2021 CA Special District Mar-Apr by California Special Districts Association

C ALI FO R N I A

SPECIAL DISTRICTS Vo l um e 16 , I s s u e 2 • Ma r ch - Ap ril 2 0 2 1

A Publication of the C alifornia Special D is tr ic ts A s s oc iation

Feature • PAGE 14

The Fire: Before and After How Two California Districts are Implementing Best Practices in Emergency Preparedness Planning

Solutions and Innovations • Page 22

What’s So Special • Page 35

Costa Mesa Sanitary District – Residential Organics Recycling Program

The Dream of a Big Bear Alpine Zoo Has Come True

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California Special DistrictsCBC18.0653 • Mar-Apr 2021

SPECIAL DISTRICT LEADERSHIP FOUNDATION

District Transparency Certificate of Excellence 2021 TRANSPARENCY CHALLENGE

IS YOUR DISTRICT UP FOR THE CHALLENGE? It is now more important than ever for local governments (including special districts), to be open and accessible to the public. The Special District Leadership Foundation’s Transparency Challenge will showcase the many steps your district takes to show it is available and transparent to the constituents and customers you serve. Taking the challenge is simple: Complete the required steps on the SDLF Transparency Checklist and your district is on the way to receiving SDLF’s Transparency Certificate of Excellence and getting recognized for your efforts!

START THE CHALLENGE TODAY!

Download the Transparency Checklist: www.sdlf.org/transparency Volume 16 • Issue 2

TABLE OF CONTENTS

Solutions and Innovations:

Costa Mesa Sanitary District – Residential Organics Recycling Program

Community Connections: Feature:

The Fire: Before and After

Cucamonga Valley Water District Delinquent Accounts Public Outreach Program

05 CEO’s Message 06 VIRTUAL Special Districts Legislative Days 07

Interview: Garamendi, Aguiar-Curry Honored for Support of Special Districts

08 CSDA News

13 You Ask, We Answer: Digitizing Documents 18 Movers and Shakers 26

Legal Brief: SB 1383 Regulations on Organic Waste Are Finalized

28 Managers Corner: 10 Ask the Experts: Helping to Find Your Embrace the Circle of Replacement Safety to Foster Trust and Cooperation Process For editorial inquiries, contact CSDA Communications Specialist Vanessa Gonzales, at 877.924.2732 or vanessag@csda.net.

29 Take Action: February Was Take Action Month 30

Districts Make the Difference: Desert Healthcare Making a Difference in Coachella Valley

32 Managing Risk: Check Fraud Liability 35

What’s So Special: The Dream of a Big Bear Alpine Zoo Has Come True

Money Matters: Understanding Your CalPERS Unfunded Accrued Liability

For advertising inquiries, contact CSDA at 877.924.2732 or advertising@csda.net.

California Special Districts • Mar-Apr 2021

CEO'S MESSAGE

Exciting New CSDA Member Benefits!

Neil McCormick CSDA Chief Executive Officer

One of the major components of CSDA’s 2020-2022 Strategic Plan is to focus on developing new, exclusive value-added benefits to assist members in a wide variety of areas. At the January 2021 meeting of the CSDA Board of Directors, two new member benefit programs were approved and I am thrilled to announce these new partnerships!

CSDA’s Outsourced On-Demand Human Resources for Special Districts Through a partnership with CPS HR Consulting, CSDA Members now have exclusive pricing and access to experienced human resource professionals to provide guidance in a wide variety of HR issue areas such as compliance, policy/procedures, recruitment/selection, salary/ classification studies, benefits administration, and more! Participating CSDA Members subscribe and receive a 14 hour block of consulting

services (two more hours than the regular package), an additional free intake hour, and periodic human resources updates for only $1,950 annually. Also, additional blocks of time are available for purchase in 5 hour increments with an additional ½ hour free for CSDA Members! Districts are already signing up. Don’t wait to get started so your district One of the major can also have access to components of HR professionals when CSDA’s 2020-2022 you need them and at an Strategic Plan is to exclusive rate!

CSDA’s Pension Advisory Services

focus on developing new, exclusive value-added benefits to assist members in a wide variety of areas.

Pensions and rising pension costs are a BIG deal. Knowing your options and beginning to plan now for the future impacts of your district’s pension commitments and liabilities is essential. So, to assist members, CSDA has partnered with a top ranked pension advisory firm, Urban Futures, Inc.

continued on page 6

CSDA Board and Staff Officers

Staff

RYAN CLAUSNITZER, CSDM, PRESIDENT, Alameda County Mosquito Abatement District

NEIL MCCORMICK, Chief Executive Officer MEGAN HEMMING, Professional Development Director CASSANDRA STRAWN, Member Services Director KYLE PACKHAM, Advocacy & Public Affairs Director TODD WINSLOW, Publications Director RICK WOOD, Finance & Administration Director JENN JACOBS, Member Services Representative ELEANOR BOLING, Member Services Representative EMILY CHA, Member Services Specialist MARCUS DETWILER, Legislative Analyst DILLON GIBBONS, Senior Legislative Representative VANESSA GONZALES, Communications Specialist COLLEEN HALEY, Public Affairs Field Coordinator JIM HARROLD, Database & Online Communities Coordinator MUSTAFA HESSABI, Legislative Analyst-Attorney CHARLOTTE HOLIFIELD, Public Affairs Field Coordinator COLE KARR, Public Affairs Field Coordinator CHRIS NORDEN, Public Affairs Field Coordinator CHRIS PALMER, Public Affairs Field Coordinator AMBER PHELEN, Executive Assistant RACHAEL POPPINO, Professional Development Assistant ALYSSA SILHI, Legislative Representative JENNIFER SMITH, Professional Development Coordinator ERIC SPENCER, Member Services Specialist ANTHONY TANNEHILL, Legislative Representative DANE WADLÉ, Public Affairs Field Coordinator ROMAN WASKIEWICZ, Legislative Assistant JAMES WILFONG, Senior Designer KRISTIN WITHROW, Communications Specialist

ELAINE MAGNER, VICE PRESIDENT, Pleasant Valley Recreation & Park District ARLENE SCHAFER, SECRETARY, Costa Mesa Sanitary District JERRY L. GILMORE, TREASURER, Truckee Sanitary District VINCENT FERRANTE, PAST PRESIDENT, Moss Landing Harbor District

Members of the Board DON BARTZ, CSDM, Phelon Pinon Hills Community Services District STANLEY CALDWELL, Mt. View Sanitary District RALPH EMERSON, Garberville Sanitary District CHAD DAVISSON, CSDM, Ironhouse Sanitary District PETER KAMPA, CSDM, Groveland & Copper Valley Community Services District JO MACKENZIE, Vista Irrigation District NOELLE MATTOCK, El Dorado Hills Community Services District STEVE PEREZ, CSDM, Rosamond Community Services District LORENZO RIOS, Clovis Veterans Memorial District KATHERINE STEWART, Vandenburg Village Community Services District FRED RYNESS, Burney Water District KIMBERLEE SENEY, Gold Mountain Community Services District

California Special Districts Association 1112 I Street, Suite 200, Sacramento, CA 95814 toll-free: 877.924.2732 • www.csda.net

A proud California Special Districts Alliance partner

VIRTUAL SPECIAL DISTRICTS LEGISLATIVE DAYS

2021 VIRTUAL

SPECIAL DISTRICTS Buy One – Get One!*

May 18 and 19, 2021

Each paid registration is eligible to register one additional person! Visit csda.net to register online. Now more than ever special districts need to advocate on behalf of the communities they serve. From the pandemic to climate adaptation, lawmakers in Sacramento and Washington D.C. are making critical decisions that will impact the budget, infrastructure, and operations of your district. Virtual Special Districts Legislative Days is the only opportunity for all types of special districts, large and small, north and south, rural and urban to come together with one united voice. Issues like revenue, governance, labor, and public works matter to all districts. Don’t miss this opportunity to hear from California’s top decision-makers, build partnerships, and strengthen the voice of local control. Past speakers have included California’s State Controller, State Treasurer, Secretary of State, Director of the Office of Emergency Services, State Auditor, Legislative Analyst, and Director of Finance. *The additional registrant should be a staff or board member from YOUR district who has NOT previously attended Special Districts Legislative Days. You’ll receive an email with the complimentary registration information within 1 day of completing your paid registration.

CEO’s Message continued (UFI), to develop a set of pension advisory services for CSDA Members that is affordable and based on a district’s operating budget. As part of this exclusive arrangement, UFI will provide customized pension modeling services for each participating CSDA Member providing expert advice on options to address rising pension costs and liabilities over time. Additionally, through this program, UFI can assist in developing a custom pension funding policy and even work through financing options should that be necessary. Understanding 6

and addressing your district’s pension obligations in the best manner possible is a very important component to ensuring your district, community, and constituents are best positioned to thrive in the long-term. Start that process now by accessing CSDA’s new Pension Advisory Services program! To get started and access either of these new CSDA member benefits, simply contact our Member Service Team at 877.924.2732 or membership@csda.net. Maximize Your Membership! California Special Districts • Mar-Apr 2021

INTERVIEW

Garamendi, Aguiar-Curry honored for support of special districts By Colleen Haley, Public Affairs Field Coordinator, California Special Districts Association

Rep. John Garamendi

Assemblywoman Cecilia Aguiar-Curry

A pair of politicians who represent Solano County have been named Legislators of the Year by the California Special Districts Association (CSDA). Rep. John Garamendi and Assemblywoman Cecilia Aguiar-Curry, both Democrats whose districts include portions of Solano County, were recognized for their work supporting special districts in California over a special Zoom event. Cary Keaten, general manager of the Solano Irrigation District, said Garamendi has been a longtime ally of special districts and talked about how when there were talks of a second infrastructure package following passage of the Coronavirus Aid, Relief and Economic Security Act, he tried to seek answers from Garamendi’s local office. They referred Keaten to Garamendi’s staff in Washington, D.C., who arranged for a conference call with Garamendi as well as the SID Board president and vice president. “It was a very good discussion, and I just remember after getting off the phone, we sat around and talked for a bit about how fortunate we were to have such access to our congressman,” he said. “He truly cares about water agencies and special districts.” After receiving an award by CSDA President Ryan Volume 16 • Issue 2

Clausnitzer, Garamendi, who was the first congressman to be honored by CSDA, delivered remarks from his Washington office. He said he was “thrilled and humbled” to be honored alongside Aguiar-Curry, who he has worked closely with on special district projects. Garamendi said special districts are a topic not a lot of Californians pay attention to, but he felt the services they provide are vital. “Special districts are really, really important,” he said. “You’re providing essential services.” Garamendi closed by encouraging the CSDA to support the Special Services Provide Critical Services Act, which was introduced last year and aims to ensure that special districts are eligible for federal funding during COVID-19. He said that Sen. Kyrsten Sinema, D-Arizona, has already signed on as the author of the Senate’s companion bill and that the original bill received 43 co-sponsors but expects it to get more. “My ask is for you to engage directly and fully now,” he said. Heather Nichols, executive director of the Yolo County Resource Conservation District, introduced Aguiar-Curry, who she called “a very engaged community member.” “Assemblymember Aguiar-Curry understands natural resource challenges that people face in her district, and she has consistently supported our work to provide our communities with technical assistance,” she said. “She makes the RCDs feel like our priorities are her priorities.” In remarks from her Sacramento office, Aguiar-Curry said it was an honor to be honored. “Special districts, you guys are the glue for our cities and counties,” she said. Aguiar-Curry also promoted a piece of legislation concerning special districts: Assembly Bill 14, the Internet for All Act of 2021, which she introduced in December with Sen. Lena Gonzalez, D-Long Beach. The legislation is aimed at providing broadband infrastructure to communities that lack easy access to high-speed internet. “It’s really important that we get that passed, also with the help of the federal government,” she said. “John (Garamendi) and I have been working on broadband for quite some time, but we’re in an urgent position right now. We need to get that done for all of you.” 7

CSDA NEWS

2021 CSDA Award Nominations Open! All CSDA award nominations must be submitted by May 14, 2021. Annually, CSDA recognizes outstanding contributions by members of the association, as well as districts and chapters, in the following categories: • Board Member of the Year • General Manager of the Year • Staff Member of the Year • Ralph Heim Exceptional Outreach & Advocacy • William Hollingsworth Award of Excellence • Chapter of the Year • Innovative Program/Project of the Year (Large and Small District categories) • Exceptional Public Outreach & Advocacy (Large and Small District categories) • Excellence in Technology – NEW this year! Each of these awards are presented at the CSDA Annual Conference & Exhibitor Showcase, August 30–September 2, in Monterey. Learn more and submit nominations at csda.net/about-csda/ get-involved/awards. For questions, email CSDA Communications Specialist Vanessa Gonzales at vanessag@csda.net. 8

ILG Beacon Program and Awards Open to Special Districts!

Wow

There is no deadline to apply to participate in the Beacon program; however, to be considered for Beacon awards, data is due on July 1, 2021. CSDA is pleased to announce additional award recognition opportunities for special districts through our affiliate organization, the Institute for Local Government (ILG). For the past 11 years, the Institute for Local Government’s Beacon Program has provided a framework for local governments to be recognized for voluntary efforts that contribute to more sustainable and resilient communities. Starting April 1, whether your agency is a Beacon participant or not, you will be able to submit an innovative project, program, plan, or policy your agency has implemented for award consideration in the following categories: • Leadership in Climate Resilience and Adaptation • Equity and Engagement in Climate Resilience and Adaptation • Cross-Agency Collaboration in Climate Resilience and Adaptation • Innovation in Energy • Innovation in Clean Transportation Award winners will be celebrated in front of a statewide audience at the annual Beacon Awards Ceremony and the CSDA Annual Conference & Exhibitor Showcase. Learn more and apply to join at www.ca-ilg.org/beacon-program.

California Special Districts • Mar-Apr 2021

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Volume 16 • Issue 2

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Embrace the Circle of Safety to Foster Trust and Cooperation By Scott Carroll, General Manager, Costa Mesa Sanitary District

sk almost any leader and they will say that trust and cooperation are essential ingredients for an organization to be successful. That makes sense because when employees do not trust their leader, or each other for that matter, they are forced to work alone to protect and advance their own interest. Without trust and cooperation, stress levels increase and the ability to form strong working relationships suffers to the point where self-interest

becomes the primary focus. As a result, employees within the organization do not innovate, share information, communicate effectively or accept accountability, which makes the organization weak. The challenge for leaders is that they cannot simply instruct their employees to trust them, nor can leaders instruct employees to cooperate. It doesn’t work that way. So, how do you build trust and cooperation within your organization? In 2014, Simon Sinek, who is best known for his 2009

TED Talk presentation on how great leaders inspire action by starting with “why”, presented a TED talk that addressed how employees develop such deep devotion to their leaders and to each other. The question posed was, “why do some employees give their blood, sweat and tears to their leaders, colleagues and to the organization?” Simon found that the organization’s environment instills devotion among people. According to Simon, “If you get the environment

right, every single one of us has the capacity to do remarkable things.” He believes a deep sense of trust and cooperation are feelings. So where do the feelings come from? Quite simply it’s the condition inside the organization that sets the tone for trust and cooperation. “When people feel safe and protected by the leadership in the organization the natural reaction is to trust and cooperate,” said Simon. Simon calls it the “Circle of Safety.” He goes on to say the following in his New York

California Special Districts • Mar-Apr 2021

Times and Wall Street Journal best seller, “Leaders Eat Last:” • “The goal of leadership is to set a culture free of danger from each other. And the way to do that is by giving people a sense of belonging. By offering them a strong culture based on a clear set of human values and beliefs. By giving them the power to make decisions. By offering trust and empathy. By creating a Circle of Safety.” • “It is easy to know when we are in the Circle of Safety because we feel it. We feel valued by our colleagues and we feel cared for by our supervisors.” • “We become absolutely confident that the leaders in the organization and all those with whom we work are there for us and will do what they can to help us succeed.” Simon Sinek’s message on the Circle of Safety could not have come at a better time for me and the Costa Mesa Sanitary District (CMSD). In 2018, I conducted a District-wide employee engagement survey for my organization and the results of the survey were a clear indication that I did not have a full understanding of the climate in my organization. Some employees expressed concern about losing their jobs, and admitted that they were afraid to make a mistake in fear of being reprimanded. Some employees refused to ask for help from management because they fear of being chastised for not knowing what to do. All of these feelings led to a decrease in staff morale, which in turn affected staff’s ability to trust and communicate if issues arose. That is not the culture I wanted established at CMSD, nor is it the legacy I want to leave behind. As Simon said in his 2014 TED Talk, “leadership matters because it’s the leader that sets the tone for the

Volume 16 • Issue 2

“Simon Sinek’s message on the Circle of Safety could not have come at a better time for me and the Costa Mesa Sanitary District (CMSD). A recent employee satisfaction survey was disseminated agency wide and the results of the survey were a clear indication that I did not have a full understanding of the climate in my organization.”

condition inside the organization.” So, I began setting the tone in my organization by describing the following guiding principles for getting the environment right: • Fear, intimidation, disrespect, and micro-managing will not be tolerated. • No disciplinary procedures for making mistakes. Instead, mistakes will be followed up by coaching and/or mentoring and to learn from our mistakes to ensure it doesn’t happen again. • Integrity and empathy will be an essential part of CMSD’s culture. • Encourage life-long learning and

ensure employees have the necessary tools to be successful. • Praise employees for work well done and coach employees when performance improvement is needed. Weekly I meet with my leadership team to ensure the Circle of Safety is implemented from top to bottom in the organization. We share our values, openly discuss matters of concern, and strategies on how to be empathetic, and how to give and receive feedback. We discuss the importance of integrity, how to create a sense of belonging continued on page 12

“I AM SEEING THE CULTURE AT CMSD GREATLY IMPROVE. EMPLOYEES ARE RELAXED AND ENGAGING WITH ONE ANOTHER...” throughout the organization, and how to develop meaningful and successful working relationships with the generationally diverse team members. Since reinforcing the “Circle of Safety” in our organization, I am seeing the culture at CMSD greatly improve. Employees are relaxed and engaging with one another, they’re openly asking questions without fear of judgment or being reprimanded and are more willing to cooperate and assist their colleagues. More importantly, they’re looking out for each other. For instance, several employees donated some of their sick leave hours to another employee 12

because he exhausted all his sick leave. In the 2020 Employee Engagement Survey, employees were asked if they believe the District is a better organization than it was one year ago? 87.5% of employees said the District is a better organization that it was one year ago compared to 65% when employees were asked the same question in 2018. While these are great signs that the Circle of Safety is getting better at CMSD, the work is not over. I envision that it will become the responsibility of every employee within CMSD, whether in a formal position of leadership, or not, to act like leaders, work to uphold

the values and keep the Circle of Safety strong forever. I encourage my fellow general managers and leaders in the public sector to check the environment condition in your organization and then read Simon Sinek’s book “Leaders Eat Last,” or at least watch his TED Talk presentation on Youtube, “Why Good Leaders Make You Feel Safe” (it’s less than fifteen minutes long). I hope you find the video inspirational. Email Scott Carroll at scarroll@cmsdca.gov to discuss the Circle of Safety, or share your thoughts on how leaders can foster trust and cooperation. California Special Districts • Mar-Apr 2021

Questions Appear in CSDA Online Communities

YOU ASK, WE ANSWER

Q&A

Digitizing Documents

Volume 16 • Issue 2

Joy Andrews General Manager, Anderson Valley Community Services District Hello, We are a small CSD with two half-time staff. Wondering to what extent other small districts digitize documents in case of natural disaster?

DeAnn Hailey Controller/CFO, Fresno Irrigation District Joy, we only digitize what we can’t afford to lose which is pretty much everything. We scan all invoices, deposits, financial statements, etc. It seems like alot but once you have them scanned, you will no longer have to go to a file cabinet to pull up a copy and you won’t have to search for a missing item. We are able to copy the scanned document into an email which saves us time copying the document and walking it over to the person that requested it. We started scanning the current documents and as we had time went back and scanned the historical documents. I do not regret going digital and highly recommend it. Cynthia Allen Administrative Services Manager, Vandenberg Village Community Services District We are currently printing all of our current reports, as well as scanning old reports, to PDF. To streamline the document management, I have all my staff save their documents to a temporary directory that I have set up specifically for their department (Accounts Receivable, Accounts Payable, Payroll, Board, General Ledger, etc.). Then, the Records Retention Coordinator (me) optimizes those documents (sometimes multiple documents need to be combined into one file, OCR performed, etc.) and then saves them to the permanent directory using the preferred naming convention. I try to move the documents once a month (once month-end for that department has been completed). I have a spreadsheet of all the documents of which we want a scanned version and I check it off the list for that month/year as soon as I move it into the permanent directory. CSDA Disclaimer: This section is not intended to be legal advice. Members should always seek legal counsel. The information contained here is for general reference purposes only.

Engage with your peers and ask questions on CSDA’s Open Forum community!

THE FIRE: BEFORE AND AFTER

How Two California Districts are Implementing Best Practices in Emergency Preparedness Planning By Kristin Withrow, Communications Specialist, California Special Districts Association

alifornia has been no stranger to natural disasters. Earthquakes, wildfire, and drought are among the top ongoing threats in the state. CSDA teamed up with USC Sol Price and Southern California Edison to host a Virtual Emergency Preparedness Summit in February. The two-day summit drew 192 registrants from 112 organizations and featured 20 speakers. The agenda included mitigation, response, asset planning, communications, and more. Across the many experts and points of discussion, some best practice patterns began to emerge.

RIM FIRE Started August 17, 2013 Declared out November 4, 2014 257,000 acres burned Cost $127 million 14

We recently reached out to two districts that were featured in California Special Districts Magazine after the 2013 Rim Fire to see what changes they’ve implemented in their recovery process. Tuolumne Utility District and Twain Harte Community Services District each have unique aspects of their new processes that align nicely with broad sections of the Emergency Preparedness Summit recommendations. These districts’ real-life experiences provide clear examples of emergency preparedness implementation. Infrastructure and Resource Planning: Planning ahead for the expansion of resources is critical. You do not want to be calling someone for the first time when you are already in a moment of need. There is an old saying, “dig your well before you’re thirsty,” that is applicable to this scenario. Make connections in your community that can help in crisis moments. Identify the limitations in your pool of resources and reach out to those who may be able to fill some gaps. This may be local community volunteer

or fundraising organizations, resource conservancies or broader state or federal partnerships. Right now, while times are calm, identify partnerships to cultivate for “boots on the ground” when you need them, and seek ways to raise needed funds for infrastructure improvements. Case in Point: Tuolumne Utility District (TUD) noted an expansion of their water supply availability was needed, including “points of diversion, and delivery by studying, designing, and completing water system consolidation and efficiency projects where possible.” In addition, the district operates in an area with over 100 private/mutual water companies that may need TUD’s expansive technical, managerial and financial assistance in the future. Attacking the wildfire risk more directly, TUD applied for fuel reduction grants, and was awarded $496,000 from the Sierra Nevada Conservancy. The grant included efforts “along the Tuolumne Main Canal, a 16-mile gold rush era, historic wooden flume conveying 95% of the District’s source water from Lyons Reservoir, to its California Special Districts • Mar-Apr 2021

FEATURE

network of water conveyance ditches leading to the water treatment plants. The project was designed as a collaborative effort to improve forest health and resiliency to wildfires and beetle outbreaks.” Project partners included TUD, Pacific Gas and Electric Company (PG&E), Stanislaus National Forest, Sierra Pacific Industries (SPI), California Conservation Corps, the Highway 108 FireSafe Council, CalFIRE and the Tuolumne Rancheria Fire Department of the Tuolumne Band of Me-Wuk Indians. Twain Harte Community Services District also provided information on some of the modifications made to their district operations since the 2013 catastrophe. General Manager Tom Trott reports the district made several equipment and infrastructure investments. The availability of water sources in rural connection points is

a resource challenge they identified. In response, the district purchased a Type 1 Tactical Water Tender (2500 gal) – also known as a ‘fold a tank’ – which allows firefighters to take water to the source of the fire and also enables them to set up an efficient point to fill multiple engines. Determined to preserve their water availability as much as possible, they installed a raw water fire draft point which enables engines to be filled with untreated water, therefore preserving the treated water systems to be maintained for drinking water in the community. Communication in Crisis: When crisis strikes, the single biggest factor that allows for concerted, organized response is communication. Develop your alert systems, subscription systems and backup systems for mass communication. Grow your social media following for use in an emergency, access bulk text services

to broadcast instructions to your employees, develop a system to “piggyback” on city or county emergency alert systems that may be more expansive than your single district’s reach. Identify communication roles – who writes your alerts, who reviews and approves, and who are your backups in those roles, if needed? If the power is out for an extended period, identify locations of community gathering that will be appropriate locations for printed flyers. Have backup generators available and fuel on hand so operations can continue. Maintain document templates for emergency scenarios and identify the parameters continued on page 16

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Volume 16 • Issue 2

for each level of communication so you don’t have to pause to consider whether a particular step is warranted: the situation is already defined and the decisions steps are pre-determined. Cases in Point: Twain Harte CSD added an “old school” emergency alert back into their capacity by rehabilitating the firehouse Fire Alert Horn to provide audible warning of imminent threat as a back up to their emergency alert system. Checking the box for high-tech options, they established an Unmanned Aerial Vehicle Program which utilizes thermal imaging as both a firefighting and rescue resource. In addition, they established their Facebook page, and implemented a subscriptionbased community alert system. Event and Incident Action Plans: First, Create an Event Action Plan to identify how things “should” run, identify variables and how to account for them. Clearly define staff roles and expectations, resources that must be in place during the event, communication processes

and strategies. The Event Action Plan flows into an Incident Action Plan to be activated when the contingencies of the Event Action Plan are exceeded. The Incident Action Plan shifts into gear to allow dynamic decision-making using the information on hand and resources and roles that have been previously identified. In addition to the existing resources, there is a plan for expansion of resources when the situation requires it. Case in Point: Twain Harte CSD partnered with the CalFIRE “Ready Set GO” campaign for ongoing community education on preparedness, created an Emergency Response Team with regular meetings designed to educate, train and empower community partners to assist in emergencies.

Know Your State & Federal Resources

The Federal Emergency Management Agency (FEMA) is a resource you should be involved with BEFORE

disaster strikes. Their website has best practice guides that help in the creation of comprehensive plans. Search the internet for “FEMA CPG101” to find their Comprehensive Preparedness Guide or “CPG201” which will guide you in Threat Hazard Identification and Risk Assessment (“THIRA”). FEMA also has a YouTube channel with Mitigation Planning webinars. Research and apply for a FEMA Hazard Mitigation Assessment (HMA) Mitigation Planning Grant. Identify what resources would be available through FEMA and CalOES before a crisis so you have a plan in place for the efficient utilization and placement of those added resources. To be prepared for the sudden influx of agency personnel and resources, get to know your FEMA and CalOES Public Assistance Officers before the next crisis. CSDA is proud to bring content to special districts throughout the state from experts in the field. For more information on future conferences and webinars, please visit our website at csda.net.

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MOVERS & SHAKERS

MOVERS& SHAKERS Jason Hodge Takes the Helm as President of the Oxnard Harbor District The Port of Hueneme welcomed new leadership last week as the Board of Harbor Commissioners unanimously voted Jason T. Hodge to serve as Board President for 2021, marking the 3rd time he has been elected to lead the District. President Hodge was first elected to the Board in 2010, having served twice before as Board President. Hodge takes the helm focused on energizing the Port’s commitment to furthering the green initiatives and focus on environmental stewardship the Port has become known for. “It’s an honor to once again be President of the Board of Commissioners of the Oxnard Harbor District. I’ve spent over a decade now helping guide the growth and environmental progress at the Port of Hueneme. Whether it’s our well-paying jobs or the meals we’ve directly fed to our community,the Port is an integral part of the health of our community.”

Providing Special Districts with Focused Legal Strategies We counsel clients throughout California in sectors including Water, Public Finance, Public Agency, Environment, Infrastructure, Employment, Data Protection, Government Relations and Eminent Domain. What solutions are you seeking?

Central San Welcomes New Director of Operations Central Contra Costa Sanitary District (Central San) welcomed Steve McDonald as its new Director of Operations on January 11. McDonald brings over 30 years of environmental Steve McDonald engineering experience and is a licensed professional civil and mechanical engineer in six states. As Director of Operations, he will oversee operations and maintenance for Central San’s collection system and its regional wastewater treatment plant in Martinez.

San Juan Water District Tobin and Miller Re-Elected to San Juan Water District Board Last November, San Juan Water District held their last at-large Pam Tobin Ken Miller elections. Five candidates from Placer and Sacramento County vied for the two at-large positions. ACWA Vice President Pam Tobin and long-time Board member Ken Miller were re-elected to serve on the Board of Directors for the 2020-24 term. Director Tobin has served on the Board since 2004 and Director Miller since 1976, with a seven-year hiatus from 1985 to 1992. Tobin was selected as the 2021 Board President and Miller was selected as the 2021 Board Vice President at the 2020 December meeting.

Do you have movers and shakers in your districts to highlight? Send to CSDA Communications Specialist-Editor Vanessa Gonzales at vanessag@csda.net for consideration in this section.

California Special Districts • Mar-Apr 2021

Randall Reed Selected to Lead CVWD as Board President On January 12, 2021, the Cucamonga Valley Water District (CVWD/District) Board of Randall James Directors selected Randall James Reed Reed to serve as its president. President Reed has served on the board since 2003 and represents Division 3 of the District’s service area. During his time on the board, President Reed has served on many committees and is currently serving on the District’s Engineering and Finance Committees. He also represents CVWD on the executive committee for the Association of California Water Agencies/Joint Powers Insurance Authority Board of Directors, and he is the President for the Association of San Bernardino County Special Districts. “The CVWD Board of Directors take the responsibility of serving constituents very seriously, and it is an honor to be selected to serve in this capacity,” commented President Reed. “I am grateful that my fellow directors are confident in my ability as president to lead the District and know that together, we will continue to provide Service Beyond Expectation to our community.”

SAWPA Announces Jeff Mosher as New General Manager The Santa Ana Watershed Project Authority (SAWPA) Commission has announced the appointment of Jeff Mosher as General Manager. Mr. Mosher will be joining SAWPA on February Jeff Mosher 16, 2021. Mosher brings more than 30 years of knowledge and experience in water resources planning and the implementation of water and wastewater projects. Mosher will oversee SAWPA’s efforts to develop regional plans, programs, and projects that protect the Santa Ana River basin water resources to maximize beneficial uses within the watershed in an economically and environmentally responsible manner.

Desert Healthcare Grant Program Helping COVID-19 Mitigation Desert Healthcare District & Foundation reported on their partnership with Riverside County and Public Health Institute to collectively allot nearly $2 million in COVID-19 related services. The district’s grant program is one of the most significant ways they assist the valley’s nonprofit organizations. They began the year with nearly $3.4 million available to award in early 2021. Interested parties may enquire at info@dhcd.org.

MAXIMIZ E Y OUR M E M BE RSHI P

VISIT CSDA’S ONLINE COMMUNITIES Connect Communicate Engage Volume 16 • Issue 2

WWW.CSDA.NET

COMMUNITY CONNECTIONS

Cucamonga Valley Water District Delinquent Accounts Public Outreach Program By Cucamonga Valley Water District Staff

Supporting CVWD Customers While Managing Overdue Balances During the Pandemic

The Cucamonga Valley Water District (CVWD) is a leading retail water and wastewater services provider servicing approximately 200,000 people in the City of Rancho Cucamonga and portions of Fontana, Ontario, Upland, and unincorporated San Bernardino County. CVWD’s mission of Service Beyond Expectation has remained unwavering during the COVID-19 pandemic as the district continues to provide safe and reliable essential services for the community, despite the financial challenges that have been created for CVWD and its ratepayers. On April 4, 2020, Governor Gavin Newsom issued Executive Order N-42-40, placing a moratorium on the shutoff of water service for customers due to non-payment. Well before Governor Newsom took this action, CVWD proactively responded to the economic impacts of the pandemic by waiving late fees on past due accounts and stopping all disconnections. Like many other water providers throughout California and the nation, CVWD began to see an increase in unpaid water bills and the corresponding loss of revenue, raising concerns about the long-term health and stability of the District’s budget. Due to the unknown timeline surrounding Governor Newsom’s moratorium and the reality that customers’ 20

outstanding balances would continue to worsen, CVWD recognized the dire need to communicate with its delinquent customers to keep accounts manageable. CVWD’s first effort was to replace standard disconnection notices with COVID-19 delinquency notices, which captured the District’s “We’re in this together spirit.” These COVID-19 delinquency notices were mailed to every delinquent customer and helped encourage communication between CVWD and the account holder. The notices contained status information for the delinquent account as well as a short message asking the customer to contact and work directly with CVWD’s Customer Service Department with a goal of coordinating a payment plan. CVWD’s next strategy consisted of an Outbound Call Campaign implemented by the Customer Service Team, where Customer Service Representatives (CSRs) were tasked to make outbound calls to delinquent account holders who did not respond to mailed COVID-19 delinquency notices. When contact with the account holder was successful, the CSR would provide personalized assistance and try to resolve the delinquent status of the account. CVWD’s leadership was extremely proactive in offering payment plans or partial payments to allow customers to catch up on their past due balances. If the CSR team was unable to reach customers by mail or phone, the CVWD Field Service Technicians (FSTs) provided in-person communications through the Door Tag Program (DTAG), which focused on contacting the account holder at their residence. If contact was made with the account holder, the FST identified themselves and provided different options for resolving their delinquent account. If the customer was willing to pay a portion of the past due amount during the DTAG communication, the FST was able to provide multiple options to complete payment. These options included using a PayPal card reader with a chip/tap device, Google or Apple Pay, or personal checks. If the FST was unable to contact the account holder, they placed a door tag notifying of delinquency and encouraging them to contact the CVWD office. Internally, the DTAG required planning and preparation for both safety and logistics. The FST team was trained in COVID-19 health and safety protocols as well as messaging and conflict resolution strategies to be better equipped when California Special Districts • Mar-Apr 2021

interacting with the customers. They were also trained to use the Paypal reader as well as the more traditional payment receipt book, and were provided with proper PPE and sanitation equipment to safeguard everyone involved in face to face interactions. This process was coordinated with the District’s billing team to apply payments taken in the field, create spreadsheets to record and measure the results of the DTAG program, and identify the most effective strategies in dealing with delinquent accounts. From August 11, 2020 to December 31, 2020, 1,659 DTAG contacts were made, resulting in 362 payments totaling $118,649 in delinquent revenue. Across the entire delinquency program 717 payments were collected totaling $191,600. Additionally, this process helped outstanding disconnection balances hold steady at $250,000, when they had steadily climbed prior to the implementation of the program. CVWD has concluded that the outreach program has supported its ratepayers during an unprecedented global health crisis by providing them with multiple

Payment Services/ Merchant Services

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options and opportunities to voluntarily resolve their delinquent accounts. The District’s concern and compassion for the community has been constant and these efforts have lessened the strain on customers whose balances would have become even more unmanageable once the moratorium is lifted. As the pandemic continues to profoundly impact both residential and business customers, the District will continue to provide safe and reliable water and wastewater services. Over the last year, CVWD has grown stronger in its adaptability and dedication to serving its community 24 hours a day, 365 days a year. This experience was not anticipated nor welcomed, yet it has strengthened the District and its resiliency, preparing it for other challenges in its future. CVWD is thankful for the dedication of its Field and Customer Service teams in providing Service Beyond Expectation to customers and its community through these outreach efforts and payment programs.

CVWD was awarded the 2020 Association of California Water Agencies (ACWA) Overall Outreach award for its vigorous advocacy on issues critical to the water industry on behalf of their customers.

Easier Member Payments-Below Market Rates AllPaid (formerly GovPayNet) is honored to be selected as CSDA’s Endorsed Affiliate for Payment Services/Merchant Services. AllPaid’s payment platform provides CSDA and its members a secure industry leading payment solution with exceptional customer service and support. These services are available at below market, pre-negotiated rates, exclusively for CSDA members.

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Volume 16 • Issue 2

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SOLUTIONS AND INNOVATIONS

COSTA MESA SANITARY DISTRICT – RESIDENTIAL ORGANICS RECYCLING PROGRAM By Nabila Guzman, Management Analyst I

Costa Mesa Sanitary received accolades for financial transparency and reporting by the Government Finance Officers Association for their Comprehensive Annual Financial Report and their Popular Annual Financial Report. These reports have garnered awards for the district for the past consecutive 9 and 5 years, respectively. 22

n 2015, the Costa Mesa Sanitary District (CMSD) became the first agency in Southern California to implement a curbside Organics Recycling Program that accepted both food scraps and yard waste. Although CMSD had been promoting zero waste practices long before the state legislature passed significant waste reduction legislation, the passing of Assembly Bill (AB) 1594 and Senate Bill (SB) 1383 made CMSD’s decision to pursue organics recycling imminent. Signed into law in 2014, AB 1594 mandated that green waste used as Alternative Daily Cover (ADC) at landfills would no longer be credited as diversion beginning January 1, 2020. State law requires local agencies to divert 50% of solid waste away from landfills. Without receiving diversion credit for ADC, many agencies would no longer meet the 50% mandate and would need to find another means for disposing of green waste. In 2016, Governor Brown signed

SB 1383, which establishes targets to achieve a 50% reduction in the level of the statewide disposal of organic waste from the 2014 level by 2020, and 75% reduction by 2025. The next step was to gauge public opinion. CMSD surveyed 1,000 customers to determine whether they thought future rate increases would be acceptable to cover the costs of a residential Organics Recycling Program. Survey results overwhelmingly indicated that customers were excited about the positive environmental impacts of the program and were willing to pay more for the added benefits of the service. With the blessing of the community and anticipation of pending state legislation, CMSD’s Board of Directors approved the roll-out of a residential Organics Recycling Program. CMSD’s waste hauler, CR&R Environmental Services, carries out the program using their state-of-the-art Anaerobic Digestion Facility to convert food scraps and yard waste into renewable natural gas that fuels its collection trucks and nutrient-rich California Special Districts • Mar-Apr 2021

compost that is given out to residents at an annual community event. Prior to this program, CMSD customers comingled landfill waste, recyclables, food waste, and yard waste in 90-gallon residential “Mixed Waste” trash carts. The Organics Recycling Program provided customers with up to two additional 64-gallon “Organics Recycling” carts strictly for food and yard waste. As CMSD transitioned from a one-cart system to a two-cart system, customers were advised that recyclables and trash in their original “Mixed Waste” carts would continue to be taken to CR&R’s Materials Recovery Facility (MRF) in Stanton, CA to be separated for recycling through a combination of manual and mechanical In addition to the distribution of kitchen pails, CMSD engaged in a number of public outreach efforts to prepare the community for the program. These included town hall meetings and workshops, an updated webpage containing frequently asked questions, a 5-minute how-to video explaining how the cart should be used, newsletter articles, a clip-and-save guide to what does and does not belong in the “Organics Recycling” cart, and a map depicting where and when the new “Organics Recycling” carts would be delivered. Additionally, CMSD partnered with Sally Geislar, a doctoral candidate at the University of California, Irvine (UCI) and the Director of UCI’s Food Works Lab, to conduct a behavioral study. The study led by Geislar, entitled “Food Scraps for Fuel: Understanding and Increasing Household sorting. Meanwhile, organic waste would be transported to CR&R’s Anaerobic Digestion Facility (AD) in Perris, CA. These combined processes ensure that the maximum number of recyclables are recovered from the waste stream and that all organic waste is kept out of the landfill. To aid the transition, CMSD purchased and distributed thousands of countertop kitchen pails to help customers easily collect food scraps at home. Kitchen pails can be lined with newspaper or compostable bags and should be emptied into the “Organics Recycling” cart weekly for collection. Kitchen pails are still available to customers at no charge and no solid waste rate increase was implemented for the Organics Recycling Program until 2019 – four years after the program’s roll-out. Volume 16 • Issue 2

continued on page 24

Supporting public agencies for almost 50 years OUR SERVICES Strategic Planning • Board Governance Public Outreach • Web Development • Document & Web Accessibility

rauchcc.com • 408-374-0977 23

Participation in the Costa Mesa Curbside Organics Program,” engaged more than 1,000 residents. The study used a two-part experimental design to understand how residents were responding to the new curbside program and to test new tools for improving resident participation. In the pilot study, participants became more pro-environmental in their attitudes after beginning to separate food scraps in the home. Many participants reported that they began shopping for food with less packaging, as well as making changes like purchasing cage-free eggs. The large sample size in the study helped evaluate what kinds of waste prevention behaviors are typical and significant, which informed CMSD’s future outreach and education. It has now been six years since the launch of the Organics Recycling Program and there have been many

challenges and lessons learned. CMSD is currently averaging approximately 800 tons of organic waste collected and recycled monthly with a contamination rate of about 5%. Over the years, CMSD has learned that continuous and evolving public outreach and education are crucial to program participation. CMSD recently launched a successful awareness campaign to educate residents about what items should be placed in the “Organics Recycling” cart and how the waste is recycled. The campaign included the promotion and distribution of countertop kitchen pails, flyers, and educational magnets. CMSD continues to work on providing tips and tools to help residents overcome the “yuck” factor, since many still worry about food waste creating bad odors and attracting unwanted critters. With SB 1383’s 2022 deadline fast approaching, CMSD is excited to see many other jurisdictions rolling

out similar programs and proud to have been a pioneer in this endeavor. As more jurisdictions implement these types of programs, it is our hope that organic waste separation becomes a norm that leads statewide efforts toward waste reduction and preservation of our state’s resources and environment. For more information: cmsdca.gov/ index.php/solid-waste/regular-trashcollection/org Contact Information: Nabila Guzman Management Analyst I nguzman@cmsdca.gov 949.645.8400 ext. 230

For more information about SB 1383 Organics Recycling Law, see the Legal Brief on page 26.

California Special Districts • Mar-Apr 2021

2019 BOARD SECRETARY/CLERK CONFERENCE SPEAKER

Business Affiliate Special Acknowledgements BUSINESS AFFILIATE

BUSINESS AFFILIATE

DIAMOND LEVEL

PLATINUM LEVEL

CSDA Finance Corporation www.csdafinance.net

Atkinson, Andelson, Loya, Ruud & Romo www.aalrr.com

Richards Watson Gershon www.rwglaw.com

Special District Risk Management Authority www.sdrma.org

Best Best & Krieger www.bbklaw.com

Umpqua Bank www.umpquabank.com

Liebert Cassidy Whitmore www.lcwlegal.com BUSINESS AFFILIATE

GOLD LEVEL

Aleshire & Wynder, LLP www.awattorneys.com

Five Star Bank www.fivestarbank.com

National Demographics Corp. (NDC) www.ndcresearch.com

AllPaid, Inc dba GovPayNet www.allpaid.com

Granicus www.granicus.com

Nossaman, LLP www.nossaman.com

Burke, Williams & Sorensen, LLP www.bwslaw.com

Interwest Consulting Group interwestgrp.com

California CAD Solutions, Inc. www.calcad.com

Kutak Rock, LLP www.kutakrock.com

Redistricting Partners www.redistrictingpartners.com Schneider Electric North America www.se.com

Centrica Business Solutions www.centricabusinesssolutions.com

Laserfiche www.laserfiche.com

Streamline www.getstreamline.com

CPS HR Consulting www.cpshr.us

Urban Futures, Inc. is honored to be selected as CSDA’s Endorsed Affiliate to provide Pension Advisory Services.

Read Understanding Your CalPERS Unfunded Accrued Liability by UFI in Money Matters on page 36.

“UFI” is a leader in addressing pension/OPEB issues. We take a comprehensive approach toward addressing your liabilities. We develop a customized pension model for each client, analyze multiple funding strategies, and evaluate risks by conducting scenarios analysis and Monte Carlo simulation. Education is an integral part of our approach: we conduct workshops to ensure that your Board and Stakeholders understand the issues. Finally, we help draft pension funding policies and adopt a long-term pension management plan. Urban Futures is California’s #1 Municipal Advisor – we provide the full spectrum of financial advisory services: from the execution of capital financings to developing long-term financial forecasts. For more information please contact: Julio Morales juliom@urbanfuturesinc.com 626.298.9583.

Volume 16 • Issue 2

LEGAL BRIEF

SB 1383 Regulations on Organic Waste Are Finalized LOCAL GOVERNMENT AGENCIES SHOULD BEGIN PREPARING FOR JAN. 1, 2022 EFFECTIVE DATE Reprinted from Best Best & Krieger LLC Legal Alerts Newsletter

To see how one special district is preparing for SB 1383, see Solutions & Innovations on page 22.

The Senate Bill 1383 regulations to divert organic waste from landfills are final and will take effect on Jan. 1, 2022. The California Department of Resources Recycling and Recovery received a Notice of Approval of Regulatory Action from the Office of Administrative Law earlier this month confirming the effective date. CalRecycle resubmitted the SB 1383 regulations to OAL on Oct. 7 to address OAL comments and comply with Administrative Procedures Act requirements. While the proposed regulations will not take effect until Jan. 1, 2022, the delayed implementation is intended to provide cities, counties and special districts with time to adopt enforceable mechanisms (ordinances and/or franchise agreements, permits or contracts with waste haulers) and administrative civil penalties to require organic waste generators, waste haulers and other entities to comply with the SB 1383 regulations. A local agency’s failure to adopt, by Jan. 1, 2022, any ordinance or enforceable mechanism for organic waste disposal reduction or include a provision in an agreement that requires a hauler to comply with CalRecycle regulations, among other things, is a major violation punishable by a penalty of $7,500 $10,000 per violation, per day. 26

CalRecycle and HF&H Consultants have developed four model tools – a franchise agreement, an edible food recovery agreement, an enforcement ordinance and a procurement policy – that local agencies can use to implement SB 1383 regulations. The model tools, and the recorded webinars and presentations describing how to utilize the tools, are posted on CalRecycle’s website. The SB 1383 regulations require local agencies to: • Provide source-separated waste collection services or recover organic waste and recyclables from mixed waste • Establish an edible food recovery program • Adopt a procurement policy regarding recovered organic waste • Adopt a reporting/recordkeeping policy to provide information to CalRecycle • Prepare and translate notices to educate waste generators about organic waste separation requirements • Create waiver forms for certain organic waste generators • Establish enforcement mechanisms to investigate complaints, perform inspections and cite organic waste generators and waste haulers that violate the SB 1383 regulations Best Best & Krieger LLP attorneys are available to review existing franchise agreements and ordinances, assist local agencies with the implementation of SB 1383 regulations and work with local agencies to tailor the agreements, ordinances and policies to meet the jurisdiction’s needs.

Disclaimer: BB&K Legal Alerts are not intended as legal advice. Additional facts, facts specific to your situation or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information herein.

California Special Districts • Mar-Apr 2021

Volume 16 • Issue 2

MANAGERS CORNER

ready to assume the leadership role – this helped my messaging to employees. The Directors also appreciated that I provided them with flexibility and some overlap with my successor. Process The Board and I agreed to begin the recruitment process in early January 2021. Interviews with the Board would be in February and March, aiming to have a new GM around May. Best Management Practices require the hiring manager (in this case, the Board), to not participate in one step of the recruitment process. We used an outside firm to market the position and conduct initial screenings for interviews to ensure a fair process.

HELPING TO FIND YOUR REPLACEMENT By Robert Shaver, General Manager at Alameda County Water District

hen I was in my 40s, retirement seemed like some far-off fictional concept. While I faithfully contributed to my deferred contribution accounts, it wasn’t until reaching my late 50s that it became more “real” and financially possible. Last fall, I made the decision to retire from the Alameda County Water District in 2021 after 30 years, serving the last 6-1/2 as General Manager. I targeted July 1 as my last workday though other dates are advantageous from a CalPERS pension perspective. This timing would place ACWD in a position for a smooth transition with my successor’s overlap. Plus, the budget process would be complete, union negotiations nearly done, and several major projects would be well underway. I am sharing other factors I considered for our agency: Advance Notice I informed the Board of Directors in November 2020 about my plans to retire and explore their views on the transition. Firstly, I asked their recruitment preference – internal or an internal/external recruitment, the latter requiring more time. While the Board chose internal/external, they wanted staff to know they believe the talent within our organization is 28

Black-out Period Once the recruitment began, the Board and I agreed to limit conversations about the recruitment to potential candidates – instead, forwarding inquiries to the District’s Human Resources Department or the consultant to avoid perception issues. Communication with Staff A change in General Managers can cause anxiety and ripples across the organization, and communication is key. During this process, I held Townhall meetings to inform and assure employees I was working to make a seamless transition. I am proud that the four most senior members of our organization, and likely GM candidates, agreed there will be neither “a silly season” nor posturing during the recruitment period. They met as a group to acknowledge the importance of demonstrating a leadership team that acts in the agency’s best interest. While the process is not complete, the ACWD Board of Directors has a long history of making excellent decisions. I am sure that whoever they choose to be their next General Manager will effectively lead the organization forward. Robert Shaver is the general manager at Alameda County Water District. He is a Special District Leadership Academy (SDLA) graduate and is a Certified Special District Manager (CSDM) and holds the Special District Leadership Foundation Certificate in Special District Governance

California Special Districts • Mar-Apr 2021

TAKE ACTION

FEBRUARY WAS TAKE ACTION MONTH

n February, CSDA organized “Take Action Month,” where the association encouraged districts to engage with their legislators and the community they serve. Each week, CSDA’s eNews included a new theme and tools to promote effective communication, including requesting meetings with elected officials and taking a position on legislation. As part of Take Action Month, CSDA unveiled a new technology that makes it easier to respond to the association’s Calls-to-Action. With CSDA’s new Automated Form Letters on state legislative Calls-to-Action, special districts can register a position with just a few clicks of a button. Ryan McNeil, District Manager of Fresno Mosquito and Vector Control District said this about the new tool: “The new auto-letter feature is fantastic, I used it earlier today for the Brown Act remote legislation and it was seamless. Great tool, it should lead to more member participation if more people knew about it.” Your district can take advantage of the Automated Form Letter today and use it to register your support for AB 361 (Rivas), which would provide remote meeting flexibility during declared emergencies. Read more below and visit csda.net/take-action/ brown-act to take action today! For those who may have missed Take Action Month, all of the resources have been compiled into an easy-to-use toolkit at csda.net/take-action.

TAKE ACTION SEASONS OF ADVOCACY: SPRING • Ensure your district has adopted a policy governing the process for adopting positions on legislation (download a sample policy at csda.net/take-action). • Register at LegislativeDays.csda.net to attend the 2021 Virtual Special Districts Legislative Days May 18-19. • Participate in CSDA Calls-to-Action and submit letters in support or opposition on significant bills facing special districts. • Watch for opportunities to share positive stories in the news on social media.

Volume 16 • Issue 2

Bill Amends Brown Act to Allow Remote Meetings During Declared Emergencies

CSDA is sponsoring Assembly Bill 361, authored by Assembly Member Robert Rivas (D-Hollister), to allow local agencies to continue providing critical public services to their communities during declared emergencies. On March 19, 2020, California Governor Gavin Newsom issued a stay-at-home order to protect public health against the COVID-19 pandemic. Following the stay-at-home order, Governor Newsom issued a number of subsequent executive orders modifying the requirements of the Brown Act so that local agencies may meet remotely without requiring that the public have physical access to the remote meeting locations (N-25-20, N-29-20, N-35-20). Unfortunately, the COVID-19 pandemic will not be the last emergency that will preclude special district boards from meeting safely in their boardroom. Whether it’s an earthquake, wildfire, or major climate event, certain scenarios are likely to affect future meetings of local agencies in need of convening. AB 361 would ensure local agencies are able to continue conducting the public’s business in an open and transparent manner when future emergencies arise. If enacted, AB 361 would codify the following: • While maintaining transparency and public access, local agencies would be able to meet remotely during a declared state of emergency or a declared local emergency. • While agencies would still be required to post agendas and meeting information, agencies would not be required to post meeting notices and/or agendas in physical locations when remotely meeting during an emergency. • While the public must continue to have access to the remote meeting and provided the ability to make public comment, agencies would not be required to make all remote meeting sites accessible to the public, nor include the remote location details in the meeting notice or agenda during a declared state of emergency or a declared local emergency. • Additionally, agency board members would not be required to be at remote sites within the territorial bounds of the agency during a declared state of emergency or a declared local emergency.

Register your district’s support for AB 361 by downloading a sample letter or completing CSDA’s new Automated Form Letter at csda.net/take-action/brown-act 29

DISTRICTS MAKE THE DIFFERENCE

DESERT HEALTHCARE MAKING A DIFFERENCE IN COACHELLA VALLEY By Kristin Withrow, Communications Specialist, California Special Districts Association

Desert Healthcare District and Foundation has been helping the community through the award of approximately $4 million in grants per year.

he Coachella Valley in Southern California is part of the Colorado Desert, situated between the Little San Bernardino Mountains to the east and the San Jacinto and Santa Rosa Mountains to the west. The valley’s agriculture industry employs 12,000 people and is the second largest contributor to the local economy, growing and processing $575 million in crops annually. Coachella Valley is known for the Coachella Valley Music and Arts Festival, which draws an annual crowd of over 250,000 fans to the area. Palm

Springs is a luxurious desert vacation destination in the Coachella Valley. Coachella Valley is home to nearly 69,000 permanent households with a median income of $47,612 and 19.2% of the residents live below the poverty line. Desert Healthcare District and Foundation has been helping the community through the award of approximately $4 million in grants per year. Their website notes their commitment to address resident’s healthcare access, local healthcare workforce shortage, health disparities and socioeconomic determinants of health. California Special Districts • Mar-Apr 2021

In January, Desert Healthcare announced their Board’s approval of $261,826 in grants to the community. Specifically, the awards went to:

The Alzheimer’s Association received $33,264 to support outreach, education and services for Coachella Valley residents with Alzheimer’s or dementia, including help for support, training, counseling and more for patients’ families and caregivers.

Inland Empire Ronald McDonald House received $119,432 to offset the costs of the program that strives to keep families together in times of critical hospital care.

Cove Communities Senior Association (dba Joslyn Center) was awarded $109,130 to support mental health clinicians and ease food insecurity for residents through the Meals on Wheels program. They followed up their January announcement with more good news for Coachella Valley residents in February. The district has helped establish The Coachella Valley Equity Collaborative when it received $1.2 million in CARES Act Funding from Riverside County in 2020. The collaborative centers around the mission to raise awareness and opportunities for COVID-19 testing in vulnerable communities. To expand testing, the collaborative sought community-based organizations and faith-based entities that would have relationships to better reach local farmworkers and other residents who lack access to healthcare. Grantees included Alianza Coachella Valley, Lideres Campesinas, TODEC Legal Center, Galilee Center, Youth Leadership Institute, Vision y Compromiso, Pueblo Unido CDC, and El Sol Neighborhood Education Center.

A public outreach campaign supported by the California Special Districts Association to provide information about special districts, descriptions on how they serve communities, and compelling content. Visit us at districtsmakethedifference.org.

Volume 16 • Issue 2

The Desert Healthcare and Foundation Board also extended the time frame for use of $225,000 in funds by the city of Palm Springs to support mental health crisis teams and wrap-around care for residents affected by homelessness. Desert Healthcare is emblematic of the spirit of Districts Make the Difference. They aren’t waiting for the community to come to them for healthcare, they are going into the community to provide assistance, support, testing and funding for programs to improve the lives of valley residents. Throughout California, we know Districts Make The Difference. About the Desert Healthcare District and Foundation The Desert Healthcare District is a local government agency formed in 1948. Its mission is to achieve optimal health at all stages of life for all District residents. The District includes more than 400,000 residents and encompasses the entire Coachella Valley. The District and Desert Healthcare Foundation, together, are one of the largest funders in the valley. These funds are used to assist residents — especially the underserved — in accessing vitally needed resources, such as primary and behavioral healthcare, housing, food, and transportation to medical appointments.

MAKE THE

MANAGING RISK

CHECK FRAUD LIABILITY By Debbie Yokota, ARM, SDRMA Chief Risk Officer

Check fraud is one of the biggest challenges facing the nation’s financial system. Through the use of computer technology and basic resourcefulness, criminals, either independently or in organized gangs, are finding it increasingly easy to manipulate checks in such a way as to defraud consumers and businesses. While both consumers and businesses may suffer financial loss from check fraud, consumers also face the inconvenience and anxiety caused by resolving problems with their banks and local merchants, as well as possible repercussions with credit bureaus. Here is some key information on what businesses and consumers can do to prevent becoming the victim of check fraud. Types of Check Fraud Schemes

Fraud schemes involving checks take many forms. Checks may be: • Altered, either as to the payee or the amount – Criminals will change the amount or payee on a valid check. • Counterfeited – using false check drawn on legitimate bank accounts. • Forged, either as to signature or endorsement. • Drawn on closed accounts. • Used in a variety of schemes. 32

Check fraud criminals may be insiders, independent operators, or organized gangs. The methods they use to further check fraud include: • Getting customer information from insiders. • Stealing bank statements and checks. • Working with dishonest employees of merchants who accept payments by check. • Rifling through trash for information about bank relationships.

California Special Districts • Mar-Apr 2021

CHECK FRAUD RESPONSIBILITIES FOR BANKS Current Uniform Commercial Codes (UCC) outline specific check fraud responsibilities for banks and corporations. Court decisions have already established guidelines for legal responsibilities, and failure to meet these guidelines can cause a bank or company to experience financial loss. UCC Revisions now define responsibilities for check issuers and paying banks under the term ordinary care. Under Sections 3-403(a) and 4-401(a), a bank can charge items against a customer’s account only if they are “properly payable” and the check is signed by an authorized individual. However, if a signature is forged, the corporate account may be liable if one of the following exceptions applies: According to UCC Section 3-103(7), ordinary care requires account holders to follow “reasonable commercial standards” prevailing in the area for their industry or business. Under 3-406, if they fail to exercise ordinary care, they may be restricted from seeking restitution from the payee bank if their own failures contributed to a forged check signature or an alteration - (for example, raising a check amount from $50 to $5000). Section 4-406 also requires customers to reconcile their bank statements within a reasonable time to detect unauthorized checks. This typically means reconciling statements as soon as they are received. The concept of comparative fault - Sections 3-406(b) and 4-406(e) - can shift liability to the check issuer. If both the bank and corporate account holder have failed to exercise ordinary care, a loss can be allocated based upon the extent that each

party’s failure contributed to the loss. Since banks are not required to physically examine every check, companies may be held liable for all or a substantial portion of any given loss - even if the bank did not verify the signature on a fraudulent check. Liability for counterfeits that are virtually identical to originals will be examined on a case-by-case basis. The process used when issuing the check will be reviewed to determine if the company exercised ordinary care or contributed to the loss.

REDUCING EXPOSURE TO CHECK FRAUD Taking proactive measures to protect your company against check and payment fraud can go a long way to protecting your organization. Following are a few simple suggestions that can be implemented in your company: 1. Purchase a “For Deposit Only” stamp and have the employee who opens the mail immediately stamp it on the back of each check received. 2. Separate duties of invoice payment approval, check preparation, check signing, and bank reconciliation to different individuals in your organization. 3. Implement Direct Deposit payments for vendors and employees. 4. Implement Positive Pay with your bank for both Accounts Payable and Payroll. This insures the bank will not cash any check that doesn’t exactly match the file you sent to them containing the check number, amount, etc. continued on page 34

SDRMA Board and Staff Officers

Staff

MIKE SCHEAFER, PRESIDENT Costa Mesa Sanitary District

LAURA S. GILL, ICMA-CM, ARM, ARM-P, CSDM, Chief Executive Officer C. PAUL FRYDENDAL, CPA, Chief Operating Officer ELLEN DOUGHTY, ARM, Chief Member Services Officer DEBBIE YOKOTA, AIC, ARM, Chief Risk Officer WENDY TUCKER, Member Services Manager ALANA LITTLE, Health Benefits Manager JENNIFER CHILTON, CPA, ARM, Finance Manager DANNY PENA, Senior Claims Examiner HEIDI SINGER, Claims Examiner II ASHLEY FLORES, Management Analyst/Board Clerk TERESA GUILLEN, Member Services Specialist I MARGARITO CRUZ, Accountant CANDICE RICHARDSON, Member Services Specialist I

SANDY SEIFERT-RAFFELSON, VICE PRESIDENT, Herlong Public Utility District ROBERT SWAN, SECRETARY, Groveland Community Services District

Members of the Board DAVID ARANDA, CSDM, Stallion Springs Community Services District JEAN BRACY, CSDM, Mojave Desert Air Quality Management District TIM UNRUH, CSDM, Kern County Cemetery District No. 1 JESSE CLAYPOOL, Honey Lake Valley Resource Conservation District

Consultants DAVID BECKER, CPA, James Marta & Company, LLP LAUREN BRANT, Public Financial Management DEREK BURKHALTER, Bickmore Actuarial CHARICE HUNTLEY, River City Bank FRANK ONO, ifish Group, Inc. ANN SIPRELLE, Best Best & Krieger, LLP KARL SNEARER, Apex Insurance Agency DOUG WOZNIAK, Alliant Insurance Services, Inc.

Volume 16 • Issue 2

Special District Risk Management Authority 1112 I Street, Suite 300, Sacramento, CA 95814 tel: 800.537.7790 • www.sdrma.org

7. 8. 9. 10.

11.

Check Clearing for the 21st Century Act (Check 21) is a federal law that makes it easier for banks to electronically transfer check images instead of physically transferring paper checks. Check 21 speeds up processing, controls costs and reduces fraud by providing early notification of return items. Consider using special checks to help deter check fraud by making checks difficult to copy, alter or counterfeit such as watermarks, copy void pantograph, chemical voids, high-resolution microprinting, threedimensional reflective holostripe, or security inks. Create a budget and compare the actual results against it at least monthly. Review monthly financial reports with budget, year to day and prior year comparisons. Actively participate in the approval, review and oversight functions of your company. Require that bank statements and copies of checks remain available for review and check them periodically. Require that bank reconciliation be performed within the accounting system – not on a spreadsheet or manually and by a person that does not write the checks and make bank deposits.

MANN

•

URRUTIA

12. Require two signatures on all checks over a specific high dollar amount. 13. Configure your network and financial software so only certain printers can print certain types of forms (easy to do for most financial software). 14. Be mindful of certain “red flag” behavior in employees, such as them living beyond their means, experiencing financial difficulties, or unwilling to share duties or refusing to take a vacation. 15. Purchase adequate fidelity bond coverage on all employees who handle cash. 16. Implement and enforce a company credit card usage policy. This policy should include who can use the cards, for what purposes and require original receipts. 17. Implement and enforce a detailed expense reimbursement policy. Require original receipts, as well as date, location, purpose and amount. Checks can be stolen, manipulated, or counterfeited. Illicitly obtained checks can be negotiated immediately, altered, or used for future counterfeiting. Generally, only unsophisticated criminals acting alone will immediately negotiate stolen checks by forging the signature. Most organized groups steal checks as a prelude to more enterprising endeavors. Security and law enforcement officials agree that the problems associated with check fraud and counterfeit negotiable instruments have reached epidemic proportions. As criminal organizations become more sophisticated in the devices they use, businesses and consumers must be more alert to this growing problem and the prevention tools available.

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California Special Districts • Mar-Apr 2021

WHAT'S SO SPECIAL

THE DREAM OF A BIG BEAR ALPINE ZOO HAS COME TRUE By The Redland Community News

fter two decades of planning, fundraising and construction, the Big Bear Alpine Zoo opened its doors to the public at its brand-new, stateof-the-art facility in early November. The Big Bear Alpine Zoo originally opened as the Moonridge Animal Park on Goldmine Drive in 1961. In 1998, the Big Bear Valley Recreation and Park District was approached to relocate the zoo and build a brand-new facility. Starting in 2002, the San Bernardino County Board of Supervisors started funding the zoo budget to relocate the Moonridge Park with assistance from the Big Bear Valley Park District, the Friends of the Big Bear Alpine Zoo and the U.S. Forest Service. In 2006, architecture firm Peckham

Guyton Albers & Viets was retained by the Friends of the Big Bear Alpine Zoo to design the new zoo. On July 25, 2016, construction began. The total cost of the project was $18.2 million. Big Bear Alpine Zoo is a sanctuary and rehabilitation facility offering injured, orphaned and imprinted wild animals a safe haven. The Alpine Zoo temporarily houses animals while they heal or permanently if they are unable to survive on their own in the wild. The zoo successfully rehabilitates and releases a vast majority of the animals brought in for care. Those that remain on exhibit are either too injured or have been imprinted/influenced by humans and are not fit for the wild and cannot be released back into the wild to care for themselves. Guests are able to experience up close

and personal every type of animal that lives in the San Bernardino National Forest along with some special residents – snow leopard sisters and a family of grizzly bears. The Big Bear Valley Recreation and Park District, a special district of the County of San Bernardino, owns the zoo, the facilities and the animals. The new Big Bear Alpine Zoo is more spacious for the animals and provides a better guest experience. The new zoo is made possible through the generosity of the San Bernardino County Board of Supervisors, the Friends of the Big Bear Alpine Zoo and The Nay Foundation. At the ribbon-cutting ceremony, The Nay Foundation presented the Big Bear Alpine Zoo with a check for $1 million for construction costs of the new animal care building.

ABOUT THE ZOO WHERE: 747 CLUBVIEW DRIVE, BIG BEAR LAKE HOW MANY ANIMALS: 26 SPECIES HOURS: 10AM-4PM DAILY (EXCEPT CHRISTMAS) SAFETY: MASKS REQUIRED

Volume 16 • Issue 2

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MONEY MATTERS

Understanding Your CalPERS Unfunded Accrued Liability By Julio Morales, Director at Urban Futures, Inc.

The first step toward developing a pension funding strategy, which ultimately may include multiple funding solutions, is to understand your CalPERS Unfunded Accrued Liability (UAL). We have used the UAL from a member agency, based on the most recent actuarial reports dated June 30, 2019, for the sake of this article. Note: It is important to note that each agency has a different UAL and faces a unique set of financial constraints. The majority of special districts only have a plan that covers Miscellaneous employees; however, some agencies also have a Safety Plan (police/ fire/lifeguard). The concepts introduced below are applicable toward either plan.

DEFINED BENEFIT PLAN The public sector has traditionally provided its employees a “Defined Benefit” retirement plan. Social Security, for example, is a defined benefit retirement program. CalPERS provides its participants a defined benefit, which is derived from a formula based on the number of years of service. The formula that an employee receives is usually based whether they are a regular (Miscellaneous) or Safety/ sworn employee, and on their hire date. Once an employee retires, the annual amount they will receive, once they retire at age 50, is based on: 1) the highest salary earned over a 1- year period during their career and 2) the number of years of service credit. If we assume an employee is under the “Classic” formula for Miscellaneous employees 2.0% @ 55, then their annual retirement compensation is equal to: 1) highest salary earned over a 1-year period = $50,000, and 2) 20 service credit. The employee would receive 40% of their highest year’s salary or $20,000 per year (2.0% x 20 years = 40% x $50,000 = $20,000). There are a variety of benefit plans available: Miscellaneous - 2.0% @ 60 / 2.0% @ 55 / 2.5% @ 55 / 2.7% @ 57 / 3.0% @ 60 / 2.0% @ 62 (PEPRA) Safety - 2.0% @ 57 / 2.5% @ 57 / 2.7% @ 57/ 2.0% @ 55/ 3.0% @ 50/ 3.0% @ 50 / 2.7% @ 57 (PEPRA)

CalPERS provides its participants a defined benefit, which is derived from a formula based on the number of years of service.

DEFINED CONTRIBUTION The private sector primarily participates in some type of “defined contribution” retirement program, commonly referred to a 401K. There are many derivates plans (Roth, 403B, SEP, IRA, etc.), which often provide some type of tax-advantage to facilitate long-term savings. The payout from Defined Contribution Plans are directly tied to the two key factors: 1. The amount contributed (and matched) 2. The investment performance of the plan The plan participants determine the amount of contributions and typically assume the responsibility investment decisions. The most important distinction is that the employee assumes the attendant risks of investment shortfalls. California Special Districts • Mar-Apr 2021

Benefit Tiers – An agency typically has two benefit tiers: 1st Tier or Classic, and PEPRA. Some agencies created a 2nd tier for new employees hired before January 1, 2013, when PEPRA took effect. California Public Employees’ Pension Reform Act (PEPRA) – PEPRA changed the benefit formula for new employees hired after January 1, 2013 or 6 months break from service: 2.0% @ 60 for Miscellaneous employees, and 2.7% @ 57 for Safety employees. PEPRA also required employees to pay 50% of their annual contributions or Normal Costs; and placed a cap on annual retirement compensation (~$150,000). Actuarial Reports - Actuarial reports are generated at the end of each fiscal year – June 30, based on the financial results experience during the prior fiscal year. CalPERS released the June 30, 2019 actuarial report in September 2020, which provides the required payment for the next following fiscal year FY 21-22. Actuarial reports therefore reflect an effective 2-year delay.

CalPERS provides a separate actuarial report for each Tier and type of employee. The majority of an agency’s UAL is concentrated in the classic plan (as opposed to PEPRA). Risk Pools – CalPERS groups all plans with less than 100 employees into a shared risk pool plan. Member agencies are placed into the plan to minimize the impact of individual benefit events – the retirement/death of a single employee in a 20-member agency is more financially significant than for a larger city with 500 employees. Actuarial calculations are made collectively, but the UAL for each agency is determined individually based on their percentage share of the plan. Some agencies mistakenly assume if they pay-off their UAL or make an additional discretionary payment (ADP) this payment will be applied toward the pool and for the benefit of other agencies. All payments are tracked and credited to each agency’s respective account, percentage allocations (of the risk pool UAL) are rebalanced after such payments are taken into account. continued on page 38

CSDAFC Board and Staff

Recent Financings

Officers JO MACKENZIE, PRESIDENT, Vista Irrigation District VINCE FERRANTE, VICE PRESIDENT, Moss Landing Harbor District ARLENE SCHAFER, SECRETARY, Costa Mesa Sanitary District GLENN LAZOF, TREASURER, Regional Government Services Authority

Members of the Board GEORGE EMERSON, Goleta Sanitary District PAUL HUGHES, CSDM, South Tahoe Public Utilities District JEFF LAND, Brandis Tallman, a Division of Oppenheimer & Co. Inc. MATTHEW MCCUE, Mission Springs Water District STEFAN MORTON, Municipal Finance Corporation

Consultants RICK BRANDIS, Brandis Tallman, a Division of Oppenheimer & Co. Inc. WILLIAM MORTON, Municipal Finance Corporation ALBERT REYES, Kutak Rock LLP SAUL ROSENBAUM, Prager & Co., LLC NICOLE TALLMAN, Brandis Tallman, a Division of Oppenheimer & Co. Inc.

Staff NEIL MCCORMICK, Chief Executive Officer CATHRINE LEMAIRE, Coordinator AMBER PHELEN, Executive Assistant RICK WOOD, Finance & Administrative Director

CSDA Finance Corporation 1112 I Street, Suite 200, Sacramento, CA 95814 tel: 877.924.2732 • www.csdafinance.net CSDA F C

Volume 16 • Issue 2

In 2020, the CSDA Finance Corporation facilitated the financing of more than $33 million in projects and purchases for special districts:

Solano Transportation Authority Admin Building - $9,000,000 Northern Salinas Valley Mosquito Abatement District Building Construction - $5,000,000 Murphys Sanitary District Bridge Loan - $4,000,000 Heritage Ranch Community Services District Solar Project - $1,500,000 Riverdale Irrigation District Land Purchase - $700,000 Bear Valley Community Services District Generators - $300,00 Nevada County Consolidated Fire Protection District Rescue Vehicle - $280,000 We have solutions for your financing needs, large and small. Contact CSDA Finance Corporation at 877.924.2732 or visit csdafinance.net. 37

ANNUAL PENSION COSTS An agency’s annual pension costs are comprised of two components: 1. Normal Costs, which represents the benefits earned by current employees this year. This amount is calculated based on a percentage of payroll. 2. Unfunded Accrued Liability (UAL) payment. This amount represents the funding shortfall of benefits earned in prior years, by both current employees and retirees. The annual UAL payment is a fixed dollar amount, which should be viewed as a “payment plan for past due bill.”

NORMAL COSTS Normal costs are calculated based on a percentage of payroll. Each Tier/Plan requires a different percentage. Given the current pension law, there is little an agency can do to change its annual normal costs, except to adjust the size of its workforce and/or negotiate for employees to pay a greater share of pension costs. We will focus on understanding the UAL, which is a fixed dollar payment toward the past service credit or past due balance. Unfunded Accrued Liability “UAL” Each agency’s UAL is determined based on two variables: 1) Accrued Value of Pension Benefits earned to date. 2) Market Value of Assets held and invested by CalPERS. The shortfall or difference between these amounts is the UAL. The District has a pension funding shortfall or UAL of $5,975,125 - 77.6% funding level. The PEPRA plan adds $51,710 to the UAL, which The UAL is for June 30, 2019, is 92% funded. while the UAL in The District’s classic plan is 2.0% @ 55, the accompanying as compared to many agencies that have chart is for 2.0% @ 50, as a result, the District has a FY 21-22. higher funding ratio than average (68%70%). Standard & Poor’s Rating Service considers pension funding status of 80% a minimum funding level, below which is considered underfunded and requires additional review. The UAL is viewed as a “past due” amount owed to CalPERS for prior service credit earned by current employees or retirees.

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Standard & Poor’s Rating Service considers pension funding status of 80% a minimum funding level, below which is considered underfunded and requires additional review.

California Special Districts • Mar-Apr 2021

Amortization Base – The UAL is comprised of a series of Amortization Bases, similar to a loan. Each Amortization Base carries an interest rate of 7.0%. Each Amortization Base has a different final maturity or term, while some repayment terms include an escalation or ramp-up feature while others do not. Therefore, each Amortization Base has a unique amortization or repayment schedule. The District has a total of 20 Amortization Bases with terms ranging from 16 years to 29 years. UAL Payments – The District will be required to pay a fixed dollar UAL payment of $429,000 in FY 21-22, in addition to the annual normal costs, which is equal to 10.8% of payroll. The UAL represents an additional 12.7% of payroll (Total Pension Costs estimated 23.6% of payroll). The District’s UAL payment is scheduled to grow until it peaks in FY 2032-33 at $667,000 million – a 64% increase.

The UAL is adjusted each year due to a combination of factors, including investment performance, actual retirement/mortality patterns, and changes in assumptions & methods. The UAL is dynamic and should be actively managed.

Julio F. Morales heads UFI’s pension advisory practice. For more information, he can be reached at juliom@ urbanfuturesinc.com.

FY20 – In 2020, CalPERS return was 4.70%. It fell short 2.30% of its benchmark rate of return of 7.0%. As a result, the District should anticipate that its UAL will grow by $630,000. CalPERS will amortize this base over 20 years, adding $71,000 to its annual UAL payments. Dynamic Liability – The UAL is adjusted each year due to a combination of factors, including investment performance, actual retirement/mortality patterns, and changes in assumptions & methods. The UAL is dynamic and should be actively managed. In some years, an agency can earn “credits” against this liability for positive investment performance, while in other years CalPERS may fall short of its target 7.0% and a new base is added to increase the UAL. It is not likely that CalPERS will “outearn” its unfunded liability (UAL) – we had an unprecedented 10-year economic recovery after the Great Recession and CalPERS remained at a 68% funded ratio. Volume 16 • Issue 2

Urban Futures, Inc. (UFI) is CSDA’s newest business affiliate and is a full service municipal consulting firm serving cities, counties, school districts, housing entities and special districts in the State of California since 1972. Urban Futures, Inc. has a broad base of expertise with highly skilled and experienced professionals. Its consulting practice includes strategic planning, financial analysis, management consulting, housing consulting and special study services with offices in the cities of Orange, Daly City, and Walnut Creek.

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Volume 15 ••Issue Issue1 1

Your Community. Your Services. Your District! This campaign is centered on the concept that special districts go beyond providing important services to their communities. They make a difference in the lives of their residents and help our state thrive. The goal is to bridge the gap between special districts and the essential services that millions of Californians value. The first step is to visit DistrictsMaketheDifference.org. The website features a simple-to-use toolkit filled with public awareness videos, web banners, posters, factsheets, and other materials that can be easily downloaded.

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California Special Districts • Mar-Apr 2021

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Volume 16 • Issue 2

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