Although not specifically required by the Administrative Code, the general powers of the General Manager and the mandates of best practices obligate the District to conduct an annual audit of District financial activities each fiscal year.

An independent auditor performs an annual audit. The District's current auditor is The Pun Group.

Comprehensive Annual Financial Report

The Government Finance Officers Association of America (GFOA) has awarded a Certificate of Achievement for Excellence in Financial Reporting to the District for its Comprehensive Annual Financial report (CAFR) for ten consecutive years. In this manner, the District has produced a CAFR that captures all accepted accounting procedures and all applicable legal requirements.

Debt Coverage

What is the Debt Coverage Ratio (DCR)?

The DCR is a contractually-obligated standard of financial measurement applied to the District following the District's issuance of Certificates of Participation (COPs) debt in 2010. The District is required to achieve each fiscal year a minimum 115% DCR. This means that the District must manage its operating budget each year to achieve net revenue in amounts at least 115% greater than all of its debt service costs. The DCR is similar to the "pre-qualification" methodology used by real estate professionals. In these cases, the intent is to determine the excess of monthly income over the monthly mortgage payment.

Expressed mathematically, the DCR is:

DCR = Net Revenue

Debt Service

What is Central Basin's Responsibility?

When the District issued $37,935,000 in COPs to refinance prior debt and finance capital improvements relating to the recycled water system in May 2010, the Official Statement and Installment Purchase Agreement agreed to by the District obligated it to achieve a DCR of at least 115%. In this manner, the Installment Purchase Agreement, in the "Amount of Rates and Charges" subsection, declares that:

" the fullest extent permitted by law, the District will fix, prescribe and collect rates and charges for the Water Service which will be at least sufficient to yield during each Fiscal Year Net Revenues equal to one hundred fifteen percent (115%) of Debt Service for such Fiscal Year. "

The District's promise to achieve a DCR is a form of security for the borrowing.

Rating Agency Reports

Moody's Credit Rating Agency: Moody's Investors Service, on October 31, 2018 has assigned a Baa2 rating of Central Basin Municipal Water District, California, Refunding Revenue Bonds, Series 2018A and 2018B (Taxable). At the same time, Moody’s affirmed the Baa1 rating of the District’s outstanding senior lien outstanding bonds and Certificates of Participation (COPs). Moody’s has also revised the outlook from negative to stable.  

To view the latest copy of Moody's Credit Rating, please click here.

Standard & Poor's (S&P): S&P reviewed the rating on Central Basin Municipal Water District, California, Outstanding Revenue Bond obligations. The rating has been lowered from “A” to “BBB+” and changed the outlook to stable from negative.  A copy of the rational supporting the rating and the outlook can be viewed here.

Debt Management

Click here to view Central Basin's Debt Management Policy.

Click here to view the latest Debt Management Report.

The Government Finance Officers of America (GFOA), in a Best Practice adopted in 2012, recommends that state and local governments adopt comprehensive debt management policies. These policies should reflect local, state and federal laws and practices, and should be reviewed periodically (and updated if necessary) by elected officials.

On December 21, 2015, the Central Basin Board of Directors adopted the District's Debt Management Policy. The Policy provides guidance on the full range of debt management, including evaluating debt issuance options; maintaining appropriate assets for present and future needs; promoting sound financial management through staff reporting requirements; protection of the District's credit rating; and adherence to the legal use of District financing authority through internal controls. In addition, the Policy's practical, user friendly elements require the continual use of long-range financial projections and obligates District staff to publish a variety of interim reports.

Other Reports

Retirement Plans Compliance

Click here to view Independent Auditor's Report on District compliance with Retirement Law.

Click here to view accounting valuation report on District's first-tier retirement plan

Click here to view accounting valuation report on District's second-tier retirement plan

Click here to view accounting valuation report on District's PEPRA retirement plan

Other Post Employment Benefits (OPEB)

Click here to view the District's June 30 2015 OPEB Actuarial Valuation Report

Click here to view the District's June 30 2013 OPEB Actuarial Valuation Report

The payment of Other Post Employment Benefits (OPEB) constitute the promise we have made to current and retired employees to continue their medical coverage and health reimbursement out-of-pocket spending after their retirement from our service. The terms of this retirement benefit are described and authorized in the District's Administrative Code.

OPEB refers to post-employment health benefits. OPEB is often confused with pension benefits. Pension benefits are governed by the terms of the District's participation in the Public Employees Retirement System (PERS). However, it is an accounting requirement that governmental agencies that fund post-employment benefits on a "pay as you go" basis, such as Central Basin, account for and report the outstanding obligations and commitments related to the benefit in essentially the same manner as for pensions. In order to determine obligations and commitments, the District contracts for a third-party actuarial determination of current and future OPEB plan costs.

The unfunded actuarial accrued liability related to this benefit amounted to $65,166 as of June 30, 2015. Accounting requirements do not require the District to fund its Annual Required Contribution (ARC) to the plan; nonetheless, the District pays its ARC in full each year, and enjoys a Net OPEB Asset of $32,226 as of June 30, 2015.

Also as of June 30, 2015, there were 18 active employees and 13 retirees covered by the District's OPEB plan.