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HomeMy WebLinkAbout2013-06-28 - Finance-Accounting Committee Meeting Minutes1 MINUTES OF THE YORBA LINDA WATER DISTRICT FINANCE-ACCOUNTING COMMITTEE MEETING Friday, June 28, 2013 8:00 a.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The June 28, 2013 meeting of the Yorba Linda Water District’s Finance- Accounting Committee was called to order by Director Hawkins at 8:00 a.m. The meeting was held in the Admin Conference Room at the District’s Administration Building located at 1717 East Miraloma Avenue in Placentia, California 92870. 2. ROLL CALL COMMITTEE STAFF Director Phil Hawkins, Chair Stephen Parker, Finance Manager Director Gary T. Melton Steve Conklin, Acting General Manager 3. PUBLIC COMMENTS None. 4. ACTION CALENDAR 4.1. Sewer Charges Collected on the Tax Roll for Fiscal Year 2013/14 Mr. Parker explained that annually the Board adopts a resolution to have sewer maintenance charges placed on the tax rolls and that the resolution is required by the County of Orange Auditor/Controller. The Committee asked what areas were put on the tax rolls, and Mr. Parker explained that it was Locke Ranch as well as multi-family and commercial customers that were previously billed by the City of Yorba Linda. The Committee supported staff recommendation, and asked as a future task that staff look into potential timing of a Prop 218 process to put the former City of Yorba Linda multi-family and commercial customers on the same rate as the other District customers. 4.2. OPEB Deposit with CERBT Mr. Parker presented a proposed action item that would have the District deposit the actuarially determined Annual Required Contribution (ARC) for Other Post-Employment Benefits (OPEB) into the California Employees Retirement Benefit Trust (CERBT). Mr. Parker explained that this would mean sending more money than necessary over to CERBT, pay the retiree pay-go costs throughout the year, and then pull back the retiree pay-go costs in June 2014. The effect would be ensuring that the entire ARC was paid, but depositing $175,297 in the CERBT fund throughout the year to try to obtain a better investment rate of return. The Committee asked some clarifying questions and supported staff recommendation. 2 5. DISCUSSION ITEMS 5.1. Investment Report for Period Ending May 31, 2013 Mr. Parker presented the investment report for May 2013. Mr. Parker explained that with the District purchasing individual assets rather than investing in pools, higher yields were available. Staff has only purchased Federal Agency Securities and Negotiable Certificates of Deposit in amounts under the $250,000 federally insured limit. Therefore, if they are held to maturity, there is no risk of loss with those investments. In the process of making investment selections themselves, the District’s yield increased, so that despite LAIF and other pools decreasing, the District’s portfolio yield increased by 10 basis points in May, to 0.75%. Mr. Parker asked the Committee about their thoughts on investing in Corporate Securities, which are approved in the investment policy, but carry a risk to principle if the corporations go out of business. The Committee requested as a future task that staff provide a pro and con list to investing in Corporate Securities. 5.2. Budget to Actual Results for May 2013 Mr. Parker presented the May Budget to Actual results and pointed out that the District is trending a little over budget in supplies and services, and under in personnel expenses while trending over budget in revenues, and slightly under budget in variable water cost. The Committee requested that future reports include a column showing the budget on a year-to-date basis to make comparisons to actual numbers easier. Mr. Parker indicated that would be done. 5.3. Short-Term Financing Rate (Verbal Report) Mr. Parker explained that with the recent increase in the US Treasury rates, investment returns were going up, but so were borrowing costs. Therefore, specific options that were being explored by the District were now at a higher rate than when this information was originally provided last month. The Committee asked that staff continue to monitor borrowing costs, and anticipated that a decision would not be made until further information was available about being annexed into Orange County Water District. 5.4. Preparation of 1 Year vs. 2 Year Budget (Verbal Report) Staff and the Committee discussed some pros and cons about a 2 year budget. One of the cons mentioned was the difficulty of having accurate numbers for the second year of the budget. The Committee asked the last time the District conducted a 2-year budget. Mr. Parker said the 2007-09 Budget was the last 2-year budget the District prepared. The Committee asked as a future staff task that staff look back at the 2007-09 Budget and bring back to the Committee the information contained in the second year of that budget as compared with actual numbers from the 2008-09 fiscal year’s financial statements. 3 5.5. Future Agenda Items and Staff Tasks • Provide options for potential timing of a sewer Prop 218 process that would allow the District to make uniform the rates for all its multi-family and commercial customers. • Provide a list of pros and cons for making investments in Corporate Securities. • Add a column on the budget to actual report that shows budget on a year-to-date basis. • Provide a comparison between the actual numbers in the 2008-09 financial statements and the second year of the 2007-09 Budget. 6. ADJOURNMENT 6.1. The meeting was adjourned at 9:03 a.m. The next Finance-Accounting Committee meeting is scheduled to be held Monday, July 22, 2013 at 12:00 p.m.