WRWC Board Meeting. Tuesday, November 14, :30 PM. Tigard Public Works Building 8777 SW Burnham St. Tigard, OR 97223

Transcription

1 WRWC Board Meeting Tuesday, November 14, :30 PM Tigard Public Works Building 8777 SW Burnham St. Tigard, OR Meeting Agenda 1. Review and Approval of Minutes of May 9, 2017 Board Meeting 2. Election of Officers for WRWC Board Meeting Schedule for Financial Statements for the Fiscal Year Ending June 30, 2017 and Unaudited Financial Report for the First Quarter of the Fiscal Year Ending June 30, Willamette Governance Group Update 6. WRWC Website Maintenance 7. Member Updates/Announcements 8. Public Comment 9. Adjournment Next Meeting February 13, :30 PM Tigard Public Works Building 8777 SW Burnham St. Tigard, OR SW 170th Avenue, Beaverton, Oregon // phone // fax //

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3 1 Link back to agenda Board Meeting Minutes Tuesday, May 9, 2017 WRWC Board Members or Alternates present: Richard Burke, WRWC Board Chair Tualatin Valley Water District Krisanna Clark, Mayor City of Sherwood Frank Bubenik, Councilor City of Tualatin John Goodhouse, Councilor City of Tigard WRWC Member Staff present: John Goodrich City of Tigard Mark Knudson, CEO TVWD Clark Balfour TVWD Jim Meierotto - TVWD Cheri Maki - TVWD Jeff Fuchs City of Tualatin Craig Sheldon City of Sherwood Dennis Koellermeier City of Tigard Guests & Members of the Public present: Adam Sussman GSI, Inc. Owen McMurtrey GSI, Inc. Call to Order Chair Richard Burke called the meeting to order at 5:22 pm 1. Update on the Willamette River Basin Review Process Jim Meierotto introduced Adam Sussman and Owen McMurtrey of GSI, Inc. Sussman gave an in-depth overview of the reallocation study of the Willamette River Basin. Presentation slides attached. 2. Review and Approval of Board Minutes of the February 1, 2017 Meeting Burke asked for a vote to approve the minutes of February 1, 2017 meeting. Frank Bubenik requested that his title be corrected to Councilor rather than Commissioner. There being no further objection to the minutes, Burke declared the minutes approved. 3. Resolution Adopt a New Registered Agent and a New Registered Office Clark Balfour presented Resolution 17-01, a housekeeping measure to update the Registered Agent and Registered Office. Balfour recommended that the Board appoint Mark Knudson as the new Registered Agent and designate Tualatin Valley Water District as the new Registered Office. Burke called for a vote to adopt Resolution It passed unanimously. DRAFT WRWC Board Meeting Minutes May 9, 2017 Page 1

4 4. Report on Third Quarter Financial Results Knudson presented the Third Quarter Financial Results report prepared by Paul Matthews (see attached). Knudson mentioned that the WRWC has realized a savings associated with having TVWD as the managing agency for the WRWC. Also, he stated that, as recommended by the Board, the WRWC continues to reduce the fund balance by using the money toward administrative costs associated with supporting the business of the WRWC and the efforts of the ongoing Willamette Governance Group negotiations. Knudson stated that there is a chance there may be additional costs in the next fiscal year for WGG negotiations. Since such funds are included in the WRWC budget, TVWD would bill any additional costs directly to partners rather than passing through the WRWC. 5. Willamette Governance Group Update Knudson reported that there has been tremendous progress in the negotiations for the WGG. Currently, an intake agreement is being finalized between the WRWC members and the cities of Wilsonville, Beaverton and Hillsboro. The City of Tualatin has chosen not to participate. TVWD is working on a draft to brief the city councils and TVWD Board in June with action anticipated in August. Knudson reported that the next steps will be to draft the purchase and sale agreements for the intake capacity itself. TVWD will be selling shares to the WRWC partners, except Tualatin. TVWD, Hillsboro and Beaverton also need to complete a Willamette Supply System Intergovernmental Agreement, which will include the intake, the raw water pipeline, the treatment plant, the storage reservoirs and the pump stations. There will need to be an amendment to the existing Wilsonville and TVWD agreement to include Sherwood and possibly Tigard. Balfour added that he met with Josh Soper and Barbara Jacobson with the City of Wilsonville and they agreed that the discussions would start no later than January Balfour said that there is an issue in the current WGG discussions concerning Wilsonville s belief that TVWD must give them the right of first offer before selling any of its capacity share of the intake facility to the other partners, whereas TVWD believes that all partners should be given equal rights. This issue will be resolved as part of the ongoing WGG process. 6. WRWC Meeting Schedule 2017 Knudson confirmed that for the remainder of the year, the meetings will start at 5:30 on the second Tuesday of August and November. 7. Member Updates/Announcements Bubenik introduced Jeff Fuchs with the City of Tualatin who has replaced Jerry Postema. 8. Public Comment There was no public present. 9. Adjournment The meeting was adjourned at 6.22 p.m. DRAFT WRWC Board Meeting Minutes May 9, 2017 Page 2

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13 2 Link back to agenda MEETING DATE: November 14, 2017 TITLE: Election of Officers for WILLAMETTE RIVER WATER COALITION BOARD MEETING AGENDA ITEM ITEM: The Intergovernmental Cooperative Agreement (IGA) creating the Willamette River Water Coalition (WRWC) includes: 1.5 Officers. Annually, at the beginning of each fiscal year, WRWC shall elect from its membership a Chair and Vice-Chair who shall be officers of the WRWC (and) who shall serve a term of one (1) year. WRWC shall also appoint a Secretary who need not be a member of WRWC who shall be responsible for WRWC s records and shall keep a record of all WRWC proceedings. Officers shall serve at the pleasure of WRWC or until their successors shall be appointed and take office. The current WRWC Chair, Richard Burke of TVWD, was elected as Chair by the WRWC Board on November 2, Traditionally, WRWC Chair responsibilities have rotated between member agencies, with succession from Vice-Chair to Chair, without reappointment. John Goodhouse was elected and served as WRWC Vice-Chair in The WRWC Board did not appoint a Secretary for the fiscal year. TVWD, as the Managing Agency for the WRWC, is willing to serve as the Secretary for the next year. This item will consist of Board nominations and election of WRWC officers and appointment of a Secretary for the fiscal year. The next election of WRWC officers for the fiscal year should occur at the August 2018 meeting of the WRWC. STAFF RECOMMENDATION: The WRWC Board should elect a Chair and Vice-Chair and appoint a Secretary for the fiscal year. BUDGET IMPACT: None. STAFF CONTACT: Mark Knudson, mark.knudson@tvwd.org, ATTACHMENTS: None. MANAGER APPROVAL: Chief Executive Officer General Counsel Finance N/A Water Supply Program N/A 1850 SW 170th Avenue, Beaverton, Oregon // phone // fax //

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15 3 Link back to agenda MEETING DATE: November 14, 2017 TITLE: WRWC Board Meeting Schedule for 2018 WILLAMETTE RIVER WATER COALITION BOARD MEETING AGENDA ITEM ITEM: Traditionally, the Willamette River Water Coalition (WRWC) has met quarterly, in the months of February, May, August and November each year. The Intergovernmental Cooperative Agreement (IGA) creating the WRWC does not establish a minimum frequency of periodic meetings of the WRWC Board. In light of ongoing work to complete new agreements for the governance of the Willamette water supply system and possible amendments to the existing WRWC IGA, it is proposed that the WRWC continue to conduct quarterly meetings during calendar year This item will consist of Board consideration of a proposed meeting schedule for calendar year If the Board wishes to continue the previously established schedule of meeting on the second Tuesday of the months of February, May, August and November, the resulting meeting schedule for calendar year 2018 would include: February 13, 2018 May 8, 2018 August 14, 2018 November 13, 2018 Meetings would start at 5:30 PM at the Tigard Public Works Building unless otherwise scheduled. Any changes to the meeting date, time or location will be coordinated with the Board Chair and Board Members and staff of the member parties will be notified. A meeting schedule for calendar year 2019 should be established at the November 2018 meeting of the WRWC. STAFF RECOMMENDATION: The WRWC Board should, by motion, establish a meeting schedule for calendar year BUDGET IMPACT: None. STAFF CONTACT: Mark Knudson, mark.knudson@tvwd.org, ATTACHMENTS: None. MANAGER APPROVAL: Chief Executive Officer General Counsel Finance N/A Water Supply Program N/A 1850 SW 170th Avenue, Beaverton, Oregon // phone // fax //

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17 4 Link back to agenda MEETING DATE: November 14, 2017 WILLAMETTE RIVER WATER COALITION BOARD MEETING AGENDA ITEM TITLE: Financial Statements for the Fiscal Year Ending June 30, 2017 and Unaudited Financial Report for the First Quarter of the Fiscal Year Ending June 30, 2018 ITEM: The fiscal year for the Willamette River Water Coalition (WRWC) ended on June 30, 2017 (FY2017). As the managing agency for the WRWC, staff from the Tualatin Valley Water District (TVWD) has prepared the WRWC s Basic Financial Statements and Supplemental Information consistent with the requirements of Oregon Law. TVWD also engaged the WRWC s independent auditor to complete its review and issue its findings. The findings of the independent auditor will be presented to the WRWC Board. As reported in August, the WRWC finished FY2017 in good financial condition. Expenditures were under the budget adopted by the WRWC Board at its May 11, 2016 Board meeting. Most of the savings during FY2017 were in professional services for the negotiation of the Willamette Governance Group (WGG). However, the WRWC is also realizing significant savings from the lower cost of administration since the transition of the management of the WRWC to TVWD in January. Consistent with the fiscal plan presented to the WRWC Board in May 2016, the WRWC s fund balances were reduced during FY2017 from $65,357 to $24,074. Considering the new role of the WRWC, staff recommends the WRWC maintain a fund balance slightly lower than the current level. Interest earned on the fund balance is credited to the WRWC fund and offsets the dues assessed on all WRWC members. In addition to presenting the WRWC s Basic Financial Statements and Supplemental Information, staff will present the Board an update on the financial results for the first quarter of the current fiscal year. BUDGET IMPACT: None. STAFF CONTACT: Paul L. Matthews, paul.matthews@tvwd.org, ATTACHMENTS: Basic Financial Statements and Supplemental Information for the Year Ending June 30, 2017 and 2016; and Unaudited Financial Report for Willamette River Water Coalition MANAGER APPROVAL: Chief Executive Officer Chief Financial Officer General Counsel Director, Water Supply Program N/A N/A 1850 SW 170th Avenue, Beaverton, Oregon // phone // fax //

18 Basic Financial Statements and Supplemental Information Years ended June 30, 2017 and 2016

19 WILLAMETTE RIVER WATER COALITION Beaverton, Oregon CONTENTS Board Members and Registered Agent 1 Independent Accountant's Review Report 3 Management's Discussion and Analysis 5 Basic Financial Statements: Statements of Net Position 9 Statements of Revenues, Expenses and Changes in Net Position 10 Statements of Cash Flows 11 Notes to Basic Financial Statements 13 Page Supplemental Information: Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual 17 Management Representation of Fiscal Affairs Required by Oregon Regulations 19

20 WILLAMETTE RIVER WATER COALITION Beaverton, Oregon WRWC Board Members as of June 30, 2017 Richard Burke, Chair Commissioner, Tualatin Valley Water District John Goodhouse, Vice Chair Councilor, City of Tigard Krisanna Clark, Board Member Mayor, City of Sherwood Frank Bubenik, Board Member Councilor, City of Tualatin WRWC Registered Agent Mark Knudson Tualatin Valley Water District 1850 SW 170th Avenue Beaverton, OR Ph: (503)

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22 475 Cottage Street NE, Suite 200, Salem, Oregon (503) INDEPENDENT ACCOUNTANT S REVIEW REPORT Board of Directors Willamette River Water Coalition 1850 SW 170 th Avenue Beaverton, Oregon We have reviewed the accompanying financial statements of the business-type activities of the Willamette River Water Coalition as of June 30, 2017 and 2016, and the related notes to the financial statements. A review includes primarily applying analytical procedures to management s financial data and making inquiries of management. A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement whether due to fraud or error. Accountant s Responsibility Our responsibility is to conduct the review engagements in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. Those standards require us to perform procedures to obtain limited assurance as a basis for reporting whether we are aware of any material modifications that should be made to the financial statements for them to be in accordance with accounting principles generally accepted in the United States of America. We believe that the results of our procedures provide a reasonable basis for our conclusion. Accountant s Conclusion Based on our reviews, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in accordance with accounting principles generally accepted in the United States of America. Required Supplementary Information Accounting principles generally accepted in the United States of America require that management s discussion and analysis on pages 5 8 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. The information is the representation of management. We have not audited or reviewed such required supplementary 3

23 information, and, accordingly, we do not express an opinion, a conclusion, nor provide any form of assurance on it. Supplementary Information Our review was made for the purpose of expressing limited assurance that there are no material modifications that should be made to the basic financial statements in order for them to be in conformity with generally accepted accounting principles. The supplementary information is presented for purposes of additional analysis and is not a required part of the financial statements. Such information has been subjected to the inquiry and analytical procedures applied in the review of the basic financial statements, and we are not aware of any material modifications that should be made thereto. CERTIFIED PUBLIC ACCOUNTANTS By: Devan W. Esch, A Shareholder Salem, Oregon October 23,

24 MANAGEMENT S DISCUSSION AND ANALYSIS

25 WILLAMETTE RIVER WATER COALITION Beaverton, Oregon MANAGEMENT S DISCUSSION AND ANALYSIS YEARS ENDED JUNE 30, 2017 AND 2016 As management of the Willamette River Water Coalition (the Coalition), a joint venture of Tualatin Valley Water District and the cities of Sherwood, Tualatin, and Tigard, we offer readers of the Coalition s financial statements this narrative overview and analysis of the Coalition s financial activities for the fiscal years ended June 30, 2017 and June 30, The report includes this Management Discussion and Analysis (MD&A) section to provide users of the basic financial statements with a narrative introductory overview and analysis of the statements. Financial Highlights Net position (asset minus liabilities) was $24,074 and $65,357 at June 30, 2017 and June 30, 2016 respectively. As of June 30, 2017 and June 30, 2016 the Coalition had no outstanding debt. Net position decreased by $41,283 for the year ended June 30, 2017 compared to a decrease of $13,894 for the year ended June 30, 2016, primarily due to increased costs for professional services. Report Layout Taken together the sections provide a comprehensive financial look at the Coalition. The individual components of the report layout include the following: Management s Discussion and Analysis. This section of the report provides an overview of financial highlights and economic factors affecting the Coalition. Basic Financial Statements. This section includes the Statements of Net Position, Statements of Revenues, Expenses and Changes in Net Position, Statements of Cash Flows, and Notes to Basic Financial Statements. The Statements focus on an entity-wide presentation using the accrual basis of accounting. They are designed to resemble more closely private-sector financial statements in that all activities are consolidated into a total for the Coalition. The Statements of Net Position focus on resources available for future operations. These statements present a snap-shot view of the assets of the Coalition, the liabilities it owes and the net difference. The Statements of Revenues, Expenses and Changes in Net Position focus on the current year operating results and the change in capital as a result of the current year operations. The Statements of Cash Flows focuses on how the Coalition obtained and expended its available cash and investments. The Notes to Basic Financial Statements provide additional disclosures required by generally accepted accounting principles and provide information to assist the reader in understanding the Coalition s financial condition. 5

26 WILLAMETTE RIVER WATER COALITION Beaverton, Oregon MANAGEMENT S DISCUSSION AND ANALYSIS YEARS ENDED JUNE 30, 2017 AND 2016 Supplemental Information: Budgetary Comparison. This schedule includes a comparison of actual revenues and expenditures to the Original and Final Budget. Management Representation of Fiscal Affairs. Consists of management s representation on the Coalitions compliance and internal controls as required by Oregon State Statutes. Statements of Net Position The Coalition s assets exceeded liabilities by $24,074 and $65,357 at June 30, 2017 and June 30, 2016 respectively, a decrease of 92.7% from 2016, and a decrease of 69.6% from 2015 as shown in Table 1. A condensed version of the Statements of Net Position as of June 30, 2017 and June 30, 2016 is as follows: Table 1: Percentage Change Change 2015 Cash and investments $ 3,287 $ 68,147 $ (64,860) -95.2% $ 135,656 Acccounts receivable 57,312 16,163 41, % - Total Assets 60,599 84,310 (23,711) 135,656 Accounts Payable 36,525 18,953 17, % 56,405 Net Position $ 24,074 $ 65,357 $ (41,283) -63.2% $ 79,251 6

27 WILLAMETTE RIVER WATER COALITION Beaverton, Oregon MANAGEMENT S DISCUSSION AND ANALYSIS YEARS ENDED JUNE 30, 2017 AND 2016 Statements of Revenues, Expenses and Changes in Net Position An expanded version of the Coalition s Statements of Revenues, Expenses and Changes in Net Position for the fiscal years ended June 30, 2017, and June 30, 2016 is as follows: Table 2: Percentage Change Change 2015 Operating Revenue: Reimbursements $ 118,113 $ 149,600 $ (31,487) -21.0% $ 99,600 Operating Expenses: 159, ,759 (5,083) -3.1% 136,168 Operating Income (Loss) (41,563) (15,159) (26,404) 174.2% (36,568) Non Operating Income: Interest income 280 1,265 (985) -77.9% 340 Change in Net Position (41,283) (13,894) (27,389) 197.1% (36,228) Net Position, beginning of year Net Position, end of year 65,357 79,251 (13,894) -17.5% 115,479 $ 24,074 $ 65,357 $ (41,283) -63.2% $ 79,251 The cost of the Coalition s activities totaled $159,676 and $164,759 for the years ended June 30, 2017 and June 30, 2016 respectively, a 3.1% decrease, and 17.3% increase from 2015, as shown in Table 2. Administrative services and governance facilitation have been the bulk of the expenses each year. The board has directed that fund balance be reduced; thus expenses have exceeded reimbursements. In fiscal year 2014, members began facilitated discussions in conjunction with other parties to establish a new long-term governance structure for management of water facilities on the Willamette River. As of June 30, 2017, those discussions were still underway. In August 2016, the City of Tualatin withdrew from governance discussions but remains a member of the Coalition. Capital Assets The Coalition has not invested in capital assets at June 30, Debt Administration As of June 30, 2017, the Coalition has no outstanding debt. 7

28 WILLAMETTE RIVER WATER COALITION Beaverton, Oregon MANAGEMENT S DISCUSSION AND ANALYSIS YEARS ENDED JUNE 30, 2017 AND 2016 Economic Factors In January 2017, the managing agency for the Coalition changed from Western Advocates, Inc. to Tualatin Valley Water District (the District). Financial records are maintained by the District. Operating expenses are charged to the Coalition as incurred. Due to the Coalition s funding structure, administrative costs are charged to all of the joint venturers, and costs for negotiating intergovernmental agreements to manage the Willamette intake facility and water supply system are charged to members participating in those governance discussions. Water Rights On June 7, 2007, the District assigned its 130 million gallons per day (MGD) water right on the Willamette River to the Coalition. On June 21, 2007 the Oregon Water Resources Department issued the Final Order extending the Coalition's Willamette River Water Right Permit (S49240) until October 1, Financial Contact The Coalition s financial statements are designed to present users including taxpayers, citizens, customers, investors and creditors with a general overview of the Coalition s finances and overall accountability. If you have questions about the contents of this report or need additional financial information, please contact Tualatin Valley Water District s Chief Financial Officer at 1850 SW 170th Avenue, Beaverton, Oregon,

29 BASIC FINANCIAL STATEMENTS

30 WILLAMETTE RIVER WATER COALITION Beaverton, Oregon STATEMENTS OF NET POSITION JUNE 30, 2017 AND ASSETS CURRENT ASSETS Cash and investments $ 3,287 $ 68,147 Accounts receivable 56,894 15,740 Interest receivable $ 60,599 $ 84,310 LIABILITIES AND JOINT VENTURER'S CAPITAL CURRENT LIABILITIES Accounts payable and accrued liabilities $ 36,525 $ 18,953 NET POSITION UNRESTRICTED 24,074 65,357 TOTAL LIABILITIES AND NET POSITION UNRESTRICTED $ 60,599 $ 84,310 See independent accountant's review report and notes to basic financial statements. 9

31 WILLAMETTE RIVER WATER COALITION Beaverton, Oregon STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION YEARS ENDED JUNE 30, 2017 AND OPERATING REVENUES: Reimbursements from joint venturers $ 118,113 $ 149,600 OPERATING EXPENSES: Operating expenses 159, ,759 OPERATING INCOME (LOSS) (41,563) (15,159) NONOPERATING INCOME: Interest income 280 1,265 CHANGE IN NET POSITION (41,283) (13,894) NET POSITION, Beginning of year 65,357 79,251 NET POSITION, End of year $ 24,074 $ 65,357 See independent accountant's review report and notes to basic financial statements. 10

32 WILLAMETTE RIVER WATER COALITION Beaverton, Oregon STATEMENTS OF CASH FLOWS YEARS ENDED JUNE 30, 2017 AND CASH FLOWS FROM OPERATING ACTIVITIES Reimbursements from joint venturers $ 76,959 $ 133,860 Paid to suppliers for goods and supplies (142,104) (202,211) NET CASH FROM OPERATING ACTIVITIES (65,145) (68,351) CASH FLOWS FROM INVESTING ACTIVITIES Interest NET CHANGE IN CASH AND INVESTMENTS (64,860) (67,509) CASH AND INVESTMENTS, Beginning of Year 68, ,656 CASH AND INVESTMENTS, End of Year $ 3,287 $ 68,147 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH FROM OPERATING ACTIVITIES: Operating income (loss) $ (41,563) $ (15,159) Adjustments to reconcile operating income (loss) to net cash from (used by) operating activities Change in operating accounts: Accounts receivable (41,154) (15,740) Accounts payable 17,572 (37,452) NET CASH FROM OPERATING ACTIVITIES $ (65,145) $ (68,351) See independent accountant's review report and notes to basic financial statements. 11

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34 NOTES TO BASIC FINANCIAL STATEMENTS

35 WILLAMETTE RIVER WATER COALITION Beaverton, Oregon NOTES TO BASIC FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2017 AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization Willamette River Water Coalition (the Coalition) was organized under Oregon Revised Statute (ORS) 190 and was established by an agreement between the cities of Tigard, Tualatin, Sherwood, and Tualatin Valley Water District (the District). The Coalition is governed by a four-member board, with one representative appointed by each member jurisdiction. The purpose of the Coalition is to preserve access to the Willamette River as a potential municipal and industrial water source for each of the growing communities listed above. The Coalition is managed by Tualatin Valley Water District. Operation and maintenance expense is determined on a unit basis by the Coalition. Each joint venturers apportioned share of the general administration expenses is determined by the following formula: one half of the administrative costs for the fiscal year is divided evenly among the Coalition s membership, the second half of the total administrative cost of the fiscal year is divided among the Coalition membership according to their percentage share of the total number of water meters served by the members of the Coalition as of January 1 of the preceding fiscal year. The following percentages were in effect at June 30, 2017: City of Tigard % City of Tualatin 7.25 City of Sherwood 6.29 Tualatin Valley Water District Governance costs are allocated to the participating members as follows: one half is divided evenly amongst the participants and the second half is divided according to their proportionate share of water meters served by all members of the governance group. Basis of Presentation and Accounting For financial reporting purposes, the Coalition reports its operations on an enterprise fund basis. Enterprise funds (a propriety fund type) are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets, liabilities and net position associated with the operations are included on Statements of Net Position. The Statements of Revenues, Expenses and Changes in Net Position present increases (revenues) and decreases (expenses) in net position. The accrual basis of accounting is utilized for financial reporting. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. 13

36 WILLAMETTE RIVER WATER COALITION Beaverton, Oregon NOTES TO BASIC FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2017 AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Basis of Presentation and Accounting (Continued) The Coalition has defined operating revenues to include all reimbursements and payments received from joint venturers. Operating expenses are defined as those expenses directly related to providing services. Non-operating revenues are revenues of the Coalition not directly attributable to services provided, consisting primarily of interest income. Use of Estimates The preparation of basic financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of certain assets, liabilities, revenues, expenses and other disclosures. Accordingly, actual results may differ from those estimates. Cash and Investments Cash is considered to be cash on hand and demand deposits. Cash and investments of the Coalition are part of a common cash and investment pool maintained for all funds managed by Tualatin Valley Water District (the District). The District applies the provisions of Governmental Accounting Standards Board (GASB) Statement No. 72, Fair Value Measurement and Application, which requires governmental entities, to report certain investments at fair value in the Statements of Net Position. Investments are valued at fair value at June 30. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The District categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices for identical instruments in active markets. Level 2 inputs are quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations in which all significant inputs are observable. Level 3 inputs are valuations derived from valuation techniques in which significant inputs are unobservable. The District is restricted by State of Oregon statutes in the types of investments that can be made. Statutes authorize the District to invest in obligations of the U.S. Treasury; agencies, and instrumentalities of the U.S.; states of Oregon, Washington, Idaho, and California; various interest-bearing bonds of municipalities; commercial paper rated P-2 and better by Moody s Investors Services or A-2 and better by Standard and Poor s Corporation; bankers acceptances; and the Oregon State Treasurer s Local Government Investment Pool. Certain other investment 14

37 WILLAMETTE RIVER WATER COALITION Beaverton, Oregon NOTES TO BASIC FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2017 AND 2016 types, which are not listed here, are also authorized. In the event different ratings are provided on an individual security by Moody s or Standard and Poor s the lowest rating must meet the District s investment policy requirements. Accounts Receivable Accounts receivable are recorded as earned and no allowance for doubtful accounts is required as all receivables are due from the joint venturers. Budgets The Coalition is an organization formed under an ORS Section 190 Intergovernmental Agreement. The Coalition is accounted for as a fund within the structure of the District, where the budget is prepared and legally adopted for the Coalition as part of the total budget for the District. The budget is prepared on a biennial basis as a separate fund on the modified accrual basis of accounting and complies with Oregon Local Budget Law. The District s resolution authorizing appropriations for each fund sets the level by which expenditures cannot legally exceed appropriations. The level of budgetary control is established at the function level (personnel services, materials and services, capital outlay, operating transfers and contingency). 2. CASH AND INVESTMENTS Interest Rate Risk As required by Oregon State Statute, the District Board of Commissioners adopts a revised investment policy on an annual basis. The District Board adopted its current policy in January The policy conforms with the guidance provided by the Oregon Short-Term Fund Board. As a means of limiting its exposure to fair value losses arising from rising interest rates, the District s investment policy has various limitations. For example, the first priority is safety, and the second priority is to invest in maturities that match liquidity needs of the District. At least one month s estimated cash operating requirement will be maintained in the LGIP. Thereafter, the District target is to maintain maturities within the following parameters: Term Minimum Allocation Percent Under 30 days 10 % Less than 1 year 25 Under 5 years 100 Further, the weighted average maturity of the total funds invested cannot exceed twelve months. 15

38 WILLAMETTE RIVER WATER COALITION Beaverton, Oregon NOTES TO BASIC FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2017 AND 2016 Custodial Credit Risk At June 30, 2017 the book balance of the District s bank deposits (checking accounts) was $478,821 and the bank balance was $2,431,419 compared to June 30, 2016 when the book balance was $721,002 and bank balance was $1,651,970. The difference between the bank deposits and bank balance is due to transactions in process. Deposits with Financial Institutions The Coalition s deposits with financial institutions, as part of the District s pool, are insured up to $250,000 by the Federal Depository Insurance Corporation (FDIC). As required by Oregon Revised Statutes, deposits in excess of federal depository insurance are held at a qualified depository for public funds. All qualified depositories for public funds are included in the multiple financial institution collateral pool that is maintained by and in the name of the Office of the State Treasurer. 3. JOINT VENTURERS CAPITAL Changes in joint venturers capital for the years ending June 30, 2015, June 30, 2016 and June 30, 2017 are as follows: City of City of City of Tualatin Valley Tigard Tualatin Sherwood Water District Total Balance, June 30, 2015 $ 18,379 $ 14,479 $ 13,969 $ 32,424 $ 79,251 Loss (2,859) (996) (868) (9,171) (13,894) Balance, June 30, ,520 13,483 13,101 23,253 65,357 Loss (9,334) (6,575) (6,378) (18,996) (41,283) Balance, June 30, 2017 $ 6,186 $ 6,908 $ 6,723 $ 4,257 $ 24, OTHER INFORMATION Risk Management The Coalition is exposed to various risks of loss related to torts; theft or damage to and destruction of assets; errors and omissions; and natural disasters for which the Coalition carries commercial insurance. The Coalition does not engage in risk financing activities where risk is retained (selfinsurance). Claims have not exceeded insurance coverage in the past three years. Related-party Transactions For the year ended June 30, 2017 reimbursements from members of the joint venture were as follows: Tigard - $31,014; Sherwood - $21,331; Tualatin - $2,923; and Tualatin Valley Water District - $62,

39 SUPPLEMENTAL INFORMATION

40 WILLAMETTE RIVER WATER COALITION Beaverton, Oregon SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL YEARS ENDED JUNE 30, 2017 AND 2016 Budget Actual Actual Original Final Fiscal Year 2017 Variance with final budget Fiscal Year 2016 REVENUES Reimbursements $ 277,160 $ 277,160 $ 118,113 $ (159,047) $ 149,600 Interest on investments (393) 1,265 Total Revenues 277, , ,393 (159,440) 150,865 EXPENDITURES: Operating expenses 48,000 48,000 36,000 12,000 48,000 Professional services 220, , , , ,458 Business expenses 9,900 9,900 6,591 3,309 13,748 Miscellaneous expenses 8,700 8,700 8,700 Water quality 5,000 5,000 5,000 Public information 8,000 8, ,500 1,553 Materials and Services** 299, , , , ,759 Contingency Total Expenditures 299, , , , ,759 Excess (Deficiency) of revenues over (under) expenditures, and net change in fund balance (21,767) (21,767) (41,283) (19,516) (13,894) BEGINNING FUND BALANCE 57,647 57,647 65,357 7,710 79,251 ENDING FUND BALANCE $ 35,880 $ 35,880 $ 24,074 $ (11,806) $ 65,357 ** Appropriated as Materials and Services 17

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43 WRWC Mission Maintain the public s rights on the Willamette River for local and regional needs

44 Willamette River Water Coalition For the annual budget period ending June 30, 2018 For the quarter ending September 30, 2017 Activity for the Quarter Budget Actual Variance Resources Unaudited Annual Budget Annual Budget To date Actual Variance Remaining Budget Revenues $ 26,369 $ - $ (26,369) Dues by TVWD & other members $ 44,000 $ 26,369 $ - $ 26,369 $ 44, (71) Interest on Investments (71) ,440 - (26,440) Total Revenues 44,278 26,440-26,298 44,278 21,243 24,074 2,831 Beginning Fund Balance 21,243 21,243 24,074 2,831 (2,831) 47,683 24,074 (23,609) Total Resources 65,521 47,683 24,074 29,129 41,447 Requirements Materials and Services: 6,506 6, Operating Expenses 26,000 6,506 6, ,000 1,178-1, Professional Services 8,500 1,178-1,178 8, Business Expense 2, ,500 2,000-2, Other Sundry 2,000 2,000-2,000 2,000 2,000-2, Water Quality 2,000 2,000-2,000 2, Public information 3, ,000 12,568 6,000 6,568 Total Expenditures 44,000 12,568 6,000 6,568 38, Contingency 6, ,600 12,568 6,000 6,568 Total Expenditures & Contingency 50,600 12,568 6,000 6,568 44,600 35,115 18,074 17,041 Ending Fund Balance 14,921 35,115 18,074 17,041 (3,153) 47,683 24,074 23,609 Total Requirements 65,521 47,683 24,074 23,609 41,447 These statements unaudited and are preliminary for fiscal year ending June 30, Page 1 of 1

45 5 Link back to agenda MEETING DATE: November 14, 2017 TITLE: Willamette Governance Group Update WILLAMETTE RIVER WATER COALITION BOARD MEETING AGENDA ITEM ITEM: The Willamette Governance Group (WGG) was established to negotiate a long-term agreement for expanded use of the Willamette water supply. Founding member agencies of the WGG included TVWD and the cities of Sherwood, Tualatin, Tigard, Beaverton, Hillsboro and Wilsonville. In August 2016, the City of Tualatin decided to not acquire an ownership interest in the ongoing expansion of the Willamette Water Supply System (WWSS). Tualatin also conveyed to the WGG and WRWC that they intend to remain a member of the WRWC and wish to assign up to 15 million gallons per day (MGD) of the WRWC s existing water right on the Willamette River to the City of Tualatin. Also in 2016, the WGG identified that the new governance structure for the WWSS will include multiple intergovernmental agreements (IGAs) and the WRWC will continue to hold the existing Willamette water right for TVWD and the cities of Sherwood, Tigard and Tualatin. This item will include a brief overview of the progress to date by the WGG, a summary of the current work underway, and the anticipated schedule for completion of the WGG negotiations. STAFF RECOMMENDATION: This item is presented for information only. BUDGET IMPACT: The WRWC budget for the current fiscal year does NOT include funding for continued work by the Willamette Governance Group. Anticipated allocation of costs for completion of the WGG negotiations will be distributed at the Board meeting. STAFF CONTACT: Mark Knudson, mark.knudson@tvwd.org, ATTACHMENTS: Presentation handouts will be provided at the WRWC Board meeting. MANAGER APPROVAL: Chief Executive Officer General Counsel Finance N/A Water Supply Program N/A 1850 SW 170th Avenue, Beaverton, Oregon // phone // fax //

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47 6 Link back to agenda MEETING DATE: November 14, 2017 TITLE: WRWC Website Maintenance WILLAMETTE RIVER WATER COALITION BOARD MEETING AGENDA ITEM ITEM: The WRWC s existing website ( currently has limited content and has historically been maintained by Maggie Kean under contract to TVWD at a rate of $75 per hour. TVWD s last contract with Ms. Kean expired in The website currently includes background and history of the WRWC, links to the websites of each of the member agencies, WRWC Board meeting minutes and agendas, information about the Willamette River, and background information on water supply planning. Much of the website s current content is outdated; for example, the last WRWC work plan is from , many of the links throughout the website are incorrect, and the most recent annual reports on each city page are several years old. Note from Ms. Kean: Ms. Kean has repeatedly asked for WRWC to change the hosting arrangement and provide guidance on the site. In response to the information provided here, she will stop hosting the site on 11/14 and will not invoice WRWC for the past year of work and hosting. This agenda item will consist of a brief overview of the existing WRWC website followed by discussion of options for upgrades or modifications to the hosting and maintenance of the WRWC website. Proposed questions for consideration by the Board include: 1. What are the members objectives for a WRWC website? 2. Do members have comments or suggestions for the existing website? 3. Do members have interest in changing or replacing the existing arrangement for website hosting and maintenance? If there is sufficient interest, TVWD is prepared to immediately assume responsibility for maintaining web hosting and domain registration (web hosting costs are less than $50 per month and domain registration is $18 per year). In addition, TVWD staff could develop a proposal to update the WRWC website to be included in the proposed work plan and budget for STAFF RECOMMENDATION: This item is presented for information only. BUDGET IMPACT: The budget for the current fiscal year includes $3,000 for public information, including continued maintenance of the existing WRWC website. The budget does NOT include resources for upgrades to the existing website. STAFF CONTACT: Mark Knudson, mark.knudson@tvwd.org, ATTACHMENTS: None SW 170th Avenue, Beaverton, Oregon // phone // fax //

48 WRWC Website Maintenance November 14, 2017 Page 2 of 2 MANAGER APPROVAL: Chief Executive Officer General Counsel N/A Finance Water Supply Program N/A