HomeMy WebLinkAbout2010-08-09 - Finance-Accounting Committee Meeting Agenda Packet
Yorba Linda
Water District
AGENDA
YORBA LINDA WATER DISTRICT
FINANCE-ACCOUNTING COMMITTEE MEETING
Monday, August 9, 2010, 4:00 PM
1717 E Miraloma Ave, Placentia CA 92870
COMMITTEE STAFF
Director John W. Summerfield, Chair Ken Vecchiarelli, General Manager
Director Ric Collett Stephen Parker, Finance Director
1. PUBLIC COMMENTS
Any individual wishing to address the committee is requested to identify themselves and state the matter on
which they wish to comment. If the matter is on this agenda, the committee Chair will recognize the individual for
their comment when the item is considered. No action will be taken on matters not listed on this agenda.
Comments are limited to matters of public interest and matters within the jurisdiction of the Water District.
Comments are limited to five minutes.
2. ACTION CALENDAR
This portion of the agenda is for items where staff presentations and committee discussions are needed prior to
formal committee action.
2.1. June 2010 Budget to Actual Results
Recommendation: That the Committee review, receive and file the June 2010
Budget to Actual Results.
2.2. Monthly Investment Report for June 2010
Recommendation: That the Committee receive and file the June 2010 Investment
Report
3. DISCUSSION ITEMS
This portion of the agenda is for matters such as technical presentations, drafts of proposed policies, or similar
items for which staff is seeking the advice and counsel of the Committee members. This portion of the agenda
may also include items for information only.
3.1. SAS 114 Required Communications
3.2. June 2010 Debt Service Ratio Calculation
3.3. Future Agenda Items and Staff Tasks
4. ADJOURNMENT
4.1. The next regular meeting of the Finance-Accounting Committee will be held on
September 13, 2010 at 4:00 p.m.
Items Distributed to the Committee Less Than 72 Hours Prior to the Meeting
Pursuant to Government Code section 54957.5, non-exempt public records that relate to open session agenda items
and are distributed to a majority of the Committee less than seventy-two (72) hours prior to the meeting will be available
for public inspection in the lobby of the District's business office located at 1717 E. Miraloma Avenue, Placentia, CA
92870, during regular business hours. When practical, these public records will also be made available on the District's
internet website accessible at http://www.ylwd.com/.
Accommodations for the Disabled
Any person may make a request for a disability-related modification or accommodation needed for that person to be
able to participate in the public meeting by telephoning the Executive Secretary at 714-701-3020, or writing to Yorba
Linda Water District, P.O. Box 309, Yorba Linda, CA 92885-0309. Requests must specify the nature of the disability and
the type of accommodation requested. A telephone number or other contact information should be included so the
District staff may discuss appropriate arrangements. Persons requesting a disability-related accommodation should
make the request with adequate time before the meeting for the District to provide the requested accommodation.
ITEM NO. 2.1
AGENDA REPORT
Meeting Date: August 9, 2010
To: Finance-Accounting Committee
From: Ken Vecchiarelli, General Manager
Presented By: Stephen Parker, Finance Director Dept: Finance
Reviewed by Legal: N/A
Prepared By: Delia Lugo, Senior Accountant
Subject: June 2010 Budget to Actual Results
STAFF RECOMMENDATION:
That the Committee review, receive and file the June 2010 Budget to Actual Results.
DISCUSSION:
Attached are the budget to actual summary results for the Water and Sewer Enterprise Funds. Overall, the
District fell short on revenues and balanced that factor with reduced expenses. Since certain year-end
accruals are still not completed, these numbers will vary from our audited financials by those accruals and any
adjustments the auditors recommend. Major items to note are:
. Operating revenues are lagging as a percentage from prior year at 95% of budgeted revenue, compared
to the prior year figure of 97% at this same time. The largest contributor of this lag is due to additional
conservation efforts. As a result of the 41% rate increase that took effect in September 2009, revenues
as a total figure are $5,256,000 higher in the current fiscal year with $23.6M.
. Variable expenses are 86% of budgeted expenses, whereas in the prior year, variable costs at this time
totaled 97%. This is due to lower water purchases based on customer conservation and on a strategy
implemented by staff to purchase higher percentages of import water in the months of July and August,
prior to the MWD rate increase implemented September 1, 2009. Due to lower water purchases,
associated lower energy costs and strategic optimization of import water purchases, variable expenses
are over $180,000 lower than at this point last year despite the substantial 19% MWD increase on
September 1.
. Depreciation expense is 16% higher than the prior year due to fixed asset projects that have been
closed and have begun depreciation in the current year.
. Supplies and services are at 80% of budgeted levels as a result of aggressive efforts by staff to limit or
defer expenditures in areas that are under staff's control.
PRIOR RELEVANT BOARD ACTION(S):
On July 12, 2010 the Committee reviewed, received, and filed the May 2010 Budget to Actual Results.
ATTACHMENTS:
Narne. Description: Type:
Water Sewer June 2010.xls Water Sewer June 2010 Backup Material
Water June 2010.xls Water June 2010 Backup Material
SewerJune 2010.xls Sewer June 2010 Backup Material
Yorba Linda Water District
Summary Financial Report
Water & Sewer Funds
For the Twelve Months Ended June 30, 2010
Annual % of
Budget Actual Annual Budget
FY 09/10 YTD through Amended
Amended 10/21/09 June 30, 2010 10/21/09
Revenue (Operating):
Water Revenue (Consumption & Flat Charge) $23,027,872 $21,492,863 93.33%
(Restricted for Debt Service) - (2,400,382)
Sewer Revenue 1,276,000 1,297,329 101.67%
Other 648,892 791,390 121.96%
Total Operating Revenue: 24,952,764 21,181,200 94.50%
Expenses (Operating):
Variable Water Costs (G.W., Import & Power) 12,259,937 10,582,618 86.32%
Salary Related Expenses 7,355,049 6,374,591 86.67%
Supplies & Services 4,479,584 3,582,320 79.97%
Depreciation & Amortization 4,540,800 4,822,281 106.20%
Total Operating Expenses: 28,635,370 25,361,810 88.57%
Operating Income (Loss) (3, 682, 606) (4,180, 610) 113.52%
Revenue (Non-Operating):
Interest and Investments 127,900 242,990 189.98%
Property Taxes 1,200,000 1,250,656 104.22%
Debt Service Income (through water revenue) - 2,400,382
Other 185,500 490,873 264.62%
Total Non-Operating Revenue: 1,513,400 4,384,901 289.74%
Expenses (Non-Operating):
Interest on Long Term Debt (1,981,300) (1,951,499) 98.50%
Other Expense (201,800) (136,404) 67.59%
Total Non-Operating Expenses: (2,183,100) (2, 087, 903) 95.64%
Non-Operating Income (Loss) (669,700) 2,296,998
Net Income (Loss) (4,352,306) (1,883,612) 43.28%
Contributed Capital 265,202 448,614 169.16%
Capital - Direct Labor 451,294
Yorba Linda Water District
Water Fund
For the Twelve Months Ended June 30, 2010
FY 2010 % of
Annual June Actual Annual
Budget FY 2010 YTD Budget
Revenue (Operating):
Water Revenue (Residential) $17,692,953 $1,657,017 $16,320,494 92.24%
(Restricted for Debt Service) - ($267,425) ($2,400,382) 0.00%
Water Revenue (Commercial & Fire Det.) 1,680,500 $523,229 $2,042,498 121.54%
Water Revenue (Landscape/Irrigation) 3,654,419 $364,167 $3,129,871 85.65%
Other Operating Revenue 643,792 $88,365 $776,560 120.62%
Total Operating Revenue: 23,671,664 $2,365,353 19,869,041 94.08%
Expenses (Operating):
Variable Water Costs (G.W., Import & Power) 12,259,937 $1,052,367 10,582,618 86.32%
Salary Related Expenses 6,538,008 $492,496 5,600,787 85.67%
Supplies & Services:
Communications 268,694 $17,539 274,224 102.06%
Contractual Services 964,090 $82,747 957,435 99.31%
Data Processing 116,148 ($10,986) 70,032 60.30%
Dues & Memberships 30,068 $2,509 29,740 98.91%
Fees & Permits 50,160 $1,385 55,991 111.62%
Insurance 342,433 $20,566 204,884 59.83%
Materials 427,424 $57,524 505,472 118.26%
District Activities, Emp Recognition 13,832 ($99) 2,968 21.46%
Maintenance 384,362 $3,418 131,661 34.25%
Non-Capital Equipment 139,910 $14,789 104,782 74.89%
Office Expense 66,775 $3,850 31,158 46.66%
Professional Services 763,760 $35,791 398,636 52.19%
Training 61,518 $4,976 35,696 58.03%
Travel & Conferences 48,892 $226 13,971 28.58%
Uncollectible Accounts 47,320 $34,535 34,952 73.86%
Utilities 27,027 $7,415 105,003 388.51%
Vehicle Equipment 279,683 $13,994 243,904 87.21%
Supplies & Services Sub-Total 4,032,096 $290,179 3,200,509 79.38%
Depreciation & Amortization 3,945,750 $355,909 4,230,239 107.21%
Total Operating Expenses 26,775,791 $2,190,951 23,614,153 88.19%
Operating Income (Loss) (3,104,127) $174,402 (3,745,112) 120.65%
Revenue (Non-Operating):
Interest 120,900 $23,233 225,657 186.65%
Property Taxes 1,092,000 $113,771 1,250,656 114.53%
Debt Service Income (through water revenue) - $267,425 2,400,382
Other Non-Operating Revenue 172,900, $130,834 488,705 282.65%
Total Non-Operating Revenue: 1,385,800 $535,263 4,365,400 141.80%
Expenses (Non-Operating):
Interest on Long Term Debt (1,981,300) ($161,612) (1,951,499) 98.50%
Job Closing Expense (40,000) $0 0.00%
Other Expense (154,500) ($2,964) (133,417) 86.35%
Total Non-Operating Expenses: (2,175,800) ($164,576) (2,084,916) 95.82%
Non-Operating Income (Loss) (790,000) $370,687 2,280,484
Total Income (Loss) $ (398949127) $545,089 $ (194649628) 37.61%
Contributed Capital $ 190,962 $101,902 329,302 172.44%
Capital - Direct Labor ($37,413) $ 429,693
Yorba Linda Water District
Sewer Fund
For the Twelve Months Ended June 30, 2010
FY 2010 % of
Annual June Actual Annual
Budget FY 2010 YTD Budget
Revenue (Operating):
Sewer Charge Revenue $1,160,000 $105,388 $1,193,208 102.86%
Locke Ranch Assessments 116,000 $125 $104,121 89.76%
Other Operating Revenue 5,100 $11,833 $14,830 290.78%
Total Operating Revenue: 1,281,100 $117,346 1,312,159 102.42%
Expenses (Operating):
Salary Related Expenses 817,041 $66,557 $773,804 94.71%
Supplies & Services:
Communications 26,654 $1,735 $27,331 102.54%
Contractual Services 137,255 $4,616 $137,314 100.04%
Data Processing 11,487 $1,964 $9,977 86.85%
Dues & Memberships 3,360 $60 $3,009 89.55%
Fees & Permits 6,040 $505 $5,150 85.26%
Insurance 33,867 $0 $18,229 53.83%
Materials 21,301 $2,159 $15,078 70.79%
District Activities 1,368 ($10) $294 21.49%
Maintenance 29,789 $4,938 $14,145 47.48%
Non-Capital Equipment 18,631 $1,091 $12,281 65.92%
Office Expense 9,550 $381 $2,854 29.88%
Professional Services 78,240 $14,846 $75,029 95.90%
Training 8,632 $619 $4,185 48.48%
Travel & Conferences 6,893 $22 $1,305 18.93%
Uncollectible Accounts 4,680 $6,660 $6,660 142.31%
Utilities 2,673 $733 $10,385 103.42%
Vehicle Equipment 47,068 $1,505 $38,585 81.98%
Supplies & Services Sub-Total 447,488 $41,824 381,811 85.32%
Depreciation & Amortization 595,050 $49,594 $592,042 99.49%
Total Operating Expenses 1,859,579 $157,975 1,747,657 93.98%
Operating Income (Loss) (578,479) ($40,629) (435,498) 75.28%
Revenue (Non-Operating):
Interest 7,000 $2,116 17,333 247.61%
Property Taxes 108,000 $0 0 0.00%
Other Non-Operating Revenue 12,600 $6,260 2,168 17.21%
Total Non-Operating Revenue: 127,600 $8,376 19,501 15.28%
Expenses (Non-Operating):
Job Closing Expense (5,000) $0 - 0.00%
Other Expense (2,300) $0 (2,987) 129.88%
Total Non-Operating Expenses: (7,300) $0 (2,987) 40.92%
Non-Operating Income (Loss) 120,300 $8,376 16,514 13.73%
Total Income (Loss) $ (458,179) ($49,005) $ (418,984)
Contributed Capital $74,240 $8,558 $120,312 162.06%
Capital - Direct Labor $0 ($21,601)
ITEM NO. 2.2
AGENDA REPORT
Meeting Date: August 9, 2010 Budgeted: N/A
To: Finance-Accounting Committee
From: Ken Vecchiarelli, General
Manager
Presented By: Stephen Parker, Finance Dept: Finance
Director
Prepared By: Delia Lugo, Senior Accountant
Subject: Monthly Investment Report for June 2010
SUMMARY:
Government Code Section 53607, et, seq., requires the person delegated to invest funds to make a
quarterly report of the investments to the legislative body.
STAFF RECOMMENDATION:
That the Committee receive and file the June 2010 Investment Report
DISCUSSION:
Staff is submitting the June 2010 Monthly Investment Report for your review and approval. The
Investment Portfolio Report presents the market value and percent yield for all the District
investments by institution. The Investment Report Summary includes budget and actual interest and
average term portfolio information as well as market value broken out by reserve categories. The
total average portfolio yield for the month of June 2010 was 0.83%.
The COP Revenue Bond 2008 is approximately $1 M lower in June than May as a result of CIP
project expenditures. Also, the Water Operating Fund increased by almost $550,000 due in part to
year-end annual invoices and increased seasonal water sales. Staff will submit the Quarterly
Investment Report ending June 30, 2010, for Board consideration at the August 26, 2010 Board
Meeting.
PRIOR RELEVANT BOARD ACTION(S):
Monthly Investment Reports are presented to the Finance-Accounting Committee on a regular
basis. Quarterly Investment Reports are presented to the Board of Directors. The Investment
Report for the month ended May, 2010 was received and filed on July 12, 2010. The Investment
Report for the quarter ended March 31, 2010 was received and filed by the Board of Directors on
May 27, 2010.
ATTACHMENTS:
Name: Description: Type:
Invst Rpt 6-10.xlsx Portfolio Report Backup Material
Agenda, 8-9_backup-June _2010.docx Backup Backup Material
Yorba Linda Water District
Investment Portfolio Report
June 30, 2010
Market % Percent Investment Maturity
Value Cost of Total Institution Yield Date Date
Cash & Checking Accounts:
$ 639,440 $ 639,440 Wells Fargo Bank N/A
$ 639,440 $ 639,440 1.86% Total 0.00%
Money Market Accounts:
$ 1,530,303 $ 1,530,303 Wells Fargo Money Market 0.30% N/A
$ 1,530,303 $ 1,530,303 4.46% Total 0.30%
$ 2,169,743 $ 2,169,743 6.32% Sub-total 0.30%
Money Market Account:
$ 10,620,078 $ 10,620,078 US Bank 2008 Revenue Bond 0.20%
$ 10,620,078 $ 10,620,078 30.95% 0.20%
CaITR UST
$ 1,054,092 $ 1,054,092 Heritage Money Market Fund 0.24%
$ 4,334,024 $ 4,334,024 Ca1TRUST Short Term 0.59%
$ 16,132,130 $ 16,132,130 Ca1TRUST Medium Term 1.40%
$21,520,246 $21,520,246 62.72% 1.18%
$ 34,310,067 $ 34,310,067 100% Total Investments 0.83%
Per Government Code requirements, the Investment Report is in compliance with the Yorba Linda Water District's
Investment Policy, and there are adequate funds available to meet budgeted and actual expenditures for the next
six months.
Delia Lugo, Senior Accountant
6/30/2010
Investment Report Summary
Below is a chart summarizing the yields as well as terms and maturities for the month of June
2010:
Avg. Portfolio Avg. Portfolio # of Avg. Term
Month Yield Without Yield With Days to of Portfolio
of 2010 Wells Capital Wells Capital Maturity in Days
June 0.83% 0.83% 368 229
Below is a chart comparing operating fund interest for current and prior fiscal years.
Actual Interest 6/30/09 6/30/10
Monthly, Operating Fund $ 489 $ 1,279
Year-to-Date, Operating Fund $ 6,655 $ 28,869
Budget 2008/2009 2009/2010
Interest Budget, Operating Fund, June YTD $64,500 $7,500
Interest Budget, Operating Fund, Annual $64,500 $7,500
Interest earned on investments is recorded in the Fund that owns the investment.
Investment Summary Comparison
The distribution of investments in the portfolio both in dollars and as a percentage of the total
portfolio by funds is as follows:
Fund Description Balance 6/30/10
Water Operating 477,224 1.39%
Water Emergency Reserve 2,061,154 6.02%
Water Capital Project Reserve 18,088,535 52.86%
Water Reserve for Debt Service 1,056,585 3.09%
COP Revenue Bond 2008 - Reserve 2,147,096 6.27%
COP Revenue Bond 2008 8,472,981 24.76%
Sewer Operating 1,184,561 3.46%
Sewer Emergency Reserve 524,017 1.58%
Sewer Capital Project Reserve 190,470 0.57%
$34,220,625 100.00%
Wells Fargo Bank Checking
Water Operating 170,638
Sewer Operating 8( 1,196)
89,442
Total 34.310.067
ITEM NO. 3.1
AGENDA REPORT
Meeting Date: August 9, 2010
To: Finance-Accounting Committee
From: Ken Vecchiarelli, General
Manager
Presented By: Stephen Parker, Finance Dept: Finance
Director
Reviewed by Legal: N/A
Prepared By: Stephen Parker, Finance
Director
Subject: SAS 114 Required Communications
DISCUSSION:
Statement on Auditing Standard (SAS) 114 requires communication by the auditors with "those in
governance" prior to the external audit. Nitin Patel, CPA, Partner with Diehl, Evans & Company, the
District's external audit firm will have that required discussion with the Finance-Accounting
Committee.
ITEM NO. 3.2
AGENDA REPORT
Meeting Date: August 9, 2010 Budgeted: N/A
To: Finance-Accounting Committee
Funding Source: N/A
From: Ken Vecchiarelli, General
Manager
Presented By: Stephen Parker, Finance Dept: Finance
Director
Reviewed by Legal: N/A
Prepared By: Stephen Parker, Finance CEQA Compliance: N/A
Director
Subject: June 2010 Debt Service Ratio Calculation
DISCUSSION:
Attached is a preliminary calculation for the year-end debt service coverage ratio. The calculation is
subject to adjustments for additional year-end accruals that are not yet completed by the Finance
Department, as well as any potential adjustments following the fiscal year audit. In addition, the
capitalized interest adjustment which decreases the denominator of the ratio (i.e. improves the ratio)
has not been included in these numbers. Despite these adjustments, which will need to be included
before the ratio is finalized, the preliminary ratio gives the Finance-Accounting Committee an idea of
where our debt coverage ratio should end up for the fiscal year ended June 30, 2010. The 41 %
water rate increase approved by the Board last September and expense reductions in variable
water cost, salaries and supplies and services are the primary reasons for the significant
improvement from the debt service coverage ratio for the year ended June 30, 2009.
ATTACHMENTS:
!blame: DOSS or.: I Ape
June 2010 Preliminary Debt Service Ratio Calculation. Asx 6/10 Preliminary Debt Service Ratio Calculation Backup Material
Yorba Linda Water District
Water Fund
2010 Actual Included in
YTD DSR Calc.
Revenue (Operating):
Water Revenue (Residential) $16,320,494 $ 16,320,494
Water Revenue (Commercial & Fire Det.) 2,042,498 2,042,498
Water Revenue (Landscape/Irrigation) 3,129,871 3,129,871
Other Operating Revenue 776,560 776,560
Total Operating Revenue: 22,269,423 22,269,423
Expenses (Operating):
Variable Water Costs (G.W., Import & Power) 10,582,618 10,582,618
Salary Related Expenses 5,600,787 5,600,787
Supplies & Services:
Communications 274,224 274,224
Contractual Services 957,435 957,435
Data Processing 70,032 70,032
Dues & Memberships 29,740 29,740
Fees & Permits 55,991 55,991
Insurance 204,884 204,884
Materials 505,472 505,472
District Activities, Emp Recognition 2,968 2,968
Maintenance 131,661 131,661
Non-Capital Equipment 104,782 104,782
Office Expense 31,158 31,158
Professional Services 398,636 398,636
Training 35,696 35,696
Travel & Conferences 13,971 13,971
Uncollectible Accounts 34,952 34,952
Utilities 105,003 105,003
Vehicle Equipment 243,904 243,904
Supplies & Services Sub-Total 3,200,509 3,200,509
Depreciation & Amortization 4,230,239 -
Total Operating Expenses 23,614,153 19,383,914
Operating Income (Loss) (1,344,730) 2,885,509
Revenue (Non-Operating):
Interest 225,657 225,657
Property Taxes 1,250,656 1,250,656
Other Non-Operating Revenue 488,705 488,705
Total Non-Operating Revenue: 1,965,018 1,965,018
Expenses (Non-Operating):
Interest on Long Term Debt (1,951,499) -
Other Expense (133,417) (133,417)
Total Non-Operating Expenses: (2,084,916) (133,417)
Non-Operating Income (Loss) (119,898) 1,831,601
Total Income (Loss) L(1,464,628) $ 4,717,110
Contributed Capital $ 329,302
DEBT SERVICE RATIO CALCULATION:
NET REVENUES $ 4,717,110
DEBT SERVICE $ 2,806,270
% 1 68%