COMPREHENSIVE ANNUAL FINANCIAL REPORTgfoa.net/cafr/COA2012/VenturaRegionalSanitationDistrict... · 2014. 5. 14. · insurance, and banking services. Major employers in the area include

COMPREHENSIVE ANNUALFINANCIAL REPORT

FISCAL YEAR ENDED JUNE 30, 2011

Mark Lawler, General Manager

VENTURA COUNTY, CALIFORNIA

Ventura Regional Sanitation DistrictVentura County, California

2011 Board of Directors

Dennis Gillette City of Thousand Oaks

Robert Gonzales City of Santa Paula

Thomas Holden City of Oxnard

Sue Horgan City of Ojai Chairman-elect

Kevin Kildee City of Camarillo

James Monahan City of San Buenaventura Chairman

Janna Orkney Special Districts

Jonathan Sharkey City of Port Hueneme

Patti Walker City of Fillmore

District Staff Mark Lawler General Manager (805) 658-4600 Vickie Dragan Director of Finance & Administration (805) 658-4646 Sally Coleman Director of Operations (805) 658-4674 Josie Guzman Clerk of the Board (805) 658-4642 Mark A. Zirbel Legal Counsel (805) 988-9886

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Ventura Regional Sanitation District Comprehensive Annual Financial Report

Fiscal Year Ended June 30, 2011

TABLE OF CONTENTS Introductory:

Letter of Transmittal .......................................................................................................1 Certificate of Achievement for Excellence in Financial Reporting ...............................7 Sites Served and/or Operated by Ventura Regional Sanitation District..........................8 Map of Area.....................................................................................................................9

Financial:

Independent Auditor’s Report .......................................................................................10 Management’s Discussion and Analysis (Unaudited)...................................................12 Basic Financial Statements Statement of Net Assets .............................................................................................19 Statement of Revenues, Expenses, and Changes in Net Assets .................................21 Statement of Cash Flows............................................................................................22 Notes to the Basic Financial Statements ....................................................................24

Required Supplementary Information:

Schedules of Funding Progress PARS Supplementary Retirement Plan ..............................................................54 Other Post-Employment Benefits Plan ...............................................................54

Supplementary Information:

Schedule of Net Assets..................................................................................................56 Schedule of Revenues, Expenses and Changes in Net Assets ......................................58 Schedule of Cash Flows ................................................................................................59

Statistical Section: Financial Trends – Last Ten Fiscal Years Changes in Net Assets and Net Assets by Component.......................................62 Operating Revenue by Source ............................................................................64 Operating Expenses by Activity .........................................................................65

Revenue Capacity – Last Ten Fiscal Years Revenue Base......................................................................................................66 Revenue Rates.....................................................................................................67 Principal Customers Current Fiscal Year & Ten Years Ago..............................68 Debt Capacity Ratio of Outstanding Debt ..................................................................................69 Pledged-Revenue Coverage ................................................................................70

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Ventura Regional Sanitation District Comprehensive Annual Financial Report


Table of Contents, Continued

Demographic Information Demographic Statistics ......................................................................................71 Principal Employers – County of Ventura..........................................................72 Building Permits ................................................................................................73 Housing Stock Estimates – County of Ventura .................................................74

Operating Information Operating and Capacity Indicators .....................................................................75

Introductory Section

Introductory Section

Ventura Regional Sanitation DistrictComprehensive Annual Financial Report


Ventura Regional Sanitation DistrictOrganization Chart

December 29, 2011 Chairman and Members of the Board of Directors, The Ventura Regional Sanitation District: The Comprehensive Annual Financial Report of the Ventura Regional Sanitation District (District) for the fiscal year ended June 30, 2011, is hereby submitted. State law requires all general-purpose local governments publish within six months of the close of each fiscal year a complete set of audited financial statements.

Management assumes full responsibility for the completeness and fairness of the presentation, including all footnotes and disclosures. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and reported in a manner designed to present fairly the financial position and results of operations of the District.

The District’s financial statements have been audited by Rogers, Anderson, Malody & Scott, LLP. The goal of the independent audit was to provide reasonable assurance that the financial statements of the District are free of material misstatement. The auditor has issued an unqualified opinion on the District’s financial statements for the fiscal year ended June 30, 2011. The independent auditor’s report is located at the front of the financial section of this report.

Management’s discussion and analysis (MD&A) immediately follows the independent auditor’s report and provides a narrative introduction, overview, and analysis of the basic financial statements. MD&A complement this letter of transmittal and should be read in conjunction with it.

The District presently has one blended component unit with a June 30 year-end. Accordingly, the Ventura Regional Public Facilities Corporation (Corporation) is presented as a blended component unit of the District. The Corporation was formed on October 25, 1989 to facilitate the issuance of Certificates of Participation (COPs). The District currently has no outstanding COPs. No separate financial statements are prepared for the Corporation and therefore are not available.

PROFILE OF VENTURA REGIONAL SANITATION DISTRICT

The District is an enterprise public waste management agency organized in July 1970 under the California County Sanitation District Act (Health & Safety Code Section 4700 et seq.). It covers about 1,600 square miles and serves approximately 90% of Ventura County.

District Governing Body

The governing board of the District consists of eight members appointed by the eight cities listed below and one member appointed by six special districts. The Board regularly meets on the first and third Thursday of each month. Meetings are publicly noticed and citizens are encouraged to attend and participate.

District’s Services

The District provides integrated waste treatment and disposal services to:

• Eight cities (Camarillo, Fillmore, Ojai, Oxnard, Port Hueneme, San Buenaventura, Santa Paula, and Thousand Oaks), each of which appoints an elected representative to the District Board of Directors; and

• Nine special districts (Camarillo Sanitary, Camrosa Water, Channel Islands Beach Community Services, Ojai Valley Sanitary, Saticoy Sanitary, Triunfo Sanitation, and Ventura County Waterworks Nos. 1 & 16), who jointly appoint a single elected representative to the District Board of Directors; and

• The County of Ventura’s unincorporated areas, except those surrounding the cities of Moorpark and Simi Valley. The unincorporated areas are not represented on the District Board of Directors because of the County’s regulatory role relative to the District’s solid waste activities.

On July 1, 1999, the District voluntarily transferred all of its property tax to the ten cities and County and began operating on a strictly enterprise basis. This was an unprecedented decision for a public agency in any of our memories, yet we believe a very important move in the right direction. Foregoing property tax subsidy causes us to be ever more productive and maximize the use of available revenues. The District and its employees are proud to be examples of government reinventing itself.

Mission Statement

Our mission is to offer the highest quality service at the lowest possible cost for our customers and provide solutions by involving our staff, our customers, and our community. A diverse team of dedicated and highly skilled equipment operators, managers, administrators, supervisors, engineers, mechanics, environmentalists, electricians, and others contribute to its achievement.

Solid Waste Operations

The District manages six municipal waste landfills, only one of which is active. The Toland Road Landfill is located in a confined, V-shaped canyon four miles east of Santa Paula and four miles west of Fillmore. The 161-acre site has been operating as a landfill since 1970. The District expanded the facility from 135-tons per day (tpd) to 1,500-tpd in FY1997 to provide 30 years of landfill capacity for western Ventura County after closure of the Bailard Landfill that same year.

The Toland Road Landfill received about 295,821 tons of refuse in FY 2011. About 83 percent of the total refuse disposed at the Toland Road Landfill is received from transfer stations operated by its two largest customers, the City of Oxnard and Gold Coast Recycling. This stable stream of refuse and revenue is guaranteed by flow assurance agreements with both customers. The District’s contract landfill tipping fee of $38.94 per ton continues to rank among the lowest in the state.

Water & Wastewater Operations

The District is responsible for management, operation, and maintenance of water and wastewater facilities and equipment throughout Ventura County. Included are facilities owned by the Triunfo Sanitation, Saticoy Sanitary, and Camarillo Sanitary Districts; Cities of Fillmore, Oxnard, Thousand Oaks, and Ventura; County of Ventura; California State University at Channel Islands; and several small water agencies. In total, the District operates and maintains three potable water systems and one recycled water system.

Both the District and participating agencies benefit from economies of scale made possible by the sharing of District expertise and resources. Work is done under fully reimbursable contracts for which annual budgets are presented to and approved by both agencies’ governing bodies.

The largest contract agency entirely managed and operated by the District is the Triunfo Sanitation District (Triunfo), which provides potable and recycled water services and wastewater disposal to residents in southeastern Ventura County. Triunfo has no staff of its own except the five elected Board members which are considered employees of the District. Action in FY 2004 extended the contractual relationship between the Districts to March 2014. Wastewater treatment is provided at the Tapia Water Reclamation Facility via a Triunfo Joint Venture with the Las Virgenes Municipal Water District. Tapia

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serves nearly 12,000 Triunfo residences and businesses. Potable water is provided to about 4,800 residents in the Oak Park area and recycled water from the Tapia plant is provided to parks, schools, and homeowners associations in the unincorporated areas of Oak Park, Lake Sherwood, and North Ranch.

The District entered into a contract with the Malibu Bay Club (MBC) in August 2003 to own and operate an On-site Wastewater Treatment System (OWTS) to serve this 136-unit condominium complex on the south coast of Ventura County. MBC’s existing simple septic system is the subject of a Regional Water Quality Control Board order to improve wastewater treatment. In 2007, in order for the District to receive reimbursement for the $2.7 million cost of the plant, it explored alternative financing options and entered into an Installment Purchase Contract with the Municipal Finance Corporation. MBC residents pay for their share of the cost through the Ventura County property tax roll.

ECONOMIC CONDITION AND OUTLOOK

Ventura County – Located directly northwest of Los Angeles County, Ventura County covers 1,873 square miles and boasts 43 miles of Pacific Ocean coastline, 7.5 miles of shoreline in public beaches, and 411 acres in state beach parks. The majority of the County’s 828,383 residents live in its southern half, while the Los Padres National Forest spans the northern half. An extensive network of roadways links the County’s 10 incorporated cities, with rail, harbor, and airport facilities providing access to outside markets. With a projected 2020 population of over one million, Ventura County is expected to experience a steady increase in population over the next 15 years as people favor its mild Mediterranean climate, beautiful coastline, and scenic agricultural setting.

Agriculture - Ventura County farmers grow over 100 different crops and often harvest two or three crops from the same parcel of land during any given year. In 2010, the estimated gross value for all agriculture in Ventura County was $1.9 billion. The most recent data available from the U.S. Department of Agriculture ranks Ventura County 10th among all counties in the U.S. in total crop value. Commercial Activity - Major industries with headquarters or divisions located in or near the District’s service area includes: automotive import distribution, biomedical research & development, agribusiness, insurance, and banking services. Major employers in the area include federal and local government agencies, health care providers, public schools, and a state university in Camarillo. The 101 Freeway corridor, also known as the Ventura Freeway, attracts many high-technology industries. The Port of Hueneme, fourth largest in the state and the only deep-water port between Los Angeles and San Francisco, serves as a powerful conduit to overseas markets. The United States Navy has been an important presence at the Naval Air Weapons Test Center, Point Mugu and Naval Construction Battalion Center, Port Hueneme for more than half a century, and was joined by the California Air National Guard in 1990. Income and Unemployment – Ventura County residents are still feeling the effects of the recession that started in December 2007 and officially ended in June 2009. Ventura County’s construction sector has lost almost 37 percent of its pre-recession jobs, while transportation, utilities, and warehousing jobs are down 18 percent and manufacturing jobs are down over 15 percent. However, the Employment Development Department reported recently that unemployment rate decreased from 10.9 percent in January 2011 to 9.8 percent in October 2011. The Ventura County real retail sales and personal income has shown some minimal growth and the recent job gains in Ventura County is positive. Real Estate – Ventura County residential sales remain very low and home values continue to fall. Home prices in Ventura County were down 7.2 percent from a year ago. The October 2011 median home price in Ventura County fell 5.6 percent to $335,000 from a year ago while in January 2006, before the economic downturn, the median home price was $608,000, 81.5% higher. Foreclosures and short sales continue at a very high pace. Although nearly one-quarter of Ventura County homeowners owed more on

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their mortgages than their homes were worth, housing prices remain affordable which is good for the buyers and in turn good for the sellers. The commercial real estate markets have also seen decline in prices and lease rates and an increase in vacancy rates. The weak real estate and commercial markets will keep the construction in Ventura County modest. Since the District is in the business of waste disposal, what is good for the economy is good for the District. Waste volumes and the relative rise and fall of the economy are inextricably entwined as both individuals and businesses choose to spend or hold larger or smaller portions of their disposable income.

LONG-TERM FINANCIAL PLANNING

The District’s emphasis is to continue offering the highest level of service and lowest possible cost to our customers and member agencies. The many challenges facing the District are, for the most part, multi-year issues that involve multi-year solutions. The expansion of traditional operations and maintenance services for waste and potable water facilities remains a short, intermediate, and long-term goal of the District.

Staff is also exploring opportunities to assist client agencies with upgrading wastewater treatment processes, biosolids processing and disposal projects, asset management, environmental management, and water reclamation. These activities may provide opportunities for new District facilities as well as water and wastewater engineering, technology evaluation, and inspection services.

The District’s FY2011-12 Five-Year Capital Improvement Plan (CIP) was updated by staff and approved by the District Board as part of the budget process. The largest project included in the CIP for FY 2012 is the Phase 3B Liner project at the Toland Road landfill. This is in preparation for the Phase 3A nearing its final capacity. The Phase 3B Liner is expected to reach its final capacity in year 2020. The major capital project, Phase 4 Liner project, is estimated to start in year 2020. District staff provides a five-year forecast to the District Board as part of the budget process and approved by the District Board. Although the forecast only includes information gathered from historical data and known future expenses, it is an important tool to assist in planning the budget from year-to-year. Finally, the Five-Year District Reserve analysis is also included as part of the budget process and approved by the District Board. The District’s Reserve Level Policy is a guideline District staff follows in maintaining reserves due to legal requirements, contractual agreements, Board’s direction and express authorization and cash reserves to cover operating shortfalls to cover for both short tem cash flow and contingency planning for unforeseen situations. Due to the economic conditions affecting the District, the Board has approved to first maintain and fund restricted reserves and the remaining to fund the cash reserves to cover operating shortfalls.

Solid Waste Operations

Toland Road Landfill – This is the only open solid waste facility operated by the District. Multi-year phased development of the Toland Road landfill provides for incremental construction of new areas just prior to completely filling the operating area. With the design of the entire landfill footprint complete, these small phases of construction can be accomplished with little disruption to landfill operations, minimal dust and noise impacts on neighbors, and easily manageable demands for cash flow to pay for improvements. The District’s waste disposal tipping fee remains very competitive compared to similar agencies. The tipping fees include solid waste facilities operations and maintenance costs; state and local regulatory agency fees, capital upgrade, and relevant future closure and postclosure costs. A table reflecting the District’s 10-year service charge rate history is located on page 66 of the Statistical Section.

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Water & Wastewater Operations

The Water & Wastewater Division will continue to focus on maintaining and expanding its customer base in an increasingly competitive environment. The District supports this continued emphasis on Water & Wastewater customer growth by including a section in the FY 2011 budget document to address Unanticipated Reimbursable Work. This budget serves as an authorized holding place for resources that can be quickly allocated to work that develops after budget adoption, thereby giving Water & Wastewater staff the ability to implement a “can do” marketing strategy and deliver promptly on the promise. On an annual basis, as part of the budget process, the District publishes billing rates for its customers.

Water & Wastewater staff provides complete operational services for two member agencies, the Triunfo Sanitation and Saticoy Sanitary Districts. District has installed and operates onsite wastewater treatment systems (OWTS) at the Toland Road Landfill and Malibu Bay Club, and is promoting additional OWTS construction and operation services in Ventura County areas where it is not feasible to connect to sanitary sewers. Biosolids Project – The Ventura County Board of Supervisors approved the Biosolids project in September 2007. Ten cities, five special districts, and the County of Ventura will benefit from this project. The project includes the construction and operation of landfill gas electrical generators and a biosolids drying facility. The site is comprised of approximately 2.44 acres and is located entirely within the existing boundaries of the Conditional Use Permit for Toland. The biosolids drying facility will import biosolids from local wastewater treatment plants and will use landfill gas to power electrical generators and biosolids dryers to process the biosolids to a level specified by the end-use of the biosolids. Potential beneficial uses of the dried biosolids include alternative cover at Toland and commercial use. The site construction and equipment installation is complete. The District celebrated the opening of the biosolids facility on November 18, 2009.

RELEVANT FINANCIAL POLICIES

The District’s investment policy’s primary objectives are safety of principal while maintaining liquidity to meet all operating requirements, and attaining a market rate of return on its portfolio. The District’s investment policy is in accordance with provisions of the California Government Code. The Finance Officer directs the collection and disbursement of all monies into and out of the District treasury, makes investments, and opens and closes bank accounts as necessary to conduct the business of the District. The District Board adopted the Identity Theft Prevention Program issued by the Federal Trade Commission (FTC) Red Flags Rule that requires companies and creditors with covered account to develop and implement a written Identity Theft Prevention Program to detect, prevent, and mitigate identity theft in connection with opening and/or modifying customer accounts. The Personnel and Finance Committee of the District is comprised of the Chair of the Board and three members of the Board. The Committee provides recommendations to the Board regarding the budget, financial policies, billing rates, and fees.

MAJOR INITIATIVES

Solid waste management continues to be a great concern as population in Ventura County continues to increase while the landfill capacity is shrinking. The District is investigating future municipal solid waste disposal options such as waste-to-energy thermal conversion process to conserve landfill capacity. CalRecycle modified the AB2296 financial assurance regulations for both currently active landfills and closed landfills. The modified regulations will have financial impact to the District. The new regulation for the active landfills is a rolling 30 year approach with the ability to step down every five years as long

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VENTURA REGIONAL SANITATION DISTRICT Ventura County, California SITES SERVED AND/OR OPERATED • Water and Wastewater Sites

Triunfo Sanitation District – Lake Sherwood Triunfo Sanitation District – Oak Park Water Service Thousand Oaks Hill Canyon Treatment Plant Camrosa Water District Treatment Plant CSA No. 29 (North Coast) Collection System CWD No. 16 (Piru) Treatment Facility Saticoy Sanitary District Treatment Facility CWD No. 1 (Moorpark Area) Thomas Aquinas College Oxnard Treatment Plant Camarillo Sanitary District Toland Water Malibu Bay Club

• Solid Waste Sites

Santa Clara Sanitary Landfill (Closed) Santa Clara Site (Closed) Coastal Site (Closed) Bailard Site (Closed) Toland Road Sanitary Landfill Ozena Modified Landfill (Closed) Tierra Rejada Landfill (Closed)

• Growth Projects

Onsite Wastewater Treatment Systems (OWTS) Environmental Monitoring & Source Control Specialized Paintings & Coatings Remote Telemetry & Controls Biosolids Processing Manhole Lining and Renewal

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Ventura County, California

CALIFORNIA San Francisco

Los Angeles

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Financial Section

Financial Section



MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)

The following discussion and analysis of the Ventura Regional Sanitation District’s (District) financial performance provides an overview and analysis of the financial activities of the District for the fiscal year ended June 30, 2011. This section should be read in conjunction with the transmittal letter at the front of this report and the District’s basic financial statements following this section.

Financial Highlights

• The assets of the District exceeded its liabilities at the close of the fiscal year by $46.9 million (net assets). Of this amount, $7.4 million (unrestricted net assets) may be used to meet the District’s ongoing obligations to its constituency and creditors.

• The District’s total net assets decreased by $2.0 million, or 4.0%, to $46.9 million.

• During fiscal year 2011, the District’s total revenues increased by 1.3% to $19.0 million and total expenses increased by 6.0% to $21.0 million.

Overview of the Financial Statements

This discussion and analysis is intended to serve as an introduction to the District’s basic financial statements. The District’s basic financial statements are comprised of two components: 1) enterprise fund financial statements; and 2) notes to the financial statements. Required supplementary information, supplementary information, and statistical information are also included in the CAFR.

Basic Financial Statements The financial statements are designed to provide readers with a broad overview of the District’s finances, in a manner similar to a private-sector business. The basic financial statements can be found on pages 19-23 of this report.

The Statement of Net Assets presents information on all of the District’s assets and liabilities, with the differences between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the District is improving or deteriorating.

The Statement of Revenues, Expenses and Changes in Net Assets presents information showing how the District’s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected assessments and earned but unused vacation leave).

The Statement of Cash Flows presents information about the District’s cash receipts and cash payments during the reporting period. It shows the amount of cash received from services provided to customers, investment income including interest earnings as well as cash paid out for operating activities, debt financing, principal and interest payments on borrowed monies, and construction projects.

Notes to the Financial Statements Provide additional information that is essential to a full understanding of the data provided in the basic financial statements and are an integral part of the financial statements. The notes to the financial statements can be found on pages 24-52 of the report.

Supplementary Information Includes the combining schedule statements for the different types of District operations.

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MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)

Financial Analysis of the District

The Summary of Net Assets and the Summary of Activities and Changes in Net Assets report information about the District’s current year activities and may serve over time as a useful indicator of the District’s financial position. These two statements report the net assets of the District and changes in them. You can think of the District’s net assets as the difference between assets (what is owned) and liabilities (what is owed) and one way to measure its financial health or position.

As can be seen from the table below, net assets decreased $2.0 million to $46.9 million in FY 2011, down from $48.9 million in FY 2010.

Summary of Net Assets

A Summary of Net Assets is presented in the following table for your analysis.

(In thousands of dollars)FY 2011 FY 2010 $ Change % Change

Assets:Current assets $ 5,643 $ 3,626 $ 2,017 55.6%Restricted assets 188 238 (50) -21.0%Non-current assets 37,638 38,336 (698) -1.8%Capital assets, net 58,395 57,532 863 1.5%

Total assets $ 101,864 $ 99,732 $ 2,132 2.1%

Liabilities:Liabilities payable from unrestricted assets $ 1,779 $ 1,862 $ (83) -4.5%Liabilities payable from restricted assets 4,388 4,015 373 9.3%Non-current liabilities 48,778 44,959 3,819 8.5%

Total liabilities 54,945 50,836 4,109 8.1%

Net assets:Investment in capital assets, net of related debt 31,990 34,692 (2,702) -7.8%Restricted 7,561 4,779 2,782 58.2%Unrestricted 7,368 9,425 (2,057) -21.8%

Total net assets 46,919 48,896 (1,977) -4.0%Total liabilities and net assets $ 101,864 $ 99,732 $ 2,132 2.1%


Net assets include three components: Invested in capital assets, net of related debt; restricted net assets; and unrestricted net assets.

By far the largest component of the District’s net assets, $32.0 million, reflects capital assets net of accumulated depreciation less any outstanding debt used to acquire them. The District uses these capital assets to provide services to its constituency; consequently, they are not available for future spending. Although the District’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

Another component of the District’s net asset, restricted net assets of $7.6 million, represents resources that are subject to external restrictions of how they may be used. Loan agreements relating to long-term

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debt restrict certain amounts for debt service, as well as restricted funding received in advanced of expenses. These restricted net assets are not available for other uses by the District.

The third and last component of the District’s net assets is the unrestricted net assets of $7.4 million that may be used to meet the District’s ongoing obligations to creditors and constituencies.


Assets:Current assets $ 3,626 $ 3,342 $ 284 8.5%Restricted assets 238 2,687 (2,449) -91.1%Non-current assets 38,336 40,459 (2,123) -5.2%Capital assets, net 57,532 58,220 (688) -1.2%

Total assets $ 99,732 $ 104,708 $ (4,976) -4.8%

Liabilities:Liabilities payable from unrestricted assets $ 1,862 $ 4,515 $ (2,653) -58.8%Liabilities payable from restricted assets 4,015 4,361 (346) -7.9%Non-current liabilities 44,959 45,911 (952) -2.1%

Total liabilities 50,836 54,787 (3,951) -7.2%

Net assets:Investment in capital assets, net of related debt 34,692 34,123 569 1.7%Restricted 4,779 8,643 (3,864) -44.7%Unrestricted 9,425 7,155 2,270 31.7%

Total net assets 48,896 49,921 (1,025) -2.1%Total liabilities and net assets $ 99,732 $ 104,708 $ (4,976) -4.8%


By far the largest component of the District’s net assets, $34.7 million, reflects capital assets net of accumulated depreciation less any outstanding debt used to acquire them. The District uses these capital assets to provide services to its constituency; consequently, they are not available for future spending. Although the District’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

Another component of the District’s net asset, restricted net assets of $4.8 million, represents resources that are subject to external restrictions of how they may be used. Loan agreements relating to long-term debt restrict certain amounts for debt service, as well as restricted funding received in advance of expenses. These restricted net assets are not available for other uses by the District.

The third and last component of the District’s net assets is the unrestricted net assets of $9.4 million that may be used to meet the District’s ongoing obligations to creditors and constituencies.

Changes in Net Assets of the District

The Summary of Activities and Changes in Net Assets is presented in the following table for your analysis. While the Summary of Net Assets shows the change in financial position of the net assets, the Summary of Activities provides answers as to the nature and source of these changes.

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The following table shows the revenue, expenses, and changes in net assets for District type activities.


Revenues:Operating revenues $ 18,344 $ 17,633 $ 711 4.0%Non-operating revenues 677 1,147 (470) -41.0%

Total revenues 19,021 18,780 241 1.3%

Expenses:Operating expenses 16,104 16,077 27 0.2%Depreciation and amortization 3,772 2,214 1,558 70.4%Non-operating expenses 1,122 1,514 (392) -25.9%

Total expenses 20,998 19,805 1,193 6.0%

Change in net assets (1,977) (1,025) (952) 92.9%

Net assets, beginning of year 48,896 49,921 (1,025) -2.1%Net assets, end of year $ 46,919 $ 48,896 $ (1,977) -4.0%

Summary of Activities and Changes in Net Assets

Total revenues increased by $241,000 or 1.3% compared to FY 2010. The Biosolids/Microturbine Electrical Generation revenues increased by $1,321,800 while the disposal and sanitation fees decreased by $611,000 and interest and investment earnings decreased by $581,000.

Total expenses increased by $1.2 million, 6.0% from FY 2010. This is mainly due to an increase in depreciation expense ($1.6 million) related to the Biosolids/Microturbines facility offset by the one time recognition ($523,000) of the “old” financial software that was replaced two years after implementation.

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Revenues:Operating revenues $ 17,633 $ 15,373 $ 2,260 14.7%Non-operating revenues 1,147 2,409 (1,262) -52.4%

Total revenues 18,780 17,782 998 5.6%

Expenses:Operating expenses 16,077 14,917 1,160 7.8%Depreciation and amortization 2,214 2,287 (73) -3.2%Non-operating expenses 1,514 758 756 99.7%

Total expenses 19,805 17,962 1,843 10.3%

Net loss before contributions (1,025) (180) (845) 469.4%

Capital contributions - 34 (34) -100.0%

Change in net assets (1,025) (146) (879) 602.1%

Net assets, beginning of year, as restated 49,921 50,067 (146) -0.3%Net assets, end of year $ 48,896 $ 49,921 $ (1,025) -2.1%

Summary of Activities and Changes in Net Assets

Total revenues increased by $998,000 or 5.6% compared to FY 2009. This is due mainly to the addition of the Biosolids/Microturbine Electrical Generation division, offset by a decrease in investment earnings. Biosolids/Microturbine Electrical Generation added $1,821,000 in revenue, while investment earnings decreased by $998,000 resulting from a combination of lower average cash balances and decreased rates of return.

Total expenses increased by $1.8 million, 10.0% from FY 2009. This is due to an increase in professional services ($1.2 million) largely related to the biosolids processing facility and the implementation of the new financial software. There was also an additional $9 million loan used to fund the biosolids capital construction which resulted in an increase of $306,000 in interest expenses. An additional expense was recognized when the “old” financial software was replaced two years after implementation resulting in a loss of $523,000. Some expenses such as contract services - material and supplies, and management and administration decreased by a combined total of $478,000.

Capital Assets

The District’s investment in capital assets as of June 30, 2011, (at cost) amounted to $79.5 million or $58.4 million (net of accumulated depreciation). District’s capital assets include land and land improvements, structures and improvements, construction in progress, equipment, vehicles, and infrastructures.

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Capital assets are illustrated below and show changes from the prior year (in thousands): Changes in capital asset amounts for 2011 were:

Balance 2010 AdditionsTransfers/ Deletions Balance 2011

Capital Assets:Non-depreciable assets $ 3,641 $ 4,658 $ (296) $ 8,003 Depreciable assets 71,744 284 (504) 71,524 Accumulated depreciation and amortization (17,853) (3,772) 493 (21,132)

Total capital assets, net $ 57,532 $ 1,170 $ (307) $ 58,395

Changes in capital asset amounts for 2010 were:Balance 2009 Additions

Transfers/ Deletions Balance 2010

Capital Assets:Non-depreciable assets $ 25,776 $ 1,171 $ (23,306) $ 3,641 Depreciable assets 48,915 24,286 (1,457) 71,744 Accumulated depreciation and amortization (16,471) (2,214) 832 (17,853)

Total capital assets, net $ 58,220 $ 23,243 $ (23,931) $ 57,532

Major capital asset events during the current fiscal year include the following:

• Toland Landfill Liner Phase 3B Liner

• Leachate Reciculation

• Mil Grove Phase 2

• IT Virtualization

• Additional Biosolids trailer

Additional information about the District’s capital assets is provided in Note B4 on pages 35 and 36.

Debt Administration

The District total debt outstanding at June 30, 2011, was $26.4 million excluding capital leases, compensated absences, and other liabilities. During the year, retirement of debt amounted to $1,434,846.

The table below summarizes the debt outstanding balances at June 30, 2011.

Beginning Payments/ EndingAmounts Due

inDescription of Project Balance Additions Deletions Balance One YearMalibu Bay Club $ 2,388,625 $ - $ (93,592) $ 2,295,033 $ 98,139

Toland Landfill Liner 5,755,752 - (392,404) 5,363,348 410,180 Biosolids Drying

Facility Project 6,128,149 - (376,375) 5,751,774 393,233 Biosolids Drying Facility/

Microturbine Project 8,567,952 - (451,620) 8,116,332 472,080 Toland Landfill 3B Liner - 5,000,000 (120,855) 4,879,145 249,469

Total long-term debt $ 22,840,478 $ 5,000,000 $ (1,434,846) $ 26,405,632 $ 1,623,101

17


Additional information on long-term debt is provided in Note B5 of the Notes to the Basic Financial Statements.

Economic Factors and Next Year’s Budgets and Rates

• The District’s fiscal year 2011-12 adopted budget totaled $20,917,095 or 2.1% less when compared to the prior year. In response to economic uncertainty and overall revenue decline, the District as part of its cost savings options reduced the number of staff through reduction in force, delayed projects, and reduced the overall operating expenses.

• The fees and charges for the Toland Road Landfill remained unchanged since the last 10%

effective September 1, 2010. In addition, the Biosolids rates increased by 3.5 % effective July 1, 2011.

• The District’s hourly billing rates increased by 5% effective July 1, 2011.

The Board held workshops to assess the available working capital, the operating and capital needs of the District, potential customer growth, potential regulatory impact, and the uncertainty of the current economy. Additional information is provided in the transmittal letter on Page 1 of this report and Notes C2 and C3 of the Notes to the Basic Financial Statements.

Requests for Information

This financial report is designed to provide a general overview of the District’s finances for all those interested. Questions concerning any of the information provided should be addressed to the Director of Finance & Administration, Ventura Regional Sanitation District, 1001 Partridge Drive, Suite 150, Ventura, California, 93003-0704. You may also visit the District’s Web site at www.vrsd.com.

18

Basic Financial Statements



VENTURA REGIONAL SANITATION DISTRICT STATEMENTS OF NET ASSETS June 30, 2011 with comparative totals for June 30, 2010

2011 2010

Current assets:Cash and cash equivalents $ 3,045,411 $ 1,015,509 Accrued interest receivable 75,382 180,066 Accounts receivable – disposal and sanitation fees, net 1,323,742 875,794 Accounts receivable – contract services, net 1,066,939 1,391,610 Accounts receivable – other, net - 869 Prepaid and other 131,719 161,707

Total current assets – unrestricted 5,643,193 3,625,555

Restricted current assets:Cash and cash equivalents 63,528 87,559 Notes receivable 100,567 102,227 Accrued interest receivable 24,285 48,121

Total current assets – restricted 188,380 237,907

Total current assets – unrestricted and restricted 5,831,573 3,863,462

Restricted non-current assets:Investments 31,244,651 27,867,221 Notes receivable 2,203,631 2,173,420 Net OPEB asset 582,752 529,133

Total non-current assets – restricted 34,031,034 30,569,774

Non-current assets:Investments - held-to-maturity 3,556,854 7,766,261 Capital assets, net 58,395,154 57,532,373 Deferred charges, net 49,167 -

Total non-current assets – unrestricted 62,001,175 65,298,634

Total non-current assets – unrestricted and restricted 96,032,209 95,868,408

Total assets $ 101,863,782 $ 99,731,870

ASSETS

The accompanying notes are an integral part of these financial statements.

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20

VENTURA REGIONAL SANITATION DISTRICT STATEMENTS OF NET ASSETS (continued) June 30, 2011 with comparative totals for June 30, 2010

2011 2010

Current liabilities:Payable from current assets:

Accounts payable and accrued expenses $ 1,131,400 $ 1,186,177 Accrued wages and compensated absences 647,547 676,049

Payable from current assets – unrestricted 1,778,947 1,862,226

Payable from restricted current assets:Customer deposits 42,524 43,024 Landfill closure/postclosure costs - expected within one year 2,620,759 2,553,059 Accrued interest payable - purchase and sale agreements 101,729 104,800 Installment purchase contract - current portion 98,138 93,592 Installment sale agreement - current portion 1,524,963 1,220,399

Payable from current assets – restricted 4,388,113 4,014,874

Total current liabilities – unrestricted and restricted 6,167,060 5,877,100

Payable from restricted non-current assets:Tierra Rejada consortium reserve 408,338 454,632 Landfill closure/postclosure costs 23,586,831 22,977,538 Installment purchase contract 2,196,895 2,295,033 Installment sale agreement 22,585,636 19,231,454

Payable from non-current assets – restricted 48,777,700 44,958,657

Total liabilities 54,944,760 50,835,757

NET ASSETSInvested in capital assets, net of related debt 31,989,522 34,691,895 Restricted

Debt service 2,304,198 2,275,647 Landfill closure and post-closure costs 4,674,012 1,974,648 Retirement trust 582,752 529,133

Unrestricted 7,368,538 9,424,790

Total net assets 46,919,022 48,896,113

Total liabilities and net assets $ 101,863,782 $ 99,731,870

LIABILITIES


21

VENTURA REGIONAL SANITATION DISTRICT STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS Fiscal year ended June 30, 2011 with comparative totals for June 30, 2010

2011 2010

Operating revenues:Disposal and sanitation fees $ 9,355,858 $ 9,966,760 Contract services 7,762,500 7,012,791 Utility electricity sales 786,162 431,353 Other revenue 439,526 222,294

Total operating revenues 18,344,046 17,633,198

Operating expenses:Salaries and benefits 7,706,235 8,149,361 Management and administrative 379,680 437,040 Operating materials and supplies 1,561,329 1,449,145 Contract services - labor 234,433 384,576 Contract services - materials and supplies 1,296,477 1,505,827 Contract services - capital outlay purchases - 2,863 Professional services 1,454,889 1,281,810 Facility maintenance 1,422,248 1,038,288 Provision for landfill closure/postclosure 1,100,128 845,629 Permits, licences and fees 948,736 982,825

Total operating expenses 16,104,155 16,077,364

Operating income before depreciation 2,239,891 1,555,834 Depreciation (3,771,550) (2,213,614)

Operating loss (1,531,659) (657,780)

Non-operating revenues(expenses):Interest and investment earnings 564,387 1,145,112 Loss on sales/disposals of capital assets, net (4,461) (565,110) Interest expense (1,117,265) (1,065,108) Other, net 111,907 117,434

Total non-operating revenues(expenses), net (445,432) (367,672)

Change in net assets (1,977,091) (1,025,452)

Net assets, beginning of year 48,896,113 49,921,565

Net assets, end of year $ 46,919,022 $ 48,896,113


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VENTURA REGIONAL SANITATION DISTRICT STATEMENTS OF CASH FLOWS Fiscal year ended June 30, 2011 with comparative totals for June 30, 2010

2011 2010

Cash flows from operating activities:Receipts from customers for disposal and sanitation services $ 8,907,410 $ 9,474,079 Receipts from customers for contract services 8,087,171 6,605,936 Receipts from customers for utility electricity sales 786,162 431,353 Receipts for other services 552,302 426,661 Payments to vendors for materials and services (7,557,577) (7,979,477) Payments for salaries, benefits and contract labor (8,022,789) (10,491,897)

Net cash provided by (used for) operating activities 2,752,679 (1,533,345)

Cash flows from capital and related financing activities:Proceeds from capital debt 4,950,000 - Acquisition and construction of capital assets (4,735,230) (2,149,890) Principal received on notes receivable (28,551) 77,232 Proceeds from the sale of capital assets 96,438 59,357 Principal paid on capital debt (1,434,846) (1,256,941) Interest paid on capital debt (1,119,503) (1,070,376)

Net cash used for capital and related financing activities (2,271,692) (4,340,618)

Cash flows from investing activities:Interest on cash and cash equivalents 5,194 202,370 Interest and dividends from investments 687,713 1,016,029 Proceeds from sales and maturities of investments 30,979,687 42,089,985 Purchases of investments (30,147,710) (39,875,452)

Net cash provided by investing activities 1,524,884 3,432,932

Net increase (decrease) in cash and cash equivalents 2,005,871 (2,441,031)

1,103,068 3,544,099

$ 3,108,939 $ 1,103,068

Reconciliation of cash and cash equivalents to statement of net assets:

Cash and cash equivalents $ 3,045,411 $ 1,015,509 Restricted cash and cash equivalents 63,528 87,559

Total cash and cash equivalents $ 3,108,939 $ 1,103,068

Cash and cash equivalents (unrestricted and restricted), end of year

Cash and cash equivalents (unrestricted and restricted), beginning of year

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VENTURA REGIONAL SANITATION DISTRICT STATEMENTS OF CASH FLOWS (continued) Fiscal year ended June 30, 2011 with comparative totals for June 30, 2010

2011 2010Reconciliation of operating loss to net cash used for operating activities:

Operating loss $ (1,531,659) $ (657,780)

Adjustments to reconcile operating loss to net cash used foroperating activities:

Depreciation and amortization 3,771,550 2,213,614 Other non-operating revenues and expenses, net 111,907 117,434

Changes in assets and liabilities:(Increase)decrease in assets:

Accounts receivable – disposal and sanitation fees, net (447,948) (104,935) Accounts receivable – contract services, net 324,671 (406,855) Accounts receivable – other, net 869 86,933 Net OPEB asset (53,619) (154,707) Prepaid and other 29,988 61,800

Increase(decrease) in liabilities:Accounts payable and accrued expenses (54,777) (849,458) Accrued wages and compensated absences (28,502) (1,803,253) Customer deposits (500) (387,746) Tierra Rejada consortium reserve (46,294) (38,460) Landfill closure/postclosure costs 676,993 390,068

Total adjustments 4,284,338 (875,565)

Net cash provided by (used for) operating activities $ 2,752,679 $ (1,533,345)

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VENTURA REGIONAL SANITATION DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2011

A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. Reporting Entity

The Ventura Regional Sanitation District (District) was formed in 1970 under the County Sanitation District Act, California Health & Safety Code 4700 et seq., to coordinate wastewater disposal services within Ventura County. Solid waste management responsibilities were added in 1972. The District provides services to the general public, private industry and various governmental entities. The District's nine-member Board of Directors (Board) is composed of one representative from each of the eight member cities and one representative of special districts in Ventura County. The criteria used in determining the scope of the financial reporting entity is based on the provisions of Governmental Accounting Statements No. 14, The Financial Reporting Entity, and No. 39, Determining Whether Certain Organizations Are Component Units (an amendment of No. 14). The District is the primary governmental unit based on the foundation of a separately appointed governing board. Component units are legally separate organizations for which the governing board of the primary government is financially accountable. The District is financially accountable if it appoints a voting majority of the organization's governing body and: 1) It is able to impose its will on that organization, or 2) There is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the primary government. The Ventura Regional Public Facilities Corporation (Corporation) was formed on October 25, 1989, to facilitate the issuance of certificates of participation for the acquisition, construction, operation and maintenance of facilities, equipment, or other property needed by the District and leasing or selling such property to the District. As such, it has no employees or other operations. Although the Corporation is legally separate, it is included as a blended component unit of the District, as it is in substance part of the District's operations. There were no outstanding certificates of participation at June 30, 2011, or 2010. No separate financial statements are prepared for the Corporation.

2. Basis of Accounting and Measurement Focus

The District reports its activities as an enterprise fund, which is used to account for operations that are financed and operated in a manner similar to a private business enterprise, where the intent of the District is that the costs of providing sanitation and contract services to its customers on a continuing basis be financed or recovered primarily through user charges (charges for services), capital grants and similar funding. Revenues and expenses are recognized on the full accrual basis of accounting. Revenues are recognized in the accounting period in which they are earned and expenses are recognized in the period incurred, regardless of when the related cash flows take place.

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VENTURA REGIONAL SANITATION DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS (continued) June 30, 2011 Enterprise funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with an enterprise fund’s principal ongoing operations. The principal operating revenues of the Ventura Regional Sanitation District, for the sanitation and service contracts, are charges to customers for sales and services. Operating expenses for enterprise funds included the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.

When both restricted and unrestricted resources are available for use, it is the District’s policy to use restricted resources first, then unrestricted resources as they are needed.

3. Financial Reporting

The District's basic financial statements are presented in conformance with the provisions of Governmental Accounting Standards Board (GASB) Statement No. 34, "Basic Financial Statements - and Management's Discussion and Analysis-.for State and Local Governments" (GASB No. 34). This statement established revised financial reporting requirements for state and local governments throughout the United States for the purpose of enhancing the understandability and usefulness of financial reports. GASB No. 34 and its related GASB pronouncements provide for a revised view of financial information and restructure the format of financial information provided prior to its adoption. A statement of net assets replaces the balance sheet and reports assets, liabilities, and the difference between them as net assets, not equity. A statement of revenues, expenses and changes in net assets replaces both the income statement and the statement of changes in retained earnings and contributed capital. GASB No. 34 also requires that the statement of cash flows be prepared using the direct method, where cash flows from operating activities are presented by major categories. Under GASB No. 34, enterprise funds such as the District have the option of consistently following or not following pronouncements issued by the Financial Accounting Standards Board (FASB) subsequent to November 30, 1989. The District has elected not to follow FASB standards issued after that date, unless such standards are specifically adopted by GASB.

4. Assets, Liabilities and Net Assets

Use of estimates - The preparation of the basic financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported changes in net assets during the reporting period. Actual results could differ from those estimates. When both restricted and unrestricted resources are available for use, it is the District's policy to use restricted resources first, then unrestricted resources as they are needed. Capital contributions - Capital contributions represent cash and capital asset additions contributed to the District by property owners, granting agencies or real estate developers desiring services that require capital expenditures or capacity commitment.

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VENTURA REGIONAL SANITATION DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS (continued) June 30, 2011 Budgetary policies - The District adopts an annual budget for planning, control, and evaluation purposes. Budgetary control and evaluation are affected by comparisons of actual revenues and expenses with planned revenues and expenses for the period. Encumbrance accounting is not used to account for commitments related to unperformed contracts for construction and services.

Current assets - unrestricted:

Cash and cash equivalents - For purposes of reporting cash flows, the District considers cash and funds invested in the State of California Local Agency Investment Fund (LAIF) and money market funds to be cash equivalents. In addition, all investments with an original maturity of three months or less when purchased are considered cash equivalents. Investments - Investments are stated at fair value, which is based on quoted market prices as of the valuation date. The gain/loss resulting from valuation is reported in the revenue account "Interest and investment earnings" on the accompanying Statement of Revenues, Expenses and Changes in Net Assets. Accounts receivable - These amounts are comprised of services provided to customers at the District's Toland Road Landfill, services to other governmental agencies by contract and other amounts due under other operating agreements, such as landfill gas royalties, and are shown net of allowance for uncollectible accounts, if applicable. Notes receivable - Include amounts due from a member agency under a short-term construction financing agreement and from previous owners of the Bailard Landfill in accordance with a settlement agreement. Prepaid expenses - Certain payments to vendors reflect costs or deposits applicable to future accounting periods and are recorded as prepaid items in the basic financial statements. Liabilities and net assets: Current liabilities - payable from current assets: Accounts payable and accrued expenses - An estimated loss is recorded in this category, net of insurance coverage and inclusive of an estimate for incurred but not reported claims, when it is probable that a claim liability has been incurred and the amount of the loss can be reasonably estimated.

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VENTURA REGIONAL SANITATION DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS (continued) June 30, 2011 Accrued wages and compensated absences - The District's personnel policies provide for accumulation of comprehensive annual leave (CAL)/vacation, sick leave and compensatory time. Cash payment of unused CAL/vacation, sick and compensatory time is available to those employees who retire or otherwise terminate their employment. Twenty-five percent of unused sick leave is payable upon termination or retirement to employees with at least ten years of service. The sick leave accrual is only available to one bargaining unit. Liabilities for CAL/vacation, compensatory time and the portion of sick leave payable upon termination are recorded when benefits are earned. Current values are included in this category. Current liabilities - payable from restricted current assets: Customer deposits - The District requires landfill customers to provide a security deposit to activate a charge account. The security deposit can be in the form of cash, certificate of deposit (payable to and held by the District), bonds and/or a letter of credit. The cash deposits are carried on the Statement of Net Assets as restricted current assets. The portion of deposits covered by certificates of deposit (held in the customer's name), bonds and letters of credit were $376,000 and $376,000 at June 30, 2011 and 2010, respectively, and are not carried on the Statement of Net Assets. Capital assets - Property and equipment with a cost of $5,000 or more and a life greater than three years are capitalized and stated at cost, except for the portions acquired by contribution, which are reported at their fair market value on the date received. The costs of normal maintenance and repair that do not add to the value of the asset or materially extend asset lives are not capitalized. Depreciation is computed using the straight-line method over estimated useful lives of the assets as shown below: Sewage treatment facility 40 years Structure and improvements 3 to 30 years Equipment 3 to 15 years Property and equipment having a cost of less than $5,000 and all equipment purchased for the District's clients and other entities under various contracts is reported in the expense category "Contracted services - materials and supplies" on the Statement of Revenues, Expenses and Changes in Net Assets. Reimbursements from such other entities for these costs are included in the revenue category "Contract services". Construction in progress - Costs associated with developmental stage projects are accumulated in an in-progress account until the project is fully developed. Once the project is complete, the entire cost of the project is transferred to a capital asset account and depreciated over its estimated useful life. The District is continuing the expansion of the Toland Road Landfill to accept a total of 15 million tons of municipal solid waste. Completion of the landfill is estimated to be by the year 2027.

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VENTURA REGIONAL SANITATION DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS (continued) June 30, 2011 Other Assets - The District established an orchard, named the Millennium Grove, in the year 2000. The approximately 15-acre orchard consists of about 1,700 avocado trees in an agricultural area on District owned property adjacent to the Toland Road Landfill entrance. The trees are now producing marketable quantities of fruit; therefore, the developmental costs are being amortized over a 40-year production life of the trees. In FY 2006, the grove was expanded by four acres and 400 trees. Landfill Closure/Postclosure Costs - expected within one year - This is the amount approved in the District's annual budget for expected closure/postclosure costs for all landfills for the next fiscal year. The financial statements utilize a net assets presentation. Net assets are categorized as follows:

• Net Investment in Capital Assets - This component of net assets consists of capital assets, net of accumulated depreciation and reduced by any debt outstanding against the acquisition, construction or improvement of those assets.

• Restricted Net Assets - This component of net assets consists of constraints placed on net assets

used through external constraints imposed by creditors, grantors, contributors, or laws or regulations of other governments or constraints imposed by law through constitutional provisions or enabling legislation.

• Unrestricted Net Assets - This component of net assets consists of net assets that do not meet the

definition of restricted or net investment in capital assets. Revenue recognition of commodity sales - As part of its approved closure plan, the District installed a gas collection system at the Coastal and Bailard Landfills. Methane gas produced by the landfills is processed by Covanta Biogas-Pacific Recovery Corporation for further sale to Southern California Edison Company (SCE) or burned in a flare constructed by the District, depending on the gas quality. The District receives a contract royalty rate of 8.3% of its prorated share of all gas sold to SCE. Gas production estimates by engineers indicate the potential volume of gas is somewhat unpredictable due to the exact mixture of refuse, compaction rate and other factors; however, the production cycle is predictable and resembles a bell curve. In December 2009, Covanta notified the District of its intention to cease operation. The District purchased the used equipment and took over the utilization of remaining landfill gas collection systems. The Coastal site has been closed sixteen (16) years and gas production has peaked and is now in decline. The Bailard site has been closed fourteen (14) years and gas production has peaked and is beginning to decline. Total gas royalties earned during the years ended June 30, 2011 and 2010 were $0 and $44,019, respectively. In March 2009, the District purchased and installed nine microturbine electric generators at the Toland Road Landfill. The District signed agreements with Southern California Edison (SCE) to interconnect to the power grid. The SCE Power Purchase Agreement (PPA) falls within the scope of the State of California Renewables Portfolio Standard Program (RPS) Program, established in 2002 by Senate Bill 1078. The RPS Program requires investors owned utilities procure an increasing percentage of electricity from the “eligible renewable energy resources”, with an overall target of 20% of their retail sales from such resources by 2010. Eligible renewable energy resources include, among other facilities, any facility in the state that uses biomass, municipal solid waste conversion, or landfill gas technology to generate electricity. The contract allows the District to generate between 1.0 Megawatt (MW) and 5 MW;

http://presentation.net/

29

VENTURA REGIONAL SANITATION DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS (continued) June 30, 2011 however, 3.82 MW is the limit allowed in the District’s California Environmental Quality Act (CEQA) document. The revenues generated from the electrical grid which are purchased by SCE were in the amount of $786,162 and $431,353 for the fiscal years ended June 30, 2011 and 2010, respectively.

5. Comparative data/reclassifications

Comparative total data for the prior year have been presented only for individual enterprise funds in the fund financial statements in order to provide an understanding of the changes in the financial position and operations of these funds. Also, certain amounts presented in the prior year data have been reclassified in order to be consistent with the current year's presentation.

B. DETAILED NOTES

1. Cash and Investments

2011 2010Cash and cash equivalents $ 3,045,411 $ 1,015,509 Restricted cash and cash equivalents 63,528 87,559 Investments 3,556,854 7,766,261 Restricted investments 31,244,651 27,867,221

Total Cash and Investments $ 37,910,444 $ 36,736,550

Cash and investments as of June 30, consist of the following:

2011 2010Cash on hand $ 1,050 $ 1,050 Deposits with financial institutions

Sweep account 779,877 759,653 Restricted cash - -

InvestmentsFederal Farm Credit Bank 1,041,630 1,072,500 Federal Home Loan Bank 5,027,925 10,467,557 Federal Home Loan Mortgage 4,070,038 9,007,489 Federal National Mortgage Association 6,575,134 3,404,986 Freddie Mac - 1,153,899 U.S. Treasury notes 17,297,196 9,751,942 Certificates of deposits 789,582 775,109 Money market funds 214,132 187,721 Local Agency Investment Fund (LAIF) 1,520,279 64,387 Ventura County Treasury Pool 593,601 90,257

Total Cash and Investments $ 37,910,444 $ 36,736,550

Cash and investments as of June 30, are classified in the accompanying financial statements as follows:

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VENTURA REGIONAL SANITATION DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS (continued) June 30, 2011

Cash and cash equivalents as of June 30, consist of the following:

2011 2010Cash and cash equivalents

Local Agency Investment Fund (LAIF) $ 1,520,279 $ 64,387 Ventura County Treasury Pool 593,601 90,257 Restricted Money market funds - - Money market funds 214,132 187,721 Sweep account 779,877 759,653 Cash on hand 1,050 1,050

Total Cash and Cash Equivalents $ 3,108,939 $ 1,103,068

Investments Authorized by the California Government Code and the District's Investment Policy The table below identifies the investment types that are authorized by the District in accordance with the California Government Code (or District's investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the District's investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provision of debt agreements of the District, rather than the general provisions of the California Government Code or the District's investment policy.

Authorized Investment TypesMaximumMaturity

Maximum Percentageof Portfolio

MaximumInvestment in

One IssuerLAIF 5 years None NoneVentura County Investment Pool 5 years None NoneU.S. Agency Securities 5 years None NoneU.S. Government Securities 5 years None NoneNegotiable Certificates of Deposit 5 years 30% NoneBanker's Acceptances 180 days 40% 30%Mutual Funds N/A 20% None

Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of its investments or collateral securities that are in the possession of another party. With respect to investments, custodial credit risk generally applies only to direct investment in marketable securities. Custodial credit risk does not apply to a local government's indirect investment in securities through the use of mutual funds or government investment pools (such as LAIF).

31


Cash and Cash Equivalents

At June 30, 2011 and 2010, the carrying amount of cash in banks was $779,877 and $759,653, respectively, and the corresponding bank balance was $1,246,231 and $1,523,406, respectively. The difference between the carrying amount of cash in banks and the corresponding bank balance is due to deposits in transit and outstanding checks.

Local Agency Investment Fund (LAIF)

The District is a voluntary participant in the LAIF that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the District's investment in this pool is reported in the accompanying basic financial statements at amounts based on the District's pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. Included in LAIF's investment portfolio are structured notes and other asset-backed securities and floating rate securities issued by federal agencies, government-sponsored enterprises, and corporations. As of June 30, 2011, the total amount invested by all public agencies in LAIF is $24.0 billion. LAIF is a part of the California Pooled Money Investment Account (PMIA), which at June 30, 2011, had a balance of $67.0 billion. Of that amount, 5.01% is invested in medium-term and short-term structured notes and asset-backed securities. The average maturity of PMIA investments is 237 days as of June 30, 2011. The District's proportionate share of LAIF's market value was $1,520,279 and $64,387 at June 30, 2011 and June 30, 2010, respectively. The amounts invested in the California LAIF are not subject to categorization as they do not represent specifically identifiable investment securities.

Interest Rate Risk

Interest rate risk is the risk that changes in market interest rates and will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the District manages its exposure to interest rate risk is by purchasing a combination of shorter and longer term investments and by timing cash flows from maturities so that a portion of the portfolio matures or comes close to maturity evenly over time as necessary to provide requirements for cash flow and liquidity needed for operations. Information about the sensitivity of the fair values of the District's investments to market interest rate fluctuations is provided by the following table that shows the distribution of the District's investment by maturity date:

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Investments at June 30, 2011:Fair Value 12 Month 13-24 25-60

Investment Type Total or Less Months MonthsFederal Farm Credit Bank $ 1,041,630 $ - $ 1,041,630 $ - Federal Home Loan Bank 5,027,925 850,935 4,176,990 - Federal Home Loan Mortgage 4,070,038 758,318 2,552,315 759,405 Federal National Mortgage Association 6,575,134 - 2,846,076 3,729,058 U.S. Treasury notes 17,297,196 6,199,832 4,149,320 6,948,044 Certificates of deposits 789,582 789,582 - - Money market funds 214,132 214,132 - - Local Agency Investment Fund (LAIF) 1,520,279 1,520,279 - - Ventura County Treasury Pool 593,601 593,601 - -

Total $ 37,129,517 $ 10,926,679 $ 14,766,331 $ 11,436,507

Investments at June 30, 2010:Fair Value 12 Month 13-24 25-60

Investment Type Total or Less Months MonthsFederal Farm Credit Bank $ 1,072,500 $ - $ - $ 1,072,500 Federal Home Loan Bank 10,467,557 3,122,002 3,045,230 4,300,325 Federal Home Loan Mortgage 9,007,489 2,510,901 5,024,838 1,471,750 Federal National Mortgage Association 3,404,986 1,751,061 1,653,925 - Freddie Mac 1,153,899 - - 1,153,899 U.S. Treasury notes 9,751,942 2,010,193 358,965 7,382,784 Certificates of deposits 775,109 775,109 - - Money market funds 187,721 187,721 - - Local Agency Investment Fund (LAIF) 64,387 64,387 - - Ventura County Treasury Pool 90,257 90,257 - -

Total $ 35,975,847 $ 10,511,631 $ 10,082,958 $ 15,381,258

Remaining Maturity (in months)

Remaining Maturity (in months)

33

VENTURA REGIONAL SANITATION DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS (continued) June 30, 2011 Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code, the District's investment policy and the actual rating as of year-end for each investment type:

Minimum ExemptTotal as of Legal From

Investment Type June 30, 2011 Rating Disclosure AAA Not rated

Federal Farm Credit Bank $ 1,041,630 A $ - $ 1,041,630 $ - Federal Home Loan Bank 5,027,925 A - 5,027,925 - Federal Home Loan Mortgage 4,070,038 A - 4,070,038 - Federal National Mortgage Association 6,575,134 A - 6,575,134 - U.S. Treasury notes 17,297,196 N/A 17,297,196 - - Certificates of deposits 789,582 N/A 789,582 - - Money market funds 214,132 N/A 214,132 - - Local Agency Investment Fund (LAIF) 1,520,279 N/A - - 1,520,279 Ventura County Treasury Pool 593,601 N/A - - 593,601

Total $ 37,129,517 $ 18,300,910 $ 16,714,727 $ 2,113,880

Minimum ExemptTotal as of Legal From

Investment Type June 30, 2010 Rating Disclosure AAA Not rated

Federal Farm Credit Bank $ 1,072,500 A $ - $ 1,072,500 $ - Federal Home Loan Bank 10,467,557 A - 10,467,557 - Federal Home Loan Mortgage 9,007,489 A - 9,007,489 - Federal National Mortgage Association 3,404,986 A - 3,404,986 - Freddie Mac 1,153,899 A - 1,153,899 - U.S. Treasury notes 9,751,942 N/A 9,751,942 - - Certificates of deposits 775,109 N/A 775,109 - - Money market funds 187,721 N/A 187,721 - - Local Agency Investment Fund (LAIF) 64,387 N/A - - 64,387 Ventura County Treasury Pool 90,257 N/A - - 90,257

Total $ 35,975,847 $ 10,714,772 $ 25,106,431 $ 154,644

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VENTURA REGIONAL SANITATION DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS (continued) June 30, 2011 The investment policy of the District contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. Investments in any one issuer (other than for U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of total District investments are as follows: Issuer Investment Type 2011 2010

Federal Home Loan Bank Federal Agency Securities 5,027,925$ 10,467,557$ Federal Home Loan Mortgage Federal Agency Securities 4,070,038 9,007,489 Federal National Mortgage Association Federal Agency Securities 6,575,134 3,404,986

2. Accounts Receivable

Disposal and sanitation fees, net - These receivables are comprised of services provided to customers at the District's Toland Road Landfill. They are shown net of an allowance for uncollectable accounts. The allowance totals $12,684 and $11,423 at June 30, 2011 and 2010, respectively. Contract services, net - These receivables result from contractual agreements to provide services such as operation & maintenance of wastewater treatment plants; collection & potable water systems; and engineering, management & administration. They are shown net of an allowance for uncollectable accounts. The allowance totals $11,464 and $15,467 at June 30, 2011 and 2010, respectively. Other, net - These receivables result from miscellaneous activities such as landfill gas royalties, prior year taxes and reimbursed State mandated costs. They are shown net of an allowance for uncollectable accounts. The allowance totals $0 and $10 at June 30, 2011 and 2010, respectively. Summary of accounts receivable as reported in the accompanying Statement of Net Assets is shown as follows:

June 30, 2011Accounts Receivable - Trade Gross Allowance Net

Disposal and sanitation $ 1,336,426 $ (12,684) $ 1,323,742 Contract services 1,078,403 (11,464) 1,066,939

Total accounts receivable $ 2,414,829 $ (24,148) $ 2,390,681

June 30, 2010Accounts Receivable - Trade Gross Allowance Net

Disposal and sanitation $ 887,217 $ (11,423) $ 875,794 Contract services 1,407,077 (15,467) 1,391,610 Other receivable 879 (10) 869

Total accounts receivable $ 2,295,173 $ (26,900) $ 2,268,273

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3. Notes Receivable

Include amounts due from the Malibu Bay Club Assessment District for the costs of constructing an onsite wastewater treatment system for the Malibu Bay Club, a California non-profit mutual benefit corporation.

4. Capital Assets

Construction/Production in Process - The District has been involved in various construction projects throughout the year. The balances of the various construction and agricultural projects that comprise the construction/production in process balances at June 30 are as follows: Construction in Progress 2011 2010

Microturbine generation station at Toland Landfill $ 545 $ 25,545 IT virtualization project - 80,000 Conversion technology 50,504 45,081 Miscellaneous projects 44,552 63,295 Toland Landfill Phase 3B Liner 5,018,668 446,312 Leachate recirculation 71,647 - Covanta - 61,934

Subtotal 5,185,916 722,167 Millenium Grove at Toland Road - 102,084

Grand total $ 5,185,916 $ 824,251

36

VENTURA REGIONAL SANITATION DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS (continued) June 30, 2011 A summary of changes in capital assets for the years ended June 30, 2011 and 2010 follows:

Beginning EndingBalance Balance

June 30, 2010 Additions Deletions June 30, 2011Capital assets, not being depreciated

Land 2,817,008$ -$ -$ 2,817,008$ Construction-in-Progress 722,167 4,658,087 (194,338) 5,185,916 Agriculture Production-in-Progress 102,084 - (102,084) -

Total capital assets, not being depreciated 3,641,259 4,658,087 (296,422) 8,002,924

Capital assets, being depreciatedStructures and improvements 54,538,205 127,198 (87,658) 54,577,745 Equipment 17,205,853 156,243 (416,025) 16,946,071

Total capital assets, being depreciated 71,744,058 283,441 (503,683) 71,523,816

Less accumulated depreciation for:Structures and improvements (12,983,879) (2,442,360) 492,908 (14,933,331) Equipment (4,869,065) (1,329,190) - (6,198,255)

Total accumulated depreciation (17,852,944) (3,771,550) 492,908 (21,131,586)

Total capital assets, being depreciated, net 53,891,114 (3,488,109) (10,775) 50,392,230

Net capital assets 57,532,373$ 1,169,978$ (307,197)$ 58,395,154$

Beginning EndingBalance Balance

June 30, 2009 Additions Deletions June 30, 2010Capital assets, not being depreciated

Land 2,842,328$ -$ (25,320)$ 2,817,008$ Construction-in-Progress 22,832,997 1,170,463 (23,281,293) 722,167 Agriculture Production-in-Progress 102,084 - - 102,084

Total capital assets, not being depreciated 25,777,409 1,170,463 (23,306,613) 3,641,259

Capital assets, being depreciatedStructures and improvements 39,821,826 14,749,781 (33,402) 54,538,205 Equipment 9,093,810 9,536,258 (1,424,215) 17,205,853

Total capital assets, being depreciated 48,915,636 24,286,039 (1,457,617) 71,744,058

Less accumulated depreciation for:Structures and improvements (11,344,689) (1,672,592) 33,402 (12,983,879) Equipment (5,127,792) (541,022) 799,749 (4,869,065)

Total accumulated depreciation (16,472,481) (2,213,614) 833,151 (17,852,944)

Total capital assets, being depreciated, net 32,443,155 22,072,425 (624,466) 53,891,114

Net capital assets 58,220,564$ 23,242,888$ (23,931,079)$ 57,532,373$

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5. Long-Term Debt

Installment Purchase Contract

During the fiscal year ended June 30, 2007, the District entered into an Installment Purchase Contract with the Municipal Finance Corporation for $2,665,600. The funds were received to reimburse the District for the costs advanced for an advanced onsite wastewater treatment system for the Malibu Bay Club, a California non-profit mutual benefit corporation. The Municipal Finance Corporation assigned all of its rights, title and interest in the Installment Purchase Contract dated April 1, 2007, to Citizens Bank. Semiannual principal and interest payments of $103,568 are due October 4 and April 4, commencing October 4, 2007 through April 4, 2027. Interest is at 4.80%. The District has pledged the Net Revenues of the Solid Waste operations for the repayment of the Installment Purchase Contract.

Installment Sale Agreement

During the fiscal year ended June 30, 2007, the District entered into an Installment Sale Agreement with the Municipal Finance Corporation for $7,000,000. The funds were received to provide financing for the expansion of the Toland Road Landfill. The Municipal Finance Corporation assigned all of its rights, title and interest in the Installment Sale Agreement dated November 2, 2006, to City National Bank. Semiannual principal and interest payments of $322,958 are due June 4 and December 4, commencing June 4, 2007 through December 4, 2021. Interest is at 4.48%. The District has pledged the Net Revenues of the Solid Waste operations for the repayment of the Installment Sale Agreement.


The District entered into an Installment Sale Agreement with the Municipal Finance Corporation for $7,000,000. The funds were received to provide financing for the acquisition and construction of a biosolids drying facility project. The Municipal Finance Corporation assigned all of its rights, title and interest in the Installment Sale Agreement dated December 1, 2007, to Citizens Bank. Semiannual principal and interest payments of $321,864 are due June 21 and December 21, commencing June 21, 2008 through December 21, 2022. Interest is at 4.43%. The District has pledged the Net Revenues of the Solid Waste operations for the repayment of the Installment Sale Agreement.


The District entered into an Installment Sale Agreement with the Municipal Finance Corporation for $9,000,000. The funds were received to provide financing for the acquisition and construction of a biosolids drying facility and microturbine project. The Municipal Finance Corporation assigned all of its rights, title and interest in the Installment Sale Agreement dated May 13, 2009, to City National Bank. Semiannual principal and interest payments of $415,231 are due November 13 and May 13, commencing November 13, 2009 through May 13, 2024. Interest is at 4.48%. The District has pledged the Net Revenues of the Solid Waste operations for the repayment of the Installment Sale Agreement.


The District entered into an Installment Sale Agreement with the Municipal Finance Corporation for $5,000,000. The funds were received to provide financing for the expansion of the Toland Road Landfill.

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VENTURA REGIONAL SANITATION DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS (continued) June 30, 2011 The Municipal Finance Corporation assigned all of its rights, title and interest in the Installment Sale Agreement dated December 23, 2010, to Bank of America. Semiannual principal and interest payments of $227,105 are due June 23 and December 23, commencing June 23, 2011 through December 23, 2025. Interest is at 4.25%. The District has pledged the District’s Net Revenues for the repayment of the Installment Sale Agreement. The following is a schedule of changes in long-term debt of the District for the fiscal year ended June 30, 2011:

Beginning Payments/ Ending Amounts Due inBalance Additions Deletions Balance One Year

Installment PurchaseContract $ 2,388,625 $ - $ (93,592) $ 2,295,033 $ 98,138

Installment SalesAgreement 5,755,752 - (392,404) 5,363,348 410,180



Installment SalesAgreement - 5,000,000 (120,855) 4,879,145 249,469

Total long-term debt $ 22,840,478 $ 5,000,000 $ (1,434,846) $ 26,405,632 $ 1,623,101

The following schedule illustrates the debt service requirements to maturity for loans outstanding as of June 30, 2011: Fiscal Years

Ending June 30, Principal Interest Total2012 1,623,101$ 1,158,353$ 2,781,454$ 2013 1,696,163 1,085,289 2,781,452 2014 1,772,518 1,008,935 2,781,453 2015 1,852,313 929,140 2,781,453 2016 1,935,702 1,238,432 3,174,134

2017-2021 11,066,927 2,840,340 13,907,267 2022-2026 6,258,997 600,567 6,859,564 2027-2029 199,911 7,225 207,136

Total 26,405,632$ 8,868,281$ 35,273,913$

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VENTURA REGIONAL SANITATION DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS (continued) June 30, 2011 6. Landfill Closure/Postclosure Costs As the District's landfill sites reach capacity, the District is responsible for closing them in accordance with applicable regulatory requirements. The District is also responsible for postclosure maintenance of the Ozena Modified Sanitary Landfill, Toland Road Landfill, Coastal Landfill site, Bailard Landfill site, and for water monitoring of the River Ridge Landfill site (the latter under an agreement with the City of Oxnard). District engineers have estimated expected closure and postclosure costs related to all of the District's landfill sites. Such costs are accrued over the estimated useful life of each site. The amount accrued for closure and postclosure costs, using the estimated useful life, represents the ratio of refuse accepted at the site to the sites expected capacity multiplied by the sites total estimated closure and postclosure costs. The $26,207,590 reported as landfill closure and postclosure care liability at June 30, 2011, represents the cumulative amount reported to date based on the use of 100% of estimated capacity for the closed landfills, and on 39.3% for the Toland Road Landfill. The District will recognize the remaining estimated cost of closure and postclosure care for the Toland Road Landfill of $13,187,035 as the remaining estimated capacity is filled. The District expects to incur continuing maintenance costs related to the closed sites for at least 30 years after closure. It is expected that revenue from the sale of methane gas produced by the closed Coastal and Bailard Landfill sites will partially offset such continuing maintenance costs associated with those sites. Title 27, California Code of Regulations, Division 2, Subdivision 1, Chapter 6, Subchapter 3, Article 1, Section 22236, requires the estimated closure and postclosure costs for operating landfills and the remaining estimated postclosure costs for certain closed landfills be adjusted for the previous year by a specified inflation percentage. Current regulations also require the District to provide financial assurance to CalRecycle. From the available financial assurance mechanisms, the District has chosen the enterprise fund account method. The District is required to make annual contributions to finance closure and postclosure care. The amount of financial assurance required is adjusted each year to the updated closure/postclosure requirements. In addition, an adjustment percentage to account for inflation of 1.010% and 1.012% was included for the years 2011 and 2010, respectively. The District is in compliance with these requirements, and, at June 30, 2011, investments of $31,244,651 are held for these purposes. These are reported as restricted assets on the statement of net assets.

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VENTURA REGIONAL SANITATION DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS (continued) June 30, 2011 The District has provided the required financial assurance to the CalRecycle estimated closure and postclosure costs for the Coastal, Bailard and Toland Road Landfill sites. The CalRecylce does not require financial assurance for the other District sites; however, the District has set aside funds to provide the required postclosure maintenance of these sites. The table below shows each landfill or landfill site, capacity of each, remaining life, costs associated with each, and the remaining costs to be recognized as of June 30, 2011. Landfill/Site: Bailard Coastal Ozena River Ridge Toland

Landfill Capacity:Estimated capacity (tons) 3,150,000 3,210,289 6,250 2,400,000 15,000,000 Percent used to date 100.0% 100.0% 100.0% 100.0% 39.3%

Estimated Closure Costs: 13,541,650$ 9,954,107$ 250,000$ 2,250,000$ 11,951,353$ Estimated corrective action 76,528 52,276 - - 468,752 Total est. postclosure/corrective action costs 7,248,444 3,083,133 467,394 1,741,316 9,304,829

Total costs 20,866,622 13,089,516 717,394 3,991,316 21,724,934 Closures/postclosure recognized 20,866,622 13,089,516 717,394 3,991,316 8,537,899

Remaining closure/postclosure to be recognized -$ -$ -$ -$ 13,187,035$

Remaining landfill life Closed FY 97 Closed FY 95 Closed FY 87 Closed FY 82 16 years

The River Ridge site has been closed since 1982, the Ozena Landfill since 1987, the Coastal site since 1995, and the Bailard site since 1997. Postclosure costs for all four have been recognized. In accordance with GASB Statement No. 18, Accounting for Municipal Solid Waste Landfill Closure and Postclosure Care Costs, landfill closure costs and costs to maintain and monitor a landfill site for 30 years after closure are to be accrued during the period the landfill is operated. The District adopted this standard in FY 1994.

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Tierra Rejada Consortium Reserve:

The District is acting as the project manager to complete the mitigation process on the closed Tierra Rejada Landfill and as trustee of the Consortiums mitigation funds. The District does not own nor has it ever provided tonnage to the Tierra Rejada Landfill. The District was named project manager because of its expertise in the landfill closure/postclosure maintenance process. The Consortium is comprised of the District, the County of Ventura, Simi Valley County Sanitation District and Rancho Simi Recreation and Park District. The District categorized this reserve as a restricted non-current asset on the Statements of Net Assets. As the District incurs expenses related to this project, this restricted reserve decreases to offset the District’s expenses incurred on behalf of the Tierra Rejada Consortium project. In 2011 and 2010, $46,294 and $38,460 in expenses were incurred at the Tierra Rejada Landfill, respectively.

7. Segment Information

The Water & Wastewater division accounts for the management, operation, and maintenance of water and wastewater facilities throughout Ventura County. The Solid Waste division accounts for the management and operation of six municipal waste landfills, only one of which is active. Selected segment information for the year ended June 30, 2011, is as follows:

Condensed Statement of Net Assets

Water and Wastewater Solid Waste Biosolids

Current assets (4,458,438)$ 19,610,829$ (7,625,852)$ Capital assets, net 4,115,186 33,055,226 20,748,995 Other assets 2,398,176 31,459,980 -

Total assets 2,054,924 84,126,035 13,123,143

Current liabilities 174,323 4,185,671 996,365 Long-term liabilities 2,196,895 33,578,012 13,002,793

Total liabilities 2,371,218 37,763,683 13,999,158

Net assets:Invested in capital assets,

net of related debt 1,820,153 22,812,733 6,880,889 Restricted 2,498,743 4,840,174 - Unrestricted (4,635,190) 18,709,445 (7,756,904)

Total net assets (316,294)$ 46,362,352$ (876,015)$

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Condensed Statement of Revenues, Expenses and Changes in Net Assets

Water and Wastewater Solid Waste Biosolids

Operating revenues:Disposal and sanitation fees -$ 9,355,858$ -$ Contract services 4,357,280 - 2,783,648 Utility electricity sales - - 786,162 Other revenue 148,968 263,491 22,019

Total operatingrevenues 4,506,248 9,619,349 3,591,829

Operating expenses:Salaries and benefits 2,833,018 2,414,518 230,235 Depreciation 248,263 2,027,156 1,413,655 Other operating expenses 1,535,017 4,072,767 1,857,661

Total operatingexpenses 4,616,298 8,514,441 3,501,551

Operating income(loss) (110,050) 1,104,908 90,278

Non-operating revenues(expenses):Interest and investment

earnings 2,443 553,317 3,561 Interest expense (112,307) (362,723) (642,235) Other non-operating revenue(expense) 110,733 (3,083) 65

Total non-operatingrevenues(expenses) 869 187,511 (638,609)

Transfers out (840,000) (1,440,000) (120,000) Change in net assets (949,181) (147,581) (668,331) Net assets, beginning of year 632,887 46,509,933 (207,684)

Net assets, end of year (316,294)$ 46,362,352$ (876,015)$

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Condensed Statement of Cash FlowsWater and

Wastewater Solid Waste BiosolidsNet cash provided by

operating activities 288,755$ 3,616,627$ 1,316,038$ Net cash used for

non-capital financing activities (840,000) (1,440,000) (120,000) Net cash used for

capital and related financing activities (284,711) (514,685) (1,502,814) Net cash provided by

investing activities 2,443 142,289 3,561 Net increase (decrease) (833,513) 1,804,231 (303,215)

Cash and cash equivalents,beginning of year (4,723,578) 16,718,693 (7,716,746)

Cash and cash equivalents,end of year (5,557,091)$ 18,522,924$ (8,019,961)$

8. Defined Benefit Pension Plans

Ventura County Employees’ Retirement Association (VCERA)

Plan Description

The District participates in a cost-sharing multiple-employer contributory defined benefit pension plan (the "Plan") administered by the Ventura County Employees' Retirement Association (VCERA). This Plan is available to the employees of the County of Ventura and the District. Participation in the Plan is mandatory for substantially all District employees. VCERA is governed by the Board of Retirement. The Plan’s benefit provisions and contribution requirements are established and may be amended by state law and resolutions and ordinances adopted by the Board of Retirement and District’s Board of Directors. The VCERA issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to the Ventura County Employees' Retirement Association, 1190 South Victoria Avenue, Suite 200, Ventura, California 93003.

Funding Policy

The VCERA Board of Retirement has the authority to establish and amend funding policy. Effective July 12, 2007, all employee contributions are paid by the District. All Tier 1 employees of the District took the early retirement incentive as of April 1, 2010, and all the remaining permanent status District employees are in the Tier II category. The VCERA Board of Retirement adopted a composite contribution rate for both Tier 1 and Tier II General Member employer contribution rate. The composite rate is the weighted average of the Tier 1 and Tier 11 General Member employer contribution. The use of the composite General Member Rate allows VCERA to continue collecting contributions for the Unfunded Actuarial Accrued Liability (UAAL) generated by all retired District Tier 1 members. The general member normal cost composite rate for FY2011 was 12.37% with a COLA of 0.25%. The combined total of 12.62% general member employer composite contribution rate was effective October 1, 2010. In addition, the Tier II employee actuarially determined rate is 5.73%, totaling the District’s employer retirement contribution rate at 18.35%.

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Annual Pension Cost

For fiscal year 2011, the District’s VCERA annual pension cost was $872,001 which is equal to the District’s required and actual contributions. The required contribution for the fiscal year 2011 was determined as part of the June 30, 2009 actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions included an 8% investment rate of return, a 5% to 13.25%, varying by service of projected salary increases, and a maximum 3% contingent upon CPI increases for General Tier 1 and fixed 2% cost-of-living adjustment not subject to CPI increases that applies to future service after March 2003. To calculate the required contribution, assumptions are made about future events that affect the amount and timing of benefits to be paid and assets to be accumulated. Each year actual experience is measured against the assumptions. The unfunded actuarial accrued liability (UAAL) is being amortized as a level percentage of payroll on a closed basis.

All Tier 1 employees of the District took the early retirement incentive as of April 1, 2010, and all the remaining permanent status District employees are in the Tier II category.

The following table shows the District’s required contributions and percentage contributed for the current year and two preceding years: Year Ended

June 30,Annual Required

ContributionPercentage Contributed

2009 884,578 100%2010 848,981 100%2011 872,001 100%

Public Agency Retirement System (PARS) – Retirement Enhancement Plan

Plan Description

In accordance with the Federal Omnibus Budget Reconciliation Act of 1990, the District established a supplemental pension benefit for substantially all of its employees through the Public Agency Retirement System (PARS) Retirement Enhancement Plan (REP). The REP is a defined benefit plan, single-employer retirement plan, and is administered for the District through a third party administrator, PARS. The REP provides for a pension retirement benefit to substantially all District employees as long as they meet the eligibility requirements. The Retirement Enhance Plan (REP) was adopted in December 2003 and amended in July 2005 and October 2009. The REP is comprised of the following three groups:

Group 1 – This plan was adopted in December 2003 and provides a benefit to active employees on or after January 1, 2004, equal to the difference of the CalPERS “2% at 55” formula and the Ventura County Employees’ Retirement Association (VCERA) Tier 1 or Tier 2 benefit formula.

Group 2 – This plan was adopted in July 2005 and provides a 2% cost-of-living benefit to active employees on or after July 1, 2005, and is a VCERA Tier II Member that does not receive a cost-of-living adjustment under VCERA.

Group 3 – This plan was adopted in December 2009 and provides a benefit for employees who terminated employment with the Employer effective March 30, 2010, and concurrently retires under a Regular Service Retirement under VCERA.

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VENTURA REGIONAL SANITATION DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS (continued) June 30, 2011 Funding Policy The District’s funding policy for Group 1 and Group 2 is to make the contribution as determined by the Plan’s actuary, expressed as a percentage of the District’s total payroll. Employee contributions are paid by the District. For fiscal year 2011, the District pays the contribution of 10.09%. The Plan’s trust Administrator is PARS and Union Bank of California is the Trustee. The following information describes the calculation methodology:

The Plan’s annual required contribution (ARC) for the fiscal year ended June 30, 2011, is based on valuation as of July 1, 2009. The annual pension costs for this period equals the plan’s annual required contribution, adjusted for historical differences between the annual required contribution and amounts contributed. The actuary has determined the District’s annual required contribution as the sum of (a) normal costs, and (b) amortization of the unfunded actuarial accrued liability. For the fiscal year ending June 30, 2011, the District’s annual required contribution is $518,694.

For previous years, the Plan’s annual required contribution was based on the July 1, 2005 actuarial valuation, which determined the District’s ARC was 7.94% for fiscal year 2008. For fiscal year 2009, the Plan’s annual required contribution was based on the July 1, 2007 actuarial valuation which determined the District’s ARC was 8.90%.

The actuarial liabilities and assets are valued as of the valuation date. The actuarial funding method used is the entry age normal method. Under this method the contribution rate is the sum of the normal cost rate plus the unfunded actuarial liability rate. The normal cost is defined as the actuarial present value of benefits allocated to the valuation year and the actuarial accrued liability is the present value of benefits allocated to all periods prior to the valuation year. The normal cost rate is determined by dividing the normal cost by expected covered payroll. In determining the Plan’s actuarial accrued liability, the projected benefit of each participant must be allocated between past years and future years.

The unfunded actuarial accrued liability (UAAL) is the difference between the actuarial accrued liability and the value of the plan assets as of the valuation date. This difference is amortized as a level percent of payroll to determine the unfunded actuarial liability rate. The period over which the UAL is amortized starts with the valuation date beginning after occurrence, and varies depending upon the source of the UAAL:

The plan’s UAAL is amortized over a period of 20 years from October 1, 2003, with over a period of 15.25 years remaining as of July 1, 2008.

Payments increasing by a payroll growth assumption of 3.25% per annum. Payments are assumed to be made throughout the year. Subsequent gains and losses and benefit improvements are amortized over the same remaining period.

The Group 3 portion of the plan is a one-time retirement incentive for employees who desire to take the retirement incentive and meets the eligibility requirements. There were twelve District employees who took the retirement incentive. The District purchased an annuity from Pacific Life Insurance to cover the costs and payable annually for the next three years in the amount of $162,643 per year. Annual Pension Cost (Group 1 & Group 2) For fiscal year 2011, the District’s annual pension cost was $518,694 for PARS was equal to the District’s required and actual contributions. The required contribution for the fiscal year 2010 was determined as

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VENTURA REGIONAL SANITATION DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS (continued) June 30, 2011 part of the July 1, 2009 actuarial valuation using the entry age normal actuarial cost method. The following is the funded status information as of June 30, 2011:

Fiscal Year Ended

Annual Pension Cost

Percentage of Annual Pension

Cost Contributed

Net Pension Obligation

2009 504,396$ 100% -$ 2010 512,083$ 100% -$ 2011 518,694$ 100% -$

Actuarial Methods and Assumptions (Group 1 & Group 2)

The following is a summary of the actuarial assumptions and methods: Valuation Date July 1, 2009 Actuarial Cost Method Entry Age Normal Asset Valuation Method Market Value Actuarial Assumptions Investment Rate of Return 7.0% Inflation Rate 3.0% Payroll Growth 3.25% Cost of Living Adjustment 2.0% compounded annually Mortality RP-2000 Combined Healthy mortality tables for males and females The unfunded actuarial accrued liability (UAAL) is being amortized as a level percentage of payroll on a closed basis.

Fund Status and Funding Progress

The funded status of the plan as of July 1, 2009 was as follows:

Actuarial accrued liability (AAL) 4,636,415$

Actuarial value of plan assets 1,571,809 Unfunded actuarial accrued liability (UAAL) 3,064,606$ Funded ratio (actuarial value of plan assets/AAL) 33.9%Covered payroll (active plan members) 5,195,165$ UAAL as a percentage of covered payroll 59%

The schedule of funding progress is presented as required supplementary information following the notes to the financial statements. The schedule presents multi-year trend information about whether the actuarial value of the plan assets are increasing or decreasing over time relative to the actuarial accrued liability of the benefit.

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9. Other Post Employment Benefits

Plan Description

The District provides post retirement healthcare benefits, in accordance with California Public Employees' Retirement System (CaIPERS), to all employees who retire from the District after attaining the age of 50 with at least ten years of service and elect to be covered. The District is part of the Public Agency portion of the Public Agency Retirement System (PARS), an agent multiple-employee plan administered by PARS, which acts as a common investment and administrative agent for participating public employees within the State of California. PARS issues a separate Comprehensive Annual Financial Report. Copies of the PARS annual financial report may be obtained from PARS, 4350 Von Karman Avenue, Suite 100, Newport Beach, CA 92660.

Funding Policy

The District’s annual OPEB cost is calculated based on the annual required contribution (ARC) of the District, an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. When an agency contributes more than the ARC, there is a net OPEB asset; when the contribution is less, a net OPEB obligation results. As of June 30, 2011, the District calculated and recorded a net OPEB asset of $582,752 and a net OPEB asset of $529,133 as of June 30, 2010.

Annual OPEB Cost and Net OPEB Obligation (Asset)

For 2011, the District’s annual OPEB cost (expense) consists of the annual required contribution plus interest on the net OPEB obligation less the adjustment to the annual required contribution. The District contributed $42,672 to the PARS trust. The table below shows the components of the District’s annual OPEB costs for the years 2011 and 2010, the amount actually contributed to the plan, and changes in the District’s net OPEB obligation:

June 30, 2011 June 30, 2010

11,443$ 17,325$ (41,008) (29,018) 18,618 12,736

(10,947) 1,043 (42,672) (155,750) (53,619) (154,707)

(529,133) (374,426) (582,752)$ (529,133)$

Contributions madeIncrease in net OPEB obligation

Net OPEB obligation - beginning of yearNet OPEB obligation - end of year

Annual required contributionInterest on net OPEB obligationAdjustment to annual required contribution

Annual OPEB cost (expense)

The District’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2011 and the two preceding years were as follows: Percentage of

Fiscal Year Annual OPEB Annual OPEB Net OPEB Ended Cost Cost Contributed Obligation

June 30, 2009 30,061$ 1345.6% (374,426)$ June 30, 2010 17,325$ 899.0% (529,133)$ June 30, 2011 11,443$ 372.9% (582,752)$

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Fund Status and Funding Progress

The funded status of the plan as of July 1, 2008 was as follows:

Actuarial accrued liability (AAL) 461,920$ Actuarial value of plan assets 297,578 Unfunded actuarial accrued liability (UAAL) 164,342$ Funded ratio (actuarial value of plan assets/AAL) 64.4%Covered payroll (active plan members) 5,472,250$ UAAL as a percentage of covered payroll 3%

Actuarial valuations of an ongoing plan involve estimates of the value reported amounts and assumptions about the probability of occurrence of events far into the future. Actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information, presents multiyear trend information that shows whether the actuarial value of the plan assets is increasing or decreasing over time, relative to the actuarial liabilities for benefits.

Actuarial Methods and Assumptions

Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation as well as the historical pattern of sharing benefit costs between the employer and plan members. The actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and actuarial value of assets, consistent with the long-term perspective of the calculations. The unfunded actuarial accrued liability (UAAL) is being amortized as a level of percentage of payroll on a closed basis. The next actuarial valuation is scheduled to be performed in October 2011. The following is a summary of the actuarial assumptions and methods: Valuation Date July 1, 2008 Actuarial Cost Method Entry Age Normal Asset Valuation Method Market Value Actuarial Assumptions Investment Rate of Return 7.75% and 4.00% annual return net of both Administrative and investment related expenses Inflation Rate 4.50% annual increase in employer contribution To CalPERS for retiree medical premium Payroll Growth 3.25% Amortization Method Level Percent of Payroll Amortization Period 30 years, open

10. Deferred Compensation

Employee Contribution Deferred Compensation Plan

The District offers to its employees an optional deferred compensation plan created in accordance with Section 457(b) of the Internal Revenue Code. This plan is available to substantially all District

49

VENTURA REGIONAL SANITATION DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS (continued) June 30, 2011 employees and allows a portion of an employee’s compensation deferred to provide funds upon retirement, termination, unforeseeable emergencies, reaching age 70 and a half, or upon death. The annual plan contribution limit for 2011 and 2010 was $16,500 and will be $17,000 in 2012. The plan is administered through a third-party administrator. The District does not perform investing function, and has no fiduciary accountability for the plan. Thus, the plans assets and any related liability to plan participants have been excluded from the accompanying basic financial statements.

Social Security

Employees of the District are also covered by the Federal Insurance Contribution Act (FICA), which is commonly known as Social Security. Contributions for Social Security are 6.2% of covered wages up to $106,800 per employee and are paid by the District. The District also pays contributions for Medicare of 1.45% of covered wages. Contributions made by the District for Social Security and Medicare for 2011 and 2010 were $374,973 and $443,924, respectively.

C. OTHER INFORMATION

1. Risk Management

The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The District is a member of the California Sanitation Risk Management Authority (CSRMA), an intergovernmental risk sharing joint powers authority currently operating as a common risk management and loss prevention program for more than 50 California sanitation districts. The District pays an annual premium to CSRMA for its public liability and workers compensation risk coverage. The Agreement for formation of CSRMA provides that will be self-sustaining through member premiums and will provide specific excess insurance through commercial companies. CSRMA is allowed to make additional assessments to its members based on a retroactive premium adjustment process. At June 30, 2011, the District participated in the CSRMA risk sharing pool as follows:

• The District’s General Liability, Auto Liability, Errors & Omissions, and Employment Practices Liability coverage are provided through CSRMA’s Pooled Liability Program.

• The Pooled layer limit is $500,000; and the Excess (Reinsurance) Liability coverage is in the amount of $15,000,000 with additional excess liability coverage of $10,000,000, bringing total coverage limits to $25,500,000.

Program deductibles include:

• $25,000 per occurrence for bodily injury, property damage and personal injury. • $2,500 per occurrence for public entity errors & omissions. • $25,000 per occurrence for employment related practices. • $2,500 per occurrence for automobile medical payments. • $250,000 per occurrence for dam failure.

In addition to the above, the District also has the following insurance coverage:

• Special form property coverage up to $1,647,446 with a deductible of $1,000 per claim. • Mobile equipment coverage with an aggregate limit of $3,075,979 subject to a deductible of

$2,500 per claim. • Computer equipment coverage with an aggregate limit of $202,400 subject to a deductible of

$500 per claim ($1,000 per mechanical breakdown).

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• Blanket building and content coverage of $1,647,446 (building) and $196,200 (contents), subject to a deductible of $1,000 per claim.

• Vehicle coverage (actual cash value) - $500 to $1,000 deductible. • Public employee blanket bond (theft $1,000,000, computer fraud $1,000,000), subject to a

$10,000 deductible. • Biosolids facility with an aggregate limit of $12,637,076 subject to a deductible of $25,000 per

claim. • Malibu Bay Club System with an aggregate limit of $3,067,584 subject to a deductible of $25,000

per claim.

Settled claims have not exceeded any of the coverage amounts in any of the last three fiscal years and there were no reductions in the District's insurance coverage during the years ending June 30, 2010 and 2009. However, CSRMA did reduce its pooled layer limit from $750,000 to $500,000 in 2011. Liabilities are recorded when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated net of the respective insurance coverage. Liabilities include an amount for claims that have been incurred but not reported (IBNR). There were no IBNR claims payable as of June 30, 2011 and 2010.

2. Commitments and Contingencies

The District's contractual commitments with outside firms for engineering, consulting, and various other services end with the fiscal year and generally do not carry forward to the next fiscal year. The District leases its administrative office under an operating lease that expires in 2012. Rent expense for the years ended June 30, 2011 and 2010 was approximately $256,150 and $248,634, respectively. Future minimum lease payments required under the lease are: Fiscal Year Ended

June 30,Annual Required

Contribution

2012 220,344 220,344$

In addition, the District is involved in litigation encountered in the normal course of business. In certain of these matters, the defense costs and settlement costs, if any, are covered by the District's liability insurance policies. In the opinion of management, there is no pending litigation that would materially affect the District's liability insurance policies or financial position.

3. Subsequent Events

In response to the continued financial challenges posed by declining revenue growth, low public tolerance for rate increases and continued cost increases of doing business, the District Board approved the following:

• Reduction of five management/administrative positions, downgrading one management position to a management analyst position and outsourcing the Information Technology effective July 1, 2011.

• District employees paying employee’s VCERA retirement contribution in phases. Effective January 1, 2012, employees will pay two percent of the employee contribution; effective June 30, 2012 an additional two percent; and effective January 1, 2013, employees will pay an additional

51


one percent of the employee retirement contribution to VCERA. These retirement contributions will be pre-tax payroll deductions.

• Employees hired after July 1, 2011, are no longer eligible to participate in the supplemental retirement plan offered through the Public Agency Retirement Services (PARS). Effective January 1, 2013, all current employees will be required to contribute one percent toward the plan. These retirement contributions will be pre-tax payroll deductions.

• The District’s contracted direct haul fee per ton rate was reduced from $38.94 down to $34.00 effective June 1, 2011. This change impacted two clients of the District. This rate reduction was approved by the District Board in September 2011. This is in response to the District being more competitive and desiring to increase the tonnage hauled at the Toland Road Landfill.

D. GOVERNMENTAL ACCOUNTING STANDARDS BOARD STATEMENTS, NOT YET EFFECTIVE

The Governmental Accounting Standards Board (GASB) has issued several pronouncements prior to June 30, 2011, that have effective dates that may impact future presentations.

GASB Statement 60, Accounting and Financial Reporting for Service Concession Arrangements, effective for financial statements for periods beginning after December 15, 2011, to improve financial reporting by establishing recognition, measurement, and disclosure requirements for service concession arrangements (SCAs) for both transferors and governmental operators requiring governments to account for and report SCAs in the same manner, which improves the comparability of the financial statements. The District intends to implement the new requirements for the fiscal year 2011-12 financial statements to the extent that they are applicable to the District. GASB Statement 61, The Financial Reporting Entity: Omnibus-an amendment of GASB Statements No. 14 and No. 34, effective for financial statements for periods beginning after June 15, 2012, the requirements of this Statement result in financial reporting entity financial statements being more relevant by improving guidance for including, presenting, and disclosing information about component units and equity interest transaction of a financial reporting entity. The District intends to implement the new requirements for the fiscal year 2011-12 financial statements to the extent that they are applicable to the District. GASB Statement 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, effective for financial statement for periods beginning after December 15, 2011, to improve financial reporting by contributing to the GASB’s effort to codify all sources of generally accepted accounting principles for state and local governments so that they derive from a single source. The District intends to implement the new requirements for the fiscal year 2011-12 financial statements to the extent that they are applicable to the District.

GASB Statement 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, effective for financial statement for periods beginning after December 15, 2011, to improve reporting by standardizing the presentation of deferred outflows of resources and deferred inflows of resources and their effects on a government’s net position. The District intends to implement the new requirements for the fiscal year 2011-12 financial statements to the extent that they are applicable to the District.

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GASB Statement 64, Derivative Instruments: Application of Hedge Accounting Termination Provisions-an amendment of GASB Statement No. 53, effective for financial statement for periods beginning after June 15, 2011, to enhance comparability and improve financial reporting by clarifying the circumstances in which hedge accounting should continue when a swap counterparty, or a swap counterparty’s credit support provider, is replaced. The District intends to implement the new requirements for the fiscal year 2011-12 financial statements to the extent that they are applicable to the District.

Required

Supplementary Inform

ation

Required SupplementaryInformation



REQUIRED SUPPLEMENTARY INFORMATION

SCHEDULES OF FUNDING PROGRESS

53

VENTURA REGIONAL SANITATION DISTRICT SCHEDULES OF FUNDING PROGRESS FISCAL YEAR ENDED JUNE 30, 2011

Actuarial Valuation

Actuarial Valuation of

Assets

Actuarial Accrued Liability

(AAL)Unfunded AAL

(UAAL)Funded Ratio

Covered Payroll

UAAL as a Percentage of

Covered PayrollDate (a) (b) (b-a) (a / b) (c) ((b - a) / c)

7/1/2005 208,415$ 1,391,756$ 1,183,341$ 15.0% 3,932,867$ 30.1%7/1/2007 968,812$ 3,547,122$ 2,578,310$ 27.3% 4,779,814$ 53.9%7/1/2009 1,571,809$ 4,636,415$ 3,064,606$ 33.9% 5,195,165$ 59.0%

Public Agency Retirement System (PARS) - Retirement Enhancement Plan (Group 1 & Group 2)

Valuation Normal Accrued Actuarial Value Unfunded AAL Funded Annual Covered UAAL as a % ofDate Liability of Assets (UAAL) Ratio Payroll Covered Payroll

7/1/2008 461,920$ 297,578$ (164,342)$ 64.42% 5,472,250$ 3.00%N/A N/A N/A N/A N/A N/A N/AN/A N/A N/A N/A N/A N/A N/A

Other Post Employment Benefits

The District has only performed one actuarial valuation dated July 1, 2008. The next actuarial valuations are expected to be completed in October 2011 and October 2014, and therefore there is no other data available for any other dates.

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Supplementary Section

Supplementary Section



TYPES OF OPERATIONS Water and Wastewater The District is responsible for management, operation and maintenance of water and wastewater facilities and equipment throughout Ventura County. Included are facilities owned by the Triunfo Sanitation, Saticoy Sanitary and Camarillo Sanitary Districts; Cities of Fillmore, Oxnard, Thousand Oaks and Ventura; County of Ventura; California State University at Channel Islands; and several small water agencies. In total, the District operates and maintains three potable water systems and one recycled water system.

Solid Waste The District manages six municipal waste landfills, only one of which is active. The Toland Road landfill is located in a confined, V-shaped canyon four miles east of Santa Paula and four miles west of Fillmore. The 161-acre site has been operated as a landfill since 1970. Biosolids/Microturbine Electrical Generation The District’s Biosolids facility converts Biosolids from local wastewater treatment facilities into EPA Class A recyclable material, using landfill gas to heat two 80-ton-per-day batch dryers. The end product is applied as alternative daily cover for refuse deposited at the landfill. The nine low emission microturbines uses compressed landfill gas to generate 2.32 megawatts of electricity. Roughly one-third is used to power the Biosolids facility and the remainder is delivered to the local power grid. Administration The Finance and Administration Department manages three public agency’s finance and accounting functions through contracted services. The District provides finance and accounting functions to Saticoy Sanitary District (SSD), Triunfo Sanitation District (TSD) and Ventura County Regional Energy Alliance (VCREA).

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VENTURA REGIONAL SANITATION DISTRICT SCHEDULE OF NET ASSETS JUNE 30, 2011

Water and Wastewater Solid Waste Biosolids Administration Total

Current assets:Cash and cash equivalents (5,557,091)$ 18,459,396$ (8,019,961)$ (1,836,933)$ 3,045,411$ Accrued interest receivable - 61,177 - 14,205 75,382 Accounts receivable – disposal and sanitation fees, net - 957,840 365,902 - 1,323,742 Accounts receivable – contract services, net 982,602 - - 84,337 1,066,939 Prepaid and other 15,484 44,603 28,207 43,425 131,719

Total current assets – unrestricted (4,559,005) 19,523,016 (7,625,852) (1,694,966) 5,643,193

Restricted current assets:Cash and cash equivalents - 63,528 - - 63,528 Notes receivable 100,567 - - - 100,567 Accrued interest receivable - 24,285 - - 24,285

Total current assets – restricted 100,567 87,813 - - 188,380

Total current assets – unrestricted and restricted (4,458,438) 19,610,829 (7,625,852) (1,694,966) 5,831,573

Restricted non-current assets:Investments - 31,244,651 - - 31,244,651 Notes receivable 2,203,631 - - - 2,203,631 Net OPEB asset 194,545 166,162 - 222,045 582,752

Total non-current assets – restricted 2,398,176 31,410,813 - 222,045 34,031,034

Non-current assets:Investments - held-to-maturity - - - 3,556,854 3,556,854 Capital assets, net 4,115,186 33,055,226 20,748,995 475,747 58,395,154 Deferred charges, net - 49,167 - - 49,167

Total non-current assets – unrestricted 4,115,186 33,104,393 20,748,995 4,032,601 62,001,175

Total non-current assets – unrestricted and restricted 6,513,362 64,515,206 20,748,995 4,254,646 96,032,209

Total assets 2,054,924$ 84,126,035$ 13,123,143$ 2,559,680$ 101,863,782$

Assets

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VENTURA REGIONAL SANITATION DISTRICT SCHEDULE OF NET ASSETS (CONTINUED) JUNE 30, 2011


Current liabilities:Payable from current assets:

Accounts payable and accrued expenses 34,813$ 772,040$ 54,879$ 269,668$ 1,131,400$ Accrued wages and compensated absences 15,042 69,548 21,924 541,033 647,547

Payable from current assets – unrestricted 49,855 841,588 76,803 810,701 1,778,947

Payable from restricted current assets:Customer deposits - 42,524 - - 42,524 Landfill closure/postclosure costs – expected within one year - 2,620,759 - - 2,620,759 Accrued interest payable - purchase and sales agreements 26,330 21,150 54,249 - 101,729 Installment purchase contract – current portion 98,138 - - - 98,138 Installment sale agreement – current portion - 659,650 865,313 - 1,524,963

Payable from current assets – restricted 124,468 3,344,083 919,562 - 4,388,113

Total current liabilities – unrestricted and restricted 174,323 4,185,671 996,365 810,701 6,167,060

Payable from restricted non-current assets Tierra Rejada consortium reserve - 408,338 - - 408,338 Landfill closure/postclosure costs - 23,586,831 - - 23,586,831 Installment purchase contract 2,196,895 - - - 2,196,895 Installment sale agreement - 9,582,843 13,002,793 - 22,585,636

Payable from non-current assets – restricted 2,196,895 33,578,012 13,002,793 - 48,777,700

Total liabilities 2,371,218 37,763,683 13,999,158 810,701 54,944,760

Net assets:Net investment in capital assets 1,820,153 22,812,733 6,880,889 475,747 31,989,522 Restricted - Debt Service 2,304,198 - - - 2,304,198 Restricted - Landfill Closure/Post-closure costs - 4,674,012 - - 4,674,012 Restricted - Retirement Trust 194,545 166,162 - 222,045 582,752 Unrestricted (4,635,190) 18,709,445 (7,756,904) 1,051,187 7,368,538

Total net assets (316,294)$ 46,362,352$ (876,015)$ 1,748,979$ 46,919,022$

Liabilities

Net Assets

57

VENTURA REGIONAL SANITATION DISTRICT SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS FISCAL YEAR ENDED JUNE 30, 2011


Operating revenues:Disposal and sanitation fees -$ 9,355,858$ -$ -$ 9,355,858$ Contract services 4,357,280 - 2,783,648 621,572 7,762,500 Utility electricity sales - - 786,162 - 786,162 Other revenue 148,968 263,491 22,019 5,048 439,526

Total operating revenues 4,506,248 9,619,349 3,591,829 626,620 18,344,046

Operating expenses:Salaries and benefits 2,833,018 2,414,518 230,235 2,228,464 7,706,235 Management and administrative 30,772 72,669 50,390 225,849 379,680 Operating materials and supplies 538,201 688,591 295,194 39,343 1,561,329 Contract services – labor 31,987 177,445 351 24,650 234,433 Contract services – materials and supplies 178,651 254,102 863,368 356 1,296,477 Professional services 445,160 379,427 310,425 319,877 1,454,889 Facility maintenance 277,532 638,468 205,476 300,772 1,422,248 Provision for landfill closure/postclosure - 1,100,128 - - 1,100,128 Permits, licences and fees 32,714 761,937 132,457 21,628 948,736

Total operating expenses 4,368,035 6,487,285 2,087,896 3,160,939 16,104,155

Operating income (loss) before depreciation 138,213 3,132,064 1,503,933 (2,534,319) 2,239,891

Depreciation (248,263) (2,027,156) (1,413,655) (82,476) (3,771,550)

Operating income (loss) (110,050) 1,104,908 90,278 (2,616,795) (1,531,659)

Non-operating revenues(expenses):Interest and investment earnings 2,443 553,317 3,561 5,066 564,387 Loss on sales and/or disposals of capital assets, net (1,061) (3,121) - (279) (4,461) Interest expense (112,307) (362,723) (642,235) - (1,117,265) Other, net 111,794 38 65 10 111,907 Transfers in 44,358 569,438 - 2,400,000 3,013,796 Transfers out (884,358) (2,009,438) (120,000) - (3,013,796)

Total non-operating revenues (expenses), net (839,131) (1,252,489) (758,609) 2,404,797 (445,432)

Change in net assets (949,181) (147,581) (668,331) (211,998) (1,977,091)

Net assets, beginning of year 632,887 46,509,933 (207,684) 1,960,977 48,896,113

Net assets, end of year (316,294)$ 46,362,352$ (876,015)$ 1,748,979$ 46,919,022$

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VENTURA REGIONAL SANITATION DISTRICT SCHEDULE OF CASH FLOWS FISCAL YEAR ENDED JUNE 30, 2011


Cash flows from operating activities:Receipts from customers for disposal and sanitation services -$ 9,074,136$ (166,726)$ -$ 8,907,410$ Receipts from customers for contract services 4,526,546 87,467 2,783,648 689,510 8,087,171 Receipts from customers for utility electricity sales - - 786,162 - 786,162 Receipts for other services 260,944 264,170 22,127 5,061 552,302 Payments to vendors for materials and services (1,634,625) (3,237,047) (1,897,193) (788,712) (7,557,577) Payments for salaries, benefits and contract labor (2,864,110) (2,572,099) (211,980) (2,374,600) (8,022,789)

Net cash provided by (used for) operating activities 288,755 3,616,627 1,316,038 (2,468,741) 2,752,679

Cash flows from non-capital financing activities:Transfers in (out) (840,000) (1,440,000) (120,000) 2,400,000 -

Net cash provided by (used for) non-capital financing activities (840,000) (1,440,000) (120,000) 2,400,000 -

Cash flows from capital and related financing activities:Proceeds from capital debt - 5,000,000 - - 5,000,000 Acquisition costs from capital debt - (50,000) - - (50,000) Acquisition and construction of capital assets (50,629) (4,686,776) (28,622) 30,797 (4,735,230) Principal received on notes receivable (28,551) - - - (28,551) Proceeds from the sale of capital assets 1,605 95,112 - (279) 96,438 Principal paid on capital debt (93,592) (513,259) (827,995) - (1,434,846) Interest paid on capital debt (113,544) (359,762) (646,197) - (1,119,503)

Net cash provided by (used for) capital and related financing activities (284,711) (514,685) (1,502,814) 30,518 (2,271,692)

Cash flows from investing activities:Interest on cash and cash equivalents 149 4,519 217 309 5,194 Interest and dividends from investments 2,294 653,707 3,344 28,368 687,713 Proceeds from sales and maturities of investments - 25,160,788 - 5,818,899 30,979,687 Purchases of investments - (25,676,725) - (4,470,985) (30,147,710)

Net cash provided by investing activities 2,443 142,289 3,561 1,376,591 1,524,884

Net increase (decrease) in cash and cash equivalents (833,513) 1,804,231 (303,215) 1,338,368 2,005,871

Cash and cash equivalents (unrestricted and restricted), beginning of year (4,723,578) 16,718,693 (7,716,746) (3,175,301) 1,103,068

Cash and cash equivalents (unrestricted and restricted), end of year (5,557,091)$ 18,522,924$ (8,019,961)$ (1,836,933)$ 3,108,939$

Reconciliation of cash and cash equivalents to statement of net assets:

Cash and cash equivalents (5,557,091)$ 18,459,396$ (8,019,961)$ (1,836,933)$ 3,045,411$ Restricted cash and cash equivalents - 63,528 - - 63,528

Total cash and cash equivalents (5,557,091)$ 18,522,924$ (8,019,961)$ (1,836,933)$ 3,108,939$

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VENTURA REGIONAL SANITATION DISTRICT SCHEDULE OF CASH FLOWS (CONTINUED) FISCAL YEAR ENDED JUNE 30, 2011


Reconciliation of operating income(loss) to net cash provided by (used for) operating activities:

Operating income(loss) (110,050)$ 1,104,908$ 90,278$ (2,616,795)$ (1,531,659)$

Adjustments to reconcile operating income(loss) to net cash provided by(used for) operating activities:

Deprecation and amortization 248,263 2,027,156 1,413,655 82,476 3,771,550 Other non-operating revenues and expenses, net 111,794 38 65 10 111,907

Changes in assets and liabilities:(Increase)decrease in assets:

Accounts receivable – disposal and sanitation fees, net - (281,222) (166,726) - (447,948) Accounts receivable – contract services, net 169,266 87,467 - 67,938 324,671 Accounts receivable – other, net 182 641 43 3 869 Net OPEB asset - - - (53,619) (53,619) Prepaid and other (12,604) (34,487) (10,631) 87,710 29,988

Increase (decrease) in liabilities: - Accounts payable and accrued expenses (118,991) 62,063 (29,252) 31,403 (54,777) Accrued wages and compensated absences 895 19,864 18,606 (67,867) (28,502) Customer deposits - (500) - - (500) Tierra Rejada consortium reserve - (46,294) - - (46,294) Landfill closure/postclosure costs - 676,993 - - 676,993

Total adjustments 398,805 2,511,719 1,225,760 148,054 4,284,338

Net cash provided by (used for) operating activities 288,755$ 3,616,627$ 1,316,038$ (2,468,741)$ 2,752,679$

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Statistical Section

Statistical Section



Ventura Regional Sanitation District Statistical Section This part of the District’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the District’s overall financial health.

Table of Contents

Page Financial Trends 62 These schedules contain trend information to help the reader understand how the District’s financial performance and well-being have changed over time. Revenue Capacity 66 These schedules contain information to help the reader assess the District’s most significant own-source revenues, wastewater service and potable water sales. Debt Capacity These schedules help the reader assess the affordability of the District’s 69 current levels of outstanding debt and the District’s ability to issue additional debt in the future. Demographic Information 71 These schedules offer demographic indicators to help the reader understand the environment within which the District’s financial activities take place. Operating Information 75 This schedule contains service and infrastructure data to help the reader understand how the information in the District’s financial report relates to the service the District provides.

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Ventura Regional Sanitation District Changes in Net Assets and Net Assets by Component Last Ten Fiscal Years

2002 2003 2004 2005

Changes in net assets:Operating revenues (see Schedule 2) $ 11,317,861 12,488,133 12,583,652 13,353,913 Operating expenses (see Schedule 3) (10,103,078) (11,748,144) (11,650,462) (12,533,252)Overhead absorption - - 196,243 156,858 Depreciation and amortization (1,242,275) (1,216,291) (1,229,131) (1,993,068)

Operating income(loss) (27,492) (476,302) (99,698) (1,015,549)

Non-operating revenues(expenses)Interest income 2,141,548 1,761,281 228,621 741,588 Property taxes - - - - Gain/(loss) on sale of assets 16,185 (465,021) (128,267) 31,544 Interest expense (38,053) (14,434) (2,429) - Other revenue/(expense), net 490,690 243,507 161,089 176,272

Total non-operating revenues(expenses), net 2,610,370 1,525,333 259,014 949,404

Net income before capital contributions 2,582,878 1,049,031 159,316 (66,145)

Capital contributions - 2,500 - 632,738

Changes in net assets $ 2,582,878 1,051,531 159,316 566,593

Net assets by component:Invested in capital assets, net of related debt $ 21,450,738 20,581,350 24,273,351 25,271,013 Restricted 5,301,160 810,339 862,014 1,373,240 Unrestricted 11,593,465 16,710,821 13,126,461 12,184,166

Total net assets $ 38,345,363 38,102,510 38,261,826 (1) 38,828,419

Notes:(1) The District made an adjustment to reflect a change in accounting method of $1,294,384.

Source: Ventura Regional Sanitation District Finance Department

Fiscal Year

-$2,000,000

-$1,000,000

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Fiscal Year

Cha

nge

in N

et A

sset

s

62

Ventura Regional Sanitation District Changes in Net Assets and Net Assets by Component (Continued) Last Ten Fiscal Years

63

2006 2007 2008 2009 2010 2011

14,685,544 14,898,038 15,278,206 15,373,416 17,633,198 18,344,046 (12,943,571) (10,522,327) (14,247,159) (14,916,090) (16,077,364) (16,104,155)

449,263 - - - - - (1,571,548) (1,530,790) (2,092,335) (2,287,277) (2,213,614) (3,771,550)

619,688 2,844,921 (1,061,288) (1,829,951) (657,780) (1,531,659)

935,270 2,171,431 2,686,225 2,143,110 1,145,112 564,387 - - - - - -

(152,453) 26,600 43,496 5,047 (565,110) (4,461) - (182,033) (617,606) (758,663) (1,065,108) (1,117,265)

231,879 465,518 284,696 260,913 117,434 111,907

1,014,696 2,481,516 2,396,811 1,650,407 (367,672) (445,432)

1,634,384 5,326,437 1,335,523 (179,544) (1,025,452) (1,977,091)

4,576,706 - - 34,024 - -

6,211,090 5,326,437 1,335,523 (145,520) (1,025,452) (1,977,091)

27,772,725 29,029,582 31,614,983 34,123,145 34,691,895 31,989,522 1,563,693 5,464,948 7,280,008 8,642,226 4,250,295 6,978,210

14,068,707 14,237,032 11,172,094 7,156,194 9,953,923 7,951,290

43,405,125 48,731,562 50,067,085 49,921,565 48,896,113 46,919,022

Fiscal Year

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Fiscal Year

Net

Ass

ets

Ventura Regional Sanitation District Operating Revenue by Source Last Ten Fiscal Years

Fiscal Disposal and Contract Other Charges Total OperatingYear Sanitation Fees Services and Services Revenue

2002 7,158,518 3,866,242 293,101 11,317,861 2003 6,938,753 5,105,580 443,800 12,488,133 2004 7,758,098 4,299,663 525,892 12,583,653 2005 8,270,377 4,761,318 322,218 13,353,913 2006 9,233,065 5,110,575 341,904 14,685,544 2007 9,212,400 5,509,207 176,431 14,898,038 2008 9,259,545 5,836,937 181,724 15,278,206 2009 9,607,937 5,546,327 219,152 15,373,416 2010 9,966,760 7,012,791 653,647 17,633,198 2011 9,355,858 7,762,500 1,225,688 18,344,046


$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

$18,000,000

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Fiscal Year

Rev

enue

64

Ventura Regional Sanitation District Operating Expense by Activity Last Ten Fiscal Years

Management Operating Provision for Permits,Fiscal Salaries and and Materials and Contracted Professional Facility Landfill Closure Licenses and Total OperatingYear Benefits Administrative Supplies Services Services Maintenance and Postclosure Fees Expenses

2002 5,556,529 407,813 1,093,829 619,124 815,251 1,251,048 (636,547) 996,031 10,103,078 2003 5,954,195 456,221 1,196,444 422,913 1,277,345 1,090,786 356,236 994,004 11,748,144 2004 5,558,291 675,159 1,031,139 1,780,458 506,662 750,122 447,845 900,786 11,650,462 2005 5,968,799 602,946 1,039,014 2,173,705 513,449 693,518 474,253 1,067,568 12,533,252 2006 6,436,860 579,581 1,176,256 1,844,454 497,123 818,951 479,774 1,110,572 12,943,571 2007 6,747,170 532,280 1,216,581 1,909,543 710,491 976,682 (2,581,131) 1,010,711 10,522,327 2008 7,368,788 240,714 1,536,603 2,251,579 246,898 940,267 563,226 1,099,084 14,247,159 2009 7,703,135 590,037 1,585,282 2,258,401 66,708 822,050 785,776 1,104,701 14,916,090 2010 8,149,361 437,040 1,449,145 1,893,266 1,281,810 1,038,288 845,629 982,825 16,077,364 2011 7,706,235 379,680 1,561,329 1,530,910 1,454,889 1,422,248 1,100,128 948,736 16,104,155

($5,000,000)

($2,500,000)

$0

$2,500,000

$5,000,000

$7,500,000

$10,000,000

$12,500,000

$15,000,000

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Fiscal Year

Exp

ense

s


65

Ventura Regional Sanitation District Revenue Base Last Ten Fiscal Years

Solid Waste Biosolids

Fiscal Received ReceivedYear (tons) (tons)

2002 323,943 -2003 346,061 -2004 371,695 -2005 395,210 -2006 392,487 -2007 365,238 -2008 360,779 -2009 366,920 -2010 291,572 48,095 2011 295,821 52,373

0

100,000

200,000

300,000

400,000

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Fiscal Year

Ton

s

Note: See Schedule 2 "Operating Revenue by Source" for information regarding sanitation revenues.

Sources: Ventura Regional Sanitation District Finance Department

66

Ventura Regional Sanitation District Revenue Rates(1) Last Ten Fiscal Years

Tipping Fees(2) 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Refuse 24.06 25.31 25.31 25.31 27.45 30.22 30.22 33.63 39.60 39.60Residual Refuse 19.06 20.31 20.31 20.31 21.79 24.16 24.16 26.89 34.54 34.54Hard-to-handle 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 110.00 110.00

Notes:(1) Rates as of June 30 of each fiscal year.(2) Rates are per ton

Source: Ventura Regional Sanitation District Board of Directors approved rate ordinances and resolutions

67

Ventura Regional Sanitation District Principal Customers Current Fiscal Year and Ten Years Ago

Tons Percentage Tons PercentageCustomer Processed of Total Processed of Total

Gold Coast Recycling 217,824 62.6% 238,608 73.0%City of Oxnard/DelNorte Reg. Recycling 43,312 12.4% 47,361 14.5%Oxnard Wastewater Treatment Plant 26,537 7.6% - N/AE.J. Harrison & Sons 16,334 4.7% 19,556 6.0%City of Ventura Wastewater Treatment Plant 13,015 3.7% - N/AHill Canyon Wastewater Treatment Plant 8,080 2.3% - N/ACity of Santa Paula 7,921 2.3% 11,212 3.4%Santa Clara Waste 3,771 1.1% - N/APerc Water Corporation 2,891 0.8% - N/AConsolidated Disposal Services 1,932 0.6% - N/ACity of Fillmore Wastewater Treatment Plant 1,735 0.5% - N/AJTZ Inc. DBA Zaccaro Roll-off 1,152 0.3% 823 0.3%Crown Disposal Company, Inc. 706 0.2% - N/AOther Customers 2,984 0.9% 9,366 2.9%

Total Tons Processed 348,194 100.0% 326,926 100.0%

20012011

Source: Ventura Regional Sanitation District

68

Ventura Regional Sanitation District Ratio of Outstanding Debt

Fiscal Year 2011

As a Share

Per of PersonalFiscal Year Amount Capita Income

2007 9,499,442 14.29 0.032%2008 15,886,465 23.74 0.053%2009 24,097,419 35.80 0.081%2010 22,840,478 33.58 - 2011 26,405,632 39.49 -

Total

Note: No historical data available as 2007 was the first year the District entered into any installment agreements.Personal income data not available for 2010 and 2011.

Sources: Ventura Regional Sanitation District Finance DepartmentVentura County Statistical Abstract 2011-12

69

Ventura Regional Sanitation District Pledged-Revenue Coverage

Installment Agreements Fiscal Year 2007-2011

Wastewater Solid Waste Total Wastewater Solid Waste Total Wastewater Solid Waste TotalRevenue sources

Operating revenues 5,122,240$ 9,608,554$ 14,730,794$ 5,790,331$ 9,478,381$ 15,268,712$ 5,440,625$ 9,926,943$ 15,367,568$ Non-operating revenues 248,007 5,597,163 5,845,170 148,320 1,942,568 2,090,888 312,416 1,970,008 2,282,424

Total revenue sources 5,370,247 15,205,717 20,575,964 5,938,651 11,420,949 17,359,600 5,753,041 11,896,951 17,649,992

ExpensesOperating expenses 4,629,434 4,342,075 8,971,509 5,739,809 7,969,878 13,709,687 5,107,328 8,742,048 13,849,376 Non-operating expenses 648,617 3,094,848 3,743,465 757,048 1,405,946 2,162,994 1,072,651 1,537,534 2,610,185

Total expenses 5,278,051 7,436,923 12,714,974 6,496,857 9,375,824 15,872,681 6,179,979 10,279,582 16,459,561

Change in net assets 92,196 7,768,794 7,860,990 (558,206) 2,045,125 1,486,919 (426,938) 1,617,369 1,190,431

Net assets, beginning of year 2,025,919 34,475,013 36,500,932 2,118,115 42,243,807 44,361,922 1,559,909 44,288,932 45,848,841

Net assets, end of year 2,118,115$ 42,243,807$ 44,361,922$ 1,559,909$ 44,288,932$ 45,848,841$ 1,132,971$ 45,906,301$ 47,039,272$

Installment paymentsPrincipal - 166,158 166,158 269,413 343,564 612,977 429,917 359,129 789,046 Interest - 156,800 156,800 281,350 302,351 583,701 420,947 286,786 707,733

Total installment payments - 322,958 322,958 550,763 645,915 1,196,678 850,864 645,915 1,496,779

Coverage - 24.1 24.3 (1.0) 3.2 1.2 (0.5) 2.5 0.8

Wastewater Solid Waste Biosolids Total Wastewater Solid Waste Biosolids TotalRevenue sources

Operating revenues 5,068,568$ 10,831,600$ 1,102,580$ 17,002,748$ 4,506,248$ 9,619,349$ 3,591,829$ 17,717,426$ Non-operating revenues 115,938 933,690 - 1,049,628 158,595 1,122,793 3,626 1,285,014

Total revenue sources 5,184,506 11,765,290 1,102,580 18,052,376 4,664,843 10,742,142 3,595,455 19,002,440

ExpensesOperating expenses 4,642,784 9,252,343 853,648 14,748,775 4,616,298 8,514,441 3,501,551 16,632,290 Non-operating expenses 1,041,806 1,909,315 456,616 3,407,737 997,726 2,375,282 762,235 4,135,243

Total expenses 5,684,590 11,161,658 1,310,264 18,156,512 5,614,024 10,889,723 4,263,786 20,767,533

Change in net assets (500,084) 603,632 (207,684) (104,136) (949,181) (147,581) (668,331) (1,765,093)

Net assets, beginning of year 1,132,971 45,906,301 - 47,039,272 632,887 46,509,933 (207,684) 46,935,136

Net assets, end of year 632,887$ 46,509,933$ (207,684)$ 46,935,136$ (316,294)$ 46,362,352$ (876,015)$ 45,170,043$

Installment paymentsPrincipal 89,256 375,398 792,288 464,654 93,592 513,259 827,995 606,851 Interest 117,880 270,518 681,904 388,398 113,544 359,762 646,197 473,306

Total installment payments 207,136 645,916 1,474,192 853,052 207,136 873,021 1,474,192 1,080,157

Coverage (2.4) 0.9 (0.1) (0.1) (4.6) (0.2) (0.5) (1.6)

2010

2007 2008 2009

2011

Note: No historical data available as 2007 was the first year the District entered into any installment agreements.

Debt was incurred by the Wastewater segment during the fiscal year, but no principalor interest payments were made as of June 30, 2007.


70

Ventura Regional Sanitation District Demographic Statistics Last Ten Fiscal Years

71

Population Personalwithin Unemployment Personal Income

Year District Rate Population Income per Capita

2002 631,524 5.6% 773,539 27,345,403 35,351 2003 639,110 5.3% 780,089 29,068,396 37,263 2004 648,756 4.8% 791,310 31,334,269 39,598 2005 655,717 4.7% 796,106 33,151,233 41,642 2006 658,837 4.3% 817,346 35,706,411 43,686 2007 664,838 4.7% 825,512 37,308,816 45,195 2008 669,116 5.9% 831,587 37,458,000 45,044 2009 673,180 9.9% 836,080 36,863,041 44,090 2010 680,235 10.6% 844,713 - - 2011 668,647 10.3% 828,383 - -

County of Ventura

575,000

595,000

615,000

635,000

655,000

675,000

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Fiscal Year

Popu

latio

n

$25,000

$30,000

$35,000

$40,000

$45,000

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Fiscal Year

Dol

lars

700,000

740,000

780,000

820,000

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Fiscal Year

Popu

latio

n

Sources: Ventura County Statistical Abstract 2011-12, California EDD Labor Market Info June 2011and U.S. Bureau of Economic Analysis.

Note: Personal income and per capita data not available for 2010 and 2011.

Ventura Regional Sanitation District Principal Employers – County of Ventura Current Fiscal Year and Ten Years Ago

2011 2001

Number of Number ofEmployer Employees EmployeesUS Naval Base, Point Mugu 5,000 - 9,999 9,728 US Naval Base, Port Hueneme 5,000 - 9,999 3,785 Amgen 5,000 - 9,999 4,500 Anthem Blue Cross 1,000 - 4,999 3,685 Countrywide Home Loans Headquarters - 3,650 Verizon Communication - 1,736 Harbor Freight tools 1,000 - 4,999 1,600 Community Memorial Hospital 1,000 - 4,999 1,424 Los Robles Hospital & Medical Center 1,000 - 4,999 1,375 Ventura County Health Care Agency 1,000 - 4,999 1,290 St John's Regional Medical Center 1,000 - 4,999 1,000 Baxter Healthcare 1,000 - 4,999 - Boskovich Farms 1,000 - 4,999 604 Farmer's Insurance Group 1,000 - 4,999 - John R. Read III Law Offices 1,000 - 4,999 - JNB Industries 1,000 - 4,999 - Ventura County Sheriff's Dept & Jails 1,000 - 4,999 -

Total Employed in County 384,400 377,100

Sources: Ventura County Economy and Employment & California EDD Labor Market Info June 2011

72

Ventura Regional Sanitation District Building Permits – County of Ventura Last Ten Fiscal Years

Fiscal New Single Other Total TotalYear Family Residence Residential Residential Nonresidential All Building

2001 791,397 32,757 824,154 177,708 1,001,862 2002 621,741 32,739 654,480 143,980 798,460 2003 633,558 209,026 842,584 379,480 1,222,064 2004 544,152 89,463 633,615 188,814 822,429 2005 794,437 244,646 1,039,083 205,075 1,244,158 2006 454,260 202,459 656,719 148,594 805,313 2007 234,027 95,036 329,063 221,365 550,428 2008 103,629 223,330 326,959 168,981 495,940 2009 74,364 96,256 170,620 82,195 252,815 2010 69,738 111,044 180,782 93,470 274,252

($100,000)

$100,000

$300,000

$500,000

$700,000

$900,000

$1,100,000

$1,300,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Fiscal Year

Tho

usan

ds o

f Dol

lars

Source: Ventura County Statistical Abstract 2011-12

Note: No information avaliable for 2011 as of the date of this report.

73

Ventura Regional Sanitation District Housing Stock Estimates – County of Ventura Last Ten Fiscal Years

74

Single Family Single FamilyFiscal Residential Residential Multiple Mulitple Mobile TotalYear Detached Attached 2 to 4 Units 5 or More Units Homes All Housing

2001 162,835 27,365 16,440 35,769 12,175 254,584 2002 166,072 27,432 16,493 36,602 12,198 258,797 2003 168,682 27,434 16,520 37,033 12,231 261,900 2004 170,942 27,456 16,613 37,308 12,264 264,583 2005 172,281 27,667 16,682 38,433 12,300 267,363 2006 174,228 27,918 16,748 39,387 12,306 270,587 2007 175,906 28,088 16,963 40,933 12,334 274,224 2008 176,979 28,131 17,181 41,698 12,331 276,320 2009 177,354 28,156 17,433 42,603 12,349 277,895 2010 177,564 28,185 17,591 43,049 12,362 278,751

150,000

170,000

190,000

210,000

230,000

250,000

270,000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Year

Num

ber

of H

omes

Source: Ventura County Statistical Abstract 2011-12

Note: No information avaliable for 2011 as of the date of this report.

Ventura Regional Sanitation District Operating and Capacity Indicators Last Ten Fiscal Years

Fiscal Central Water & SolidYear Services Wastewater Waste Total

2002 18 30 28 762003 18 27 29 742004 16 24 29 692005 17 25 25 672006 17 26 24 672007 15 27 24 662008 17 28 25 702009 19 31 25 752010 17 30 22 692011 18 33 21 72

District Employees by Department

0

10

20

30

40

50

60

70

80

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Fiscal Year

Em

ploy

ees

Fiscal District Area Collection Treatment Average Dry Potable Water Recycled Water Landfill Daily LandfillYear (Square Miles) System (Miles) Capacity (MGD) Weather Flow (MGD) Capacity (MGM) Capacity (MGM) Acreage Capacity (tons)

2002 1,864 255 5.95 3.74 88.51 32.672003 1,864 149 5.95 3.74 70.32 27.572004 1,864 150 5.95 3.74 70.32 27.572005 1,864 150 5.95 3.74 70.32 27.57 161 1,5002006 1,864 150 5.95 3.74 70.32 27.57 161 1,5002007 1,864 150 5.95 3.74 70.32 27.57 161 1,5002008 1,864 150 5.95 3.74 70.32 27.57 161 1,5002009 1,864 150 5.95 3.63 70.32 27.57 161 1,5002010 1,864 150 5.95 3.63 70.32 27.57 161 1,5002011 1,864 150 5.95 3.63 70.32 27.57 161 1,500

MGD - Millions of Gallons per DayMGM - Millions of Gallons per Month

Other Operating and Capacity Indicators


75

Ventura Regional Sanitation District Operating and Capacity Indicators Capital Asset Statistics by Function

: No historical data available prior to 2007.

Function 2007 2008 2009 2010 2011

WastewaterVehicles 10 12 13 13 13Golf Cart - - 1 1 1 Mobilehome 1 1 1 - - Machinery & Equipment 14 16 17 17 17Cranes 1 1 1 1 1Heavy equipment 2 3 3 3 3Trailers - 5 14 15 15Furniture & Fixtures - - - 16 16Computer equipment 1 1 1 1 1Water tanks 1 - - - - Buildings 1 1 1 3 3Buildings (square footage) 3,000 3,000 3,000 5,880 5,880 Wastewater treatment system 1 1 1 1 1Valew vacuum system - - - 1 1

Solid WasteVehicles 8 8 8 8 8Machinery & Equipment 16 16 16 15 15Forklifts/Hydraulic lifts 1 2 2 2 2Heavy equipment 5 5 5 5 5Compactor - 1 1 1 1Water truck 1 1 1 1 1Bulldozers 6 5 5 5 5Computer equipment 4 6 6 6 6Fuel tanks - 1 1 1 1Solar system 1 1 1 1 1Buildings 3 3 3 3 3Buildings (square footage) 3,480 3,480 3,480 3,480 3,480 Landfills 4 4 4 4 4Biosolids facility - - - 1 1Microturbine generation station - - - 1 1Landfill gas treatment skid - - - 1 1Site security system - - - 1 1Leachate systems 2 2 2 2 2Gas monitoring wells - - - 5 5Water wells 4 4 4 4 4Water tanks 3 3 3 3 3Land (acreage) 652.17 652.17 652.17 652.17 652.17

Central AdministrationVehicles 1 1 1 1 1Machinery & Equipment 1 1 1 1 1Furniture & Fixtures 11 11 11 11 11Computer equipment 8 9 9 9 9

Note

76

Documents

COMPREHENSIVE ANNUAL FINANCIAL REPORTgfoa.net/cafr/COA2012/VenturaRegionalSanitationDistrict... · 2014. 5. 14. · insurance, and banking services. Major employers in the area include