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HomeMy WebLinkAbout2011-03-15 - Finance-Accounting Committee Meeting Agenda Packet Yorba Linda Water District AGENDA YORBA LINDA WATER DISTRICT FINANCE-ACCOUNTING COMMITTEE MEETING Tuesday, March 15, 2011, 9:30 AM 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. January 2011 Budget to Actual Results Recommendation: That the Committee review, receive and file the January 2011 Budget to Actual Results. 2.2. January 2011 Investment Report Recommendation: That the Committee review, receive and file the January 2011 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. District Credit Card Options 3.2. Sewer Allocation Study 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 April 11, 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: March 15, 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: January 2011 Budget to Actual Results STAFF RECOMMENDATION: That the Committee review, receive and file the January 2011 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 January 2011. Overall, the District revenue is trending below expectations due to lower water consumption from above normal rainfall and cooler temperatures. Water operating revenue is only 55.2% of annual budget, which is lower by approximately 5.2% from the normal trend for seven months of the fiscal year. The budget was based on 15% conservation (i.e. reduced demands), and through January customer demands are down by 24% year to date. Variable water costs as a percentage of budget are slightly higher than operating revenues as a result of the District's operational strategy to purchase more import water in the first six months of the fiscal year. The majority of the individual supplies and services expenses are trending below or on budget, with a few exceptions that have been previously discussed in Finance-Accounting Committee meetings. Fees & Permits as well as Materials expenses are significantly above budget due to the timing of payment due dates. While we are 58.3% through the fiscal year as of January 31, we have realized only 10% of the District's budgeted net loss of $2.2 million, resulting in a year-to-date savings of over $1 million as compared to the budget. PRIOR RELEVANT BOARD ACTION(S): On February 7, 2011 the Committee reviewed, received and filed the December 31, 2010 Budget to Actual Results. On February 10, 2011, the Board of Directors received and filed the Quarterly Financial Statements for the period ending December 2010. ATTACHMENTS: Name: Desel iption: ype: Water Sewer January 2011.xls January 2011 Consolidated Statement Backup Material Water Jan 2011.xls January 2011 Water Statement Backup Material Sewer January 2011.xls January 2011 Sewer Statement Backup Material Yorba Linda Water District Summary Financial Report Water & Sewer Funds For Seven Months Ending January 31, 2011 Annual Actual YTD Budget YTD through Under/(Over) %of FY 10/11 January 31, 2011 Budget Annual Budget Revenue (Operating): Water Revenue (Consumption & Flat Charge) $25,672,831 $14,019,720 $11,653,111 54.61% Sewer Revenue 1,235,402 765,357 $470,045 61.95% Other 714,221 528,410 $185,811 73.98% Total Operating Revenue: 27,622,454 15,313,487 12,308,967 55.44% Expenses (Operating): Variable Water Costs (G.W., Import & Power) 12,667,236 7,152,519 5,514,717 56.46% Salary Related Expenses 7,624,683 3,757,612 3,867,071 52.87% Supplies & Services 3,996,585 1,794,265 2,202,320 44.89% Depreciation & Amortization 52017,876------------------ 3,052,851 1,965,025 60.84% Total Operating Expenses: 29,306,380 15,757,247 13,549,133 53.77% Operating Income (Loss) (1,683,926) (443,760) (1,240,166) 26.35% Revenue (Non-Operating): Interest and Investments 156,000 155,347 653 99.58% Property Taxes 1,206,000 706,509 499,491 58.58% Other 126,133 5302392J------------- (404,257) 420.50% Total Non-Operating Revenue: 1,488,133 1,392,246 95,887 93.56% Expenses (Non-Operating): Interest on Long Term Debt (1,940,954) (1,120,256) (820,698) 57.72% Other Expense (103,193) (49,259) (53,934) 47.73% Total Non-Operating Expenses: (2,044,147) (1,169,515) (874,632) 57.21% Non-Operating Income (Loss) (556,014) 222,731 (778,745) -40.06% Net Income (Loss) ($2,239,940) ($221,029) ($2,018,911) 9.87% Contributed Capital 145,860 445,168 (299,308) 305.20% Capital - Direct Labor - 273,271 273,271 Yorba Linda Water District Water Fund For Seven Months Ending January 31, 2011 FY 2011 YTD % of Annual January Actual Under/(Over) Annual Budget 2011 YTD Budget Budget Revenue (Operating): Water Revenue (Residential) $ 17,248,481 $ 643,325 $ 8,893,124 $ 8,355,357 51.56% Water Revenue (Commercial & Fire Det.) 1,522,341 97,657 1,066,969 455,372 70.09% Water Revenue (Landscape/Irrigation) 3,588,335 62,856 2,183,844 1,404,491 60.86% Water Revenue (Service Charge) 3,313,674 278,657 1,875,782 1,437,892 56.61% Other Operating Revenue 701,089 34,687 524,992 176,097 74.88% Total Operating Revenue: 26,373,920 1,117,182 14,544,711 11,829,209 55.15% Expenses (Operating): Variable Water Costs (G.W., Import & Power) 12,666,536 527,923 7,152,138 5,514,398 56.46% Salary Related Expenses 6,809,598 520,583 3,341,778 3,467,820 53.05% Supplies & Services: Communications 374,576 10,882 128,785 245,791 34.38% Contractual Services 707,007 64,493 412,385 294,622 58.33% Data Processing 109,596 1,306 35,928 73,668 32.78% Dues & Memberships 30,778 1,413 21,245 9,533 69.03% Fees & Permits 44,020 3,631 41,350 2,670 93.93% Board Election 72,800 148 148 72,652 0.00% Insurance 314,314 - 163,174 151,140 51.91% Materials 337,800 41,139 240,988 96,812 71.34% District Activities, Emp Recognition 11,648 1,547 6,040 5,608 51.85% Maintenance 325,227 19,762 69,038 256,189 21.23% Non-Capital Equipment 92,611 3,231 29,218 63,393 31.55% Office Expense 41,221 1,596 15,286 25,935 37.08% Professional Services 638,224 26,994 215,427 422,797 33.75% Training 45,735 3,856 13,026 32,709 28.48% Travel & Conferences 40,602 443 10,015 30,587 24.67% Uncollectible Accounts 45,955 - 5,612 40,343 12.21% Utilities 111,930 6,212 57,581 54,349 51.44% Vehicle Equipment 256,302 10,557 115,936 140,366 45.23% Supplies & Services Sub-Total 3,600,346 197,210 1,581,182 2,019,164 43.92% Depreciation & Amortization 4,403,257 387,432 2,701,028 1,702,229 61.34% Total Operating Expenses 27,479,737 1,633,148 14,776,126 12,703,611 53.77% Operating Income (Loss) (1,105,817) (515,966) (231,415) (874,402) 20.93% Revenue (Non-Operating): Interest 142,000 20,240 142,648 (648) 100.46% Property Taxes 1,206,000 55,702 706,509 499,491 58.58% Other Non-Operating Revenue 100,687 165,755 501,857, (401,170) 498.43% Total Non-Operating Revenue: 1,448,687 241,697 1,351,014 97,673 93.26% Expenses (Non-Operating): Interest on Long Term Debt (1,940,954) (158,855) (1,120,256) (820,698) 57.72% Other Expense (102,193) (2,947) (41,392) (60,801) 40.50% Total Non-Operating Expenses: (2,043,147) (161,802) (1,161,648) (881,499) 56.86% Non-Operating Income (Loss) (594,460) 79,895 189,366 (783,826) -31.86% Total Income (Loss) $ (197009277) $ (4369071) $ (429049) (1,658,228) 2.47% Contributed Capital $ 92,807 $ 118,531 $ (25,724) 127.72% ,Capital - Direct Labor $ 30,097 $ 270,927 $ 270,927 1 .1 Yorba Linda Water District Sewer Fund For Seven Months Ending January 31, 2011 FY 2011 YTD % of Annual January Actual Underi(Over) Annual Budget FY 2011 YTD Budget Budget Revenue (Operating): Sewer Charge Revenue $ 1,132,574 $ 93,618 $ 706,311 $ 426,263 62.36% Locke Ranch Assessments 102,828 2,268 59,046 43,782 57.42% Other Operating Revenue 13,132 395 3,419 9,713 26.04% Total Operating Revenue: 1,248,534 96,281 768,776 479,758 61.57% Expenses (Operating): Variable Costs (Power) 700 62 380 320 54.29% Salary Related Expenses 815,085 64,264 415,835 399,250 51.30% Supplies & Services: Communications 39,284 1,063 12,905 26,379 32.85% Contractual Services 61,478 5,288 37,457 24,021 60.93% Data Processing 10,839 129 3,554 7,285 32.79% Dues & Memberships 3,340 140 2,245 1,095 67.22% Fees & Permits 6,382 317 4,529 1,853 70.97% Board Election 7,200 15 15 7,185 0.21% Insurance 31,086 - 16,139 14,947 51.92% Materials 18,815 517 14,516 4,299 77.15% District Activities 1,152 153 597 555 51.82% Maintenance 41,973 1,883 30,874 11,099 73.56% Non-Capital Equipment 20,509 979 6,173 14,336 30.10% Office Expense 3,879 158 1,498 2,381 38.62% Professional Services 67,176 3,010 25,074 42,102 37.33% Training 5,314 370 2,206 3,108 41.51% Travel & Conferences 4,348 44 981 3,367 22.56% Uncollectible Accounts 4,545 - 555 3,990 12.21% Utilities 11,070 614 5,676 5,394 51.27% Vehicle Equipment 57,849 13,990 48,089 9,760 83.13% Supplies & Services Sub-Total 396,239 28,670 213,083 183,156 53.78% Depreciation & Amortization 614,619 50,897 351,823 262,796 57.24% Total Operating Expenses 1,826,643 143,893 981,121 845,522 53.71% Operating Income (Loss) (578,109) (47,612) (212,345) (365,764) 36.73% Revenue (Non-Operating): Interest 14,000 1,677 12,699 1,301 90.71% Other Non-Operating Revenue 25,446 14,873 28,533 (3,087) 112.13% Total Non-Operating Revenue: 39,446 16,550 41,232 (11786) 104.53% Expenses (Non-Operating): Other Expense (1,000) 0 (7,867) 6,867 786.70% Total Non-Operating Expenses: (1,000) - (7,867) 6,867 786.70% Non-Operating Income (Loss) 38,446 16,550 33,365 5,081 86.78% Total Income (Loss) $ (539,663) $ (31,062) $ (178,980) $ (360,683) 33.17% Contributed Capital $53,053 326,637 (273,584) 615.68% Capital - Direct Labor - (46) (2,344) $2,344 0.00% ITEM NO. 2.2 AGENDA REPORT Meeting Date: March 15, 2011 To: Finance-Accounting Committee From: Ken Vecchiarelli, General Manager Presented By: Stephen Parker, Finance Dept: Finance Director Prepared By: Delia Lugo, Senior Accountant Subject: January 2011 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 January 2011 Investment Report. DISCUSSION: Staff is submitting the January 2011 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. The Water Operating fund has decreased by approximately $421,300 due to the payment of the biannual replenishment assessment to Orange County Water District in the amount of $858,004.20, as well as the annual annexation charge in the amount or $67,376.64. 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 December 31, 2010 was received and filed by the Finance-Accounting Committee on February 7, 2011. The Investment Report for the quarter ended December 31, 2010 was received and filed by the Board of Directors on February 10, 2011. ATTACHMENTS: Name: Des°:Cripstion: Type: Invst_Rpt 1-11.xlsx Investment Report Backup Material Agenda, 3-15 backup-Jan 2011.docx Agenda Backup Backup Material Yorba Linda Water District Investment Portfolio Report January 31, 2011 Market % Percent Value Cost of Total Institution Yield Cash & Checking Accounts: $ 54,743 $ 54,743 Wells Fargo Bank $ 54,743 $ 54,743 0.16% Total 0.00% Money Market Accounts: $ 846,733 $ 846,733 Wells Fargo Money Market 0.30% $ 846,733 $ 846,733 2.62% Total 0.30% $ 901,476 $ 901,476 2.79% Sub-total 0.30% Money Market Account: $ 8,296,543 $ 8,296,543 US Bank 2008 Revenue Bond 0.20% $ 8,296,543 $ 8,296,543 25.69% 0.20% CaITR UST $ 4,969,275 $ 4,945,900 Ca1TRUST Short Term 0.47% $ 18,133,718 $ 17,923,616 Ca1TRUST Medium Term 1.25% $23,102,993 $22,869,516 71.53% 1.08% $ 32,301,012 $ 32,067,535 100% 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 1/31/11 Investment Report Summary Below is a chart summarizing the yields as well as terms and maturities for the month of January 2011: Avg. Portfolio Avg. Portfolio # of Avg. Term Month Yield Without Yield With Days to of Portfolio of 2010 CaITRUST CaITRUST Maturity in Days January 0.21% 0.83% 368 256 Below is a chart comparing operating fund interest for current and prior fiscal years. Actual Interest 01/31/10 01/31/11 Monthly - January $19,845 $21,917 Year-to-Date $117,461 $155,347 Budget 2009/2010 2010/2011 Interest Budget, January YTD $74,608 $87,500 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 01/31/11 Water Operating $ 320,720 0.97% Water Emergency Reserve 2,070,278 6.27% Water Capital Project Reserve 19,506,753 59.05% Water Reserve for Debt Service 641,976 1.94% COP Revenue Bond 2008 - Reserve 2,147,096 6.50% COP Revenue Bond 2008 6,149,447 18.61% Sewer Operating 486,679 1.47% Sewer Emergency Reserve 1,004,103 3.04% Sewer Capital Project Reserve 708,463 2.15% $33,035,515 100.00% Wells Fargo Bank Checking Water Operating (742,038) Sewer Operating 7,535 73( 4,503) Total 32.301.012 ITEM NO. 3.1 AGENDA REPORT Meeting Date: March 15, 2011 To: Finance-Accounting Committee From: Ken Vecchiarelli, General Manager Presented By: Stephen Parker, Finance Dept: Finance Director Prepared By: Stephen Parker, Finance Director Subject: District Credit Card Options SUMMARY: Staff is exploring options for business credit card accounts with rewards or point systems that could be utilized for District business-related expenses, such as transportation and lodging for conferences and seminars. American Express offers this type of account and staff is reviewing the cost benefit of this and similar options. ITEM NO. 3.2 AGENDA REPORT Meeting Date: March 15, 2011 To: Finance-Accounting Committee From: Ken Vecchiarelli, General Manager Presented By: Stephen Parker, Finance Dept: Finance Director Prepared By: Stephen Parker, Finance Director Subject: Sewer Allocation Study SUMMARY: The District has historically applied an overhead charge of approximately 9% of total operating expenses from the Water Operating Fund to the Sewer Operating Fund. The Finance Department was asked to review this number and determine if this historical allocation is still justified and if not, to make a recommendation for an adjustment. Staff has completed an initial assessment of this allocation and is preparing to discuss this matter further during the budget process. DISCUSSION: For decades a 9% rate has been used to allocate indirect costs from the Water Fund to the Sewer Fund. The Finance Department was tasked to complete a review of this allocation and to determine if any adjustment is appropriate. A methodology for an appropriate sewer allocation was determined through discussions with each Department, to apply a factor toward each section of the Supplies and Services Budget. The 2010/11 budgeted figures were then multiplied by the budget individual section's determined rate. The combined figure was then compared against the allocated cost assuming the flat 9% rate. The results of the analysis revealed that the indirect costs charged to sewer lined up much more closely to 7% overall as opposed to the current 9%. The difference was approximately $136,000 in the current fiscal year budget. For the upcoming budget process, staff recommends an allocation rate of 7%.