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HomeMy WebLinkAbout2014-04-21 - Board of Directors Meeting Minutes 2014-071 MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS WORKSHOP MEETING Monday, April 21, 2014, 3:00 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The April 21, 2014 Workshop Meeting of the Yorba Linda Water District Board of Directors was called to order by President Kiley at 3:04 p.m. The meeting was held in the Board Room at the District's Administration Building located at 1717 East Miraloma Avenue in Placentia, California 92870. 2. PLEDGE OF ALLEGIANCE President Kiley led the pledge. 3. ROLL CALL DIRECTORS PRESENT STAFF PRESENT Robert R. Kiley, President Steve Conklin, Acting General Manager Ric Collett, Vice President John DeCriscio, Operations Manager Michael J. Beverage Gina Knight, Human Resources/Risk Manager Phil Hawkins Delia Lugo, Finance Manager Gary T. Melton Art Vega, Acting IT Manager Annie Alexander, Executive Secretary Cindy Botts, Management Analyst Damon Micalizzi, Public Information Officer 4. PUBLIC COMMENTS None. 5. DISCUSSION ITEMS 5.1. Draft FY 2014/15 Budget Mrs. Lugo provided the Board with copies of the PowerPoint presentation, and the following draft documents: o Salaries and Benefits Budget Comparison o Vehicle Equipment and Capital Outlay o Supplies and Services Comparison for the Board of Directors and All Departments A. Operating Budget Mr. Conklin and Mrs. Lugo provided an overview of the Salaries and Benefits Budget Comparison and responded to questions from the Board regarding merit and COLA increases and the District's OPEB Contribution. Mrs. Lugo explained that the District's OPEB 1 2014-072 Contribution had not been included in last fiscal year's budget and would be due July 2014. Mr. Conklin clarified that that the 3% COLA increase would be offset by increased employee contributions to CaIPERS. Mrs. Lugo then provided an overview of the key budget assumptions and the budget summary and responded to questions from the Board regarding the difference in Income (Loss) from the last budget workshop. She explained that the financial information being provided to the Board today included depreciation and non-operating costs in revenue and expenses. Staff then responded to additional questions from the Board regarding the Salaries and Benefits Budget Comparison. Mrs. Knight indicated that the costs associated with the 3% COLA and merit increases would be identified separately in the final draft of the budget. Mrs. Lugo clarified that the projected revenue in the draft budget included the 2.5% rate increase. Director Kiley asked where the estimated expense information for the education reimbursement program was delineated in the budget. Mrs. Lugo explained that these costs were included in the Fringe Benefits and that staff could provide the Board with a spreadsheet breaking these expenses out. Mrs. Lugo also indicated that the proposed budget included an assumption of 5% water conservation by District customers due to the heightened media coverage of the statewide drought. Mrs. Lugo then provided an overview of the projected revenues, expenses, variable costs and water purchases. Mr. Conklin and Mr. DeCriscio responded to questions from the Board regarding future groundwater and import water purchases as related to construction of the Fairmont Booster Pump Upgrade Project. Mrs. Lugo then reviewed the planned water rate increase (year 3 of 3) in the fixed charges and other agencies water rates in comparison. Director Melton suggested that the rate comparison information be made available to District customers. Mr. Micalizzi explained that staff was planning to include this data in the summer newsletter. Mr. Conklin added that staff would be providing a presentation to the Citizens Advisory Committee regarding the proposed budget at its next meeting. Directors Melton and Hawkins suggested that staff include water rates for Golden State Water Company and the Serrano Water District. Mr. Micalizzi noted that more current rate information for all water agencies would be available once their budgets were approved in June. Mrs. Lugo indicated that District customers would not see the new rate increase reflected on their bill (for July usage) until August. Mrs. Lugo then reviewed the expense key factors and changes in the supplies and services. 2 2014-073 B. Supplies and Services Budget • Board of Directors Mrs. Lugo reviewed the Board of Directors' Supplies and Services Comparison and detailed proposed budget expenses. She then responded to questions from the Board regarding budgeting for election expenses and the increased cost in dues and memberships. • Administration Mrs. Lugo reviewed the Administration Department's Supplies and Services Comparison and detailed proposed budget expenses. Staff then responded to questions from the Board regarding duties of the proposed Public Information Assistant position and decrease in the cost of professional development. Mr. Conklin noted that staff expected a reduction in legal services. • Finance Mrs. Lugo reviewed the Finance Department's Supplies and Services Comparison and detailed proposed budget expenses. Mrs. Lugo responded to questions from the Board regarding current debt collection practices and the possibility of selling customer debts in the future. She also noted that staff was expected the costs associated with fees and permits would continue to increase as more customers sign up for electronic forms of payment. Staff is planning to research possible lower cost alternatives during the next fiscal year. • Human Resources Mrs. Lugo reviewed the Human Resources Department's Supplies and Services Comparison and detailed proposed budget expenses. Mrs. Knight identified various costs associated with Professional Development and responded to questions from the Board regarding employees' life insurance benefits. • Information Technology Mrs. Lugo reviewed the Information Technology Department's Supplies and Services Comparison and detailed proposed budget expenses. Mr. Vega identified various costs associated with software license renewals and GIS contractual services. 3 2014-074 C. Capital Improvement Projects Mr. Conklin reviewed the 5-year Capital Improvement Program Projections and noted that an increase in operating reserves would be needed in order to comply with the District's current reserve policy. D. District Reserves Mr. Conklin and Mrs. Lugo responded questions regarding the District's line of credit with Wells Fargo, the possibility of an extension of the associated credit agreement, the District's bond ratio, and potential financing opportunities available through CSDA. Mrs. Lugo explained that staff had provided the Board with 3 scenarios for funding the District's Operating Reserves. Following discussion, it was the consensus of the Board to select the scenario in which Operating Reserves would be funded at 12%. Mr. Conklin and Mrs. Lugo noted that staff would be meeting with Mr. Sanjay Gaur from Raftelis Financial Consultants to review the District's financial model, discuss the need for a rate study, and potential financing alternatives. 6. ADJOURNMENT 6.1. The meeting was adjourned at 4:03 p.m. The next Regular Board of Directors Meeting will be held Thursday, April 24, 2014 at 8:30 a.m. Steven R. Conklin Board Secretary 4 SAY 1 5 2014 MM