Financials

Financial Transparency

The sections below provide a detailed look at M1W's financial strategies and award-winning financial reports. For a quick look at our financials, click here for our "Budget in Brief," a two-page budget summary. For the most current report for each area listed, use the "CY" links.
 

Annual Operating and ten-year Capital Budgets are adopted for each Fiscal Year (FY) from July 1st through June 30th. These budgets have won awards from the Governmental Finance Officers Association (GFOA) and California Society of Municipal Finance Officers (CSMFO).


The total budget (including Pure Water Monterey (PWM)) is $99 million, which is funded by service charges, grants, State loans, and contributions from other agencies, and consists of the following:

  • 39% - Wastewater Treatment
  • 5% -   Water Reclamation for Agriculture
  • 56% - Construction of PWM

The $45 million for wastewater and reclamation operations (excluding PWM) includes:

  • 32% - Staffing
  • 28% - Other Operational Costs
  • 33% - Capital / Maintenance Projects
  • 7% -   Debt Service

The Agency is projected to have $6 million of available reserves at the end of the fiscal year. The Agency conducts a fee study every three years to address its reserve levels and deferred maintenance and ensure its financial stability and stewardship.

The Capital Budget is designed to identify capital expenses for the next ten years and to plan appropriately for how to complete those projects within projected revenues.


The annual Capital Improvement Budget is $69 million and the ten-year plan totals $139 million (excluding $123 million of unfunded projects for future years) which consists of:

Project 10 Year Amounts
Pure Water Monterey $54 million
Grant Funded $10 million
Pump Stations $30 million
Plant Assets $29 million
Outfall / Other $12 million

When determining the priority of proposed projects, staff evaluate them for urgency, feasibility, and for enhancements towards the community, health, and safety.

The Agency develops a Comprehensive Annual Financial Report (CAFR) which has won awards from GFOA. The Popular Annual Financial Report (PAFR) is a summary of the CAFR.

Ten year financial trends in the CAFR include:

  • Residential monthly rates up $0.75 annually
  • Top 10 customers less than 7% of total revenue
  • Operational costs up 7% annually
  • Population up 37,000 (9%)
  • Per capita Income up $12,000 (24%)
  • Unemployment rate down to 5.2%
  • Average Daily Influent Flow down 13%

Project opportunities with M1W can be found here. When submitting bids or proposals:

  • Bid selection is based on the lowest responsive bidder (subject to verification of responsiveness). 
  • RFP selection is based on qualifications as established in the proposal.
  • Unless otherwise indicated, pre-proposal meetings are held at the Regional Treatment Plant, 14811 Del Monte Boulevard, Marina, at the date and time noted in the proposal for the project.
  • Bids are publicly opened via the electronic bid management systems
  • Bidders may attend bid openings at M1W Administrative Office, 5 Harris Court, Bldg. D, Monterey, at the date and time noted in the proposal for the project.
  • For additional information, contact the manager noted for the project.

M1W's bonds are rated A+ by Standard and Poors and its debt coverage ratio for 17-18 was 144% (125% is required/170% coverage is recommended per policy). Key disclosures are listed below:

Debt Summary Disclosure Report EMMA Disclosure
Debt Policies Credit Analysis Website Disclaimer


A summary of M1W's outstanding debt at June 30, 2018 totaling $75 million is below, with debt service for FY 2018-19 totaling $3.3 million and increasing to $7.5 million in FY 2019-20 as a result of the PWM loan.

2012 Pension Bonds
Matures 2026, interest rate 4.18%, annual debt service $0.8 million, balance $6.4 million

2013 Infrastructure Bonds
Matures 2026, interest rate 2.14%, annual debt service $1.1 million, balance $8.2 million

2003 USBR Reclamation Loan
Matures 2036, interest 0-7.6%, annual debt service $1.1 million, balance $12.1 million

2017 State SRF Loan for PWM
Matures 2049, interest rate 1%, annual debt service $4.2 million, balance $48.3 million

2016 Line of Credit for PWM
Matures 2019, interest rate variable, annual debt service, balance $0 million

Energy / Vehicle Leases
Matures 2022, interest rate 0-5%, annual debt service $0.1 million, balance $0.3 million

M1W establishes financial policies to provide a framework to prudently manage resources, ensure internal controls, and provide accountability to the public, all of which are contained here and summarized below:

CIP / Budget
The Board approves any budget changes > $75,000 or to increase a fund's budget

Debt Management
125% debt service coverage is required, 170% coverage is recommended per policy

Reserves
25% of annual operating and capital budgets is the current recommended level

Capital Assets
Assets > $5,000 with lives > one year are capitalized, with estimated lives of 15-75 years

Investments
M1W's highly rated investment pools offer same day liquidity and diversified portfolios

Purchasing
Goods and services > $75,000 and public projects > $35,000 require board approval

Surplus Property
Requirements vary depending on the type of property involved

Included in this section are the Agency's Investment Reports and its Investment Policy.

The report contains information on:

  • Cost / Market Values
  • Restricted / Unrestricted Amounts
  • Rate of Return on Investments
  • Distribution of Investments
  • Distribution of Investment Pools
  • Maturities / Cash Flow Trends
  • Review of Compliance with Policy
  • Trends in the National Economy
  • Ability to Meet Short-Term Obligations

Click on the links below for information on pensions and compensation:
CalPERs amortizes M1W's 3 @ 60 plan unfunded liability over 28 years

Pension Terms
List of commonly used terms in their actuarials (provided by CalPERS)
M1W's funding status for its 3 @ 60 plan is 76% and 96-98% for its other plans

Pension Liability Summary
Provides trends on contributions, funding, CalPERS rate of return and liabilities
Net UAL (Unfunded Actuarial Liability) $28 million, termination liability $93 million

CalPERS Valuation Reports
Search with our prior name (Monterey Regional Water Pollution Control Agency)
M1W Normal Cost Rate is 13% for the 3 @ 60 plan and 7-9% for its other plans
 
CalPERS YTD Performance and Investment Allocation
Included in Investment Committee's "Performance and Risk" monthly report
A 7.15% rate of return is assumed, with 6.2% projected for the next ten years.

PEPRA (California Public Employees' Pension Reform Act) - @ 62 plan
Describes how PEPRA changes retirement benefits for new members
Employee Rates are 8.2% for the 3 @ 60 plan, 6.5-7.2% for its other plans.

Agency Compensation
Select "Public Employer Types" then "Special Districts" then "Monterey One Water"
Estimated 18-19 CalPERS payments 18-19: $3 million, $1.4 million for 3 @ 60 plan UAL

Additional Information on the Pension Plans:

Item Amount
Liability Plan Volatility 3 @ 60 / Other Plans 16 / 0.4-0.6
Estimated UAL Payment FY 24-25 $2.3 million
Savings with 10 / 15 Year Payment Plans $6-11 million
Change in UAL with 1% Change in Rate $9-12 million
FY 20-21 Normal Cost 3 @ 60 / Other Plans 15.3% / 7.5-10.3%

These reports provide additional unaudited financial information to the Board and Public.  Additional information on the annual financial reports filed with the State Controller's Office can be found here.

The interim financials include:

  • Revenues - By Major Category
  • Expenses - By Department / Object
  • Capital Projects - Pure Water Monterey
  • Capital Projects - Grants / Third Parties
  • Capital Projects - Other Wastewater
  • Major Maintenance (O&M) Projects

The Capacity Fee Reports show how impact fees collected from new residential or business development partially fund debt service and eligible projects in accordance with State reporting requirements.

Administrative Offices


We're Here to Help

7:30 a.m. to 5:30 p.m. Monday through Thursday

7:30 a.m. to 5:00 p.m. Fridays

5 Harris Court, Bldg D
Monterey, CA 93940

(831) 372-3367
or (831) 422-1001

or email our Finance Department:
Accounts Payable
Customer Service
Finance

Use this link for additional notes on viewing bookmarks used for navigating PDF files contained in this section. For a free PDF reader, visit Adobe Acrobat here.