HomeMy WebLinkAbout2008-11-10 - Finance-Accounting Committee Meeting MinutesITEM NO.
MINUTES OF THE
YORBA LINDA WATER DISTRICT
FINANCE-ACCOUNTING COMMITTEE MEETING
November 10, 2008
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A meeting of the Yorba Linda Water District Finance-Accounting Committee was called
to order by Director John W. Summerfield at 8:12 a.m. The meeting was held at the
District's offices, 1717 E. Miraloma Ave, Placentia.
DIRECTORS PRESENT:
Director John W. Summerfield
STAFF PRESENT:
Ken Vecchiarelli, Assistant GM
Diane Cyganik, Finance Director
ACTION ITEMS:
1. Monthly Financial Statements for the first and second months of fiscal year 2008-
09 ending July 31 and August 31, 2008, respectively.
The Financial Statements were reviewed by the Committee. It was
recommended that the monthly Financial Statements for July 31, 2008 and
August 31, 2008 be received and filed by the Board of Directors.
DISCUSSION ITEMS:
2. Investment Report ending September 30, 2008.
The Investment Report for month ending September 30, 2008 was discussed
and accepted as presented. Director Summerfield raised the question as to
why the Wells Fargo Checking accounts are not earning interest and whether or
not it is possible to set up as a ZBA account that sweeps any money at the end
of the day into a money market account. This is being investigated by staff and
the findings will be reported back to the Committee.
3. Monthly Portfolio Report ending October 31, 2008. Report by Keith Khorey,
Wells Capital Management.
The Committee spoke with Keith Khorey by telephone and he gave a market
summary and discussed the October Portfolio Report. In his market summary,
Keith made the following points: the global economy is slowing down with
conditions not experienced since the 1940's; a fourth quarter recession is very
likely; unemployment rates hit 61/s% for October but he felt that this seemed low.
Keith presented a summary of the October Portfolio Report including the
following highlights: the portfolio yield to maturity was at 2.62% which is 150
basis points above the Fed Funds Rate of 1.00; the District had an unrealized
loss of $18,376 as of September 30, 2008 which turned around to become an
unrealized gain of $15,014 as of October 31, 2008; several investments matured
in October 2008; the monthly portfolio interest is much lower than it has been in
the past since the portfolio is not as large as it used to be, and the interest rates
have declined significantly. Currently, Wells Capital has a large percentage of
the District's investments in very short-term commercial paper because of the
market volatility and they will maintain this conservative approach until it is
determined where the market is going.
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4. Potential effects of CalPERS investment loss.
The impact of the financial market downturn on CalPERS investments was briefly
discussed by the Committee. While reports that CALPERS investments had lost
over $46.513 during the current market downturn, it is still too early to determine
the long term impacts. CalPERS rate stabilization policies help to spread market
gains and losses over 15 years, cushioning the effects so no single year
contribution change would be severe. However, if the CALPERS losses are
realized, rates could increase by 2% to 4% in 2010 and 2011.
ADJOURNMENT:
The Committee adjourned at 8:58 a.m. The next Finance-Accounting Committee
meeting will be held December 9, 2008.
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