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HomeMy WebLinkAbout2011-05-09 - Finance-Accounting Committee Meeting Minutes MINUTES OF THE YORBA LINDA WATER DISTRICT FINANCE-ACCOUNTING COMMITTEE MEETING May 9, 2011 A meeting of the Finance-Accounting Committee was called to order by Director Collett at 4:00 p.m. The meeting was held at the District's Administrative Office at 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 None. 2. ACTION CALENDAR 2.1. Independent Audit Services Contract Mr. Parker reported to the Committee that staff requested proposals for auditing services from ten qualified firms. Five firms responded and staff evaluated each of the proposals for expertise, audit approach, team qualifications, experience and value. The firms receiving the top two rankings were Mayer Hoffman McCann P.C. and Diehl Evans & Co. Because of the strong working relationship already built with Diehl Evans & Co. over the past three years, and due to the negative publicity associated with Mayer Hoffman McCann's working relationship with the City of Bell, staff is recommending a Professional Services Agreement with Diehl Evans. Staff contacted the firm's partner and asked if they would match the lower proposal price submitted by Mayer Hoffman McCann P.C., which they agreed to do. Therefore, staff recommends Diehl Evans & Co. for the consideration of a three year agreement for auditing services, with two subsequent one-year options. The Committee asked about the prudence of staying with one auditing firm for too many years. Mr. Parker noted the Government Finance Officers Association (GFOA) recommends up to ten years, while his personal preference is five to seven. Mr. Vecchiarelli also explained that the District can opt out of the agreement in any year with one-month's written notice for any reason. He added that prior to our most recent auditing agreement; the District had done just that, ending a three-year contract after the second year. Following discussion, the Committee supported recommending the Board of Directors authorize the President to execute a Professional Services Agreement with Diehl Evans & Co. 2.2. March 2011 Budget to Actual Results Mr. Parker presented the March 2011 Budget to Actual Results. He identified that nothing significant had changed from the prior month. 1 Water operating revenue was still down a few percent from the normal trend (4.1 for this time of the year due to lower demands. The majority of the supplies and services expenses were at or below budget with a few exceptions that had been previously discussed. Mr. Vecchiarelli explained that salary related expenses were down due to a number of positions being unfilled for a period of time as well as staff time being charged to capital projects. Mr. Parker also shared that variable water costs as a percentage of budget were lower than operating revenues, and would continue to trend lower as the District purchases a higher percentage of groundwater in the second half of the year. 2.3. Investment Report through March 31, 2011 Mr. Parker presented the March 2011 Investment Report, and pointed out the signficant changes in the Water Operating and Water Capital funds as a result of a quarterly reconciliation of the captial items paid in the regular check register out of the operating fund. He also shared that the Water Reserve for Debt Service fund was down by over $800,000 as a result of the semi-annual debt service payment due March 31, 2011. The Committee asked for a comparison column to be included in the Investment Report Summary next to the current month's balance in future reports. Mr. Parker agreed that it would provide beneficial information and indicated staff will add that information. The Committee recommended the Board receive and file the Investment Report through March 2011. 3. DISCUSSION ITEMS 3.1. Draft Budget Overview, Draft Reserve Policy Mr. Parker explained that budgeted numbers have not changed much from the previous month's presentation to the Committee. In addtiion, some budget numbers had not been finalized at the Committee level yet. As a result of that and a Board Budget Workshop scheduled for June 1, staff is planning on presenting the draft budget overview to the entire Board at the workshop. The Committee requested that adequate information be sent to the Board in advance of the workshop to have a useful and engaging budget discussion. 3.2. FY 2011/12 Budget Calendar Update Mr. Parker handed out an updated version of the Budget Calendar reflecting the new June 1 Board Workshop, and indicated that the budget completion would now take advantage of extra time build into the process b providing a draft budget to the full Board at the regular meeting on June 9 and adoption at the June 23rd regular meeting. 3.3. March 2011 Debt Service Ratio Mr. Parker shared the unaudited debt service ratio through March 31, 2011. The ratio of 2.05 was up slightly from 2.02 at December 31, 2010. Mr. Parker explained that this was right where Fitch had wanted to see the ratio, and added that it was higher than expected, as the District's year-to- 2 date loss described in Item 2.2 was approximately $1 M better than budgeted. 3.4. Future Agenda Items and Staff Tasks None. 4. ADJOURNMENT 4.1. The Committee adjourned at 4:42 p.m. The next regular meeting of the Finance-Accounting Committee will be held on June 13, 2011 at 4:00 p.m. 3