HomeMy WebLinkAbout2011-01-10 - Finance-Accounting Committee Meeting Agenda Packet
Yorba Linda
Water District
AGENDA
YORBA LINDA WATER DISTRICT
FINANCE-ACCOUNTING COMMITTEE MEETING
Monday, January 10, 2011, 4:00 PM
1717 E Miraloma Ave, Placentia CA 92870
COMMITTEE STAFF
Director Ric Collett, Chair Ken Vecchiarelli, General Manager
Director Robert R. Kiley 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. California Employers' Retirement Benefit Trust Fund
Recommendation: That the Committee recommend the Board of Directors authorize
the President to execute a CERBT Program Agreement and Election of YLWD to
Prefund Other Post Employment Benefits through CaIPERS and approve a
Resolution of the Board of Directors to delegate authority to request disbursements
from the trust.
2.2. November 2010 Budget to Actual Results
Recommendation: That the Committee review, receive and file the November 2010
Budget to Actual Results.
2.3. November 2010 Investment Report
Recommendation: That the Committee review, receive and file the November 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. Sewer Financial Projections
3.2. Future Agenda Items and Staff Tasks
4. ADJOURNMENT
4.1. The next regular meeting of the Finance-Accounting Committee will be held on February
14, 2011 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: January 10, 2011 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: Joann Gitmed, Accounting CEQA Compliance: N/A
Assistant II
Subject: California Employers' Retirement Benefit Trust Fund
SUMMARY:
The District budgeted for the Annual Required Contribution of Other Post Employment Benefits
(OPEB) for FY 2010/11. It is a requirement that these funds be placed with a trustee. CalPERS
offers the California Employers' Retiree Benefit Trust (CERBT) to allow public employers to make
contributions for OPEB purposes.
STAFF RECOMMENDATION:
That the Committee recommend the Board of Directors authorize the President to execute a
CERBT Program Agreement and Election of YLWD to Prefund Other Post Employment Benefits
through CalPERS and approve a Resolution of the Board of Directors to delegate authority to
request disbursements from the trust.
DISCUSSION:
In 2004, the Governmental Accounting Standards Board (GASB) established Statement 45 in order
for governments to report information regarding the nature and size of their long-term financial
obligations and commitments for Other Post Employment Benefits (OPEB) (i.e. retiree health care
benefits). Prior to Statement 45, public employers typically followed a "pay-as-you-go" approach in
which the cost of benefits was not reported until after an employee's retirement. This approach,
however, provided incomplete information as to the financial position and long-run financial health
of a government agency.
With the implementation of GASB 45, public employers must now report their annual OPEB cost
and their unfunded actuarial accrued liabilities for past service costs, similar to how employee
retirement benefits are currently reported. In addition, the Statement also:
1. Requires reporting the estimated cost of the benefits as expenses each year.
2. Provides more accurate information on the financials statements about the total cost of the
services that a agency provides to its constituents.
3. Clarifies whether the amount that a agency has paid or contributed for OPEB during the year
covers its annual actuarially determined OPEB cost.
4. Provides better reports to users about an agency's unfunded actuarial accrued liability and
changes in the funded status of benefits.
While Statement 45 only requires public employers to measure and report the future cost of OPEB,
prefunding those benefits is recommended in order to ensure a sustainable benefit program.
Currently, CalPERS offers the California Employers' Retiree Benefit Trust (CERBT) in order for
public employers to prefund OPEB costs.
CERBT began operation in March 2007 and currently has contracts with over 300 California public
agencies. The program receives voluntary contributions from employers and invests those assets
into public market securities. Employers can contribute an Annual Required Contribution (ARC) and
seek reimbursement for pay-as-you-go costs, or employers can contribute the ARC net of annual
pay-as-you-go costs and not seek reimbursement. The contributions and investments are held in a
trust dedicated exclusively to pay for OPEB promised by employers to their employees. Although
the funds are accounted for by individual employers, they are co-invested with other agency
contributions in order to broaden investment opportunities and to minimize costs.
In order to participate in CERBT, a government agency must obtain an OPEB valuation report by
either an actuarial valuation, or an AMM (alternative measurement method). Upon completion of the
valuation report, an agency must adopt and execute an agreement and election to prefund and
submit the valuation and agreement to CalPERS for approval. Upon approval by CalPERS, an
agency may begin OPEB prefunding contributions. Due to GASB 45 requirements, the District
obtained its OBEB valuation in June 2009.
For FY 2010/11, the District budgeted for the ARC in the amount of $217,979. However, until
money is placed in a trust, it will formally fund the current fiscal year's Annual Required Contribution
for GASB 45 purposes. Staff is recommending that the District place the 2010/11 ARC with CERBT.
ATTACHMENTS:
Name: Description: Type:
Prefund Agreement-BOD.pdf Agreement to Prefund Agreement
Delegation of Authority-BOD.pdf Delegation of Authority Agreement
CALIFORNIA EMPLOYER'S RETIREE BENEFIT TRUST PROGRAM ("CERBT'")
AGREEMENT AND ELECTION
OF
YORBA LINDA WATER DISTRICT
(NAME OF EMPLOYER)
TO PREFUND OTHER POST EMPLOYMENT
BENEFITS THROUGH CaIPERS
WHEREAS (1) Government Code Section 22940 establishes in the State Treasury the
Annuitants` Health Care Coverage Fund for the prefunding of health care coverage for
annuitants (Prefunding Plan); and
WHEREAS (2) The California Public Employees' Retirement System (CaIPERS) Board
of Administration (Board) has sole and exclusive control and power over the
administration and investment of the Prefunding Plan (sometimes also referred to as
CERBT), the purposes of which include, but are not limited to (i) receiving contributions
from participating employers and establishing separate Employer Prefunding Accounts
in the Prefunding Plan for the performance of an essential governmental function (ii)
investing contributed amounts and income thereon, if any, in order to receive yield on
the funds and (iii) disbursing contributed amounts and income thereon, if any, to pay for
costs of administration of the Prefunding Plan and to pay for health care costs or other
past employment benefits in accordance with the terms of participating employers'
plans; and
WHEREAS (3) YORBA LINDA WATER DISTRICT
(NAME OF EMPLOYER)
(Employer) desires to participate in the Prefunding Plan upon the terms and conditions
set by the Board and as set forth herein; and
WHEREAS (4) Employer may participate in the Prefunding Plan upon (i) approval by
the Board and (ii) filing a duly adopted and executed Agreement and Election to Prefund
Other Post Employment Benefits (Agreement) as provided in the terms and conditions
of the Agreement; and
WHEREAS (5) The Prefunding Plan is a trust fund that is intended to perform an
essential governmental function within the meaning of Section 115 of the Internal
Revenue Code as an agent multiple-employer plan as defined in Governmental
Accounting Standards Board (GASB) Statement No. 43 consisting of an aggregation of
single-employer plans, with pooled administrative and investment functions,
Rev 6173/2010
NOW, THEREFORE, BE IT RESOLVED THAT EMPLOYER HEREBY MAKES THE
FOLLOWING REPRESENTATION AND WARRANTY AND THAT THE BOARD AND
EMPLOYER AGREE TO THE FOLLOWING TERMS AND CONDITIONS:
A. Representation and Warranty
Employer represents and warrants that it is a political subdivision of the State of
California or an entity whose income is excluded from gross income under Section 115
(1) of the Internal Revenue Code.
B. Adoption and Approval of the Agreement; Effective Date; Amendment
(1) Employer's governing body shall elect to participate in the Prefunding Plan by
adapting this Agreement and filing with the CaIPERS Board a true and correct original
or certified copy of this Agreement as follows:
Filing by mail, send to: CaIPERS
Constituent Relations Office
CERBT (OPEB)
P.O. Box 942709
Sacramento, CA 94229-2709
Filing in person, deliver to,
CalPERS Mailroom
Constituent Relations Office
CERBT (OPEB)
Attn: Employer Services Division
400 Q Street
Sacramento, CA 95811
(2) Upon receipt of the executed Agreement, and after approval by the Board, the
Board shall fix an effective date and shall promptly notify Employer of the effective date
of the Agreement.
(3) The terms of this Agreement may be amended only in writing upon the agreement
of both CalPERS and Employer, except as otherwise provided herein. Any such
amendment or modification to this Agreement shall be adapted and executed in the
same manner as required for the Agreement. Upon receipt of the executed amendment
or modification, the Board shall fix the effective date of the amendment or modification.
(4) The Board shall institute such procedures and processes as it deems necessary to
administer the Prefunding Plan, to carry out the purposes of this Agreement, and to
maintain the tax exempt status of the Prefunding Plan. Employer agrees to follow such
procedures and processes.
Rev 6/23/2010 2
C. Other Post Employment Benefits (OPEB) Cost Reports and Employer Contributions
(1) Employer shall provide to the Board an ®PEB cost report on the basis of the
actuarial assumptions and methods prescribed by the Board. Such report shall be for
the Board's use in financial reporting, and shall be prepared at least as often as the
minimum frequency required by GASB 43. This OPEB cost report may be prepared as
an actuarial valuation report or, if the employer is qualified under GASB 45 and 57, may
be prepared as an Alternative Measurement Method (AMM) report.
(a) Unless qualified under GASB 45 and 57 to provide an AMM report,
Employer shall provide to the Board an actuarial valuation report. Such
report shall be for the Board's use in financial reporting, and shall be
prepared at least as often as the minimum frequency required by GASB
43 and 57, and shall be:
1) prepared and signed by a Fellow or Associate of the Society of
Actuaries who is also a Member of the American Academy of
Actuaries or a person with equivalent qualifications acceptable to the
Board;
2) prepared in accordance with generally accepted actuarial practice and
GASB 43, 45 and 57; and,
3) provided to the Board prior to the Board's acceptance of contributions
for the valuation period or as otherwise required by the Board.
(b) If qualified under GASB 45 and 57, Employer may provide to the Board an
AMM report- Such report shall be for the Board's use in financial
reporting, shall be prepared at least as often as the minimum frequency
required by GASB 43 and 57, and shall be,
1) affirmed by Employer's external auditor, or by a Fellow or Associate
of the Society of Actuaries who is also a Member of the American
Academy of Actuaries or a person with equivalent qualifications
acceptable to the Board, to be consistent with the AMM process
described in GASB 45;
2) prepared in accordance with GASB 43, 45, and 57; and,
3) provided to the Board prior to the Board's acceptance of
contributions for the valuation period or as otherwise required by
the Board..
(2) The Board may reject any OPEB cast report submitted to it, but shall not
unreasonably do so. In the event that the Board determines, in its sole discretion, that
Rev 6/23/?D10 3
the QPEB cost report is not suitable for use in the Board's financial statements or if
Employer fails to provide a required QPEB cost report, the Board may obtain, at
Employer's expense, an QPEB cost report that meets the Board's financial reporting
needs. The Board may recover from Employer the cost of obtaining such QPEB cost
report by billing and collecting from Employer or by deducting the amount from
Employer's account in the Prefunding Plan.
(3) Employer shall notify the Board of the amount and time of contributions which
contributions shall be made in the manner established by the Board_
(4) Employer contributions to the Prefunding Plan may be limited to the amount
necessary to fully fund Employer's actuarial present value of total projected benefits, as
supported by the QPEB cost report acceptable to the Board. As used throughout this
document, the meaning of the term "actuarial present value of total projected benefits"
is as defined in GASB Statement No. 45. If Employer's contribution causes its assets in
the Prefunding Plan to exceed the amount required to fully fund the actuarial present
value of total projected benefits, the Board may refuse to accept the contribution.
(5) The minimum Employer contribution will be at least $5000 or be equal to Employer's
Annual Required Contribution, whichever is less, as that term is defined in GASB
Statement No. 45. Contributions can be made at any time following the seventh day
after the effective date of the Agreement provided that Employer has first complied with
the requirements of Paragraph C.
D. Administration of Accounts, Investments, Allocation of Income
(1) The Board has established the Prefunding Plan as an agent plan consisting of an
aggregation of single-employer plans, with pooled administrative and investment
functions, under the terms of which separate accounts will be maintained for each
employer so that Employer's assets will provide benefits only under employer's plan.
(2) All Employer contributions and assets attributable to Employer contributions shall be
separately accounted for in the Prefunding Plan (Employer's Prefunding Account).
(3) Employer's Prefunding Account assets may be aggregated with prefunding account
assets of other employers and may be co-invested by the Board in any asset classes
appropriate for a Section 115 Trust.
(4) The Board may deduct the costs of administration of the Prefunding Plan from the
investment income or Employer's Prefunding Account in a manner determined by the
Board.
(5) Investment income shall be allocated among employers and posted to Employer's
Prefunding Account as determined by the Board but no less frequently than annually.
Re-v 6,/2312010 4
(6) If Employer's assets in the Prefunding Plan exceed the amount required to fully fund
the actuarial present value of total projected benefits, the Board, in compliance with
applicable accounting and legal requirements, may return such excess to Employer.
E. Reports and Statements
(1) Employer shall submit with each contribution a contribution report in the form and
containing the information prescribed by the Board.
(2) The Board shall prepare and provide a statement of Employer's Prefunding Account
at least annually reflecting the balance in Employer's Prefunding Account, contributions
made during the period and income allocated during the period, and such other
information as the Board determines.
F. Disbursements
(1) Employer may receive disbursements not to exceed the annual premium and other
casts of post employment healthcare benefits and other post employment benefits as
defined in GASB 43.
(2) Employer shall notify CalPERS in writing in the manner specified by CalPERS of the
persons authorized to request disbursements from the Prefunding Plan on behalf of
Employer.
(3) Employer's request for disbursement shall be in writing signed by Employer's
authorized representative, in accordance with procedures established by the Board.
The Board may require that Employer certify or otherwise establish that the monies will
be used for the purposes of the Prefunding Plan.
(4) Requests for disbursements that satisfy the requirements of paragraphs (2) and (3)
that are received on or after the first of a month will be processed by the 15th of the
following month. (For example, a disbursement request received on or between March
1st and March 31st will be processed by April 15th; and a disbursement request
received on or between April 1st and April 36th will be processed by May 15th.)
(5) CalPERS shall not be liable for amounts disbursed in error if it has acted upon the
written instruction of an individual authorized by Employer to request disbursements. In
the event of any other erroneous disbursement, the extent of CalPERS' liability shall be
the actual dollar amount of the disbursement, plus interest at the actual earnings rate
but not less than zero.
(6) No disbursement shall be made from the Prefunding Plan which exceeds the
balance in Employer's Prefunding Account.
Rev 6/2312-310 5
G. Costs of Administration
Employer shall pay its share of the costs of administration of the Prefunding Plan, as
determined by the Board.
H. Termination of Employer Participation in Prefunding Plan
(1) The Board may terminate Employer's participation in the Prefunding Plan if
(a) Employer gives written notice to the Board of its election to terminate;
(b) The Board finds that Employer fails to satisfy the terms and conditions of
this Agreement or of the Board's rules or regulations.
(2) if Employer's participation in the Prefunding Plan terminates for any of the foregoing
reasons, all assets in Employer's Prefunding Account shall remain in the Prefunding
Plan, except as otherwise provided below, and shall continue to be invested and accrue
income as provided in Paragraph
(3) After Employer's participation in the Prefunding Plan terminates, Employer may not
make contributions to the Prefunding Plan.
(4) After Employer's participation in the Prefunding Plan terminates, disbursements
from Employer's Prefunding Account may continue upon Employer's instruction or
otherwise in accordance with the terms of this Agreement.
(5) After thirty-six (36) months have elapsed from the effective date of this Agreement
or at such earlier date as may be approved by the Board in its sole discretion:
(a) Employer may request a trustee to trustee transfer of the assets in
Employer's Prefunding Account. Upon satisfactory showing to the Board
that the transfer will satisfy applicable requirements of the internal
Revenue Code and the Board's fiduciary duties, then the Board shall
effect the transfer within one hundred twenty (120) days. The amount to
be transferred shall be the amount in the Employer's Prefunding Account
as of the disbursement date and shall include investment earnings up to
the investment earnings allocation date immediately preceding the
disbursement date. In no event shall the investment earnings allocation
date precede the transfer by more than 120 days.
(b) Employer may request a disbursement of the assets in Employer's
Prefunding Account. Upon satisfactory showing to the Board that all of
Employer's obligations for payment of post employment health care
benefits and other post employment benefits and reasonable
administrative costs of the Board have been satisfied, then the Board shall
Rev 6/23/2010 6
effect the disbursement within one hundred twenty (120) days. The
amount to be disbursed shall be the amount in the Employer's Prefunding
Account as of the disbursement date and shall include investment
earnings up to the investment earnings allocation date immediately
preceding the disbursement date. In no event shall the investment
earnings allocation date precede the disbursement by more than 120
days-
(6) After Employer's participation in the Prefunding Plan terminates and at such time
that no assets remain in Employer's Prefunding Account, this Agreement shall
terminate.
(7) If, for any reason, the Board terminates the Prefunding Plan, the assets in
Employer's Prefunding Account shall be paid to Employer after retention of (i) amounts
sufficient to pay post employment health care benefits and other post employment
benefits to annuitants for current and future annuitants described by the employer's
current substantive plan (as defined in GASB 43), and (ii) amounts sufficient to pay
reasonable administrative costs of the Board.
(S) If Employer ceases to exist but Employer's Prefunding Plan continues to exist and if
no provision has been made by Employer for ongoing payments to pay post
employment health care benefits and other post employment benefits to annuitants for
current and future annuitants, the Board is authorized to and shall appoint a third party
administrator to carry out Employer's Prefunding Plan. Any and all costs associated
with such appointment shall be paid from the assets attributable to contributions by
Employer.
(9) If Employer should breach the representation and warranty set forth in Paragraph
A., the Board shall take whatever action it deems necessary to preserve the tax-exempt
status of the Prefunding Plan-
L General Provisions
(1) Books and Records.
Employer shall keep accurate books and records connected with the performance of
this Agreement- Employer shall ensure that books and records of subcontractors,
suppliers, and other providers shall also be accurately maintained. Such books and
records shall be kept in a secure location at the Employer's office(s) and shall be
available for inspection and copying by CaIPERS and its representatives.
(2) Audit.
(a) During and for three years after the term of this Agreement, Employer
shall permit the Bureau of State Audits, CalPERS, and its authorized
representatives, and such consultants and specialists as needed, at all
Rev 6/23/2010 7
reasonable times during normal business hours to inspect and copy, at the
expense of CaIPERS, books and records of Employer relating to its
performance of this Agreement.
(b) Employer shall be subject to examination and audit by the Bureau of State
Audits, CalPERS, and its authorized representatives, and such
consultants and specialists as needed, during the term of this Agreement
and for three years after final payment under this Agreement. Any
examination or audit shall be confined to those matters connected with the
performance of this Agreement, including, but not limited to, the costs of
administering this Agreement. Employer shall cooperate fully with the
Bureau of State Audits, CalPERS, and its authorized representatives, and
such consultants and specialists as needed, in connection with any
examination or audit. All adjustments, payments, and/or reimbursements
determined to be necessary by any examination or audit shall be made
promptly by the appropriate party.
(3) Notice.
(a) Any notice, approval, or ether communication required or permitted under
this Agreement will be given in the English language and will be deemed
received as follows--
1 . Personal delivery. When personally delivered to the recipient.
Notice is effective on delivery.
2. First Class Mail. When mailed first class to the last address of the
recipient known to the party giving notice. Notice is effective three
delivery days after deposit in a United States Postal Service office
or mailbox..
3. Certified mail. When mailed certified mail, return receipt requested.
Notice is effective on receipt, if delivery is confirmed by a return
receipt.
4. Overnight Delivery. When delivered by an overnight delivery
service, charges prepaid or charged to the sender's account, Notice
is effective on delivery, if delivery is confirmed by the delivery
service.
5. Telex or Facsimile Transmission. When sent by telex or fax to the
last telex or fax number of the recipient known to the party giving
notice. Notice is effective on receipt, provided that (I) a duplicate
copy of the notice is promptly given by first-class or certified mail or
by overnight delivery, or (ii) the receiving party delivers a written
confirmation of receipt. Any notice given by telex or fax shall be
Rev 6/23/2010 8
deemed received on the next business day if it is received after
5.00 p.m. (recipient's time) or on a nonbusiness day.
5. E-mail transmission. When sent by e-mail using software that
provides unmodifiable proof (i) that the message was sent, (ii) that
the message was delivered to the recipient's information processing
system, and (iii) of the time and date the message was delivered to
the recipient along with a verifiable electronic record of the exact
content of the message sent.
Addresses for the purpose of giving notice are as shown in Paragraph B.(1) of this
Agreement.
(b) Any correctly addressed notice that is refused, unclaimed, or
undeliverable because of an act or omission of the party to be notified
shall be deemed effective as of the first date that said notice was refused,
unclaimed, or deemed undeliverable by the postal authorities, messenger
or overnight delivery service.
(c) Any party may change its address, telex, fax number, or e-mail address by
giving the other party notice of the change in any manner permitted by this
Agreement.
(d) All notices, requests, demands, amendments, modifications or other
communications under this Agreement shall be in writing. Notice shall be
sufficient for all such purposes if personally delivered, sent by first class,
registered or certified mail, return receipt requested, delivery by courier
with receipt of delivery, facsimile transmission with written confirmation of
receipt by recipient, or e-mail delivery with verifiable and unmodifiable
proof of content and time and date of sending by sender and delivery to
recipient. Notice is effective on confirmed receipt by recipient or 3
business days after sending, whichever is sooner.
(4) Modification
This Agreement may be supplemented, amended, or modified only by the mutual
agreement of the parties. No supplement, amendment, or modification of this
Agreement shall be binding unless it is in writing and signed by the party to be charged.
(5) Survival
All representations, warranties, and covenants contained in this Agreement, or in any
instrument, certificate, exhibit, or other writing intended by the parties to be a part of
their Agreement shall survive the termination of this Agreement until such time as all
amounts in Employer's Prefunding Account have been disbursed.
Rev 6/23/2010 9
(6) Waiver
No waiver of a breach, failure of any condition, or any right or remedy contained in or
granted by the provisions of this Agreement shall be effective unless it is in writing and
signed by the party waiving the breach, failure, right, or remedy. No waiver of any
breach, failure, right, or remedy shall be deemed a waiver of any other breach, failure,
right, or remedy, whether or not similar, nor shall any waiver constitute a continuing
waiver unless the writing so specifies.
(7) Necessary Acts, Further Assurances
The parties shall at their own cost and expense execute and deliver such further
documents and instruments and shall take such other actions as may be reasonably
required or appropriate to evidence or carry out the intent and purposes of this
Agreement.
Rev 6123/2010 10
A majority vote of Employer's Governing Body at a public meeting held on the
day of the month of in the year authorized entering
into this Agreement.
Signature of the Presiding Officer:
Printed Name of the Presiding Officer:
Name of Governing Body:
Name of Empioyer: -
Date:
BOARD OF ADMINISTRATION
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
BY _
ALAN MILLIGAN
ACTUARIAL AND EMPLOYER SERVICES BRANCH
CALIFORNIA PUBLIC EMPLOYEES" RETIREMENT SYSTEM
To be completed by CalPERS
The effective date of this Agreement is:
Rev 6/23/2010 11
Ca1FERS
DELEGATION OF AUTHORITY
TO REQUEST DISBURSEMENTS
RESOLUTION
OF THE
Board of Directors
(GOVERNING BODY)
OF THE
Yorba Linda Water District
(NAME OF EMPLOYER)
The Board of Directors delegates to the incumbents in
(GOVERNING BODY)
the positions of General Manager and
(TITLE)
Finance Director authority to request on behalf
(TITLE) -
of the Employer disbursements from the Other Past Employment Prefunding
Plan and to certify as to the purpose for which the disbursed funds will be used.
By
Title
Witness
Date
OPEB Delegation of AL]tharity (2107)
ITEM NO. 2.2
AGENDA REPORT
Meeting Date: January 10, 2011
To: Finance-Accounting Committee
From: Ken Vecchiarelli, General Manager
Presented By: Stephen Parker, Finance Director Dept: Finance
Prepared By: Delia Lugo, Senior Accountant
Subject: November 2010 Budget to Actual Results
STAFF RECOMMENDATION:
That the Committee review, receive and file the November 2010 Budget to Actual Results.
DISCUSSION:
Attached are the District's budget to actual summary results for the Water Fund, Sewer Fund and a combined
statement for both funds pertaining to the reporting month of November 2010. Overall, District revenue is
trending below expectations due to lower water consumption from rain fall, cooler temperatures and higher
conservation levels. Water operating revenue is only 43.9% of annual budget, which is lower than the normal
trend for the reporting months of the fiscal year. The budget was based on 15% conservation, and through
November customers are conserving at 22.9%, which is a 53% increase.
The Sewer Fund is on target with a majority of its budgeted items, with the exception of insurance, vehicle
equipment, materials and maintenance costs mainly due to the timing of payment due dates.
Variable water costs as a percentage of budget are higher than operating revenues. This is primarily the result
of the District's operational strategy to purchase a higher percentage of import water in the first six months of
the fiscal year, to take advantage of the current import water rates prior to Metropolitan Water District of
Southern California's 7.5% rate increase, which takes effect on January 1, 2011.
For the month of November the non-operating revenue for both the Water and Sewer Funds reflect negative
amounts. This is the net affect for this line item due to the recording of unrealized losses of $69,811.35 for the
medium term and $797.60 for the short term accounts held at CalTRUST. The loss is due a $0.04 drop in the
per share price for all the shares the District has invested.
PRIOR RELEVANT BOARD ACTION(S):
On December 20, 2010 the Committee reviewed, received and filed the October 31, 2010 Budget to Actual
Results.
ATTACHMENTS:
Name. Deseliption: ype:
Water Sewer November 2010.xls November 2010 Consolidated Statement Backup Material
Water Nov 2010.xls November 2010 Water Statement Backup Material
Sewer November 2010.xls November 2010 Sewer Statement Backup Material
Yorba Linda Water District
Summary Financial Report
Water & Sewer Funds
For Five Months Ending November 30, 2010
Annual Actual YTD
Budget YTD through Under/(Over) % of
FY 10/11 November 30, 2010 Budget Annual Budget
Revenue (Operating):
Water Revenue (Consumption & Flat Charge) $25,672,831 $11,141,740 $14,531,091 43.40%
Sewer Revenue 1,235,402 522,751 $712,651 42.31%
Other 7142221 4492876 $264,345 62.99%
Total Operating Revenue: 27,622,454 12,114,367 15,508,087 43.86%
Expenses (Operating):
Variable Water Costs (G.W., Import & Power) 12,667,236 5,913,702 6,753,534 46.69%
Salary Related Expenses 7,624,683 2,598,476 5,026,207 36.82%
Supplies & Services 3,996,585 1,377,315 2,619,270 34.46%
Depreciation & Amortization 5,017,876 2,175,906, 2,8412970 43.36%
Total Operating Expenses: 29,306,380 12,065,399 17,240,981 41.17%
Operating Income (Loss) (1,683,926) 48,968 (1,732,894) -2.91%
Revenue (Non-Operating):
Interest and Investments 156,000 112,132 43,868 71.88%
Property Taxes 1,206,000 100,308 1,105,692 8.32%
Other 1262133 3382694 (212,561) 268.52%
Total Non-Operating Revenue: 1,488,133 551,134 936,999 37.04%
Expenses (Non-Operating):
Interest on Long Term Debt (1,940,954) (802,546) (1,138,408) 41.35%
Other Expense (103,193) (422058) (61,135) 40.76%
Total Non-Operating Expenses: (2,044,147) (844,604) (1,199,543) 41.32%
Non-Operating Income (Loss) (556,014) (293,470) (262,544) 52.78%
I I
Net Income (Loss) ($2,239,940) ($244,502) ($1,995,438) 10.92%
Contributed Capital 145,860 445,168 (299,308) 305.20%
Capital - Direct Labor - 209,286 209,286
Yorba Linda Water District
Water Fund
For Five Months Ending November 30, 2010
FY 2011 YTD % of
Annual November Actual Under/(Over) Annual
Budget 2010 YTD Budget Budget
Revenue (Operating):
Water Revenue (Residential) $ 17,248,481 $ 981,104 $ 7,098,369 $ 10,150,112 41.15%
Water Revenue (Commercial & Fire Det.) 1,522,341 128,692 822,942 699,399 54.06%
Water Revenue (Landscape/Irrigation) 3,588,335 183,028 1,902,396 1,685,939 53.02%
Water Revenue (Service Charge) 3,313,674 278,066 1,318,033 1,995,641 39.78%
Other Operating Revenue 701,089 26,313 447,793 253,296 63.87%
Total Operating Revenue: 26,373,920 1,597,203 11,589,533 14,784,387 43.94%
Expenses (Operating):
Variable Water Costs (G.W., Import & Power) 12,666,536 836,462 5,913,442 6,753,094 46.69%
Salary Related Expenses 6,809,598 467,769 2,308,493 4,501,105 36.95%
Supplies & Services:
Communications 374,576 25,434 104,081 270,495 27.79%
Contractual Services 707,007 55,133 303,658 403,349 42.95%
Data Processing 109,596 - 12,139 97,457 11.08%
Dues & Memberships 30,778 482 19,304 11,474 62.72%
Fees & Permits 44,020 2,629 36,181 7,839 82.19%
Board Election 72,800 - - 72,800 0.00%
Insurance 314,314 319 162,855 151,459 51.81%
Materials 337,800 35,713 175,238 162,562 51.88%
District Activities, Emp Recognition 11,648 1,349 4,172 7,476 35.82%
Maintenance 325,227 17,051 45,131 280,096 13.88%
Non-Capital Equipment 92,611 2,577 20,325 72,286 21.95%
Office Expense 41,221 5,569 11,284 29,937 27.37%
Professional Services 638,224 20,042 175,369 462,855 27.48%
Training 45,735 446 8,156 37,579 17.83%
Travel & Conferences 40,602 1,533 5,610 34,992 13.82%
Uncollectible Accounts 45,955 - 5,612 40,343 12.21%
Utilities 111,930 5,990 46,489 65,441 41.53%
Vehicle Equipment 256,302 16,409 85,680 170,622 33.43%
Supplies & Services Sub-Total 3,600,346 190,676 1,221,284 2,379,062 33.92%
Depreciation & Amortization 4,403,257 387,562 1,925,441 2,477,816 43.73%
Total Operating Expenses 27,479,737 1,882,469 11,368,660 16,111,077 41.37%
Operating Income (Loss) (1,105,817) (285,266) 220,873 (1,326,690) -19.97%
Revenue (Non-Operating):
Interest 142,000 19,543 102,779 39,221 72.38%
Property Taxes 1,206,000 50,371 100,308 1,105,692 8.32%
Other Non-Operating Revenue 100,687 (18,330) 321,999 (221,312) 319.80%
Total Non-Operating Revenue: 1,448,687 51,584 525,086 923,601 36.25%
Expenses (Non-Operating):
Interest on Long Term Debt (1,940,954) (158,855) (802,546) (1,138,408) 41.35%
Other Expense (102,193) (2,947) (35,498) (66,695) 34.74%
Total Non-Operating Expenses: (2,043,147) (161,802) (838,044) (1,205,103) 41.02%
Non-Operating Income (Loss) (594,460) (110,218) (312,958) (281,502) 52.65%
Total Income (Loss) $ (197009277) $ (3959484) $ (929085) (1,608,192) 5.42%
Contributed Capital $ 92,807 $ - $ 1181531 $ (25,724) 127.72%
,Capital - Direct Labor $ 42,804 $ 207,493 $ 207,493 1 .1
Yorba Linda Water District
Sewer Fund
For Five Months Ending November 30, 2010
FY 2011 YTD % of
Annual November Actual Underi(Over) Annual
Budget FY 2010 YTD Budget Budget
Revenue (Operating):
Sewer Charge Revenue $ 1,132,574 $ 95,628 $ 515,543 $ 617,031 45.52%
Locke Ranch Assessments 102,828 6,341 7,208 95,620 7.01%
Other Operating Revenue 13,132 (261) 2,083 11,049 15.86%
Total Operating Revenue: 1,248,534 101,708 524,834 723,700 42.04%
Expenses (Operating):
Variable Costs (Power) 700 52 260 440 37.14%
Salary Related Expenses 815,085 55,219 289,983 525,102 35.80%
Supplies & Services:
Communications 39,284 2,515 10,258 29,026 26.11%
Contractual Services 61,478 3,267 25,532 35,946 41.53%
Data Processing 10,839 - 1,201 9,638 11.08%
Dues & Memberships 3,340 48 2,053 1,287 61.47%
Fees & Permits 6,382 1,237 4,203 2,179 65.86%
Board Election 7,200 - - 71200 0.00%
Insurance 31,086 32 16,107 14,979 51.81%
Materials 18,815 1,230 13,381 5,434 71.12%
District Activities 1,152 133 412 740 35.76%
Maintenance 41,973 4,755 28,755 13,218 68.51%
Non-Capital Equipment 20,509 550 2,994 17,515 14.60%
Office Expense 3,879 551 1,102 2,777 28.41%
Professional Services 67,176 2,152 20,134 47,042 29.97%
Training 5,314 299 1,276 4,038 24.01%
Travel & Conferences 4,348 152 547 3,801 12.58%
Uncollectible Accounts 4,545 - 555 3,990 12.21%
Utilities 11,070 592 4,579 6,491 41.36%
Vehicle Equipment 57,849 3,723 22,942 34,907 39.66%
Supplies & Services Sub-Total 396,239 21,236 156,031 240,208 39.38%
Depreciation & Amortization 614,619 50,341 250,465 364,154 40.75%
Total Operating Expenses 1,826,643 126,848 696,739 1,129,904 38.14%
Operating Income (Loss) (578,109) (25,140) (171,905) (406,204) 29.74%
Revenue (Non-Operating):
Interest 14,000 1,694 9,353 4,647 66.81%
Other Non-Operating Revenue 25,446 (6,307) 16,695 8,751 65.61%
Total Non-Operating Revenue: 39,446 (4,613) 26,048 13,398 66.03%
Expenses (Non-Operating):
Other Expense (1,000) (6,560) 5,560 656.00%
Total Non-Operating Expenses: (1,000) (6,560) 51560 656.00%
Non-Operating Income (Loss) 38,446 (4,613) 19,488 18,958 50.69%
Total Income (Loss) $ (539,663) $ (29,753) $ (152,417) $ (387,246) 28.24%
Contributed Capital $53,053 267,847 326,637 (273,584) 615.68%
Capital - Direct Labor - (528) (1,793) $1,793 0.00%
ITEM NO. 2.3
AGENDA REPORT
Meeting Date: January 10, 2011
To: Finance-Accounting Committee
From: Ken Vecchiarelli, General Manager
Presented By: Stephen Parker, Finance Director Dept: Finance
Prepared By: Delia Lugo, Senior Accountant
Subject: November 2010 Investment Report
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 review, receive and file the November 2010 Investment Report.
DISCUSSION:
Staff is submitting the November 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 reserves categories.
There are a few items that the Finance Department would like to point out. The balance in the Sewer Capital
Project account has increased by approximately $284,000 predominantly due to a payment in the amount of
$267,847 received form Metropolitan Water District for the Diemer Sewer Capital Fee. The Water Operating
investment held at CaITRUST increased by approximately $177,000 due to the transfer of excess funds from
the District's general checking account; and the Water Reserve for Debt Service account held at CaITRUST
increased by approximately $150,000. The Finance Department will be making a monthly transfer into this
account from the general checking in order to meet the Debt Service obligation due March 31, 2011. One
other item to note is that the Bond 2008 account balance is approximately $488,000 lower due to the CIP
payments made for projects in progress.
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 October 31, 2010 was received and filed by the Finance-Accounting Committee on December 20,
2010. The Investment Report for the quarter ended September 30, 2010 was received and filed by the Board
of Directors on November 10, 2010.
ATTACHMENTS:
Name: Description: Type:
Invst_Rpt 1110.xlsx Portfolio Report Backup Material
Agenda 01-10 backup-November 2010.docx AgendaBackup Backup Material
Yorba Linda Water District
Investment Portfolio Report
November 30, 2010
Market % Percent
Value Cost of Total Institution Yield
Cash & Checking Accounts:
$ 252,625 $ 252,625 Wells Fargo Bank
$ 252,625 $ 252,625 0.77% Total 0.00%
Money Market Accounts:
$ 906,444 $ 906,444 Wells Fargo Money Market 0.30%
$ 906,444 $ 906,444 2.81% Total 0.30%
Money Market Account:
$ 8,324,809 $ 8,324,809 US Bank 2008 Revenue Bond 0.20%
$ 8,324,809 $ 8,324,809 25.78% 0.20%
CaITR UST
$ 5,011,073 $ 4,992,331 Ca1TRUST Short Term 0.57%
$ 17,792,002 $ 17,582,185 Ca1TRUST Medium Term 1.20%
$22,803,075 $22,574,516 70.64% 1.06%
$ 32,286,953 $ 32,058,394 100% Total Investments 0.81%
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.
C
Delia Lugo, Senior Accountant
11/30/10
Investment Report Summary
Below is a chart summarizing the yields as well as terms and maturities for the month of
November 2010:
Avg. Portfolio Avg. Portfolio # of Avg. Term
Month Yield Without Yield With Days to of Portfolio
of 2010 CaITRUST CaITRUST Maturity in Days
November 0.21% 0.81% 368 282
Below is a chart comparing operating fund interest for current and prior fiscal years.
Actual Interest 11/30/09 11/30/10
Monthly - November $19,100 $21,237
Year-to-Date $97,823 $112,132
Budget 2009/2010 2010/2011
Interest Budget, November YTD $53,292 $65,000
Interest Budget, Annual $127,900 $156,000
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 11/30/10
Water Operating $ 377,957 1.15%
Water Emergency Reserve 2,069,071 6.29%
Water Capital Project Reserve 19,534,628 59.41%
Water Reserve for Debt Service 372,902 1.13%
COP Revenue Bond 2008 - Reserve 2,147,096 6.53%
COP Revenue Bond 2008 6,177,713 18.79%
Sewer Operating 396,742 1.21%
Sewer Emergency Reserve 1,004,085 3.06%
Sewer Capital Project Reserve 798,114 2.43%
$32,878,308 100.00%
Wells Fargo Bank Checking
Water Operating (585,382)
Sewer Operating 5( ,973)
59( 1,355)
Total 32.286.953
ITEM NO. 3.1
AGENDA REPORT
Meeting Date: January 10, 2011 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: Sewer Financial Projections
DISCUSSION:
The City of Yorba Linda is in the process of determining whether to have Yorba Linda Water District
take over the approximately 6,100 sewer connections the City currently provides service to. As
discussions continue with the City, staff wanted to update the Finance-Accounting Committee with
financial information to compare and evaluate the effects of the City sewer transfer.
ATTACHMENTS:
Name: Description: Type:
Sewer _Financial _Projections.pdf Sewer Financial Projections Backup Material
Sewer Costs with City Sewers
Sewer Revenues:
Sewer Operating Revenue
Sewer Nonoperating Revenue
Subtotal Sewer Revenues
Sewer Expenses:
Sewer Supplies & Services Budget
9% Supplies & Services Allocation
Sewer Salary Related Expenses
9% Salary Allocation
Nonoperating Expenses
Subtotal Sewer Expenses
Cash Flow Impact
Vehicle Equipment & Capital Outlay
End of FY Projected Capital Project Reserves
AMP Recommendation Funding
Sewer Costs without City Sewers
Sewer Revenues:
Sewer Operating Revenue
Sewer Nonoperating Revenue
Subtotal Sewer Revenues
Sewer Expenses:
Sewer Supplies & Services Budget
9% Supplies & Services Allocation
Sewer Salary Related Expenses
9% Salary Allocation
Nonoperating Expenses
Subtotal Sewer Expenses
Cash Flow Impact
Vehicle Equipment & Capital Outlay
End of FY Projected Capital Project Reserves
AMP Recommendation Funding
Sewer Financial Projections
FY 2010/11- 2015/16
Adopted Mid -Year
Budget Adjusted Assuming Sum Through
2010/11 2010/11 4/1/11 Transfer 2011/12 2012/13 2013/14 2014/15 2015/16 2015/16
1,248,534
1,248,534
1,358,653
1,689,011
1,689,011
1,689,011
1,689,011
1,689,011
9,803,708
39,446
39,446
39,446
39,446
39,446
39,446
39,446
39,446
236,676
1,287,980
1,287,980
1,398,099
1,728,457
1,728,457
1,728,457
1,728,457
1,728,457
10,040, 384
(72,900)
(77,900)
(98,943)
(162,071)
(166,933)
(171,941)
(177,099)
(182,412)
(959,397)
(293,797)
(293,797)
(288,715)
(273,470)
(283,041)
(292,948)
(303,201)
(313,813)
(1,755,188)
(349,849)
(349,849)
(390,956)
(514,278)
(539,992)
(566,992)
(595,341)
(625,108)
(3,232,667)
(465,236)
(465,236)
(469,307)
(481,519)
(498,372)
(515,815)
(533,869)
(552,554)
(3,051,437)
(1,000)
(1,000)
(1,000)
(1,000)
(1,000)
(1,000)
(1,000)
(1,000)
(6,000)
(1,182,782)
(1,187,782)
(1,248,921)
(1,432,338)
(1,489,338)
(1,548,695)
(1,610,510)
(1,674,887)
(9,004,689)
105,198
100,198
149,178
296,119
239,119
179,762
117,947
53,570
1,035,695
(68,000)
(108,000)
(258,000)
(790,000)
(150,000)
(500,000)
(60,000)
(60,000)
(1,818,000)
837,198
792,198
683,376
189,496
278,615
(41,624)
16,324
9,893
9,893
257,400
257,400
275,700
330,600
339,000
339,000
339,000
339,000
1,962,300
Adopted
Mid -Year
Budget
Adjusted
Sum Through
2010/11
2010/11
2011/12
2012/13
2013/14
2014/15
2015/16
2015/16
1,248,534
1,248,534
1,248,534
1,248,534
1,248,534
1,248,534
1,248,534
6,242,670
39,446
39,446
39,446
39,446
39,446
39,446
39,446
197,230
1,287,980
1,287,980
1,287,980
1,287,980
1,287,980
1,287,980
1,287,980
6,439,900
(72,900)
(77,900)
(124,733)
(128,475)
(132,329)
(136,299)
(140,388)
(662,224)
(293,797)
(293,797)
(273,470)
(283,041)
(292,948)
(303,201)
(313,813)
(1,466,472)
(349,849)
(349,849)
(367,341)
(385,709)
(404,994)
(425,244)
(446,506)
(2,029,793)
(465,236)
(465,236)
(481,519)
(498,372)
(515,815)
(533,869)
(552,554)
(2,582,131)
(1,000)
(1,000)
(1,000)
(1,000)
(1,000)
(1,000)
(1,000)
(5,000)
(1,182,782)
(1,187,782)
(1,248,063)
(1,296,597)
(1,347,086)
(1,399,613)
(1,454,261)
(6,745,621)
105,198
100,198
39,917
(8,617)
(59,106)
(111,633)
(166,281)
(305,721)
(68,000)
(108,000)
(490,000)
(60,000)
(460,000)
(60,000)
(60,000)
(1,130,000)
837,198
792,198
342,115
273,497
(245,609)
(417,242)
(643,523)
(643,523)
257,400
257,400
330,600
339,000
339,000
339,000
339,000
1,686,600