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HomeMy WebLinkAbout2011-06-13 - Finance-Accounting Committee Meeting Agenda Packet Yorba Linda Water District AGENDA YORBA LINDA WATER DISTRICT FINANCE-ACCOUNTING COMMITTEE MEETING Monday, June 13, 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. Sewer Financial Model Recommendation: That the Committee recommend the Board of Directors approve an amendment in the amount of $10,000 to an existing Professional Services Agreement with Raftelis Financial Consultants to add a deliverable of a Sewer Financial Model. 2.2. Authorization to Invest in Local Agency Fund Recommendation: That the Committee recommend the Board of Directors approve a resolution authorizing the investment of monies in the Local Agency Investment Fund. 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. OPEB Liability Pay Down 3.2. 2008 COP Reserve Funds Investment 3.3. April 2011 Budget to Actual Results 3.4. Investment Report Through April 2011 3.5. Future Agenda Items and Staff Tasks 4. ADJOURNMENT 4.1. The next regular meeting of the Finance-Accounting Committee will be held on July 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: June 13, 2011 Budgeted: Yes Total Budget: $15,000 To: Finance-Accounting Committee Cost Estimate: $10,000 Funding Source: Operating Funds From: Ken Vecchiarelli, General Account No: 1-3010-0780-00 Manager Job No: J2010-07 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 Model STAFF RECOMMENDATION: That the Committee recommend the Board of Directors approve an amendment in the amount of $10,000 to an existing Professional Services Agreement with Raftelis Financial Consultants to add a deliverable of a Sewer Financial Model. DISCUSSION: Raftelis Financial Consultants, Inc. was selected by YLWD through an RFP process to provide the District with a Cost of Service and Water Rate Study in March 2010. One of the deliverables of that agreement is providing staff with a Water Financial Model that will assist staff in budgeting and projecting revenues, operating and capital expenditures, debt service coverage and more for years into the future. Staff is anticipating utilizing this tool, but desires to have a similar tool for the Sewer Fund to enable budgeting and projecting for the District as a whole. As such, a Request For Proposal was sent to five companies who submitted proposals on the Water Rate Study. Four of the companies asked questions of staff, but only one submitted a proposal. The one proposal was from Raftelis Financial Consultants for $10,000. Staff spoke with one of the vendors who had contact with the District but didn't propose, and asked them to provide an approximate range of expected fees for the project. The $10,000 proposal was the low end of the range provided by the company. Staff recommends that an amendment of $10,000 be added to the existing PSA with Raftelis Financial Consultants for the extra deliverable of a Sewer Financial Plan. PRIOR RELEVANT BOARD ACTION(S): On March 11, 2010 the Board authorized the General Manager to execute a Professional Services Agreement with Raftelis Financial Consultants in the amount of $77,005 to conduct a Cost of Service and Water Rate Study. On June 9, 2011, the Board adopted the 2011-2013 Strategic Plan, which in the Initiatives and Action Plans section under FR 1-A calls for a strategy to Develop a Comprehensive Multi-Year Financial Plan. ATTACHMENTS: YLWD_WW_FPlan_Model _Proposal _May 2011.pdf Sewer Financial Model Proposal Backup Material RFC ■ 201 S. Lake Ave., Suite 301 Phone 626 • 583 • 1894 ■ www.raftelis.com Pasadena • CA • 91101 Fax 626 • 583 • 1411 RAFTELIS FINANCIAL CONSULTANTS, INC. May 13, 2011 Mr. Stephen M. Parker Finance Director Yorba Linda Water District 1717 Miraloma Avenue Placentia, CA 92870 Subject: Proposal for Developing a Wastewater Financial Plan Model Dear Mr. Parker: Raftelis Financial Consultants, Inc. (RFC) is pleased to submit this proposal to assist the Yorba Linda Water District (District) with developing a Wastewater Financial Plan Model (Model). RFC has a broad range of experience in the areas of interests to the District, more specifically in the areas of conducting long-term financial plan studies. RFC is one of the largest full-service utility financial consulting firms, specializing in financial plan and rate studies. We have assisted many agencies throughout California and all across the U.S. conducting thousands of such studies. RFC offers the following advantages: • Depth of Local Resources: We have the largest utility financial practice in California and one of the largest in the nation, and will ensure the project is completed on time or with an accelerated schedule, if needed. • Experience: In California alone, we have performed hundreds of studies, especially in Southern California. In 2010, we worked in 26 states and conducted more than 200 studies. • Industry Leadership: Our senior staff is involved in shaping industry standards by chairing various committees within American Water Works Association (AWWA) and Water Environment Federation (WEF). RFC staff has written one of the leading books on water and wastewater rate setting: Water and Wastewater Finance and Pricing, and co-authored other industry standard books, such as: AWWA's Manual M1, Principles of Water Rates, Fees and Charges, AWWA's Water Rates, Fees, and the Legal Environment, 2nd Edition, and WEF's Financing and Charges for Wastewater Systems. RFC also publishes the nationally recognized biennial Water and Wastewater Rate Survey, which is co-published with AWWA, and the CA-NV Water Rate Survey which is co-published with the CA-NV AWWA. Being so actively involved in the industry allows us to keep the District informed of emerging trends and issues, and to be confident that our recommendations are insightful and founded on sound industry principles. • Modeling Experts: Due to our depth of resources and experience, we have developed some of the most sophisticated and user-friendly financial/rate models available. These models are tools that allow us to examine different policy options and their financial/customer impacts in real Yorba Linda Water District Proposal for Developing a Wastewater Financial Plan Model time. In a workshop environment, our models allow us to quickly review impacts of changes to different parameters, to determine which policy option is feasible, and to reach consensus quickly. Our models are customized to be presented in a Board workshop to help facilitate agreement on financial policies associated with the District • Knowledge of CA Regulatory Requirements. The regulatory environment in California has become more stringent due to Proposition 218 and Government Code Section 54999. Because of our extensive experience, we are very familiar with these regulations and have made presentations on this subject at the Association of California Water Agencies (ACWA), the California Society of Municipal Finance Officers, and CA-NV AWWA. In addition, we are frequently called upon to be expert witnesses on these regulatory matters. This regulatory knowledge will ensure that our recommendations account for aspects that are unique to California utilities. • Focus. RFC's services are solely focused on providing financial, pricing, and management consulting services to water and wastewater industry utilities. This focus allows RFC professionals to develop and maintain knowledge and skills which are extremely specialized to the services that we provide, and will allow us to provide the District with independent and objective advice. • Client Satisfaction. RFC strives to develop strong relationships with each of our clients. We recognize that we have a vested interest in the success of each of our clients. We work collaboratively with our clients during the engagement and provide any necessary assistance after the engagement. Yorba Linda Water District (District or YLWD) currently serves 15,000 wastewater connections in most of Yorba Linda and portions of Placentia, Brea, Anaheim and areas of unincorporated Orange County. Beginning of Fiscal Year (FY) 2011, the District expects to gain an additional 6,100 connections from the City of Yorba Linda. The District is independent of all city and county governments. All revenues collected from wastewater services (the current wastewater rates are shown in the Table below) are used to fund operational and capital expenditures of the wastewater enterprise. Metered use Single Family $5.50 per month Multi Family $3.85 per unit per month Commercial, Industrial & Public First 2,200 cu ft $5.50 per month Authority with water meters Above 2,200 cu ft $4.62 per 1,000 cu ft RFC 2 I e i- Yorba Linda Water District Proposal for Developing a Wastewater Financial Plan Model Commercial, Industrial & Public First 1,100 cu ft $5.50 per month Authority with sewer meters Above 1,100 cu ft $5.06 per 1,000 cu ft In 2010, the District engaged RFC in a Cost of Service and Water Rate Study, where one of the deliverables of the study was a Financial Plan Model that could help develop a multi-year projection or budget for its water enterprise fund. District staff would like to have a similar model developed for the wastewater enterprise to provide complete multi-year budget projections and to conduct sensitivity analysis for changes to selected key variables in the financial plan, including different financing options for CIP, and/or different CIP schedules. We believe that our unique combination of qualifications and experience will ensure successful implementation of forward-looking solutions that will benefit the District and its customers. bcupE UP 6ER YCES Ir - 1, M FR R' :1 " `.1 n a s s-1- The kick-off meeting provides a solid foundation for the project and serves as a forum in which District staff can provide input on the project's approach, work plan, schedule, and priorities. RFC also develops a better understanding of the District's financial goals and the model capability through this meeting. RFC will review the financial position of the wastewater fund, including revenue and reserve requirements (operating cash flow, capital projects, emergency, etc.), debt coverage, and annual rate funded capital. This review will allow the project team to get a better understanding of the District's financial picture and will serve as the basis for financial policy recommendations. The task of developing a Multi-Year Financial Plan Model will include the projections of budget items, such as: annual costs related to the collection system, labor, power, materials, capital expenditures, operating and maintenance (O&M) expenses, reserve contributions, depreciation and debt service, using assumptions based on different economic factors and growth trends. RFC will develop a forecast of wastewater revenue requirements for the next 10-year planning period. This will include an estimate of revenues based on current rates, growth in customers and fee levels, as well as revenues generated from charges from ancillary services and other non-rate revenues. Revenue requirements will be projected over the rate-setting period considering the current budget, the District's capital improvement plan (CIP), the utilities' existing debt service, other obligations, and current economic trends. RFC will identify funding needs and develop financing options for capital projects over the long planning horizon, allowing the District to make timely adjustments to expenses, reserve balances, or the timing of capital projects to smooth rate impacts and to maintain financial stability. The RFC 3 1 Yorba Linda Water District Proposal for Developing a Wastewater Financial Plan Model financial model will have the capability to examine the impact of different financing options for CIP, such as debt issuance or PAYGO. Lastly, the financial model will have the ability to examine the financial consequences of annexing City sewer accounts within the District. RFC will conduct a cash flow analysis/summary to determine the revenue adjustments needed to meet projected revenue requirements for each year of the planning period. The cash flow worksheet in the Model incorporates revenues generated from different sources, expenses needed to maintain the utilities' systems, any transfers in and out of the working cash fund, as well as coverage needed to meet current and proposed debt service requirements. RFC will also review reserves policies to recommend appropriate reserves balances, such as: operating, capital, rate stabilization, etc., consistent with the District's risk management practices and industry standards. The wastewater rates will be updated based on the percentage increase in revenue developed from the financial plan. The below dashboard is a sample of a recent financial model RFC has developed. ~~rrl•~p~~~ r°~l~ar~ru~al e~~ald ~v~~~r~l ~a~rl~~d:;r The Dashboard allows quick decision making by visually displaying impacts of changes to selected variables. Zero Selected Variables xo-m. ,a,~n,re Na of Years Display in Charts 5 Selertye.ar to show Financial 5tructure Under Currenf' e1 a511YV lYrL Iii lil f rn1:(Ir'11 ~1• 1 9i.i `'a._C:`4L PL?..^J 250% ypp S1U i~ 290A, - I50~ 520 ?ut:a •9a; 519 c . g- I io zoed 2os~ Cosa aaie so.YO xoai xaY: :9u .,n - n.t::.-u_~t~mprage I ....9a~nc prr,rr ...Y Orb se. , ~en.r,..nrary ` Required Dept Coverage 12 SA r meet L)eht Coverage ~-iordrurrent gexnues -~ir.44rupe:ed P- -s millions KE:s FRV .S ~I CIP Expenditures $.5p S§'. ~ 512 5~Q i19 $29 SIO - $ " NIQ 3011 .1-1 "0 oTotal Reserve Balances -TOta. 4 Alert Reserve Balance . ueat Fmenci mg L pnrco rtevAdjmcZJI* New D,L- 5 5 u,u-UU.:ga 5 S 5 5 - RFC will conduct one half-day training session with District staff to demonstrate all of the key aspects of the Model. The training will consist of reviewing methodologies used during the study and understanding the Model's design and layout, how to adjust key variables that support the "what-if" scenario development features of the Model, and how to update the Model with new inputs for the RFC 4 1 INI Yorba Linda Water District Proposal for Developing a Wastewater Financial Plan Model District's future use. At the completion of the training, RFC will provide the Model in Microsoft Excel 2007 format along with the Model user manual (in PowerPoint) to the District for its future use. • 1 kick-off on-site meeting • 1 half-day on-site training session • Several phone conferences as needed for discussion and/or data clarification • Kick-off meeting package to guide the discussion • Data request list • Wastewater Financial Plan Model in Microsoft Office ExceIT"2007 • Presentation materials for the training session (Model Manual) RFC 5 Yorba Linda Water District Proposal for Developing a Wastewater Financial Plan Model PROJECT REFERENCES RFC has been assisting El Toro Water District (District) with its rates for several years. The District had not updated its water and wastewater rates and rate structure in over ten years and was operating at a deficit. RFC prepared a financial plan over a 12-year period considering operating and capital expenses, debt and reserve requirements. A cost of service analysis was also conducted to review fairness of rates and rate structures. Multiple scenarios were developed to review impacts and suggested a phased approach to implementing cost of service rates. Alternate innovative sources of revenues were considered to minimize rate impacts. We also reviewed the reclaimed water rates and surveyed surrounding agencies to compare rates, sources of revenue, unit cost of providing service based on total sales, etc. to determine the competitive effectiveness of the District's operations. The District also engaged RFC to design a water budget rate structure for its residential and irrigation accounts to be implemented in July 2010. Michael Gr..., Residential water budgets include indoor allocations varying with number of Assistant G41], occupants and outdoor allocations varying with weather data and irrigable area. The irrigation area was determined based on a percentage of the residual of the total parcel area minus building area acquired from the Assessors' database to be refined when better data is available from MWDOC. The formula for developing allocation budgets considers irrigation efficiency and type of landscape. The whole concept was to encourage ef- ficient use of water and send a strong signal for conservation. RFC assisted the District in developing variance programs to accommodate customers with unique user characteristics. RFC also developed a web-based calculator so that customers could review impacts. RFC developed a water budget rate model that allowed the District to quickly view the impacts of alternate rates and budgets, so that policy makers could make informed decisions. The water budget rate structure was designed to ensure revenue stability, financial sufficiency, and to provide the appropriate price signal on the different supply costs and conservation program funding for the District. This tool was invaluable when presenting results in graphical format to the District Board of Directors because it enabled them to see the impacts of different water budgets on their customers in real-time. The Board adopted the water budget rate structure in June 2010. Lastly, RFC interfaced with Continental Utility Solutions, Inc. (CUSI), the Dis- trict's billing consultant, and provided specifications to ensure that the budget rate structure could be smoothly implemented. RFC 6 1 g e Yorba Linda Water District Proposal for Developing a Wastewater Financial Plan Model Western Municipal Water District (District) serves roughly 24,000 retail and 8 wholesale customers in western Riverside County with approximately 125,000 acre ft. of water per year from the Colorado River, State Water Project, and groundwater. As a member agency of the Metropolitan Water District of Southern California (MWD), the District provides supplemental water to the cities of Corona, Norco, and Riverside, as well as the water agencies of Box Springs Mutual, Eagle Valley Mutual, Elsinore Valley, Lee Lake, and Rancho California. The District is also one of five of the member agencies of the Santa Ana Watershed Project Authority (SAWPA), a regional water resources planning and project implementation organization. The District operates and maintains domestic and industrial wastewater collection and conveyance systems for retail and contract services customers in Lake Hills, March Air Reserve Base, Home Gardens, and Norco. RFC has been assisting the District with several projects including the development of a water budget rate structure for its retail customers, the development of a long-term financial plan for each cost center within the rlemondC@wmwd.com District, a review and analysis of the annual water rate update, and a water budget web calculator to be used as a public outreach tool. The main objective of the water budget rate study is to identify and thoroughly examine three (3) potential water budget rate structures for each of the two identified cost centers (Murrieta and Riverside). RFC has developed a Water Budget Rate Model (Model) in Excel 2007 so each of the two costs centers will have the ability to change the key factors for all water allocations, to provide revenue and impact analysis, and to generate sample customer monthly bills under existing and proposed rates. At the end of the study, RFC will present the results to the District Board in a workshop and provide justification to ensure that the Water Budget Rate Structure complies with Proposition 218 requirements in a concise yet detailed technical memorandum. The Model will then be delivered to the District. To assist the District during water budget rate implementation, RFC is developing a web-based bill calculator as a public outreach tool to allow customers to review their allocations compared with their actual usage and their bill impacts. The water budget rate structure is scheduled to be implemented in 2011. In 2010, RFC assisted the District in its annual water rate update study to ensure revenue sufficiency for recovering the increasing costs of imported water and to enhance revenue stability by designing a rate structure that will reduce the District's dependency on property tax to fund its operations. RFC 7 1 g e Yorba Linda Water District Proposal for Developing a Wastewater Financial Plan Model In order to better financially manage all 14 enterprises, the District needs a comprehensive, yet user-friendly financial plan model which can be used to facilitate communications between staff and the District's Board of Directors about the financial implications of different financial policies and capital projects. The Model assists coordination and decision making between the engineering and finance staff to prioritize capital projects and to define a capital financing plan to achieve a sustainable and achievable solution. In fiscal year 2011, the District engaged RFC to develop a customized 30-year Financial Plan Model (Model) with the ability to conduct scenario analysis. The interactive dashboard of the Model displays the Long-Term Financial Plan of the 14 enterprises in a graphical format. A Capital Improvement Plan (CIP) manager was developed to save customized CIP scenarios to be used for financial implication evaluations. The built-in scenario manager enables Model users to save, load, and compare the results of different assumptions, inputs, and CIP scenarios. Customized financial reports in preset printed format can be generated at an individual enterprise level and at an aggregate level for the whole District. CITY OF SAN DIEGO The City of San Diego (City) engaged RFC to perform a water and wastewater cost of service and rate design study. The study was conducted with extensive stakeholder group involvement. The selected stakeholders represented a variety of commercial businesses and residential communities in the City. Metropolitan Wastewater Department (Metro) provides wastewater services to the City and 14 other participating agencies that are part of a regional wastewater system. The study included a comprehensive review of the City's revenue requirements and allocation methodology, review of the City's user classification method, and an analysis of cost-of-service and rate design for City users. The rate structure was modified to provide a more equitable sharing of costs consistent with regulatory requirements. Rate design included an evaluation of rate structure alternatives with an emphasis on incorporating a uniform monthly base fee in conjunction with volume rates. The study also included a review of the City's capacity charges. The water rate study involved evaluation of billing data, extensive analysis of the capital improvement program, allocation of CIP capacity between expansion and replacement, and financial modeling to demonstrate City compliance with regulatory requirements. Capacity charge calculations were incorporated into the rate model to determine the effects on the City and ensure adequate revenue collection. Cost-of-service rates have been developed based on American Water Works Association methodologies jcole@sandiego.ov using the base-extra capacity method, as well as transition rates, to provide RFC 8 1 Yorba Linda Water District Proposal for Developing a Wastewater Financial Plan Model smooth transition to cost-of-service rates. Rates for this engagement were implemented in July 2004 and updated in January 2007. RFC worked with the City's attorneys to develop the Proposition 218 notice. In 2010, RFC completed a recycled water cost of service rate study Ii involving various scenarios of cost We appreciate the work sharing between the wastewater performed, and assistance and water utilities and recovery of sunk costs. The planning period for RFC provided to the City. the recycled water study extends over 40 years to determine when - Jim Barrett, the recycled water utility recovers water Department Director the investments made by the water enterprise. PROJECT FEES RFC will complete the above scope of services for a lump sum amount of $10,000. RFC will invoice the District monthly based on percentage completion basis. We are excited about this opportunity to assist the District with this important study. If you have any questions, please do not hesitate to contact Sanjay Gaur at 213-327-4405. Sincerely, Sudhir D. Pardiwala, PE Vice President RFC 9 1 ITEM NO. 2.2 AGENDA REPORT Meeting Date: June 13, 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: Authorization to Invest in Local Agency Fund STAFF RECOMMENDATION: That the Committee recommend the Board of Directors approve a resolution authorizing the investment of monies in the Local Agency Investment Fund. DISCUSSION: Staff is requesting the authorization to invest funds in the Local Agency Investment Fund (LAIF) as an alternative investment option and to add diversity to the Districts investment portfolio. The District had an active account with LAIF up until 2006, when the District decided to invest funds with Wells Capital Management. LAIF is a voluntary program created by statute: began in 1977 as an investment alternative for California's local governments and special districts and it continues today under Treasurer Bill Lockyer's administration. The enabling legislation for the LAIF is Section 16429.1 et seq. of the California Government Code. This program offers local agencies the opportunity to participate in a major portfolio, which invests hundreds of millions of dollars, using the investment expertise of the Treasurer's Office Investment staff at no additional cost to the taxpayer. LAIF is part of a Pooled Money Investment Account (PMIA). PMIA has Policies, Goals, and Objectives for the portfolio to make certain that our goals of Safety, Liquidity and Yield are not jeopardized and that prudent management prevails. Currently there are 2,779 participants and a pooled investment portfolio of $24.1 billion at LAIF. Some key points in support of this request are as follows: . No risk to the loss of principal . Highest yield for the most conservative investment . LAIF's average monthly yield is comparable to CaITRUST's Short Term Yield PRIOR RELEVANT BOARD ACTION(S): The District's current Investment Policy, adopted on March 11, 2010 under Resolution 10-03, lists LAIF as an authorized investment category in Section 5. Strategic Initiate FR-2C of the District's adopted 2011-2013 Strategic Plan mandates the District to Implement an Approach to Ensure Reserves are Responsibly Funded. The action under consideration will provide a higher level of diversity for the District's investments while preserving principal, which ultimately lowers risk. ATTACHMENTS: Name: Description: Type: Resolution No. 11-XX.doc Resolution Backup Material LAIF Performance.pdf LAIF Performance Information Backup Material LAIF_Participation _Chart.pdf LAIF Participation Chart Backup Material PMIA Average Monthly Yields.pdf PM IA Monthly Average Yield Summary Backup Material RESOLUTION NO. 11-XX RESOLUTION OF THE BOARD OF DIRECTORS OF YORBA LINDA WATER AUTHORIZING INVESTMENT OF MONIES IN THE LOCAL AGENCY INVESTMENT FUND WHEREAS, Pursuant to Chapter 730 of the statutes of 1976 Section 16429.1 was added to the California Government Code to create a Local Agency Investment Fund in the State Treasury for the deposit of money of a local agency for purposes of investment by the State Treasurer; and WHEREAS, the Board of Directors does hereby find that the deposit and withdrawal of money in the Local Agency Investment Fund in accordance with the provisions of Section 16429.1 of the Government Code for the purpose of investment as stated therein as in the best interests of the Yorba Linda Water District. NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby authorize the deposit and withdrawal of Yorba Linda Water District monies in the Local Agency Investment Fund in the State Treasury in accordance with the provisions of Section 16429.1 of Government Code for the purpose of investment as stated therein, and verification by the State Treasurer's Office of all banking information provided in that regard. BE IT FURTHER RESOLVED, that the following Yorba Linda Water District officers or their successors in office shall be authorized to order the deposit or withdrawal of monies in the Local Agency Investment Fund: (NAME) (NAME) (NAME) (TITLE) (TITLE) (TITLE) (SIGNATURE) (SIGNATURE) (SIGNATURE) PASSED AND ADOPTED this XXth day of June 2011 by the following called vote: AYES: NOES: ABSTAIN: ABSENT: Resolution No. 11-XX Authorizing Investment of Monies in the Local Area Investment Fund 1 Michael J. Beverage, President Yorba Linda Water District ATTEST: Kenneth R. Vecchiarelli, Secretary Yorba Linda Water District Reviewed as to form by General Counsel: Arthur G. Kidman, Esq. McCormick, Kidman & Behrens Resolution No. 11-XX Authorizing Investment of Monies in the Local Area Investment Fund 2 Sill Leer, State Treasurer Inside the State Treasurer's Office .gig c estmient Fund (I-A'.-) PMSA Performance Report LAIF Performance Repot Average Quarter ending 03131]2011 Daily Quarter to Maturity Date Yield* Date Yield (in days) Apportionment Rate: 0-51% T'2 i ,'2U11 ❑.41 0.52 197 Earnings Ratio: .00001390282087'521 5,'22;2011 0.41 0.51 197, Fair Value Factor: 1,001262155 5/2312011 0.41 0._:1 192 Daily: 0.45% 5/24!2011 0.41 0.51 190 Quarter To Date: 0.52%n 5/25?2011 0.41 0.51 196 Average Life: 193 5126/2011 0.41 0.51 197 5/27/2011 0.40 0.50 189 5/2812011 0,40 0.50 189. 5/29/2011 0.40 0.50 185 PMIA Average Monthly Effective Yields 51/30/2011 0.40 0.50 185 5%31!2011 0.400.50 185 APR 2011 0.588%-„ 6/112011 0.40 0.50 192 MAR 2011 0.500% 6/2.'2011 0.39 0.449 195 FEB 2011 0.512% 6i3.!2011 0.39 0.49 194 `Daily yield does not reflect capital gains or losses Pealed Money Investment Account Portfolio Composition $70 Billion 04/30/11 Loans Corporate Bands 6.77% 0.00% Commercial Paper 'R 11.25% z ~ i; Time Deposits ':r= r' 5.51% Treasuries 47.24% CDs/BNs 12,69% Agencies Mortgages 15.84% 0.70% LOCAL AGENCY INVESTMENT FUND Participation as of 5/31/11 2,779 Agencies 160 BONDS 55 COUNTIES 309 TRUSTEES 6% 20 ° 475 CITIES 11% 17% - - - - - - - - - f 1,780 DISTRICTS 64% PMIA Average Monthly= Effective Yields Page 1 of 1 Pooled Money Investment Account PMIA Average Monthly Effective Yields Jars Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dee 1977 5.770 5.660 5.660 5.650 5.760 5.850 5.930 6.050 6.090 6.090 6.610 6.730 1978 6.920 7.050 7.140 7.270 7.386 7.569 7.652 7.821 7.871 8.110 8.286 8.769 1979 8.777 8.904 8.820 9.082 9.046 9224 9.202 9.528 9.259 9.814 111.223 10.218 1980 10.980 11.251 11.490 11.480 12.017 11.798 10.206 9.870 9.945 10.056 10.426 14.961 1981 10.987 11.686 11.130 11.475 12.179 11.442 12.346 12.844 12.059 12.397 11.887 11.484 1982 11.683 12.444 11.835 11173 12.270 11.994 12.235 11.909 11.151 11.111 10.704 10.401 1983 10,251 9.887 9.688 9.868 9.527 9.600 9.879 10.07610.202 10.182 10164 10.227 1984110.312110-280 10,382 10.594 10.843 11.119 11.355 11.557 11.597 11.681 11.474 11.024 1985 10.579 10.289 10.118 10.025 10.180 9.743 9.656 9.417 9.572 9.482 9.488 9.371 1986 9.252 9.090 8.958 8.621 8.369 8225 8.141 7.844 7.512 7.586 7.432 7.439 1987 7.365 7.157 7.205 7.044 7.294 7289 7.464 7.562 7.712 7.825 8.121 8.071 1988 8.078 8.050 7.945 7.940 7.815 7.929 8.089 8.245 8.341 8.397 8.467 8.563 1989 8.698 8.770 8.870 8.992 9.227 9204 .9.056 8.833 8.801 8.779 8.685 8.645 1990 8.571 8.538 8.506 8.497 8.531 8.538 8.517 8382 8.333 8321 8.269 8279 1991 8.164 8.002 7.775 7.666 7.374 7.169 7.098 7.072 6.859 6.719 6.591 6.318 1992 6.122 5.863 5.680 5.692 5.379 5.323 5.235 4.958 4.760 4.730 4.659 4.547 1993 4.678 4.649 4.624 4.605 4.427 4.554 4.438 4.472 4.430 4.380 4.365 4.384 1994 4.359 4.176 4.248 4.333 4.434 4.623 4.823 4.989 5.106 5.243 5.380 5.528 1995 5.612 5.779 5.934 5.960 6.008 5.997 5.972 5.910 5.832 5.784 5.805 5.748 1996 5.698 5.643 5.557 5.538 5.502 5.548 5.587 5.566 5.601 5.601 5.599 5.574 1997 5.583 5.575 5.580 5.612 5.634 5.667 5.679 5.690 5.707 5.705 5.715 5.744 1998 5.742 5.720 5.680 5.672 5.673 5.671 5.652 5.652 5.639 5.557 5.492 5374 1999 5.265 5210 5.136 5.119 5.086 5.095 5.178 5.225 5.274 5.391 5.484 5.639 2000 5.760 5.824 5.851 6.014 6.190 6.349 6.443 6.505 6.502 6.517 6.538 6.535 2001 5.372 6.169 5.976 5.760 5.328 4.958 4.635 4.502 4.288 3.785 3.526 3.2651 2002 3.4768 2.967 2.861 2.845 2.740 2,687 2.714 2.594 2.604 2.487 2.301 2.201 2003 2.103 1.945 1.904 1.858 1.769 1.697 1.653 1.632 1.635 1.596 1.572 1.545 2004 1.528 1.440 1.474 1.445 1.426 1.469 1.604 1.672 1.771 1.890 2.003 2.134 2005 2264 2368 2.542 2.724 2.856 2.967 3.083 3.179 3.324 3.458 1636 3.808 2006 3.955 4.043 4.142 4.305 4.563 4.700 4.849 4.946 5.023 5.098 5.125 5.129 2007 5.156 5.181 5.214 5.222 5.248 5.250 5.255 5253 5.231 5.137 4.962 4.801 2008 4.620 4.161 3.777 3.400 3,072 2.894 2.787 2-779 2.774 2.709 2.568 2,353 2009 2.046 1.869 1.822 1.607 1.530 1.377 1.035 0.925 0.750 0.646 0.611 0.569 2010 0,558 0.577 0.547 0.588 0.560 0.528 0.531 0] 513 0.500 0.480 0.454 01.452 20111 0.538 0-512 0.500 0.588 0.413 http://NN,Nvw.treasurer.ca.gov/pmla-laif7historicatlavg_tnn yids.asp 6/812011 ITEM NO. 3.1 AGENDA REPORT Meeting Date: June 13, 2011 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: OPEB Liability Pay Down DISCUSSION: The District's Annual Required Contribution (ARC) for Other Post-Employment Benefits (OPEB) is $217,979. This amount was budgeted in the current year, but was not in years past. Over the past two years, YLWD only paid retiree benefits on a pay-as-you-go (PAYGO) basis, which resulted in an underfunding of it's ARC by $236,483. Because of this liability, the Employee Liability Reserve was established, calling for $100,000 to be set aside annually to eventually pay down our OPEB liability. Earlier this year the Board authorized investment in the California Employees Retirement Benefit Trust (CERBT) for the difference between our ARC and the PAYGO retiree expenditures. At this time, staff is planning to also place in the CERBT the $100,000 established by the Employee Liability Reserve for FY 2010/11. This will save the District $5,000 immediately, as any OPEB obligation (of which the District currently has $236,483 on its Statement of Net Assets) is assessed a 5% actuarially assumed interest charge annually. If a payment is made to the CERBT prior to June 30, 2011, that interest calculation will not be made on the portion covered by a payment. In addition, money invested in the CERBT has realized a much better return historically as compared to the District's investment portfolio. Funding the CERBT with Employee Liability Reserve money makes prudent financial sense, and complies with the purpose that the reserve was established. As such, the intention would be to fund the CERBT with the $100,000 set aside for the Employee Liability Reserve in FY 2011/12 as well. This action complies with Strategic Initiatives FR2-C Implement an Approach to Ensure Reserves are Responsibly Funded, and FR3-C Manage Cash Flow to Maximize Investment Income. PRIOR RELEVANT BOARD ACTION(S): On January 26, 2011, the Board authorized the President to execute a CERBT Program Agreement and Election of YLWD to Prefund Other Post Employment Benefits through CalPERS. ITEM NO. 3.2 AGENDA REPORT Meeting Date: June 13, 2011 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 CEQA Compliance: N/A Director Subject: 2008 COP Reserve Funds Investment DISCUSSION: The 2008 COP's called for a Reserve Fund to be established in the amount of $2,147,096.26 to protect the bond-holders from a potential default by the District. These funds cannot be touched until the principal payments are made in full unless the District is in default. The funds are, however, in the name of YLWD. In the past 2 years, the funds have been invested in a US Bank Money Market Account, earning a yield between 0.2% and 0.3% - see attached chart. Through inquiries with US Bank, staff realized that a better yield could be obtained without risk to the principal (unless the funds were pulled out). As such, staff is pleased to share that an investment in a Federal Home Loan Bank note with a maturity of May 28, 2014 was entered into. Federal Home Loan Bank notes are backed by the full faith and credit of the U.S. government. This investment will result in an actual yield of 0.9% for the remaining three years, 3 to 4.5 times better than the yield of the last two years. The difference will result in over $15,000 more in investment income to the District over the current US Bank Money Market rate. ATTACHMENTS: Narne: Description: V y pe: Investment yields.xls Yield by Investment Type - 2007-10 Backup Material Q U C VI 2 N < O U OZ P~ ol9d r 01,E P~ 6OJ a9 60, Oy 6°i JQ 60,E dS 60' 4 hb 60" ~ 60, 60, P~ 60, ~ Yb 9 60, 4-1 P~ 60_9 a E y 60" PG a0 ~ oy ~ moo, aJ, ~b d'°/ J 8~4 O~ P~ ~O, ~b do, ll~~ 9 dy P/ IO,J dO X07 02 JO X0,9, dS `O~hb O O O O O O O lD ~fl m N .ti O PRA ITEM NO. 3.3 AGENDA REPORT Meeting Date: June 13, 2011 To: Finance-Accounting Committee From: Ken Vecchiarelli, General Manager Presented By: Stephen Parker, Finance Dept: Finance Director Reviewed by Legal: N/A Prepared By: Delia Lugo, Senior Accountant CEQA Compliance: N/A Subject: April 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 April 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 72.6% of annual budget, which is lower by approximately 6.3% from the normal trend for the reporting 10 months of the fiscal year. The budget was based on 15% conservation, and through April customer demands are down by 23% year to date. Variable water costs as a percentage of budget are slightly lower than operating revenues. 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. While we are 83% through the fiscal year, we have reached only 56% of the District's budgeted net loss of $2.2 million resulting in a savings of approximately $1 million as compared to the budget. PRIOR RELEVANT BOARD ACTION(S): On May 9, 2011 the Committee reviewed, received and filed the March 31, 2011 Budget to Actual Results. ATTACHMENTS: Name: Description: Type: Water Sewer Apirl 2011.xls April 2011 Consolidated Statement Backup Material Water Apr 2011.xlsx April 2011 Water Statements Backup Material Sewer April 2011.xls April 2011 Sewer Statement Backup Material Yorba Linda Water District Summary Financial Report Water & Sewer Funds For Ten Months Ending April 30, 2011 Annual Actual YTD Budget YTD through Under/(Over) %of FY 10/11 April 30, 2011 Budget Annual Budget Revenue (Operating): Water Revenue (Consumption & Flat Charge) $25,672,831 $18,419,233 $7,253,598 71.75% Sewer Revenue 1,235,402 1,095,221 $140,181 88.65% Other 714,221 754,528 ($40,307) 105.64% Total Operating Revenue: 27,622,454 20,268,982 7,353,472 73.38% Expenses (Operating): Variable Water Costs (G.W., Import & Power) 12,667,236 8,995,227 3,672,009 71.01% Salary Related Expenses 7,624,683 5,518,196 2,106,487 77.02% Supplies & Services 3,987,702 2,682,658 1,305,044 67.27% Depreciation & Amortization 52017,876------------------ 4,377755 640,121 87.24% Total Operating Expenses: 29,297,497 21,573,836 7,723,661 73.64% Operating Income (Loss) (1,675,043) (1,304,854) (370,189) 77.90% Revenue (Non-Operating): Interest and Investments 156,000 227,223 (71,223) 145.66% Property Taxes 1,206,000 1,211,970 (5,970) 100.50% Other 126,133 2661950 (-1-40-,-8-1-7)- 211.64% Total Non-Operating Revenue: 1,488,133 1,706,143 (218,010) 114.65% Expenses (Non-Operating): Interest on Long Term Debt (1,940,954) (1,596,821) (344,133) 82.27% Other Expense (103,193) (62,081) (41,112) 60.16% Total Non-Operating Expenses: (2,044,147) (1,658,902) (385,245) 81.15% Non-Operating Income (Loss) (556,014) 47,241 (603,255) -8.50% Net Income (Loss) ($2,231,057) ($1,257,613) ($973,444) 56.37% Contributed Capital 145,860 824,692 (678,832) 565.40% Capital - Direct Labor - 354,267 354,267 Yorba Linda Water District Water Fund For Ten Months Ending April 30, 2011 FY 2011 YTD % of Annual April Actual Under/(Over) Annual Budget 2011 YTD Budget Budget Revenue (Operating): Water Revenue (Residential) $ 17,248,481 $ 830,373 $ 11,656,197 $ 5,592,284 67.58% Water Revenue (Commercial & Fire Det.) 1,522,341 115,488 1,429,686 92,655 93.91% Water Revenue (Landscape/Irrigation) 3,588,335 142,352 2,618,635 969,700 72.98% Water Revenue (Service Charge) 3,313,674 279,821 2,714,715 598,959 81.92% Other Operating Revenue 701,089 30,414 735,488 (34,399) 104.91% Total Operating Revenue: 26,373,920 1,398,448 19,154,721 7,219,199 72.63% Expenses (Operating): Variable Water Costs (G.W., Import & Power) 12,666,536 766,898 8,994,687 3,671,849 71.01% Salary Related Expenses 6,809,598 705,311 4,891,404 1,918,194 76.95% Supplies & Services: Communications 374,576 16,029 194,311 180,265 51.87% Contractual Services 708,372 71,226 594,736 113,636 83.96% Data Processing 102,771 13,995 72,844 29,927 70.88% Dues & Memberships 30,778 589 26,239 4,539 85.25% Fees & Permits 44,020 4,753 50,712 (6,692) 115.20% Board Election 72,800 - 32,485 40,315 0.00% Insurance 314,314 8,793 203,142 111,172 64.63% Materials 337,982 52,447 352,401 (14,419) 104.27% District Activities, Emp Recognition 11,648 1,036 13,331 (1,683) 114.45% Maintenance 325,227 34,870 152,973 172,254 47.04% Non-Capital Equipment 92,611 8,148 46,542 46,069 50.26% Office Expense 41,221 1,666 22,525 18,696 54.64% Professional Services 632,764 27,423 300,249 332,515 47.45% Training 48,147 1,801 16,773 31,374 34.84% Travel & Conferences 40,830 1,067 15,503 25,327 37.97% Uncollectible Accounts 45,955 - 5,612 40,343 12.21% Utilities 111,930 6,220 71,625 40,305 63.99% Vehicle Equipment 256,302 53,276 220,570 35,732 86.06% Supplies & Services Sub-Total 3,592,248 303,339 2,392,573 1,199,675 66.60% Depreciation & Amortization 4,403,257 390,502 3,872,970 530,287 87.96% Total Operating Expenses 27,471,639 2,166,050 20,151,634 7,320,005 73.35% Operating Income (Loss) (1,097,719) (767,602) (996,913) (100,806) 90.82% Revenue (Non-Operating): Interest 142,000 21,405 209,025 (67,025) 147.20% Property Taxes 1,206,000 428,347 1,211,970 (5,970) 100.50% Other Non-Operating Revenue 100,687 37,564 250,131 (149,444) 248.42% Total Non-Operating Revenue: 1,448,687 487,316 1,671,126 (222,439) 115.35% Expenses (Non-Operating): Interest on Long Term Debt (1,940,954) (158,855) (1,596,821) (344,133) 82.27% Other Expense (102,193) (3,972) (54,214) (47,979) 53.05% Total Non-Operating Expenses: (2,043,147) (162,827) (1,651,035) (392,112) 80.81% Non-Operating Income (Loss) (594,460) 324,489 20,091 (614,551) -3.38% Total Income (Loss) $ (1,692,179) $ (443,113) $ (976,822) (715,357) 57.73% Contributed Capital $ 92,807 $ 66,367 $ 498,055 $ (405,248) 536.66% Ca ital - Direct Labor - $ 7,203 $ 348,477 $ 348,477 Yorba Linda Water District Sewer Fund For Ten Months Ending April 30, 2011 FY 2011 YTD % of Annual April Actual Underi(Over) Annual Budget FY 2011 YTD Budget Budget Revenue (Operating): Sewer Charge Revenue $ 1,132,574 $ 94,740 $ 992,942 $ 139,632 87.67% Locke Ranch Assessments 102,828 36,729 102,279 549 99.47% Other Operating Revenue 13,132 - 19,040 (5,908) 144.99% Total Operating Revenue: 1,248,534 131,469 1,114,261 134,273 89.25% Expenses (Operating): Variable Costs (Power) 700 53 540 160 77.14% Salary Related Expenses 815,085 64,418 596,792 218,293 73.93% Supplies & Services: Communications 39,284 1,672 20,084 19,200 51.13% Contractual Services 61,613 9,078 54,589 7,024 88.60% Data Processing 10,164 1,384 7,205 2,959 70.89% Dues & Memberships 3,340 190 2,870 470 85.93% Fees & Permits 6,382 13 5,035 1,347 78.89% Board Election 7,200 - 3,213 3,987 44.63% Insurance 31,086 870 20,092 10,994 64.63% Materials 18,833 1,536 17,529 1,304 93.08% District Activities 1,152 102 1,318 (166) 114.41% Maintenance 41,973 1,108 37,438 4,535 89.20% Non-Capital Equipment 20,509 2,860 15,148 5,361 73.86% Office Expense 3,879 165 2,214 1,665 57.08% Professional Services 66,576 2,840 34,058 32,518 51.16% Training 5,629 511 21872 21757 51.020/o Travel & Conferences 4,371 205 1,556 2,815 35.60% Uncollectible Accounts 4,545 - 555 3,990 12.21% Utilities 11,070 615 7,065 4,005 63.82% Vehicle Equipment 57,849 74 57,244 605 98.95% Supplies & Services Sub-Total 395,455 23,223 290,085 105,370 73.35% Depreciation & Amortization 614,619 80,998 534,785 79,834 87.01% Total Operating Expenses 1,825,859 168,692 1,422,202 403,657 77.89% Operating Income (Loss) (577,325) (37,223) (307,941) (269,384) 53.34% Revenue (Non-Operating): Interest 14,000 1,748 18,198 (4,198) 129.99% Other Non-Operating Revenue 25,446 2,922 16,819 8,627 66.10% Total Non-Operating Revenue: 39,446 4,670 35,017 4,429 88.77% Expenses (Non-Operating): Other Expense (1,000) (7,867) 6,867 786.70% Total Non-Operating Expenses: (1,000) - (7,867) 61867 786.70% Non-Operating Income (Loss) 38,446 4,670 27,150 11,296 70.62% Total Income(Loss) $ (538,879) $ (32,553) $ (280,791)E$ (258,088) 52.11% Contributed Capital $53,053 - 326,637 (273,584) 615.68% Capital - Direct Labor - (1,136) (5,790) $5,790 0.00% ITEM NO. 3.4 AGENDA REPORT Meeting Date: June 13, 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: Investment Report Through April 2011 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 presents a monthly investment report to the Finance-Accounting Committee for their information and review. DISCUSSION: Staff is submitting the April 2011 Monthly Investment Report for your review. 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 yield for the month ending April 2011 increased 6% to 0.93% as a result of the yield in CaITRUST's Short Term fund increasing from 0.50% to 0.57%, and the yield in CaITRUST's Medium Term fund increasing from 1.30% to 1.40%. Staff would like to point out that the overall decrease in the investment balance is $250,000. Some of the larger changes include a decrease of $220,000 in Water Operating Reserve and a $100,000 decrease in the Water Capital Project Reserve due to CIP spending. 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 March 31, 2011 was received and filed by the Finance-Accounting Committee on May 9, 2011. The Investment Report for the quarter ended March 31, 2011 was received and filed by the Board of Directors on May 12, 2011. ATTACHMENTS: Name: Description: Type: Invst_Rpt 0411.xlsx April 2011 Investment Report Backup Material Ivst Agenda Backup - Apirl 2011.xlsx Agenda Backup Backup Material Yorba Linda Water District Investment Portfolio Report April 30, 2011 Market % Percent Value Cost of Total Institution Yield Cash & Checking Accounts: $ 102,302 $ 102,302 Wells Fargo Bank $ 102,302 $ 102,302 0.32% Total 0.00% Money Market Accounts: $ 696,949 $ 696,949 Wells Fargo Money Market 0.30% $ 696,949 $ 696,949 2.24% Total 0.30% $ 799,250 $ 799,250 2.57% Sub-total 0.30% Money Market Account: $ 8,181,605 $ 8,181,605 US Bank 2008 Revenue Bond 0.20% $ 8,181,605 $ 8,181,605 26.34% 0.20% CaITR UST $ 4,502,775 $ 4,473,822 Ca1TRUST Short Term 0.57% $ 17,582,488 $ 17,313,019 Ca1TRUST Medium Term 1.40% $22,085,263 $21,786,841 71.10% 1.23% $ 31,066,118 $ 30,767,696 100% Total Investments 0.93% 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 4/30/11 Investment Summary Report Below is a chart summarizing the yields as well as terms and maturities for the month of April 2011: Avg. Portfolio Avg. Portfolio # of Avg. Term Month Yield Without Yield With Days to of Portfolio of 2010 CalTRUST CalTRUST Maturity In Days April 0.20% 0.93% 368 276 Below is are charts comparing operating fund interest for current and prior fiscal years. Actual Interest 4/30/2010 4/30/2011 Monthly - April $ 18,009 $ 23,152 Year-to-Date $ 182,840 $ 227,223 Budget 2009/2010 2010/2011 Interest Budget, April YTD $ 106,583 $ 130,000 Interest Budget, Annual $ 127,900 $ 156,000 Interest earned on investments is recorded in the fund that owns the investment. Investment Summary Comparison Between Current and Previous Month The distribution of investments in the portfolio both in dollars and as a percentage of the total portfolio by funds is as follows: March 2011 % Alloc April 2011 % Alloc Fund Description Balance 3/31/2011 Balance 4/30/2011 Water Operating Reserve $ 2,396,918 7.53% $ 2,334,459 7.35% Water Emergency Reserve 2,072,500 6.51% 2,075,414 6.54% Water Capital Project Reserve 16,961,824 53.32% 16,860,251 53.10% Water Reserve for Debt Service 76 0.00% 92,677 0.29% COP Revenue Bond 2008 - Reserve 2,147,096 6.75% 2,147,096 6.76% COP Revenue Bond 2008 6,033,113 18.96% 6,034,509 19.00% Sewer Operating 496,394 1.48% 460,784 1.45% Sewer Emergency Reserve 1,005,375 3.16% 1,008,477 3.18% Sewer Capital Project Reserve 726,692 2.29% 736,869 2.33% 31,839,988 100.00% $ 31,750,536 100.00% Wells Fargo Bank Checking Water Operating (510,058) (669,032) Sewer Operating (18,236) (15,386) (528,294) (684,418) Totals $ 31,311,694 $ 31,066,118