We annually survey 27 Bay Area wastewater agencies and communities to compare our residential sewer service charges and ensure that we’re giving our customers a competitive rate. The latest survey shows charges ranging from $178 to $804 per year. At $304 annually, USD is in the lowest 20 percent of the group.

$44,407,783

Other Financial Information

Accounting System

District financial records are maintained on the accrual basis of accounting as required by the Government Accounting Standards Board (GASB) Section 1600.125. Accrual basis accounting recognizes transactions, events, and circumstances when they occur, rather than when cash is received or paid.

Internal Controls

The District's internal controls adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions. Internal controls include but are not limited to fraud protection checks, timely bank reconciliations, segregation of duties wherever possible, financial system access security, board review of expenditures, dual signatures, credit card restrictions and limitations. In addition, USD has a fraud reporting hotline and a Board Audit Committee, and undergoes an independent outside audit.

Budgetary Controls

Budgetary controls are maintained by the District to ensure compliance with the annual budget adopted by the Board of Directors. All financial activities for the fiscal year are included in the annual budget, along with a ten-year financial plan. Budgetary control is maintained at the management level for administrative and operating budgets, and at the project level for capital improvements. The Board of Directors receives budget updates monthly.

Revenues

The District receives its revenue from four primary sources: Sewer service charges, capacity fees, other minor operating revenues such as permits, inspections and outside work that we perform in cooperation with other municipalities, and interest earnings on reserve funds.

Sewer Service Charge

The sewer service charge is collected on the annual property tax bill. The District prepares the budget and the projections of needed revenue during the annual budget process, which is concluded by June 30th of each year. Sewer service charges to be collected are provided to the County of Alameda in August of each fiscal year. The District receives its primary payments of funds in December and April. The sewer service charge is divided into three primary categories of customers: Residential, commercial and institutional, and industrial. The calculation of the sewer service charge for the various categories of customers is based upon their average flow, as well as contribution of their projected solids load and chemical oxygen demand (waste strength) as indicators of pollutants discharged to the sewer.

Sewer service charges are used to pay for operating and maintenance costs and construction related to renewal or replacement of sewers, buildings and equipment.

The District has a sampling program to periodically test the flow from its industrial customers.The annual residential fee for 2011/2012 is $304.33 for a single family dwelling.

Capacity Fees

The District charges a sewer connection fee for all new customers of $4,404.30 for an equivalent dwelling unit (EDU) for Fiscal Year 2012. This is a flat rate. The charges for commercial, industrial, and office use are based on factors such as square footage, flow and type of business or industry. Revenues from capacity fees are used to fund capital projects and upgrades that increase capacity or that are closely related to the system's capacity.

Interest Income

The District earns interest on portfolio investments and the Local Agency Investment Fund, which is allocated to the major revenue categories (Capacity and Sewer Service) monthly by percentage of fund balance.

Operating Cost Factors

The District's budget and rates are often impacted by factors beyond our control that can drive our costs upward and often result in rate increases. Some of these "driving forces" in recent years have included the high cost of fuel and chemicals, rising construction material costs worldwide, new regulations, market-driven compensation packages, including medical insurance benefits, and increasing electrical costs. USD works to control these costs by generating a large portion of our own electricity, using alternative chemicals, deferring some construction projects and using energy-efficient equipment. USD has fewer staff than we did in 1997.

Debt Administration

The District has an outstanding debt of $32,457,147 as of June 30, 2011. This includes $31,985,449 in State Revolving Fund Loans and $471,698 in use permit fees with the City of Union City. The District anticipates issuing debt in the next fiscal year for a Thickener Project.

Risk Management

The District 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 District with coverage for workers compensation, general liability and property loss insurance.

Audits                                                       

California state statutes require an annual independent audit of the accounts and financial records of the District. USD contracts annually with an independent audit firm (Vavrinek, Trine, Day & Co., LLP, Certified Public Accountants) to review the financial statements and present a report to the Board of Directors. Audit firms are changed on a regular basis.

Our Board has formed an Audit Committee which provides recommendations on auditor selection, reviews the audit report, and meets independently with the auditors. The Committee reviews with management and the independent auditors the effect of any regulatory and accounting initiatives (e.g. GASB pronouncements), as well as other unique transactions. In addition, the Committee reviews, if applicable, any serious difficulties or disputes with management encountered during the audit, and evaluates auditor performance.

Below are links to the Independent Auditors report for the past two fiscal years.

Auditors Report FY 2011

To contact us regarding USD financial topics, contact Richard Cortes, Manager, Business Services, at (510) 477-7500.