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HomeMy WebLinkAbout2012-09-26 - Finance-Accounting Committee Meeting Minutes1 MINUTES OF THE YORBA LINDA WATER DISTRICT FINANCE-ACCOUNTING COMMITTEE MEETING September 26, 2012 A meeting of the Finance-Accounting Committee was called to order by Director Kiley at 4:00 p.m. The meeting was held at the District’s Administrative Office at 1717 E. Miraloma Ave, Placentia CA 92870. COMMITTEE STAFF Director Robert R. Kiley, Chair Steve Conklin, Acting General Manager Director Phil Hawkins Stephen Parker, Finance Manager OTHERS Nitin Patel, Partner, White Nelson Diehl Evans LLP 1. PUBLIC COMMENTS None. 2. ACTION CALENDAR 2.1. Submission of 2012 Audit Reports Mr. Parker summarized the three reports that were being presented to the Committee as a result of the completion of the audit process and introduced Mr. Nitin Patel, Partner at White Nelson Diehl Evans LLP, who was the engagement partner on the job. Mr. Patel went over the language on the opinion letter and explained what it meant. He explained that the District received an unqualified (or “clean”) opinion. Mr. Patel then went over the GAS (Governmental Auditing Standards) letter, which described the auditor’s review of internal controls and identified two items as significant deficiencies, where internal controls could be improved. Mr. Patel explained that while Management’s Response was included in the letter, the auditors do not issue an opinion on the comments. The Committee asked if staff had the opportunity to review the comments prior to them being issued, and Mr. Patel indicated that they had. Lastly, Mr. Patel went over the Communication to Those in Governance letter. These are required disclosures that identify sensitive estimates in the financial statements, corrected misstatements detected by audit procedures and any potential disagreements with management among other disclosures. Mr. Patel pointed out that the documents being presented were provided to the Finance-Accounting Committee last year on October 24th, so there was a significant improvement in the timeline for accomplishing the audit. 2 Mr. Parker gave his thanks to White Nelson Diehl Evans for working successfully within a tight timeline and despite the District’s Accounting section being short-staffed. Mr. Patel deferred all the credit for that went to the Senior on the engagement – Kassie Radermacher. The Committee thanked Mr. Patel for his firm’s work on the audit and coming to present it to them. The Committee supported presenting the CAFR, GAS Letter and Communication to Those in Governance letter to the whole Board for acceptance at the October 11 meeting. At that point Mr. Patel left the meeting. 2.2. Authorization to Invest in Local Agency Investment Fund Mr. Parker explained that the resolution the Board approved June 23, 2011 authorized the GM, Finance Director and Senior Accountant or their successors in office to interact with LAIF on behalf of the District. Steve Conklin, being the Acting GM, therefore, is authorized to transfer District funds held at LAIF. However, if there is a position change, LAIF requires a new resolution. While the duties remained the same, on July 1, 2012 the Finance Director position was changed to Finance Manager, and this triggered a requirement for a new resolution. Therefore, Mr. Parker indicated that the resolution before the Finance-Accounting Committee was identical to the one submitted last year, just with a changed title for Mr. Parker, and a new person in the GM position. The Committee supported staff’s recommendation. 2.3. Authorized Officers for Investments Held at Pershing Mr. Parker discussed conversations staff had with multiple broker/dealers. Every broker/dealer had a preferred third party custodian for investments. Some had monthly fees, while others were free if purchases were made from the particular broker/dealer. Only one custodian was willing to have no holding fees for purchases made from the broker/dealer they interact with most as well as purchases made through other broker/dealers. That custodian was Pershing LLC. First Empire Securities, a broker/dealer that has been approved by the District, has a relationship with Pershing LLC that would allow all investments to be held without fees to the District (the fees are paid by First Empire Securities). Staff therefore brought to the Committee a resolution that would provide authorization to the Finance Manager and Acting General Manager to act on the District’s behalf relating to investments held at Pershing LLC. The Committee had questions about Pershing related to insurance, their customers, the length of time they had been in business and how many holdings they had. The Committee supported staff recommendation, but asked that their questions be addressed in the agenda report that went to the Board. 3 2.4. Adopting Water Development and Customer Service Fees Mr. Parker explained that the Board approved the Meter Resizing Policy on September 6, but that the water development and customer service fees did not match the policy. Therefore, staff updated the policy to include in Section 1 the costs of any elective meter resizing. The Committee supported staff’s recommendation, but requested that additional language be included that removes the cost of the meter if the meter was scheduled for replacement. 3. DISCUSSION ITEMS 3.1. Budget to Actual Results for July and August 2012 Mr. Parker presented the budget to actual results for July and August 2012. The Committee and Mr. Parker discussed some individual line items and had no outstanding questions. 3.2. Investment Reports for July and August 2012 Mr. Parker presented the investment reports for July and August 2012. The Committee and Mr. Parker discussed some changes in balances and the new investment of a money market account with Bank of the West and had no outstanding questions. 3.3. Status of Strategic Plan Initiatives Mr. Parker updated the Committee on strategic plan initiatives relating to Fiscal Responsibility. The completion of the Refunding Revenue Bonds, Series 2012A and the establishment of the Line of Credit with Wells Fargo were also discussed. The Committee recommended not drawing down the line besides the initial funding unless it was necessary and staff agreed. 3.4. Future Agenda Items and Staff Tasks • That the agenda report for the resolution authorizing officers for investments held at Pershing include information related to insurance, Pershing’s customers, their length of time in business and holdings. • That the resolution adopting water development and customer service fees be changed to reflect a reduction in fees for elective meter resizing where the District was scheduled to replace the meter already. 4. ADJOURNMENT 4.1. The Committee adjourned at 5:10 p.m. The next meeting of the Finance- Accounting Committee will be held Monday, October 22, 2012 at 4:00 p.m.