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HomeMy WebLinkAbout2014-02-24 - Finance-Accounting Committee Meeting MinutesMINUTES OF THE YORBA LINDA WATER DISTRICT FINANCE - ACCOUNTING COMMITTEE MEETING Monday, February 24, 2014, 4:00 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The February 24, 2014 meeting Accounting Committee was calle d The meeting was held in the Administration Building located a California 92870. 2. ROLL CALL COMMITTEE 3. 4. of the Yorba Linda Water District's Finance- to order by Director Beverage at 4:00 p.m. Admin Conference Room at the District's t 1717 East Miraloma Avenue in Placentia, Director Michael J. Beverage, Chair Director Phil Hawkins STAFF Steve Conklin, Acting General Manager Delia Lugo, Finance Manager PUBLIC COMMENTS None. ACTION CALENDAR 4.1. Submission of 2013 Audit Reports Mrs. Lugo presented the Audited Financial Statements for the Year Ending June 30, 2013. She summarized the three reports that were being presented to the Committee as a result of the completion of the audit process. The language of the opinion letter was reviewed, and Mrs. Lugo explained that the District received and unqualified ( "Clean ") opinion. Mrs. Lugo went over the GAS (Governmental Auditing Standards) letter, which described the auditor's review of internal controls and identified five items as significant deficiencies, where internal controls could be improved. The Committee asked if the staff had the opportunity to review the comments prior to them being issued, and Mrs. Lugo indicated that they had. Discussion continued in regards to the timing of the audit being completed, and Mrs. Lugo assured the Committee that there are goals in place to have the field work start as usually scheduled in regards to the year ending June 30, 2014. The Committee supported presenting the CAFR, GAS Letter and Communication to Those in Governance letter to the whole Board for acceptance at its March 13, 2014 meeting. 5. DISCUSSION ITEMS 5.1. Draft Reserve Policy for FY 2014/15 Mrs. Lugo presented the Reserve Policy for FY 2014/15. In the discussion, Mrs. Lugo explained that it is an annual requirement to review existing reserve requirements and funding levels. Mrs. Lugo stated that staff will not be proposing any major changes to the existing policy. The only changes made consisted of updating account balances for the Employee Liability Reserve in regards to the District's OPEB liability. 5.2. Draft Finance Department Budget for FY 2014/15 Mrs. Lugo presented the package of the Proposed 2014/15 Supplies and Services Budget for the Finance Department. The budget package contained individual section detailed budgets, as well as a consolidated department as a whole budget. The presented 2014/15 documents reflect a budget total of $439,675, which is an 8% increase when compared to the prior year's budget. Mrs. Lugo explained that this increase is predominantly in the areas of Uncollectible Accounts and Fees and Permits. The Fees and Permits increase is related to projected increases in banking services in relation to lock box and credit card or auto debit processing fees. The increase in Uncollectible Accounts pertains to the potential write -off of unpaid customer billing balances. The Committee approved the proposed Finance Department Supplies and Services Budget for FY 2014/15. 5.3. Projected Operating Revenues for FY 2014/15 (To be provided at the meeting.) Mrs. Lugo presented the Projected Operating Revenues for FY 2014/15. Water Revenues are the driving force when projecting revenues for the District. Water Revenues are broken down into three categories — residential, commercial /fire, and landscape irrigation. Mrs. Lugo explained that a formula using the average units of consumption (first six months of actual units consumed annualized forward of the current FY) and the number of connections for each category is used to project revenues. Three scenarios were presented to the Committee: no conservation efforts, a 5% voluntary conservation effort, and a 10% voluntary conservation effort. The presentation of scenarios reflected the following overall increases in projected revenues for the District: an 11.81% increase where no conservation efforts were taken into consideration; a 7.8% increase where 5% voluntary conservation efforts were taken into consideration; and a 3.8% increase where 10% voluntary conservation efforts were taken into consideration. After some detailed discussion, the Committee decided to support presenting the Projected Operating Revenues for FY 2014/15 where a 5% voluntary conservation effort would be taken into consideration. 2 5.5. Budget to Actual Results for January 2014 Mrs. Lugo reviewed the January 2014 Budget to Actual Results report with the Committee. Mrs. Lugo noted that the expenditures to date are trending as previously reported with the exception of Materials in the Supplies and Services section of the Sewer Fund statement which are at 175% of the annual budgeted amount. This is primarily due to unbudgeted expenses pertaining to the adjustment of manholes in relation to the City Yorba Linda's "Street Rehabilitation Program" and manhole adjustments in the unincorporated areas with the boundaries of the City of Placentia. 5.6. Investment Report for the Period Ending January 31, 2014 Mrs. Lugo presented the Investment Report for the Period Ending January 317 2014. She noted that the average yield for the reporting month is 0.62 %. Mrs. Lugo stated that the overall decrease in the investment balance from the previous month is approximately $1 million. This is due to the biannual payment of $1,566,425 to OCWD for the Replenishment Assessment fees. A hand -out that reports the use and available balance of the Line of Credit between the District and Wells Fargo Bank was available for review and discussion. There were no other key items to discuss. 5.7. Future Agenda Items and Staff Tasks None. 6. ADJOURNMENT 6.1. The meeting was adjourned at 05:08 p.m. The next Finance - Accounting Committee meeting is scheduled to be held Friday, March 28, 2014 at 8:00 a.m. 3