Nevada Irrigation District Financial Report Reason for the Investigation*

R1

The Grand Jury recommends NID develop a standard formula based on estimated future delivery costs that will be used for determining future user rate adjustments. Further, the Grand Jury recommends that factors used in producing user rates be published each year.

R2

The Grand Jury recommends that the NID Board of Directors hire the expertise to accurately project their capital requirements and establish an effective long range planning process.

R3

The Grand Jury recommends NID develop a process to improve their communications with the community.

R4

our customers have a 5/8" meter) are correct. The irrigation/miners inch rate shown for 1 miners inch is correct but this is not representative of the District's rate schedule. The rate lowest per miners inch rate in 1989 was $88 and for 1998 was $113.30. Attached is a summary of the changes for water rate, CPI and connection fees. This shows that on some years, there is correlation between the water rate increases and CPI changes.

R5

Agree/Partially Agree The District has attempted to respond under the Recommendation Section to the comments concerning system improvements, projects scheduled and unscheduled maintenance in a positive manner agreeing that there are projects not fully completed in each anticipated year. There are numerous reasons such as; higher priority needs; weather (restricting full completion); delays yet allowing the project to be used until full completion; from time to time the need to have as built drawings finished in order to close out the work order. Whatever the delay there is the goal to finalize all paper work as quickly as possible and accurately. There is no question that projects have been postponed for periods of time and it is again based upon availability of personnel to professionally design and monitor the project. Some projects are developer originated and the District responds to the time frames that are provided by the developer. See item 5

R6

Partially Agree with addition of City building codes as required for projects located in City limits.

R7

Other Educational Activities The District offers school and public tours of its office, water treatment plants and hydroelectric power plants, provides print materials to the schools and works on watershed planning with high school students. The District is a sponsor of the Nevada County Imaginarium. NID also produces and bottles tasty drinking water fresh from the Sierra Nevada.

R8

was used are questions NID cannot answer. The writer of this FINDING uses the word assumptions and therefore chart 2 cannot be verified. The District does apologize for the inadvertent noncompliance in its first submittal of response to the Grand Jury report. Sincerely, A Sand Make R. Paul Williams President JPC/sm Attachment: Summary of Rate Fees Changes Original submittal 9-16-99 . ... Summary of Rate & Fees Changes Raw Water CPI 5/8 Conn. Treated Water Connect. Year 1st MI Addl MI Ave Fees $ BI-Mo. Usage Ave August Fees 6.00% 4.00% 4.92% 4.70% 2.59% $ 1,980 1989 2.50% 5.30% 3.85% 1988=$1,930 1.00% 2.02% $ 3.00% 1.97% 1.00% 1.00% 5.60% 2,020 1.00% 1990 4.95% $ 2,120 1.00% 4.03% 4.00% 4.00% 4.00% 3.80% 7.00% 1991 4.00% 4.00% 4.00% 2.36% $ 4.00% 4.00% 4.00% 3.80% 2,170 1992 3.10% 3.10% 3.10% 3.10% 3.10% 3.10% 2.76% $ 2,230 1993 3.10% 2.50% 2.50% 4.04% $ 2,320 2.50% 2.50% 2.50% 2.50% 2.80% 1994 3.00% 3.00% 3 00% 3.00% 16.81% $ 2,710 3.00% 3.00% 2.89% Yr 1of3 of 37% increase 1995 3.00% 3.20% 5.00% 3.00% 4.18% 2.60% 13.28% $ 3,070 1996 3/4/5% Yr 1of2 of storage comp. Incr 1997 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.90% 14.01% $ 3,500 2.00% 2.00% 2.00% 2.00% 2.00% 2.20% 3.71% $ 1998 2.00% 3,630 3.02% 3.12% Ave 10 yrs 3.44% 8.3% 10/12/99 WTRATE History xis è 1 . ŧ 1 1 1 ŧ 1 , k į 1 $ ì 1 ś ノレ M:\Chatigny Folder\Grand Jury Response 8-23-99 doc evada Irrigation Dis 1036 W Main St + PO Box 1019 + Grass Valley, CA 95945-1019 + (530) 273-6185 From Auburn & Lincoln: 1-800-222-4102 FAX: (530) 477-2646 The District pledges to provide its customers with a safe dependable water supply for urban and agricultural uses at the lowest feasible cost utilizing available resources today and in the future. IN REPLYING REFER TO FILE NO September 16, 1999 County of Nevada Civil Grand Jury 950 Maidu Avenue Nevada City, CA 95959 Attention: Foreperson The following is the District's response to the 1998-99 Grand Jury report recommendations. Comment 1 The Grand Jury recommends NID develop a standard formula based on estimated future delivery costs that will be used for determining future user rate adjustments. Further, the Grand Jury recommends that factors used in producing user rates be published each year. Response The District's Water Rate committee had directed staff at its May 26, 1999, meeting to prepare a request for proposal to solicit assistance in performing a cost of service study of user fees. Once this study is completed, the District will review the findings and consider adoption of the results. The anticipated completion date of the study is February 2000. At the conclusion of the study a determination will be made as to how customers will be informed in regards to annual changes in rates and fees for services provided by the District. Comment 2 The Grand Jury recommends that the NID Board of Directors hire the expertise to accurately project their capital requirements and establish an effective long range planning process. Directors: Nancy Weber, Div. 1 • Ernst L. Bierwagen, Div. 2 • Dale H. Birdsall, Div. 3 • R. Paul Williams, Div. 4 • George Leipzig, Div. General Manager: James P. Chatigny • Secretary: S Carol Gates • Treasurer: Teresita T Andrews Attorneys: Minasian, Spruance, Baber, Meith, Soares & Sexton, LLP 287 000 ACRES SITUATED IN NEVADA PLACER, SIERRA & YUBA COUNTIES September 16, 1999 County of Nevada, Civil Grand Jury Response In past years, the District has not published an annual "Capital Improvement List". As of a few years ago, the District relied on its budgeting process to set project priorities on a year by year basis. The budget project list was a compilation of separate project lists by the Maintenance, Operations and Engineering departments. For the past two years, District staff has been developing a database containing both maintenance projects and capital improvement projects. This database is referred to as the Project List. The database is a work-in-progress, and is continuously being refined to improve content and usability. Staff members from maintenance, operations, engineering, and administration meet regularly to update the list. All projects placed on the Project List are assigned a primary and secondary funding source using one of 10 categories. Please refer to the enclosed table "Project Funding Categories". A list of projects for the Years 1999 – 2005 is also enclosed. The list includes the project cost estimate and the anticipated primary and secondary funding source. (Five of the ten categories are unused at this time.) The anticipated primary and secondary expenditures for each effected funding category are totaled by year in the following table. 1999 2000 2001 2002 2003 2004 2005 COP 0 13,500,000 0 0 0 1,185,000 0 OPR 2,095,850 3,091,300 2,080,000 1,594,500 432,750 253,250 117,500 RMB 65,000 12,500 0 0 12,750 10,750 1,233,000 RSI 7,040,500 34,000 0 230,200 4,877,000 640,000 432,900 4,370,000 TSI 1,136,750 1,844,500 1,536,000 2,019,500 1,870,000 120,000 The enclosed project list and above table demonstrates that the process used to project the need for long-term funding, i.e., reserve funds, is not artificially diminished by funds needed for maintenance projects. Maintenance type projects, where practical and necessary, are generally funded from District Operating Revenues (OPR). The content and priorities found with the Project List will change routinely, from year to year, and within each budget year. The District must remain flexible in its approach to project scheduling in order to accommodate unexpected needs of our customers and to respond to unscheduled maintenance, state or federal mandates, natural disasters, and other unforeseen factors that might effect department work loads. September 16, 1999 County of Nevada, Civil Grand Jury Other tools will be developed in the near future including a document retrieval system, leading to automation of all District maps, and a facilities management program that makes use of the automated maps. These tools will assist staff in forecasting maintenance projects and capital improvements. A consultant may be necessary to coordinate this effort. At this time, given the advancements made thus far on the Project List, it does not seem necessary to out-source the task of projecting capital requirements or to establish a long range planning process. District staff is making satisfactory progress on both fronts. ł Comment 3 The Grand Jury recommends NID develop a process to improve their communications with the community. Response The District has developed a very indepth program to provide information to customers and other interested groups. Here is an overview of the District's public information efforts:

R9

Agree Directors: Nancy Weber, Div 1 + Ernst L Bierwagen, Div 2 + Peter Arnold, Div 3 + R Paul Williams, Div 4 + George Leibzig, Div 5 General Manager: James P Chatigny • Secretary: S Carol Gates • Treasurer: Teresita T Andrews Attorneys: Minasian, Spruance, Baber, Meith, Soares & Sexton, LLP 287,000 ACRES SITUATED IN NEVADA, PLACER, SIERRA & YUBA COUNTIES

R10

Agree Partially (There is no fund available in reserve to negotiate with PG&E. The reserve funds are to assist in procuring a license renewal with Federal Energy Regulatory Commission.) FINANCIAL