,667,641 1,134,015 

$ 41,613,398 $ - $ 2,493,688 $ 39,119,710 $ 2,439,555 

26




Bonded Debt 

In 2003, the Agency issued revenue refunding bonds in the amount of $11,430,000. Interest is payable June 2004 

through June 2017 at a weighted average interest rate of 3.57%. Principal payments commenced on June 30, 

2004. A portion of the proceeds from the bonds were used to refund the balance of the 1993 revenue refunding 

bonds ($4,405,000). The remaining balance of the proceeds was used to refund a portion of the 1994 capital 

appreciation waste water contract revenue bonds. 

In 2006, the Agency issued revenue bonds in the amount of $9,780,000. Interest is payable semiannually 

beginning December 1, 2006 through June 1, 2026 at a weighted average interest rate of 4.77%. Principal 

payments begin on June 30, 2014. The bonds were issued to finance the construction of a biosolid dewatering 

facility, a new cogeneration facility, and the Salinas pump capacity enhancement project. 

The outstanding general obligation bonded debt is as follows: 

Bonds 

Bonds 

Issue Maturity Interest Original Outstanding Outstanding 

Date Date Rate Issue July 1, 2009 Issued Redeemed June 30, 2010 

2003 2017 3.57% $ 11,430,000 $ 7,525,000 $ - $ 1,150,000 $ 6,375,000 

2006 2026 4.77% 9,780,000 9,780,000 - - 9,780,000 

$ 17,305,000 $ - $ 1,150,000 $ 16,155,000 

Debt Service Requirements to Maturity 

The bonds mature through 2027 as follows: 

Year ending June 30 Principal Interest Total 

2011 $ 1,075,000 $ 761,313 $ 1,836,313 

2012 1,030,000 707,563 1,737,563 

2013 1,050,000 656,063 1,706,063 

2014 980,000 611,438 1,591,438 

2015 1,135,000 569,788 1,704,788 

2016-2020 4,875,000 2,173,350 7,048,350 

2021-2025 4,960,000 1,020,500 5,980,500 

2026-2030 1,050,000 52,500 1,102,500 

16,155,000 $ 6,552,513 $ 22,707,513 

Premium, net of amortization 464,088 

Total $ 16,619,088 

27




Construction Loans 

In 1995, the Agency participated in the State Revolving Loan Fund Program with a maximum loan amount of 

$3,275,425 at an interest rate of 3.1% per annum. The loan is payable in annual installments of $224,632, 

including interest, at 3.1% per annum, with the final payment due August 13, 2013. 

In 1999, the District participated in the State Revolving Loan Fund Program with a maximum loan amount of 

$8,850,000 at an interest rate of 3.03% per annum. The loan is payable in annual installments of approximately 

$630,000, commencing March 31, 2000, including interest, with final payment due March 31, 2018. Repayment 

of this loan is guaranteed by the County of Monterey (see Note 6). 

In 2003, The Agency obtained a Bureau of Reclamation loan with a maximum loan amount of $20,544,400 at a 

periodic interest rate of 7.625%. Debt service payments began on April 1, 2003, with final payment due 

December 2036. Repayment of this loan is guaranteed by the County of Monterey (see Note 6). 

The outstanding construction loan debt is as follows: 

Loans 

Loans 

Issue Maturity Interest Original Outstanding Outstanding 

Date Date Rate Issue July 1, 2009 Issued Redeemed June 30, 2010 

1995 2014 3.100% $ 3,275,425 $ 1,025,811 $ - $ 192,830 $ 832,981 

Monterey County Guaranteed 

1999 2018 3.030% 8,850,000 4,898,145 - 480,248 4,417,897 

2003 2037 7.625% 20,544,400 17,888,623 - 638,879 17,249,744 

22,786,768 - 1,119,127 21,667,641 

$ 23,812,579 $ - $ 1,311,957 $ 22,500,622 

Debt Service Requirements to Maturity 

The construction loans mature through 2014 as follows: 


2011 198,808 25,822 224,630 

2012 204,971 19,659 224,630 

2013 211,325 13,305 224,630 

2014 217,877 6,755 224,632 

$ 832,981 $ 65,541 $ 898,522 

28




The Monterey County construction loans mature through 2037 as follows: 


2011 $ 1,134,015 $ 594,931 $ 1,728,945 

2012 1,149,364 567,856 1,717,220 

2013 1,165,189 540,305 1,705,494 

2014 1,181,505 512,264 1,693,769 

2015 1,198,326 483,717 1,682,043 

2016-2020 4,978,293 1,991,190 6,969,482 

2021-2025 3,194,397 1,586,343 4,780,740 

2026-2030 3,194,397 1,293,204 4,487,601 

2031-2035 3,194,397 1,000,064 4,194,461 

2036-2040 1,277,759 317,946 1,595,705 

$ 21,667,641 $ 8,887,819 $ 30,555,460 

NOTE 6 – WATER RECLAMATION PROJECT 

In September 1995, construction began on a tertiary treatment plant, which would allow the Agency to reclaim 

water and provide it to local agricultural water users (the Reclamation Project). The construction project was 

substantially complete at June 30, 2000, and the Agency transferred the cost of the project, totaling approximately 

$33 million, from CIP to fixed assets, as of July 1, 1998. Funding for the construction project was provided by a 

zero interest loan from the Bureau of Reclamation, a low interest loan from the California State Revolving Loan 

Fund and funding from the MCWRA. 

The Agency has contracted with the County of Monterey to provide the reclaimed water, which will be sold to the 

agricultural water users. Water deliveries to users commenced during the later part of fiscal 1999. 

The Agency receives operating resources from the County sufficient to fund both the ongoing operations and 

maintenance of the tertiary treatment plant and the debt service requirements on the loans incurred by the Agency 

to build the plant. The sources of these operating resources are expected to be generated from water user charges 

and assessments. In addition, the Agency has contracted with the County to provide services relating to the 

distribution of the reclaimed water to the users. 

The Reclamation Project, from an operational standpoint, is designed to be revenue-neutral to the Agency. All 

identifiable operating costs of the tertiary treatment plant, including the storage and distribution of reclaimed 

water to the users, are reimbursed from the County of Monterey. In addition, as noted above, the County is 

responsible for reimbursing the Agency for the debt service on the loans used to fund the construction project as 

the payments come due. Since the tertiary treatment plant is an asset of Agency, the Agency commenced 

depreciating the plant during the 1998-1999 fiscal year, the year it was placed into service. 

29




Reimbursements from the County to pay the principal portion of the loans incurred to fund the plant construction 

will eventually offset the depreciation expense on the treatment plant. However those reimbursements will not be 

received by the Agency in the same timeline that the depreciation expense is being charged to operations, thus 

creating a potential distortion of the Agency’s results of operations. Therefore, the Agency is accruing a noncurrent 

receivable from Monterey County for the unfunded depreciation expense on the reclamation plant, 

approximately $1,100,000 per year. Reimbursements from the County for debt service on the state loan 

commenced during the year ended June 30, 2000, and reimbursements on the Bureau of Reclamation loan 

commenced during the year ended June 30, 2006. Reimbursements that relate to principal repayments are 

credited against the receivable balance. Such reimbursements totaled $1,119,128 and $1,104,687 for the years 

ended June 30, 2010 and 2009, respectively. 

The net impact of this treatment is to properly abate both the current depreciation expense on the reclamation 

plant and the future principal reimbursement to the Agency (otherwise reflected as income) resulting in no net 

impact to the Agency’s statement of operations. The County is the primary guarantor of both loans and is 

contractually obligated to the Agency to provide the necessary debt service reimbursements as those amounts 

become due. 

NOTE 7 – DEFINED BENEFIT PENSION PLAN 

CalPERS Pension Plan (The Plan) 

Plan Description 

The Agency provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to 

plan members and beneficiaries. 

The Plan is part of the Miscellaneous Plan of CalPERS, a cost-sharing agent multiple-employer defined benefit 

plan administered by CalPERS, which acts as a common investment and administrative agent for participating 

public employers within the State of California. A menu of benefit provisions as well as other requirements is 

established by State statutes within the Public Employees’ Retirement Law. The Agency selects optional benefit 

provisions from the benefit menu by contract with CalPERS and adopts those benefits through board resolutions. 

CalPERS issues a separate comprehensive annual financial report. Copies of the CalPERS annual financial report 

may be obtained from the CalPERS Executive Office, 400 P Street, Sacramento, CA 95814. 

Funding Policy 

The Agency, on behalf of the employees participating in the Plan, contributes 8% of their annual covered salary. 

In addition, the Agency is required to contribute the actuarially determined remaining amount necessary to fund 

the benefits for its members. The actuarial methods and assumptions used are those adopted by CalPERS Board 

of Administration. The employer contribution rate for was 23.006%, 22.782%, and 21.325%, for the years ended 

June 30, 2010, 2009, and 2008, respectively. The contribution requirements of the plan members are established 

by State statute and the employer contribution rate is established and may be amended by CalPERS. The 

Agency’s annual pension cost was $2,180,258, $2,097,847, and $1,907,606, for the years ending June 30, 2010, 

2009 and 2008, respectively, and equals 100 percent of the required contributions for each year. 

30




NOTE 8 – JOINT POWERS AGREEMENT 

The Agency participates in one joint venture under a joint power agreement (“JPA”) with the California 

Sanitation Risk Management Authority (“CSRMA”). The relationship between the Agency and CSRMA is such 

that CSRMA is not a component unit of the agency for financial reporting purposes. 

CSRMA arranges for and provides workers’ compensation, property, liability and errors and omissions insurance 

for its member governmental entities. The CSRMA is governed by a board consisting of representatives from its 

member entities. 

The board controls the operations of the CSRMA including selection of management and approval of operating 

budgets, independent of any influence by the member district beyond their representation on the board. Each 

member district pays a premium commensurate with the level of coverage requested and shares surpluses and 

deficits proportionate to their participation in the CSRMA. 

CSRMA has budgeting and financial reporting requirements independent of member units and its financial 

statements are not presented in these financial statements; however, fund transactions between CSRMA and the 

Agency are included in these statements. Audited financial statements are available from the respective entity. 

The Agency has appointed one board member to the governing board of CSRMA. 

During the year ended June 30, 2010, the Agency made payments of $356,769 to CSRMA for workers 

compensation and property and liability insurance premiums. 

NOTE 9 – SALINAS RIVER WATER DISINFECTION SYSTEM 

This receivable represents amounts advanced by the Agency to the Monterey County Water Resources Agency 

(MCWRA) for costs of the design and construction of the Salinas River Water Disinfection System (SRDD) and 

connection to the 80 acre foot pond at the Salinas Valley Reclamation Plant (SVRP). The project will impound 

water from the Salinas River, and mix the water with water produced by the SVRP in the Pond. The combined 

water will then be chlorinated for food safety purposes and then distributed to growers for agricultural uses 

through the existing Castroville Seawater Intrusion Project’s (CSIP) distribution system. As of June 30, 2010, it 

has not been determined who will actually own the system, however the Agency and MCWRA are currently 

working on an agreement whereby MRWPCA would operate and maintain the system with all operating costs 

being subject to reimbursement from MCWRA. As such, the advanced costs have been treated as a receivable as 

these costs as well are subject to reimbursement. The amounts recorded as of June 30, 2010 were repaid in the 

2010/11 fiscal year. 

31

OTHER SUPPLEMENTARY INFORMATION


BUDGETARY COMPARISON SCHEDULE 

FOR THE YEAR ENDED JUNE 30, 2010 

Variance 

Approved 

Favorable 

Budget Actuals (Unfavorable) 


User fees $ 16,531,606 $ 16,308,396 $ (223,210) 

Other 728,742 769,150 40,408 

Total Revenues 17,260,348 17,077,546 (182,802) 


Administrative 1,539,476 1,471,053 68,423 

Finance 2,007,907 1,996,228 11,679 

Laboratory 1,463,271 1,330,963 132,308 

Regional Treatment Plant - Administrative 620,072 617,151 2,921 

Field Maintenance 3,408,547 3,367,567 40,980 

Cogeneration 941,228 1,049,699 (108,471) 

Regional Treatment Plant - Maintenance and Operations 5,565,055 5,226,750 338,305 

Major Maintenance and Operations Non Capital Projects 134,009 209,116 (75,107) 

Total Operating Expenses 15,679,565 15,268,527 411,038 

DEBT SERVICE 

Principal 1,342,830 1,342,830 - 

Interest 850,613 840,311 10,302 

Total Debt Service 2,193,443 2,183,141 10,302 

OTHER INCOME (EXPENSE) 

Interest income 115,000 70,761 (44,239) 

Capacity charges 600,000 588,530 (11,470) 

Other 106,200 234,014 127,814 

Total Other Income (Expense) 821,200 893,305 72,105 

CAPITAL OUTLAY (3,380,260) (2,287,673) 1,092,587 

CHANGE IN NET ASSETS $ (3,171,720) $ (1,768,490) $ 1,403,230 

32


SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE 

FOR THE YEAR ENDED JUNE 30, 2010 

Federal Loan Loan 

CFDA Balance Balance 

Program Name Number June 30, 2009 Add Delete June 30, 2010 

Environmental Protection Agency 

Revolving loan - Marina Project 66.458 $ 1,025,811 $ - $ 192,830 $ 832,981 

Revolving loan - Reclamation Project 66.458 4,898,145 - 480,248 4,417,897 

$ 5,923,956 $ - $ 673,078 $ 5,250,878 

Department of the Interior 

Bureau of Reclamation Loan 15.000 $ 17,888,623 $ - $ 638,879 $ 17,249,744 

Totals $ 23,812,579 $ - $ 1,311,957 $ 22,500,622 

33


NOTES TO SUPPLEMENTARY INFORMATION 

FOR THE YEAR ENDED JUNE 30, 2009 

NOTE 1 – BUDGETARY BASIS OF ACCOUNTING 

The Agency prepares its budget on a basis of accounting that differs from generally accepted accounting 

principles (GAAP). The actual results of operations are presented in the Supplemental Schedule on the budgetary 

basis to provide a meaningful comparison of actual results with budget. In addition, certain budget amounts have 

been reclassified to conform to the presentation of actual amounts in the Supplemental Schedule. Budgeted 

amounts presented are the original adopted budget. The primary difference between the budgetary basis of 

accounting and GAAP is that capital assets are expensed rather than capitalized and depreciated and that debt 

principal payment are expensed rather than a reduction of liability. 

NOTE 2 – RECONCILIATION OF BUDGETARY BASIS TO GAAP BASIS 

A reconciliation of the budgetary basis of accounting to GAAP is as follows: 

Change in net assets - budgetary basis $ (1,768,490) 

Capital outlay 2,287,673 

Principal payments on long-term debt 1,342,830 

Depreciation and amortization (3,830,253) 

Change in net assets GAAP basis $ (1,968,240) 

NOTE 3 – SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE 

General 

The accompanying schedule of Federal financial assistance presents the revolving loans from the EPA through the 

State of California and the loan from the Bureau of Reclamation through the Department of the Interior. Proceeds 

from such loans were used to fund construction of a tertiary water treatment plant to provide reclaimed water to 

be used for agricultural purposes. The expenditures for construction of the plant have been tested in prior years. 

There were no significant project expenditures during the year ended June 30, 2010. 

Basis of Accounting 

The accompanying schedule of federal financial assistance is presented using the accrual basis of accounting. 

Grant Amendments 

No grant amendments were made during the current year. 

34



Section III 

STATISTICAL SECTION 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Trends – Changes in Net Assets 

The information in this schedule is intended to assist users in understanding and assessing how our 

Agency's financial position has changed over the past ten years. 

Revenue Capacity – Revenue Base and Revenue Rates 

This schedule reflects the Agency's ability to generate revenue by including the total number of users 

and revenue rates for the two largest categories of revenue over the last ten years. 

Revenue Capacity – 10 Largest Rate Payers for Current Year and Nine Years Ago 

The information presented in this schedule assists readers in knowing which users the Agency relies 

on for revenue during the current year and nine years ago and the percentage of total fees per 

principal user. 

Debt Capacity – Ratios of Outstanding Bonds 

This schedule is intended to assist readers in assessing the Agency's debt burden and its relationship 

to the service area's personal income for the past ten years. 

Debt Capacity – Bonded Debt 

The information in this schedule indicates the amount of total bonded debt in relation to total 

operating revenue and capacity fees for the past ten years. 

Debt Capacity – Direct and Overlapping Debt 

This schedule is intended to assist readers in assessing the Agency's ability to meet its annual debt 

service obligations over the past ten years. 

Debt Capacity – Pledged Revenue Coverage 

This schedule is intended to assist readers in assessing the Agency's ability to meet its annual debt 

service obligations over the past ten years. 

Demographics and Economic Information - Population and Income 

The purpose of this schedule is to assist readers in understanding the socioeconomic environment 

within which the Agency operates over the past ten years. 

Demographics and Economic Information – Number of employees by major industry 

Operating Information – Agency Employees by Function 

Average dry weather flow is the amount of wastewater received into the treatment plant per day in 

million gallons. 

Operating Information – Operating Indicators 

Monterey Regional Water Pollution Control Agency is a wastewater treatment plant with a flow 

capacity of 29.6 million gallons per day (MGD). During the treatment process, biosolids are removed 

from the water and are naturally dried in drying beds or mechanically dried by a screw press. The 

amount of dry solids produced during the treatment process is a performance indicator of the actual 

treatment processes. This schedule is to inform users of actual flow and biosolid production of the 

Agency for the past 10 years. 

Operating Information – Capital Assets 

This schedule is intended to provide readers with information about the Agency's capital assets by 

asset type for the past ten years.


FINANCIAL TRENDS – CHANGES IN NET ASSETS 

FISCAL YEAR 2001 THROUGH FISCAL YEAR 2010 

2010 2009 2008 2007 


User Fees 16,308,396 16,156,975 15,591,285 14,187,996 

Other operating revenues 769,150 766,379 900,024 867,405 

Total operating revenues 17,077,546 16,923,354 16,491,309 15,055,401 


BEFORE DEPRECIATION 

Administrative 1,471,053 1,591,497 1,447,346 1,324,259 

Finance 1,996,228 1,849,227 1,811,822 1,749,013 

Laboratory 1,330,963 1,443,842 1,410,376 1,290,672 

Regional Treatment Plant 

- Administrative 617,151 557,118 358,319 520,182 

Field Maintenance 3,367,567 3,312,200 3,118,647 3,103,192 

Cogeneration 1,049,699 1,099,069 965,046 932,749 

Regional Treatment Plant 

- Maintenance & Operations 5,226,750 5,331,146 5,201,819 4,557,069 

Major Maintenance & Operations 

- Non Capital Projects 209,116 439,407 691,988 846,589 

Total operating expenses 

before depreciation 15,268,527 15,623,506 15,005,363 14,323,725 

DEPRECIATION 3,822,747 4,331,821 4,666,624 4,186,995 

OPERATING LOSS (2,013,728) (3,031,973) (3,180,678) (3,455,319) 

NONOPERATING REVENUES 

(EXPENSES) 

Interest revenue 70,761 323,919 821,667 1,079,839 

Interest expense (840,311) (887,760) (927,297) (925,155) 

Amortization of bond issuance cost (7,506) (7,760) (7,251) 51,429 

Capital Contributions - - - - 

Capacity charges 588,530 639,974 1,691,420 1,326,829 

Other revenue 216,920 180,019 192,583 344,290 

Other expense 17,094 21,615 9,856 (18,629) 

Total nonoperating revenues 45,488 270,007 1,780,978 1,858,603 

Decrease in net assets (1,968,240) (2,761,966) (1,399,700) (1,596,716) 

Beginning Net Assets 83,759,089 86,521,055 87,920,755 90,099,127 

Prior Period Adjustment - (581,656) 

Ending Net Assets $ 81,790,849 $ 83,759,089 $ 86,521,055 $ 87,920,755 

Invested in capital assets, $ 69,765,250 $ 69,931,077 $ 69,728,636 $ 68,638,562 

net of related debt 

Restricted 10,134,219 10,294,768 10,855,825 10,767,593 

Unrestricted 1,891,380 3,533,244 5,936,594 8,514,600 

Total Net Assets $ 81,790,849 $ 83,759,089 $ 86,521,055 $ 87,920,755 

Source: Agency Audited Financial Statements 

35


FINANCIAL TRENDS – CHANGES IN NET ASSETS 


2006 2005 2004 2003 2002 2001 

13,554,796 13,215,969 12,915,763 12,825,320 12,850,576 12,988,845 

802,340 729,587 681,297 563,364 585,988 566,997 

14,357,136 13,945,556 13,597,060 13,388,684 13,436,564 13,555,842 

1,323,081 1,408,352 1,332,550 1,416,086 1,223,571 1,224,142 

1,654,415 1,609,837 1,360,912 1,123,233 1,113,055 971,619 

1,210,997 988,293 1,024,537 805,044 704,840 666,966 

482,775 546,559 562,023 392,606 355,668 375,154 

3,059,164 3,128,901 3,326,291 3,023,949 2,952,093 2,499,436 

898,461 921,101 836,785 558,898 787,225 666,516 

4,353,583 4,509,467 4,602,296 4,711,940 4,132,931 3,499,211 

141,109 - - - - - 

13,123,585 13,112,510 13,045,394 12,031,756 11,269,383 9,903,044 

4,279,388 4,736,783 5,272,278 5,849,993 6,038,515 6,374,714 

(3,045,837) (3,903,737) (4,720,612) (4,493,065) (3,871,334) (2,721,916) 

588,576 429,386 535,660 545,501 701,529 1,420,806 

(625,874) (661,488) (1,270,767) (863,090) (988,793) (1,367,467) 

(81,711) (81,711) (52,521) (460,299) (39,978) (39,978) 

- - - 10,339 1,630,058 (2,221,437) 

1,063,101 1,261,636 1,317,287 2,063,748 1,196,858 2,014,272 

75,399 11,705 47,503 58,419 1,202,690 9,910 

(26,678) (30,966) (508,534) 11,424 (282,657) - 

992,813 928,562 68,628 1,366,042 3,419,707 (183,894) 

(2,053,024) (2,975,175) (4,651,984) (3,127,023) (451,627) (2,905,810) 

92,152,151 95,127,326 99,779,310 102,906,333 103,357,960 106,263,770 

$ 90,099,127 $ 92,152,151 $ 95,127,326 $ 99,779,310 $ 102,906,333 $ 103,357,960 

$ 75,950,233 $ 75,174,473 $ 76,791,056 $ 71,287,437 $ 79,583,276 $ 83,394,302 

3,822,681 9,741,899 10,492,830 25,959,203 18,159,627 15,992,796 

10,326,213 7,235,779 7,843,440 2,532,670 5,163,430 3,970,862 

$ 90,099,127 $ 92,152,151 $ 95,127,326 $ 99,779,310 $ 102,906,333 $ 103,357,960 

35


REVENUE CAPACITY – REVENUE BASE AND REVENUE RATES 


FISCAL YEARS ENDED 2010 2009 2008 2007 

Total User Fees $ 15,726,740 $ 16,156,975 $ 15,991,285 $ 14,187,996 

Residential $ 11,150,033 $ 11,107,805 $ 10,738,549 $ 10,100,999 

Industrial 289,802 287,797 278,494 198,148 

Commercial 3,031,172 3,048,019 2,904,920 2,442,439 

Military 487,553 252,360 369,403 319,653 

Other - - - 43,141 

Liquid Waste Haulers 362,210 357,880 405,440 389,114 

Grease Haulers 138,980 129,988 149,516 122,783 

Diluted Oily Waste 88,240 208,621 106,800 99,013 

Brine Receiving 408,683 468,839 392,382 330,839 

Revenue Base 

Number of Users 61,051 60,924 60,481 60,076 

Fee Structure 

Residential per month $ 12.00 $ 11.10 $ 10.75 $ 10.00 

Commerical 

Businesses per 10 employees 

per month $ 8.30 $ 7.55 $ 7.55 $ 7.00 

Hospitals per unit per month $ 96.19 $ 96.19 $ 94.30 $ 95.34 

(gallons per unit) 193 193 189 210 

Restaurants per capacity seating 

per meal per month $ 0.75 $ 0.70 $ 0.65 $ 0.50 

Supermarkets per month $ 133.60 $ 131.60 $ 116.75 $ 92.10 

Source: Agency Customer Service Billing Department 

36


REVENUE CAPACITY – REVENUE BASE AND REVENUE RATES 


2006 2005 2004 2003 2002 2001 

$ 13,554,796 $ 13,215,969 $ 12,915,763 $ 12,825,320 $ 12,850,576 $ 12,988,845 

$ 9,465,474 $ 9,130,819 $ 8,716,503 $ 8,703,358 $ 8,554,700 $ 8,511,332 

199,778 207,028 200,728 260,090 370,344 467,915 

2,457,049 2,383,728 2,372,908 2,420,538 2,510,183 2,607,008 

512,098 727,850 727,849 727,849 727,848 731,345 

57,613 24,600 19,332 852 (45) 1,643 

413,745 429,929 406,478 363,474 362,851 317,687 

148,897 100,715 217,031 146,392 116,238 106,312 

50,054 44,101 77,151 32,769 30,408 35,111 

128,981 - - - - - 

62,763 62,429 61,893 61,373 58,586 56,255 

$ 9.70 $ 9.70 $ 9.30 $ 9.30 $ 9.30 $ 9.30 

$ 6.60 $ 6.60 $ 6.60 $ 6.60 $ 6.90 $ 7.50 

$ 98.06 $ 88.59 $ 90.40 $ 85.47 $ 82.58 $ 76.66 

210 205 200 190 182 173 

$ 0.50 $ 0.50 $ 0.50 $ 0.50 $ 0.50 $ 0.55 

$ 91.30 $ 91.30 $ 91.30 $ 91.30 $ 93.45 $ 100.90 

36



REVENUE CAPACITY – REVENUE BASE AND REVENUE RATES (Continued) 


Monthly Residential User Fee Rates 

$20.00 

$15.00 

$12.00 

$10.00 

$11.10 

$10.75 

$10.00 

$9.70 $9.70 

$9.30 $9.30 $9.30 $9.30 

$5.00 

$0.00 

2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 

37


REVENUE CAPACITY – 10 LARGEST RATE PAYERS 

FISCAL YEAR 2010 AND FISCAL YEAR 2001 


Percentage 

Percentage 

of Total 

of Total 

User Fee User Fee User Fee User Fee 

User Rank Revenues Revenue Rank Revenues Revenue 

Parks at Monterey Bay 1 $ 195,671 1.20% $ - 

- 

Department of Army-Presidio of Monterey 2 180,449 1.11% - - 

Department of Navy-La Mesa Housing 3 168,727 1.03% 2 128,327 1.04% 

Mission Linen 4 66,610 0.41% 4 134,822 1.09% 

Department of Navy-Postgraduate School 5 61,651 0.38% 6 93,632 0.76% 

Preston Park 6 47,153 0.29% 44,514 0.36% 

Salinas Valley Memorial 7 44,565 0.27% 5 - - 

Embassy Suites 8 43,870 0.27% 61,339 0.5% 

Monterey Gourmet Foods 9 40,046 0.25% - - 

Salinas Tallow 10 39,987 0.25% - - 

Department of Army-Fort Ord - - 1 409,820 3.33% 

Intergrated Devices Technology - - 3 157,015 1.27% 

Hyatt Regency Hotel - - 7 50,656 0.41% 

Monterey Plaza Hotel - - 8 41,059 0.33% 

Natividad Medical Center - - 9 40,833 0.33% 

Artichoke Industries - - 10 - 0.00% 

$ 888,729 5.45% $ 1,162,017 9.43% 

Source: Agency Customer Service Billing Department 

38


DEBT CAPACITY – RATIOS OF OUTSTANDING BONDS 


Wastewater Total As a Percent of 

Fiscal Years Revenue Bonds Loans Payable Total Debt Personal Income Personal Income 

2010 $ 16,155,000 $ 22,964,710 $ 39,119,710 $ - * - 

2009 17,305,000 24,308,398 41,613,398 17,381,644,000 0.2% 

2008 18,445,000 25,631,848 44,076,848 17,205,000,000 0.3% 

2007 19,745,000 26,936,148 46,681,148 16,194,108,000 0.3% 

2006 11,235,000 27,741,226 38,976,226 15,586,498,000 0.3% 

2005 12,422,465 28,839,332 41,261,797 14,771,776,000 0.3% 

2004 13,572,422 29,417,110 42,989,532 14,096,150,000 0.3% 

2003 21,112,321 29,997,283 51,109,604 13,380,948,000 0.4% 

2002 15,969,228 30,566,943 46,536,171 12,676,027,000 0.4% 

2001 17,675,890 30,184,158 47,860,048 12,540,815,000 0.4% 

Source: Agency Audited Financial Statements and Employment Development Department Labor Market Info 

* Data not available at time of publication. 

39


DEBT CAPACITY – BONDED DEBT 


(Operating 

Wastewater Revenue and As a Percent of Total Total Debt per 

Fiscal Years Revenue Bonds Capacity Fees) Available Revenue Ratepayers/Customers Ratepayer/Customer 

2010 $ 16,155,000 $ 16,315,270 

99.0% 61,051 $ 264.61 

2009 17,305,000 16,796,949 103.0% 60,924 284.04 

2008 18,445,000 17,282,705 106.7% 60,481 304.97 

2007 19,745,000 16,382,230 120.5% 60,076 328.67 

2006 11,235,000 15,420,237 72.9% 62,763 179.01 

2005 12,422,465 15,207,192 81.7% 62,429 198.99 

2004 13,572,422 14,914,347 91.0% 61,893 219.29 

2003 21,112,321 15,452,432 136.6% 61,373 344.00 

2002 15,969,228 14,633,422 109.1% 58,586 272.58 

2001 17,675,890 15,570,114 113.5% 56,255 314.21 

40


DEBT CAPACITY – DIRECT AND OVERLAPPING DEBT 

AND DEBT LIMITATION 


The Agency does not have an overlapping debt with other governments. Additionally, the Agency does not have 

a legal debt limit. 

41


DEBT CAPACITY – PLEDGED REVENUE COVERAGE 


Available Revenue 

Debt Service 

(Operating Revenue , 

Capacity Fees & 

Fiscal Years Other Revenues) Principal Interest Total Coverage 

2010 $ 17,084,420 $ 1,342,830 $ 369,300 $ 1,712,130 9.98 

2009 17,563,328 1,332,830 884,813 2,217,643 7.92 

2008 18,182,729 1,481,409 935,234 2,416,643 7.52 

2007 16,382,230 1,445,954 925,155 2,371,109 6.91 

2006 15,420,237 2,422,034 625,874 3,047,908 5.06 

2005 15,207,192 1,315,490 661,488 1,976,978 7.69 

2004 14,914,347 8,255,872 1,270,767 9,526,639 1.57 

2003 15,452,432 6,534,203 863,090 7,397,293 2.09 

2002 14,633,422 2,002,378 988,793 2,991,171 4.89 

2001 15,570,114 2,064,594 1,099,988 3,164,582 4.92 

Note: Debt Service amounts do not include loans for the reclamation project which is funded 

by the County of Monterey. 

42


DEMOGRAPHICS AND ECONOMIC INFORMATION – POPULATION AND 

INCOME 

FISCAL YEAR JUNE 30, 2000 THROUGH FISCAL YEAR JUNE 30, 2009 

Calendar Per Capita Median School Unemployment 

Year Population (1) Income (2) Age (3) Enrollment (4) Rate (5) 

2009 433,887 42,324 32.5 70,949 10.40% 

2008 428,549 42,144 32.2 70,523 8.50% 

2007 423,762 38,373 32.2 69,851 7.20% 

2006 423,048 38,373 31.9 70,374 6.90% 

2005 422,632 36,137 36.1 71,971 7.30% 

2004 421,793 34,224 34.5 73,863 8.30% 

2003 418,285 32,425 32.7 73,812 9.00% 

2002 412,965 30,863 31.0 73,416 8.90% 

2001 407,192 30,755 32.0 72,529 7.80% 

2000 398,873 30,004 31.7 71,186 7.40% 

Sources: 

(1), (2), and (5) Employment Development Department, LaborMarket Info 

(3) US Census Bureau American Factfider 

(4) California Department of Education, Educational Demographics Unit 

Notes: 

School Enrollment includes kindergarten through grade 12 and on a fiscal year basis. 

Results of the 2000 census indicated that the Population of Monterey county was 401,192. 

Our Agency serves North Monterey County, which equals to approximately 63% of the 

county's population. The schedule sets forth actual population figures for the County of 

Monterey. 

Most recent information available 

43

433,887 428,549 423,762 423,048 422,632 421,793 418,285 412,965 407,192 


DEMOGRAPHICS AND ECONOMIC INFORMATION – POPULATION AND 

INCOME (Continued) 


POPULATION GROWTH 

500,000 

400,000 

398,873 

300,000 

200,000 

100,000 

0 

2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 


44


DEMOGRAPHICS AND ECONOMIC INFORMATION – NUMBER OF EMPLOYEES 

BY MAJOR INDUSTRY 

FOR THE YEAR ENDED JUNE 30, 2000 THROUGH JUNE 30, 2009 

MSA and Industry 2009 2008 2007 2006 2005 2004 

Salinas MSA Totals: 

No. of Businesses 11,770 11,883 12,646 11,543 11,167 11,270 

No. of Employees 146,140 151,764 165,140 150,949 150,590 99,475 

Payroll $ 1,283,015 $ 1,350,632 $ 1,484,352 $ 1,275,051 $ 1,253,717 $ 1,162,536 

Agriculture 

No. of Businesses 546 564 571 577 584 602 


Payroll $ 380,582 $ 367,621 $ 369,556 $ 342,021 $ 336,288 $ 307,580 

Mining 1 

No. of Businesses - 7 8 9 9 10 

No. of Employees - 207 195 201 192 213 

Payroll $ - $ 4,006 $ 3,828 $ 3,742 $ 3,429 $ 2,359 

Utilities 


No. of Employees 500 498 553 569 528 480 

Payroll $ 11,086 $ 10,210 $ 9,265 $ 8,836 $ 9,714 $ 9,756 

Construction and Mining 

No. of Businesses 930 972 991 1,012 965 995 


Payroll $ 59,777 $ 72,734 $ 81,141 $ 80,519 $ 73,121 $ 71,493 

Manufacturing 



Payroll $ 56,038 $ 62,193 $ 64,045 $ 65,346 $ 73,030 $ 73,187 

Wholesale Trade 



Payroll $ 74,947 $ 77,892 $ 72,518 $ 69,628 $ 71,940 $ 59,857 

45


OPERATING INFORMATION – AGENCY EMPLOYEES BY FUNCTION 

FISCAL YEAR JUNE 30, 2001 THROUGH FISCAL YEAR JUNE 30, 2010 

MSA and Industry 2009 2008 2007 2006 2005 2004 

Retail Trade 



Payroll $ 107,453 $ 123,527 $ 123,776 $ 120,907 $ 120,898 $ 114,448 

Transportation and Warehousing 



Payroll $ 34,856 $ 36,686 $ 34,636 $ 28,644 $ 28,851 $ 26,107 

Information 



Payroll $ 24,735 $ 31,165 $ 35,997 $ 33,618 $ 33,578 $ 31,249 

Finance and Insurance 



Payroll $ 47,648 $ 68,173 $ 69,518 $ 63,144 $ 63,242 $ 50,791 

Real Estate, Rental and Leasing 



Payroll $ 15,087 $ 17,372 $ 21,402 $ 22,315 $ 21,537 $ 20,400 

Services 



Payroll $ 470,805 $ 479,053 $ 598,670 $ 436,331 $ 418,089 $ 395,309 

Source: Employment Development Department, Labor Market Information and Monterey County 

1 

Mining industry has been combinded with the Construction industry starting in 2009 

Notes: 

Figures are as of third quarter of calender year 

Data does not include totals for governmental employment 

Data is confidential and suppressed if there are fewer than 3 businesses in a category employment 

or 1 employee makes up 80% of category. 

Rules instituted by the Federal Bureau of Labor Statistics after September 11, 2001 prohibit state 

departments of labor or economic security from publicly identifying the names of individual employers. 

MRWPCA has removed the Major Employer data from the statisitical section. GASB Statement No. 44 

allows for employment by industry data to be published instead. 

46


OPERATING INFORMATION – AGENCY EMPLOYEES BY FUNCTION 

FISCAL YEAR JUNE 30, 2001 THROUGH FISCAL YEAR JUNE 30, 2010 

FUNCTION 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 

Administrative 6.3 6.0 6.0 5.5 6.3 6.0 7.0 6.0 6.0 6.0 

Finance 16.0 15.5 15.0 15.5 15.5 14.0 14.0 14.0 14.0 14.0 

Environmental Services 8.5 9.0 9.0 10.0 9.0 10.5 10.0 8.8 7.0 7.0 

RTP - Administrative 3.0 3.0 2.0 3.0 3.0 3.0 4.0 2.0 2.0 2.0 

Field Maintenance 7.3 7.0 7.3 8.0 7.0 7.0 9.5 9.5 9.5 10.5 

Cogeneration 1.0 1.0 1.0 2.0 2.0 2.0 1.5 1.5 1.5 1.5 

RTP - Maint. & Operations 31.5 34.0 35.0 32.5 32.0 31.0 33.0 34.0 31.0 30.0 

TOTALS: 73.5 75.5 75.3 76.5 74.8 73.5 79.0 75.8 71.0 71.0 

47


OPERATING INFORMATION – OPERATING INDICATORS 


OPERATING INDICATORS, LAST TEN YEARS 

Average Daily 

Biosolid (Sludge) 

Year Influent Flow Production 

(Calendar) (MGD) (Dry Tons) 

2009 19.9 4,324 

2008 19.3 5,923 

2007 19.8 5,440 

2006 21.1 4,522 

2005 20.7 5,673 

2004 20.7 6,543 

2003 21.1 5,237 

2002 21.6 7,243 

2001 21.2 6,819 

2000 21.9 5,662 

Source: Agency Annual Report 


48


OPERATING INFORMATION – OPERATING INDICATORS (Continued) 


ANNUAL INFLUENT FLOW 

30 

20 

Million Gallons 

10 

0 

2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 


49


OPERATING INFORMATION – OPERATING INDICATORS (Continued) 


BIOSOLID PRODUCTION 

Dry Tons 

- 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 

2009 

4,324 

2008 

5,923 

2007 

5,440 

2006 

4,522 

2005 

5,673 

2004 

6,543 

2003 

5,237 

2002 

7,243 

2001 

6,819 

2000 

5,662 


50


OPERATING INFORMATION – CAPITAL ASSETS 


Property, Plant & Equipment 2010 2009 2008 2007 

Land 2,097,827 2,097,827 2,068,853 2,068,853 

Buildings 96,679,989 96,390,355 92,706,567 91,922,504 

Improvements other than Buildings 51,640,199 51,640,199 51,317,044 51,317,044 

Equipment 76,910,307 75,679,717 71,298,154 70,758,980 

Construction in Progress 7,345,409 6,820,020 12,274,408 9,490,109 

Subtotal Capital Assets 234,673,731 232,628,118 229,665,026 225,557,490 

Less Accumulated Depreciation (136,079,462) (131,355,766) (126,098,656) (120,430,359) 

Total Capital Assets 98,594,269 101,272,352 103,566,370 105,127,131 

Wastewater Facilities 

Number of treatment plant(s) 1.0 1.0 1.0 1.0 

Co-Generation 100% of 100% of 100% of 100% of 

Plant Power Plant Power Plant Power Plant Power 

Number of pump stations - owned 10.0 10.0 10.0 10.0 

Number of pump stations - 

maintained (includes city owned) 27.0 27.0 27.0 27.0 

Average dry weather flow 19.9 MGD * - 19.3 MGD 19.8 MGD 

Gravity - Miles of 2.3 2.3 2.3 2.3 

Force Mains - Miles of 19.7 19.7 19.7 19.7 

*Data not available at publication. 

51


OPERATING INFORMATION – CAPITAL ASSETS 


2006 2005 2004 2003 2002 2001 

2,068,852 2,068,852 2,068,852 2,068,852 2,068,852 2,068,852 

91,586,793 90,681,185 89,577,468 89,286,670 89,172,141 89,181,740 

51,213,691 51,213,691 51,213,691 51,213,691 51,201,723 51,184,849 

69,287,395 69,531,461 67,083,368 66,709,348 66,166,340 65,506,764 

6,122,622 3,686,006 5,501,730 3,170,559 1,578,001 1,027,588 

220,279,353 217,181,195 215,445,109 212,449,120 210,187,057 208,969,793 

(115,109,536) (110,012,356) (103,786,943) (97,016,570) (89,863,548) (82,334,699) 

105,169,817 107,168,839 111,658,166 115,432,550 120,323,509 126,635,094 

1.0 1.0 1.0 1.0 1.0 1.0 

100% of 100% of 100% of 100% of 100% of 100% of 

Plant Power Plant Power Plant Power Plant Power Plant Power Plant Power 

10.0 10.0 10.0 10.0 10.0 10.0 

27.0 27.0 27.0 27.0 27.0 27.0 

21.1 MGD 20.7 MGD 20.7 MGD 21.1 MGD 21.6 MGD 21.2 MGD 

2.3 2.3 2.3 2.3 2.3 2.3 

19.7 19.7 19.7 19.7 19.7 19.7 

51

Section IV 

INTERNAL CONTROL AND COMPLIANCE SECTION 

Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other 

Matters Based on an Audit of Financial Statements Performed in Accordance with Governmental Auditing 

Standards.

INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL 

OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS 

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN 

ACCORDANCE WITH GOVERNMENTAL AUDITING STANDARDS 



Monterey, California 

We have audited the financial statements of Monterey Regional Water Pollution Control Agency (the “Agency”) 

as of and for the years ended June 30, 2010 and 2009, and have issued our report thereon dated November 15, 

2010. We conducted our audits in accordance with auditing standards generally accepted auditing in the United 

States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the 

Comptroller General of the United States. 

Internal Control Over Financial Reporting 

In planning and performing our audit, we considered the Agency's internal control over financial reporting as a 

basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, 

but not for the purpose of expressing an opinion on the effectiveness of the Agency’s internal control over 

financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Agency’s internal 

control over financial reporting. 

A deficiency in internal control exists when the design or operation of a control does not allow management or 

employees, in the normal course of performing their assigned functions, to prevent or detect and correct 

misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal 

control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements 

will not be prevented, or detected and corrected on a timely basis. 

Our consideration of internal control over financial reporting was for the limited purpose described in the first 

paragraph of this section and was not designed to identify all deficiencies in internal control over financial 

reporting that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any 

deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined 

above. 

Compliance and Other Matters 

As part of obtaining reasonable assurance about whether the Agency’s financial statements are free of material 

misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and 

grant agreements, noncompliance with which could have a direct and material effect on the determination of 

financial statement amounts. However, providing an opinion on compliance with those provisions was not an 

objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no 

instances of noncompliance or other matters that are required to be reported under Government Auditing 

Standards. 

52

This report is intended for the information of the board of directors. finance and personnel committee, 

management, the State Controller’s Office, Federal awarding agencies, and pass-through entities, and is not 

intended to be and should not be used by anyone other than these specified parties. 

Palo Alto, California 

November 15, 2010 

53

2010 - Monterey Regional Water Pollution Control Agency

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