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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 1 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 2 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. 3