ML13329A163

Riverside Public Utils 1989-90 Annual Rept

ML13329A163
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Site:	San Onofre
Issue date:	06/30/1990
From:	Carnahan B RIVERSIDE, CA
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RIVERSIDE PUBLIC UTILITIES 1989-90 ANNUAL REPORT PUBLIC UTILITIES RIVERSIDE 91121.20249 911210 PDIR ADOCK 05000206.

I PDR

A Message from the Director The Creation of Context The Ecology of Energy A World of Water 17 In the Spirit of Service 21 Financial Review PUBLIC UTILITIES RIVERSIDE

Each working day Riverside Public Utilities crews prepare to meet the needs of the community by gsing beyond the maintenance of the system ts planning and building for the future.

Continuous and uninterrupted service is a daily standard at Riverside Public Utilities and the local nature of the Utility helps to create an exceptional level of service. The effort of troublemen nmaking emergency repairs is only a part of the comnplex system which provides our electricity.

B C

The role of the publicly-owned utility has changed from one of merely providing products-water and electricity-to one of providing a wide range of services. A range of services which educates, informs, is accessible, is responsible and is responsive.

From The The major theme of this year's report highlights the numerous and varied ways your Riverside Public Utilities fulfills these isector multiple goals.

Riverside Public Utilities continued to provide the funda mental products in record setting amounts last year. The electric peak demand was 407 megawatts and the water peak day delivery was 95 million gallons. The system has grown to over 87,000 electric customers and 61,000 water customers.

The Utilities has continued to provide a wide range of programs to benefit the customer/owners. The programs vary from assistance to the poor, protecting and preserving our physical environment and providing continued economic health to our community. As has been the case since 1984, there was no electric or water rate increase in the 1989/90 budget year.

The program to develop adequate, reliable, and varied power supply sources continued in 1989/90. The current mix includes hydroelectric, coal and nuclear generating sources with serious consideration given to solar, geothermal, wind and demand side management alternatives for the future. Participa tion in studies for new transmission lines to bring power to Riverside from outside the region continued.

Bill D. Carnahian Locally, two new substations were built to serve increasing Director, Riverside Public Utilities.

load requirements. The Orangecrest and Springs substations were designed to meet the goals of environmental sensitivity in a meaningful and practical way. Both stations have low visual profile designs and are walled and landscaped to be compatible with the neighborhoods.

The current drought continued in 1989/90, however, the impact on Riverside was not as severe as felt by other com munities in southern California. Approximately 90% of the water needed was produced locally. Even though mandatory water conservation measures will most likely not be needed in Riverside, the Board of Public Utilities and City Council adopted a comprehensive Water Management Plan which contains voluntary conservation measures for Riverside customers. Utili ties' staff investigated many water waste complaints during the last year and informed customers of ways to avoid water waste.

This program is expected to expand next year as the drought effects continue to be well publicized in Southern California.

The year 1989/90 has been exciting and challenging for all of the Utilities' employees. As always, the employees have re sponded in commendable fashion. The increasing demands were met with a true understanding of the desires and needs of the community. The customers of the Riverside Public Utilities can look with pride on the leadership provided by the Board of Public Utilities and City Council plus the dedication and devotion of the employees. It has been my pleasure to have been associated with each and every one of them.

RIVE&RSIDE Bill D. Carnahan Director

The Board of Public Utilities is made up of citizens appointed for four year ternis by City Council: (seated left to right) Esteban Soriano, Roger Luebs (Chair), Ron McCoy, (standing)

Paul Osborne, Mary Curtin, Glen Stephens, John Tavaglione.

(From left to right) Riverside Public Utilities Assistant Directors: Brian G.

Thomas, Finance and Administration; Michael J. Baldwin, Operations; Dieter P. Wirtzfeld, Engineering and Resources.

Providing the Product THE As Riverside Public Utilities enters the 1990s, it strives t renew its commitment to service, a commitment born of its C

E TO understanding of its role in the social and economic sectors so the community, as well as its part in the larger world around un OF CONTEXT Looking back to the genesis of the electric utility in 1895 an the water utility in 1913, the reason for their creation was the delivery of product-electricity and water. That necessity, delivering water and electricity to the homes, businesses, and farms of America, was itself a great movement which created publicly-owned utilities across the country, especially in the 1920s and 30s.

Much of this century has been devoted to that enterprise, the building of great generating stations and water works, the transmission facilities to bring the water and electricity home, and finally, the local delivery of these commodities to the citizens who needed them. But, as this pressing need became satisfied, public utilities grew into a much greater role in the communities they served.

A System of Service Directed by its City Council and Board of Public Utilities, Riverside Public Utilities has been able to be especially respon RiVerside public Utilities hias ben sive to the social and economic environment of its community.

able to be responsive to tre social Employing local people in the service of their own families and and economic environment of the neighbors has obvious social benefits in addition to creating an comunityj by employing local peoplc in the service of their own families exceptional level of service. But the economic climate of and neighboro. Here electric workers Riverside has benefited as well.

load new power poleo for installation.

In a city of over 218,000, Riverside Public Utilities employs almost 400 people and has an annual operating budget of $250 million. More than $15.3 million in wages and salaries are disbursed into the community and more than $11.5 million is transferred directly into the City of Riverside's General Fund.

Through these indirect and direct means, Riverside Public Utilities contributes to all facets of the community; parks, roads, fire fighters, police, businesses, stores, restaurants, and real estate. Beyond this, Riverside Public Utilities still maintains safe and reliable service at reasonable rates.

It is these social and economic factors which have been the impetus for a transition over the past decade. You can see it in the Utilities' new programs, programs which assist seniors and the disabled, which help the low income, and which go into the classrooms and the community with a new message of concern and the responsibility to consume responsibly. Riverside Public Utilities has grown beyond being a provider of product and has become a purveyor of service.

PUBLIC LILITIES RIVERSIDE

New facilities must be planned years in advance of when they are needed. Here an underground electrical service is being designed on a computer.

Each year Riverside Public Utilities takes and tests more than 4,000 samples in an ongoing program to ensure that water quality is safeguarded.

1989-90 FISCAL YEAR HIGHLIGHTS ELECTRIC WATER YEAR ENDED JUNE 30 YEAR ENDED JUNE 30 OPERATIONS 1990 1989 1990 1989 Production 1,526 million 1,460 million 67,847 acre feet 63,948 acre feet kilowatt-hours kilowatt-hours System peak requirements 407,000 367,200 95 million 89 million kilowatts kilowatts gallons gallons Average number of customers 87,000 84,000 61,000 59,000 FINANCIAL (in thousands)

Total operating revenues

$146,588

$119,712

$16,941

$16,482 Transferred to City of Riverside General Fund

$ 9,652

$ 6,581

$ 1,895

$ 1,835 CREDIT RATING MOODY'S INVESTORS STANDARD AND POOR'S SERVICE CORPORATION Electric Revenue Bonds Aa A+

Water Revenue Bonds Al A+

Reasonable, Reliable, Responsible, Resourceful But service is complex. It means not only meeting your customers' needs but embracing their aspirations. In the 1990s, those aspirations include a wide range of activities from assisting the poor, to protecting and preserving our physical environment while providing for the continued growth and economic health of our community.

Reasonable and stable rates, reliable delivery, social and environmental responsibility must all be balanced for resources which are finite. As Riverside grows to a population of 253,000 by the year 2000, we will see the results of how well we have planned for this challenge.

New water and electricity conservation and management strategies will play a part. New facilities will be constructed to meet goals which are sensitive to the aesthetic and natural qualities of the landscape. A new corporation yard will provide for more efficient operations and meet ever increasing service levels. New substations and reservoirs will have low visual The City of Riverside has been profiles, leaving their neighborhoods undisturbed.

Warfongrit years h an A philosophy of resource management has come fully to the publicly-owned utility.

forefront. In addition to managing electricity demands in the most cost effective manner, new energy resources such as solar and geothermal technologies will be explored. Independent transmission facilities will open up new energy markets. Water reuse and reclamation will again be emphasized. And as our role in our environment continues to grow, we are prepared to use that understanding to plan for the future in a way which will serve us all.

PUBLIC UTILITIES RIVERSIDE

Renewable energy resources like solar power could play an important part in Riverside's future energy mix.

Long distance transmission lines are an important part of developing resources that we control through our publicly owned utilities.

Transmission projects guarantee paths for power at fixed rates.

Resouwces and Reasons Oiv and Hydroelectricity. Coal. Nuclear energy. Geothermal re sources. Solar power. Wind generation. Oil and natural gas. The diverse sources of electricity present a complex array of options for utilities.

Economic, social, and environmental factors drive the selection of resources for a balanced mix; reliable, renewable, yet reasonably priced. And beyond the selection of the resources themselves, there is the question of their transmission.

As a participant in the energy marketplace, Riverside Public Utilities has developed a diverse energy mix to supply 85% of its own energy needs through resources it controls in partnership with other utilities.

Coal-fired generation facilities with state of the art emission controls, Intermountain Power Project (IPP) and Bonanza Generating Station (Bonanza) in Utah, provide one of the least expensive sources of electricity in Riverside's energy mix. These facilities are located close to their source of fuel but the energy they produce must be transmitted long distances.

Nuclear energy from San Onofre Nuclear Generating Station is one of the few local resources which can provide electricity within the criteria set by the South Coast Air Quality Manage ment District. Hydroelectricity provided by generating facilities at Hoover Dam is both renewable and extremely cost-effective.

planning for the future is a major This diversity of resources has helped Riverside Public part of developing electric resources Utilities achieve reasonable and stable rates and guarantee a which are both cost effective and reliable supply of long term energy.

balanced.

Riverside Public Utilities also operates in the energy market place, in addition to the resources it owns. It executes long term contracts such as the 20 megawatts of seasonal peaking capacity purchased from the California Department of Water Resources (CDWR). This five year agreement saves Riverside Public Utilities more than a half million dollars annually over purchases from Southern California Edison (SCE) for power needed to meet peak uses during the summer. Negotiations to extend this contract began this year.

The City of Riverside, along with Anaheim, Azusa, Banning, and Colton reached accord with SCE on a new 1990 Integrated Operations Agreement. This agreement settled a protracted dis pute concerning the City's ability to integrate new resources and the operation and dispatch of the City's existing integrated re sources. The new agreement provides the City new opportunities for optimizing its resource mix in a timely fashion, reduces the amount of capacity required for reserves, and assures the City full credit from the operation of its resources. In addition, the City and SCE also signed a separate Power Supply Agreement where by SCE agrees to sell the City specific monthly peaking capacity and associated energy at a price significantly lower than its wholesale rate tariff. This agreement will last through 1998 with a net present worth saving of more than $30 million.

This year also saw the completion of a new 20 year 1990 Power Supply Plan and Load Forecast. This plan allows for future energy contracts with producers of power from renewable PUBLIC U 1ITIES resources. Meeting future needs with resources which meet both economic and environmental goals is exemplified by a new RIVERSIDE

contract with the Bonneville Power Authority (Bonneville). This 20 year agreement will provide 23 megawatts of summer and 16 megawatts of winter peaking capacity, at a present value savings of $11.5 million over SCE purchases for the life of the contract.

But beyond these savings, the Bonneville agreement meets larger environmental and economic goals through a capacity energy exchange. Bonneville.provides electricity to meet Riverside's peak demands during the day. However, for conserva tion and economic reasons, Bonneville wishes to avoid releases of water to generate electricity at night. Riverside has excess Hydr y from Hoover Dam is electricity available at night through its IPP resource. By effective.

effecive.exchanging this energy at night for energy supplied to Riverside during the day, both economic and conservation goals are met.

Bonneville alone, however, cannot satisfy the demands predicted by the 1990 Power Supply Plan and Load Forecast.

Riverside Public Utilities continues to explore new generation facilities and has embarked on an investigation of power pur chase agreements for geothermal, solar, and hydroelectric energy.

The reliability of these resources and their cost will be analyzed in the context of Riverside Public Utilities' commitment to reasonable and stable rates to determine the extent to which these new resources will become a part of Riverside's power supply mix.

The Paths of Power A Utility worker pulls the loot In the world of power supply, electricity is instantaneous.

uidrrground line up to a riser pole The moment it is created, it is also consumed.

connecting an underground service to Perhaps the most difficult thing for us to understand is how the Springs Substation.

it can be constantly present, waiting for us to demand it as we press the switches at our homes, schools, and businesses.

Each act, turning on a light, a television, a computer, makes each of us a participant in a great system fed by distant generators and consumed simultaneously by millions of others, just like us.

Like springs which feed streams, the creation and delivery of electricity has evolved into a highly complex interconnected system. Electricity is available to us as individuals in much the same way as we might take water from a great river system-the bucket we dip and lift being instantly replaced somewhere else.

But where nature has determined the watercourses for our streams and rivers, it is man that creates the paths for power.

In this vast system, it is not enough to own the sources of electricity, we must also own the means to bring it home or we must pay those who do own those means. Purchased transmis sion rights are vulnerable to the policies and priorities of the sellers. As a result, Riverside now participates with a variety of other cities, utilities, and power associations in building its own transmission projects, projects which would guarantee the right to transmit certain amounts of electricity at a fixed price.

The Utah-Nevada Transmission Project (Utah-Nevada), for example, is a project which may potentially provide a path for IPP and Bonanza power. Projects like Utah-Nevada, however, represent more than a reliable route at a fixed price. They are gateways to hydroelectric resources in Canada and coal and natural gas facilities in Idaho, Montana and Canada.

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Similarly, the Mead-Phoenix project will not only be a firm route for electricity from the Palo Verde Nuclear Generating Station but will open up the balance of the resources of the Southwest. Mead-Adelanto, scheduled for 1995 completion, will bring all of these sources to Riverside and the other 12 California cities who are building the project. Riverside has already participated in the financing of these projects through the Southern California Public Power Authority which has issued

$650 million in revenue bonds.

Transmission projects are gateways to new sources of economy power in the northwest, southwest, and Canada.

Transmission projects are gateways which go beyond assist ing us to bring our own power home. They open up access to the resources of other regions so we may maximize our purchases of economy power. Last year 15% of Riverside's electricity was bought in the energy marketplace as economy power.

Last year, through participation in the Western Systems Power Pool, the City saved over $1.25 million purchasing economy energy rather than energy supplied by SCE. But the cost of paying for transmitting this power can substantially reduce savings and, in some cases, those who own the transmis sion systems can use limited capacity to refuse to provide access to some markets altogether. By having its own paths, Riverside Public Utilities can retain the savings generated by economy power and open new potential markets for the future.

The activities of Riverside's load schedulers in the energy marketplace have allowed Riverside to become a regional leader. Riverside serves as the agent for the cities of Azusa, Banning, and Colton, saving more than $5.2 million annually for those cities with economy purchases. Riverside Public Utilities received more than $240,000 for providing these services. These scheduling personnel also sell excess power from resources Riverside owns, resulting in $295,000 in net revenues.

Riverside Public Utilities understands that safeguarding savings goes beyond the buying and selling of electricity.

Safeguarding savings means managing consumption and thereby controlling costs for new power plants.

While Riverside Public Utilities has a variety of residential programs which teach conservation and encourage shifting use of electricity to off-peak hours, these programs have a limited ability to offset increases in demands caused by growth in the commmunity. Purchases, like the agreements with CDWR and Bonneville can, however, make highly significant contributions to controlling the need for new facilities.

The 1990 Power Supply Plan and Load Forecast goes further still in providing for load management through the develop ment of a demand-side management policy which focuses on such technologies as Thermal Energy Storage (TES) by large industrial users.

TES systems which store energy during off-peak hours for use later in the day represent optimum opportunities to control peak loads. In the near future, the University of California, Riverside (UCR) working with Riverside Public Utilities, is expected to implement a TES system that is expected to reduce peak loads by four megawatts. TES projects of this magnitude

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SUMMARY

will allow Riverside Public Utilities to respond more effectively to customer concerns about air quality, global warming, and nonrenewable resources by helping to reduce the need for new power plants.

Electric System Services Riverside Public Utilities experienced a new record peak of 407 megawatts on June 27, 1990, enough electricity to light more than four million 100 watt light bulbs simultaneously.

Riverside Public Utilities' new Orangecrest substation was brought on line 52 days before the peak and helped the Utility to serve this new record demand without delivery problems or overloads. This substation, and its sister substation, Springs, completed later in the summer of 1990, are part of a $107 million six year Capital Improvement Program (CIP) designed to fulfill crucial future needs. The CIP provides for eight substation expansions, one substation upgrade, and new transmission and distribution facilities.

As well as contributing to Riverside Public Utilities'reliability as a service provider, Orangecrest and Springs also help the Utility meet its goals of environmental sensitivity in a meaningful and practical way. Both stations have low visual profiles minimizing their effect on the neighborhoods.

Another opportunity for Riverside Public Utilities to be a full partner in the future of the community is the. expansion of UCR. By working together to plan for UCR's expanded needs as it grows from 8,000 to 18,000 students, Riverside Public Utilities has been able to develop plans to meet this expansion and save the City more than $5 million and at the same time, UCR has been able to save $2 million in facility costs.

Electrical System Growth New Residential Services 2,415 New Commercial/Industrial Services 379 New Overhead Distribution Lines 5.62 miles New Underground Distribution Lines 26.00 miles New Service Areas Acquired 2.50 sq. miles Conversion of 4 kv to 12 kv Lines 4.25 miles PUBLIC UTILITIES RIVERSIDE

Approximately 200 vehicles are housed at the Corporation Yard, soon to be replaced with a new larger facility.

Final completion of the University City Booster Station will assist the Utility to better serve a growing community.

I'I

-ARP

It is 97% of our bodies. Each day we use it to cook, to work, to live. There is no life without it.

A WORLD Now in the fifth year of the current drought, Riverside's good fortune in owning 90% of its water requirements becomes more apparent daily.

That resource, groundwater drawn from the Bunker Hill Basin in San Bernardino and the North Riverside Basin, has given Riverside a unique opportunity to develop a thorough under standing of how the natural world and the world of human activity are entwined and interdependent. We understand that we cannot live without water and we have learned that our water supply can only survive if we manage it with water quality and water conservation as the center of our strategy.

Each year 10 to 15 inches of rain or snow runs off the mountains. It percolates through a natural filter of sand and gravel, creating a water resource of very high quality. Riverside's 44 operating domestic wells deliver that resource to your taps through the distribution system.

Human livelihoods and activities can threaten that resource.

Agricultural runoff can carry the residues of fertilizers and pesticides down to the groundwater. Toxic substances can seep through the soil.

Currently, Riverside Public Utilities water meets or exceeds all federal and state standards for water quality. Riverside Public Utilities considers safeguarding the quality of its groundwater essential to its overall strategy to keep Riverside independent of reliance on imported supplies.

Each year more than 4,000 samples are taken and tested for bacteria and chemicals. And Riverside Public Utilities has initiated basin wide cooperation among groundwater users to protect the supply.

A priority has been coping with the threat of contamination posed by chemicals at Norton Air Force Base. Norton-an EPA Superfund site-is examining alternatives and Riverside Public Utilities is a regional leader in ensuring appropriate action on decontamination and treatment options.

WATER STATISTICS 95.4 92.9 86.0 90.9 89.3 19.8 176 18.6

18. 19. 0 18.1 17.61 11.6 10.5 ON

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ONPUBLIC UTIIrFIES ANNUAL RAINFALL WATER SALES PEAK DAY DEMAND INCHES BILLION GALLONS MILLION GALLONS RIVERSIDE

100 10 A Secure Spl 90 Spl 80 Security of supply does not end with vigilance over water 70 7 4.8 quality. In 1989-90, Riverside imported 9.8% of its water supply.

60 This water was used to meet peak demands, making Riverside 50 Public Utilities a part of California's larger water system, a 50 system where 75% of the precipitation falls in the north and 75%

40 of the demand is in the populous semiarid south. And while 30 politics and drought are decreasing the reliability of imported 20 supplies, regional growth dictates that Riverside's demands for 10 water may increase as much as 20% over the next ten years.

9.8%

9.8%1 Planning for the future includes conservation.

1989-1990 In 1989-90, Riverside Public Utilities embarked on a campaign to encourage voluntary conservation through a series of activities WaterProdution including bill stuffers, radio and newspaper ads, and television F1Bunker Hill public service announcements. These activities significantly LIBasin increased customer requests for additional water conservation Lca information during 1989-90.

80

WellsBut, effective water management is more than refraining

[1Purchased from use. Programs for water reuse, reclamation, and the use of FL1 Water nonpotable water for irrigation are being developed. Ground water supplies which have high salt content or undesirable chemical levels which can be treated and made potable are being evaluated.

Riverside also has plans to increase storage capacity by building new reservoirs which will allow water, available during lower use periods, to be stored for peak use. These reservoirs will also provide emergency capacity enabling Riverside Public Utilities to supply its customers with water during natural disasters such as earthquakes.

Water System Services Riverside Public Utilities began construction of two new booster stations during 1989-90, University City and Tilden. The Utility also completed construction of the 36" Van Buren pipeline which delivers water to the Van Buren and Mockingbird Canyon reservoirs.

The Water Utility's Capital Improvement Program reflects the need to be sensitive to local environmental and neighborhood concerns. Eight of the new reservoirs which form a part of the

$79 million six year plan will be constructed underground. As a result, this new construction will not disturb sensitive views and neighborhood aesthetic qualities.

Water System Growth New Water Services 859 New Water Main and Appurtenances 14 miles Well Production 390.1 billion gallons New Booster Station Capacity 576,000 gallons/day

THE 1989-1990 WATER DOLLAR Debt Serv Source of Revenue 130 Available for Additions &

peration &

6 Replacements Maintenance Water 10g Supply Transfer to City General Fund 53C 25c Distribution of Revenue Residential Commercial Sales 20

& Industrial Other Sales Sales 200 Other Revenue 0

0 BUNKER HILL BERNARDINO RIVERSIDE WATER SYSTEM 1989-1990 0,

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• Booster Stations RIVERSIDE o Reservoirsa Major Mains RIVERSIDE P UBLIC TH.AIIES

Here, the controls of the new University City Booster Station are tested before the water pumping facility is brought on line.

Public utilities have evolved from being providers of product to being purveyors of service. Customer service activities form an important component of Utilities operations.

The role of the publicly-owned utility in our world has T THE changed. With the arrival of the 1990s, the transition covering I

111 more than a decade is complete. Utilities have evolved from providers of product to purveyors of service. And the question, SPIRIT OF "How do we fit into our world?" is answered ever more clearly.

For utilities, the answer is that we must provide a complete RVICE service to our customers, a service which is reliable at a reasonable cost-but also a service which educates, informs, is accessible, is responsible, and is responsive. These are the goals of the 90s.

Customer Service Customer service activities for 1989-90 were dominated by the development and implementation of a new Customer Information and Billing System. This system involved four City Departments and included new hardware, new software, and a new bill format designed to improve accessibility to both billing and customer account information.

Implemented in July 1990, the new system featured a single larger format bill which allows all users to be billed on a single Water Aware." Req nests for system. New software allows the tracking of customer account.

inforniation and program information and billing information so that this information is participation have increased 20 fold easily accessible in answering customer's inquiries.

withi t/ic initiation of a coordinatedInteipeettophstenwbligsyemprad water awareness campaign.

wate awrenss cmpagn.In the implementation phase the new billing system operated without transitional problems for 75% of customers from the beginning of the first billing cycle. For a portion of Riverside's customers, billing irregularities occurred and were resolved on an ongoing basis.

Customer service personnel demonstrated both spirit and stamina during the implementation phase, fielding more than 15,000 calls during this period. Their patience and perseverance contributed greatly to the success of the program.

To Inform and to Teach Riverside Public Utilities Education and Information pro gram experienced a 264% increase in inquiries for program information in 1989-90, answering more than 8,300 requests.

Directions established by the newly formed Public Affairs Committee of the Board of Public Utilities resulted in the City's first fully coordinated water conservation campaign. These activities-water awareness events, brochures, bill stuffers, radio and newspaper advertising, and television public service announcements, increased overall program and information requests more than 20 fold over the previous year.

Energy related information was also widely distributed, with requests for additional information and program applica tions increasing 213% over 1988-89. More than 233 customers received rebates under COOL CA$H, a program which pro vides rebates for upgrading existing cooling equipment with energy efficient central air conditioners, heat pumps, and evaporative coolers.

In 1989-90, swimming pool owners were again offered an sinuc-rITEs opportunity to participate in a program which offers a $36 annual credit to pool owners who operate their pool pumps RIVERSIDE

during off-peak hours. During 1989-90 the level of participation increased by 534 customers.

Energy and water conservation information were summa rized in a new booklet to be distributed during the coming year to new Riverside Public Utilities customers. This booklet, entitled "Welcome," is representative of the comprehensive approach to service that is the Utilities' goal for the 90s. Not only does it pro vide important service information, it educates customers about water and electricity management and offers them opportunities to participate in city-wide efforts in these areas.

In 1990-91, Riverside Public Utilities will expand the pro gram to include outdoor electrical safety and implementation strategies for demand side management programs. Water con servation program activities will continue and new programs High winds and falling limbs are will be developed.

constant hazards. Repair crews make Riverside Public Utilities School Education Program reaches repairs with restoration of service as students in more than 100 classrooms with energy and water their tsp priority.

education programs each year. During the 1989-90 fiscal year more than 1,200 fifth graders participated in an annual Water is Life poster contest. This multi-agency program resulted in a poster featuring the top drawings. Participating sponsors in cluded Riverside Public Utilities, Elsinore Valley Municipal Water District, Rancho California Water District, and Western Municipal Water District.

Responsibility and Responsiveness Riverside Public Utilities continued its outreach to seniors and the disabled through the WE CARE/HHEARTS program.

This year the program was expanded to include water awareness as well as energy efficiency. In 1989-90, specific bill stuffers on these programs were distributed to customers and requests for information and in-home energy and water use audits doubled.

More than 980 visits were made by the part-time senior citizen employees who conduct the audit, give conservation advice and install weather stripping, water heater blankets, low flow shower heads, and toilet kits.

Responsibility and responsiveness also led to the devel opment of a new public service program by Riverside Public Utilities in 1989-90. SHARE is a joint program of Riverside Public Utilities and the County of Riverside Department of Community Action.

SHARE provides the means for customers to make monthly donations on their utility bills. These monies are set aside to assist low income customers who need temporary assistance with utility deposits and utility bill payments. Program applica tions and disbursements are administered by the Department of Community Action.

SHARE was implemented in November 1989 and has raised more than $14,700 in its first twelve months of operation.

Employee Recognition The staff at Riverside Public Utilities is a team of talented and committed professionals who serve their community in the highest tradition of public utilities. Each year, Riverside Public Utilities takes the opportunity to recognize employees who reach the 35 year service benchmark in their careers.

In 1989-90, Carl R. Danzek completed 35 years of service at Riverside Public Utilities. Before coming to the City, Carl gradu ated from Ord High School, Nebraska. Upon graduation, he attended the Commercial Business Extension College of Omaha, majoring in Accounting and Business. He also served in the United States Marine Corps for two years. After completing military service, Carl applied to the City to be a Meter Reader and on March 6, 1956, became a City employee.

Since beginning his employment with the City, Carl has worked his way through the ranks of the Public Utilities Com mercial Division. His tenure with the City has involved meter reading, collections, routing of accounts, and his current position Carl R Danzek of supervising Meter Reader and Field Service employees for a number of years.

Carl has placed his employment with the City at the top of his priorities. He has been a dedicated, responsible, and loyal employee making numerous contributions to the Utilities De partment. He is a true team player who is highly valued by his fellow employees.

PRUC UTITIE RIVERSIDE

On Center Street, Riverside Public Utilities drills a new domestic water well. Over 90% of the city's water supply comes from wells which are publicly owned through Riverside Public Utilities.

Here pipe is loaded for a project in a development in Riverside.

Riverside Public Utilities financial plan-continued to experience strong growth with FINANCIAL ning is evidenced by the stable rates enjoyed electric customers increasing by 3.8% and by its ratepayers. Electric rates have not water customers up by 23%. Sales revenue increased since 1984, while water rates were in the Electric Utility decreased from $130.6 REVIEW increased for the first time in seven years in million to $127.1 million, or 2.7%. this de November 1990. The water rate increase of crease in sales revenues reflected the $7.1 5.7% was implemented to help support a million reduction in electric bills to River strong capital program and maintain ade-side's residential and commercial customers quate coverage ratios. Electric and water through the refund credit. Expenses in the rates, which increased at levels significantly Electric Utility increased from $109.9 million less than the average increase in the Con-to $131.4 million. The large increase in sumer Price Index, have been accompanied operating expenses reflects the full cost of by consistently strong financial statements.

operation of both units of the itermountain The financial strength of Riverside Public Power Project. In fiscal year 1988/89, $20.4 Utilities is reflected in the rating of its long million was distributed from the project to term revenue bonds. Riverside Public Utili-Riverside, as Riverside's share of excess ties' electric revenue bonds are rated Aa by construction funds. These funds were in Moody's and A+ by Standard and Poor's. The cluded in the Rate Stabilization Account.

Wafer Utility's revenue bonds are rated Al Funds from the Rate Stabilization Account by Moody's and A+ by Standard and Poor's.

were used in 1989/90 to offset the difference Riverside Public Utilities is a municipal between operating revenues and operating corporation, and as part of the City of expenses, and lower electric bills in the face Riverside has no stockholders, pays no of rising.costs.

dividends and does not distribute earnings.

Sales in the Water Utility increased Riverside Public Utilities pays for the costs from $16.4 million to $16.8 million, or 2.4%.

of operation and debt service through rev-The Water Utility experienced a slight.de enues from our customers. Approximately crease in operating costs due to lower 50% of annual capital expenditures are pumping costs.

made from revenues, with the remaining Capital expenditures in the Electric capital facilities financed via electric and Utility continued at a brisk pace. Construc water revenue bonds and contributions in tion on two new substations was completed aid. of construction.

by the Electric Utility,'along with a large In June of 1987, Riverside's Board of number of transmission, distribution, and Public Utilities implemented a Rate Stabili-service additions. These expenditures to zation Account in the Electric Utility. This taled $20.0 million in 1989/90, up over 40%

account was initially funded with refunds from 1988/89.

from Southern California Edison (SCE), sales In the Water Utility, capital outlays for of pre-release energy from San Onofre transmission mains and distribution facili Nuclear Generating Station Units 2 & 3, ties totaled $6.0 million, down about 35%

and net revenues resulting from lower than from last year. Capital expenditures in future anticipated power expenses. In addition, years are expected to increase significantly the difference between revenues and ex-above these levels as reservoirs and trans penses flows through the Rate Stabilization mission projects designed in 1989/90 come Account. Careful management of the Rate to fruition in the next several years.

Stabilization Account and control of ex-In addition to the costs of operation, penses has positioned the Electric Utility to Riverside Public Utilities pays for all services reduce electric bills to our residential and rendered by other City departments and small commercial customers by 8%, begin-transfers up to 11.5% of its prior year reve fling July 1, 1989. Over -$7.1 million was dnues to the City's General Fund. In fiscal refunded to our customers during the year 1989/90, the Electric Utility transferred 1989/90 fiswcale.year.

u$9.7 million to the General Fund, while the Riverside Public Utilities' service area Water Utility transferred $1.9 million.

ITeIrC UT a IsES RIVERSIDE

City of Riverside ELECTRIC UTILITY SELECTED STATISTICS Electric Utility POWER SUPPLY (mWh) 1989/90 1988/89 1987/88 1986/87 1985/86 San Onofre 239,500 272,500 237,100 263;700 168,400 Intermountain Power 795,400 716,100 641,300 396,800 Palo Verde 27,800 58,300 51,500 42,300 Hoover 24,100

-16,800 38,400 Firm Contracts 314,000 229,700 292,300 156,100 7,900 Non-Firm Contracts 77,600 112,000 63,400 202,600 228,200 Southern California Edison

_ 54,400

%20,0 196,700 803,400 Total 1,525,600 1,459,800 1,344,800 1,258,200 1,207,900 System Peak (mW) 407.0 367.2 317.6 292.2 323.4 ELECTRIC USE Average Number of Customers Residential 78,795 76,087 74,195 72,197 68,579 Commercial 8,083 7,620 7,169 6,677 6,282 Industrial 186 196 193 330 301 Other 146 148 148 150 252 Total 87,210 84,051 81,705 79,354 75,414 Millions of Kilowatt-hour Sales Residential 516 503 452 431 421 Commercial 356 333 298 279 265 Jndustrial.

527 534 480 439 449 Other 41 43 41 42 38 Total 1,440 1,413 1,271 1,191 1,173 Average Annual kWh per Residential Customer 6,549 6,611 6,092 5,970 6,139 Average Price (cents/kWh) 9.10 9.04 9.28 9.27 9.00 Debt as a percent of Net Plant*

78.8%

85.4%

89.1%

93.6%

96.7%

Operating Income as a percent of Operating Revenues 10.4%

8.2%

13.5%

19.6%

16.6%

Employees 264 259 243 225 190

• Net plant includes Nuclear Fuel Inventory and Wotk in Progress.

City of BALANC SHEET Riverside 1990 June 30 1989 Electric Utility (In Thousands)

Assets Utility plant:

Production

$113,295

$111,694 Transmission 8,402 8,206 Distribution 98,794 90,680 General 5,747 4,871 226,238 215,451 Less accumulated depreciation (68,287)

(60,903) 157.,951 154,548 Construction in progress 19,203 10,895 Nuclear fuel, at amortized cost 6,097 7,122 Total utility plant 183,251 172,565 Restricted assets 32,508 30,824 Current assets:

Cash and investments 22,599 49,912 Accounts receivable, net 15,772 15,674 Accrued interest receivable 1,171 1,353 Prepaid expenses 4,021 2,964 Nuclear materials inventory 344 386 Total current assets 43,907 70,289 Other assets:

Unamortized project costs 184 427 Total assets

$259,850

$274,105 The notes to the financial statements are an integral part of this statement.

PUlLIC LILITIES RIVERSIDE

City of Riverside BALANCE SHEET Electric Utility 1990 June 30 1989 (In Thousands)

Capitalization and liabilities Equity:

Retained earnings Reserved

$ 17,813

$ 17,810 Unreserved 10,000 10,000 Total retained earnings.

27,813 27,810 Contributed capital 24,460 19,692 Total equity 52,273 47,502 Long-term obligations, less current portion 141,576 144,665 Total capitalization 193,849 192,167 Non-current liabilities:

Decommissioning liability 4,696 3,014 Rate stabilization account 13,898 40,428 Total non-current liabilities 18,594.

43,442 Current liabilities payable from restricted assets:

Accrued interest payable 2,570 2,628 Current portion of long-term obligations 3,110 2,959 Total current liabilities payable from restricted assets 5,680 5,587 Current liabilities:

Accounts payable 9,953 8,643 Accrued liabilities 3,901 3,426 Rate stabilization account 27,873 20,840 Total current liabilities 41,727 32,909 Commitments and contingencies Total capitalization and liabilities

$259,850

$274,105 The notes to the financial statements are an integral part of this statement.

City of STATEMENT OF OPERATIONS AND Riverside RETAINED EARNINGS Electric Utility For the Fiscal Years Ended June 30EU 1990 1989 (In Thousands)

Operating revenues:

Residential

$ 44,670

$ 46,836 Commercial and industrial 79,276 8(,190 Sales to other utilities 2,004 2,344 Provision for rate stabilization 19,497 (10,901)

Other 1,141 1,243 Total operating revenues 146,588 119,712 Operating expenses:

Purchased power 98,405 78,699 Other 20,304 18,843 Maintenance 4,421 4,516 Depreciation and amortization 8,236 7,804 Total operating expenses 131,366

.109,862 Operating income 15,222 9,850 Non-operating revenues (expenses):

Interest income 4,700 5,938 Interest expense (10,486)

(10,727)

Loss on retirement of utility plant (41)

(97)

Other 260 1,598 Non-operating revenues (expenses)

(5,567)

(3,288)

Income before operating transfers 9,655

-6,562 Operating transfer out:

General fund contribution (9,652)

(6,581)

Net income (loss) 3 (19)

Retained earnings, July 1 27,810 27,829 Retained earnings, June 30

$ 27,813

$ 27,810 The notes to the financial statements are an integral part of this statement.

PUBLIC UTILITIES RIVERSIDE

City of Riverside STATEMENT OF CHANGES IN FINANCIAL POSITION Electric Utility For the Fiscal Years Ended June 30 1990 1989 (In Thousands)

Sources of working capital:

Operations:

Net income (loss) 3

($

19)

Expenses not requiring current outlay of financial resources:

Depreciation and amortization 8,236 7,804 Loss on retirement of utility plant 41 97 Amortization of nuclear fuel 1,746 2,276 Provision for decommissioning liability 1,682 2,247 Decrease in unamortized project costs 243 212 Working capital-provided by operations 11,951 12,617 Increase in contributed capital 4,768 1,318 Increase in current liabilities payable from restricted assets 93 156 Proceeds from sale of fixed assets 62 Total sources of working capital 16,874 14,091 Uses of working capital:

Acquisition of utility plant 20,050 14,164 Reduction of long-term obligations 3,089 2,232 Purchase of nuclear fuel 721 662 Increase in restricted assets 1,684 2,227 Decrease in rate stabilization account 26,530

.4,953 Total uses of working capital 52,074 24,238 Net decrease in working capital

($35,200)

($10,147)

Component elements of net increase (decrease) in working capital:

Cash and investments

($27,313)

$ 5,316 Receivables, net (84)

(2,526)

Prepaid.expenses 1,057 1,615 Nuclear materials inventory (42)

(69)

Accounts payable (1,310) 1,814 Accrued liabilities (475)

(443)

Rate stabilization account (7,033)

(15,854)

Net decrease in working capital

($35,200)

($10,147)

The notes to the financial statements are an integral part of this statement.

NOTE 1.

SUMMARY

OF SIGNIFICANT.

commence in the year 2015. The Electric Utility ACCONTIG POICIS hs set aside $4,696,000 in cash and investments The Electric Utility exists under; and by as its estimated share of the decommissioning virtue of, the City Charter enacted in 1883, and is cost. Based on a cost estimate completed by a component unit of the City of Riverside (City).

Southern California Edison, the Utility plans to 1I1 ANCIAL The Electric Utility is responsible for the genera-set aside approximately $1,380,000 per year to tion, transmission and distribution of electric fund this liability.

power for sale in the City.

Cash and Investments Basis of Accounting The City Treasurer deposits idle funds in The Financial Statements of the Electric accordance with Section 53601 of the California Utility are presented in conformity with generally Government Code and the City's general invest accepted accounting principles as applicable to ment policy. In accordance with the City's pol

ilyicy, the Electric Utlt' ahadivsmnsde governments and substantially in conformity Utility's cash and investment with accounting principles prescribed by the are invested in a pool managed by the Treasurer Federal Energy Regulatory Commission, except of the City. The Electric Utility does not own for the method of accounting for contributed specific, identifiable investments of the pool. At capital described below. The Electric Utility is June 30, 1990, cost approximated the market not subject to the regulations of the Federal value of the Electric Utility's share pf pooled Energy Regulatory Commission, cash and investments. The bank balance was covered by federal depository insurance or by Utility Plant and Depreciation collateral held in the pledging bank's trust 14 V

All utility plant is valued at -historical cost, or department for the benefit of the City. At June 0

estimated historical cost, if actual historical cost is

.30, 1990, the City has invested principally in verside not available. Contributed plant is valued at its medium term and floating rate notes, certificates estimated fair market value on the date contrib-of deposit and U.S. Treasury obligations which includes labor, materials, allocated i-were insured, registered or collateralized with uted. Cost namdslbr mtrasloatdi-scrte.Ismns held ayteC t

Jun 30, 1990t ecni Uh direct charges such as engineering, supervision, securities held by then h or itsJ agent in0th construction and transportation equipment, re tiremerit plan contributions and other fringe under Repurchase and Reverse Repurchase benefits, and certain administrative and general Agreements and Investments in Deferred Com expenses. The cost of relatively minor replace-pensation Plans were uninsured and unregis ments are included in maintenance expense.

tered, with securities held by the counter-party Depreciation is provided over the estimated or by its trust department or agent but not in the useful lives of the related assets using the City's name. Disclosure of the legal and con straight line method. The estimated useful lives tractual provisions of the City's investment are as follows:

policy and carrying amounts by type of in vestment categorized by credit risk may be Production Plant...............

30 years found in the footnotes to the City's "Comprehen Transmission and sive Annual Financial Report" for the fiscal year Distribution Plant....... 20-50 years ended June 30; 1990.

Equipment..................

5-15 years Revenue Recognition Nuclear Fuel The Electric Utility uses the accrual basis of The Electric Utility amortizes the cost of

-'accounting. Revenues are recognized when nuclear fuel to expense using the "as burned" earned and expenses are recognized when incur-method. In accordance with the Nuclear Waste red. Electric Utility customers are billed monthly.

Disposal Act of 1982, the Electric Utility is Unbilled electric service charges are recorded at charged one mill per kilowatt-hour of energy year end and are included in accounts receivable.

that is generated by the City's share of San Unbilled accounts receivable were $4,631,000 at Onofre Nuclear Generating-Station's Units 2 and June 30, 1989 and $4,688,000 at June 30, 1990. An 3 to provide for estimated future storage and

, allowance for doubtful accounts is maintained disposal of spent fuel. The Electric Utility pays for utility and miscellaneous accounts receiv this fee to its operating agent, Southern Cali-able. The balance in this account is adjusted at fornia Edison Company, on a quarterly basis.

fiscal year end to approximate the amount antici pated to be uncollectible. The balance in the Nuclear Decommissioning allowance account was $854,000 at June 30, 1989 Federal regulations require the Electric and $945,000 at June 30, 1990. During the fiscal Utility to provide for the future decommissioning year, accounts determined to be uncollectible of its ownership share of the nuclear units at San are recorded as bad debt expense.

Onofre. A reserve fund has been established in the Electric Utility for the decommissioning of Inventories the nuclear power plant and restoration of the The City maintains a separate Central Stores beach front at the San Onofre Nuclear Generating inventory. The Electric Utility expenses items as PUBLIC UIIIES Station. The-Electric Utility -funds the reserve they are drawn out of Central Stores. As such, and recognizes expense over the useful life of the Electric Utility does not include inventories the generating plant. Decommissioning should on its financial statements.

RVERSIDE

Contributed Capital or made available to the employes or otfier Under the provisions of.the City Charter, beneficiary) solely the property andrights of the amounts received from customers and others for City, subject only to the claims of -the City's constructing utility plant are combined with general creditors. Participants' rights under the retained earnings to represent equity. Accord-plan are equal to those of general creditors of the ingly, contributed capital is shown in the ac-City in an amount equal to the fair market value companying balance sheet as an equity account and is not offset against utility plant. Depreciation provided for the related utility plant is expensed.

Employees'-Retirement Plan:

The City contributes to 'the California Public Employees Retirement System (PERS), an agent Compensated Absences Compnsatd Asencs

.multiple-employer public employee retirement The accompanying financial statements system that acts asa common investment and include accruals for salaries, fringe benefits and administrative agency for participating public compensated absences due employees at June entities within the state of California. All perma 30, 1990. The Electric Utility treats compepsated absences due employeesas a current liability.

are eligible for participation in PERS. Benefits Employees receive ten to twenty-five vaca-vest after five years of service and are determined tion days a year based upon length of service. A b

maximum of two years vacation can be accumu-ya forla a

sder Employees a lated and unused vacation may be redeemed for retire at age 60 and. receive 2 percent of their cash upon separation.

highest average annual salary for each year of Employees receive one day of sick leave for service completed. Employees retiring at age 50 each month of employment, with unlimited ac-to 59 receive a lesser percentage for each year of cumulation. Employees who terminate for rea sons other than retirement or death lose all fits. These benefit provisions and all other accumulated sick leave. Upon retirement orstatute death, a percentage of unused sick leave is paid and City ordinance.

to certain employees or their estates in a lump sum based on longevity. Employees hired in the the Umlye contribut the general bargaining unit after July 1, 1979 cannot redeem unused sick leave. A liability is recog nized for the portion of accumulated sick leave mended by the PERS actuaries and consulta nts benefits which is estimated will be settled upon retirement or death.

a dpe tePR or fAmnsr retirmentor dath.tion.

These benefit provisions and all other re

• quirements are established by state statute and*

Self-Insurance Program City ordinance: The Utility pays both the em The Electric Utility participates in a self-ployee and employer contributions. Allocation insurance program for workers' compensation and general liability coverage which is adminis-Utility is not available. City-wide information tered by the City. The Electric Utility pays an concerning elements of the unfunded pension amount to the City representing an estimate of benefit obligation, contributions to PERS for the amounts to be paid for reported claims incurred year ended June 30,1990, and recent trend infor and unreported claims based upon past experi-mation may be found in the notes to the City's ence, modified for current trends and information.

Comprehensive Annual Financial Report" for While the ultimate losses incurred through the fiscal year ended June 30, 1990...

June 30,1990 are dependent upon future develop ments, the Utility's management believes that Rate Stabilization Account amounts paid are sufficient to cover such losses.

The Electric Utility's rules andregulations provide for'a Rate Stabilization Account (RSA)

Deferred Compensation -and Employees' Which is used to offset changes in the cost of Retirement Plans operations. Wholesale rate refunds and over or under collections of revenues resulting from the Deferred Compensation Plan:

difference between the Electric-Utility's actual The City offers its, employees a deferred costs of supplying electric power and energy compensation plan created in accordance with and the amount billed to customers through Internal Revenue Code Section 457. The plan, existing rates are recorded in the RSA. The available to all city employees, permits deferral amount of the RSA is determined in accordance of a portion of employee salary until future with a formula based on retained earnings.not years. The deferred compensation is not available exceeding the required reserve for debt service to employees until termination, retirement, plus a $10,000,000 reserve forworking capital.

death, or unforeseeable emergency.

The Electric Utility's fiscal 1990-91 budget in-.

All amounts of compensation deferred under cludes the recognition of revenues in the amount the plan, all property and rights purchased with of $27,873,000 from the RSA to be used to offset those amounts, and all income attributable to fiscal year 1990-91 rate, increases. Customer those amounts, property or rights are (until paid billings were reduced by $7,108,000 during the

year ended June 30, 1990 through credits to Budgets and Budgetary Accounting customer bills.

The Electric Utility presents, and the City V 11S TV eCCouncil adopts, an annual budget. The proposed General Fund Contribution budget includes estimated expenditures and Pursuant to the City Charter, the Electric forecasted revenues. The City Council adopts FINANCIAL Utility may transfer up to 11.5 percent of its prior the Electric Utility's budget at its last meeting in.

year's gross operating revenues to the City's June via-an adopting-resolution. The Electric General Fund. The Electric Utility transferred '5.6 Utility's budgeted expenditures for fiscal year percent in 1988-89 and 7.5 percent of the prior 1989-90 amounted to $158,141,000 while. the year's gross operating revenues to the General adopted 1990-91 budget totals $192,295,000.

F*

Fun& This amounted to $6,580,500 in 1988-89 Fisca Y ar and $9,65i,550 in 1989-90.

Ended NOTE 2. LONG-TERM OBLIGATIONS The following is a summaryof changes in long-term obligations of the Electric Utility for the year June 30, 1990 ended June 30, 1990 (in thousands):

Balance Balance July 1, 1989 Increase Decrease June 30, 1990 1

0o Certificates of participation 979

$43

$ 246 776 Revenue bonds payable 146,645 2,735 143,910 Total

$147,624

$43

$2,981

$144,686 Annual debt service requirements to maturity as of June 30, 1990 are as follows (in thousands):

There 1991 1992 1993

-1994 1995 after

.Total Certificates of participation 205 193 171 97 66 44 776 Bond interest payable 10,159 9,902 9,641 9,370 9,097 99,544 147,713.

Bond principal payable 2,905

- 3,110 3,320 3,575 3,820 127,180 143,910 Total

$13,269

$13,205

$13,132

$13,042

$12,983

$226,768

$292,399 The Electric Utility's share of outstanding

$121,025,000 1986 - Electric Revenue Re Certificates of Participation are due in annual funding Serial A bonds; $36,410,000 serial bonds installments through January 1, 1996; interest due in annual installments from $760,000 to rates range from 5.75 percent to 9.4 percent.

$4,740,000 through October 1,2001; interest from 5.2 percent to 6.8 percent, $15,705,000 'term Revenue bonds payable at June 30, 1990 are as bonds due October 1, 2004 at 7.0 percent; and follows:

$68,910,000 term bonds due October 1; 2013 at 7.0

$80,000,000 1980 Electric Revenue, serial percent......................$118,950,000 bonds due in annual installments from $925,000 Total Electric Revenue to $1,250,000 through October 1, 1993; interest Bonds Payable................$143,910,000 from 8.1 percent to 10.0 percent.. $4,325,000

$9,070,000 1980 Electric Revenue Refunding The Electric Utility's bond indentures require serial bonds due in annual installments from the Utility to maintain a debt service coverage

$470,000 through October 1, 1993; interest from ratio as defined by the bond covenants of 1.25.

8.1 percent to 10.0 percent........ $1,880,000 The Electric Utility's debt service coverage ratio

$35,000,000 1983 Electric Revenue serial bonds due in annual installments from $435,000 to $680,000 through October 1, 1995; interest NOTE 3. RESERVED RETAINED from 8.5 percent to 10.5 percent

.. $3,330,000 EARNINGS

-$16,500,000 1985 Electric Revenue bonds; A reserve for debt service has been estab

$6,110,000 serial bonds due in annual installments lished pursuant to applicable bond indentures.

from $315,000 to $650,000 through October 1, The reserve for debt service at June 30, 1990 is 2000; interest from 6.75 percent to 8.3 percent; equal to the maximum annual debt service

$4,155,000 term bonds due October 1, 2005 at 8.4 required in future years plus three months' percent; and $6,235,000 term bonds due October interest and nine months' principal due in the PUBLIC UliII11LM 1, 2010 at 8.5 percent

$15,425,000 next fiscal year.

RIVERSIDE

NOTE 4. LITIGATION debt service requirements. Such payments are In April, 1985, Southern California Edison considered a cost of purchased power.

Company filed a lawsuit in the amount of As of July 1, 1988, an amendment to the IPA

$4,747,000 regarding costs related to nuclear fuel bond resolution provided for the use of surplus purchases made by Edison for San Onofre construction funds to reduce power costs to Nuclear Generating Station Units 2 and 3. The purchasers. As a participant in the project, the City believes that this claim is without merit and Electric Utility received $20,700,000 of these has denied the claim. This case is proceeding surplus funds in the form of credits on its power and no opinion as to the probable outcome can bill. These credits have been included in the Rate be rendered at this time. No amounts have been Stabilization Account and will be used to offset accrued for this contingency in the accompanying future rate increases.

financial statements.

The Electric Utility is a member of the Southern California Public Power Authority Rate Cases and Other Proceedings (SCPPA), a joint powers agency. SCPPA provides The Utility is a party plaintiff in various rate for the financing and construction of electric cases and other proceedings affecting the Electric generating and transmission projects for partici Utility. The Utility does not believe that any of pation by some or all of its members. To the these proceedings will have an adverse effect extent the Electric Utility participates in projects upon the financialcondition of the Electric Utility.

developed by SCPPA, the Electric Utility is obli The Electric Utility is a defendant in various gated for its proportionate share of the cost of lawsuits arising in the normal course of business.

the project. The projects and the Electric Utility's Management, based in part on the opinion of proportionate share-of SCPPA's obligations are outside legal counsel, does not believe that the as follows:

ultimate resolution of these matters will have a P

material effect on the financial position or results oject Percent Share of operations of the Electric Utility.

Palo Verde Nuclear Generating Station..........5.4 percent Southern Transmission NOTE 5. COMMITMENTS System..................10.1 percent Take or Pay Contracts Hoover Dam Uprating.........31.9 percent The Electric Utility has entered into a Power IAs part of the take or pay commitments Sales Contract with the Intermountain Power with IPA and SCPPA, the Electric Utility has Agency (IPA) for the delivery of electric power.

agreed to pay its share of current and long-term The Electric Utility's share of IPA power is equal obligations. Payment for these obligations will to 7.6 percent of the generation output of IPA's be made from operating revenues received dur 1,699 megawatt coal-fueled generating station, ing the year that payment isdue. Interest rates located in Central Utah.

on the outstanding debt associated with the The contract constitutes an obligation of the take or pay obligations range from 5.0 percent to Electric Utility to make payments solely from 8.5 percent. The following schedule details the revenues of the Electric Utility. The Power Sales amount of principal which is due and payable by Contract requires the Electric Utility to pay the Electric Utility for each project in the fiscal certain minimum charges which are based on year indicated.

Principal Paymens,

(in thousands)

IPA

.SCPPA c

uPalo Verde Year Intermountain Nuclear Southern Ending Power Generating Transmission Hoover June Project Station S

i System Upra ing Total 1991

$3,825

824, 999

$ 5,648 1992 4,984 882

-1,065' A6931 1993-5,177 947 1,141 7,265 1994 5,658 1,018 1,223 156 8,055 1995 6,501 1,099

• 1,326 167 9,093 Thereafter 379,546 f59,492 110,659 10,662 560,359 Total

$405,691

$64,262

$116,413 P$10,985

$597,351

4 H Power Sales Agreements cumulated depreciation of $25,443,000. The The Electric Utility has executed three firm Electric Utility's portion of current and lon VO E TO Power Sales Agreements that allow the Electric term debt associated with SONGS is included in Utility to purchase capacity and energy to offset the accompanying financial statements.

purchases from Southern California Edison. The As a participant in SONGS, the Electric NANCIAL agreements are with the Deseret Generation and Utilitycould be subject to assessment of retro Transmission Cooperative (Deseret) of Sandy, spective insurance premiums in the event of Utah, the Pacific Gas and Electric Company nuclear incident at San Onofre orany other STATEMENTS (PG &E) and the California Department of Water licensed reactor in the United States.

Resources (CDWR). The agreement with Deseret is a fixed price purchase of 46.7 megawatts of Report of Independent'Accountants Fiscal Year firm capacity and associated energy for a period of eight years, ending December 31, 1994. The N

e r

,1 agreement with PG&E is a purchase of 5 mega-To the City Council and Board of Public watts of firm capacity and associated energy, Utilities of the City-of Riverside, renewable on an annual basis. The agreement California with CDWR is a purchase of 20 megawatts of Jn 3n ot m

g firm capacity and associated energy during the I

u pnoteacmayn aac months of May through October each year, and setadterltdsaeet foeain monhs f My hrogh ctoereac yer, nd and retained earnings and of changes in financial expires on October 31, 1993. The sale and ac-position present fairly, in all material respects

-ceptati.ce of capacity and energy is contingent ceptnceof apaityand nery i cotinent the financial position of the City of Riverside upon'available transmission service.

t upon 'vailale trnsmisson sevice.Electric Utility at June 30, 1989 and 1988, and the ty o Joint Ventures results of its operations and the changes in its Puruat o SttemntAgeeen wth financial position for the years then ended in Riesd Pursuant to a Settlement Agreement with Southern California Edison, dated August 4, conformity with generally accepted accounting 1972, the City was granted the right to acquire a principles. These financial statements are the 1.79 percent ownership interest in San Onofre responsibility of the management of the City o Nuclear GeneratingRiverside; our responsibility is to express a Electric Utility and 3. Pursuant to the Settlement gS)eUnts opinion on these financial statements based on and. Prsuat t theSetlemet Areemnt, our audits. We conducted our audits of these SCE agreed to provide the necessary transmis sion service to deliver the outpit of SONGS to s

Riverside. SCE and the City entered into the auditing standards which require that we plan SONGS Participation Agreement which sets and perform the audit-to obtain reasonable trmS Padcontiton n ugemnde which ste assurance about whether the financial state forth the terms and conditions under which the City, through the Electric Utility, participates in audt icue exaini a

tstasis, evi the ownership and output of SONGS. Mainte-auiinldsemnngonattbssv nance and operation of SONGS remains the dence supporting the amounts and disclosures responsibility of SNS in the financial statements, assessing the ac respnsiblityof SE.

counting principles used and significant esti The Electric Utility's share of the capitalized mates made by management, and evaluating the construction cost and operating expenses is in-overall financial statement presentation. We cluded in the Electric Utility financial state-believe. that our audits provide a reasonable ments. As of June 30, 1990, Riverside's 1.79 basis for the opinion expressed above.

percent share of the capitalized construction costs for SONGS totaled $113,295,000 With ac-t Price Waterhouse RIVERSIDE

City Of Riverside WATER UTILITY SELECTED FINANCIAL STATISTICS Water-Utility WATER SUPPLY (acre-ft) 1989/90 1988/89 1987/88 1986/87 1985/86 Pumping 61,249 60,815 57,446 57,267 53,314 Purchases 6,598 3,133 3,214 3,417 3,454 Total 67,847 63,948 60,660 60,684 56,768

% Pumped 90.3%

95.2%

94.7%

94.4%

93.9%

System Peak Day (gals) 35,400,000 89,248,000 90,858,000 86,025,000 92,894,000 WATER USE Average Number of Customers Residential 52,889 52;076 51,018 50,132 49,212 Commercial/Industrial 3,976 3,862 3,757 3,670 3,553 Other 3,692 3,237 2,942 2,528 2,603 Total 60,557 59,175 57,717 56,330 55,368 CCF Sales Residential 17,149,071 16,527,248 15,156,174 15,417,373 14,616,402 Commercial/Industrial 8,573,499.

8,266,856 7,805,421 7,896,845 7,184,416 Other 74,372 564,663 1,254,534 1,511,726 1,696,000 Total 26,464,942 25,358,767 24,216,129 24;825,944 23,496,818 Average Annual CCF per Residential Customer 324 317 297 308 297 Average Price (cents/ccf) 62.3 61.2 63.5 62.5 62.0 Debt as a percent of Net Plant 40.0%

42.7%

47.5%

480%

52.7%

Operating income as a percent of Operating Revenues 10.6%

16.0%

6.0%

'12.8%

13.6%

Employees 129.5 129.5 124.5 119.5 122.0

City of BALANCE SHEET Riverside June 30 Water Utility 1990'

1989, (In Thousands)

Assets Utility plant:

Source of supply

$ 13,886

$ 10,500 Pumping 4,927 4,642 Treatment 326 319 Transmission and distribution 97,007 94,632 General 3,584 3,260 Intangible 5,543 5,542 125,273 118,895 Less accumulated depreciation (36,468)

(33,836) 88, 805 85,059 Construction in progress 7,148 7,527 Total utility plant 95,953 92,586 Total restricted assets 5,246 5,239 Current Assets:

Cash and investments

.33,609 33,556 Accounts receivable, net 2,370 1,909 Accrued interest receivable 702 666 Total current assets 36,681 36,131 Other assets 142 151 Total assets

$138,022

$134,107 The notes to the financial statements are an integral part of this statement.

PUBLIC UTILITIES RIVERSIDE

City of Riverside BALANCE SHEET W ater Utility 1990 June 30 1989 (In Thousands)

Capitalization and liabilities Equity:

Retained earnings Reserved

$ 5,246 5,239 Unreserved 26,795 25,266 Total retained earnings 32,041 30,505 Contributed capital 65,055 61,624 Total equity 97,096 92,129 Long-term obligations, less current portion 36,309 37,890 Total capitalization 133,405 130,019 Current liabilities payable from restricted assets:

Accrued interest payable 629 648 Current portion of long-term obligations 1,769 1,674 Total current liabilities payable from restricted assets 2,398 2,322 Current liabilities:

Accounts payable 771 401 Accrued liabilities 1,448 1,365 Total current liabilities 2,219

-1,766 Commitments and contingencies Total capitalization and liabilities

$138,022

$134,107 The notes to the financial statements are an integral part of this statement.

City of STATEMENT OF OPERATIONS AND Riverside RETAINED EARNINGS Water Utility For the Fiscal Years Ended June 30 1990 1989 (In Thousands)

Operating revenues:

Water sales Residential

$11,224

$10,861 Commercial 5,222 5,043 Other 495 578 Total operating revenues 16,941 16,482 Operating expenses:

Operations 7,181 6,361 Maintenance 1,888 1,806

'Purchased energy 2,129 2,190 Purchased water 1,135 833 Depreciation 2,811 2,659 Total operating expenses 15,144 13,849 Operating income 1,797 2,633 Non-operating revenues (expenses):

Interest income 3,136 2,985 Interest expense (2,663)

(2,666)

Gain on retirement of utility plant 160 59 Other 1,001 903 Total non-operating revenues (expenses) 1,634 1,281 Income before operating transfers 3,431 3,914 Operating transfer out:

General fund contribution (1,895)

(1,835)

Net income 1,536 2,079 Retained earnings, July 1 30,505.

28,426.

Retained earnings, June 30

$32,041

$30,505 The notes to the financial statements are an integral part of this statement.

PUBLIC UTILITIES RIVERSIDE

City of Riverside STATEMENT OF CHANGES IN FINANCIAL POSITION Water Utility For the Fiscal Years Ended June 30 1990 1989 (In Thousands)

Sources of working capital:

Operations:

Net income

$ 1,536

$ 2,079 Expenses not requiring current outlay of financial resources:

Depreciation and amortization 2,811 2,659 G Cain on retirement of utility plant (160)

(59)

Amortization of debt.issuance costs 9

10 Working capital provided by operations 4,196 4,689 Increase in contributed capital 3,431 8,259 Decrease in restricted assets 375 Increase in current liabilities payable from restricted assets 76 86 Proceeds from sale of utility plant 230 Total sources of working capital 7,933 13,409 Uses of working capital Acquisition of utility plant 6,248 9,356 Reduction of long-term obligations 1,581 1,308 Increase in restricted assets' 7

Total uses of working capital 7,836 10,664 Net increase in working capital 97

$ 2,745 Component elements of net increase (decrease) in working capital:

Cash and investments 53

$ 2,735 Receivables, net 497 (174)

Accounts payable (369) 420 Accrued liabilities (84)

(236)

Net increase in working capital 97

$ 2,745 The notes to the financial statements are an integral part of this statement.

NOTE 1.

SUMMARY

OF SIGNIFICANT Agreements and Investments in Deferred Corn ACCOUNTING POLICIES pen.sation Plans were uninsured and unregisO The Water Utility exists under, and by vir-terd, with securities heldby the counterparty tue of, the City Charter enacted in 1883,.and is a Fn component unit of the City of Riverside (City).

City's'name. Disclosure of the legal and con The Water Utility is responsible for the produc-tyactual provisions of the City's investmen tion; transmission and distribution of water for I n carina t

by t

ye on ATEMENTS sale in the City.

-salein the notes to the City's "Comprehensive Basis of Accounting..,

Annual Financial Report" -for the fiscal year The Financial Statements of the Water Util-ended June 30, 1990.

ity are presented in conformity with generally Revenue Recognition Fiscal Year accepted accounting principles as applicable to governments and substantially in conformity accounting.

ues re rg d when with accounting principles prescribed by the earned and expenses are recognizedwhen incur California Public -Utilities Commission,.-except for the methodi of accounting for contributed rd ae tlt utmr r

ildmnhy capital described below. The Water Utility is Unbilled service charges are recorded at not subject to the regulations of the California year end and are included in Accounts Receiv Public Utilities Commission.

able: Unbilled accounts receivable Were $750,000 at June 30,1989 and $759,000 at June 30,1990. An Utility Plant and Depreciationalof Utilty lantandDeprciaion lloance for doubtful accounts is maintained city o All utility plant is valued at historical cost for utility and miscellaneous accountsreceivable.

or estimated historical cost,,if actual historical The balance in this account is adjusted at fiscal cost is not available. Contributed plant is valued year end to approximate the amount anticipated Riverside at its estimated fair market value on the date to be uncollectible The balance in the allbwance contributed. Cost includes labor, materials, account was $212,000 at June 30, 1989 and allocated indirect charges such as engineering,

$214,229 at June 30, 1990. During the fiscal year, supervision, construction and transportation.aconsdtrietob hletbeae W trU iiy equipment, retirement plan contributions and recorded as bad debt expense.

other fringe benefits, and certain administrative Inventories and general expenses. The cost of relatively The Cit maintains a separate Central Stores minor replacements are included in mainte invetory The Water Utility expenses items as nance expense.

• Derecatio

• i proide ove th est-

-they are drawn out of Central Stores. As such, Depreciation is provided over the esti mated useful lives of the related assets using the Water Utility does not include inventories the straight. line method. The estimated useful on its financial statements.

lives are as follows:

Contributed Capital Supply Pumping Under the provisions of the City Charter, and Treatment Plant..... 20-50 years amounts received from customers and others Transmission and for constructing utility plant are combined with Distribution Plant....... 30-50 years retained earnings to represent equity. Accord General Plant ingly, contributed capital is shown in the and Equipment............ 5-50 years accompanying balance sheet as an equity ac Cashand nvesment

• ,count and is not offset against utility. -plant.

CashDepreciation provided for the related utility The City Treasurer deposits idle funds in plant is expensed.

accordance with Section 53601 of the California Government Code and the City's general invest-Compensated Absences ment policy. In accordance with the City's The accompanying financial statements in policy, the Water Utility's cash and investments dude accruals for salaries, fringe benefits and are invested in a pool managed by the Treasurer compensated absences due employees at June of the City. The Water Utility does not own 30, 1990. The Water Utility treats compensated specific, identifiable investments of the pool.

absences due employees as a current liability.

At-June 30,.1990, cost approximated the Employees'receive ten to twenty vacation market value of the Water Utility's share of days a year based upon length of service. A max pooled cash and investments. The bank balance imum of two years vacation can be accumulated was covered by federal depository insurance and unused vacation may be redeemed for cash or by collateral held in the pledging bank's upon separation.

trust department for the benefit of the City. At Employees receive one day of sick leave for June 30,1990, the City has invested principally in each month of employment with unlimited medium term and floating rate notes, certificates accumulation. Employees who terminate for rea of deposit.and U.S. Treasury obligations which son's other than retirement or death lose all were insured, registered or collateralized with accumulated sick leave. Upon retirement or securities held by the City or its agent in the death, a percentage-of unused sick leave is paid City's name. Investments held at June 30, 1990 to certain employeesor their estates in a lump J,

under Repurchase and Reverse Repurchase

-sump basedon longevity. Employeeshired in VERSIDE

the general bargaining unit after July 1, 1979 nent full-time and selected part-time employees cannot redeem unused sick leave. A liability is are eligible for participation in PERS. Benefits recognized for the portion of accumulated sick vestafterfiveyearsofserviceandaredetermined leave benefits which is estimated to be settled by a formula that considers the employee's age, upon retirement or death.

years of service and salary. Employees may SelfInsuance

.retire at age 60 and receive 2 percent of their Self-Insurance Program highest average annual salary for each year of The Water Utility participates in a self-insur-service completed. Employees retiring at age 50 ance program for workers' compensation and to 59 receive a lesser percentage for each year of general liability coverage which is administered service. PERS also provides death and disability by the City. The Water Utility pays an amount to benefits. These benefit provisions and all other the City representing an estimate of amounts to requirements are established by state statute be paid for. reported claims incurred and un-and City ordinance.

reported claims based upon past experience, Employee contributions are 7 percent, while modified for current trends and information.

the Utility is required to contribute theremain Whilethe ultimate losses incurred through ing amounts necessary to fund the benefits for June 30, 1990 is dependent upon future develop-its members using the actuarial basis recoi ments, the Utility's management believes that mended by the PERS actuaries and consultants amounts paid are sufficient to cover such losses.

and adopted by the PERS Board of Administra tion. These benefit provisions and all other Deferred Compensation and requirements are established by state statute Employees' Retirement Plans and City ordinance. The Utility pays both the Deferred Compensation Plan:

employee and employer contributions. Alloca tion of PERS financial data related to the Water The City offers its employees a deferred Utility is not available. City-wide information compensation plan created in accordance with concerning elements of the unfunded pension Internal Revenue Code Section 457. The plan, benefit obligation, contributions to PERS for the available to all city employees, permits deferral year ended June. 30, 1990, and recent trend of a portion of employee salary until future information may be found in the notes to the years. The deferred compensation is not avail-City's "ComprehensiveAnnual Financial Report" able to employees until termination, retirement, for the fiscal year ended. June 30, 1990.

death, or unforeseeable emergency (as defined).

All amounts of compensation deferred under General Fund Contribution the plan, all property rights purchased with Pursuant to the City Charter, the Water Util those amounts and all income attributable to ity may transfer up to 11.5 percent of its prior these amounts, property or rights are solely the year's gross operating revenues to the City's property and rights of the City (until paid or General Fund. In Fiscal Years 1988-89 and 1989 made available to the employee or other bene-90 the Water Utility transferred 11.5 percent of ficiary) subject only to the claims of the City's.

gross operating revenues, or $1,835,000 in 1988 general creditors. Participants' rights under the 89 and $1,895,000 in 1989-90.

Plan are equal to those general creditors of the City in an amount equal to the fair market value Budgets and Budgetary Accounting of the deferred account for each participant.

The Water Utility presents, and the City Council adopts, an annual budget. The proposed Employees' Retirement Plan:

budget includes estimated expenditures and The City contributes to the California Public forecasted revenues. The City Council adopts Employees Retirement System (PERS), an agent the Water Utility's budget at its last meeting multiple-employer public employee retirement in June via an adopting resolution. The Water system that acts as a common investment and Utility's budgeted expenditures for fiscal year administrative agency for participating public 1989-90 amounted to $29,952,000 while the entities within the state of California. All perma-adopted 1990-91 budget totals $38,713,000.

NOTE 2. LONG-TERM OBLIGATIONS The following is a summary of changes in long-term obligations of the Water Utility for the year ended June 30, 1990 (in thousands):c i

te ea Balance o s Balance July 1, 1989 Increase Dbecrease June -30, 1990 Certificates of participationr 552

$ 219

$ o 431 Contracts payable E

o1,332 10 a 1,322 Revenue bonds payable 37,680 1,355 36,325 Total

$39,564

$98

$1,584

$38,078 The annual requirements to amortize all debt outstanding (including interest) as of June 30,1990 is as follows (in thousands):

1991 1992 1993 1994 1995 Thereafter Total Certificates of participation

-N T ST and contracts payable

$ 344

$ 273

$ 202

$ 181

$ 181 572

$ 1,753 Bond interest payable 2,459

-2,374 2,284.

2,190 2,090 16,215 27,612 FINANCIAL Bond principal payable 1,425 1,505 1,540 1,615 1,685 28,555 36,325 Total

$4,228

$4,152

$4,026

$3,986

$3,956

$45,342

$65,690 The Water Utility's share of outstanding The Water Utility's bond indentures require Certificates of Participation are due in annual the Utility to-maintain a debt service coverag installments through January 1, 1996;ratio, as defined by the bondcovenants, of 1.50.

i rates range from 5.75 percent to 9.4 percent.

-The Water Utility's debt service coverage ratio Contracts payable at June 30, 1990 consist of was 2.25 at June 30, 1990.

Water Stock acquisition rights payable to various N

3 SOE water companies.

EARNINGS Revenue bonds payable at June 30, 1990 are as A reserve for debt service has been es follows:

tablished pursuant to applicable bond inden

$1,000,000 1966 Water Revenue Series 2 serial tures. The reserve for debt service at'June 30, bonds due in annual installments from $35,000 to 1990 is equal 'to the -maximum annual debt

$40,000 through February 1, 1996; interest from service required in future years plus accrued it 3.7 ercet to3.75perent

........ $230000 interest and pri ncipal due in the next fiscal year.

3.7 percent to 3.75 percent..........

$230,000

$3,500,000 1967 Water Revenue Series A NOTE4. LITIGATION Riverside series bonds due in annual installments from The WaterUtility is a defendant in various

$110,000 to $130,000 through June 1, 2002; interest lawsuits arising in the normal course of busi from 4.20 percent to 4.25 percent

.. $1,400,000 ness. Management, based in part on the opinion Wat

$1,500,000 1969 Water Revenue serial bonds of outside legal counsel, does not believe tha due in annual installments from $50,000 through the ultimate resolution of these matters wia y

December 1, 1999; interest, from 6.8 percent to 7.0 have a material effect on the financial positionor percent....

$500,000 results of operations. of the Water Utility.

$5,000,000 1972 Water Revenue serial bonds due in annual installments from $180,000 to Report of Independent Accountants

$325,000 through May 1, 2002; interest from 3.0 November 16, 1990 percent to 5.6 percent............

$2,935,000 To the City Council and Board of Public

$6,900,000 1973 Water Revenue serial bonds Utilities of the City of Riverside, due in annual installments from $235,000 to

$435,000 through August 1, 2003; interest from Ifori 5.30 percent to 5.75 percent.......

$4,515,000 Ino the accmpn g baan

$5,000,000 1974and retained earnings and of changes in financial due in annual installments from $180,000 to

$310,0000; the financial position of the City of Riverside from 7.25 percent to 7.5 percent.Water Utility at June 30, 1989 and 1988, and the

$2,000,000 1976 Water Revenue serial bonds results of its operations and the changes in its due in annual installments from $60,000 to financial position for the years then ended in

$145,000 through February 1, 2006; interest from conformity with generally accepted accounting 6.0 percent to 6.25 percent.........$1,415,000 principles. These financial statements are the

$3,000,000 1977 Water Revenue serial bonds responsibility of the managenent of the City of due in annual. installments from $80,000 to Riverside; our responsibility is to express an

$225,000 through February 1, 2007; interest from opinion on these financial statements based on 5.1 percent to 5.75 percent........

$2,200,000 Our audits. We conducted our'audits of these

$6,600,000 1978 Water Revenue serial bonds statements in accordancewith generally accepted

-due in annual installments from $200,000 to auditing standards which require that'we plan

$410,000 through April 1, 2008;interest from 5.1 and perform, the audit to obtain reasonable percent to 5.8 percent............

$4,885,000 assurance about whether the financial state

$15,900,000 1985 Water Revenue bonds, are free of'material misstatement. An

$5,845,000 serial bonds due in annual install-audit includes examining, on a test basis, evi ments from $295,000 to $625,000 through dence supporting the amounts and disclosures October 1, 2000; interest from 6.9 percent to in the financial statements, assessing the ac 8.4 percent; $4;010,000 term bonds due Octo-counting principles used and significant esti ber 1, 2005, interest at 8.5 percent; and $6,045,000 mates made by management, and evaluatingthe term bonds due October 1, 2010, interest at 8.6 overall financial statement presentation. We percent.................

$14,875,000 believe that our. audits provide a reasonable PUBLIC TIS Total Water Revenue basis for the opinion expressed above.

BondsayableT.................h$36,325,000 Price Waterhouse c

aRIVERSIDE

Antoine S. Abu Shabakeh Malcolm N. Duckett Jeffrey J. Lewis Isac J. Sanchez Ernest W. Adams Daniel Duron Paul A. Lindsay Lawson R. Satterfield Richard E. Adams David W. Eich David M. Little Rhonda L. Satterlee Wendy F. Adams John J. Enderson Connie L. Lizarraga Barbara A. Savard IUVL1R JIJL Raymond S. Aguilar Richard L. Ennis Lydann R. Lord Samuel L. Scarcello Richard C. Aguilera Mark S. Ensign Robert L. Lovell

. Donna K.*Schick Jerry C. Alexander, Jr.

William E. Fagan Henry A. Loya Delbert L. Schroeder David A. Alfaro Patrick E. Fahey Robert L. Lucas Faye L. Schuman Laura D. Ammermon Scott L. Faust Michael H. Luitwieler John B. Schwartz Arthur V. Anaya Pauline G. Finn Carol L. Lyons Barbara L. Scott Kenneth A. Anderson Ronald T Fiske Tammy J. Mader Mark-E. Scribner Guillermo Armenta Fraik R. Fitzgerald Arthur P. Madril John L. Sevey I

Alfred Arredondo Ronald D: Frost Jaime J. Ma by Daniel D. Shackelford Christopher Avila Gerald A. Gandara Babaloloa Makinde Odus Omar E. Shehab Robert S. Ayers, Jr.

David V. Garcia George E. Manuel John M. Shephard Nora L. Aylward Raoul B. Garcia Bairy W. Marshall Candice C. Shih Helen M. Azevedo Yolanda C. 'Garcia Christine Martino Brian Simpson Mary S. Babin Steven V. Garcia Peggy I. Mayer Dennis G. Sims Stephen H. Badgett Thomas D. Garcia Christina M. McCaslin James R. Sinner John J. Bailey Joseph A. Garozzo Daniel L. McClenathan Richard H. Skelton Judy L. Bailey Richard Gastelum Alison L. McDaniel David A. Smart Charles F. Baldwin Anita L. Gatter Kurt McDonald Dale F. Smith Michael J. Baldwin Paul R. Gearhart Margery 1. McDowell Jerry L. Smith Del R. Ballard Thomas R. Gibbins Lois G. McGinnis Julie A. Smith Frederick.H. Barkley George F. Gielish Richard D. McGrath Nancy A. Smith Robert E. Barnekow Robert B. Gill Kenneth B. McGregor Sandra L. Smith Ron W. Barry Arthur P. Gomez Jeffrey K. McKown Wendell K. Smith Vahid Bazel Daniel M. Gomez Martin W. McLeod Marco J. Sortillon Larry T. Beal Veronica Gomez Richard K. McKinny Mark T. Soverns

'Ronald E. Becker Ronald W. Goodermuth David M. McLellan Edward M. Spinney William D. Bedford, Jr.

James G. Grady Sheridan A McReynolds Robert B. Spires Francis L. Beliveau Manuel S. Gray Larry D. Meester Lee H. Stallberg Harold J. Bell Marilyn J. Grayston Richard G. Mendoza Kelly C. Starkey Walter N. Bell, Jr.

Richard J. Greenwalt Ismael E. Mercado Lu Cinda Staudt Gary L. Bender Bacilio Gutierrez, Jr.

Madalyn M. Mieldazis Peggy J. Stephan Dwight H. Benner' Luciano Guzman Eddie R. Milholland Donald Stewart, Jr.

Bruce C. Benter John W. Hair C. Ra Miller Shelly L. Stewart Jacqueline M. Bishop Ronald J. Ham Claudie R. Miller Kevin P. Stinson Matthew Blais William L. Hannah Donald P. Miller Troy F. Stinson Charles R. Bluemel Patrick B. Hannifin Roy A. Miller Dennis J. Stirlen Craig W. Bostrom Edward P. Hansen Kevin S. Milligan Fred J. Stoiber Fernand R. Boucher Robert W. Harper William K. Modesitt Terry L. Stroud Gregory J. Bowers Sherwin L. Harris Odell Moncrief T.D. Sweatt Robert D. Bowes William W. Harris, Jr.

A. R. (Ric) Montano II Ticia L. Symonds.

Biian G. Bozarth Lee A. Hartman Robert A. Montano Maruice S. Taks Robert Bracken Wanda F. Hedlund Philip M. Montefu Alvin M. Tannenbaum.

Thomas G. Bradshaw Alfred W. Heinen Carol A. Morabito Bruce C. Taylor David W. Bride James P. Henke Kevin D. Munns Joseph M. Tenenbaum Christine Y. Brooks Patricia J. Henwood Gregory L. Myers Diane J. Tepper Jeanette E. Brown Juan R. Hernandez Ray D. Neal, Jr.

Brian G. Thomas Michael E. Brown Lorraine H. Hernandez Peter Nesic Bryan D. Thomas Patrick D. Brown Victor H. Hernandez Richard S. Nevarez Robert L. Thomas Robert H. Brown Victoria M. Herrera Ortiz Rita Nicks Cynthia L. Thompson Willie L. Brown Richard A. Hinojosa Barry J. Niemiec Michael J. Torelli Gerald R. Burton Edward K. Hogerty Gary L. Nolff Abraham Torres David W. Butler A. Pat Hohl Randall W. Olgren Joey M. Toth Loretta F. Butler Denise L. Holman Charles Olivier Tina Tran Jerry G. Byrd Richard E. Holmes Al P. Orozco Vincent N. Trepepi Alfredo E. Cahuas Keith A. Hoover Joseph A..Orth Richard L. Trower Randell S. Carder James T. Hornbarger Darrell R. Otjen Robert W. Truesdell Maria A. Carlton Isabella M. Horton Dwight W. Page Dale L. Underwood Bill D. Carnahan Richard.W. Houser Cecil R. Parker, Jr.

Adrian A. Valdez Carlos Castro Woodrow Hoye Clyde B. Parker Lynne M. Vasquez Leon Chagolla Ross Hrinko.

Gilbert S. Penunuri Rick D. Velasco Ami R. Chaudhury William L. Hughes Charlie R. Penunuri Victor G. Velasquez Joseph Chavez Gloria M. Humphrey Rey M. Perez Michael J. Vernon Gail L. Chavez Muench Kenneth L. Humphrey Maril n F. Pieper Karol L. Veu Casovic Joseph S. Chavez Roger L. Hunt Donald R. Pim Clarence R. Voll, Jr.

Thomas K. Clarke Daniel Hurtado Davis N. Plourde Roger J. Wagner Jeffrey D. Clausen Tam T. Huynh David J. Porchia Theresa S. Waldschmitt Cheryl E. Clelland Marvin L. Infante Billy J. Powers Peggy L. Wales Danny L. Clemons Bonnie M. Ivy Gregory L. Prator Robert F. Wallstead James E. Coleman Roger S. Jackson Michael R. Price Richard W. Wayman Donald J. Colgan Nicolaas J. Jacobs Daryl A. Proctor Edward M. Wdowiak Thomas J. Colins Lester W. Jameson, Jr.

Pat L. Pruitt Alfred H. Wells Linda S. Conerly Raymond G. Jaure Donald R. Pulsifer Joe E. Westmoreland Mark S. Connor John N. Johnson Daniel W. Randall Paul 0. Westover, Jr.

Bobby V. Cordova James E. Johnson Lena J. Raniada Mary T. Whaley Cecil T. Cox Lila M, Johnson Jack C. Read Mic ael R. White Glenn M. Cox Sam R. Johnson David L. Redding Ronald J. White Alan D. Craig Steven T. Johnson Stan V. Reynolds Walter L. White Paul R. Crawford Wayne L. Johnson Linda C. Rhoads.

David J. Whiting Pamela D. Crosby Robert N Joranco Jeffrey J. Richardson Casey L. Whitney Billie I. Crumley, Jr.

Chris A. Joranco Mildred A. Ridges William Whitten Arnold J. Cruz Jeffrey S. Karalun Donald G. Ringgold Mark Wholley Jackie L. Cunningham Aileen M. Keller Harry T. Robertson Ronald H. Wigg Carl R. Danzek George E. Kelley Linda L. Rocha Edward T. Wilks James H. Deal Jesse K. Kent Michael A. Rodgers Phyllis J. Williams Robert Delgado William D. Kilpatrick Max A. Rodriguez Brian R. Willis John T. Denham Andrew J. Kirkland, Jr.

Ramona M. Rodriguez David C: Wilson Gregory M. Diaz David R. Knapp Linda K. Rogan, Dieter P. Wirtzfeld Mercedez P. Diaz Gus W. Knie Donald C. Rogers Alan P. Wohlfarth Peter E. Diaz Randal A. Koers John E. Rolwes Merle C. Wolff Richard J. Dickinson Edward L. Kostjal, Jr.

Daniel S. Romano Ralph F. Wollerton Dave F. Diecks David W. Krell James F. Ruel Roberta A. Womack Kerry W. Dittler Steven E. Lafond William D. Ryan Ben G. Wong Richard W. Dolenar Pamela M. Lawrence Richard.M. Ryno Wayne M. Woodall Cruz Dominguez David C. Lawson Adrian Saint James N. Wysong Patricia J. Doonan Ruben M. Leivas Elvira St. Louis Edward B. Young Russell J. Doose

.,Mary A. Lemon Angel H. Sanchez Leonard W. Zabloudil Richard S. Drobek Kelly L. Lesseg

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