HomeMy WebLinkAbout2014-05-20 - Finance-Accounting Committee Meeting MinutesMINUTES OF THE
YORBA LINDA WATER DISTRICT
FINANCE - ACCOUNTING COMMITTEE MEETING
Tuesday, May 20, 2014, 4:00 p.m.
1717 E Miraloma Ave, Placentia CA 92870
1. CALL TO ORDER
The May 20, 2014 meeting of the Yorba Linda Water District's Finance -
Accounting Committee was called to order by Director Hawkins at 4:00 p.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
Director Phil Hawkins, Chair
Director Michael J. Beverage
3. PUBLIC COMMENTS
None.
4. ACTION CALENDAR
STAFF
Steve Conklin, Acting General Manager
Delia Lugo, Finance Manager
4.1. Appropriations Limit for FY 2014/15
Mrs. Lugo presented the 2014/15 Appropriations Limit Calculation for the
Committee's review. Mrs. Lugo explained that the annual calculation of
the Appropriations Limit is a State requirement designed to assure that
government agencies do not assess or collect taxes beyond the calculated
limit. For FY 2014/15 the calculated Appropriations Limit for Yorba Linda
Water District is $6,025,347, which is significantly higher than the Property
budget amount of $1,283,642. The Committee supports staff's
recommendation of adopting the new limit for FY 2014/15 as reflected in
Resolution No. 14 -XX.
4.2. FY 2014/15 Water Rate Increase
Mrs. Lugo discussed the issue of the rate increase for FY 2014/15. In
June 2012, the Board held a meeting to discuss and consider a three -year
rate increase. The result was to move forward with the three -year rate
increase, but due to the possibility that the financial position of the District
might improve the Board elected to only adopt the first year of the three
annual rate increases. In June 2013, a financial evaluation was performed
during the FY 2013/14 budget process and the Board elected to adopt the
second year of the three year annual increases, being a 2.5% rate
increase. In preparing the budget for FY 2014/15 and performing a
financial evaluation of the District's current position and forecasting out
five years, it has become evident that the third of a three -year rate
increase is necessary for the operational obligations of the District to be
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met. Following a discussion session, the Committee supported staff's
recommendation that the Board approve the third -year rate increase of
2.5% for FY 2014/15, adopt Resolution No. 14 -XX, and rescind Resolution
No. 13 -13.
4.3. Financial Reserves Policy for FY 2014/15
Mrs. Lugo presented the 2014/15 Financial Reserves Policy for the
Committee's review. Mrs. Lugo disclosed that there are no major changes
to the policy presented, but that minor changes pertaining to account
balances presented in Item 1.5 Employee Liabilities Reserve Section B
have been made. The Committee supports staff's recommendation that
the Board of Director's approve Resolution No. 14 -XX adopting the
Financial Reserves Policy for FY 2014/15 and rescind Resolution No. 13-
07.
4.4. Unaudited Financial Statements for the Period Ending March 31, 2014 (To
be presented at the meeting.)
Mrs. Lugo presented the Unaudited Financial Statements for the Period
Ending March 31, 2014 as handouts for the Committee to review. With
the Committee approval these statements would be included in the
Consent Calendar for the June 12, 2014 Board Meeting. The Debt
Service Ratio for the period ending March 31, 2014 was calculated to be
2.55 %, which is well above the required coverage ratio of 1.10 %. After
some discussion on key items reported in the financial statements, the
Committee supported staff recommendation.
5. DISCUSSION ITEMS
5.1. Investment Policy Annual Review
Mrs. Lugo presented the District's current Investment Policy that was
adopted under Resolution No. 13 -06. Upon review of this policy by the
Finance Department, which is an annual requirement under the California
Government Code, it was determined that no changes were needed at this
time. The Committee supported staff recommendation and the Annual
Review of the Investment Policy will be added to the Action Calendar for
the June 12, 2014 Board Meeting.
5.2. Investment Report for the Period Ending April 30, 2014
Mrs. Lugo presented the Investment Report for the Period Ending April 30,
2014. She noted that the average yield for this reporting month is 0.69 %.
Mrs. Lugo went on to discuss that the increase in the Water Operating
Reserve balance was due to the receipt of tax apportionments from the
County of Orange. There were no further items to discuss.
5.3. Budget to Actual Results for April 2014
Mrs. Lugo reviewed the April 2014 Budget to Actual Results report with
the Committee. Mrs. Lugo noted that the expenditures to date are
trending as previously reported
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5.4. Finance Department Transactions (Verbal Report)
Mrs. Lugo had contacted the CSDA Finance Corporation in regards to
some short -term financing options. She received quotes back on 6
different scenarios and presented them to the Committee. The Committee
supported the idea of holding off on making any firm decisions in regards
to Short -Term loans to fund future capital projects until the analysis of
future financial position of the District if completed.
5.5. Future Agenda Items and Staff Tasks
At the suggestion of Mr. Conklin and Mrs. Lugo the Committee supports
the idea of the Finance staff working with Raftellis Financial Consultant,
Inc. to become fully trained on the functionality and proper uses of the
Financial Model program purchased from Raftellis two years ago. Once
trained, staff will prepare an analysis projecting the financial position of the
District over the next five years. This analysis will also help determine if a
future rate increase will be required to meet the future financial obligations
of the District. Mrs. Lugo is to contact Sanjay Gaur, Senior Manager, of
Raftellis to request that he prepare a scope of work to get this project
started. The goal is to have this projected completed and ready to present
to the Committee in July 2014.
6. ADJOURNMENT
6.1. The meeting was adjourned at 5:15 p.m. The next Finance - Accounting
Committee meeting is scheduled to be held Monday, June 23, 2014 at
4:00 p.m.
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