HomeMy WebLinkAbout2011-08-08 - Finance-Accounting Committee Meeting Agenda Packet
Yorba Linda
Water District
AGENDA
YORBA LINDA WATER DISTRICT
FINANCE-ACCOUNTING COMMITTEE MEETING
Monday, August 8, 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. 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.
2.1. Auditor Discussion with Those In Governance
3. ACTION CALENDAR
This portion of the agenda is for items where staff presentations and committee discussions are needed prior to
formal committee action.
3.1. June 2011 Budget to Actual Results
Recommendation: That the Committee review the June 2011 Budget to Actual
Results, and recommend the Board of Directors receive and file the June 2011
Unaudited Budget to Actual Statements.
3.2. Investment Report through June 2011
Recommendation: That the Committee recommend the Board of Directors receive
and file the year to date Investment Report through June 2011.
4. DISCUSSION ITEMS CONTINUED
4.1. June 2011 Unaudited Debt Service Ratio
4.2. Possible Change to Regular FAC Meeting Day
4.3. Status Report on Committee Specific Strategic Plan Initiatives
4.4. Future Agenda Items and Staff Tasks
5. ADJOURNMENT
5.1. The next regular meeting of the Finance-Accounting Committee will be held on
September 12, 2011 at 4:00 p.m. unless otherwise scheduled.
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: August 8, 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: Auditor Discussion with Those In Governance
DISCUSSION:
Nitin Patel, Partner, and Daphnie Munoz, Manager, from Diehl, Evans & Company, LLP will address
the Finance-Accounting Committee with information pertaining to the upcoming audit of the fiscal
year ending June 30, 2011. They will also be available for questions the Committee may have.
PRIOR RELEVANT BOARD ACTION(S):
On May 26, 2011 the Board authorized the President and Secretary to execute a Professional
Services Agreement with Diehl, Evans & Company for a three year contract with two subsequent
one-year options for a fee not to exceed $97,695.
ITEM NO. 3.1
AGENDA REPORT
Meeting Date: August 8, 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: June 2011 Budget to Actual Results
STAFF RECOMMENDATION:
That the Committee review the June 2011 Budget to Actual Results, and recommend the Board of
Directors receive and file the June 2011 Unaudited Budget to Actual Statements.
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 June 2011. Overall, the
District fell short on revenues but was able to balance that with reduced expenses. As a few year
end journal entries are still not booked, these numbers will vary from our audited financials by those
accruals and any adjustments the auditors recommend. Staff does not expect the numbers to
change dramatically. Major items to note include:
. Operating revenues fell short of budgeted expectations by nearly 10%. The largest contributor
to the shortfall was decreased water demands as the budget was based on 15% conservation,
and through June customer demands were down 23.6% year to date. Still, as this is the first
complete fiscal year with the September 2009 rates in effect, operating revenues actually
increased by $3.7 million over the 2009/10 fiscal year.
. Variable water costs as a percentage of budget are slightly lower than water operating
revenues.
. Depreciation expense is 5% higher than budget due to more CIP projects than expected being
closed out and therefore adding to the depreciated totals in the current year.
. Supplies and Services ended the year less than 90% of budget, however this number was
increased by $220,000 as a result of projects budgeted in CIP (Recycled Water Program and
Sewer Master Plan) that did not meet the definition of a capital asset and therefore were
expensed and not capitalized.
. Other expenses exceeded budget by $245,000. Over $175,000 of the expenses in this
category relate to prior year expenses for projects budgeted in CIP (Recycled Water Program,
Sewer Master Plan and OC-51) that did not meet the definition of a capital asset. Over
$100,000 more related to the Vista del Verde Valve Replacement, where defective valves that
were not yet fully depreciated were replaced and there remaining book value had to be written
off. A portion of these losses were offset by grant funds received for the Recycled Water
Program.
The unaudited loss for the fiscal year ending June 30, 2011 is $1.57 million, which reflects a net
savings of over $500,000 when compared to the budgeted net loss.
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: Des-- ipt on: Type:
Water Sewer June 2011.xls June 2011 Consolidated Statement Backup Material
Wtr June 2011.xlsx June 2011 Water Statement Backup Material
Sewer June 2011.xls June 2011 Sewer Statement Backup Material
Yorba Linda Water District
Summary Financial Report
Water & Sewer Funds
For Twelve Months Ending June 30, 2011
Annual Actual YTD % of
Budget YTD through Under/(Over) Annual
FY 10/11 June 30, 2011 Budget Budget
Revenue (Operating):
Water Revenue (Consumption & Flat Charge) $25,672,831 $22,718,911 $2,953,920 88.49%
Sewer Revenue 1,235,402 1,295,738 ($60,336) 104.88%
Other 714,221 880,066 $165,845 123.22%
Total Operating Revenue: 27,622,454 24,894,715 2,727,739 90.12%
Expenses (Operating):
Variable Water Costs (G.W., Import & Power) 12,667,236 11,255,684 1,411,552 88.86%
Salary Related Expenses 7,624,683 6,999,589 625,094 97.36%
Supplies & Services 3,985,735 3,574,365 411,370 89.68%
Depreciation & Amortization 5,017,876 5,279,862 261,986 105.22%
Total Operating Expenses: 29,295,530 27,109,500 2,186,030 92.54%
Operating Income (Loss) (1,673,076) (2,214,785) 541,709 132.38%
Revenue (Non-Operating):
Interest and Investments 156,000 294,430 (138,430) 188.74%
Property Taxes 1,206,000 1,258,768 (52,768) 104.38%
Other 126,133 310,950 184,817 246.53%
Total Non-Operating Revenue: 1,488,133 1,864,148 (376,015) 125.27%
Expenses (Non-Operating):
Interest on Long Term Debt (1,940,954) (1,926,358) (14,596) 99.25%
Other Expense 103,193 348,348 245,155 337.57%
Total Non-Operating Expenses: (2,044,147) (2,274,706) 230,559 111.28%
Non-Operating Income (Loss) (556,014) (410,558) (145,456) 73.84%
Total Income (Loss) Before Capital Contributions (2,229,090) (2,625,343) 396,253 117.78%
Contributed Capital 145,860 1,052,512 (906,652) 721.59%
Net Income(Loss) (2,083,230) (1,572,831) (510,399) 75.50%
Capital - Direct Labor - (423,634) 423,634
Yorba Linda Water District
Water Fund
For Twelve Months Ending June 30, 2011
FY 2011 YTD % of
Annual June Actual Under/(Over) Annual
Budget 2011 YTD Budget Budget
Revenue (Operating):
Water Revenue (Residential) $ 17,248,481 $ 1,544,434 $ 14,363,188 $ 2,885,293 83.27%
Water Revenue (Commercial & Fire Det.) 1,522,341 184,329 1,748,000 (225,659) 114.82%
Water Revenue (Landscape/Irrigation) 3,588,335 433,221 3,333,093 255,242 92.89%
Water Revenue (Service Charge) 3,313,674 280,582 3,274,629 39,045 98.82%
Other Operating Revenue 701,089 56,676 846,077 (144,988) 120.68%
Total Operating Revenue: 26,373,920 2,499,242 23,564,987 2,808,933 89.35%
Expenses (Operating):
Variable Water Costs (G.W., Import & Power) 12,666,536 1,308,574 11,255,035 1,411,501 88.86%
Salary Related Expenses 6,809,598 842,740 6,208,767 600,831 97.06%
Supplies & Services:
Communications 365,838 31,087 240,750 125,088 65.81%
Contractual Services 684,257 71,949 712,729 (28,472) 104.16%
Data Processing 129,934 (5,185) 118,175 11,759 90.95%
Dues & Memberships 28,230 106 26,905 1,325 95.31%
Fees & Permits 44,020 3,876 57,813 (13,793) 131.33%
Board Election 72,800 - 32,485 40,315 44.62%
Insurance 314,314 (1,365) 201,975 112,339 64.26%
Materials 333,933 34,211 432,482 (98,549) 129.51%
District Activities, Emp Recognition 11,648 147 13,478 (1,830) 115.71%
Maintenance 328,822 68,680 237,689 91,133 72.29%
Non-Capital Equipment 95,887 23,352 82,829 13,058 86.38%
Office Expense 41,041 2,052 25,485 15,556 62.10%
Professional Services 636,404 107,442 453,942 182,462 71.33%
Training 48,921 2,721 20,968 27,953 42.86%
Travel & Conferences 40,238 32 19,416 20,822 48.25%
Uncollectible Accounts 45,955 19,308 24,920 21,035 54.23%
Utilities 111,930 6,454 83,604 28,326 74.69%
Vehicle Equipment 256,302 18,511 261,686 (5,384) 102.10%
Supplies & Services Sub-Total 3,590,474 383,378 3,047,331 543,143 84.87%
Depreciation & Amortization 4,403,257 406,291 4,669,580 (266,323) 106.05%
Total Operating Expenses 27,469,865 2,940,983 25,180,713 2,289,152 91.67%
Operating Income (Loss) (1,095,945) (441,741) (1,615,726) 519,781 147.43%
Revenue (Non-Operating):
Interest 142,000 40,229 270,806 (128,806) 190.71%
Interest (Restricted for Capital Projects) - - -
Property Taxes 1,206,000 25,025 1,258,768 (52,768) 104.38%
Other Non-Operating Revenue 100,687 (36,733) 290,019 (189,332) 288.04%
Total Non-Operating Revenue 1,448,687 $28,521 1,819,593 (370,906) 125.60%
Expenses (Non-Operating):
Interest on Long Term Debt (1,940,954) (169,615) (1,925,291) (15,663) 99.19%
Other Expense (102,193) (178,751) (235,909) 133,716 230.85%
Total Non-Operating Expenses (2,043,147) (348,366) (2,161,200) 118,053 105.78%
Non-Operating Income (Loss) (594,460) (319,845) (341,607) (252,853) 57.47%
Total Income (Loss) Before Capital Contributions (1,690,405) (761,586) (1,957,333) 266,928 115.79%
Contributed Capital 92,807 178,103 711,094 (618,287) 766.21%
Net I ncome(Loss) $ (1,597,598) $ (583,483) $ (1,246,239) $ (351,359) 78.01%
Capital - Direct Labor - $ (34,231) $ (400,589) $ 400,589
Yorba Linda Water District
Sewer Fund
For Twelve Months Ending June 30, 2011
FY 2011 YTD % of
Annual June Actual Under/(Over) Annual
Budget FY 2011 YTD Budget Budget
Revenue (Operating):
Sewer Charge Revenue $ 1,132,574 $ 102,629 $ 1,191,711 $ (59,137) 105.22%
Locke Ranch Assessments 102,828 858 104,029 (1,201) 101.17%
Other Operating Revenue 13,132 12,175 33,988 (20,856) 258.82%
Total Operating Revenue: 1,248,534 $115,662 1,329,728 (81,194) 106.50%
Expenses (Operating):
Variable Costs (Power) 700 56 649 51 92.71%
Salary Related Expenses 815,085 94,013 790,822 24,263 99.85%
Supplies & Services:
Communications 38,222 3,075 24,670 13,552 64.54%
Contractual Services 59,228 4,800 63,168 (3,940) 106.65%
Data Processing 12,851 (513) 11,688 1,163 90.95%
Dues & Memberships 3,088 11 2,936 152 95.08%
Fees & Permits 6,382 1,030 5,910 472 92.60%
Board Election 7,200 - 3,213 3,987 44.63%
Insurance 31,086 (135) 19,977 11,109 64.26%
Materials 18,432 401 20,888 (2,456) 113.32%
District Activities 1,152 15 1,333 (181) 115.71%
Maintenance 42,328 4,356 42,419 (91) 100.21%
Non-Capital Equipment 20,833 2,977 22,534 (1,701) 108.16%
Office Expense 4,059 203 2,526 1,533 62.23%
Professional Services 66,996 185,726 224,787 (157,791) 335.52%
Training 5,629 303 3,293 2,336 58.50%
Travel & Conferences 4,312 3 1,949 2,363 45.20%
Uncollectible Accounts 4,545 1,910 2,465 2,080 54.24%
Utilities 11,070 638 8,249 2,821 74.52%
Vehicle Equipment 57,849 1,576 65,030 (7,181) 112.41%
Supplies & Services Sub-Total 395,262 206,376 527,035 (131,773) 133.34%
Depreciation & Amortization 614,619 54,499 610,282 4,337 99.29%
Total Operating Expenses 1,825,666 354,944 1,928,788 (103,122) 105.65%
Operating Income (Loss) (577,132) (239,282) (599,060) 21,928 103.80%
Revenue (Non-Operating):
Interest 14,000 $3,586 23,625 (9,625) 168.75%
Other Non-Operating Revenue 25,446 (754) 20,930 4,516 82.25%
Total Non-Operating Revenue: 39,446 $2,832 44,555 (5,109) 112.95%
Expenses (Non-Operating):
Interest on Long Term Debt(OPEB) (1,064) (1,064) 1,064 0.00%
Other Expense (1,000) (104,575) (112,442) 111,442 11244.20%
Total Non-Operating Expenses: (1,000) (105,639) (113,506) 112,506 11350.60%
Non-Operating Income (Loss) 38,446 (102,807) (68,951) 107,397 -179.35%
Total Income (Loss) Before Capital Contributions (538,686) (342,089) (668,011) 129,325 124.01%
Contributed Capital $53,053 13,774 341,418 (288,365) 643.54%
Net Income (Loss) ($485,633) ($328,315) ($326,593) ($159,040) 67.25%
Capital - Direct Labor - (6,466) (23,045) $23,045 0.00%
ITEM NO. 3.2
AGENDA REPORT
Meeting Date: August 8, 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: Investment Report through June 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 RECOMMENDATION:
That the Committee recommend the Board of Directors receive and file the year to date Investment
Report through June 2011.
DISCUSSION:
Staff is submitting the Investment Report through June 2011 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 reserves categories.
The total yield for the month ending June 2011 increased 22% to 1.04% as a result of purchasing a
$2,115,000 par Federal Home Loan note with $2,144,397 of the 2008 COP Reserve Fund money
held by US Bank. The purchase has a yield of 1.36%, but because it was purchased for a premium,
the effective yield of the investment over the life will be 0.9%. In addition, the yield in CalTRUST's
Short Term fund increased from 0.48% to 0.51 and the yield in CalTRUST's Medium Term fund
increased from 1.32% to 1.36%.
The overall increase in the investment balance from the previous month is $614,000. In the month
of June, staff initiated transfers between various reserves held in investments. The primary purpose
of the transfers was to end the year in accordance with the reserve policy and projected funding
levels. However, moves were also made to maximize the return on investments. As a result of
transferring funds in our investment accounts, some of the larger balance changes include the
following:
. a decrease in the Water Operating Reserve of over $400,000 to lower the account closer to
it's minimum target of $1,375,000
. a decrease in the Water Emergency Reserve of over $1,080,000 to lower the account to it's
minimum target of $1,000,000
. an increase of over $2,250,000 in the Water Capital Project Reserve as the water accounts
that were lowered transferred money into this account
. an increase of over $170,000 in the Reserve for Debt Service account, a decrease of over
$300,000 in the COP Bond Reserve to reimburse operating for bond-financed CIP projects
. a decrease of over $65,000 in the Sewer Operating Reserve to lower the account closer to it's
maximum target of $143,712
. a decrease of $15,000 in the Sewer Emergency Reserve to lower the account to it's maximum
target of $1,000,000
. an increase of over $50,000 in the Sewer Capital Project Reserve as the sewer accounts that
were lowered transferred money into this account
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 May 31, 2011 was received and filed by the Finance-Accounting
Committee on July 11, 2011. The Investment Report through March 31, 2011 was received and
filed by the Board of Directors on May 12, 2011.
ATTACHMENTS:
Name: Description: -I ype:
Invst_Rpt 6-11.xlsx June 2011 Investment Report Backup Material
Invst Agenda Backup - June 2011.xlsx Backup Agenda Backup Material
Yorba Linda Water District
Investment Portfolio Report
June 30, 2011
Market % Percent
Value Cost of Total Institution Yield
Cash & Checking Accounts:
$ 114,024 $ 114,024 Wells Fargo Bank
$ 114,024 $ 114,024 0.35% Total 0.00%
Money Market Accounts:
$ 847,176 $ 847,176 Wells Fargo Money Market 0.20%
$ 847,176 $ 847,176 2.65% Total 0.20%
$ 961,199 $ 961,199 3.00% Sub-total 0.20%
Money Market Account:
$ 5,647,560 $ 5,647,560 US Bank 2008 Revenue Bond 0.10%
2,143,130 2,144,397 US Bank 2008 Revenue Bond 1.36%
$ 7,790,690 $ 7,791,957 24.33% 0.45%
CaITR UST
$ 2,494,665 $ 2,317,243 Ca1TRUST Short Term 0.51%
$ 20,771,146 $ 20,426,598 Ca1TRUST Medium Term 1.36%
$23,265,812 $22,743,841 72.68% 1.27%
$ 32,017,701 $ 31,496,998 100% Total Investments 1.04%
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.
XZp.-~
Delia Lugo, Senior Accountant
6/30/11
Investment Summary Report
Below is a chart summarizing the yields as well as terms and maturities for the month of June 2011:
Avg. Portfolio Avg. Portfolio # of Avg. Term
Month Yield Without Yield With Days to of Portfolio
of 2010 CalTRUST CalTRUST Maturity In Days
June 0.42% 1.04% 423 304
Below is are charts comparing operating fund interest for current and prior fiscal years.
Actual Interest 6/30/2010 6/30/2011
Monthly - June $ 27,217 $ 43,815
Year-to-Date $ 244,857 $ 294,430
Budget 2009/2010 2010/2011
Interest Budget, June YTD $ 127,900 $ 156,000
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:
May 2011 % Alloc June 2011 % Alloc
Fund Description Balance 5/31/2011 Balance 6/30/2011
Water Operating Reserve $ 1,611,858 5.17% $ 1,375,000 4.31%
Water Emergency Reserve 2,080,479 6.68% 999,271 3.13%
Water Capital Project Reserve 17,074,567 54.91% 19,343,391 60.63%
Water Reserve for Debt Service 278,697 0.90% 451,898 1.42%
COP Revenue Bond 2008 - Reserve 2,147,096 6.91% 2,145,021 6.72%
COP Revenue Bond 2008 5,951,840 19.14% 5,645,669 17.70%
Sewer Operating 182,899 0.59% 143,997 0.45%
Sewer Emergency Reserve 1,012,629 3.29% 998,019 3.13%
Sewer Capital Project Reserve 747,571 2.41% 801,412 2.51%
$ 31,087,636 100.00% $ 31,903,678 100.00%
Wells Fargo Bank Checking
Water Operating 280,161 107,673
Sewer Operating 35,764 6,350
315,925 114,023
Totals $ 31,403,561 $ 32,017,701
ITEM NO. 4.1
AGENDA REPORT
Meeting Date: August 8, 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: June 2011 Unaudited Debt Service Ratio
DISCUSSION:
Yorba Linda Water District covenanted with the issuance of the 2003 and 2008 Certificates of
Participation (COP's),"...to fix, prescribe and collect rates and charges for Water Service which will
be at least sufficient to yield during each Fiscal Year, Net Revenues equal to 110% of the Debt
Service for such Fiscal Year." To confirm the covenant is upheld, a calculation is made and
reviewed by the external auditors and included in the Comprehensive Annual Financial Report.
Honoring these covenants allows the District to maintain high bond ratings and provides confidence
in the financial markets for any bond resales and future issuances.
The June 30, 2009 audit revealed that the District's debt service calculation was 0.86 - well below
the rate covenant. That prompted a significant rate increase in September 2009. To mitigate against
a year end recurrence, staff calculates the District's debt service ratio on a quarterly basis and
report this figure to the Finance-Accounting Committee.
Accordingly, June 2011's unaudited debt service ratio is 1.66 as shown in the attached calculation.
This percentage is down from March 2011's ratio of 2.05. The decrease is due to lower than
budgeted water demands in the final quarter of the year, a number of supplies and services
expenses being completed in the last few months of the fiscal year, and $500,000 hitting expenses
in June for closed CIP jobs that were reclassified to expenses and for assets retired before they
were fully depreciated.
As the year closes, the District's budgeted debt service ratio of 1.85 was not realized because of a
difficult year with revenues falling well short of expectations. While the District is in no short-term
jeopardy of falling short of the 1.10 requirement as the unaudited ratio of 1.66 remains significantly
higher, the District should target for its debt service ratio to trend higher in the future to maintain a
strong rating on its bonds.
ATTACHMENTS:
Name: Description: Type:
Wtr June 2011- DS Ratio.xlsx June 2011 Unaudited Debt Service Ratio Calculation Backup Material
Yorba Linda Water District
Water Fund
For Twelve Months Ending June 30, 2011
Actual Data Included in
YTD DSR Calc.
Revenue (Operating):
Water Revenue (Residential) $ 14,363,188 $ 14,363,188
Water Revenue (Commercial & Fire Det.) 1,748,000 1,748,000
Water Revenue (Landscape/Irrigation) 3,333,093 3,333,093
Water Revenue (Service Charge) 3,274,629 3,274,629
Other Operating Revenue 846,077 846,077
Total Operating Revenue: 23,564,987 23,564,987
Expenses (Operating):
Variable Water Costs (G.W., Import & Power) 11,255,035 11,255,035
Salary Related Expenses 6,208,767 6,208,767
Supplies & Services:
Communications 240,750 240,750
Contractual Services 712,729 712,729
Data Processing 118,175 118,175
Dues & Memberships 26,905 26,905
Fees & Permits 57,813 57,813
Board Election 32,485 32,485
Insurance 201,975 201,975
Materials 432,482 432,482
District Activities, Emp Recognition 13,478 13,478
Maintenance 237,689 237,689
Non-Capital Equipment 82,829 82,829
Office Expense 25,485 25,485
Professional Services 453,942 453,942
Training 20,968 20,968
Travel & Conferences 19,416 19,416
Uncollectible Accounts 24,920 24,920
Utilities 83,604 83,604
Vehicle Equipment 261,686 261,686
Supplies & Services Sub-Total 3,047,331 3,047,331
Depreciation & Amortization 4,669,580 -
Total Operating Expenses 25,180,713 20,511,133
Operating Income (Loss) (1,615,726) 3,053,854
Revenue (Non-Operating):
Interest 270,806 270,806
Property Taxes 1,258,768 1,258,768
Other Non-Operating Revenue 290,019 290,019
Total Non-Operating Revenue 1,819,593 1,819,593
Expenses (Non-Operating):
Interest on Long Term Debt (1,925,291) (10,760)
Other Expense (235,909) (235,909)
Total Non-Operating Expenses (2,161,200) (246,669)
Non-Operating Income (Loss) (341,607) 1,572,924
Total Income (Loss) Before Capital Contributions (1,957,333) 4,626,778
Contributed Capital 711,094 -
Total Income (Loss) $ (1,246,239) $ 4,626,778
Debt Service Ratio Calculation:
Net Revenues $ 4,626,778
Debt Service 2,779,940
166%
ITEM NO. 4.2
AGENDA REPORT
Meeting Date: August 8, 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: Possible Change to Regular FAC Meeting Day
SUMMARY:
Staff would like to propose that the Finance-Accounting Committee consider changing the day they
meet on a regular basis to the third Monday of each month or any later date to allow for financial
information to be provided to the Committee on a much more timely basis.
DISCUSSION:
Currently financial information is presented to the Finance-Accounting Committee on a monthly
basis as it pertains to budget to actual statements as well as investment reports. However, due to
the early date in the month (anywhere from the 8th to the 14th) that the FAC meets, this information
ends up being two months old (June's information is presented at the August meeting).
For the last two months the Accounting Section of the Finance Department has been working on a
trial basis to see if it would be possible to get financial information to the FAC on a more timely
basis. We have determined that we could submit monthly data the following month to the FAC if the
Committee were to meet on the third Monday of each month, or any day later in the month.
There are two negative impacts on the District if this change was made. The first is that Department
Heads would not get an opportunity to correct expenses they may have classified incorrectly initially
until the following month. The expenses would still be corrected, but they would be reflected in the
following month. We have on average between one and two corrections a month.
The second negative impact would be that some expenses would be reflected in a later month than
how they are currently reported. Currently financial information is not gathered until after the second
check register of the month has been closed. Therefore, if a June expense wasn't invoiced until
mid-July it would still be reflected as a June expense if it was paid on the second check register of
July. In the scenario being proposed, we would gather financial information after the close of the
first check register of the month. That June invoice received in mid-July wouldn't be reflected on
financial information until July's statements.
Staff has evaluated these negatives and believes that the benefit of more timely information to the
FAC would trump the negatives. In addition, the Accounting Section is exploring the practice of a
full-accrual close of the books every quarter. If that were done, the quarterly data would reflect a
much more complete picture of the District's finances, and would include all of the information
mentioned in both of the negative impacts.
If the Finance-Accounting Committee agrees that receiving financial information between three and
four weeks faster would be a benefit, then staff would like to request that another date (any time
including or after the third Monday of each month) be selected for future Finance-Accounting
Committee meeting dates.
ITEM NO. 4.3
AGENDA REPORT
Meeting Date: August 8, 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: Status Report on Committee Specific Strategic Plan Initiatives
DISCUSSION:
Attached are the strategies in the 2011-2013 Strategic Plan that relate to Fiscal Responsibility, and
will be overseen by the Finance-Accounting Committee. Included is an update on each strategy
relating to Fiscal Responsibility.
PRIOR RELEVANT BOARD ACTION(S):
On June 9, 2011 the Board adopted the 2011-2013 Strategic Plan.
ATTACHMENTS:
Name: Description: Type:
Strategic Plan Tracking- FA.xlsx Strategic Plan Tracking - Finance-Accounting Backup Material
Strategic Plan Initiatives Status Report
Finance - Accounting Committee
Completion
Strategies
Start Date
Lead Party
Jul 2011 Progress
Aug 2011 Progress
Date
FR 1: Maintain Fiduciary Res onsibilit
Prepare a High Level
Annual Budget
Document and
Comprehensive
Completed Budget June 2011. Submit for
Submission for budget award will be
FR 1 -13
Annual Financial
Feb -11
Jun -11
Finance Director
award July 2011. Complete CAFR September
completed in August. The deadlines are
Report and Compete
2011. Submit for award October 2011.
still far off.
for Recognition by the
Government Finance
Officers Association
Revise the Water and
Sewer Rules and
Preliminary review of fee schedule completed. A
Regulation and
General
FR 1 -C
Evaluate Fee
Feb -11
Dec -11
Manager/
number of revisions
rules and regs temporarily the water and sewer
completed. Plan to
No Change
Schedules Regularly
Finance Director
for Proper Cost of
finalize in October for submission to November.
Service Coverage
Include in
Maintain Commitment
Quarterly review of debt service ratios will
Sept -09 Rate
Quarterly
Board of
FR 1 -E
to Strong Debt
Increase
Financial
Directors
continue as well as integrating the ratio into
No Change
Services Ratio
forward financial projections.
Review
FR 2: Increase Reserve Fund in
Review the Reserve
Finance
FR 2 -A
Policy and Funding
Apr -11
Jul -11
Director /Board
Completed review /revision of reserve policy in
No Change
Levels Annually
of Directors
June 2011.
Annual Review
Implement an
of CIP
Forward projection of reserve balances will be
Approach to Ensure
Financial
Finance
completed along with future financial
FR 2 -C
Apr -11
Director /Board
No Change
Reserves are
Needs Included
projections. The District's reserve needs may be
Responsibly Funded
in Budget
of Directors
updated for FY 20 12 / 13 with this new data.
Preparation
FR 3: IdentifV and Develop Additional Revenue Options!
Review Opportunities
A survey of credit cards used by CSMFO
Staff has met with three credit card
to Earn "Cash Back"
members has been completed. The results will
companies and will explore what other
FR 3 -13
on Operating Expense
Jan-11
On -going
Finance Director
be reviewed and options that appear
companies have to offer before making a
through Commercial
Credit Card Accounts
advantageous to the District pursued further.
recommendation to the FAC.
Delia Lugo, Senior Accountant reviews the cash
Manage Cash Flow to
balances and needs daily. Mutliple times a
FR 3 -C
Maximize Investment
On -going
On -going
Finance Director
month, excess cash is transferred to
No Change
Income
investments to earn interest until the next
check register.
FR 4: Provide a Rate Structure that Promotes Water Use Efficiency
Raftelis, the water study consultants, are
Complete the Cost of
Finance
updating the information provided to them with
FR 4 -A
Service and Water
Mar -10
Mar -12
Director /Board
new 2011/12 budget data and will meet with
No Change
Rates Study
of Directors
staff in August or September to prepare a
presentation for the Board.
The Board will be given information on multiple
Evaluate Equitable
Board of
Rate Structures that
Directors/
rate structure options in October 2011 with
FR 4 -13
Oct -11
Mar -12
which they can give staff direction as to what
No Change
Promote Conservation
and Efficiency
General
Manager
rate structure they believe would best promote
conservation and efficiency.
Completed
Develop a
5 -year financial plan included in budget. Water
FR 1 -A
Comprehensive Multi-
Feb -11
Oct -11
Finance Director
and sewer financial models should be available
No Change
Year Financial Plan
by December 2011.
Evaluate and Revise
Completed March 2011. Consider changing
FR 1 -D
the Sewer Fund
Nov -10
Mar -11
Finance Director
allocation methodology in conjunction with FY
No Change
Allocation
2012 13 budget process.