HomeMy WebLinkAbout2011-06-13 - Finance-Accounting Committee Meeting Minutes
MINUTES OF THE
YORBA LINDA WATER DISTRICT
FINANCE-ACCOUNTING COMMITTEE MEETING
June 13, 2011
A meeting of the Finance-Accounting Committee was called to order by Director Collett
at 4:10 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. Sewer Financial Model
Mr. Parker shared the background of selecting Raftelis Financial
Consultants through an RFP process for the Cost of Service and Water
Rate Study and that one of the deliverables of that project is a Water
Financial Model. Mr. Parker explained that having a Sewer Financial
Model would allow staff to develop a comprehensive multi-year financial
plan. As such, staff issued an RFP for a Sewer Financial Model to five
companies that submitted proposals on the water project, but only
received one response - a $10,000 proposal from Raftelis Financial
Consultants.
Mr. Parker discussed with another vendor what the range of expected fees
for the project would be, and $10,000 was at the bottom of the range
provided. Staff recommended that an amendment of $10,000 be added to
the existing PSA with Raftelis Financial Consultants for the extra
deliverable of a Sewer Financial Model. The Committee verified that this
was an appropriate way to add this project and noted that with the
proposed price, staff and the GM could have authorized this project
without going to the Board. The Committee supported staff's
recommendation, but requested for transparency that this amendment go
to the Board on the action calendar.
2.2. Authorization to Invest in Local Agency Investment Fund
Mr. Parker noted that the District had previously invested in LAIF as
recently as 2006, that it is an approved investment in the District's current
investment policy and that it is a very common conservative local
government investment in the State of California. Mr. Parker explained
that because the account was closed in 2006, LAIF requires a resolution
by the Board before money can be invested in LAIF. The Committee was
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familiar with LAIF and supported staff's recommendation to have the
Board approve a resolution authorizing the investment of money in LAIF.
3. DISCUSSION ITEMS
3.1. OPEB Liability Pay Down
Mr. Parker explained that in the current year, the District budgeted for the
entire Annual Required Contribution (ARC), which is determined
actuarially. In the prior years, however, YLWD had only paid retiree
benefits on a pay-go basis. This had caused an underfunding of the ARC
by $236,483 over the last two years.
Mr. Parker clarified that in January the Board authorized investment in the
CalPERS Trust, CERBT, and for the District to fund the difference
between the budgeted ARC ($217,979) and the pay-go retiree expense
(approximately $120,000) into the Trust. He went on to share that the
Board approved an Employee Liability Reserve of $100,000 in May 2010
for FY 10/11.
Mr. Parker shared that staff's recommendation is to spend down the
$100,000 reserve to pay down the OPEB liability on the District's balance
sheet by funding it into the CERBT in addition to the other budgeted
funding. Mr. Parker explained that because the liability on the balance
sheet is assessed a 5% actuarially-assumed interest charge annually, by
spending the reserve funds and reducing the liability by $100,000, the
District would save $5,000 immediately. In addition, money invested in
the CERBT has realized a much better return than the District's portfolio
historically.
The Committee supported staff's plan, but requested that the item be
presented to the full Board as an action item.
3.2. 2008 COP Reserve Funds Investment
Mr. Parker was pleased to announce that the District was now earning
0.9% on the $2,147,096.26 in it's 2008 COP Reserve, instead of the 0.2%
to 0.3% it had been earning in the last two years in a money market
account. The investment has no risk of loss of principal unless the funds
were pulled out, which is impossible unless the District refinances or
defaults on the 2008 COPS. Mr. Parker noted that the difference between
the Federal Home Loan Bank note and the current US Bank Money
Market rate results in over $15,000 in investment income annually.
3.3. April 2011 Budget to Actual Results
Mr. Parker presented the April 2011 Budget to Actual results and gave a
summary as to the District's financial position. It has not changed
dramatically from the past months, with water revenues below budget, but
variable water cost, salaries and benefits and supplies and services all
below budget as well, with a year-to-date total net loss of $1.3 million
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being almost $1 million better than budgeted. The Committee did not
have any questions for staff to follow up on.
3.4. Investment Report Through April 2011
Mr. Parker shared the April 2011 Investment Report, which had a 6%
increase in yield to 0.93% and an overall decrease in investment balance
of $250,000. A reformatted Investment Summary Report was presented
that showed the prior month's balance and % allocation by fund along with
the current month's information. The Committee did not have any
questions for staff to follow up on.
3.5. Future Agenda Items and Staff Tasks
None.
4. ADJOURNMENT
4.1. The Committee adjourned at 4:45 p.m. The next regular meeting of the
Finance-Accounting Committee will be held on July 11, 2011 at 4:00 p.m.
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