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HomeMy WebLinkAbout2008-02-12 - Finance-Accounting Committee Meeting MinutesITEM NO. " le" MINUTES OF THE YORBA LINDA WATER DISTRICT FINANCE-ACCOUNTING COMMITTEE February 12, 2008 A meeting of the Yorba Linda Water District Finance-Accounting Committee was called to order by Committee Chairman William R. Mills at 4:00 p.m. The meeting was held at District Headquarters, 4622 Plumosa Drive, Yorba Linda. DIRECTORS PRESENT: Director William R. Mills, Chair Director Michael J. Beverage STAFF PRESENT: Michael Payne, General Manager Ken Vecchiarelli, Assistant GM Diane Cyganik, Finance Director Sandi Van Etten, Senior Accountant ACTION ITEMS: Consider a policy on the disposition of unexpected refunds from outside agencies. General Manager Payne discussed the Committee's consideration to recommend to the Board of Directors to adopt a resolution setting forth a policy on refunding all future unexpected checks received from agencies such as Municipal Water District of Orange County (MWDOC) or the Metropolitan Water District of Southern California (MET) with a base refund amount of $0.10 per connection. The Committee will recommend to the Board to approve this resolution at the February 28, 2007 Board Meeting. 2. Consider setting forth the policy on the criteria for the Basic Service Charge component of the Water Rate. General Manager Payne discussed the Committee's consideration to recommend to the Board of Directors adopting a resolution affirming and setting forth the formula for setting the future basic service charge component of water rate adjustments using a formula of 21% of the fixed supplies, services, salaries and benefits of personnel costs identified in the budget. The Committee recommended adding another "whereas" to show a report was compiled to arrive at this 21% basic service charge component, and they will recommend to the Board approval of this resolution at the February 28, 2008 Board Meeting. 0 DISCUSSION ITEMS: 3. Review of Investment Reports for the month ending December 31, 2007. Ms. Van Etten presented the Investment Report to the Committee and changes to the report presentation were discussed. The items that will be addressed and changed to make the report more comparable include showing the fiscal year (FY) Interest Budget to equal the Sewer and Water Operating budget; separating the interest earned into Operating and Capital Projects, which will provide monthly interest that ties to the budget more closely. The Investment Report for month ending December 31, 2007 was accepted as presented with the expectation of staff revising the report as discussed from this point going forward. 4. Monthly status report on portfolio investments ending January 31, 2008. Keith Khorey, Principal of Wells Capital Management reported via conference call at approximately 4:08 p.m. to discuss the activity that transpired during the month of January 2008. Mr. Khorey discussed the state of the financial economy and how it is impacting the District's portfolio. Mr. Khorey stated that the Fed's cut 125 basis points to avoid a recession and are likely to cut 25 or 50 basis points more in March 2008. Many questions were posed and answered, and the conference call was concluded by thanking Mr. Khorey. 5. Report on Issuance of 2008 Certificates of Participation. is Assistant General Manager Vecchiarelli gave a brief overview of the Certificates of Participation (COP) Bid Sale he attended along with Finance Director Cyganik at the offices of Fieldman Rolapp & Associates. The sale was a great success at rates ranging from the top four bidders of 4.475878 to 4.518041. The top two bidders were Banc of America Securities LLC and UBS Securities LLC with True Interest Costs of 4.47578 and 4.476713, respectively. The bid was awarded to Banc of America Securities. In addition, Mr. Tom DeMars, Principal of Fieldman Rolapp & Associates, reported to the Committee via conference call on the COP Bond Bid Sale and congratulated the District for the great success. Mr. DeMars stated there were six participants and a lot of interest from the public on the bond sale. He also said the right decision was made on not insuring the bonds, and the reason was two-fold: (1) the District had a strong credit rating, and (2) the District had a better credit rating than the bond insurers due to the recent melt-down that has taken place. The conference call was concluded by thanking Mr. DeMars and his staff for a job well done. 6. Review Cash Flow Format Finance Director Cyganik revisited the cash flow format with the Committee and asked for their feedback. There were a few minor comments. Once incorporated, the cash flow report will be brought to the Committee on a monthly basis. -2- 7. Report on Credit Card Issues General Manager Payne informed the Committee of the recent credit card fraud that transpired on the District's credit card. The Accounting Department caught the malicious transactions and quickly reported them to the Bank, which in turn credited the District's account for the amount of the fraudulent transactions. The fraud was also reported to the Brea Police Department, which conducted an investigation based on the District's findings. They are now in pursuit of the suspect. 8. Golden State Water Company Water Rates General Manager Payne provided the Committee with a comparison of rates between Yorba Linda Water District and Golden State Water Company based on 100 cu. ft. of water delivered using a 1-inch meter for one year. Yorba Linda Water District's rate is $58.47 and Golden State Water Company's rate is $92.28. ADJOURNMENT: The Committee adjourned at approximately 5:20 p.m. The next Finance-Accounting Committee meeting is scheduled for Tuesday, March 11, 2008 at 4:00 p.m. at District Headquarters, 4622 Plumosa Drive, Yorba Linda, CA. • • -3-