The first meeting in three months required more time than usual for the Pine Cove Water District board. However, a large portion of the time was devoted to receiving and approving the 2015-16 audit.

“An unqualified opinion is the highest form of assurance we can give,” said Terry P. Shea, a certified public accountant and partner in the accounting firm of Rogers, Anderson, Malody & Scott LLP of San Bernardino, who conducted the audit.

As of June 30, the end of the 2015-16 fiscal year, PCWD’s net assets were $2.6 million, unchanged from the year before.

During fiscal year 2015-16, total revenue was $797,000, including $467,000 from water sales. Total expenses were $793,000 resulting in a net $4,100 gain. Transmission and distribution programs cost $120,000, and overall employee retirement and benefits totaled $149,000.

Long-term debt or liabilities is $917,000, of which pension liability is the largest, about $491,000. This has increased since last year, according to Shea. The post-employment benefits other than pensions have an unfunded liability of about $10,000. The cash balance exceeds $217,000.

“Overall, it is a great report; debt is manageable,” Shea elaborated. “You’ve replaced much of your infrastructure over the past few years.”

General Manager Jerry Holldber distributed a draft of Ordinance 9, “Rules and regulations for water service,” for the board to review and then discuss at the next meeting. Original Ordinance 4 describes the basic district policies, such as general manager duties, procedure for setting water rates, billing and infrastructure, including hydrants, hook-ups, connections and others.

“It hasn’t been updated since the 1960s,” Holldber said.

Multiple users of a single meter and backflow requirements are the principal changes from the older ordinance. The new ordinance also will update many other issues, such as how to determine water production costs, and will remove the actual water rates from the ordinance, saying they will be established through board resolutions.

The board also approved extending the Rocky Point lease with Verizon. The lease yields $21,000 to the district and grows 3.5 percent annually. Director Diana Luther, speaking for the board, advised Holldber not to sell the lease back to Verizon.

For the fifth-consecutive month, September’s water usage in Pine Cove continued to exceed the prior year’s usage. Last month, PCWD produced 3.1-million gallons, or 480,000 (18.5 percent) more than in September 2015.

Since the beginning of 2016, total production has been 24.6-million gallons, which is nearly 370,000 gallons more than the first nine months of 2015. The 2016 usage is still about 500,000 gallons (or 20 percent) less than the same period in 2013.

However, Holldber reported that the water loss has grown since summer and he is actively investigating the district’s distribution system.

“They found four leaks so far and none were surfacing,” he told the board. “They may be 5 gallons per minute, which could yield about 430,000 gallons over two months.” One is in an area where he plans to replace pipeline next year.

Monitor well no. 10 has dropped 3 feet since July, but a couple of well levels have risen during the period, he reported.

As a precaution in case the drought continues, Holldber said he has flushed several wells in the Dutch Flats area and is preparing them for production as an alternative water source next spring, if they are needed.

“We need to stay one step ahead,” he added.

At the end of his report, Holldber announced that PCWD is planning to sponsor a class on the Brown Act and state ethics legislation in the next few months. PCWD’s legal counsel, Brad Neufeld, will conduct the session.