Reporting Requirements for Water and Wastewater Systems

1. Reporting Requirements for Water and Wastewater Systems A presentation by Rural Community Assistance Corporation . Prepared by Leslie R. Kryder Socorro, New Mexico, December 16, 2010

2. Rural Community Assistance Corporation Our mission is to provide technical assistance, training, and financing so rural communities achieve their goals and visions.

3. The Network Western RCAPRural CommunityAssistance Corporation916/447-2854www.rcac.org Midwest RCAPMidwest Assistance Program952/758-4334www.map-inc.org Southern RCAPCommunity Resource Group479/443-2700www.crg.org Northeast RCAPRCAP Solutions800/488-1969www.rcapsolutions.org Great Lakes RCAPWSOS Community Action Commission800/775-9767www.glrcap.org Southeast RCAPSoutheast Rural Community Assistance Project866/928-3731www.southeastrcap.org Rural Community Assistance Partnership800/321-7227www.rcap.org 3

4. This material is based upon work supported under a grant by the Utilities Programs, United States Department of Agriculture, and produced as part of the RCAP Technitrain Project. Any opinions, findings, conclusions, or recommendations expressed in this material are solely the responsibility of the authors and do not necessarily represent the official views of the Rural Utilities Programs. RCAC is an equal opportunity provider and employer.

5. Today’s Agenda • Describe the reporting requirements incumbent upon water and wastewater systems to USDA-RD and several other agencies. • Create a customized due dates calendar for each attendee.

6. Housekeeping • Schedule & breaks • Question parking lot • Pre-class and post-class self-assessments • A workshop evaluation • Lots of handouts!

7. Introductions • Presenters • Linda Martinez • Leslie Kryder • The Class • Name & Affiliation • Size of your water system • What made you want to come today? • What’s your biggest question? RCAC 3150 Carlisle Blvd NE, Suite 208 Albuquerque, NM 87110 505 298 4511

8. Approach • Learning through interaction: • Ask questions! • Share your experience and knowledge with the group

9. Reports to be covered . . . • USDA-RD • USDA-RD Financial management reports • USDA-RD ARRA Project reporting • Professional Audit (A-133) • Public Regulation Commission • Nonprofit Corporate Report • New Mexico Tax & Revenue • Gross receipts Tax (CRS-1) • Water Conservation Fee • State Engineer • Meter readings • Return flow credits • Proof of beneficial use or application for extension • NM Environment Dept. • Consumer Confidence Report • CCR Certification

10. Topics covered for each reporting requirement • What to report • Whom to report to • When to file • How to file • Cost • Resources – How to Get Help • Questions

11. Reporting Requirements for Water and Wastewater Systems Reports for USDA-RD Loan and Grant Recipients

12. USDA-RD Financial Management Reports • Who must report • Systems that have an outstanding loan with USDA-RD. • What to report • Operating budget • Projected cash flow • Statement of budget, income, and equity (RD 442-2) or Profit and Loss • Balance sheet (RD 442-3) • Supplemental data • Report to • USDA-RD in Albuquerque by email, fax, or mail • No filing fee • When to file • Quarterly for first year loan recipients • Annually thereafter (FY) • Due 60 days after EoP * • If the system has both water and wastewater systems, the financial information must be reported separately for each. * EoP – End of Period

13. Why would you want to file these reports?

14. Why would you want to file these reports? • Meet the legal requirements of your loans • Improve the management of the system’s finances • Know if your cash flow is positive or negative • Know where you are spending your money

15. USDA-RD Reporting - Summary • What you need to file: • Budget or USDA-RD 442-7 • Profit and Loss or USDA-RD 442-2 • Balance Sheet or USDA-RD 442-3 • Supplemental Data • Insurance coverage • Water produced and water sold • Rate schedule • Past due balances • And more . . . • Yes, you can use Quickbooks reports if your chart of accounts is correctly set up.

16. USDA-RD ARRA Reporting • Who must report • Systems with ARRA funding • What to report • Award info • Monies expended • Jobs created & retained • Buy American provisions • Sub-recipients • Report to • www.federalreporting.gov • May use Excel template (preferred) or web page • When to file • Quarterly until all funds have been spent • Due date varies by quarter; usually about 10 calendar days after EoP. • No filing fee • If the system has both grants and loans, they must file separately for each. • Need active DUNS, CCR, and FRPIN. A common problem is an expired CCR #. • Contact USDA-RD with questions. • There are frequent webinars on filing requirements.

17. Audits • Audit are required according to the State Auditor Rule. • There is a new 7-tier financial reporting schema. For more details, visit http://saonm.org/state-auditor-rule • For more information contact State Auditor Office 2540 Camino Edward Ortiz, Ste # A Santa Fe, NM 87507 • Telephone (505) 476-3800 • Fax (505) 827-3512 • www.osanm.org  7 Tiers of Financial Reporting • Tier 1 – Less than $10,000 in revenue • Tier 2 - > $10,000 <$50,000 in revenue • Tier 3 - < $50,000 in revenue and spends 50% or remainder of capital outlay award • Tier 4 - > $50,000 < $250,000 in revenue (no capital outlay expenditures) • Tier 5 - > $50,000 < $250,000 in revenue plus capital outlay expenditures • Tier 6 - > $250,000 < $500,000 in revenue • Tier 7 - > $500,000 in revenue

18. Professional Audit (A-133) • Who must report • Any system which has spent at least $500,000 during the year • Often applies to systems as they implement USDA-RD funded projects • What to report • This is a professional audit prepared by an outside firm that the system hires. • Report to • A copy of the audit goes to USDA-RD if the system has a USDA-RD loan. • Audits cost several thousands of dollars. • When to file • Due within 9 months of EoP (FY) • Requirements are different for Tribes; contact USDA-RD for more info.

19. Questions about USDA-related reporting requirements?

20. Other Reports PRC Nonprofit Corporate Report NM Tax & Revenue: Gross Receipts Tax Water Conservation Fee Office of the State Engineer: Meter Readings Return Flow Credits Proof of Beneficial Use or alternative NMED: Consumer Confidence Report CCR Certification

21. PRC Nonprofit Corporate Report • Who must report • All public nonprofit water and wastewater systems • What to report • A brief statement of the character of the affairs that the corporation is actually conducting. • Names and addresses of the directors and officers of the corporation. • Report to • NM PRC Corporations Bureau • Cost • $10 filing fee; plus $10 if late. • When to file • Due 15 days after EoP (FY).

22. NM Tax & Revenue: Gross Receipts Tax • Who must report • All public nonprofit water and wastewater systems • What to report • Gross receipts tax at governmental rate (currently 5%) • Report to • NM Tax & Revenue • May file with state office in Santa Fe or any District office • Cost • No filing fee, but there are late charges and penalties for late filing. • When to file • Semi-annually, quarterly, or monthly, depending on income level and filing status. • Due by 25th of the month after EoP. • The system needs a CRS number, which can be obtained by filing Business Tax Registration Update form. • The system must file even if it had no income during the period.

23. NM Tax & Revenue: Water Conservation Fee • Who must report • All public nonprofit water and wastewater systems • What to report • Conservation fee is 3 cents ($.03) per thousand gallons produced. • Report to • NM Tax & Revenue • May file with state office in Santa Fe or any District office • Cost • No filing fee, but there are late charges and penalties for late filing. • When to file • Semi-annually, quarterly, or monthly, depending on income level and filing status (it will be the same as your GRT due date). • Due by 25th of the month after EoP. • If no water was produced, no report needs to be filed. • This is calculated based on the well or other source meter(s) on your system.

24. Office of the State Engineer: Meter Readings • Who must report • All water and wastewater systems with permits • What to report • Report the current meter reading on each source meter (well, spring, etc.) at EoP • Report to • NM OSE by email, fax, or mail • No filing fee • When to file • Monthly, quarterly, or annually, per letter of condition for water permit • Due by 10th of the month after EoP. • Exercise care in reading the meter as some are in gallons and some in acre-feet; also some have multiplier zeroes on the end.

25. Office of the State Engineer: Return Flow Credit • Who must report • Systems with a return flow credit in their permit • What to report • Report the current meter reading on each wastewater discharge meter. • Report to • NM OSE by email, fax, or mail • No filing fee • When to file • As stipulated on the water permit. • Exercise care in reading the meter as some are in gallons and some in acre-feet; also some have multiplier zeroes on the end. • There’s no official form; may use the Meter Reading form and note “return flow credit” in the comments.

26. Office of the State Engineer: Proof of Beneficial Use (aka Final Inspection and Report of Beneficial Use of Underground Water) • Who must report • All water and wastewater systems with a permit • What to report • Report the current annual water use of the system. • Report to • NM OSE by email, fax, or mail • Cost • $25 • When to file • This is filed one time, when the system has begun to use its full permitted water right. • Do not file this until you have begun to use your full permitted water right; instead file the Application for Extension of Time . . . • There is a corresponding form for surface water rights.

27. Office of the State Engineer: Application for Extension of Time in Which to Perfect an Application of Underground Water • Who must report • All water and wastewater systems with a permit • What to report • Report the current annual water diversion and consumption of the system. • Report to • NM OSE by email, fax, or mail • Cost • $25 • When to file • File for the first time when you have begun to use your well or water source. • File before the expiration of the current extension. • Typical extension periods are 3 years and 1 year, at the OSE’s discretion. • File repeatedly until the system uses its full permitted water right—could be 20 or 30 years. • There is a corresponding form for surface water rights.

28. New Mexico Environment Department: Consumer Confidence Report • Who must report • Every Community Water System (CWS), i.e. every system that “has at least fifteen service connections or regularly serves an average of at least twenty-five individuals daily at least 60 days out of the year.” • What to report • Water system information • Source water assessment information • Definitions of terms • Data on detected regulated contaminants • Compliance with DWRs • Required educational information • Report to • All water system customers • Cost • Your cost to prepare and distribute materials • When to report • Annually on or before July 1. • CWSs that sell water to other CWSs must provide this information to the water purchasers by April 1.

29. New Mexico Environment Department: CCR Certification • Who must report • All CWSs • What to report • Certify that the CCR was prepared and distributed by July 1. • Report to • NMED Drinking Water Bureau • No filing fee • When to report • Annually on or before Oct 1.

30. Why would you want to file the CCR and CCR certification?

31. Why would you want to file the CCR and CCR certification? • To make sure your water is safe to drink. • To assure your customers that the water is safe to drink.

32. About IRS Form 990 • Some mutual domestics have begun filing IRS 990 Return of Organization Exempt From Income Tax. • However, it is an open question whether this is an actual requirement. • Bottom line: if you don’t already file this, don’t start; if you have filed before, don’t stop.

33. Good Recordkeeping • Why keep organized and complete records?

34. Reporting Calendars We’ll work on this as a group exercise.

35. Exercises • Pequeño Water Association Reporting Schedule • Your System’s Reporting Schedule

36. Annual Tasks for Water and Wastewater Systems

37. Additional Resources • What are additional resources for systems and associations?