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2017-11-28 - Board of Directors Meeting Agenda Packet (B)
AGENDA YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS REGULAR MEETING Tuesday, November 28, 2017, 6:30 PM 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL J. Wayne Miller, President Al Nederhood, Vice President Andrew J. Hall, Director Phil Hawkins, Director Brooke Jones, Director 4. ADDITIONS/DELETIONS TO THE AGENDA 5. INTRODUCTIONS AND PRESENTATIONS 5.1. Elected Official Liaison Reports 6. PUBLIC COMMENTS Any individual wishing to address the Board is requested to identify themselves and state the matter on which they wish to comment. If the matter is on the agenda, the Board will recognize the individual for their comment when the item is considered. No action will be taken on matters not listed on the agenda. Comments are limited to matters of public interest and matters within the jurisdiction of the Water District. Comments are limited to three minutes. 7. CONSENT CALENDAR All items listed on the consent calendar are considered to be routine matters, status reports, or documents covering previous Board instructions. The items listed on the consent calendar may be enacted by one motion. There will be no discussion on the items unless a member of the Board, staff, or public requests further consideration. 7.1. Minutes of the Board of Regular Meeting Held October 24, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.2. Minutes of the Board of Directors Special Meeting Held November 8, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.3. Minutes of the Board of Directors Special and Regular Meetings Held November 14, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.4. Minutes of the Board of Directors Workshop Meeting Held November 16, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.5. Payments of Bills, Refunds, and Wire Transfers Recommendation: That the Board of Directors ratify and authorize disbursements in the amount of $2,508,219.63. 7.6. Directors and General Manager Fees and Expenses Report for First Quarter of FY18 Recommendation: That the Board of Directors receive and file the Directors and General Manager Fees and Expenses Report for First Quarter of FY18. 8. ACTION CALENDAR This portion of the agenda is for items where staff presentations and Board discussions are needed prior to formal Board action. 8.1. Selection of Investment Strategy for Public Agencies Post-Employment Benefits Trust with Public Agency Retirement Services (PARS) Recommendation: That the Board of Directors determine an Asset Allocation Investment Strategy for future District contributions into the PARS Public Agencies Post-Employment Benefits Trust based on the discussion and presentation by the PARS representative. 8.2. Revising Budgeted Positions for the Remainder of Fiscal Year 2018 Recommendation: That the Board of Directors adopt Resolution No. 17-37 revising the budgeted positions for the remainder of Fiscal Year 2018 and rescinding resolution No. 17-21. 8.3. Modifying Classifications and Salary Ranges for Management Employees Recommendation: That the Board of Directors adopt Resolution No. 17-38 amending Exhibit B of Resolution No. 15-08 to modify the Classifications and Salary Ranges for Management Employees for the remainder of Fiscal Years 2015-2018. 9. DISCUSSION ITEMS This portion of the agenda is for matters that cannot reasonably be expected to be concluded by action of the Board of Directors at the meeting, such as technical presentations, drafts of proposed policies, or similar items for which staff is seeking the advice and counsel of the Board of Directors. Time permitting, it is generally in the District’s interest to discuss these more complex matters at one meeting and consider formal action at another meeting. This portion of the agenda may also include items for information only. 9.1. Results of Fitch Surveillance and Potential Issuance of Customer Rebate 9.2. Budget to Actual Reports for the Month Ending October 31, 2017 9.3. Cash and Investment Report for Period Ending October 31, 2017 9.4. Unaudited Financial Statements for First Quarter of FY18 9.5. Request for Proposals for General Counsel Services (Nederhood) 9.6. Needs Assessment and Estimated Costs for Upgrading Audio/Visual System in Board Room (Nederhood) 10. REPORTS, INFORMATION ITEMS, AND COMMENTS 10.1. Directors' Reports 10.2. General Manager's Report 10.3. General Counsel's Report 10.4. Future Agenda Items and Staff Tasks 11. COMMITTEE REPORTS 11.1. Interagency Committee with MWDOC and OCWD (Miller/Nederhood) · Minutes of meeting held November 20, 2017 at 4:00 p.m. · Next meeting scheduled January 25, 2018 at 4:00 p.m. 11.2. Joint Agency Committee with City of Yorba Linda (Miller/Hawkins) · Next meeting scheduled December 18, 2017 at 4:00 p.m. at YL City Hall. 11.3. Joint Agency Committee with City of Placentia (Miller/Nederhood) · Next meeting yet to be scheduled. 12. INTERGOVERNMENTAL MEETINGS 12.1. MWDOC Board - November 15, 2017 (Nederhood 12.2. OCWA Luncheon - November 15, 2017 (Jones/Miller) 12.3. OCSD Board - November 15, 2017 (Jones) 12.4. OCSD State of the District - November 17, 2017 (Hawkins/Jones/Nederhood) 12.5. YL City Council - November 21, 2017 (Nederhood) 12.6. ACWA/JPIA Fall Conference - November 27-28, 2017 (Nederhood) 13. BOARD OF DIRECTORS ACTIVITY CALENDAR 13.1. Meetings from November 29 - January 31, 2018 14. CONFERENCES, SEMINARS, AND SPECIAL EVENTS This section of the agenda is for the Board of Directors to authorize Director attendance at the listed events. 14.1. OCWA Luncheon - November 15, 2017 NWRI Workshop - December 5, 2017 Recommendation: That the Board of Directors ratify and/or approve Director attendance at these events if desired. 15. ADJOURNMENT 15.1. A strategic planning workshop has been scheduled Thursday, December 7, 2017 at 6:30 p.m. The next Regular Board of Directors Meeting will be held Tuesday, December 12, 2017. Closed Session (if necessary) will begin at 5:30 p.m. or 6:00 p.m. depending on time requirements and regular business at 6:30 p.m. Items Distributed to the Board Less Than 72 Hours Prior to the Meeting Pursuant to Government Code section 54957.5, non-exempt public records that relate to open session agenda items and are distributed to a majority of the Board less than seventy-two (72) hours prior to the meeting will be available for public inspection in the lobby of the District’s business office located at 1717 E. Miraloma Avenue, Placentia, CA 92870, during regular business hours. When practical, these public records will also be made available on the District’s internet website accessible at http://www.ylwd.com/. Accommodations for the Disabled Any person may make a request for a disability-related modification or accommodation needed for that person to be able to participate in the public meeting by telephoning the Executive Secretary at 714-701-3020, or writing to Yorba Linda Water District, P.O. Box 309, Yorba Linda, CA 92885-0309. Requests must specify the nature of the disability and the type of accommodation requested. A telephone number or other contact information should be included so the District staff may discuss appropriate arrangements. Persons requesting a disability-related accommodation should make the request with adequate time before the meeting for the District to provide the requested accommodation. ITEM NO. 7.1 AGENDA REPORT Meeting Date: November 28, 2017 Subject:Minutes of the Board of Regular Meeting Held October 24, 2017 STAFF RECOMMENDATION: That the Board of Directors approve the minutes as presented. ATTACHMENTS: Name:Description:Type: 2017-10-24_-_Minutes_-_BOD_(B).doc Minutes Minutes Minutes of the YLWD Board of Directors Regular Meeting Held October 24, 2017 at 6:30 p.m. 1 2017-XXX MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS REGULAR MEETING Tuesday, October 24, 2017, 6:30 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The meeting was called to order at 6:30 p.m. 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL DIRECTORS PRESENT STAFF PRESENT J. Wayne Miller, President Brett Barbre, Assistant General Manager Al Nederhood, Vice President Steve Conklin, Engineering Manager Phil Hawkins, Director Gina Knight, HR/Risk and Safety Manager Brooke Jones, Director Art Vega, Information Technology Manager Javier Martinez, Water Production Superintendent DIRECTORS ABSENT Kelly McCann, Senior Accountant Andrew J. Hall, Director Annie Alexander, Executive Assistant ALSO PRESENT Andrew Gagen, Partner, Kidman Law LLP Beth Haney, Councilmember, City of Yorba Linda Daphnie Munoz, Audit and Assurance Partner, White Nelson Diehl Evans 4. ADDITIONS/DELETIONS TO THE AGENDA None. 5. INTRODUCTIONS AND PRESENTATIONS 5.1. Elected Official Liaison Reports Councilmember Beth Haney commented on her attendance at a recent MWDSC infrastructure tour and noted the Yorba Linda State of the City was scheduled November 2, 2017. Minutes of the YLWD Board of Directors Regular Meeting Held October 24, 2017 at 6:30 p.m. 2 2017-XXX 6. PUBLIC COMMENTS None. 7. CONSENT CALENDAR Director Hawkins made a motion, seconded by Director Nederhood, to approve the Consent Calendar. Motion carried 4-0-0-1 with Director Hall being absent. 7.1. Minutes of the Board of Directors Special Meeting Held September 12, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.2. Minutes of the Board of Directors Regular Meeting Held September 12, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.3. Minutes of the Board of Directors Special Meeting Held September 14, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.4. Minutes of the Board of Directors Special Meeting Held September 20, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.5. Payments of Bills, Refunds, and Wire Transfers Recommendation: That the Board of Directors ratify and authorize disbursements in the amount of $2,550,667.09. 7.6. Terms and Conditions for Sewer Service with Marzola, 5162 Mountain View Avenue Recommendation: That the Board of Directors approve the Terms and Conditions for Sewer Service with Marzola, 5162 Mountain View Avenue, Job No. 201732S. Minutes of the YLWD Board of Directors Regular Meeting Held October 24, 2017 at 6:30 p.m. 3 2017-XXX 7.7. Amendment Two of the Well 21 Lease Agreement Recommendation: That the Board of Directors authorize approval and execution of Amendment Two of the Lease Agreement between the Orange County Water District and the Yorba Linda Water District for Warner Basin Complex – Well No. 21. 7.8. Brand Name Requirement for Pressure Regulating Station (PRS) Rehabilitation Phase 2 Project Recommendation: That the Board of Directors approve the Brand Name Requirement for the PRS Rehabilitation Phase 2 Project for the items as specified in staff’s memorandum, namely ABB magnetic flow meters, Cla- Val pressure reducing valves, and Rosemont pressure transmitters. 8. ACTION CALENDAR 8.1. Audit Reports for Fiscal Year Ending June 30, 2017 Staff introduced Daphnie Munoz of White Nelson Diehl Evans. Staff also noted Vice President Nederhood’s title had been corrected on page xi of the report. Ms. Munoz reviewed the auditor’s report and noted the District’s financial statements were presented fairly in all material respects in accordance with generally accepted accounting principles. She then responded to questions from the Board regarding the auditing team, depreciation and capitalization of assets, and the District’s historical net position. Discussion followed regarding the District’s investments held by Pershing, future consideration of transferring them to another safekeeper, and the auditor’s process for reviewing warehouse operations. Director Hawkins made a motion, seconded by Director Jones, to receive and file the Yorba Linda Water District Comprehensive Annual Financial Report for the Fiscal Year Ending June 30, 2017 as corrected, the Report on Internal Control, and the Communication to Those in Governance Letter. Motion carried 4-0-0-1 with Director Hall being absent. 8.2. Pension Rate Stabilization Program and Other Post-Employment Benefits Funding Policy Staff explained the Board previously requested preparation of a policy for paying down the District’s pension and other post-employment benefit liabilities. Minutes of the YLWD Board of Directors Regular Meeting Held October 24, 2017 at 6:30 p.m. 4 2017-XXX Brief discussion followed regarding scheduling a future workshop meeting to review investment strategies with Public Agency Retirement Services (PARS). Director Nederhood made a motion, seconded by Director Hawkins, to approve Resolution No. 17-33 adopting a Pension Rate Stabilization Program (PRSP) and Other Post-Employment Benefits (OPEB) Funding Policy for FY 18. Motion carried 4-0-0-1 on a Roll Call vote with Director Hall being absent. 8.3. Election for Appointment of Special District Representative to Orange County Redevelopment Agency Oversight Board Staff explained that the Orange County Local Area Formation Commission was conducting an election for the special district representative to the new formed Orange County Redevelopment Agency Oversight Board. Staff then explained the options available to the Board. The Board determined to postpone consideration of this matter until the next regular meeting. No Directors expressed an interest in being nominated as a candidate. Staff was instructed to invite the interested candidates to that same meeting. 8.4. Proposed Increased Assessments Affecting District Properties Located in Local Landscaping Zone L-5A of the City of Yorba Linda Street Lighting and Landscaping Maintenance District Staff explained the District had received assessment ballots for three parcels in this zone, one of which was for $0 and would not be counted. Staff note the Board had previously voted in favor of the proposed increased assessments in other zones. Director Hawkins made a motion, seconded by Director Jones, to vote in favor of the increased assessments for these parcels and authorize staff to complete and submit the ballots as required. Motion carried 4-0-0-1 with Director Hall being absent. 9. DISCUSSION ITEMS 9.1. Cash and Investment Report for Period Ending September 30, 2017 Staff noted the report had been revised, a copy of which was distributed during the meeting. Staff then reviewed key information contained in the report. Minutes of the YLWD Board of Directors Regular Meeting Held October 24, 2017 at 6:30 p.m. 5 2017-XXX 9.2. Budget to Actual Reports for the Month Ending September 30, 2017 Staff reviewed the reports and touched on cumulative volumetric water revenue and variable expenses. The Board provided feedback to staff regarding data to be included in future charts. 10. REPORTS, INFORMATION ITEMS, AND COMMENTS 10.1. Directors' Reports None. 10.2. General Manager's Report Assistant General Manager Barbre asked each of the managers or their designees to report on activities within their respective departments and reminded the Board of some upcoming events. 10.3. General Counsel’s Report None. 10.4. Future Agenda Items and Staff Tasks Vice President Nederhood commented on resolving the issue with the District’s investments held at Pershing and requested staff look into the performance of a third-party warehouse and inventory audit. Following brief discussion, staff was instructed to provide the Board with results of the cycle count for first quarter of FY18. President Miller suggested discussion of the PARS investment strategies take place during a regular meeting rather than a workshop meeting. Director Jones requested discussion of budget based rate structures at a future meeting. The Board discussed addressing this topic in conjunction with development of the strategic plan. Minutes of the YLWD Board of Directors Regular Meeting Held October 24, 2017 at 6:30 p.m. 6 2017-XXX 11. COMMITTEE REPORTS 11.1. Interagency Committee with MWDOC and OCWD (Miller/Nederhood) Next meeting is scheduled November 20, 2017 at 4:00 p.m. 11.2. Joint Agency Committee with City of Yorba Linda (Miller/Hawkins) Minutes of the meeting held September 18, 2017 at 4:00 p.m. were provided in the agenda packet. Next meeting is scheduled December 18, 2017 at 4:00 p.m. at YL City Hall. 11.3. Joint Agency Committee with City of Placentia (Miller/Nederhood) Next meeting yet to be scheduled. 12. INTERGOVERNMENTAL MEETINGS The Directors reported on their attendance at the following meetings. 12.1 LAFCO – October 11, 2017 (Nederhood – As Needed) Director Nederhood did not attend this meeting. 12.2 WACO – October 13, 2017 (Miller/Nederhood) 12.3. YL City Council – October 17, 2017 (Hawkins) 12.4. MWDOC Board – October 18, 2017 (Nederhood) 12.5. OCWA Luncheon – October 18, 2017 (Miller) 12.6. OCWD Board – October 18, 2017 (Jones) 13. BOARD OF DIRECTORS ACTIVITY CALENDAR 13.1. Meetings from October 25 – December 31, 2017 Minutes of the YLWD Board of Directors Regular Meeting Held October 24, 2017 at 6:30 p.m. 7 2017-XXX 14. CONFERENCES, SEMINARS, AND SPECIAL EVENTS 14.1. OCWA Luncheon – October 18, 2017 OCSD State of the District – November 17, 2017 Director Hawkins made a motion, seconded by Director Jones, to ratify and/or approve Director attendance at these events. Motion carried 4-0-0-1 with Director Hall being absent. 15. ADJOURNMENT 15.1. The meeting was adjourned at 8:16 p.m. Annie Alexander Assistant Board Secretary ITEM NO. 7.2 AGENDA REPORT Meeting Date: November 28, 2017 Subject:Minutes of the Board of Directors Special Meeting Held November 8, 2017 STAFF RECOMMENDATION: That the Board of Directors approve the minutes as presented. ATTACHMENTS: Name:Description:Type: 2017-11-08_-_Minutes_-_BOD.doc Minutes Minutes Minutes of the YLWD Board of Directors Special Meeting Held November 8, 2017 at 12:30 p.m. 1 2017-XXX MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS SPECIAL MEETING Wednesday, November 8, 2017, 12:30 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The meeting was called to order at 12:30 p.m. 1.1. TELECONFERENCE SITE 1121 L St #600, Sacramento CA 95814 Assistant General Manager Brett Barbre stated that Director Hawkins was not available to participate in the meeting telephonically. 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL DIRECTORS PRESENT STAFF PRESENT J. Wayne Miller, President Brett Barbre, Assistant General Manager Al Nederhood, Vice President Gina Knight, HR/Risk and Safety Manager Brooke Jones, Director Marcus Millen, Records Mgmt Specialist DIRECTORS ABSENT Andrew J. Hall, Director Phil Hawkins, Director ALSO PRESENT Andrew Gagen, Partner, Kidman Law LLP 4. PUBLIC COMMENTS None. Minutes of the YLWD Board of Directors Special Meeting Held November 8, 2017 at 12:30 p.m. 2 2017-XXX 5. CLOSED SESSION The meeting was adjourned to Closed Session at 12:32 p.m. Directors Jones, Miller and Nederhood were present. Also present were General Counsel Andrew Gagen, Assistant General Manager Barbre, and HR/Risk and Safety Manager Gina Knight. 5.1. Conference with Labor Negotiators Pursuant to Section 54957.6 of the California Government Code Agency Designated Representatives: Brett Barbre, Asst General Manager Gina Knight, HR/Risk and Safety Mgr Unrepresented Employees: Management Employee Group The Board reconvened in Open Session at 2:12 p.m. General Counsel Gagen reported that no action was taken during Closed Session that was required to be reported under the Brown Act. 6. ADJOURNMENT 6.1. The meeting was adjourned at 2:12 p.m. Brett Barbre Assistant General Manager ITEM NO. 7.3 AGENDA REPORT Meeting Date: November 28, 2017 Subject:Minutes of the Board of Directors Special and Regular Meetings Held November 14, 2017 STAFF RECOMMENDATION: That the Board of Directors approve the minutes as presented. ATTACHMENTS: Name:Description:Type: 2017-11-14_-_Minutes_-_BOD_(A).doc Minutes Minutes 2017-11-14_-_Minutes_-_BOD_(B).doc Minutes Minutes Minutes of the YLWD Board of Directors Special Meeting Held November 14, 2017 at 5:30 p.m. 1 2017-XXX MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS SPECIAL MEETING Tuesday, November 14, 2017, 5:30 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The meeting was called to order at 5:33 p.m. 2. ROLL CALL DIRECTORS PRESENT STAFF PRESENT J. Wayne Miller, President Marc Marcantonio, General Manager Al Nederhood, Vice President Brett Barbre, Assistant General Manager Andrew J. Hall, Director Gina Knight, HR/Risk and Safety Manager Phil Hawkins, Director Annie Alexander, Executive Assistant Brooke Jones, Director ALSO PRESENT Andrew Gagen, Partner, Kidman Law LLP 3. PUBLIC COMMENTS None. 4. CLOSED SESSION The meeting was adjourned to Closed Session at 5:33 p.m. All Directors were present. Also present were General Counsel Andrew Gagen, General Manager Marc Marcantonio, Assistant General Manager Brett Barbre, and HR/Risk and Safety Manager Gina Knight. The following items were taken out of order. 4.1. Conference with Labor Negotiators Pursuant to Section 54957.6 of the California Government Code Agency Designated Representatives: Marc Marcantonio, General Manager Brett Barbre, Assistant General Manager Gina Knight, HR/Risk and Safety Manager Unrepresented Employees: Management Employee Group Minutes of the YLWD Board of Directors Special Meeting Held November 14, 2017 at 5:30 p.m. 2 2017-XXX 4.3. Conference with Legal Counsel – Existing Litigation Pursuant to Paragraph (1) of Subdivision (d) of Section 54956.9 of the California Government Code Name of Case: Irvine Ranch Water District vs. Orange County Water District (OC Superior Court – Case No. 00858584) General Manager Marcantonio and Assistant General Manager Barbre left the Closed Session at 6:03 p.m. prior to discussion of the following item. 4.2. Public Employee Performance Evaluation Pursuant to Section 54957 of the California Government Code Title: General Manager The Board reconvened in Open Session at 6:33 p.m. President Miller announced that as the Board had not concluded discussion of Item No. 4.2., the Closed Session would be suspended until after the regular meeting was adjourned. General Counsel Gagen reported that no action was taken during discussion of Item Nos. 4.1. and 4.3. that was required to be reported under the Brown Act. The meeting was then recessed at 6:34 p.m. CLOSED SESSION CONTINUED Following adjournment of the regular meeting at 8:49 p.m., the Board reconvened into Closed Session at 8:56 p.m. All Directors were present. Also present was General Manager Marcantonio. 4.2. Public Employee Performance Evaluation Pursuant to Section 54957 of the California Government Code Title: General Manager The Board reconvened in Open Session at 9:40 p.m. No Action was taken during the continued discussion of Item No. 4.2. that was required to be reported under the Brown Act. 5. ADJOURNMENT 5.1. The meeting was adjourned at 9:40 p.m. Annie Alexander Assistant Board Secretary Minutes of the YLWD Board of Directors Regular Meeting Held November 14, 2017 at 6:30 p.m. 1 2017-XXX MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS REGULAR MEETING Tuesday, November 14, 2017, 6:30 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The meeting was called to order at 6:34 p.m. 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL DIRECTORS PRESENT STAFF PRESENT J. Wayne Miller, President Marc Marcantonio, General Manager Al Nederhood, Vice President Brett Barbre, Assistant General Manager Andrew J. Hall, Director Steve Conklin, Engineering Manager Phil Hawkins, Director John DeCriscio, Operations Manager Brooke Jones, Director Gina Knight, HR/Risk and Safety Manager Delia Lugo, Finance Manager Art Vega, Information Technology Manager Mike Carreon, Facilities Maintenance Worker Annie Alexander, Executive Assistant Saira Hernandez, Accountant ALSO PRESENT Andrew Gagen, Partner, Kidman Law LLP 4. ADDITIONS/DELETIONS TO THE AGENDA None. Finance Manager Delia Lugo introduced Saira Hernandez, newly hired Accountant. 5. INTRODUCTIONS AND PRESENTATIONS 5.1. Elected Official Liaison Reports Assistant General Manager Brett Barbre, in his role as Director, reported on recent MWDOC and MWDSC business. He also commented on the status of the CA WaterFix and legislative activity. Minutes of the YLWD Board of Directors Regular Meeting Held November 14, 2017 at 6:30 p.m. 2 2017-XXX 6. PUBLIC COMMENTS None. 7. CONSENT CALENDAR Vice President Nederhood requested Item No. 7.7. be removed from the Consent Calendar. Director Hall stated he needed to abstain from voting on Item No. 7.5. Director Hawkins made a motion, seconded by Director Jones, to approve Item Nos. 7.1. through 7.6. on the Consent Calendar. Motion carried 5-0 with Director Hall abstaining from voting on Item No. 7.5. 7.1. Minutes of the Board of Directors Workshop Meeting Held September 20, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.2. Minutes of the Board of Directors Special and Regular Meetings Held September 26, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.3. Minutes of the Board of Directors Special and Regular Meetings Held October 10, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.4. Minutes of the Board of Directors Workshop Meeting Held October 19, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.5. Minutes of the Board of Directors Special Meeting Held October 24, 2017 Recommendation: That the Board of Directors approve the minutes as presented. Minutes of the YLWD Board of Directors Regular Meeting Held November 14, 2017 at 6:30 p.m. 3 2017-XXX 7.6. Payments of Bills, Refunds, and Wire Transfers Recommendation: That the Board of Directors ratify and authorize disbursements in the amount of $842,258.11. ITEMS REMOVED FROM CONSENT CALENDAR FOR SEPARATE ACTION 7.7. Claim for Damages Filed by Mercury Insurance Group Staff responded to questions from the Board regarding the claim and reasons for it being referred to ACWA-JPIA. Director Hall made a motion, seconded by Director Hawkins, to reject the claim filed by Mercury Insurance Group and refer it to ACWA-JPIA for further handling. Motion carried 5-0. 8. ACTION CALENDAR 8.1. Amending the Personnel Rules A revised copy of the associated resolution was distributed to the Board and made available to the public just prior to the meeting. Staff explained the impact of at-will employment on the District’s recruitment efforts for unrepresented positions and the proposed procedure for making classification changes. Director Hall made a motion, seconded by Director Hawkins, to adopt Resolution No. 17-34 as revised amending the Personnel Rules for the Yorba Linda Water District. Motion 5-0 on a Roll Call vote. 8.2. Amending Employee Compensation Letters to Rescind the At-Will Employment Provision and Modify the Pay Plans for Unrepresented Employees Revised copies of the associated resolutions and exhibits were distributed to the Board and made available to the public just prior to the meeting. Staff summarized the impact of at-will employment on the District’s recruitment efforts and reviewed the proposed modifications to the pay plans for unrepresented positions. Minutes of the YLWD Board of Directors Regular Meeting Held November 14, 2017 at 6:30 p.m. 4 2017-XXX Director Hall made a motion, seconded by Director Jones, to (1) adopt Resolution No. 17-35 as revised to amend Exhibit A and further amend Exhibit E of the Employee Compensation Letter (Resolution No. 15-08) in order to rescind the at-will employment provision and modify the pay plan for Management employees for the remainder of Fiscal Years 2015-2018; and (2) adopt Resolution No. 17-36 as revised to amend both Exhibits A and E of the Employee Compensation Letter (Resolution No. 15-07) in order to rescind the at-will employment provision and modify the pay plan for Professional and Confidential employees for the remainder of Fiscal Years 2015-2018. Motion carried 5-0 on a Roll Call vote. 8.3. Publication of General Counsel’s Opinion Letter Regarding MWDOC Memorandum Staff explained the purpose of General Counsel’s opinion letter regarding the Assistant General Manager’s employment with the District and concurrent service on MWDOC and MWDSC’s Board of Directors. Discussion followed regarding the District’s policies and procedures for Director and employee reporting of conflict of interests. Director Hall made a motion, seconded by Director Nederhood, to direct staff to publish General Counsel’s opinion letter and attached memorandum prepared by MWDOC’s legal counsel regarding the Assistant General Manager’s employment with YLWD and concurrent service on MWDOC and Met Boards of Directors. Motion carried 5-0. 8.4. Election for Association of California Water Agencies (ACWA) President, Vice President and Bylaw Amendments Staff provided an overview of ACWA’s upcoming election, voting procedures, and candidates. Staff also noted the proposed bylaw amendments were minor. Director Hawkins made a motion, seconded by Director Jones, to authorize President Miller to cast the District’s ballot for the ACWA President, Vice President, and bylaws update at ACWA’s Fall Conference on November 29, 2017. Motion carried 5-0. 9. REPORTS, INFORMATION ITEMS, AND COMMENTS 9.1. Directors' Reports Director Hall suggested the Board of Directors’ policies and procedures manual be reviewed and updated in the upcoming year. Minutes of the YLWD Board of Directors Regular Meeting Held November 14, 2017 at 6:30 p.m. 5 2017-XXX Director Jones requested staff compile talking points related to pending legislation/regulations and schedule meetings to discuss same with appropriate representatives. Vice President Nederhood spoke in favor of Director Jones’ request and commented on the importance of broadcasting a consistent clear message. President Miller displayed some slides from a presentation he had attended regarding the predictability of snow and rainfall in California. 9.2. General Manager's Report General Manager Marc Marcantonio shared a message he’d received from Mayor Peggy Huang and asked each of the managers to report on activities within their respective departments. 9.3. General Counsel’s Report None. 9.4. Future Agenda Items and Staff Tasks Vice President Nederhood requested an agenda item to discuss the status of Fitch’s surveillance and develop an action plan for issuing a customer rebate. Staff noted the Board had previously taken action to issue the rebate subject to reaffirmation of the District’s AA rating from Fitch. Should Fitch respond within the next week or so, staff will provide a report at the next regular meeting. Brief discussion followed on how or whether this matter should be agendized for the next regular meeting. Vice President Nederhood requested an agenda item to discuss the issuance of a Request for Proposals for general counsel services. President Miller requested an agenda item to discuss the District’s process for issuing contracts. General Manager Marcantonio explained that staff was in the process of surveying local water agencies’ rates for general and labor counsel services, the results of which would be shared with the Board shortly. General Counsel Andrew Gagen suggested staff contact the Monte Vista Water District as they’d recently completed a similar survey. Minutes of the YLWD Board of Directors Regular Meeting Held November 14, 2017 at 6:30 p.m. 6 2017-XXX Vice President Nederhood Requested an agenda item to discuss needs and costs associated with upgrading the audio/visual equipment in the Board room. Vice President Nederhood also requested an agenda item to discuss the pay plan structures for unrepresented positions. The Board determined to discuss this matter at the second regular meeting in January. President Miller requested staff obtain historical earnings data from Public Agency Retirement Services in order to prepare for selection of the investment strategy at the next regular meeting. 10. COMMITTEE REPORTS 10.1. Interagency Committee with MWDOC and OCWD (Miller/Nederhood) Next meeting is scheduled November 20, 2017 at 4:00 p.m. 10.2. Joint Agency Committee with City of Yorba Linda (Miller/Hawkins) Next meeting is scheduled December 18, 2017 at 4:00 p.m. at YL City Hall. 10.3. Joint Agency Committee with City of Placentia (Miller/Nederhood) Next meeting yet to be scheduled. 11. INTERGOVERNMENTAL MEETINGS The Directors reported on their attendance at the following meetings. 11.1 MWDOC/OCWD Joint Planning Committee – October 25, 2017 (Jones/Nederhood) 11.2 OCSD Board – October 25, 2017 (Hawkins) 11.3. OCWD Groundwater Adventure Tour – October 26, 2017 (Jones) 11.4. ISDOC – October 26, 2017 (Hawkins/Nederhood) 11.5. MWDOC Board – November 1, 2017 (Nederhood) 11.6. OCSD Operations Committee – November 1, 2017 (Jones) Minutes of the YLWD Board of Directors Regular Meeting Held November 14, 2017 at 6:30 p.m. 7 2017-XXX 11.7. YL State of the City – November 2, 2017 (Jones/Miller) 11.8. MWDOC Elected Officials’ Forum – November 2, 2017 (Jones/Miller/Nederhood) 11.9 Well 21 Ribbon Cutting Ceremony – November 3, 2017 (Miller/Nederhood) 11.10 ISDOC Executive Committee – November 7, 2017 (Nederhood) 11.11 YL City Council – November 8, 2017 (Miller) 11.12 LAFCO – November 8, 2017 (Nederhood – As Needed) General Counsel Gagen briefed the Board on a recent development related to pending litigation between IRWD and OCWD. He also noted the information provided was publicly available. 12. BOARD OF DIRECTORS ACTIVITY CALENDAR 12.1. Meetings from November 15 – December 31, 2017 The following matter was discussed during the special meeting which reconvened following adjournment of this meeting. 13. CLOSED SESSION 13.1. Public Employee Performance Evaluation Pursuant to Section 54957 of the California Government Code Title: General Manager 14. ADJOURNMENT 14.1. The meeting was adjourned at 8:49 p.m. Annie Alexander Assistant Board Secretary ITEM NO. 7.4 AGENDA REPORT Meeting Date: November 28, 2017 Subject:Minutes of the Board of Directors Workshop Meeting Held November 16, 2017 STAFF RECOMMENDATION: That the Board of Directors approve the minutes as presented. ATTACHMENTS: Name:Description:Type: 2017-11-16_-_Minutes_-_BOD.doc Minutes Minutes Minutes of the YLWD Board of Directors Workshop Meeting Held November 16, 2017 at 6:30 p.m. 1 2017-XXX MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS WORKSHOP MEETING Thursday, November 16, 2017 6:30 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The meeting was called to order at 6:34 p.m. 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL DIRECTORS PRESENT STAFF PRESENT J. Wayne Miller, President Marc Marcantonio, General Manager Al Nederhood, Vice President Steve Conklin, Engineering Manager Andrew J. Hall, Director John DeCriscio, Operations Manager Phil Hawkins, Director Gina Knight, HR/Risk and Safety Manager Brooke Jones, Director Delia Lugo, Finance Manager Art Vega, Information Technology Manager Annie Alexander, Executive Assistant Kaden Young, Management Analyst ALSO PRESENT Andrew Gagen, Partner, Kidman Law LLP 4. PUBLIC COMMENTS None. 5. DISCUSSION ITEMS 5.1. Review of District’s Mission, Vision and Goals Attendees discussed the District’s mission and vision statements and agreed on the following language: MISSION STATEMENT Yorba Linda Water District will provide reliable water and sewer services to protect public health and the environment with financial integrity and superior customer service. Minutes of the YLWD Board of Directors Workshop Meeting Held November 16, 2017 at 6:30 p.m. 2 2017-XXX VISION STATEMENT Yorba Linda Water District will accomplish our mission to improve the quality of life for those we serve by: Embracing Proven Technology Improving Customer Satisfaction Providing Efficient and Responsive Operations Ensuring Reliable Infrastructure The group also discussed the District’s core values and agreed on the following language: CORE VALUES Integrity – We demonstrate integrity every day by practicing the highest ethical standards and by ensuring that our actions follow our words. Accountability – We acknowledge that both the Board and staff of the District are accountable to the public that we serve, as well as to each other. Responsibility – We take full responsibility for our actions. We maintain a commitment of courtesy, assessment and resolution with all customer concerns. Transparency – We promote a culture where we actively listen to our customers and communicate openly about our policies, processes and plans for the future. Teamwork – Success centers on working together and sharing information and resources to achieve common goals. Civility – We are dedicated to ensuring that every voice of the District is treated with dignity and respect, and that differences are valued and individual abilities and contributions are recognized. Minutes of the YLWD Board of Directors Workshop Meeting Held November 16, 2017 at 6:30 p.m. 3 2017-XXX The group then discussed the following core values and/or goals and determined to continue review of same at the next strategic planning workshop. Communicate Openly Financial Sustainability District Aesthetics District Security District Culture/Ethics Professional Staffing Emergency Preparedness 6. ADJOURNMENT 6.1. The meeting was adjourned at 8:00 p.m. Annie Alexander Assistant Board Secretary ITEM NO. 7.5 AGENDA REPORT Meeting Date: November 28, 2017 Budgeted:Yes To:Board of Directors Cost Estimate:$2,508,219.63 Funding Source:All Funds From:Marc Marcantonio, General Manager Presented By:Delia Lugo, Finance Manager Dept:Finance Reviewed by Legal:N/A Prepared By:Richard Cabadas, Accounting Assistant I CEQA Compliance:N/A Subject:Payments of Bills, Refunds, and Wire Transfers SUMMARY: Section 31302 of the California Water Code says the District shall pay demands made against it when they have been approved by the Board of Directors. Pursuant to law, staff is hereby submitting the list of disbursements for Board of Directors’ approval. STAFF RECOMMENDATION: That the Board of Directors ratify and authorize disbursements in the amount of $2,508,219.63. DISCUSSION: The items on this disbursement list includes: A check of $116,644.28 to ACWA/JPIA for December 2017 medical & dental premium; a check of $82,165.86 to George Chevrolet for (3) 2018 Silverado trucks; a check of $243,459.50 to Orange County Water District for September 2017 In-Lieu water; a check of $717,698.40 to Pacific Hydrotech Corporation for the Fairmont Booster Pump Station progress payment #11; and a wire of $559,334.12 to MWDOC for September 2017 water deliveries. The balance of $193,594.59 is routine invoices. The Accounts Payable check register total is $1,912,896.75, Payroll No. 22 total is $276,797.80, Payroll No. 23 total is $318,525.08, where the total of all listed disbursements for this agenda report is $2,508,219.63. A summary of the disbursements is attached. PRIOR RELEVANT BOARD ACTION(S): The Board of Directors approves bills, refunds and wire transfers semi-monthly. ATTACHMENTS: Name:Description:Type: 17-CS_1128.pdf Cap Sheet Backup Material CkReg112817.pdf Check Register Backup Material 17_CC_1128.pdf Credit Card Summary Backup Material Summary of Disbursements November 28, 2017 CHECK NUMBERS & WIRES: Computer Checks 70958—71058 $ 1,353,562.63 ____________ $ 1,353,562.63 WIRES: W 111517 MWDOC $ 559,334.12 _____________ $ 559,334.12 TOTAL OF CHECKS & WIRES $1,912,896.75 PAYROLL NO. 22: Direct Deposits $ 174,075.15 Third Party Checks 6809—6816 $ 15,594.86 Payroll Taxes $ 50,465.55 EFT – CalPERS Payroll #22 $ 36,662.24 $ 276,797.80 PAYROLL NO. 23: Direct Deposits $ 199,839.67 Third Party Checks 6817—6828 $ 18,261.79 Payroll Taxes $ 63,681.00 EFT – CalPERS Payroll #23 $ 36,742.62 $ 318,525.08 TOTAL OF PAYROLLS $595,322.88 ---------------------------------------------------------------------------------------------------------------------- DISBURSEMENT TOTAL: $2,508,219.63 ================================================================== APPROVED BY THE BOARD OF DIRECTORS MINUTE ORDER AT BOARD MEETING OF NOVEMBER 28, 2017 ==================================================================. Check No.Date Vendor Name Amount Description 70970 11/28/2017 3T Equipment Company Inc.4,525.50 SEWER MAIN REPAIR PARTS 70972 11/28/2017 ACWA/JPIA 116,644.28 MEDICAL & DENTAL PREMIUM - DECEMBER 2017 70973 11/28/2017 Aljon Graphics, Inc 179.13 MANUAL PURCHASE ORDER FORMS 70974 11/28/2017 Alternative Hose Inc.134.22 SHOP EQUIPMENT 70959 11/28/2017 ANUJ SAIGAL 96.26 CUSTOMER REFUND 70975 11/28/2017 Applied Best Practices LLC 59.00 PROFESSIONAL SERVICES - DISCLOSURE SERVICES 70976 11/28/2017 Aqua-Metric Sales Co.2,000.00 SUPPORT - AUTO READ SOFTWARE 70977 11/28/2017 Aquatic Inspections, Inc.9,000.00 HIGHLAND RESERVOIR INSPECTION 70978 11/28/2017 Aramark 409.94 UNIFORM SERVICE 70979 11/28/2017 AT & T - Calnet3 856.24 ATT CALNET3 70980 11/28/2017 Autoscribe Corporation 1,202.75 PAYMENT VISION GATEWAY 70981 11/28/2017 BrightView Tree Care Services Inc.4,575.00 LANDSCAPE AND TREE SERVICE AT MULTIPLE LOCATIONS 70982 11/28/2017 CalCard US Bank 4,239.42 CREDIT CARD TRANSACTIONS - OCTOBER & NOVEMBER 2017 70983 11/28/2017 California United Bank 37,773.60 J10-11B - FAIRMONT PUMP STATION UPGRADE - RETENTION #11 70984 11/28/2017 CDW Government, Inc 9,393.64 VMWARE LICENSE RENEWAL 70985 11/28/2017 Chambers Group Inc.2,245.57 PROFESSIONAL SERVICES - HIDDEN HILLS CEQA 70960 11/28/2017 CINTHIA BURGE 37.57 CUSTOMER REFUND 70986 11/28/2017 City Of Placentia 5,001.98 SEWER FEES - OCTOBER 2017 70987 11/28/2017 Coastline Equipment 129.09 VEHICLE MAINTENANCE - UNIT #139 & #145 70988 11/28/2017 CPR1 LLC 660.23 ANNUAL AED TOTAL SOLUTION 70989 11/28/2017 Culligan of Santa Ana 1,749.31 EQUIPMENT PE SOFTENER 70958 11/28/2017 DALE YEAGER 63.73 CUSTOMER REFUND 70991 11/28/2017 Dion & Sons, Inc.5,094.66 ENGINE MAINTENANCE - OIL 70992 11/28/2017 Eisel Enterprises, Inc.765.03 METER BOX, LID AND COVERS 70993 11/28/2017 Employee Relations, Inc.139.10 PRE-EMPLOYMENT BACKGROUND CHECK 70994 11/28/2017 Employment Development Department 388.78 UNEMPLOYMENT INSURANCE 70995 11/28/2017 Enkay Engineering & Equipment Inc 900.00 TRANSIT PIPE DISPOSAL 70996 11/28/2017 Enthalpy Analytical, Inc.2,024.30 WATER QUALITY LAB TESTING 70998 11/28/2017 EyeMed 1,403.93 EYEMED - NOVEMBER 2017 70997 11/28/2017 Fairway Ford Sales, Inc.32.76 VEHICLE MAINTENANCE - UNIT #186 70999 11/28/2017 Fieldman Rolapp & Associates 4,824.29 PROFESSIONAL SERVICES - RESERVE POLICY 71000 11/28/2017 Flex Advantage 117.00 FLEX ADVANTAGE - 26 PARTICIPANTS - OCTOBER 2017 71001 11/28/2017 Francisco R. Quintero 225.00 CERTIFICATE REIMBURSEMENT - WATER DISTRIBUTION OPERATOR 71002 11/28/2017 Fuller Truck Accessories 2,186.70 VEHICLE EQUIPMENT - CROSS BOX UNITS - #216, 217 &218 71003 11/28/2017 Fullerton Paint & Flooring 178.04 CLEANING/PAINTING SUPPLIES 70963 11/28/2017 GENERAL NUTRITION CORP 39.43 CUSTOMER REFUND 71004 11/28/2017 George Chevrolet 82,165.86 2018 SILVERADO TRUCKS - UNITS #216, #217 & #218 71005 11/28/2017 Graybar Electric Co 1,016.66 PLC HARDWARE 71006 11/28/2017 Haaker Equipment Co.2,041.08 VEHICLE MAINTENANCE - UNIT #197 71007 11/28/2017 Harrington Industrial 464.80 J2017-35 - RICHFIELD CHLORINATION SYSTEM - 3" VALVE BALL 71008 11/28/2017 Hi-Tech E V S, Inc./Crimson Fire 226.85 EMERGENCY EQUIPMENT SUPPLIES 71009 11/28/2017 Infosend Inc.2,289.43 POSTAGE & PRINTING FEE 71012 11/28/2017 J & S Construction 2,500.00 CONCRETE REPAIR 71010 11/28/2017 Jackson's Auto Supply - Napa 302.90 VEHICLE MAINTENANCE - UNIT #168 & #175 71011 11/28/2017 John Decriscio 27.00 TRAVEL EXPENSE - CA/NV AWWA CONFERENCE 70971 11/28/2017 JONES IMPERIAL 2 LLC 123.89 CUSTOMER REFUND 70965 11/28/2017 JS ALLIANCE CORP 89.08 CUSTOMER REFUND 70967 11/28/2017 JULIET ANEKWE 204.57 CUSTOMER REFUND 71013 11/28/2017 Ken Mendum 1,183.60 TRAVEL EXPENSE - CA/NV AWWA CONFERENCE 71014 11/28/2017 Kidman Law 13,274.25 LEGAL SERVICES 70964 11/28/2017 LAINA HILLIGER 104.60 CUSTOMER REFUND 71015 11/28/2017 Lawson Products Inc 138.06 MECHANIC SHOP SUPPLIES 71016 11/28/2017 Liebert Cassidy Whitmore 6,963.00 LEGAL SERVICES 71018 11/28/2017 Managed Health Network 175.50 EAP NOVEMBER 2017 71019 11/28/2017 Mc Fadden-Dale Hardware 629.91 HARDWARE SUPPLIES 71020 11/28/2017 Mc Master-Carr Supply Co.168.20 SHOP SUPPLIES 71021 11/28/2017 Minuteman Press 161.62 BUSINESS CARDS - HERNANDES, S & YOUNG, K 71022 11/28/2017 Mobile Industrial Supply 8.00 WELDING SUPPLIES 71023 11/28/2017 Morton Salt, Inc.2,458.04 COARSE SALT W111517 11/15/2017 Municipal Water District 559,334.12 WATER DELIVERIES - SEPTEMBER 2017 71024 11/28/2017 Muzak LLC 89.56 CUSTOMER MESSAGE/PHONE SERVICE - NOVEMBER 2017 71026 11/28/2017 National Signal Inc.369.54 VEHICLE EQUIPMENT - UNIT #193 71025 11/28/2017 NatPay Online Business Solutions 24.00 DOCULIVERY - OCTOBER 2017 Yorba Linda Water District Check Register For Checks Dated: 11/15/2017 thru 11/28/2017 71027 11/28/2017 Nickey Kard Lock Inc 5,637.70 FUEL - 10/16-10/31/17 70961 11/28/2017 NOLI LEGASPI 112.33 CUSTOMER REFUND 71028 11/28/2017 North Bay Pensions, LLC 900.00 OPEB & CALPERS - EARLY PAY-OFF PROJECTIONS 71030 11/28/2017 O.C. Driveline 495.37 ENGINEERING MAINTENANCE - FAIRMONT #2 71029 11/28/2017 Occu-Med, Ltd.70.00 PRE-EMPLOYEE PHYSICALS 71031 11/28/2017 Omni Enterprise Inc.2,990.00 JANITORIA SERVICES - SEPTEMBER 2017 71032 11/28/2017 Orange County - Tax Collector 1,142.72 ENCROACHMENT PERMITS 71033 11/28/2017 Orange County Water District 243,459.50 IN-LIEU WATER - SEPTEMBER 2017 71034 11/28/2017 Orvac Electronics 210.53 CABLING SUPPLIES 70962 11/28/2017 OSSIMA HUSSRI 101.00 CUSTOMER REFUND 71040 11/28/2017 P.T.I. Sand & Gravel, Inc.341.83 ROAD MATERIAL - +30 FILL SAND 71035 11/28/2017 Pacific Hydrotech Corporation 717,698.40 J10-11B - FAIRMONT PUMP STATION UPGD - PROGRESS PAYMENT #11 71036 11/28/2017 Pacific Safety Center 280.00 ANNUAL MEMBERSHIP RENEWAL 71037 11/28/2017 Pascal & Ludwig Constructors, Inc 5,979.00 J14-23 - RICHFIELD ROAD PIPELINE - MCC MODIFICATION 71038 11/28/2017 Plumbing And Industrial Supply 116.37 PLUMBING SUPPLIES 71039 11/28/2017 Powerstride Battery 191.02 VEHICLE MAINTENANCE - UNIT #199 & #204 71041 11/28/2017 Quinn Company 354.43 ENGINE MAINTENANCE - WELL 18 71043 11/28/2017 R & S Overhead Doors of So-Cal, Inc 404.33 REPAIR - ROLLING STEEL DOOR 71046 11/28/2017 Rachel Padilla/Petty Cash 543.63 PETTY CASH - O101117, O103117, O110617 & Y110817 71042 11/28/2017 RKI Engineering, LLC 2,400.00 CONTROL SUPPORT SERVICE 71044 11/28/2017 Safety-Kleen Systems Inc 281.50 HAZARDOUS WASTE REMOVAL 71045 11/28/2017 Selman Chevrolet Company 560.30 VEHICLE EQUIPMENT - UNIT #218 70966 11/28/2017 SOHYUN KWON 44.93 CUSTOMER REFUND 71049 11/28/2017 St.Jude Hospital Yorba Linda 35.00 DOT PHYSICALS 71047 11/28/2017 Stater Bros. Markets 40.28 MEETING SUPPLIES 71048 11/28/2017 Steelclad, Inc.3,900.00 LANDSCAPE SERVICE 71050 11/28/2017 Support Product Services 7,384.00 HIGHLAND #1 - ENGINE MAINTENANCE 71051 11/28/2017 Switch Ltd 521.00 DATA HOSTING - COLOCATION 70969 11/28/2017 TECHNICO TV INC 904.60 CUSTOMER REFUND 71017 11/28/2017 The Lighthouse Inc.1,290.78 VEHICLE EQUIPMENT - UNIT #216 & #218 71052 11/28/2017 Time Warner Cable 179.24 MIRALOMA BASIC CABLE SERVICE 70968 11/28/2017 TOMAS ODELID 154.60 CUSTOMER REFUND 71055 11/28/2017 U S Bank 2,750.00 2012A BOND FEE - COVERAGE PERIOD 10/1/17-9/30/18 71053 11/28/2017 Underground Service Alert 336.70 DIGALERT - OCTOBER 2017 71056 11/28/2017 United Water Works, Inc.5,013.08 WAREHOUSE STOCK & VALVE REPAIR PARTS 71054 11/28/2017 UNUM Life Insurance Co. of America 3,812.44 LIFE,AD&D, STD & LTD - DECEMBER 2017 71057 11/28/2017 Westside Building Material 363.07 MISCELLANEOUS WAREHOUSE PARTS 70990 11/28/2017 White Nelson Diehl Evans LLP 2,370.00 FINAL BILLING - YEAR END AUDIT 71058 11/28/2017 YO Fire 3,697.47 WAREHOUSE STOCK & WATER SERVICE REPAIR PARTS 1,912,896.75 11/02/2017 PAYROLL #22 - EMPLOYEE DIRECT DEPOSIT 174,075.15 11/02/2017 PAYROLL #22 - PAYROLL TAX PAYMENT 50,465.55 11/02/2017 PAYROLL #22 - CALPERS EFT 36,662.24 6809 11/02/2017 COLONIAL LIFE & ACCIDENT 128.30 6810 11/02/2017 FLEX ADVANTAGE 1,914.72 6811 11/02/2017 LINCOLN FINANCIAL GROUP 3,850.14 6812 11/02/2017 NATIONWIDE RETIREMENT SOLUTIONS 8,359.79 6813 11/02/2017 KATHERINE VARGAS-LIMON 231.00 6814 11/02/2017 CALIFORNIA STATE DISBURSEMENT UNIT 366.92 6815 11/02/2017 CALIFORNIA STATE DISBURSEMENT UNIT 339.69 6816 11/02/2017 CALIFORNIA STATE DISBURSEMENT UNIT 404.30 276,797.80 11/16/2017 PAYROLL #23 - EMPLOYEE DIRECT DEPOSIT 199,839.67 11/16/2017 PAYROLL #23 - PAYROLL TAX PAYMENT 63,681.00 11/16/2017 PAYROLL #23 - CALPERS EFT 36,742.62 6817 11/16/2017 COLONIAL LIFE 128.30 6818 11/16/2017 FLEX ADVANTAGE 1,914.72 6819 11/16/2017 LINCOLN FINANCIAL GROUP 3,921.72 6820 11/16/2017 NATIONWIDE RETIREMENT SOLUTIONS 8,359.79 6821 11/16/2017 GARNISHMENT 231.00 6822 11/16/2017 CA STATE DISBURSEMENT UNIT 366.92 6823 11/16/2017 CA STATE DISBURSEMENT UNIT 339.69 6824 11/16/2017 CA STATE DISBURSEMENT UNIT 404.30 6825 11/16/2017 AMERICAN HERITAGE LIFE 1,543.13 6826 11/16/2017 MIDLAND LIFE INSURANCE 240.00 6827 11/16/2017 RELIANCE DI 47.54 6828 11/16/2017 AMERITAS 764.68 318,525.08 Payroll Checks #22 Payroll Checks #23 Vendor Name Amount Description Panera Bread 146.73 Lunch meeting - Fitch Ratings Review - (10) attendees Home Depot 29.03 SOD for Landscape Repair Swiss Cleaners 10.00 Repair of traffic signs Strobes N More 114.14 Vehicle maintenance - Unit #169 & #195 Home Depot 216.04 SOD for Landscape Repair ABPA So California Chapter 80.00 ABPA membership renewal - Maldonado, R ABPA So California Chapter 60.00 ABPA Annual conference State of California - Consumer Affairs 116.00 PE license renewal - Logsdon, D Amazon.com 109.77 Cell phone supplies Amazon.com 111.66 Cell phone supplies Home Depot 64.45 Hardware supplies State of California - Consumer Affairs 116.00 PE license renewal - Conklin, S Orchard Supply 11.82 Maintenance repair parts US Post Office 6.65 Mailing fee - Bond counsel Starbucks 31.90 Coffee - Well 21 - Ribbon cutting Porto's Bakery & Café 30.24 Baked goods - Well 21 - Ribbon cutting Home Depot 54.33 Tools and equipment McMaster Carr 138.17 Hardware supplies Stefano's Golden Baked Hams 220.00 Lunch - MWDOC interagency meeting Stater Brothers 15.17 Beverages for water use efficiency meeting State of California - Consumer Affairs 116.00 PE license renewal - Hong, B CSMFO 110.00 CSMFO annual membership dues - Lugo, D Farmer Boys 48.86 Lunch - GAAP 2017 Training update - (5) attendees Amazon.com 423.49 Vehicle equipment - Unit #217 & #218 Home Depot 91.38 Hardware supplies Light Bulbs, Etc.64.60 Ballast for light fixture Costco 111.68 General meeting supplies - Intergovermental Meetings The Home Depot 45.01 Supplies for sampling station Poke Sushi 28.06 Lunch meeting with Raftelis Financial Consulting - (2) attendees Smart & Final 13.98 Supplies - Employee Halloween event Alliance Safety Council 135.00 Certified Occupational Safety Specialist renewal - Smith, J Amazon.com 146.49 Vehicle equipment - Unit #218 Ontario International Airport 36.00 Travel expense - CA/NV AWWA Conference - Smith, J Atlantis 55.71 Travel expense - CA/NV AWWA Conference - Smith, J Barrio Café 24.01 Travel expense - CA/NV AWWA Conference - Smith, J Costco 27.44 Supplies - Employee Halloween event Smart & Final 61.68 Supplies - Employee Halloween event AWWA 117.50 (1) M68 Water Quality book Toucan Charlies 17.52 Travel Expense - CA/NV AWWA Conference - Decriscio, J Bistro NAPA 22.32 Travel Expense - CA/NV AWWA Conference - Decriscio, J ExecuCar 155.06 Travel Expense - CA/NV AWWA Conference - Decriscio, J Togo's 29.76 Business lunch - (3) attendees Big 5 Sporting Goods 86.19 Quick shade canopy - sewer crew CDW 389.58 IT hardware supplies IIMC 200.00 Membership renewal - Alexander, A 4,239.42 Cal Card Credit Card U S Bank ITEM NO. 7.6 AGENDA REPORT Meeting Date: November 28, 2017 To:Board of Directors From:Marc Marcantonio, General Manager Presented By:Delia Lugo, Finance Manager Dept:Finance Prepared By:Richard Cabadas, Accounting Assistant I Subject:Directors and General Manager Fees and Expenses Report for First Quarter of FY18 SUMMARY: Presented are the First Quarter Directors and General Manager Fees and Expenses Report for FY18. STAFF RECOMMENDATION: That the Board of Directors receive and file the Directors and General Manager Fees and Expenses Report for First Quarter of FY18. ATTACHMENTS: Name:Description:Type: BOD_GM_Fees_and_Expenses.pdf Backup Material Backup Material GL Trip Trip Trip Event/ Director Date Date Name Location Meals Lodging Travel Conf. Fee Misc.Total trip Total Hawkins 8/31/17 8/30/17 MWDOC Water Policy Forum Fountain Valley, CA -$ -$ -$ 80$ -$ 80$ 7/30/17 7/17/17 WACO Fountain Valley, CA -$ -$ 28$ -$ -$ 28$ -$ 108$ Miller 8/31/17 8/30/17 MWDOC Water Policy Forum Fountain Valley, CA -$ -$ -$ 80$ -$ 80$ 8/31/17 9/14/17 Yorba Linda Mayors Prayers Breakfast Yorba Linda, CA -$ -$ -$ 25$ -$ 25$ -$ 105$ Hall 8/31/17 09/24-25/17 CSDA Governance Workshop Monterey, CA 16$ 215$ 315$ -$ -$ 546$ 9/29/17 09/24-25/17 CSDA Governance Workshop Monterey, CA -$ -$ 47$ -$ -$ 47$ -$ 593$ Nederhood 7/30/17 7/12/17 LAFCO Orange, CA -$ -$ 9$ -$ -$ 9$ 7/30/17 7/1-31/17 MWDOC, LAFCO & OCWD Fountain Valley, CA -$ -$ 95$ -$ -$ 95$ 7/31/17 7/11/17 ACWA Region 8 program Los Angeles, CA -$ -$ -$ 50$ -$ 50$ 8/29/17 8/16-17/17 CA/NV AWWA Conference San Diego, CA 54$ -$ -$ -$ -$ 54$ 8/29/17 8/1-30/17 MWDOC, WACO & SWRCB Fountain Valley, CA -$ -$ 106$ -$ -$ 106$ 8/31/17 8/30/17 MWDOC Water Policy Forum Fountain Valley, CA -$ -$ -$ 80$ -$ 80$ 8/31/17 10/6/17 ACWA Region 9 & 10 Los Angeles, CA -$ -$ -$ 65$ -$ 65$ 8/31/17 9/14/17 Yorba Linda Mayors Prayers Breakfast Yorba Linda, CA -$ -$ -$ 25$ -$ 25$ 9/29/17 9/20/17 MWDOC Fountain Valley, CA -$ -$ 27$ -$ -$ 27$ 9/30/17 12/12-15/17 CRWUA Conference Las Vegas, NV -$ 146$ 182$ 475$ -$ 803$ -$ 1,313$ Jones 7/30/17 7/5,19/17 OCWD Fountain Valley, CA -$ -$ 46$ -$ -$ 46$ 8/29/17 8/16-17/17 Urban Water Institute San Diego, CA -$ -$ 120$ -$ -$ 120$ 8/29/17 8/1-30/17 OCWD & MWDOC Fountain Valley, CA -$ -$ 62$ -$ -$ 62$ 8/31/17 8/30/17 MWDOC Water Policy Forum Fountain Valley, CA -$ -$ -$ 80$ -$ 80$ 8/31/17 10/6/17 ACWA Region 9 & 10 Los Angeles, CA -$ -$ -$ 65$ -$ 65$ 8/31/17 9/17/17 ACWA Region 5 Tour Corona, CA -$ -$ -$ 30$ -$ 30$ 9/29/17 9/1-30/17 MWDOC, WACO, OCWD & ACWA - REGION 5 Multiple locations -$ -$ 220$ -$ -$ 220$ 9/30/17 12/12-15/17 CRWUA Conference Las Vegas, NV -$ 146$ 182$ 475$ -$ 803$ -$ 1,427$ Total Director's 70$ 507$ 1,439$ 1,530$ -$ 3,547$ 3,547$ General Manager Marcantonio 7/30/17 7/1-30/17 OCWD, WACO & MWDOC Multiple locations -$ -$ 85$ -$ -$ 85$ 8/29/17 8/16-18/17 UWI Conference San Diego, CA 95$ -$ 108$ -$ -$ 203$ 8/31/17 9/14/17 Yorba Linda Prayor Breakfast Yorba Linda, CA -$ -$ -$ 25$ -$ 25$ 9/1/17 8/1-31/17 MWDOC & Bus. Meetings Multiple locations -$ -$ 69$ -$ -$ 69$ 9/29/17 9/24-27/17 Bond Buyers Conference Carlsbad, CA 74$ 867$ 86$ 290$ -$ 1,317$ 9/29/17 9/13,21/17 OCWD & MWDOC Fountain Valley, CA -$ -$ 34$ -$ -$ 34$ 9/30/17 12/12-15/17 CRWUA Conference Las Vegas, NV -$ 146$ 182$ 475$ -$ 803$ 9/30/17 10/23-26/17 CA/NV AWWA Conference Reno, NV -$ -$ 168$ 495$ -$ 663$ Total GM 169$ 1,013$ 732$ 1,285$ -$ 3,200$ 3,200$ Total Director's & GM 240$ 1,520$ 2,171$ 2,815$ -$ 6,746$ 6,746$ DIRECTOR'S & GENERAL MANAGER'S RECAP OF TRAVEL/CONFERENCE EXPENSES FIRST QUARTER OF FY 18 JULY - SEPTEMBER 2017 HAWKINS MILLER HALL NEDERHOOD JONES SUB-TOTAL MARCANTONIO TOTAL DIRECTORS: REGULAR MEETINGS ATTENDED 5 6 6 6 6 29 COMMITTEE MEETINGS ATTENDED 1 2 0 3 0 6 SPECIAL MEETINGS ATTENDED 3 3 3 3 3 15 OTHER MEETINGS ATTENDED 2 7 4 11 13 37 TOTAL MEETINGS ATTENDED YTD 11 18 13 23 22 87 87 DIRECTOR FEES YTD $1,650 $2,700 $1,950 $3,450 $3,300 $13,050 $13,050 MEETING FEES BUDGET YTD $4,500 $4,500 $4,500 $4,500 $4,500 $22,500 $22,500 TRAVEL & CONFERENCES EXPENSES YTD $108 $105 $593 $1,313 $1,427 $3,546 $3,546 TRAVEL & CONFERENCE BUDGET YTD $1,929 $1,929 $1,929 $1,929 $1,929 $9,644 $9,644 TOTAL DIRECTORS FEES & EXPENSES YTD $1,758 $2,805 $2,543 $4,763 $4,727 $16,596 $16,596 TOTAL FEES & EXPENSES BUDGET YTD $6,429 $6,429 $6,429 $6,429 $6,429 $32,144 $32,144 GENERAL MANAGER EXPENSES YTD $3,200 $3,200 GENERAL MANAGER TRAVEL & CONFERENCE BUDGET YTD $6,581 $6,581 TOTAL FEES & EXPENSES YTD $1,758 $2,805 $2,543 $4,763 $4,727 $16,596 $3,200 $19,796 TOTAL FEES & EXPENSES BUDGET YTD $6,429 $6,429 $6,429 $6,429 $6,429 $32,144 $6,581 $38,725 YORBA LINDA WATER DISTRICT DIRECTORS AND GENERAL MANAGER FEES AND EXPENSES YEAR-TO-DATE REPORT FROM 07-01-2017 TO 09-30-2017 FY 18 ITEM NO. 8.1 AGENDA REPORT Meeting Date: November 28, 2017 To:Board of Directors From:Marc Marcantonio, General Manager Presented By:Brett R. Barbre, Asst General Manager Prepared By:Delia Lugo, Finance Manager Subject:Selection of Investment Strategy for Public Agencies Post-Employment Benefits Trust with Public Agency Retirement Services (PARS) STAFF RECOMMENDATION: That the Board of Directors determine an Asset Allocation Investment Strategy for future District contributions into the PARS Public Agencies Post-Employment Benefits Trust based on the discussion and presentation by the PARS representative. DISCUSSION: At the October 10, 2017 meeting, the Board approved Resolution No. 17-32 adopting the PARS Public Agencies Post-Employment Benefits Trust for the purpose of pre-funding the District's pension and OPEB obligations. In support of this action, staff developed the Pension Rate Stabilization Program (PSRB) and Other Post-Employment Benefits (OPEB) Funding Policy ("Policy") that addresses the methodology and process for funding current and future contractual obligations to provide pension and retiree medical benefits as set forth in the District's personnel rules and regulations. The Policy also establishes procedures that are formulated in compliance with the requirements of Section 115 of the Internal Revenue Code for a prudent and systematic investment program in support of the District's goal. As written in Section 7.0 "Asset Allocation Investment Strategy" of the Policy (Policy No. 3010-008), PARS provides flexibility to the District in the selection of the investment strategy for its funds in the Trust, giving the District control on target yield and level of risk on its investments. Within the Trust, the District has the option of pre-funding either or both of the Pension and OPEB accounts. In either case, the District has the ability to select one of five Investment Options that best suits its desired or expected return on its investments in the Trust. Each Investment Option allocates the assets in varying investment combinations of equity, fixed income, and cash. With each Investment Option, as the expected rate of return increases so does the assumed risk. The Asset Allocation Strategies and the corresponding Investment Options currently available are: Strategy Equity Fixed Income Cash Conservative 5% - 20% 60% - 95% 0% - 20% Moderately Conservative 20% - 40% 50% - 80% 0% - 20% Moderate 40% - 60% 40% - 60% 0% - 20% Balanced 50% - 70% 30% - 50% 0% - 20% Capital Appreciation 65% - 80% 10% - 30% 0% - 20% ATTACHMENTS: Name:Description:Type: YLWD_Investment_Selection.pdf Backup Material Backup Material Yorba Linda water district OPEB & Pension Investment Selection November 28, 2017 Contacts Jennifer Meza Supervisor,Client Services jmeza@pars.org (800) 540-6369 x141 Nik Weigand Client Services Coordinator nweigand@pars.org (800) 540-6369 x150 Keith Stribling Senior Portfolio Manager keith.stribling@highmarkcapital.com (949) 553-2591 Yorba linda water district ▎3 Pars Trust Team Corporate Experience 33 years (1984 –2017)154 years (1863 –2017)98 years (1919 –2017) Plans Under Administration 1,600+ plans,850+ public agencies, 400,000+ participants Dollars under Administration Over $2.6 billion Over $4 trillion Over $16.6 billion under management Trust Administrator & Consultant Trustee Investment Manager •Recordkeeping/sub-trust accounting •Actuarial coordination •Monitor contributions/process disbursements •Monitor plan compliance •Ongoing client liaison •Safeguard plan assets •Oversight protection •Plan fiduciary •Custodian of assets •Investment sub-advisor to U.S. Bank •Open architecture •Investment strategy and asset allocation development •Investment policy assistance Yorba linda water district ▎4 OPEB Actuarial Results Valuation Date: July 1, 2017 Prefunding Discount Rate: 6.50% Total OPEB Liability $3,595,567 Actuarial Value of Assets $1,322,152 Net OPEB Liability $2,273,415 Annual Determined Contribution (ADC)$257,706 Annual Benefit Payments (Pay-as-you-Go)$137,979 Rule of thumb:For every one percent increase in the discount rate, the unfunded liability is lowered by 10 -12%. Yorba linda water district ▎5 Pension Funding Status As of June 30, 2016, Yorba Linda Water District’s CalPERS pension plan is funded as*: Actuarial Liability $34.0M Assets $25.7M Unfunded Liability $8.3M Funded Ratio 75.6% Employer Contribution Amount (FY 17-18)$0.8M Projected Employer Contribution Amount (FY 24-25)$1.8M (109.8% ↑) * Data from Agency’s 2015-16 CalPERS actuarial valuation Yorba linda water district ▎6 Projected Employer Contributions (Misc.) Projected misc. contributions increase from $0.8M to $1.8M* (109.8% ↑) * Data from Agency’s 2015-16 CalPERS actuarial valuation 13.00% 15.00% 17.00% 19.00% 21.00% 23.00% 25.00% 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25% of PayrollTotal Contributions (%) Yorba linda water district ▎7 HighMARK CAPITAL MANAGEMENT Yorba linda water district ▎8 Establish: Determine your Strategic Asset Allocation Strategy Each Investment Objective reflects the associated PARS Diversified Portfolio as of 9/30/2017. A client ‘s portfolio construction may vary depending on the client's investment needs, objectives, and restrictions as well as the prevailing market conditions at the time of investment. Moderately Conservative Moderate Expected Standard Deviation (Volatility)Expected ReturnBalanced Capital Appreciation Efficient frontier of portfolios with varying ranges of equities and fixed income Conservative Equity Fixed Income Cash Conservative 5-20%60-95%0-20% Moderately Conservative 20-40%50-80%0-20% Moderate 40-60%40-60%0-20% Balanced 50-70%30-50%0-20% Capital Appreciation 65-85%10-30%0-20% 8 Construct Your Plan’s Portfolio: PARS Diversified Portfolios –Active v. Passive 9 Each Investment Objective reflects the associated PARS Diversified Portfolio as of 9/30/2017. A client ‘s portfolio construction may vary depending on the client's investment needs, objectives, and restrictions as well as the prevailing market conditions at the time of investment. Specific securities identified above do not represent all of the securities purchased, sold or recommended for advisory clients, and you should not assume that investments in the securities identified in this presentation were or will be profitable. HighMark Plus (Active)Index Plus (Passive) Equity Ticker Fund Name Ticker Fund Name Large Cap Blend SMGIX Columbia Contrarian Core Z IVV iShares Core S&P 500 Large Cap Blend VGIAX Vanguard Growth & Income Adm Large Cap Value DODGX Dodge & Cox Stock IVE iShares S&P 500 Value Large Cap Growth HNACX Harbor Capital Appreciation Ret IVW iShares S&P 500 Growth Large Cap Growth PRUFX T. Rowe Price Growth Stock I Mid Cap Blend IWR iShares Russell Mid-Cap IWR iShares Russell Mid-Cap Real Estate VNQ Nuveen Real Estate Securities I VNQ Vanguard REIT ETF Small Cap Value UBVLX Undiscovered Managers Behavioral Val L IWN iShares Russell 2000 Value Small Cap Growth PRJIX T. Rowe Price New Horizons I IWO iShares Russell 2000 Growth International NWHMX Nationwide Bailard Intl Eqs Instl International DODFX Dodge & Cox International Stock International MQGIX MFS International Growth I EFA iShares MSCI EAFE Emerging Markets HHHYX Hartford Schroders Emerging Mkts Eq I VWO Vanguard FTSE Emerging Markets ETF Fixed Income Ticker Fund Name Ticker Fund Name Short Term Bond VFSUX Vanguard Short-Term Investment-Grade Adm VFSUX Vanguard Short-Term Investment-Grade Adm Intermediate Term Bond PTTRX PIMCO Total Return Instl AGG iShares Core US Aggregate Bond Intermediate Term Bond PTRQX Prudential Total Return Bond Q Intermediate Term Bond NWJJX Nationwide HighMark Bond InSvc Floating Rate Note EIFHX Eaton Vance Floating-Rate & Hi Inc Inst BKLN PowerShares Senior Loan ETF Cash Characteristics Fund Manager Dependency Higher dependency on portfolio manager skill Tracks index, thus little-to-no dependency on portfolio manager skill Opportunity to Outperform Index Opportunity to outperform index Typically performs below index after fees Costs Higher expense ratios due to portfolio manager skill Lower expense ratio due to little dependency on portfolio manager skill or opportunity for outperformance City of Tustin ▎10 HighMark Capital Management Returns Equity (%)1 Year 3 Years 5 Years 10 Years Capital Appreciation 65-85%14.07%7.54%9.56%-- Balanced 50-70%12.25%6.63%8.12%5.22% Moderate 40-60%10.14%6.00%7.03%5.07% Moderately Conservative 20-40%6.51%4.67%5.14%4.77% Conservative 5-20%3.88%3.69%3.71%4.29% * Past performance does not guarantee future results RETURNS AS OF SEPTEMBER 30, 2017 11 INVESTMENT BIOGRAPHY J.Keith Stribling,CFA,Director and Senior Portfolio Manager Keith joined HighMark in 1995. He manages investment portfolios on behalf of high-net- worth clients, trusts, retirement plans, foundations, and non-profit organizations. Previously, he was co-manager and an analyst of the HighMark Value strategy since 1997. Keith began his career in the investment industry in 1985. Prior to joining HighMark, Keith worked in the derivatives arbitrage group at First Boston and in foreign currency arbitrage at Shatkin Trading. Keith received a BA from Stetson University and is a CFA charterholder. HighMark Plus (Active) Current Quarter* 1.60% Blended Benchmark** 1.30% Year To Date 5.50% Blended Benchmark 4.19% 1 Year 3.88% Blended Benchmark 3.04% 3 Year 3.69% Blended Benchmark 3.34% 5 Year 3.71% Blended Benchmark 3.36% 10 Year 4.29% Blended Benchmark 3.80% PARS DIVERSIFIED PORTFOLIOS CONSERVATIVE INVESTMENT OBJECTIVE ANNUAL RETURNS ASSET ALLOCATION — CONSERVATIVE PORTFOLIO Comprehensive Investment Solution HighMark® Capital Management, Inc.’s (HighMark) diversified investment portfolios are designed to balance return expectations with risk tolerance. Key features include: sophisticated asset allocation and optimization techniques, four layers of diversification (asset class, style, manager, and security), access to rigorously screened, top tier money managers, flexible investment options, and experienced investment management. Rigorous Manager Due Diligence Our manager review committee utilizes a rigorous screening process that searches for investment managers and styles that have not only produced above-average returns within acceptable risk parameters, but have the resources and commitment to continue to deliver these results. We have set high standards for our investment managers and funds. This is a highly specialized, time consuming approach dedicated to one goal: competitive and consistent performance. Flexible Investment Options In order to meet the unique needs of our clients, we offer access to flexible implementation strategies: HighMark Plus utilizes actively managed mutual funds while Index Plus utilizes index-based securities, including exchange-traded funds. Both investment options leverage HighMark’s active asset allocation approach. Risk Management The portfolio is constructed to control risk through four layers of diversification – asset classes (cash, fixed income, equity), investment styles (large cap, small cap, international, value, growth), managers and securities. Disciplined mutual fund selection and monitoring process helps to drive return potential while reducing portfolio risk. WHY THE PARS DIVERSIFIED CONSERVATIVE PORTFOLIO? Q3 2017 * Returns less than 1-year are not annualized. **Breakdown for Blended Benchmark: 7.5% S&P500, 1.5% Russell Mid Cap, 2.5% Russell 2000, 1% MSCI EM FREE, 2% MSCI EAFE, 52.25% BC US Agg, 25.75% ML 1-3 Yr US Corp/Gov’t, 2% US High Yield Master II, 0.5% Wilshire REIT, and 5% Citi 1 Mth T-Bill. Prior to October 2012, the blended benchmarks were 12% S&P 500; 1% Russell 2000, 2% MSCI EAFE, 40% ML 1-3 Year Corp./Govt, 40% BC Agg, 5% Citi 1 Mth T-Bill. Prior to April 2007, the blended benchmarks were 15% S&P 500, 40% ML 1-3Yr Corp/Gov, 40% BC Agg, and 5% Citi 1 Mth T-Bill. To provide a consistent level of inflation-protected income over the long-term. The major portion of the assets will be fixed income related. Equity securities are utilized to provide inflation protection. Conservative Moderately Conservative Moderate Balanced Capital Appreciation Efficient Frontier Risk (Standard Deviation) Reward (Rate of Return) Strategic Range Policy Tactical Equity 5 – 20% 15% 15% Fixed Income 60 – 95% 80% 79% Cash 0 – 20% 5% 6% ANNUALIZED TOTAL RETURNS (Gross of Investment Management Fees, but Net of Embedded Fund Fees) Index Plus (Passive) Current Quarter* 1.27% Blended Benchmark** 1.30% Year To Date 4.39% Blended Benchmark 4.19% 1 Year 2.71% Blended Benchmark 3.04% 3 Year 3.13% Blended Benchmark 3.34% 5 Year 3.30% Blended Benchmark 3.36% 10 Year 3.74% Blended Benchmark 3.80% PORTFOLIO FACTS HighMark Plus (Active) Inception Data 07/2004 No of Funds in Portfolio 19 Index Plus (Passive) Inception Data 07/2004 No of Funds in Portfolio 13 HighMark Plus (Active) 2008 -9.04% 2009 15.59% 2010 8.68% 2011 2.19% 2012 8.45% 2013 3.69% 2014 3.88% 2015 0.29% 2016 4.18% Index Plus (Passive) 2008 -6.70% 2009 10.49% 2010 7.67% 2011 3.70% 2012 6.22% 2013 3.40% 2014 4.32% 2015 0.06% 2016 3.75% HIGHMARK CAPITAL MANAGEMENT 350 California Street Suite 1600 San Francisco, CA 94104 800-582-4734 www.highmarkcapital.com ABOUT THE ADVISER HighMark® Capital Management, Inc. (HighMark) has over 90 years (including predecessor organizations) of institutional money management experience with more than $16.6 billion in assets under management. HighMark has a long term disciplined approach to money management and currently manages assets for a wide array of clients. ABOUT THE PORTFOLIO MANAGEMENT TEAM Andrew Brown, CFA® Senior Portfolio Manager Investment Experience: since 1994 HighMark Tenure: since 1997 Education: MBA, University of Southern California; BA, University of Southern California Salvatore “Tory” Milazzo III, CFA® Senior Portfolio Manager Investment Experience: since 2004 HighMark Tenure: since 2014 Education: BA, Colgate University J. Keith Stribling, CFA ® Senior Portfolio Manager Investment Experience: since 1985 HighMark Tenure: since 1995 Education: BA, Stetson University Christiane Tsuda Senior Portfolio Manager Investment Experience: since 1987 HighMark Tenure: since 2010 Education: BA, International Christian University, Tokyo Anne Wimmer, CFA® Senior Portfolio Manager Investment Experience: since 1987 HighMark Tenure: since 2007 Education: BA, University of California, Santa Barbara Randy Yurchak, CFA® Senior Portfolio Manager Investment Experience: since 2002 HighMark Tenure: since 2017 Education: MBA, Arizona State University; BS, University of Washington Asset Allocation Committee Number of Members: 16 Average Years of Experience: 26 Average Tenure (Years): 13 Manager Review Group Number of Members: 7 Average Years of Experience: 20 Average Tenure (Years): 7 The performance records shown represent size-weighted composites of tax exempt accounts that meet the following criteria: Composites are managed by HighMark’s HighMark Capital Advisors (HCA) with full investment authority according to the PARS Conservative active and passive objectives and do not have equity concentration of 25% or more in one common stock security. The adviser to the PARS portfolios is US Bank, and HighMark serves as sub-adviser to US Bank to manage these portfolios. US Bank may charge clients as much as 0.60% annual management fee based on a sliding scale. As of September 30, 2017, the blended rate is 0.58%. US Bank pays HighMark 60% of the annual management fee for assets sub-advised by HighMark under its sub-advisory agreement with US Bank. The 36 basis points paid to HighMark, as well as other expenses that may be incurred in the management of the portfolio, will reduce the portfolio returns. Assuming an investment for five years, a 5% annual total return, and an annual sub-advisory fee rate of 0.36% deducted from the assets at market at the end of each year, a 10 million initial value would grow to $12.54 million after fees (Net-of-Fees) and $12.76 million before fees (Gross-of-Fees). Additional information regarding the firm’s policies and procedures for calculating and reporting performance results is available upon request. In Q1 2010, the PARS Composite definition was changed from $750,000 minimum to no minimum. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxes but do reflect the deduction of trading expenses. Returns are calculated based on trade-date accounting. Blended benchmarks represent HighMark’s strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Free Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The US High Yield Master II Index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg Barclays Capital (BC) U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The Merrill Lynch (ML) 1-3 Year U.S. Corporate & Government Index tracks the bond performance of The ML U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years. The unmanaged Citigroup 1-Month Treasury Bill Index tracks the yield of the 1-month U.S. Treasury Bill. HighMark Capital Management, Inc. (HighMark), an SEC-registered investment adviser, is a wholly owned subsidiary of MUFG Union Bank, N.A. (MUB). HighMark manages institutional separate account portfolios for a wide variety of for-profit and nonprofit organizations, public agencies, public and private retirement plans, and personal trusts of all sizes. It may also serve as sub-adviser for mutual funds, common trust funds, and collective investment funds. MUB, a subsidiary of MUFG Americas Holdings Corporation, provides certain services to HighMark and is compensated for these services. Past performance does not guarantee future results. Individual account management and construction will vary depending on each client’s investment needs and objectives. Investments employing HighMark strategies are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by the Bank or any Bank affiliate, and MAY lose value, including possible loss of principal. 350 California Street Suite 1600 San Francisco, CA 94104 800.582.4734 www.highmarkcapital.com HOLDINGS STYLE Small Cap 2.5% Interm-Term Bond 64.7% Floating Rate Note 2.0% Short-Term Bond 12.4% Large Cap Core 4.2% Large Cap Growth 1.2% Mid Cap 1.1% Intl Stocks 3.5% Cash 5.9% Large Cap Value 1.8% Real Estate 0.7% HighMark Plus (Active) Index Plus (Passive) Columbia Contrarian Core Z iShares Core S&P 500 ETF Vanguard Growth & Income Adm iShares S&P 500/Value Dodge & Cox Stock Fund iShares S&P 500/Growth Harbor Capital Appreciation iShares Russell Mid-Cap ETF T. Rowe Price Growth Stock Vanguard REIT ETF iShares Russell Mid-Cap ETF iShares Russell 2000 Value Vanguard REIT ETF iShares Russell 2000 Growth Undiscovered Managers Behavioral Value iShares MSCI EAFE T. Rowe Price New Horizons Vanguard FTSE Emerging Markets ETF Nationwide Bailard International Equities Vanguard Short-Term Invest-Grade Adm Dodge & Cox International Stock iShares Core U.S. Aggregate MFS International Growth I PowerShares Senior Loan Hartford Schroders Emerging Markets Eq First American Government Obligations Z Vanguard Short-Term Invest-Grade Adm PIMCO Total Return Prudential Total Return Nationwide HighMark Bond Eaton Vance Floating Rate & High Income First American Government Obligations Z Holdings are subject to change at the discretion of the investment manager. PARS DIVERSIFIED PORTFOLIOS MODERATELY CONSERVATIVE INVESTMENT OBJECTIVE ANNUAL RETURNS ASSET ALLOCATION — MODERATELY CONSERVATIVE PORTFOLIO Comprehensive Investment Solution HighMark® Capital Management, Inc.’s (HighMark) diversified investment portfolios are designed to balance return expectations with risk tolerance. Key features include: sophisticated asset allocation and optimization techniques, four layers of diversification (asset class, style, manager, and security), access to rigorously screened, top tier money managers, flexible investment options, and experienced investment management. Rigorous Manager Due Diligence Our manager review committee utilizes a rigorous screening process that searches for investment managers and styles that have not only produced above-average returns within acceptable risk parameters, but have the resources and commitment to continue to deliver these results. We have set high standards for our investment managers and funds. This is a highly specialized, time consuming approach dedicated to one goal: competitive and consistent performance. Flexible Investment Options In order to meet the unique needs of our clients, we offer access to flexible implementation strategies: HighMark Plus utilizes actively managed mutual funds while Index Plus utilizes index-based securities, including exchange-traded funds. Both investment options leverage HighMark’s active asset allocation approach. Risk Management The portfolio is constructed to control risk through four layers of diversification – asset classes (cash, fixed income, equity), investment styles (large cap, small cap, international, value, growth), managers and securities. Disciplined mutual fund selection and monitoring process helps to drive return potential while reducing portfolio risk. WHY THE PARS DIVERSIFIED MODERATELY CONSERVATIVE PORTFOLIO? Q3 2017 * Returns less than 1-year are not annualized. **Breakdown for Blended Benchmark: 15.5% S&P500, 3% Russell Mid Cap, 4.5% Russell 2000, 2% MSCI EM FREE, 4% MSCI EAFE, 49.25% BC US Agg, 14% ML 1-3 Yr US Corp/Gov’t, 1.75% US High Yield Master II, 1% Wilshire REIT, and 5% Citi 1 Mth T-Bill. Prior to October 2012, the blended benchmarks were 25% S&P 500; 1.5% Russell 2000, 3.5% MSCI EAFE, 25% ML 1-3 Year Corp./Govt, 40% BC Agg, 5% Citi 1 Mth T-Bill. Prior to April 2007, the blended benchmarks were 30% S&P 500, 25% ML 1-3Yr Corp/Gov, 40% BC Agg, and 5% Citi 1 Mth T-Bill. To provide current income and moderate capital appreciation. The major portion of the assets is committed to income- producing securities. Market fluctuations should be expected. Strategic Range Policy Tactical Equity 20 - 40% 30% 30% Fixed Income 50 - 80% 65% 67% Cash 0 - 20% 5% 3% ANNUALIZED TOTAL RETURNS (Gross of Investment Management Fees, but Net of Embedded Fund Fees) HighMark Plus (Active) Current Quarter* 2.30% Blended Benchmark** 1.94% Year To Date 7.48% Blended Benchmark 6.13% 1 Year 6.51% Blended Benchmark 5.58% 3 Year 4.67% Blended Benchmark 4.61% 5 Year 5.14% Blended Benchmark 5.06% 10 Year 4.77% Blended Benchmark 4.52% Index Plus (Passive) Current Quarter* 1.90% Blended Benchmark** 1.94% Year To Date 6.14% Blended Benchmark 6.13% 1 Year 5.23% Blended Benchmark 5.58% 3 Year 4.36% Blended Benchmark 4.61% 5 Year 4.86% Blended Benchmark 5.06% 10 Year 4.23% Blended Benchmark 4.52% PORTFOLIO FACTS HighMark Plus (Active) Inception Data 08/2004 No of Funds in Portfolio 19 Index Plus (Passive) Inception Data 05/2005 No of Funds in Portfolio 13 Efficient Frontier Risk (Standard Deviation) Reward (Rate of Return) Conservative Moderately Conservative Moderate Capital Appreciation Balanced HighMark Plus (Active) 2008 -15.37% 2009 18.71% 2010 10.46% 2011 1.75% 2012 10.88% 2013 7.30% 2014 4.41% 2015 0.32% 2016 4.93% Index Plus (Passive) 2008 -12.40% 2009 11.92% 2010 9.72% 2011 3.24% 2012 8.24% 2013 6.78% 2014 5.40% 2015 -0.18% 2016 5.42% HIGHMARK CAPITAL MANAGEMENT 350 California Street Suite 1600 San Francisco, CA 94104 800-582-4734 www.highmarkcapital.com ABOUT THE ADVISER HighMark® Capital Management, Inc. (HighMark) has over 90 years (including predecessor organizations) of institutional money management experience with more than $16.6 billion in assets under management. HighMark has a long term disciplined approach to money management and currently manages assets for a wide array of clients. ABOUT THE PORTFOLIO MANAGEMENT TEAM Andrew Brown, CFA® Senior Portfolio Manager Investment Experience: since 1994 HighMark Tenure: since 1997 Education: MBA, University of Southern California; BA, University of Southern California Salvatore “Tory” Milazzo III, CFA® Senior Portfolio Manager Investment Experience: since 2004 HighMark Tenure: since 2014 Education: BA, Colgate University J. Keith Stribling, CFA® Senior Portfolio Manager Investment Experience: since 1985 HighMark Tenure: since 1995 Education: BA, Stetson University Christiane Tsuda Senior Portfolio Manager Investment Experience: since 1987 HighMark Tenure: since 2010 Education: BA, International Christian University, Tokyo Anne Wimmer, CFA® Senior Portfolio Manager Investment Experience: since 1987 HighMark Tenure: since 2007 Education: BA, University of California, Santa Barbara Randy Yurchak, CFA® Senior Portfolio Manager Investment Experience: since 2002 HighMark Tenure: since 2017 Education: MBA, Arizona State University; BS, University of Washington Asset Allocation Committee Number of Members: 16 Average Years of Experience: 26 Average Tenure (Years): 13 Manager Review Group Number of Members: 7 Average Years of Experience: 20 Average Tenure (Years): 7 The performance records shown represent size-weighted composites of tax exempt accounts that meet the following criteria: Composites are managed by HighMark’s HighMark Capital Advisors (HCA) with full investment authority according to the PARS Moderately Conservative active and passive objectives and do not have equity concentration of 25% or more in one common stock security. The adviser to the PARS portfolios is US Bank, and HighMark serves as sub-adviser to US Bank to manage these portfolios. US Bank may charge clients as much as 0.60% annual management fee based on a sliding scale. As of September 30, 2017, the blended rate is 0.58%. US Bank pays HighMark 60% of the annual management fee for assets sub-advised by HighMark under its sub-advisory agreement with US Bank. The 36 basis points paid to HighMark, as well as other expenses that may be incurred in the management of the portfolio, will reduce the portfolio returns. Assuming an investment for five years, a 5% annual total return, and an annual sub-advisory fee rate of 0.36% deducted from the assets at market at the end of each year, a 10 million initial value would grow to $12.54 million after fees (Net-of-Fees) and $12.76 million before fees (Gross-of-Fees). Additional information regarding the firm’s policies and procedures for calculating and reporting performance results is available upon request. In Q1 2010, the PARS Composite definition was changed from $750,000 minimum to no minimum. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxes but do reflect the deduction of trading expenses. Returns are calculated based on trade-date accounting. Blended benchmarks represent HighMark’s strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Free Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The US High Yield Master II Index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg Barclays Capital (BC) U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The Merrill Lynch (ML) 1-3 Year U.S. Corporate & Government Index tracks the bond performance of The ML U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years. The unmanaged Citigroup 1-Month Treasury Bill Index tracks the yield of the 1-month U.S. Treasury Bill. HighMark Capital Management, Inc. (HighMark), an SEC-registered investment adviser, is a wholly owned subsidiary of MUFG Union Bank, N.A. (MUB). HighMark manages institutional separate account portfolios for a wide variety of for-profit and nonprofit organizations, public agencies, public and private retirement plans, and personal trusts of all sizes. It may also serve as sub-adviser for mutual funds, common trust funds, and collective investment funds. MUB, a subsidiary of MUFG Americas Holdings Corporation, provides certain services to HighMark and is compensated for these services. Past performance does not guarantee future results. Individual account management and construction will vary depending on each client’s investment needs and objectives. Investments employing HighMark strategies are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by the Bank or any Bank affiliate, and MAY lose value, including possible loss of principal. 350 California Street Suite 1600 San Francisco, CA 94104 800.582.4734 www.highmarkcapital.com HOLDINGS STYLE Small Cap 4.5% Interm-Term Bond 54.6% Floating Rate Note 1.8% Short-Term Bond 10.2% Large Cap Core 8.7% Large Cap Growth 2.5% Mid Cap 2.2% Intl Stocks 7.2% Cash 3.5% Large Cap Value 3.5% Real Estate 1.4% HighMark Plus (Active) Index Plus (Passive) Columbia Contrarian Core Z iShares Core S&P 500 ETF Vanguard Growth & Income Adm iShares S&P 500/Value Dodge & Cox Stock Fund iShares S&P 500/Growth Harbor Capital Appreciation iShares Russell Mid-Cap ETF T. Rowe Price Growth Stock Vanguard REIT ETF iShares Russell Mid-Cap ETF iShares Russell 2000 Value Vanguard REIT ETF iShares Russell 2000 Growth Undiscovered Managers Behavioral Value iShares MSCI EAFE T. Rowe Price New Horizons Vanguard FTSE Emerging Markets ETF Nationwide Bailard International Equities Vanguard Short-Term Invest-Grade Adm Dodge & Cox International Stock iShares Core U.S. Aggregate MFS International Growth I PowerShares Senior Loan Hartford Schroders Emerging Markets Eq First American Government Obligations Z Vanguard Short-Term Invest-Grade Adm PIMCO Total Return Prudential Total Return Nationwide HighMark Bond Eaton Vance Floating Rate & High Income First American Government Obligations Z Holdings are subject to change at the discretion of the investment manager. PARS DIVERSIFIED PORTFOLIOS MODERATE INVESTMENT OBJECTIVE ANNUAL RETURNS ASSET ALLOCATION — MODERATE PORTFOLIO Comprehensive Investment Solution HighMark® Capital Management, Inc.’s (HighMark) diversified investment portfolios are designed to balance return expectations with risk tolerance. Key features include: sophisticated asset allocation and optimization techniques, four layers of diversification (asset class, style, manager, and security), access to rigorously screened, top tier money managers, flexible investment options, and experienced investment management. Rigorous Manager Due Diligence Our manager review committee utilizes a rigorous screening process that searches for investment managers and styles that have not only produced above-average returns within acceptable risk parameters, but have the resources and commitment to continue to deliver these results. We have set high standards for our investment managers and funds. This is a highly specialized, time consuming approach dedicated to one goal: competitive and consistent performance. Flexible Investment Options In order to meet the unique needs of our clients, we offer access to flexible implementation strategies: HighMark Plus utilizes actively managed mutual funds while Index Plus utilizes index-based securities, including exchange-traded funds. Both investment options leverage HighMark’s active asset allocation approach. Risk Management The portfolio is constructed to control risk through four layers of diversification – asset classes (cash, fixed income, equity), investment styles (large cap, small cap, international, value, growth), managers and securities. Disciplined mutual fund selection and monitoring process helps to drive return potential while reducing portfolio risk. WHY THE PARS DIVERSIFIED MODERATE PORTFOLIO? Q3 2017 * Returns less than 1-year are not annualized. **Breakdown for Blended Benchmark: 26.5% S&P500, 5% Russell Mid Cap, 7.5% Russell 2000, 3.25% MSCI EM FREE, 6% MSCI EAFE, 33.50% BC US Agg, 10% ML 1-3 Yr US Corp/Gov’t, 1.50% US High Yield Master II, 1.75% Wilshire REIT, and 5% Citi 1 Mth T-Bill. Prior to October 2012, the blended benchmarks were 43% S&P 500; 2% Russell 2000, 5% MSCI EAFE, 15% ML 1-3 Year Corp./Govt, 30% BC Agg, 5% Citi 1 Mth T-Bill. Prior to April 2007, the blended benchmarks were 50% S&P 500, 15% ML 1-3Yr Corp/Gov, 30% BC Agg, and 5% Citi 1 Mth T-Bill. To provide growth of principal and income. It is expected that dividend and interest income will comprise a significant portion of total return, although growth through capital appreciation is equally important. Strategic Range Policy Tactical Equity 40 - 60% 50% 50% Fixed Income 40 - 60% 45% 47% Cash 0 - 20% 5% 3% ANNUALIZED TOTAL RETURNS (Gross of Investment Management Fees, but Net of Embedded Fund Fees) HighMark Plus (Active) Current Quarter* 3.07% Blended Benchmark** 2.73% Year To Date 9.92% Blended Benchmark 8.45% 1 Year 10.14% Blended Benchmark 9.15% 3 Year 6.00% Blended Benchmark 6.15% 5 Year 7.03% Blended Benchmark 7.27% 10 Year 5.07% Blended Benchmark 5.21% Index Plus (Passive) Current Quarter* 2.73% Blended Benchmark** 2.73% Year To Date 8.48% Blended Benchmark 8.45% 1 Year 8.95% Blended Benchmark 9.15% 3 Year 5.72% Blended Benchmark 6.15% 5 Year 6.88% Blended Benchmark 7.27% 10 Year 5.08% Blended Benchmark 5.21% PORTFOLIO FACTS HighMark Plus (Active) Inception Data 10/2004 No of Funds in Portfolio 19 Index Plus (Passive) Inception Data 05/2006 No of Funds in Portfolio 13 Efficient Frontier Risk (Standard Deviation) Reward (Rate of Return) Conservative Moderately Conservative Moderate Capital Appreciation Balanced HighMark Plus (Active) 2008 -22.88% 2009 21.47% 2010 12.42% 2011 0.55% 2012 12.25% 2013 13.06% 2014 4.84% 2015 0.14% 2016 6.44% Index Plus (Passive) 2008 -18.14% 2009 16.05% 2010 11.77% 2011 2.29% 2012 10.91% 2013 12.79% 2014 5.72% 2015 -0.52% 2016 7.23% HIGHMARK CAPITAL MANAGEMENT 350 California Street Suite 1600 San Francisco, CA 94104 800-582-4734 www.highmarkcapital.com ABOUT THE ADVISER HighMark® Capital Management, Inc. (HighMark) has over 90 years (including predecessor organizations) of institutional money management experience with more than $16.6 billion in assets under management. HighMark has a long term disciplined approach to money management and currently manages assets for a wide array of clients. ABOUT THE PORTFOLIO MANAGEMENT TEAM Andrew Brown, CFA® Senior Portfolio Manager Investment Experience: since 1994 HighMark Tenure: since 1997 Education: MBA, University of Southern California; BA, University of Southern California Salvatore “Tory” Milazzo III, CFA® Senior Portfolio Manager Investment Experience: since 2004 HighMark Tenure: since 2014 Education: BA, Colgate University J. Keith Stribling, CFA® Senior Portfolio Manager Investment Experience: since 1985 HighMark Tenure: since 1995 Education: BA, Stetson University Christiane Tsuda Senior Portfolio Manager Investment Experience: since 1987 HighMark Tenure: since 2010 Education: BA, International Christian University, Tokyo Anne Wimmer, CFA® Senior Portfolio Manager Investment Experience: since 1987 HighMark Tenure: since 2007 Education: BA, University of California, Santa Barbara Randy Yurchak, CFA® Senior Portfolio Manager Investment Experience: since 2002 HighMark Tenure: since 2017 Education: MBA, Arizona State University; BS, University of Washington Asset Allocation Committee Number of Members: 16 Average Years of Experience: 26 Average Tenure (Years): 13 Manager Review Group Number of Members: 7 Average Years of Experience: 20 Average Tenure (Years): 7 The performance records shown represent size-weighted composites of tax exempt accounts that meet the following criteria: Composites are managed by HighMark’s HighMark Capital Advisors (HCA) with full investment authority according to the PARS Moderate active and passive objectives and do not have equity concentration of 25% or more in one common stock security. The adviser to the PARS portfolios is US Bank, and HighMark serves as sub-adviser to US Bank to manage these portfolios. US Bank may charge clients as much as 0.60% annual management fee based on a sliding scale. As of September 30, 2017, the blended rate is 0.58%. US Bank pays HighMark 60% of the annual management fee for assets sub-advised by HighMark under its sub-advisory agreement with US Bank. The 36 basis points paid to HighMark, as well as other expenses that may be incurred in the management of the portfolio, will reduce the portfolio returns. Assuming an investment for five years, a 5% annual total return, and an annual sub-advisory fee rate of 0.36% deducted from the assets at market at the end of each year, a 10 million initial value would grow to $12.54 million after fees (Net-of-Fees) and $12.76 million before fees (Gross-of-Fees). Additional information regarding the firm’s policies and procedures for calculating and reporting performance results is available upon request. In Q1 2010, the PARS Composite definition was changed from $750,000 minimum to no minimum. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxes but do reflect the deduction of trading expenses. Returns are calculated based on trade-date accounting. Blended benchmarks represent HighMark’s strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Free Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The US High Yield Master II Index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg Barclays Capital (BC) U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The Merrill Lynch (ML) 1-3 Year U.S. Corporate & Government Index tracks the bond performance of The ML U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years. The unmanaged Citigroup 1-Month Treasury Bill Index tracks the yield of the 1-month U.S. Treasury Bill. HighMark Capital Management, Inc. (HighMark), an SEC-registered investment adviser, is a wholly owned subsidiary of MUFG Union Bank, N.A. (MUB). HighMark manages institutional separate account portfolios for a wide variety of for-profit and nonprofit organizations, public agencies, public and private retirement plans, and personal trusts of all sizes. It may also serve as sub-adviser for mutual funds, common trust funds, and collective investment funds. MUB, a subsidiary of MUFG Americas Holdings Corporation, provides certain services to HighMark and is compensated for these services. Past performance does not guarantee future results. Individual account management and construction will vary depending on each client’s investment needs and objectives. Investments employing HighMark strategies are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by the Bank or any Bank affiliate, and MAY lose value, including possible loss of principal. 350 California Street Suite 1600 San Francisco, CA 94104 800.582.4734 www.highmarkcapital.com HOLDINGS STYLE Small Cap 7.5% Interm-Term Bond 39.1% Floating Rate Note 1.5% Short-Term Bond 6.3% Large Cap Core 14.7% Large Cap Growth 4.3% Mid Cap 3.6% Intl Stocks 12.5% Cash 3.1% Large Cap Value 6.0% Real Estate 1.5% HighMark Plus (Active) Index Plus (Passive) Columbia Contrarian Core Z iShares Core S&P 500 ETF Vanguard Growth & Income Adm iShares S&P 500/Value Dodge & Cox Stock Fund iShares S&P 500/Growth Harbor Capital Appreciation iShares Russell Mid-Cap ETF T. Rowe Price Growth Stock Vanguard REIT ETF iShares Russell Mid-Cap ETF iShares Russell 2000 Value Vanguard REIT ETF iShares Russell 2000 Growth Undiscovered Managers Behavioral Value iShares MSCI EAFE T. Rowe Price New Horizons Vanguard FTSE Emerging Markets ETF Nationwide Bailard International Equities Vanguard Short-Term Invest-Grade Adm Dodge & Cox International Stock iShares Core U.S. Aggregate MFS International Growth I PowerShares Senior Loan Hartford Schroders Emerging Markets Eq First American Government Obligations Z Vanguard Short-Term Invest-Grade Adm PIMCO Total Return Prudential Total Return Nationwide HighMark Bond Eaton Vance Floating Rate & High Income First American Government Obligations Z Holdings are subject to change at the discretion of the investment manager. PARS DIVERSIFIED PORTFOLIOS BALANCED INVESTMENT OBJECTIVE ANNUAL RETURNS ASSET ALLOCATION — BALANCED PORTFOLIO Comprehensive Investment Solution HighMark® Capital Management, Inc.’s (HighMark) diversified investment portfolios are designed to balance return expectations with risk tolerance. Key features include: sophisticated asset allocation and optimization techniques, four layers of diversification (asset class, style, manager, and security), access to rigorously screened, top tier money managers, flexible investment options, and experienced investment management. Rigorous Manager Due Diligence Our manager review committee utilizes a rigorous screening process that searches for investment managers and styles that have not only produced above-average returns within acceptable risk parameters, but have the resources and commitment to continue to deliver these results. We have set high standards for our investment managers and funds. This is a highly specialized, time consuming approach dedicated to one goal: competitive and consistent performance. Flexible Investment Options In order to meet the unique needs of our clients, we offer access to flexible implementation strategies: HighMark Plus utilizes actively managed mutual funds while Index Plus utilizes index-based securities, including exchange-traded funds. Both investment options leverage HighMark’s active asset allocation approach. Risk Management The portfolio is constructed to control risk through four layers of diversification – asset classes (cash, fixed income, equity), investment styles (large cap, small cap, international, value, growth), managers and securities. Disciplined mutual fund selection and monitoring process helps to drive return potential while reducing portfolio risk. WHY THE PARS DIVERSIFIED BALANCED PORTFOLIO? Q3 2017 * Returns less than 1-year are not annualized. **Breakdown for Blended Benchmark: 32% S&P500, 6% Russell Mid Cap, 9% Russell 2000, 4% MSCI EM FREE, 7% MSCI EAFE, 27% BC US Agg, 6.75% ML 1-3 Yr US Corp/Gov’t, 1.25% US High Yield Master II, 2% Wilshire REIT, and 5% Citi 1 Mth T-Bill. Prior to October 2012, the blended benchmarks were 51% S&P 500; 3% Russell 2000, 6% MSCI EAFE, 5% ML 1-3 Year Corp./Govt, 30% BC Agg, 5% Citi 1 Mth T-Bill. Prior to April 2007, the blended benchmarks were 60% S&P 500, 5% ML 1-3Yr Corp/Gov, 30% BC Agg, and 5% Citi 1 Mth T-Bill. To provide growth of principal and income. While dividend and interest income are an important component of the objective’s total return, it is expected that capital appreciation will comprise a larger portion of the total return. Strategic Range Policy Tactical Equity 50 – 70% 60% 60% Fixed Income 30 – 50% 35% 37% Cash 0 – 20% 5% 3% ANNUALIZED TOTAL RETURNS (Gross of Investment Management Fees, but Net of Embedded Fund Fees) HighMark Plus (Active) Current Quarter* 3.62% Blended Benchmark** 3.15% Year To Date 11.57% Blended Benchmark 9.69% 1 Year 12.25% Blended Benchmark 10.99% 3 Year 6.63% Blended Benchmark 6.93% 5 Year 8.12% Blended Benchmark 8.37% 10 Year 5.22% Blended Benchmark 5.60% Index Plus (Passive) Current Quarter* 3.17% Blended Benchmark** 3.15% Year To Date 9.69% Blended Benchmark 9.69% 1 Year 10.87% Blended Benchmark 10.99% 3 Year 6.40% Blended Benchmark 6.93% 5 Year 7.91% Blended Benchmark 8.37% 10 Year 5.11% Blended Benchmark 5.60% PORTFOLIO FACTS HighMark Plus (Active) Inception Data 10/2006 No of Funds in Portfolio 19 Index Plus (Passive) Inception Data 10/2007 No of Funds in Portfolio 13 Efficient Frontier Risk (Standard Deviation) Reward (Rate of Return) Conservative Moderately Conservative Moderate Capital Appreciation Balanced HighMark Plus (Active) 2008 -25.72% 2009 21.36% 2010 14.11% 2011 -0.46% 2012 13.25% 2013 16.61% 2014 4.70% 2015 0.04% 2016 6.82% Index Plus (Passive) 2008 -23.22% 2009 17.62% 2010 12.76% 2011 1.60% 2012 11.93% 2013 15.63% 2014 6.08% 2015 -0.81% 2016 8.26% HIGHMARK CAPITAL MANAGEMENT 350 California Street Suite 1600 San Francisco, CA 94104 800-582-4734 www.highmarkcapital.com ABOUT THE ADVISER HighMark® Capital Management, Inc. (HighMark) has over 90 years (including predecessor organizations) of institutional money management experience with more than $16.6 billion in assets under management. HighMark has a long term disciplined approach to money management and currently manages assets for a wide array of clients. ABOUT THE PORTFOLIO MANAGEMENT TEAM Andrew Brown, CFA® Senior Portfolio Manager Investment Experience: since 1994 HighMark Tenure: since 1997 Education: MBA, University of Southern California; BA, University of Southern California Salvatore “Tory” Milazzo III, CFA® Senior Portfolio Manager Investment Experience: since 2004 HighMark Tenure: since 2014 Education: BA, Colgate University J. Keith Stribling, CFA® Senior Portfolio Manager Investment Experience: since 1985 HighMark Tenure: since 1995 Education: BA, Stetson University Christiane Tsuda Senior Portfolio Manager Investment Experience: since 1987 HighMark Tenure: since 2010 Education: BA, International Christian University, Tokyo Anne Wimmer, CFA® Senior Portfolio Manager Investment Experience: since 1987 HighMark Tenure: since 2007 Education: BA, University of California, Santa Barbara Randy Yurchak, CFA® Senior Portfolio Manager Investment Experience: since 2002 HighMark Tenure: since 2017 Education: MBA, Arizona State University; BS, University of Washington Asset Allocation Committee Number of Members: 16 Average Years of Experience: 26 Average Tenure (Years): 13 Manager Review Group Number of Members: 7 Average Years of Experience: 20 Average Tenure (Years): 7 The performance records shown represent size-weighted composites of tax exempt accounts that meet the following criteria: Composites are managed by HighMark’s HighMark Capital Advisors (HCA) with full investment authority according to the PARS Balanced active and passive objectives and do not have equity concentration of 25% or more in one common stock security. The composite name has been changed from PARS Balanced/Moderately Aggressive to PARS Balanced on 5/1/2013. The adviser to the PARS portfolios is US Bank, and HighMark serves as sub-adviser to US Bank to manage these portfolios. US Bank may charge clients as much as 0.60% annual management fee based on a sliding scale. As of September 30, 2017, the blended rate is 0.58%. US Bank pays HighMark 60% of the annual management fee for assets sub-advised by HighMark under its sub-advisory agreement with US Bank. The 36 basis points paid to HighMark, as well as other expenses that may be incurred in the management of the portfolio, will reduce the portfolio returns. Assuming an investment for five years, a 5% annual total return, and an annual sub-advisory fee rate of 0.36% deducted from the assets at market at the end of each year, a 10 million initial value would grow to $12.54 million after fees (Net-of-Fees) and $12.76 million before fees (Gross-of-Fees). Additional information regarding the firm’s policies and procedures for calculating and reporting performance results is available upon request. In Q1 2010, the PARS Composite definition was changed from $750,000 minimum to no minimum. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxes but do reflect the deduction of trading expenses. Returns are calculated based on trade-date accounting. Blended benchmarks represent HighMark’s strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Free Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The US High Yield Master II Index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg Barclays Capital (BC) U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The Merrill Lynch (ML) 1-3 Year U.S. Corporate & Government Index tracks the bond performance of The ML U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years. The unmanaged Citigroup 1-Month Treasury Bill Index tracks the yield of the 1-month U.S. Treasury Bill. HighMark Capital Management, Inc. (HighMark), an SEC-registered investment adviser, is a wholly owned subsidiary of MUFG Union Bank, N.A. (MUB). HighMark manages institutional separate account portfolios for a wide variety of for-profit and nonprofit organizations, public agencies, public and private retirement plans, and personal trusts of all sizes. It may also serve as sub-adviser for mutual funds, common trust funds, and collective investment funds. MUB, a subsidiary of MUFG Americas Holdings Corporation, provides certain services to HighMark and is compensated for these services. Past performance does not guarantee future results. Individual account management and construction will vary depending on each client’s investment needs and objectives. Investments employing HighMark strategies are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by the Bank or any Bank affiliate, and MAY lose value, including possible loss of principal. 350 California Street Suite 1600 San Francisco, CA 94104 800.582.4734 www.highmarkcapital.com HOLDINGS STYLE Small Cap 9.0% Interm-Term Bond 31.6% Floating Rate Note 1.2% Short-Term Bond 4.5% Large Cap Core 17.4% Large Cap Growth 5.0% Mid Cap 4.5% Intl Stocks 15.5% Cash 2.7% Real Estate 1.6% Large Cap Value 7.0% HighMark Plus (Active) Index Plus (Passive) Columbia Contrarian Core Z iShares Core S&P 500 ETF Vanguard Growth & Income Adm iShares S&P 500/Value Dodge & Cox Stock Fund iShares S&P 500/Growth Harbor Capital Appreciation iShares Russell Mid-Cap ETF T. Rowe Price Growth Stock Vanguard REIT ETF iShares Russell Mid-Cap ETF iShares Russell 2000 Value Vanguard REIT ETF iShares Russell 2000 Growth Undiscovered Managers Behavioral Value iShares MSCI EAFE T. Rowe Price New Horizons Vanguard FTSE Emerging Markets ETF Nationwide Bailard International Equities Vanguard Short-Term Invest-Grade Adm Dodge & Cox International Stock iShares Core U.S. Aggregate MFS International Growth I PowerShares Senior Loan Hartford Schroders Emerging Markets Eq First American Government Obligations Z Vanguard Short-Term Invest-Grade Adm PIMCO Total Return Prudential Total Return Nationwide HighMark Bond Eaton Vance Floating Rate & High Income First American Government Obligations Z Holdings are subject to change at the discretion of the investment manager. PARS DIVERSIFIED PORTFOLIOS CAPITAL APPRECIATION INVESTMENT OBJECTIVE ANNUAL RETURNS ASSET ALLOCATION — CAPITAL APPRECIATION PORTFOLIO Comprehensive Investment Solution HighMark® Capital Management, Inc.’s (HighMark) diversified investment portfolios are designed to balance return expectations with risk tolerance. Key features include: sophisticated asset allocation and optimization techniques, four layers of diversification (asset class, style, manager, and security), access to rigorously screened, top tier money managers, flexible investment options, and experienced investment management. Rigorous Manager Due Diligence Our manager review committee utilizes a rigorous screening process that searches for investment managers and styles that have not only produced above-average returns within acceptable risk parameters, but have the resources and commitment to continue to deliver these results. We have set high standards for our investment managers and funds. This is a highly specialized, time consuming approach dedicated to one goal: competitive and consistent performance. Flexible Investment Options In order to meet the unique needs of our clients, we offer access to flexible implementation strategies: HighMark Plus utilizes actively managed mutual funds while Index Plus utilizes index-based securities, including exchange-traded funds. Both investment options leverage HighMark’s active asset allocation approach. Risk Management The portfolio is constructed to control risk through four layers of diversification – asset classes (cash, fixed income, equity), investment styles (large cap, small cap, international, value, growth), managers and securities. Disciplined mutual fund selection and monitoring process helps to drive return potential while reducing portfolio risk. WHY THE PARS DIVERSIFIED CAPITAL APPRECIATION PORTFOLIO? Q3 2017 * Returns less than 1-year are not annualized. **Breakdown for Blended Benchmark: 39.5% S&P500, 7.5% Russell Mid Cap, 10.5% Russell 2000, 5.25% MSCI EM FREE, 10.25% MSCI EAFE, 16% BC US Agg, 3% ML 1-3 Yr US Corp/Gov’t, 1% US High Yield Master II, 2% Wilshire REIT, and 5% Citi 1 Mth T-Bill. The primary goal of the Capital Appreciation objective is growth of principal. The major portion of the assets are invested in equity securities and market fluctuations are expected. Strategic Range Policy Tactical Equity 65 - 85% 75% 75% Fixed Income 10 - 30% 20% 23% Cash 0 - 20% 5% 2% ANNUALIZED TOTAL RETURNS (Gross of Investment Management Fees, but Net of Embedded Fund Fees) Current Quarter* 4.01% Blended Benchmark** 3.79% Year To Date 12.06% Blended Benchmark 11.71% 1 Year 14.07% Blended Benchmark 13.84% 3 Year 7.54% Blended Benchmark 7.93% 5 Year 9.56% Blended Benchmark 9.91% Inception to Date (105-Mos.) 10.71% Blended Benchmark 11.45% PORTFOLIO FACTS HighMark Plus (Active) Inception Data 01/2009 No of Funds in Portfolio 19 Index Plus (Passive) Inception Data N/A No of Funds in Portfolio 13 Efficient Frontier Risk (Standard Deviation) Reward (Rate of Return) Conservative Moderately Conservative Moderate Capital Appreciation Balanced 2008 N/A% 2009 23.77% 2010 12.95% 2011 -1.35% 2012 13.87% 2013 20.33% 2014 6.05% 2015 -0.27% 2016 8.81% HIGHMARK CAPITAL MANAGEMENT 350 California Street Suite 1600 San Francisco, CA 94104 800-582-4734 www.highmarkcapital.com ABOUT THE ADVISER HighMark® Capital Management, Inc. (HighMark) has over 90 years (including predecessor organizations) of institutional money management experience with more than $16.6 billion in assets under management. HighMark has a long term disciplined approach to money management and currently manages assets for a wide array of clients. ABOUT THE PORTFOLIO MANAGEMENT TEAM Andrew Brown, CFA® Senior Portfolio Manager Investment Experience: since 1994 HighMark Tenure: since 1997 Education: MBA, University of Southern California; BA, University of Southern California Salvatore “Tory” Milazzo III, CFA® Senior Portfolio Manager Investment Experience: since 2004 HighMark Tenure: since 2014 Education: BA, Colgate University J. Keith Stribling, CFA® Senior Portfolio Manager Investment Experience: since 1985 HighMark Tenure: since 1995 Education: BA, Stetson University Christiane Tsuda Senior Portfolio Manager Investment Experience: since 1987 HighMark Tenure: since 2010 Education: BA, International Christian University, Tokyo Anne Wimmer, CFA® Senior Portfolio Manager Investment Experience: since 1987 HighMark Tenure: since 2007 Education: BA, University of California, Santa Barbara Randy Yurchak, CFA® Senior Portfolio Manager Investment Experience: since 2002 HighMark Tenure: since 2017 Education: MBA, Arizona State University; BS, University of Washington Asset Allocation Committee Number of Members: 16 Average Years of Experience: 26 Average Tenure (Years): 13 Manager Review Group Number of Members: 7 Average Years of Experience: 20 Average Tenure (Years): 7 The performance records shown represent size-weighted composites of tax exempt accounts that meet the following criteria: Composites are managed by HighMark’s HighMark Capital Advisors (HCA) with full investment authority according to the PARS Capital Appreciation active and passive objectives and do not have equity concentration of 25% or more in one common stock security. The adviser to the PARS portfolios is US Bank, and HighMark serves as sub-adviser to US Bank to manage these portfolios. US Bank may charge clients as much as 0.60% annual management fee based on a sliding scale. As of September 30, 2017, the blended rate is 0.58%. US Bank pays HighMark 60% of the annual management fee for assets sub-advised by HighMark under its sub-advisory agreement with US Bank. The 36 basis points paid to HighMark, as well as other expenses that may be incurred in the management of the portfolio, will reduce the portfolio returns. Assuming an investment for five years, a 5% annual total return, and an annual sub-advisory fee rate of 0.36% deducted from the assets at market at the end of each year, a 10 million initial value would grow to $12.54 million after fees (Net-of-Fees) and $12.76 million before fees (Gross-of-Fees). Additional information regarding the firm’s policies and procedures for calculating and reporting performance results is available upon request. In Q1 2010, the PARS Composite definition was changed from $750,000 minimum to no minimum. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxes but do reflect the deduction of trading expenses. Returns are calculated based on trade-date accounting. Blended benchmarks represent HighMark’s strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Free Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The US High Yield Master II Index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg Barclays Capital (BC) U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The Merrill Lynch (ML) 1-3 Year U.S. Corporate & Government Index tracks the bond performance of The ML U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years. The unmanaged Citigroup 1-Month Treasury Bill Index tracks the yield of the 1-month U.S. Treasury Bill. HighMark Capital Management, Inc. (HighMark), an SEC-registered investment adviser, is a wholly owned subsidiary of MUFG Union Bank, N.A. (MUB). HighMark manages institutional separate account portfolios for a wide variety of for-profit and nonprofit organizations, public agencies, public and private retirement plans, and personal trusts of all sizes. It may also serve as sub-adviser for mutual funds, common trust funds, and collective investment funds. MUB, a subsidiary of MUFG Americas Holdings Corporation, provides certain services to HighMark and is compensated for these services. Past performance does not guarantee future results. Individual account management and construction will vary depending on each client’s investment needs and objectives. Investments employing HighMark strategies are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by the Bank or any Bank affiliate, and MAY lose value, including possible loss of principal. 350 California Street Suite 1600 San Francisco, CA 94104 800.582.4734 www.highmarkcapital.com HOLDINGS STYLE Small Cap 10.5% Interm-Term Bond 17.8% Floating Rate Note 1.0% Short-Term Bond 4.0% Large Cap Core 22.2% Large Cap Growth 6.2% Mid Cap 5.5% Intl Stocks 20.2% Cash 2.2% Large Cap Value 8.8% Real Estate 1.8% HighMark Plus (Active) Index Plus (Passive) Columbia Contrarian Core Z iShares Core S&P 500 ETF Vanguard Growth & Income Adm iShares S&P 500/Value Dodge & Cox Stock Fund iShares S&P 500/Growth Harbor Capital Appreciation iShares Russell Mid-Cap ETF T. Rowe Price Growth Stock Vanguard REIT ETF iShares Russell Mid-Cap ETF iShares Russell 2000 Value Vanguard REIT ETF iShares Russell 2000 Growth Undiscovered Managers Behavioral Value iShares MSCI EAFE T. Rowe Price New Horizons Vanguard FTSE Emerging Markets ETF Nationwide Bailard International Equities Vanguard Short-Term Invest-Grade Adm Dodge & Cox International Stock iShares Core U.S. Aggregate MFS International Growth I PowerShares Senior Loan Hartford Schroders Emerging Markets Eq First American Government Obligations Z Vanguard Short-Term Invest-Grade Adm PIMCO Total Return Prudential Total Return Nationwide HighMark Bond Eaton Vance Floating Rate & High Income First American Government Obligations Z Holdings are subject to change at the discretion of the investment manager. ITEM NO. 8.2 AGENDA REPORT Meeting Date: November 28, 2017 To:Board of Directors From:Marc Marcantonio, General Manager Presented By:Gina Knight, HR/Risk and Safety Manager Prepared By:Gina Knight, HR/Risk and Safety Manager Subject:Revising Budgeted Positions for the Remainder of Fiscal Year 2018 STAFF RECOMMENDATION: That the Board of Directors adopt Resolution No. 17-37 revising the budgeted positions for the remainder of Fiscal Year 2018 and rescinding resolution No. 17-21. DISCUSSION: Per the General Manager's recommendation and for career progression, the District's Operation Manager classification will be placed at Range 39. Attached to this report are copies of Resolution No. 17-37 and revised exhibit. ATTACHMENTS: Name:Description:Type: Resolution_No._17-37_-_Budgeted_Positions.doc Resolution Resolution Resolution_No._17-37_-_Exhibit_A.xlsx Exhibit Exhibit Resolution No. 17-37 Approving Budgeted Positions for Remainder of FY18 and Rescinding Resolution No. 17-21 1 RESOLUTION NO. 17-37 RESOLUTION OF THE BOARD OF DIRECTORS OF THE YORBA LINDA WATER DISTRICT REVISING THE BUDGETED POSITIONS FOR THE REMAINDER OF FISCAL YEAR 2018 AND RESCINDING RESOLUTION NO. 17-21 WHEREAS, the Board of Directors adopted Resolution No. 13-01 on January 24, 2013, the "Yorba Linda Water District Personnel Rules"; and WHEREAS, the “Personnel Rules” direct that the number of Authorized Positions and Salary Ranges are subject to approval by the Board of Directors; and WHEREAS, the Board of Directors adopted Resolution No. 17-21 on July 11, 2017, approving the budgeted positions for Fiscal Year 2018; and WHEREAS, it is the desire of the Board of Directors to adopt Budgeted Positions for the remainder of Fiscal Year 2018 as set forth in Exhibit “A” attached hereto, and to rescind Resolution No. 17-21. NOW THEREFORE BE IT RESOLVED by the Board of Directors of the Yorba Linda Water District as follows: Section 1. The number of Budgeted Positions as set forth in Exhibit "A" and attached hereto is approved and adopted for Fiscal Year 2018 effective November 28, 2017. Section 2. The General Manager is hereby authorized to employ up to the number of employees budgeted and funded in each fiscal year without further approval of the Board of Directors. Resolution No. 17-37 Approving Budgeted Positions for Remainder of FY18 and Rescinding Resolution No. 17-21 2 Section 3. The General Manager is hereby authorized while this Resolution is active to fill a budgeted position that is vacated with a new employee at a lower or equal classification and/or with a part time employee or contract staff. The General Manager is further authorized to fix and alter the compensation of employees subject to budget limitations Section 4. That Resolution No. 17-21 is hereby rescinded effective November 28, 2017. PASSED AND ADOPTED this 28th day of November 2017 by the following called vote: AYES: NOES: ABSTAIN: ABSENT: J. Wayne Miller, Ph.D., President Yorba Linda Water District ATTEST: Marc Marcantonio, Board Secretary Yorba Linda Water District Reviewed as to form by General Counsel: Andrew B. Gagen, Esq. Kidman Law LLP Exhibit A Resolution No. 17-37 Budgeted Positions for Remainder of Fiscal Year 18 Effective November 28, 2017 Salary Range Position Classification Budgeted as of 7/11/2017 Proposed Change Budgeted as of 11/28/2017 12 Office Clerk 1 1 Customer Service Rep I 0 0 Public Affairs Representative 1 1 16 Meter Reader I 1 1 Accounting Assistant I 1 1 Customer Service Rep II 2 2 Maintenance Worker I 9 9 Mechanic I 0 0 Plant Operator I 0 0 18 Meter Reader II 2 2 Customer Service Rep III 2 2 Operations/Warehouse Assistant 1 1 Records Management Specialist 1 1 Engineering Technician I 0 0 Maintenance Worker II 7 7 Water Quality Technician I 0 0 Accounting Assistant II 1 1 Facilities Maintenance 1 1 Mechanic II 1 1 Information Systems Tech I 1 1 Water Quality Technician II 1 1 Human Resources Technician 0 0 Maintenance Worker III 5 5 Mechanic III 1 1 Meter Services Lead 1 1 Plant Operator II 3 3 21 23 15 19 20 22 17 Page 1 of 2 Plant Operator II 3 3 Safety and Training Technician 0 0 Construction Inspector 1 1 Engineering Technician II 2 2 GIS Technician 0 0 Human Resources Analyst 2 2 Accountant 1 1 Instrumentation Technician 1 1 GIS Analyst 1 1 Sr. Construction Inspector 1 1 Sr. Fleet Mechanic 1 1 Sr. Maintenance Worker 4 4 Sr. Plant Operator 1 1 Associate Engineer 1 1 Customer Service Supervisor 1 1 27 25 26 24 Page 1 of 2 Exhibit A Resolution No. 17-37 Budgeted Positions for Remainder of Fiscal Year 18 Effective November 28, 2017 Safety and Training Analyst 1 1 Construction Project Supervisor 1 1 Management Analyst 1 1 Programmer Analyst 1 1 Water Conservation Supervisor 0 0 29 Chief Water System Operator 1 1 IS Administrator 1 1 Records Management Administrator 1 1 Sr. Accountant 1 1 Water Maint. Superintendent 1 1 Water Production Superintendent 1 1 Water Quality Engineer 1 1 32 Executive Assistant 1 1 34 Sr. Project Manager 1 1 Communications Manager 0 0 Engineering Manager 1 1 Finance Manager 1 1 Human Resources/Risk and Safety Manager 1 1 IT Manager 1 1 Operations Manager 1 -1 0 38 39 Operations Manager 0 1 1 40 Assistant General Manager 1 1 General Manager 1 1 Total 80 0 80 Salary Set by Board 37 30 31 28 Page 2 of 2 Salary Range Position Classification 10 Water Conservation Representative 0 0 Office Clerk 0 0 Water Conservation Representative 0 0 Total 0 0 0 12 Page 2 of 2 ITEM NO. 8.3 AGENDA REPORT Meeting Date: November 28, 2017 To:Board of Directors From:Marc Marcantonio, General Manager Presented By:Marc Marcantonio, General Manager Prepared By:Gina Knight, HR/Risk and Safety Manager Subject:Modifying Classifications and Salary Ranges for Management Employees STAFF RECOMMENDATION: That the Board of Directors adopt Resolution No. 17-38 amending Exhibit B of Resolution No. 15-08 to modify the Classifications and Salary Ranges for Management Employees for the remainder of Fiscal Years 2015-2018. DISCUSSION: The California Code of Regulations (CCR) 570.5 as contained in the California Public Employees' Retirement Law (PERL), provides the Requirement for a Publicly Available Pay Schedule. To stay in compliance with CalPERS' requirement the District 's governing body needs to approve this amendment in a regular open meeting. ATTACHMENTS: Name:Description:Type: Resolution_No._17-38_-_ME_Salary_Ranges.docx Resolution Resolution Resolution_No._17-38_-_Exhibit_B.docx Exhibit Exhibit Resolution No. 17-38 Amending Resolution No. 15-08 Related to Management Employees Compensation Letter 1 RESOLUTION NO. 17-38 RESOLUTION OF THE BOARD OF DIRECTORS OF THE YORBA LINDA WATER DISTRICT AMENDING EXHIBIT B OF RESOLUTION NO. 15-08 TO MODIFY THE SALARY RANGES FOR MANAGEMENT EMPLOYEES FOR THE REMAINDER OF FISCAL YEARS 2015-2018 WHEREAS, the Board of Directors of the Yorba Linda Water District previously adopted the Employee Compensation Letter for Management Employees for Fiscal Years 2015-2018 (Resolution No. 15-08); and WHEREAS, the Board of Directors subsequently adopted Resolution No. 17-24 amending Exhibits B and E of the Employee Compensation Letter (Resolution No. 15-08) to modify the classifications, salary ranges and pay plan for Management employees; and WHEREAS, it is the desire of the Board of Directors to further amend Exhibit B of the Employee Compensation Letter (Resolution No. 15-08) in order to modify the salary ranges for Management employees for the remainder of Fiscal Years 2015-2018. NOW THEREFORE BE IT RESOLVED by the Board of Directors of the Yorba Linda Water District as follows: Section 1. That Exhibit B - Management Employees Classifications and Salary Ranges of Resolution No. 15-08 be amended to read as attached hereto and by this reference incorporated herein. PASSED AND ADOPTED this 28th day of November 2017, by the following called vote: AYES: NOES: ABSTAIN: ABSENT: J. Wayne Miller, Ph.D., President Yorba Linda Water District Resolution No. 17-38 Amending Resolution No. 15-08 Related to Management Employees Compensation Letter 2 ATTEST: Marc Marcantonio, Board Secretary Yorba Linda Water District Reviewed as to form by General Counsel: Andrew B. Gagen, Esq. Kidman Law LLP Exhibit B Yorba Linda Water District – Management Employees Classifications and Salary Ranges Effective November 28, 2017 CLASSIFICATION TITLE SALARY RANGES FLSA Assistant General Manager ME 40 Exempt Engineering Manager ME 37 Exempt Finance Manager ME 37 Exempt Human Resources/Risk and Safety Manager ME 37 Exempt Information Technology Manager ME 37 Exempt Operations Manager ME 39 Exempt ITEM NO. 9.2 AGENDA REPORT Meeting Date: November 28, 2017 To:Board of Directors From:Marc Marcantonio, General Manager Presented By:Delia Lugo, Finance Manager Dept:Finance Prepared By:Saira Hernandez, Accountant Subject:Budget to Actual Reports for the Month Ending October 31, 2017 DISCUSSION: For the month ending October 31, 2017, staff is presenting Budget to Actual reports for the District as a whole, as well as the individual Water and Sewer Funds. Cumulative Volumetric Water Revenue, as reported through the month ending October 31, 2017, reflects an average rebound of 4.73% above that reported in the prior year for the same reporting period. The residential classified customer connections have experienced the largest rebound in monthly consumption. Total Variable Costs results reflect a 6.90% increase when compared to prior year results for the same reporting period. The increase in costs is reflective of the increase in water demand which is 5.04 % ahead of budget. Supplies & Services within the Water Fund have decreased by 7.06% compared to the reported results of the prior year. STRATEGIC PLAN: FR 1-F: Continue to Record and Report the Fairly Stated Financial Activities of the District in a Timely and Transparent Manner to the Board of Directors and Member Agencies ATTACHMENTS: Name:Description:Type: Budget_to_Actual_Stmts_Oct_2017.pdf Backup Material Backup Material FY18 Annual Budget YTD Actuals thru October 2017 YTD % of Budget Water Revenue (Residential) 14,278,688$ 6,139,645$ 43.00% Water Revenue (Commercial & Fire Det.) 2,071,031$ 715,850$ 34.56% Water Revenue (Landscape/Irrigation) 3,079,054$ 1,669,399$ 54.22% Service Charges 10,106,238$ 3,331,399$ 32.96% Other Operating Revenue 769,106$ 292,595$ 38.04% Total Operating Revenue 30,304,117$ 12,148,888$ 40.09% Revenue (Non-Operating): Interest 275,000$ 109,980$ 39.99% Property Taxes 1,710,000$ 51,292$ 3.00% Other Non-Operating Revenue 604,646$ 171,866$ 28.42% Total Non-Operating Revenue 2,589,646$ 333,138$ 12.86% Total Revenue 32,893,763$ 12,482,026$ 37.95% Expenses (Operating): Variable Water Costs (G.W., Import & Power) Water-Related Costs 11,240,088$ 4,995,789$ 44.45% Fixed Costs 1,443,355$ 291,036$ 20.16% Power-Related Costs 1,285,413$ 377,707$ 29.38% Variable Water Costs Related Expenses Total 13,968,855$ 5,664,532$ 40.55% Salary Related Expenses 8,859,867$ 2,375,292$ 26.81% Reduction for Capital Project Labor (215,000)$ -$ 0.00% Salary Related Expenses Total 8,644,867$ 2,375,292$ 27.48% Supplies & Services Communications 189,565$ 53,488$ 28.22% Contractual Services 519,653$ 133,814$ 25.75% Data Processing 235,322$ 46,380$ 19.71% Dues & Memberships 80,492$ 57,579$ 71.53% Yorba Linda Water District Water Enterprise FY18 ProForma - Use of Funds October 2017 Dues & Memberships 80,492$ 57,579$ 71.53% Fees & Permits 264,641$ 54,300$ 20.52% Insurance 263,506$ 80,068$ 30.39% Materials 797,347$ 250,185$ 31.38% District Activities, Emp Recognition 22,506$ 5,320$ 23.64% Maintenance 339,342$ 135,561$ 39.95% Non-Capital Equipment 104,678$ 32,152$ 30.72% Office Expense 39,662$ 12,206$ 30.77% Professional Services 650,108$ 152,637$ 23.48% Training 61,728$ 8,374$ 13.57% Travel & Conferences 102,493$ 19,109$ 18.64% Uncollectible Accounts 17,205$ 219$ 1.27% Utilities 158,100$ 70,249$ 44.43% Vehicle Expenses 286,812$ 91,037$ 31.74% Supplies & Services Sub-Total 4,133,160$ 1,202,678$ 29.10% Total Operating Expenses 26,746,883$ 9,242,502$ 34.56% Expenses (Non-Operating) Other Expense 15,220$ 10,006$ 65.74% Total Non-Operating Expenses 15,220$ 10,006$ 65.74% Total Expenses 26,762,103$ 9,252,508$ 34.57% Net Revenues 6,131,660$ 3,229,518$ 52.67% Less: Debt Service (Principal & Interest) 2,729,799$ 1,919,271$ 70.31% Less: Committed Capital Expenditures (PayGo) 2,635,755$ 538,344$ 20.42% Less: Special Item - Conservation Credit -$ 1,105,809$ 0.00% Transfer to/(from) Reserves 766,107$ (333,905)$ -43.58% Net -$ -$ Yorba Linda Water District Summary Financial Report Water & Sewer Funds For Period Ending October 31, 2017 Annual YTD Oct YTD YTD Actual Prior Year Prior Year YTD Actual YTD Actual Budget Budget Actual Actual (Under) Over Oct. Actual Actual (thru vs vs FY18 FY18 FY18 FY18 YTD Budget FY17 Oct. 2016)PY Actual $PY Actual % Revenue (Operating): Water Revenue (Residential)$14,278,688 $5,922,800 $1,357,417 $6,139,645 216,845 $1,331,051 $5,713,135 $426,509 7.47% Water Revenue (Commercial & Fire Det.)2,071,031 859,064 161,103 $715,850 (143,214)164,063 692,096 23,755 3.43% Water Revenue (Landscape/Irrigation)3,079,054 1,277,192 363,444 $1,669,399 392,208 378,859 1,616,399 53,000 3.28% Water Revenue (Service Charge)10,106,238 3,368,746 832,982 $3,331,399 (37,347)827,044 3,479,529 (148,130)-4.26% Sewer Charge Revenue 2,032,245 677,415 171,719 $686,246 8,831 156,800 626,695 59,551 9.50% Locke Ranch Assessments 223,000 - 88 $302 302 75 342 (40) 0.00% Other Operating Revenue 866,161 288,720 85,417 $314,439 25,718 103,256 369,587 (55,148)-14.92% Total Operating Revenue:32,656,417 12,393,936 2,972,170 $12,857,280 463,343 2,961,148 12,497,783 359,497 2.88% Revenue (Non-Operating): Interest 310,000 103,333 56,406 126,572 23,239 38,927 94,352 32,220 34.15% Property Tax 1,710,000 48,887 7,793 51,292 2,405 4,700 46,229 5,063 0.00% Other Non-Operating Revenue 624,521 208,174 9,959 170,267 (37,907)69,257 162,870 7,396 4.54% Total Non-Operating Revenue:2,644,521 360,394 74,158 348,131 (12,263)112,884 303,451 44,680 14.72% Total Revenue 35,300,938 12,754,330 3,046,328 13,205,411 451,080 3,074,032 12,801,234 404,176 3.16% Expenses (Operating): Variable Water Costs (G.W., Import & Power)13,968,855 5,770,138 1,340,186 5,664,532 (105,605)1,112,623 5,299,072 365,460 6.90% Salary Related Expenses 9,643,124 2,799,886 694,433 2,676,662 (123,225)629,671 2,984,148 (307,486)-10.30% Supplies & Services 4,621,895 1,394,132 338,345 1,347,590 (46,542)308,227 1,394,334 (46,744) -3.35% Total Operating Expenses 28,233,874 9,964,156 2,372,964 9,688,784 (275,373)2,050,521 9,677,554 11,230 0.12% Expenses (Non-Operating): Interest on Long Term Debt 1,489,796 474,723 115,401 448,943 (25,780) 130,618 554,497 (105,554) -19.04% Other Expense 15,220 5,073 17,673 (673)(5,746)30,084 11,513 (12,186) 105.84% Total Non-Operating Expenses:1,505,016 479,797 133,074 448,270 (31,526) 160,702 566,010 (117,740) -20.80% Total Expenses 29,738,890 10,443,953 2,506,038 10,137,054 (306,899)2,211,223 10,243,564 (106,510)-1.04% Net Position Before Capital Contributions 5,562,048 2,310,378 540,290 3,068,357 757,979 862,809 2,557,670 510,686 19.97% Special Item - 1,105,809 1,105,809 - - 1,105,809 0.00% Capital Contributions (Non-Cash Transaction -- - 935 1,787,583 1,787,583 764 674,990 1,112,593 164.83% GASB 34 Compliant) Net Position Before Depreciation 5,562,048 2,310,378 541,225 3,750,131 1,439,753 863,573 3,232,660 517,471 16.01% Depreciation & Amortization 7,182,000 2,394,000 618,866 2,474,329 80,329 595,055 2,372,272 102,057 4.30% Total Net Position ($1,619,952)($83,622)($77,641)$1,275,802 $1,359,424 $268,518 $860,388 $415,414 48.28% (21,154)(76,088) (76,088) (23,673)(83,630) 7,542 -9.02% (With October 31, 2016 for comparison purposes) Annual YTD Oct YTD YTD Actual Prior Year Prior YTD YTD Actual YTD - CUR Budget Budget Actual Actual (Under)Over Oct. Actual Actual (thru vs vs FY18 FY18 FY18 FY18 YTD Budget FY17 Oct 2016) PY Actual $PY Actual % Revenue (Operating): Water Revenue (Residential)$14,278,688 $5,922,800 $1,357,417 $6,139,645 216,845 $1,331,051 $5,713,135 $426,510 7.47% Water Revenue (Commercial & Fire Det.)2,071,031 $859,064 161,103 715,850 (143,214)$164,063 692,096 23,754 3.43% Water Revenue (Landscape/Irrigation)3,079,054 $1,277,192 363,444 1,669,399 392,207 378,859 1,616,399 53,000 3.28% Water Revenue (Service Charge)10,106,238 3,368,746 832,982 3,331,399 (37,348)827,044 3,479,529 (148,131) -4.26% Other Operating Revenue 769,106 256,369 81,466 292,596 36,227 90,892 334,274 (41,679) -12.47% Total Operating Revenue:30,304,117 11,684,170 2,796,412 12,148,888 464,718 2,791,909 11,835,433 313,455 2.65% Revenue (Non-Operating): Interest 275,000 91,667 44,900 109,980 18,314 32,002 83,932 26,048 31.04% Property Tax 1,710,000 48,887 7,793 51,292 2,405 4,700 46,229 5,063 10.95% Other Non-Operating Revenue 604,646 201,549 12,609 171,866 (29,683)11,268 104,291 67,575 64.79% Total Non-Operating Revenue:2,589,646 342,103 65,302 333,138 (8,964)47,970 234,452 98,686 42.09% Total Revenue 32,893,763 12,026,272 2,861,714 12,482,026 455,754 2,839,879 12,069,885 412,141 3.41% Expenses (Operating): Variable Water Costs (G.W., Import & Power)13,968,855 5,770,138 1,340,186 5,664,532 (105,606)1,112,623 5,299,072 365,460 6.90% Salary Related Expenses 8,644,867 2,504,437 617,646 2,375,292 (129,145)555,685 2,673,198 (297,906) -11.14% Supplies & Services: Communications 189,565 63,188 6,607 53,488 (9,700)7,733 78,745 (25,257) -32.07% Contractual Services 519,653 133,218 50,108 133,814 596 26,396 139,624 (5,810) -4.16% Data Processing 235,322 48,941 11,243 46,380 (2,561)13,695 54,280 (7,900) -14.55% Dues & Memberships 80,492 51,831 27,181 57,579 5,749 27,096 56,212 1,367 2.43% Fees & Permits 264,641 54,714 13,095 54,300 (414)10,734 59,525 (5,225) -8.78% Board Election - - - - - - 72,539 (72,539) -100.00% Insurance 263,506 87,835 19,754 80,068 (7,767)14,830 80,683 (614) -0.76% Materials 797,347 265,782 57,257 250,185 (15,597)71,719 285,860 (35,675) -12.48% District Activities, Emp Recognition 22,506 7,502 2,722 5,320 (2,182)1,563 3,493 1,828 52.34% Maintenance 339,342 113,114 27,472 135,561 22,447 42,017 92,973 42,588 45.81% Non-Capital Equipment 104,678 34,893 12,456 32,152 (2,740)12,279 34,403 (2,251) -6.54% Office Expense 39,662 13,221 3,007 12,206 (1,015)1,684 8,126 4,080 50.21% Professional Services 650,108 161,203 26,125 152,637 (8,566)13,483 147,773 4,864 3.29% Training 61,728 20,576 2,209 8,374 (12,202)2,150 9,866 (1,492) -15.12% Travel & Conferences 102,493 34,164 6,777 19,109 (15,056)4,412 17,180 1,929 11.23% Uncollectible Accounts 17,205 5,735 293 219 (5,516)1,079 4,441 (4,222) -95.07% Utilities 158,100 62,700 15,586 70,249 7,549 9,142 45,146 25,103 55.60% Vehicle Equipment 286,812 95,604 19,124 91,037 (4,567)23,004 103,166 (12,130) -11.76% Supplies & Services Sub-Total 4,133,160 1,254,220 301,016 1,202,678 (51,542)283,016 1,294,035 (91,357) -7.06% Total Operating Expenses 26,746,883 9,528,794 2,258,848 9,242,502 (286,293)1,951,324 9,266,305 (23,803) -0.26% Expenses (Non-Operating): Interest on Long Term Debt 1,489,796 474,723 115,401 448,943 (25,780)130,618 554,497 (105,554) -19.04% Other Expense 15,220 5,073 17,673 10,006 4,932 32,188 13,617 (3,611) 26.52% Total Non-Operating Expenses:1,505,016 479,797 133,074 458,949 (20,848) 162,806 568,114 (109,165) -19.22% Total Expenses 28,251,899 10,008,591 2,391,922 9,701,451 (307,140)2,114,130 9,834,419 (132,968) -1.35% Net Position Before Capital Contributions 4,641,864 2,017,681 469,792 2,780,575 762,894 725,749 2,235,466 545,109 24.38% Special Item - - - 1,105,809 1,105,809 - - 1,105,809 0.00% Capital Contributions (Non-Cash Transaction -- - - 968,275 968,275 351,960 616,315 175.11% GASB 34 Compliant) Net Position Before Depreciation 4,641,864 2,017,681 469,792 2,643,041 625,360 725,749 2,587,426 55,615 2.15% Depreciation & Amortization 5,832,000 1,944,000 505,422 2,020,909 76,909 483,682 1,928,607 92,302 4.79% Total Net Position (1,190,136) 73,681 (35,630) 622,132 548,451 242,067 658,819 (36,687) -5.57% Capital - Direct Labor (19,659) (69,463)(69,463) (20,321)(76,999) 7,536 -9.79% (With October 31, 2016 for comparison purposes) Yorba Linda Water District Water Fund For Period Ending October 31, 2017 Annual YTD Oct YTD YTD Actual Prior Year Prior Year YTD Actual YTD - CUR Budget Budget Actual Actual (Under)Over Oct. Actual Actual (thru vs vs FY18 FY18 FY18 FY18 YTD Budget FY17 Oct. 2016)PY Actual $PY Actual % Revenue (Operating): Sewer Charge Revenue $2,032,245 $677,415 $171,719 $686,246 $8,831 $156,800 $626,695 $59,551 9.50% Locke Ranch Assessments 223,000 0 88 302 302 75 342 (40) 0.00% Other Operating Revenue 97,055 32,352 3,951 21,844 (10,508)12,363 35,313 (13,469) -38.14% Total Operating Revenue:2,352,300 709,767 175,758 708,392 (1,374)169,238 662,350 46,043 6.95% Revenue (Non-Operating): Interest 35,000 11,667 11,506 16,592 4,925 6,925 10,420 6,171 59.22% Other Non-Operating Revenue 19,875 6,625 (2,650) (1,599)(8,224)57,989 58,580 (60,179)-102.73% Total Non-Operating Revenue:54,875 18,292 8,856 14,993 (3,299)64,914 69,000 (54,007) -78.27% Total Revenue 2,407,174 728,058 184,614 723,385 (4,673)234,152 731,350 (7,964) -1.09% Expenses (Operating): Salary Related Expenses 998,257 295,450 76,787 301,370 5,920 73,987 310,950 (9,580)-3.08% Supplies & Services: Communications 12,010 4,003 497 2,267 (1,737)582 3,738 (1,471)-39.36% Contractual Services 28,237 9,412 3,772 10,072 660 1,974 10,014 58 0.58% Data Processing 15,078 5,026 846 3,491 (1,535)1,031 4,213 (722)-17.14% Dues & Memberships 6,053 2,018 2,046 4,334 2,316 2,040 4,231 103 2.43% Fees & Permits 17,474 5,825 702 2,500 (3,325)680 2,611 (111)-4.25% Board Election - - - - - - 5,460 (5,460)-100.00% Insurance 19,834 6,611 1,487 6,027 (584)1,116 6,073 (46)-0.76% Materials 51,653 17,218 2,357 15,564 (1,654)5,005 12,182 3,382 27.76% District Activities, Emp Recognition 1,694 565 205 397 (168)118 263 134 50.87% Maintenance 170,559 38,353 12,186 36,210 (2,143)361 11,933 24,277 203.44% Non-Capital Equipment 20,147 6,716 3,162 9,598 2,882 819 3,580 6,018 168.12% Office Expense 2,963 988 213 906 (82)127 612 294 48.09% Professional Services 40,417 8,972 1,229 7,625 (1,347)1,183 6,545 1,080 16.50% Training 6,782 2,261 516 932 (1,329)422 1,487 (555)-37.34% Travel & Conferences 12,752 4,251 510 1,816 (2,434)243 1,162 654 56.25% Uncollectible Accounts 1,295 432 20 82 (350)151 803 (721)-89.81% Utilities 12,600 4,200 1,222 5,509 1,310 742 3,620 1,889 52.18% Vehicle Equipment 69,188 23,063 6,363 37,583 14,520 8,620 21,773 15,810 72.61% Supplies & Services Sub-Total 488,735 139,912 37,334 144,913 5,001 25,214 100,300 44,613 44.48% Total Operating Expenses 1,486,991 435,361 114,121 446,283 10,921 99,201 411,250 35,033 8.52% Expenses (Non-Operating): Interest Expense - - - - - - - - - Other Expense - - - (10,679) (10,679) (2,104) (2,104) (8,575) - Total Non-Operating Expenses:- - - (10,679) (10,679) (2,104) (2,104) (8,575) 0.00% Total Expenses 1,486,991 435,361 114,121 435,604 242 97,097 409,146 26,458 6.47% Net Position Before Capital Contributions 920,183 292,697 70,493 287,781 (4,915)137,055 322,204 (34,422) -10.68% Capital Contributions (Non-Cash Transaction -- - 935 819,308 819,308 764 323,030 496,278 153.63% GASB 34 Compliant) Net Position Before Depreciation 920,183 292,697 71,428 1,107,089 814,393 137,819 645,234 461,856 71.58% Depreciation & Amortization 1,350,000 450,000 113,445 453,419 3,419 111,373 443,665 9,755 2.20% Total Net Position (429,817) (157,303) (42,017) 653,670 810,973 26,446 201,569 452,101 224.29% Capital - Direct Labor (1,495) (6,625)(6,625) (3,352) (6,631)6 -0.09% Yorba Linda Water District Sewer Fund For Period Ending October 31, 2017 (With October 31, 2016 for comparison purposes) $1,217,261 $1,409,468 $1,633,904 $2,141,950 $3,479,529 $3,331,398$744,894 $799,537 $777,189 $640,971 $692,097 $715,850 $1,943,570 $2,087,830 $2,121,022 $1,102,164 $1,616,399 $1,669,399 $6,898,811 $7,294,269 $7,128,338 $4,687,668 $5,713,135 $6,139,644 $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 FY13 FY14 FY15 FY16 FY17 FY18 Water Revenue Comparison by Fiscal Year Water Revenue (Service Charge) Water Revenue (Commercial & Fire Det.) Water Revenue (Landscape/Irrigation) Water Revenue (Residential) $10,804,536 $11,591,104 $11,660,453 $11,856,291 $11,501,160 $8,572,753 - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 JULY AUGUST SEPTEMBER OCTOBER $101,350 $90,253 $72,759 $101,350 $90,253 $72,759 $101,350 $90,253 $72,759 $85,326 $73,629 $72,759 Variable Water Cost by Month (Variable Vs. Fixed Expenses) Fixed Portion of Costs (MWDOC's Annual Connection amortized over 12 months for all Fiscal Years) 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 2,000,000 Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Variable Costs Analysis FY16 Var Costs FY17 Var Costs FY18 Var Costs (includes 100% of Annual Connection Expensed in July) - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 FY16 FY17 FY18 FY16 FY17 FY18 FY16 FY17 FY18 FY16 FY17 FY18 JULY AUGUST SEPTEMBER OCTOBER 55,561 58,238 56,992 51,254 63,184 80,884 61,537 66,195 54,463 48,708 49,885 59,881 119,268 136,162 131,653 80,846 154,590 207,053 121,214 178,617 142,649 76,382 123,019 138,015 CONSUMPTION BY UNITS CCF Residential Commercial Landscape 131653 207053 142649 138015 56992 80884 54463 59881 497331 731663 541570 530268 0.00 0.00 0.07 0.00 0.00 0.20 0.40 0.60 0.80 1.00 1.20 0 200000 400000 600000 800000 1000000 1200000 Jul-17 Aug-17 Sep-17 Oct-17 Rainfall, in.Consumption, CCFConsumption vs Rainfall R C L Rain ITEM NO. 9.3 AGENDA REPORT Meeting Date: November 28, 2017 To:Board of Directors From:Marc Marcantonio, General Manager Presented By:Delia Lugo, Finance Manager Dept:Finance Prepared By:Kelly McCann, Senior Accountant Subject:Cash and Investment Report for Period Ending October 31, 2017 SUMMARY: Government Code Section 530607, et. seq., requires the person delegated to invest funds to make monthly report of investments to the legislative body DISCUSSION: The Cash & Investment Portfolio Report presents the market value and percent yield for all District investments by institution. The Cash & Investment Summary Report includes budget and actual interest and average term portfolio information as well as market value broken out by reserve categories. The Fair Value Measurement Report categorizes investments with the fair value hierarchy established by generally accepted accounting principles. The total average yield for the month ending October 31, 2017 is 1.24%. The overall increase in the total investment balance from the previous month is approximately $609,000. Large balance changes include the following: an increase in the Water Operating Fund of $917,036 and an increase in the Sewer Operating Fund of $119,787 both due to a positive net effect between operating revenues and expenses through the reporting month of the fiscal year; and an decrease in the Restrictive 2017A Acquisition Fund of $439,095 for the payment of Fairmont Booster Pump Station capital project costs. STRATEGIC PLAN: FR 1-F: Continue to Record and Report the Fairly Stated Financial Activities of the District in a Timely and Transparent Manner to the Board of Directors and Member Agencies ATTACHMENTS: Name:Description:Type: Cash_and_Invest_Rprt_Oct_2017.pdf Backup Material Backup Material Below is a chart summarizing the yields as well as terms and maturities for the month of October 2017: Average # of Month Portfolio Days to of 2017 Yield Maturity October 1.24%104 Below are charts comparing operating fund interest for current and prior fiscal years. Actual Interest 10/31/2016 10/31/2017 Monthly - October 38,927$ 56,406$ Year-to-Date 94,352$ 126,572$ Budget 2016/2017 2017/2018 Interest Budget, October YTD 38,333$ 103,333$ Interest Budget, Annual 115,000$ 310,000$ Interest earned on investments is recorded in the fund that owns the investment. The distribution of investments in the portfolio both in dollars and as a percentage of the total portfolio by funds is as follows: Total of $38.2 million in cash and investments which is split between minimum reserve requirements and what is available to meet current year obligations (operating costs, debt service, capital costs). The number of Days in Cash for Un-Restricted Water Reserve balance is 371 and Un-Restricted Sewer Reserve balance is 1,160. Reserve Cash and Requirements Investments September 2017 % Alloc October 2017 % Alloc "Target Available for Fund Description Balance 9/30/2017 Balance 10/31/2017 Levels"CY Obligations Water Operating Reserve 13,165,844$ 39.98%10,601,240$ 31.39%9,459,287$ 1,141,953$ Water Emergency Reserve 3,469,057 10.53%6,919,361 20.49%7,790,359 (870,998) Water Capital Project Reserve 5,714,160 17.35%5,717,801 16.93%5,716,336 1,465 Rate Stabilization Reserve 4,006,898 12.17%3,951,201 11.70%3,957,692 (6,491) Un-Restricted Water Reserve Balance 26,355,959 27,189,603 26,923,674 265,929 Conservation Reserve 104,010 0.32%103,416 0.31%- 103,416$ Employee Liability Reserve 1,749,887 5.31%1,752,452 5.19%272,054 1,480,398 Restricted Reserve Balance 1,853,897 1,855,868 272,054 1,583,814 Sewer Operating Reserve 656,273 1.99%657,861 1.95%498,142$ 159,719$ Sewer Emergency Reserve 2,545,934 7.73%2,550,385 7.55%2,545,934 4,451 Sewer Capital Project Reserve 1,518,337 4.61%1,518,167 4.50%1,519,358 (1,191) Un-Restricted Sewer Reserve Balance 4,720,544 4,726,414 4,563,434 162,980 Total Reserve Balances 32,930,401$ 100.00%33,771,885$ 100.00%31,759,162$ 2,012,723$ Water Operating 424,609 511,249 Sewer Operating 15,410 133,610 440,019 644,859 Revenue Bond 2017A-Acquisition Fund 4,296,086 3,859,343 Total Cash and Investments 37,666,506$ 38,276,087$ Cash & Investment Summary Report Cash & Investment Summary Comparison Between Current and Previous Month Wells Fargo Bank Checking US Bank Held (Restricted) Market %Date of Percent Value Par of Total Institution Maturity Yield Checking Account: 644,859$ 644,859$ Wells Fargo Bank 29,718 29,718 Pershing 674,577$ 674,577$ 1.76%Total 0.00% Money Market Accounts: 3,859,343$ 3,859,343 US Bank (Revenue Bonds)0.63% 952,771 952,771 Bank of the West 0.08% 4,812,114$ 4,812,114$ 12.57%Total 0.52% Federal Agency Securities: 498,940$ 500,000 Federal Home Loan Bank 06/12/18 1.00% 499,320$ 500,000 Federal Home Loan Bank 06/13/18 1.10% 998,260$ 1,000,000$ 2.61%Total 1.05% Certificates of Deposits: 247,861$ 248,000$ CIT Bank, Salt Lake 05/22/18 1.20% 248,027$ 248,000 Discover 05/22/18 1.19% 247,861$ 248,000 Goldman Sachs Bank 05/22/18 1.20% 248,069$ 248,000 Beal Bank 05/23/18 0.99% 248,193$ 247,000 Barclays Bank 04/30/18 2.23% 248,154$ 248,000 State Bank of India 05/14/18 1.14% 248,514$ 249,000 Webster Bank 05/03/18 0.90% 248,055$ 248,000 American Express Centurion Bank 05/23/18 1.19% 247,717$ 248,000 GE Capital Bank 05/24/18 1.10% 248,631$ 249,000 Oriental Bank & Trust 05/29/18 1.05% 248,557$ 249,000 Enterprise Bank & TR Co Lowell 05/30/18 1.00% 248,574$ 249,000 Safra National Bank 05/31/18 1.00% 247,559$ 248,000 Townebank Portsmouth 05/31/18 1.00% 248,562$ 249,000 Mascoma Savings Bank 05/29/18 1.00% 100,030$ 100,000 Ally Bank Midvale Utah 12/11/17 1.54% 198,608$ 200,000 World's Foremost Bk Sydney 05/28/19 1.30% 246,914$ 248,000 Capital One Bk USA Natl Assn 05/13/19 1.20% 245,150$ 249,000 Comenity Cap Bk Salt Lake City 06/30/21 1.67% 243,799$ 248,000 EnerBank USA Salt Lake City 08/26/20 1.32% 245,632$ 248,000 EverBank Jacksonville Fla CTF 08/30/19 1.16% 180,017$ 180,000 HSBC BK USA, NA MC Clean CTF 08/31/21 1.24% 241,492$ 248,000 Wells Fargo Bank NA Sioux Falls D 08/31/21 1.64% 247,200$ 247,000 PrivateBank & Tr Chicago Ill CTF 03/30/22 2.19% 250,218$ 249,000 JP Morgan Chase Bk NA Columbus 03/31/22 2.43% 5,673,394$ 5,693,000$ 14.82%Total 1.32% Pooled Investment Accounts: 7,096,951$ 7,096,951$ Local Agency Investment Fund 1.14% 1,319,931 1,320,125 CalTRUST Short Term 1.25% 17,700,859 17,780,422 CalTRUST Medium Term 1.50% 26,117,741$ 26,197,498$ 68.24%1.39% 38,276,087$ 38,377,189$ 100%Total Investments 1.24% Per Government Code requirements, the Investment Report is in compliance with the Yorba Linda Water District's Investment Policy, and there are adequate funds available to meet budgeted and actual expenditures for the next six months. 10/31/17 Yorba Linda Water District Cash & Investment Portfolio Report October 31, 2017 ________________________________ Kelly D. McCann, Senior Accountant Yorba Linda Water District Fair Value Measurement Report October 31, 2017 Quoted Observable Unobservable Prices Inputs Inputs Investments Level 1 Level 2 Level 3 Total CalTRUST Investment Pool -$ 19,020,790$ -$ 19,020,790$ Local Agency Investment Fund - 7,096,951 - 7,096,951 U.S. Government Sponsored Agency Securities - 998,260 - 998,260 Negotiable Certificates of Deposit - 5,673,394 - 5,673,394 Total Investments -$ 32,789,396$ -$ 32,789,396$ 2017A Revenue Bond - Acquisition Fund Reconciliation for the Construction of the Fairmont Booster Pump Station Transaction Beginning Construction Retention YLWD Interest AVAILABLE Description Date Balance Costs Payments Labor Earned subtotal Balance Beginning Balance 5/11/2017 6,000,000.00$ 6,000,000.00$ 6,000,000.00$ Withdrawal Request #1 5/31/2017 (492,396.40)$ (25,915.60)$ (518,312.00)$ 5,481,688.00$ Interest Earned 6/1/2017 1,304.58$ 1,304.58$ 5,482,992.58$ Withdrawal Request #2 6/27/2017 (382,969.61)$ (20,155.35)$ (8,676.19)$ (411,801.15)$ 5,071,191.43$ Interest Earned 7/3/2017 2,191.39$ 2,191.39$ 5,073,382.82$ Withdrawal Request #3 7/25/2017 (321,714.36)$ (15,243.60)$ (336,957.96)$ 4,736,424.86$ Interest Earned 8/1/2017 2,492.88$ 2,492.88$ 4,738,917.74$ Withdrawal Request #4 8/22/2017 (133,871.43)$ (6,779.60)$ (140,651.03)$ 4,598,266.71$ Interest Earned 9/1/2017 2,418.85$ 2,418.85$ 4,600,685.56$ Withdrawal Request #5 9/26/2017 (274,696.65)$ (12,562.60)$ (17,344.18)$ (304,603.43)$ 4,296,082.13$ Interest Earned 10/3/2017 2,286.89$ 2,286.89$ 4,298,369.02$ Withdrawal Request #6 10/24/2017 (417,145.84)$ (21,950.10)$ (439,095.94)$ 3,859,273.08$ subtotal =6,000,000.00$ (2,022,794.29)$ (102,606.85)$ (26,020.37)$ 10,694.59$ 3,859,273.08$ ITEM NO. 9.4 AGENDA REPORT Meeting Date: November 28, 2017 To:Board of Directors From:Marc Marcantonio, General Manager Presented By:Delia Lugo, Finance Manager Dept:Finance Prepared By:Kelly McCann, Senior Accountant Subject:Unaudited Financial Statements for First Quarter of FY18 SUMMARY: Presented are the Unaudited Financial Statements for the Period Ending September 30, 2017 for the District. DISCUSSION: For the period ending September 30, 2017, staff is presenting “unaudited” statements in the CAFR format. We have included a Statement of Net Position, a Debt Service Ratio Calculation, a Water Enterprise ProForma Use of Funds Statement, a Consolidated Budget to Actual Statement, as well as the individual Water and Sewer Budget to Actual Statements. As reported in the Schedule of Net Assets, the District’s Net Position reflects a more positive result when compared to that of the same reporting period of the prior fiscal year by approximately $3.3 million. This is prominently due to the District refinancing the 2008A COP Bond into the 2017A Refunding Revenue Bond, deferral of recognizing expenses related for the CalPERS Unfunded Accrued Liability (UAL), Municipal Water District of Orange County (MWDOC) Retail Service Connection, and Other Pension Employee Benefits (OPEB) annual prepayments into future months compare to expensing these costs in the 1st quarter of the prior fiscal year. The District’s annual Operating Budget reflects an anticipated 15% annual rebound in Volumetric Water Sales (customer consumption) from the reported water sales resulting in FY16. As of September 30, 2017, actual Volumetric Water Sales reflects a rebound of 31% when compared to the same reporting period of FY16 (when the SWRCB mandate to reduce customer consumption was in effect). Residential classified customer connections have had the largest rebound in consumption for this reporting period. This overall rebound percentage is expected to smooth out in the future months as the weather patterns change. Total Variable Water Costs as reported through September 30, 2017 reflect a 3.29% increase when compared to prior year for the same reporting period. The increase in costs is reflective of an increase in demand as well as a higher cost per acre foot. With the issuance of the Refunding Revenue Bonds, Series 2017A the District is covenanted “…to fix, prescribe and collect rates and charges for Water Service which will be at least sufficient to yield during each Fiscal Year, Net Revenues equal to 125% of the Debit Service for such Fiscal Year.” To confirm the covenant is upheld, staff calculates the Debt Service Ratio quarterly. Accordingly, the “unaudited” Debt Service Ratio Calculation for the Period Ending September 30, 2017 is being reported at 369%. This demonstrates the District’s strong financial health. STRATEGIC PLAN: FR 1-F: Continue to Record and Report the Fairly Stated Financial Activities of the District in a Timely and Transparent Manner to the Board of Directors and Member Agencies ATTACHMENTS: Name:Description:Type: Unaudited_Fin_Stmts_1st_Qtr_FY18.pdf Backup Material Backup Material ASSETS September 2017 September 2016 CURRENT ASSETS: Cash and cash equivalents 31,125,442$ 26,348,286$ Investment 6,672,652 9,585,227 Accounts receivable - water and sewer services 4,307,658 4,325,560 Accrued interest receivable 20,345 27,327 Prepaid expenses & other deposits 1,216,407 437,761 Inventory 251,323 245,674 TOTAL CURRENT ASSETS 43,593,827 40,969,835 NONCURRENT ASSETS: Bond issuance costs 394,181 419,012 Other post-employment benefit (OPEB) asset 411,343 276,289 Deferred Pension Plans 1,966,284 712,574 Notes Receivable 78,567 154,107 Capital assets: Non-depreciable 6,471,448 5,225,326 Depreciable, net of accumulated depreciation 184,967,876 183,979,383 TOTAL NONCURRENT ASSETS 194,289,699 190,766,691 TOTAL ASSETS 237,883,526 231,736,526 LIABILITIES CURRENT LIABILITIES: Accounts payable 3,036,421 2,122,722 Accrued expenses 1,383,671 1,644,598 Accrued interest payable - 828,529 Certificates of Participation - current portion - 795,000 Refunding Revenue Bond(s) - current portion 1,140,000 285,000 Accrued OPEB 3,376 1,216 Compensated absences 395,206 359,807 Customer and construction deposits 645,747 503,097 Deferred revenue 300,366 325,412 TOTAL CURRENT LIABILITIES 6,904,787 6,865,381 LONG-TERM LIABILITIES (LESS CURRENT PORTION): Deferred annexation revenue 13,979,260 14,474,306 Compensated absences 1,251,486 1,139,389 Net Pension Liability 7,240,999 5,289,322 Deferred Pension Plan 753,101 1,331,326 Deferred Inflow - Gain on Bond 106,992 - Refunding Revenue Bond(s) 39,314,039 6,132,007 Certificate of Participation - 31,536,819 TOTAL LONG TERM LIABILITIES (LESS CURRENT PORTION)62,645,877 59,903,169 TOTAL LIABILITIES 69,550,664 66,768,550 NET ASSETS:168,332,862$ 164,967,976$ YORBA LINDA WATER DISTRICT UNAUDITED COMBINING SCHEDULE OF NET ASSETS September 30, 2017 (With September 30, 2016 for comparison only) September 2017 September 2016 OPERATING REVENUES: Water sales 9,141,346$ 8,800,142$ Sewer revenues 514,741 470,162 Other operating revenues 229,021 266,331 TOTAL OPERATING REVENUES 9,885,108 9,536,635 OPERATING EXPENSES Variable water costs 4,324,346 4,186,449 Personnel services 1,982,229 2,354,476 Supplies and services 1,009,244 1,086,107 Depreciation and amortization 1,855,462 1,777,217 TOTAL OPERATING EXPENSES 9,171,281 9,404,249 OPERATING INCOME/(LOSS)713,827 132,386 NONOPERATING REVENUES (EXPENSES): Property taxes 43,499 41,529 Investment income 70,165 55,426 Interest expense (333,542) (423,879) Other nonoperating revenues 160,308 93,614 Other nonoperating expenses 18,346 18,571 TOTAL NONOPERATING REVENUES/EXPENSES (41,224) (214,739) NET INCOME/(LOSS) BEFORE CAPITAL CONTRIBUTIONS, SPECIAL/EXTRAORDINARY ITEM(S)672,603 (82,353) SPECIAL ITEM(S) - CONSERVATION CREDIT (1,105,809) - CAPITAL CONTRIBUTIONS 1,786,648 674,226 CHANGES IN NET ASSETS 1,353,442 591,873 NET ASSETS - BEGINNING OF YEAR 166,979,420 164,376,102 NET ASSETS - FOR PERIOD END JUNE 30, 2017 168,332,862$ 164,967,976$ YORBA LINDA WATER DISTRICT UNAUDITED COMBINING SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS September 30, 2017 (With September 30, 2016 for comparison only) YTD Debt Prior YTD PY Debt Actual Service Actual Service FY18 Calculation FY17 Calculation Revenue (Operating): Water Revenue (Residential)$4,782,228 $4,782,228 $4,382,083 $4,382,083 Water Revenue (Commercial & Fire Det.)554,747 $554,747 528,034 $528,034 Water Revenue (Landscape/Irrigation)1,305,955 $1,305,955 1,237,540 $1,237,540 Water Revenue (Service Charge)2,498,416 $2,498,416 2,652,485 $2,652,485 Other Operating Revenue 211,129 211,129 243,382 243,382 Total Operating Revenue:9,352,475 9,352,475 9,043,524 9,043,524 Revenue (Non-Operating): Interest 65,081 65,081 51,930 51,930 Property Tax 43,499 43,499 41,529 41,529 Other Non-Operating Revenue 159,257 35,496 93,023 (30,738) Total Non-Operating Revenue:267,837 144,076 186,482 62,721 Total Revenue 9,620,312 9,496,551 9,230,006 9,106,245 Expenses (Operating): Variable Water Costs (G.W., Import & Power)4,324,346 4,324,346 4,186,449 4,186,449 Salary Related Expenses 1,757,645 1,757,645 2,117,513 2,117,513 Supplies & Services 901,666 901,666 1,011,021 1,011,021 Depreciation 1,515,487 - 1,444,925 - Total Operating Expenses 8,499,144 6,983,657 8,759,908 7,314,983 Expenses (Non-Operating): Interest on Long Term Debt 333,542 - 423,879 - Other Expense (7,667)(7,667)(18,571)(18,571) Total Non-Operating Expenses:325,875 (7,667) 405,308 (18,571) Total Expenses 8,825,019 6,975,990 9,165,216 7,296,412 Net Position Before Capital Contributions/Special Items 795,293 2,520,561 64,790 1,809,833 Special Item - Conservation Credit 1,105,809 - - - Transfers (To)/From - - - - Capital Contributions (Non-Cash Transaction -968,275 - 351,960 - GASB 34 Compliant) Net Position 657,759$ 2,520,561$ 416,750$ 1,809,833$ DEBT SERVICE RATIO CALCULATION: Net Revenues 2,520,561$ 1,809,833$ Debt Service 682,450$ 679,221$ %369% 266% Yorba Linda Water District Unaudited Debt Service Ratio Calculation For Period Ending September 30, 2017 (With September 30, 2016 for comparison purposes) FY18 Annual Budget YTD Actuals thru September 2017 YTD % of Budget Water Revenue (Residential)14,278,688$ 4,782,228$ 33.49% Water Revenue (Commercial & Fire Det.)2,071,031$ 554,747$ 26.79% Water Revenue (Landscape/Irrigation)3,079,054$ 1,305,955$ 42.41% Service Charges 10,106,238$ 2,498,416$ 24.72% Other Operating Revenue 769,106$ 211,129$ 27.45% Total Operating Revenue 30,304,117$ 9,352,475$ 30.86% Revenue (Non-Operating): Interest 275,000$ 65,081$ 23.67% Property Taxes 1,710,000$ 43,499$ 2.54% Other Non-Operating Revenue 604,646$ 159,257$ 26.34% Total Non-Operating Revenue 2,589,646$ 267,837$ 10.34% Total Revenue 32,893,763$ 9,620,312$ 29.25% Expenses (Operating): Variable Water Costs (G.W., Import & Power) Water-Related Costs 11,240,088$ 3,817,270$ 33.96% Fixed Costs 1,443,355$ 218,278$ 15.12% Power-Related Costs 1,285,413$ 288,798$ 22.47% Variable Water Costs Related Expenses Total 13,968,855$ 4,324,346$ 30.96% Salary Related Expenses 8,859,867$ 1,757,645$ 19.84% Salary Related Expenses - Limited-term Staff -$ -$ 0.00% Reduction for Capital Project Labor (215,000)$ -$ 0.00% Salary Related Expenses Total 8,644,867$ 1,757,645$ 20.33% Supplies & Services Communications 189,565$ 46,882$ 24.73% Contractual Services 519,653$ 83,706$ 16.11% Data Processing 235,322$ 35,137$ 14.93% Dues & Memberships 80,492$ 30,399$ 37.77% Fees & Permits 264,641$ 41,205$ 15.57% Board Election -$ -$ 0.00% Insurance 263,506$ 60,315$ 22.89% Materials 797,347$ 192,928$ 24.20% District Activities, Emp Recognition 22,506$ 2,598$ 11.54% Maintenance 339,342$ 108,089$ 31.85% Non-Capital Equipment 104,678$ 19,697$ 18.82% Office Expense 39,662$ 9,199$ 23.19% Professional Services 650,108$ 126,512$ 19.46% Training 61,728$ 6,165$ 9.99% Travel & Conferences 102,493$ 12,332$ 12.03% Uncollectible Accounts 17,205$ (74)$ -0.43% Utilities 158,100$ 54,663$ 34.57% Vehicle Expenses 286,812$ 71,913$ 25.07% Supplies & Services Sub-Total 4,133,160$ 901,666$ 21.82% Total Operating Expenses 26,746,883$ 6,983,657$ 26.11% Expenses (Non-Operating) Other Expense 15,220$ (7,667)$ -50.37% Total Non-Operating Expenses 15,220$ (7,667)$ -50.37% Total Expenses 26,762,103$ 6,975,990$ 26.07% Net Revenues 6,131,660$ 2,644,322$ 43.13% Less: Debt Service (Principal & Interest)2,729,799$ 1,919,271$ 70.31% Less: Committed Capital Expenditures (PayGo)2,635,755$ 472,888$ 17.94% Less: Special Item - Conservation Credit -$ 1,105,809$ 0.00% Transfer to/(from) Reserves 766,107$ (853,645)$ -111.43% Net -$ -$ Yorba Linda Water District Water Enterprise FY18 ProForma - Use of Funds September 2017 Yorba Linda Water District Summary Financial Report Water & Sewer Funds For Period Ending September 30, 2017 Annual YTD Sept YTD YTD Actual Prior Year Prior Year YTD Actual YTD Actual Budget Budget Actual Actual (Under) Over Sept. Actual Actual (thru vs vs FY18 FY18 FY18 FY18 YTD Budget FY17 Sept. 2016)PY Actual $PY Actual % Revenue (Operating): Water Revenue (Residential)$14,278,688 $4,661,992 $1,484,961 $4,782,228 120,236 $1,779,116 $4,382,084 $400,144 9.13% Water Revenue (Commercial & Fire Det.)2,071,031 676,192 162,479 554,747 (121,445)204,712 528,033 26,714 5.06% Water Revenue (Landscape/Irrigation)3,079,054 1,005,311 398,933 1,305,955 300,644 502,994 1,237,540 68,415 5.53% Water Revenue (Service Charge)10,106,238 2,526,560 831,686 2,498,416 (28,144)827,872 2,652,485 (154,069)-5.81% Sewer Charge Revenue 2,032,245 508,061 179,226 514,527 6,466 178,219 469,895 44,632 9.50% Locke Ranch Assessments 223,000 - 130 214 214 193 267 (53) 0.00% Other Operating Revenue 866,161 216,540 72,059 229,021 12,481 84,756 266,331 (37,310)-14.01% Total Operating Revenue:32,656,417 9,594,655 3,129,474 9,885,108 290,453 3,577,862 9,536,635 348,473 3.65% Revenue (Non-Operating): Interest 310,000 77,500 31,121 70,165 (7,335)25,136 55,426 14,739 26.59% Property Tax 1,710,000 42,847 40,856 43,499 652 39,001 41,529 1,970 0.00% Other Non-Operating Revenue 624,521 156,131 9,741 160,308 4,177 52,226 93,614 66,694 71.24% Total Non-Operating Revenue:2,644,521 276,478 81,718 273,972 (2,506)116,363 190,569 83,403 43.77% Total Revenue 35,300,938 9,871,134 3,211,192 10,159,080 287,946 3,694,225 9,727,204 431,876 4.44% Expenses (Operating): Variable Water Costs (G.W., Import & Power)13,968,855 4,538,160 1,358,893 4,324,346 (213,814)1,262,158 4,186,449 137,897 3.29% Salary Related Expenses 9,643,124 2,099,915 728,115 1,982,229 (117,686)721,973 2,354,476 (372,247)-15.81% Supplies & Services 4,621,895 1,034,851 374,544 1,009,244 (25,606)352,330 1,086,107 (76,863) -7.08% Total Operating Expenses 28,233,874 7,672,925 2,461,552 7,315,819 (357,106)2,336,461 7,627,032 (311,213)-4.08% Expenses (Non-Operating): Interest on Long Term Debt 1,489,796 339,635 111,181 333,542 (6,093) 155,918 423,879 (90,337) -21.31% Other Expense 15,220 3,805 (23,870) (18,346)(22,151)7,818 (18,571)225 1.21% Total Non-Operating Expenses:1,505,016 343,440 87,311 315,196 (28,244) 163,736 405,308 (90,112) -22.23% Total Expenses 29,738,890 8,016,366 2,548,863 7,631,015 (385,350)2,500,197 8,032,340 (401,325)-5.00% Net Position Before Capital Contributions 5,562,048 1,854,768 662,329 2,528,065 673,296 1,194,029 1,694,863 833,201 49.16% Special Item - - 1,105,809 1,105,809 - - 1,105,809 0.00% Capital Contributions (Non-Cash Transaction -- - - 1,786,648 1,786,648 673,588 674,226 1,112,422 164.99% GASB 34 Compliant) Net Position Before Depreciation 5,562,048 1,854,768 662,329 3,208,904 1,354,135 1,867,616 2,369,090 839,814 35.45% Depreciation & Amortization 7,182,000 1,795,500 618,090 1,855,462 59,962 592,391 1,777,217 78,245 4.40% Total Net Position ($1,619,952)$59,268 $44,239 $1,353,442 $1,294,173 $1,275,225 $591,873 $761,569 128.67% (19,030)(54,935) (54,935) (19,764)(59,957) 5,022 -8.38% (With September 30, 2016 for comparison purposes) Annual YTD Sept YTD YTD Actual Prior Year Prior YTD YTD Actual YTD - CUR Budget Budget Actual Actual (Under)Over Sept. Actual Actual (thru vs vs FY18 FY18 FY18 FY18 YTD Budget FY17 Sept. 2016) PY Actual $PY Actual % Revenue (Operating): Water Revenue (Residential)$14,278,688 $4,661,992 $1,484,961 $4,782,228 120,236 $1,779,116 $4,382,083 $400,145 9.13% Water Revenue (Commercial & Fire Det.)2,071,031 $676,192 162,479 554,747 (121,445)204,712 528,034 26,713 5.06% Water Revenue (Landscape/Irrigation)3,079,054 $1,005,311 398,933 1,305,955 300,644 502,994 1,237,540 68,415 5.53% Water Revenue (Service Charge)10,106,238 2,526,560 831,686 2,498,416 (28,144)827,872 2,652,485 (154,069) -5.81% Other Operating Revenue 769,106 192,277 70,060 211,129 18,853 81,659 243,382 (32,253) -13.25% Total Operating Revenue:30,304,117 9,062,330 2,948,119 9,352,475 290,145 3,396,353 9,043,524 308,951 3.42% Revenue (Non-Operating): Interest 275,000 68,750 28,575 65,081 (3,669)23,394 51,930 13,151 25.32% Property Tax 1,710,000 42,847 40,856 43,499 652 39,001 41,529 1,970 0.00% Other Non-Operating Revenue 604,646 151,162 14,059 159,257 8,096 52,226 93,023 66,234 71.20% Total Non-Operating Revenue:2,589,646 262,759 83,490 267,837 5,078 114,621 186,482 81,355 43.63% Total Revenue 32,893,763 9,325,089 3,031,609 9,620,312 295,223 3,510,974 9,230,006 390,306 4.23% Expenses (Operating): Variable Water Costs (G.W., Import & Power)13,968,855 4,538,160 1,358,893 4,324,346 (213,814)1,262,158 4,186,449 137,897 3.29% Salary Related Expenses 8,644,867 1,878,327 644,364 1,757,645 (120,682)655,198 2,117,513 (359,868) -16.99% Supplies & Services: Communications 189,565 47,391 30,528 46,882 (509)40,775 71,012 (24,130) -33.98% Contractual Services 519,653 84,913 29,129 83,706 (1,207)41,210 113,228 (29,522) -26.07% Data Processing 235,322 38,331 10,683 35,137 (3,194)20,383 40,586 (5,449) -13.43% Dues & Memberships 80,492 29,000 4,529 30,399 1,399 521 29,116 1,283 4.41% Fees & Permits 264,641 42,660 23,257 41,205 (1,455)33,306 48,791 (7,586) -15.55% Board Election - - - - - - 72,539 (72,539) -100.00% Insurance 263,506 65,877 19,968 60,315 (5,562)20,095 65,853 (5,538) -8.41% Materials 797,347 199,337 60,641 192,928 (6,408)87,826 214,141 (21,213) -9.91% District Activities, Emp Recognition 22,506 5,627 1,260 2,598 (3,029)457 1,930 669 34.65% Maintenance 339,342 84,836 51,433 108,089 23,254 17,617 50,957 57,132 112.12% Non-Capital Equipment 104,678 21,170 8,753 19,697 (1,472)10,210 22,123 (2,426) -10.96% Office Expense 39,662 9,916 4,493 9,199 (717)4,616 6,442 2,757 42.80% Professional Services 650,108 127,027 52,801 126,512 (515)30,181 134,290 (7,778) -5.79% Training 61,728 15,432 1,911 6,165 (9,267)1,513 7,716 (1,551) -20.10% Travel & Conferences 102,493 25,623 7,110 12,332 (13,291)4,357 12,768 (436) -3.41% Uncollectible Accounts 17,205 4,301 (174) (74) (4,375)(418) 3,363 (3,437) -102.20% Utilities 158,100 49,525 10,420 54,663 5,138 9,824 36,004 18,659 51.82% Vehicle Equipment 286,812 71,703 30,112 71,913 210 7,904 80,162 (8,249) -10.29% Supplies & Services Sub-Total 4,133,160 922,667 346,854 901,666 (21,001)330,377 1,011,021 (109,355) -10.82% Total Operating Expenses 26,746,883 7,339,154 2,350,111 6,983,657 (355,498)2,247,732 7,314,983 (331,326) -4.53% Expenses (Non-Operating): Interest on Long Term Debt 1,489,796 339,635 111,181 333,542 (6,093)155,918 423,879 (90,337) -21.31% Other Expense 15,220 3,805 (13,191) (7,667) (11,472)7,818 (18,571) 10,903 58.71% Total Non-Operating Expenses:1,505,016 343,440 97,990 325,875 (17,565) 163,736 405,308 (79,433) -19.60% Total Expenses 28,251,899 7,682,595 2,448,101 7,309,532 (373,063)2,411,469 7,720,291 (410,759) -5.32% Net Position Before Capital Contributions 4,641,864 1,642,495 583,508 2,310,780 668,286 1,099,505 1,509,715 801,065 53.06% Special Item - - 1,105,809 1,105,809 - - 1,105,809 0.00% Capital Contributions (Non-Cash Transaction -- - - 968,275 968,275 351,960 351,960 616,315 175.11% GASB 34 Compliant) Net Position Before Depreciation 4,641,864 1,642,495 583,508 2,173,246 530,752 1,451,465 1,861,675 311,571 16.74% Depreciation & Amortization 5,832,000 1,458,000 504,645 1,515,487 57,487 481,627 1,444,925 70,562 4.88% Total Net Position (1,190,136) 184,495 78,863 657,759 473,265 969,838 416,750 241,009 57.83% Capital - Direct Labor (17,178) (49,804)(49,804) (18,870) (56,678) 6,874 -12.13% (With September 30, 2016 for comparison purposes) Yorba Linda Water District Water Fund For Period Ending September 30, 2017 Annual YTD Sept YTD YTD Actual Prior Year Prior Year YTD Actual YTD - CUR Budget Budget Actual Actual (Under)Over Sept. Actual Actual (thru vs vs FY18 FY18 FY18 FY18 YTD Budget FY17 Sept. 2016)PY Actual $PY Actual % Revenue (Operating): Sewer Charge Revenue $2,032,245 $508,061 $179,226 $514,527 $6,466 $178,219 $469,895 $44,632 9.50% Locke Ranch Assessments 223,000 0 130 214 214 193 267 (53) 0.00% Other Operating Revenue 97,055 24,264 1,999 17,893 (6,371)3,097 22,949 (5,056) -22.03% Total Operating Revenue:2,352,300 532,325 181,355 532,634 310 181,509 493,111 39,524 8.02% Revenue (Non-Operating): Interest 35,000 8,750 2,547 5,085 (3,665)1,743 3,495 1,590 45.48% Other Non-Operating Revenue 19,875 4,969 (4,318) 1,051 (3,918)- 591 461 77.98% Total Non-Operating Revenue:54,875 13,719 (1,771)6,136 (7,583)1,743 4,086 2,050 50.17% Total Revenue 2,407,174 546,044 179,584 538,770 (7,273)183,252 497,197 41,574 8.36% Expenses (Operating): Salary Related Expenses 998,257 221,587 83,751 224,583 2,996 66,776 236,963 (12,380)-5.22% Supplies & Services: Communications 12,010 3,003 696 1,769 (1,234)886 3,156 (1,387)-43.94% Contractual Services 28,237 7,059 2,193 6,301 (758)2,632 8,040 (1,739)-21.63% Data Processing 15,078 3,770 804 2,645 (1,125)1,661 3,182 (537)-16.88% Dues & Memberships 6,053 1,513 341 2,288 775 39 2,191 97 4.43% Fees & Permits 17,474 4,369 719 1,798 (2,571)917 1,931 (133)-6.89% Board Election - - - - - - 5,460 (5,460)-100.00% Insurance 19,834 4,959 1,503 4,540 (419)1,513 4,957 (417)-8.41% Materials 51,653 12,913 716 13,207 294 800 7,177 6,030 84.02% District Activities, Emp Recognition 1,694 424 91 192 (232)34 145 47 32.28% Maintenance 170,559 32,640 9,221 24,024 (8,616)5,903 11,572 12,452 107.60% Non-Capital Equipment 20,147 5,037 477 6,436 1,399 1,219 2,760 3,676 133.19% Office Expense 2,963 741 338 692 (49)347 485 208 42.83% Professional Services 40,417 10,104 1,439 6,396 (3,708)1,111 5,362 1,034 19.28% Training 6,782 1,696 125 415 (1,280)92 1,065 (650)-61.00% Travel & Conferences 12,752 3,188 535 1,306 (1,882)328 919 387 42.11% Uncollectible Accounts 1,295 324 29 61 (263)(72) 652 (591)-90.64% Utilities 12,600 3,150 842 4,288 1,138 792 2,878 1,410 48.99% Vehicle Equipment 69,188 17,297 7,622 31,219 13,922 3,749 13,152 18,067 137.36% Supplies & Services Sub-Total 488,735 112,184 27,691 107,577 (4,607) 21,951 75,084 32,494 43.28% Total Operating Expenses 1,486,991 333,771 111,442 332,160 (1,611) 88,727 312,047 20,113 6.45% Expenses (Non-Operating): Interest Expense - - - - - - - - - Other Expense - - (10,679) (10,679) (10,679) - - (10,679) - Total Non-Operating Expenses:- - (10,679) (10,679) (10,679) - - (10,679) 0.00% Total Expenses 1,486,991 333,771 100,763 321,481 (12,290) 88,727 312,047 9,434 3.02% Net Position Before Capital Contributions 920,183 212,272 78,821 217,289 5,017 94,526 185,150 32,140 17.36% Capital Contributions (Non-Cash Transaction -- - - 818,373 818,373 321,628 322,266 496,107 153.94% GASB 34 Compliant) Net Position Before Depreciation 920,183 212,272 78,821 1,035,662 823,390 416,154 507,416 528,247 104.11% Depreciation & Amortization 1,350,000 337,500 113,445 339,975 2,475 110,764 332,293 7,682 2.31% Total Net Position (429,817) (125,228) (34,624) 695,687 820,915 305,389 175,123 520,564 297.26% Capital - Direct Labor (1,853) (5,130)(5,130) (893) (3,279)(1,851)56.45% Yorba Linda Water District Sewer Fund For Period Ending September 30, 2017 (With September 30, 2016 for comparison purposes) $905,223 $1,042,559 $1,211,204 $1,273,782 $2,652,485 $2,498,416 $567,352 $573,395 $568,714 $496,428 $528,034 $554,747 $1,480,325 $1,519,855 $1,579,645 $896,502 $1,237,540 $1,305,955 $5,297,139 $5,282,789 $5,262,514 $3,667,584 $4,382,084 $4,782,227 $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 $9,000,000 $10,000,000 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Water Revenue Comparison by Fiscal Year Water Revenue (Service Charge) Water Revenue (Commercial & Fire Det.) Water Revenue (Landscape/Irrigation) Water Revenue (Residential) $8,250,039 $8,418,598 $8,622,077 $9,141,345 $8,800,143 $6,334,296 $22,577,410 $26,794,629 $25,435,084 $26,923,674 314 365 360 360 60 110 160 210 260 310 360 410 $20,000 $5,020,000 $10,020,000 $15,020,000 $20,020,000 $25,020,000 $30,020,000 Sept. 2014 Sept. 2015 Sept. 2016 Sept. 2017 Unrestricted Reserves & Days in Cash (Water) Unrestricted Reserves (Water)Days in Cash (Water) $8,935,002 $9,040,255 $7,422,206 $9,230,006 $9,620,312 $7,895,936 $7,879,414 $6,482,837 $7,720,291 $7,309,532 $- $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 Sept. 2013 Sept. 2014 Sept. 2015 Sept. 2016 Sept. 2017 Water Revenues & Expenses - 1st Quarter (excludes Depreciation, Special Items, and Contributed Capital ) Total Revenue Total Expenses $444,523 $428,274 $421,470 $497,197 $538,770 $337,761 $314,934 $295,754 $312,047 $321,481 $- $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 Sept. 2013 Sept. 2014 Sept. 2015 Sept. 2016 Sept. 2017 Sewer Revenues & Expenses - 1st Quarter (excludes Depreciation, Special Items, and Contriubed Capital) Total Revenue Total Expenses 0 100000 200000 300000 400000 500000 600000 700000 800000 900000 Jul-14 Jul-15 Jul-16 Jul-17 Aug-14 Aug-15 Aug-16 Aug-17 Sep-14 Sep-15 Sep-16 Sep-17 JUL AUG SEPConsumption, CCFCustomer Consumption by Type Residential Commercial Landscape 0.00 0.20 0.40 0.60 0.80 1.00 1.20 0 200000 400000 600000 800000 1000000 1200000 Jul-17 Aug-17 Sep-17 Rainfall, in.Consumption, CCFConsumption vs Rainfall R C L Rain $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 JULY AUGUST SEPTEMBER $101,350 $90,253 $72,759 $101,350 $90,253 $72,759 $101,350 $90,253 $72,759 Variable Water Costs by Month (Variable vs. Fixed Expenses) (MWDOC's Annual Connection amortized over 12 months for all Fiscal Years) $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 $1,800,000 $2,000,000 Jul Aug Sept Oct Nov Dec Jan Feb Mar April May June Variable Costs Analysis FY16 Var Costs FY17 Var Costs FY18 Var Costs (includes 100% of Annual Connection Charge in July) ITEM NO. 11.1 AGENDA REPORT Meeting Date: November 28, 2017 Subject:Interagency Committee with MWDOC and OCWD (Miller/Nederhood) · Minutes of meeting held November 20, 2017 at 4:00 p.m. · Next meeting scheduled January 25, 2018 at 4:00 p.m. ATTACHMENTS: Name:Description:Type: 2017-11-20_-_Minutes_-_YLWD-MWDOC-OCWD.docx Minutes Minutes Minutes of the YLWD/MWDOC/OCWD Interagency Committee Meeting Held November 20, 2017 at 4:00 p.m. 1 MINUTES OF THE YORBA LINDA WATER DISTRICT INTERAGENCY COMMITTEE MEETING WITH MWDOC AND OCWD Monday, November 20, 2017, 4:00 P.M. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The meeting was called to order at 4:00 p.m. 2. ROLL CALL YLWD COMMITTEE MEMBERS YLWD STAFF J. Wayne Miller, President Marc Marcantonio, General Manager Al Nederhood, Vice President Steve Conklin, Engineering Manager John DeCriscio, Operations Manager MWDOC COMMITTEE MEMBER MWDOC STAFF None Rob Hunter, General Manager OCWD COMMITTEE MEMBER OCWD STAFF Roger Yoh, Director Mike Markus, General Manager OTHER ATTENDEES Brooke Jones, YLWD Director (As observer only, non-participatory.) 3. PUBLIC COMMENTS None. 4. DISCUSSION ITEMS 4.1. MWD Water Supply Conditions and Outlook Mr. Hunter reported that MWD water supply conditions continue to be very good, with 2.3 million acre-feet (AF) of water in storage, following the largest increase in storage ever, as a result of record rains last year. He noted that CA Dept of Water Resources is holding Oroville Reservoir at a lower level than in the past at this time of year, as a precaution to minimize the possibility of overflow to the spillway, which is still in the process of upgrade and repair. Minutes of the YLWD/MWDOC/OCWD Interagency Committee Meeting Held November 20, 2017 at 4:00 p.m. 2 4.2. Condition of OCWD Groundwater Basin, Water Purchased for Recharge, and In-Lieu Recharge Mr. Markus reported that the condition of the groundwater basin continues to improve, due to the 65,000 AF of water being purchased for recharge, and the in-lieu program, which is on schedule to reduce the basin overdraft by 100,000 AF by June 2018. With these efforts as describe, he noted that the goal is to reduce the overdraft to 200,000 AF by June. 4.3. PFOS/PFOA Testing and Mitigation Mr. Conklin reported that PFOS and PFOA testing continues on a quarterly basis, performed by the OCWD lab. Samples are taken at each production well and at Highland Reservoir, where the flow from all wells in operation is blended before distribution to any customers. The test results are seeing little variation. The combined total of PFOS and PFOA at Highland is the value that is most closely reviewed. The running average is 66 parts per trillion, with an EPA advisory limit of 70 ppt. OCWD continues to monitor for the contaminants upstream in Riverside and San Bernardino counties, as well as in production and monitoring wells in Orange County. Per OCWD, no potentially responsible parties have been identified, and there is thought that the release of the contaminants may have been decades ago, based on the depth in the OC basin where they have been found. 4.4. Huntington Beach Desalination Project Mr. Markus reported that the Project recently received State Lands Commission approval. Next up will be consideration by the Regional Water Quality Control Board. If approval received, last will be consideration by the California Coastal Commission, in mid-2018. Under the existing scenario, OCWD would be responsible for design and construction of all necessary infrastructure outside of the plant. OCWD continues to look at various users, demand conditions, infrastructure options and cost estimates. 4.5. California Water Fix Project Mr. Hunter reported that MWD board recently voted to support the Water Fix Project. Most of the State Water Project agencies have also confirmed their support. Support for the Project among Central Valley Project (CVP) agencies (some 250 entities) is unsure as the water for those agencies is through the federal government. He noted that the good news is that the Senate just confirmed Brenda Burman as the Commissioner of the Bureau of Reclamation. It is hoped that she will be able to pull some of the CVP entities into support for the Project. Minutes of the YLWD/MWDOC/OCWD Interagency Committee Meeting Held November 20, 2017 at 4:00 p.m. 3 4.6. North and South Basin Projects Mr. Markus reported that work is proceeding on the prep of the Remedial Investigation and Feasibility Study (RI/FS) for each project. Regarding the North Basin Project, still pursuing EPA National Priorities Listing. As a preliminary response measure for North Basin, work is complete and Well EW-1 is operational, extracting about 1 mgd of contaminated water and discharging to the OCSD trunk sewer. Regarding the South Basin, court ruled in favor of OCWD in recent appeal. No other details provided on South Basin. 4.7. YLWD Well Projects Mr. Conklin reported that Well 21 is on line and producing about 3000 gpm. Regarding Well 22 project, contractor has been hired and expects to start work on drilling the well by January 2018. District staff is completing the RFP and will issue it shortly to retain a consultant for design and construction-phase services for the equipping of the well and the discharge piping. 4.8. Future Agenda Items None. 5. ADJOURNMENT 5.1. The meeting was adjourned at 5:00 p.m. SC ITEM NO. 13.1 AGENDA REPORT Meeting Date: November 28, 2017 Subject:Meetings from November 29 - January 31, 2018 ATTACHMENTS: Name:Description:Type: BOD_-_Activities_Calendar.pdf Backup Material Backup Material Board of Directors Activity Calendar Event Date Time Attendance By November ACWA Fall Conference Wed, Nov 29 8:00 AM Jones/Miller/Nederhood Yorba Linda Planning Commission Wed, Nov 29 6:30 PM Hawkins (As Needed) ACWA Fall Conference Thu, Nov 30 8:00 AM Jones/Miller/Nederhood December WACO Fri, Dec 1 7:30 AM Jones (All Directors PA) ACWA Fall Conference Fri, Dec 1 8:00 AM Jones/Nederhood ISDOC Executive Committee Tue, Dec 5 7:30 AM Nederhood Yorba Linda City Council Tue, Dec 5 6:30 PM Hall MWDOC Wed, Dec 6 8:30 AM Nederhood Active Shooter Awareness Training Wed, Dec 6 2:00 PM Hawkins/Jones OCSD Operations Committee Wed, Dec 6 5:00 PM Hawkins OCWD Wed, Dec 6 5:30 PM Jones Board of Directors Workshop Meeting Thu, Dec 7 6:30 PM WACO Fri, Dec 8 7:30 AM Jones (All Board) Board of Directors Regular Meeting Tue, Dec 12 6:30 PM LAFCO Wed, Dec 13 8:00 AM Nederhood (As Needed) CRWUA Annual Conference Wed, Dec 13 8:00 AM Jones/Nederhood Yorba Linda Planning Commission Wed, Dec 13 6:30 PM Hawkins (As Needed) CRWUA Annual Conference Thu, Dec 14 8:00 AM Jones/Nederhood CRWUA Annual Conference Fri, Dec 15 8:00 AM Jones/Nederhood Joint Committee Meeting with City of Yorba Linda Mon, Dec 18 4:00 PM Nederhood/Hawkins YL City Council Tue, Dec 19 6:30 PM Hawkins MWDOC Wed, Dec 20 8:30 AM Nederhood OCWD Wed, Dec 20 5:30 PM Jones OCSD Wed, Dec 20 6:00 PM Hawkins/Jones District Offices Closed Mon, Dec 25 7:00 AM Yorba Linda Planning Commission Wed, Dec 27 6:30 PM Hawkins (As Needed) January District Offices Closed Mon, Jan 1 7:00 AM ISDOC Executive Committee Tue, Jan 2 7:30 AM Nederhood Yorba Linda City Council Tue, Jan 2 6:30 PM TBD MWDOC Wed, Jan 3 8:30 AM Nederhood OCSD Operations Committee Wed, Jan 3 5:00 PM Hawkins OCWD Wed, Jan 3 5:30 PM Jones WACO Fri, Jan 5 7:30 AM Jones (All Directors PA) Board of Directors Regular Meeting Tue, Jan 9 6:30 PM LAFCO Wed, Jan 10 8:00 AM Nederhood (As Needed) Yorba Linda Planning Commission Wed, Jan 10 6:30 PM Hawkins (As Needed) YL City Council Tue, Jan 16 6:30 PM TBD MWDOC Wed, Jan 17 8:30 AM Nederhood OCWD Wed, Jan 17 5:30 PM Jones Board of Directors Regular Meeting Tue, Jan 23 6:30 PM MWDOC/OCWD Joint Planning Committee Wed, Jan 24 8:30 AM Jones/Nederhood OCSD Wed, Jan 24 6:00 PM Hawkins/Jones Yorba Linda Planning Commission Wed, Jan 24 6:30 PM Hawkins (As Needed) Interagency Committee Meeting with MWDOC and OCWD Thu, Jan 25 4:00 PM Miller/Nederhood PA = Preauthorized ITEM NO. 14.1 AGENDA REPORT Meeting Date: November 28, 2017 Subject:OCWA Luncheon - November 15, 2017 NWRI Workshop - December 5, 2017 STAFF RECOMMENDATION: That the Board of Directors ratify and/or approve Director attendance at these events if desired. ATTACHMENTS: Name:Description:Type: OCWA_Lunch.pdf Backup Material Backup Material NWRI_Workshop.pdf Backup Material Backup Material OCWA Luncheon Announcement November, 2017 November 15 Luncheon: The New Realities of Energy Storage and Use at Irvine Ranch Water District Speaker: Patrick Sheilds, Executive Director of Operations, Irvine Ranch Water District Abstract The retirement of the San Onofre Nuclear Generating Station (SONGS) created a gap in local electric power generation capacity of approximately 2,200 megawatts (MW). In 2015, the California Public Utilities Commission approved a portfolio of Local Capacity Requirements contracts proposed by Southern California Edison to address the gap left by SONGS. One of these contracts was to develop 50 MW of behind-the-meter (connected to host customer load) grid-scale energy storage systems using batteries. Advanced Microgrid Solutions was awarded the contract to develop 50 MW battery storage within the To Register for the November 15 Luncheon Presentation CLICK HERE The 2018 Board Members will also be announced Wednesday November 15, 2017 11:30 am to 1:30 pm Dave & Busters Irvine Spectrum 661 Spectrum Center Drive Irvine, California 92618 (949) 727-0555 Registration Info: The cost for registration is: $30 for OCWA members with reservations before noon on Tuesday, November 14 impacted area. These energy storage projects sited at qualified host customer facilities involves charging batteries from the grid during off-peak hours (lower cost power) and then discharging them during on-peak times reducing stress on the grid as well as reducing the overall cost of power to the host. IRWD is host to 11 systems under development AMS. The developer bears all responsibility for project design, development, permitting, financing, maintenance, operations, and all legal and contractual obligations to SCE. Recent advances in battery technology and software that controls the interaction between the batteries and the grid, have made the systems more viable, reliable and cost effective. IRWD entered into ten-year contracts using a public- private partnership model to develop 7 MW of battery storage at the 11 sites. Some grant funding was successfully obtained with cost savings from the battery systems operation shared between both parties. About Our Speaker Patrick Sheilds has over 15 years executive experience overseeing water recycling, potable water, biosolids management, natural treatments, and renewable energy programs in both public and private sectors. He is the sponsor of pioneering 7 MW/34MWh battery energy storage project at eleven sites supported by a ten- year Energy Management Service Agreement and $11M in grant funding. He has developed and secured financing of $50M for over 7 megawatts (MW) of renewable energy projects including solar power, fuel cell, and wind power to increase energy system reliability to reduce reliance on the grid, stabilize energy costs, and reduce the carbon footprint. He has also advanced the use of PPA's in the public sector for renewable energy projects. Mr Sheilds is experienced in advising public and private sectors in the areas of: resource recovery, water program optimization, water recycling and renewable energy project development, energy efficiency, regulatory compliance, and biosolids management. $40 for OCWA members with or without reservations after noon on Tuesday, November 14 $40 for non-members Cancellations must be received by the reservation deadline. Late cancellations and no-shows will be billed. For additional information, please contact: Leticia Villarreal (714) 378-3203 Orange County Water Association P.O. Box 51404 | Irvine, California 92619-1404 www.ocwater.org Orange County Water Association, P.O. Box 51404, Irvine, CA 92619-1404 CALIFORNIA DEPARTMENT OF WATER RESOURCES NATIONAL WATER RESEARCH INSTITUTE ORANGE COUNTY WATER DISTRICT Workshop on Seasonal to Sub-Seasonal Precipitation Forecasting December 5, 2017 Orange County Water District, Fountain Valley, CA REGISTER ONLINE AT https://www.regonline.com/S2S_Precipitation_Forecasting_Workshop AGENDA 9:30 am Registration Desk Opens 10:00 am Welcome and Opening Remarks Jeanine Jones, California Department of Water Resources Kevin Hardy, NWRI 10:15 am Improving Seasonal to Sub-seasonal (S2S) Precipitation Forecasting: An Overview Jeanine Jones, PE, California Department of Water Resources 10:45 am Improving S2S Precipitation Forecasting: A Scientific Perspective Duane Waliser, PhD NASA Jet Propulsion Laboratory 11:15 am Reconstructions of Paleo Droughts in Southern California Connie Woodhouse, Ph.D. University of Arizona. 11:45 am Use of Paleo Reconstructions for Drought Risk Management: Guidebook for Water Managers Connie Woodhouse and Jeanine Jones 12:15 pm Opportunities for California: Extreme Precipitation Events Marty Ralph, Ph.D., Scripps Institute of Oceanography 12:45 pm LUNCH (provided) 1:15 pm Forecast-informed Reservoir Operations (FIRO) Application: Russian River Pilot Project Jay Jasperse, PE, or Brad Sherwood, Sonoma County Water Agency 1:45 pm Exploring the Possibilities at Prado Dam Greg Woodside, PE, Orange County Water District 2:15 pm Next Steps: Where Do We Go From Here? Jeanine Jones 2:45 pm Adjourn Workshop EVENT WEB SITE: http://www.nwri-usa.org/s2s_precipitation_workshop.htm LOCATION: Orange County Water District, Board Room, 18700 Ward Street, Fountain Valley, CA 92708 CONTACT: Dawna Hernandez, Event Manager, NWRI (dhernandez@nwri-usa.org) or (714) 378-3278 Suzanne Sharkey, Water Resources Scientist, NWRI (ssharkey@nwri-usa.org) or (714) 378-8236 To register, please visit https://www.regonline.com/registration/Checkin.aspx?EventID=2087671. The registration fee of $30 includes all materials, continental breakfast, lunch, and drinks. BACKUP MATERIALS DISTRIBUTED LESS THAN 72 HOURS PRIOR TO THE MEETING ITEM NO. 8.1. ASSET ALLOCATION - RISK & REWARD Five Year Returns January 1950 - September 2017 Period Returns Worst -Average .Best Ending Worst Average Average Average Best Percent Percent Exceeding Return Return Return Portfolio Mix: 9/17 Return Loss Return Gain Return Negative Positive Inflation 10.4% Stocks 90% 27.4% No Bonds 12.8% -5.7% -1.4% 10.4% 11.3% 27.4% 7% 93% 76% -5.7% Cash 10% 9.9% Stocks 80% �- 25.8% Bonds 10% 11.5% -4.5% -1.0% 9.9% 10.5% 25.8% 5% 95% 76% -4.5% # Cash 10% 9.4% Stocks 70% 24.2% Bonds 20% 10.2% -3.4% -0.6% 9.4% 9.7% 24.2% 3% 97% 76% -3.4% 0 Cash 10% 8.9% Stocks 60% 22.6% Bonds 30% 8.9% -2.3% -1.4% 8.9% 8.9% 22.6% 0%' 100% 77% -2.3% 5 Cash 10% 8.4% Stocks 50% 20.9% Bonds 40% 7.5% -1.1% -0.6% 8.4% 8.4% 20.9% 0%` 100% 80% Cash 10% 7.9% Stocks 40% 19.3% Bonds 50% 6.2% 0.0% 0.0% 7.9% 7.9% 19.3% 0%" 100% 82% 0.0% Cash 10% 7.4% Stocks 30% r 17.8% Bonds 60% 4.9% 1.1% --- 7.4% 7.4% 17.8% 0% 100% 84% LsrflrA�J� 1.1% Cash 10% _ 6.9% Stocks 20% 17.3% Bonds 70% 3.6% 2.3% -- 6.9% 6.9% 17.3% 0% 100% 84% 2.3% Gash 10% 6.4% Stocks 10% 17.0% Bonds 80% 2.2% 2.2% ---- 6.4% 6.4% 17.0% 0% 100% 85% 2.2% Cash 10% 5.9% No Stocks - 16.6% Bonds 90% 0.9% 0.9% - 5.9% 5.9% 16.6% 0% 100% 81% 0.9% Cash 10% ` ass 1 han 0.5% The Consumer Price Index for September 2017 is preliminary. Data: Rolling 5 year annualized returns using monthly data(753 Observations) Stocks: Standard&Poor's 500 Stock Index•Bonds: Intermediate Treasury Bonds-Cash: 90-Day Treasury Bills-Inflation: Consumer Price Index Sources:Standard&Poor's Corporation;Ryan Labs, Inc.;Merrill Lynch, Pierce, Fenner&Smith Inc.;Bloomberg Finance L.P.;Bureau of Labor Statistics The information presented herein was compiled from sources believed to be reliable.It is intended for illustrative purposes only,and is furnished without responsibility for completeness or accuracy.Past performance does not guarantee future results. This illustration is subject to the terms 8 conditions at www.crandellpierce.com/usage.pdf Under no circumstances may this illustration be copied,reproduced or redistributed In whole or in part including the data contained herein,without prior written permission. 238S-5 Copyright®2017 Crandall,Pierce 8 Company-All rights reserved-14047 West Petronella Drive-Libertyville,Illinois 60048.1-847-549-6015-Internet:www.crandaliplerce.com -CCCI-XXIX- MATERIALS SUBMITTED BY: Keith Stribling MEETING DATE: November 28, 2017 ITEM NO. 8.1. ASSET ALLOCATION ® RISK & REWARD Ten Year Returns January 1950 - September 2017 Period Returns .Worst 'Average .Best Ending Worst Average Average Average Best Percent Percent Exceeding Return Return Return Portfolio Mix: 9117 Return Loss Return Gain Return Negative Positive Inflation 9.9% Stocks 90% 18.0% No Bonds 6.7% -2.8% -1.0% 9.9% 10.2% 18.0% 3% 97% 82% -2.8% Cash 10% 9.5% Stocks 80% 17.2% Bonds 10% 6.3% -1.9% -0.9% 9.5% 9.6% 17.2% 1% 99% 83% \ e 1.9% Cash 10% �Ct � •- �---_ � 9.1% Stocks 70% 16.4% Bonds 20% 5.9% -1.0% -0.5% 9.1% 9.1% 16.4% 1% 99% 82% -1.0% / Cash 10% 8.70/6 Stocks 60% 15.7% Bonds 30% 5.5% -0.1% -0.1% 8.7% 8.7% 15.7% 0%* 100% 82% -0.1% i Cash 10% 8.2% Stocks 50% G�1L�aPw 15.0% Bonds 40% 5.0% 0.8% ---- 8.2% 8.2% 15.0% 0% 100% 82% 0.8% Cash 10% 7.8% Stocks 40% 14.2% Bonds 50% 4.6% 1.7% - 7.8% 7.8% 14.2% 0% 100% 85% 1.7% Cash 10% 7.4/o o Stocks 30% - 13.7% Bonds 60% 4.2% 2.6% --- 7.4% 7.4% 13.7% 0% 100% 86% tnSerVO� � 2.6% Cash 10% 7.0% Stocks 20% 3.5% 13.2% Bonds 70% 3.7% 3.5% --- 7.0% 7.0% 13.2% 0% 100% 86% Cash 10% wk 6.6% Stocks 10% 12.7% Bonds 80% 3.3% 3.3% -- 6.6% 6.6% 12.7% 0% 100% 87% 3.3% Cash 10% 6.2% No Stocks �- 12.3% Bonds 90% 2.9% 1.7% ---- 6.2% 6.2% 12.3% 0% 100% 88% W 1.7% Cash 10% 'Less Than o.5% The Consumer Price Index for September 2017 is preliminary. Data: Rolling 10 year annualized returns using monthly data(693 Observations) Stocks: Standard& Poor's 500 Stock Index•Bonds: Intermediate Treasury Bonds•Cash: 90-Day Treasury Bills•Inflation:Consumer Price Index Sources:Standard&Poor's Corporation;Ryan Labs, Inc.;Merrill Lynch,Pierce, Fenner&Smith Inc.;Bloomberg Finance L.P.;Bureau of Labor Statistics The information presented herein was compiled from sources believed to be reliable.It is intended for illustrative purposes only,and Is furnished without responsibility for completeness or accuracy.Past performance does not guarantee future results. This illustration is subject to the terms&conditions at www.crandallpierce.com/usage.pdf Under no circumstances may this illustration be copied,reproduced or redistributed in whole or in part including the data contained herein,without prior written permission. 238S-10 Copyright O 2017 Crandall,Pierce&Company.All rights reserved•14047 West Petronella Drive•Libertyville,Illinois 60048.1-847-549-6015•Internet:www.crandallpierce.com -CCCLxXIX- MATERIALS SUBMITTED BY: Keith Stribling MEETING DATE: November 28, 2017 RESOLUTION NO. 17-37 RESOLUTION OF THE BOARD OF DIRECTORS OF THE YORBA LINDA WATER DISTRICT REVISING THE BUDGETED POSITIONS FOR THE REMAINDER OF FISCAL YEAR 2018 AND RESCINDING RESOLUTION NO. 17-21 WHEREAS, the Board of Directors adopted Resolution No. 13-01 on January 24, 2013, the "Yorba Linda Water District Personnel Rules"; and WHEREAS, the “Personnel Rules” direct that the number of Authorized Positions and Salary Ranges are subject to approval by the Board of Directors; and WHEREAS, the Board of Directors adopted Resolution No. 17-21 on July 11, 2017, approving the budgeted positions for Fiscal Year 2018; and WHEREAS, it is the desire of the Board of Directors to adopt Budgeted Positions for the remainder of Fiscal Year 2018 as set forth in Exhibit “A” attached hereto, and to rescind Resolution No. 17-21. NOW THEREFORE BE IT RESOLVED by the Board of Directors of the Yorba Linda Water District as follows: Section 1. The number of Budgeted Positions as set forth in Exhibit "A" and attached hereto is approved and adopted for Fiscal Year 2018 effective November 1228, 2017. Section 2. The General Manager is hereby authorized to employ up to the number of employees budgeted and funded in each fiscal year without further approval of the Board of Directors. REVISED ITEM NO. 8.2. MATERIALS SUBMITTED BY: Gina Knight MEETING DATE: November 28, 2017 Section 3. The General Manager is hereby authorized while this Resolution is active to fill a budgeted position that is vacated with a new employee at a lower or equal classification and/or with a part time employee or contract staff. The General Manager is further authorized to fix and alter the compensation of employees subject to budget limitations Section 4. That Resolution No. 17-21 is hereby rescinded effective November 1228, 2017. PASSED AND ADOPTED this 28th day of November 2017 by the following called vote: AYES: NOES: ABSTAIN: ABSENT: J. Wayne Miller, Ph.D., President Yorba Linda Water District ATTEST: Marc Marcantonio, Board Secretary Yorba Linda Water District Reviewed as to form by General Counsel: Andrew B. Gagen, Esq. Kidman Law LLP REVISED ITEM NO. 8.2. MATERIALS SUBMITTED BY: Gina Knight MEETING DATE: November 28, 2017 Exhibit A Resolution No. 17-37 Budgeted Positions for Remainder of Fiscal Year 18 Effective November 12, 2017 Salary Range Position Classification Budgeted as of 7/11/2017 Proposed Change Budgeted as of 11/12/2017 12 Office Clerk 1 1 Customer Service Rep I 0 0 Public Affairs Representative 1 1 16 Meter Reader I 1 1 Accounting Assistant I 1 1 Customer Service Rep II 2 2 Maintenance Worker I 9 9 Mechanic I 0 0 Plant Operator I 0 0 18 Meter Reader II 2 2 Customer Service Rep III 2 2 Operations/Warehouse Assistant 1 1 Records Management Specialist 1 1 Engineering Technician I 0 0 Maintenance Worker II 7 7 Water Quality Technician I 0 0 Accounting Assistant II 1 1 Facilities Maintenance 1 1 Mechanic II 1 1 Information Systems Tech I 1 1 Water Quality Technician II 1 1 Human Resources Technician 0 0 Maintenance Worker III 5 5 Mechanic III 1 1 Meter Services Lead 1 1 Plant Operator II 3 3 Safety and Training Technician 0 0 Construction Inspector 1 1 Engineering Technician II 2 2 GIS Technician 0 0 Human Resources Analyst 2 2 Accountant 1 1 Instrumentation Technician 1 1 GIS Analyst 1 1 Sr. Construction Inspector 1 1 Sr. Fleet Mechanic 1 1 Sr. Maintenance Worker 4 4 Sr. Plant Operator 1 1 Associate Engineer 1 1 Customer Service Supervisor 1 1 27 25 21 26 23 24 15 19 20 22 17 Page 1 of 2 REVISED ITEM NO. 8.2. MATERIALS SUBMITTED BY: Gina Knight MEETING DATE: November 28, 2017 Exhibit A Resolution No. 17-37 Budgeted Positions for Remainder of Fiscal Year 18 Effective November 12, 2017 Safety and Training Analyst 1 1 Construction Project Supervisor 1 1 Management Analyst 1 1 Programmer Analyst 1 1 Water Conservation Supervisor 0 0 29 Chief Water System Operator 1 1 IS Administrator 1 1 Records Management Administrator 1 1 Sr. Accountant 1 1 Water Maint. Superintendent 1 1 Water Production Superintendent 1 1 Water Quality Engineer 1 1 32 Executive Assistant 1 1 34 Sr. Project Manager 1 1 Communications Manager 0 0 Engineering Manager 1 1 Finance Manager 1 1 Human Resources/Risk and Safety Manager 1 1 IT Manager 1 1 Operations Manager 1 -1 0 38 39 Operations Manager 0 1 1 40 Assistant General Manager 1 1 General Manager 1 1 Total 80 0 80 Salary Range Position Classification 10 Water Conservation Representative 0 0 Office Clerk 0 0 Water Conservation Representative 0 0 Total 0 0 0 Salary Set by Board 12 37 30 31 28 Page 2 of 2 REVISED ITEM NO. 8.2. MATERIALS SUBMITTED BY: Gina Knight MEETING DATE: November 28, 2017 RESOLUTION NO. 17-38 RESOLUTION OF THE BOARD OF DIRECTORS OF THE YORBA LINDA WATER DISTRICT AMENDING EXHIBIT B OF RESOLUTION NO. 15-08 TO MODIFY THE SALARY RANGES FOR MANAGEMENT EMPLOYEES FOR THE REMAINDER OF FISCAL YEARS 2015-2018 WHEREAS, the Board of Directors of the Yorba Linda Water District previously adopted the Employee Compensation Letter for Management Employees for Fiscal Years 2015-2018 (Resolution No. 15-08); and WHEREAS, the Board of Directors subsequently adopted Resolution No. 17-24 amending Exhibits B and E of the Employee Compensation Letter (Resolution No. 15-08) to modify the classifications, salary ranges and pay plan for Management employees; and WHEREAS, it is the desire of the Board of Directors to further amend Exhibit B of the Employee Compensation Letter (Resolution No. 15-08) in order to modify the salary ranges for Management employees for the remainder of Fiscal Years 2015-2018. NOW THEREFORE BE IT RESOLVED by the Board of Directors of the Yorba Linda Water District as follows: Section 1. That Exhibit B - Management Employees Classifications and Salary Ranges of Resolution No. 15-08 be amended effective November 12, 2017 to read as attached hereto and by this reference incorporated herein. PASSED AND ADOPTED this 28th day of November 2017, by the following called vote: AYES: NOES: ABSTAIN: ABSENT: J. Wayne Miller, Ph.D., President Yorba Linda Water District REVISED ITEM NO. 8.3 MATERIALS SUBMITTED BY: Gina Knight MEETING DATE: November 28, 2017 ATTEST: Marc Marcantonio, Board Secretary Yorba Linda Water District Reviewed as to form by General Counsel: Andrew B. Gagen, Esq. Kidman Law LLP REVISED ITEM NO. 8.3 MATERIALS SUBMITTED BY: Gina Knight MEETING DATE: November 28, 2017 Exhibit B Yorba Linda Water District – Management Employees Classifications and Salary Ranges Effective November 1228, 2017 CLASSIFICATION TITLE SALARY RANGES FLSA Assistant General Manager ME 40 Exempt Engineering Manager ME 37 Exempt Finance Manager ME 37 Exempt Human Resources/Risk and Safety Manager ME 37 Exempt Information Technology Manager ME 37 Exempt Operations Manager ME 39 Exempt REVISED ITEM NO. 8.3 MATERIALS SUBMITTED BY: Gina Knight MEETING DATE: November 28, 2017 Fitch Affirms Yorba Linda Water District, CA's Water Revs at 'AA'; Outlook Stable Fitch Ratings-San Francisco-28 November 2017: Fitch Ratings affirms the 'AA' rating on the following Yorba Linda Water District, CA (the district) bonds: --$7.2 million revenue refunding bonds, series 2012A; --$29.1 million Yorba Linda Water District Financing Authority, CA revenue bonds, series 2017A (issued on behalf of the district). The Rating Outlook is Stable. SECURITY The revenue bonds are parity obligations secured by net water revenues of the district after payment of operations and maintenance expenses. KEY RATING DRIVERS STRONG FINANCIAL PROFILE: The district's financial performance remained strong across a period of extreme drought due to prompt rate adjustments to offset the impact of state mandated conservation. Fitch- calculated debt service coverage (DSC) averaged a very strong 3.1x over the three fiscal years (FY) ended June 30, 2017. Liquidity fell to a still strong 441 days cash in FY 2017. RATE CONTROVERSY EASES: A new board of directors has made some progress in building a community consensus on water rates after a period of rate controversy. Drought-related rate adjustments prompted a rate controversy that culminated in the replacement of four-fifths of the district's board of directors in November 2016. The new board appears focused on minimizing rate increases while maintaining strong financial performance. The board has developed a solid financial policy framework for rate setting. The rating remains lower than suggested by the financial metrics due to the history of rate controversy. Page 1 of 9[ Press Release ] Fitch Affirms Yorba Linda Water District, CA's Water Revs at '... 11/29/2017https://www.fitchratings.com/site/pr/1032994 ITEM NO. 9.1. MATERIALS SUBMITTED BY: Brett Barbre MEETING DATE: November 28, 2017 MANAGEABLE DEBT PROFILE: The debt burden was moderate at $1,672 per customer at the end of fiscal 2017. Debt is projected to decline to $1,207 over the next five years. The district has no other near-term borrowing plans. STRONG OPERATING PROFILE: The district serves an affluent suburban residential service area in Orange County, California. The district's supply position is solid after the district gained access to significant groundwater supplies in recent years, reducing reliance on imported supplies. RATING SENSITIVITIES RATE POLICY TO DRIVE RATING: The rating could come under downward pressure if the district and community fail to maintain consensus on rates that lead to full cost recovery and continued solid financial performance. The rating is unlikely to move higher until rate controversy eases convincingly on a sustained basis. CREDIT PROFILE The district is located in northeastern Orange County approximately 35 miles southeast of downtown Los Angeles, and 11 miles north of Santa Ana. The service area predominantly covers the city of Yorba Linda, an upper income suburban community, in addition to portions of Anaheim, Brea, and Placentia, and unincorporated county areas. STRONG FINANCIAL PROFILE The district continues to perform well in the aftermath of an intense drought that led to unprecedented state actions to curb water usage across the state of California. The district was ordered to reduce water production by 28% to 36% during the most intense stages of the drought. District policymakers reacted by raising fixed meter fees sharply, which provided very strong financial performance but caused a rate controversy in a community that was very skeptical of state drought regulation. Debt service coverage jumped to 4.1x in 2016 on drought surcharges. Coverage fell back to a still strong 2.7x in 2017 as drought surcharges were removed and rationing ended. Demand has begun to recover, but Fitch Page 2 of 9[ Press Release ] Fitch Affirms Yorba Linda Water District, CA's Water Revs at '... 11/29/2017https://www.fitchratings.com/site/pr/1032994 ITEM NO. 9.1. MATERIALS SUBMITTED BY: Brett Barbre MEETING DATE: November 28, 2017 expects some degree of conservation to endure, reflecting changes in appliances and landscaping that will reduce water usage that will remain after the drought. Liquidity decreased somewhat but remained strong in 2017, as the district paid some rebates to ratepayers and paid off a line of credit. Unrestricted cash and investments equalled $29.9 million, or 441 days cash, at June 30, 2017. GOVERNANCE WEIGHS ON RATING The district has faced periodic rate controversies over the past decade, which has led to significant and unusual turnover in the board of directors. The most recent rate controversy grew out of large increases in fixed meter fees that were imposed to offset drought-related revenue losses and to fund increased infrastructure investments that will allow the district to pump more groundwater. The controversy led to an unsuccessful lawsuit by a local taxpayers association and eventually culminated in an electoral takeover of the board of directors at the November 2016 election. Of five board members, one incumbent decided not to seek re-election, one was defeated, and two were recalled. The newly elected board of directors has been in place for almost a year and has gone through a budget cycle, holding rates steady for FY 2018. While the new board is focused on minimizing rate increases, the board has established financial policies and targets that would maintain strong financial performance with a focus on paying down unfunded retirement liabilities and investing in infrastructure renewal. Management reports that a district decision to refund about $2.2 million of drought related charges to ratepayers and the board's decision to forego a rate increase in 2018 has begun to ease the level of rate controversy in the community. The history of rate controversy and instability at the management and elected policymaker levels continues to weigh on the rating, but recent trends appear positive. A failure to maintain a degree of consensus among stakeholders on rate policy could put downward pressure, while a sustained resolution of the controversy could lead to positive rating action (assuming Page 3 of 9[ Press Release ] Fitch Affirms Yorba Linda Water District, CA's Water Revs at '... 11/29/2017https://www.fitchratings.com/site/pr/1032994 ITEM NO. 9.1. MATERIALS SUBMITTED BY: Brett Barbre MEETING DATE: November 28, 2017 continued strong financial performance). MANAGEABLE DEBT PROFILE Debt is moderate and expected to decline gradually over the next five years. The district had $41.8 million of debt outstanding at the end of FY 2017. Debt ratios are moderate with debt per customer at $1,672 versus an 'AA' category median of $1,823. Debt to net plant assets is low at 30%, and debt to funds available for debt service is moderate at 5.5x. Debt is projected to decline to $1,207 per customer over the next five years with gradual amortization of outstanding debt and no further borrowing. The district's $20.3 million five year capital improvement plan is 70% pay-go funded. The district issued $6 million of new money bonds earlier this year that will pay for about 30% of the planned investments. Amortization is healthy with 89% of debt repaid over the next 20 years. The district has also begun to take aggressive steps to improve prefunding of retirement liabilities to 90% over the next decade. STRONG OPERATING PROFILE The district serves a diverse, affluent suburban residential service area in Orange County, California. Median household income is more than twice the national level, and unemployment rates trend lower the national average. The district's supply position is solid after the district gained access to significant groundwater supplies in recent years, reducing reliance on imported supplies. The district will get about 75% of its supplies from relatively affordable local groundwater after new facilities reach full production in 2019. The remainder of its supplies are imported. Supply availability remained solid throughout the recent drought due to large investments in water storage capacity and groundwater management by regional wholesalers. The district provides water services to roughly 25,000 customers, of which about 90% are residential. Customer concentration is moderate with the top 10 ratepayers providing 11.1% of 2017 operating revenues. The largest customers are governments and large homeowners associations that represent many underlying payers, lessening any concerns about Page 4 of 9[ Press Release ] Fitch Affirms Yorba Linda Water District, CA's Water Revs at '... 11/29/2017https://www.fitchratings.com/site/pr/1032994 ITEM NO. 9.1. MATERIALS SUBMITTED BY: Brett Barbre MEETING DATE: November 28, 2017 concentration. Contact: Primary Analyst Andrew Ward Director +1-415-732-5617 Fitch Ratings, Inc. 650 California Street San Francisco, CA 94103 Secondary Analyst Shannon Groff Director +1-415-732-5628 Committee Chairperson Douglas Scott Managing Director +1-512-215-3725 In addition to the sources of information identified in Fitch's Revenue- Supported Rating Criteria, this action was additionally informed by information from Lumesis. Media Relations: Sandro Scenga, New York, Tel: +1 212-908-0278, Email: sandro.scenga@fitchratings.com. Additional information is available on www.fitchratings.com Applicable Criteria Rating Criteria for Public Sector Revenue-Supported Debt (pub. 05 Jun 2017) (https://www.fitchratings.com/site/re/898969) U.S. Water and Sewer Revenue Bond Rating Criteria (pub. 30 Nov 2016) (https://www.fitchratings.com/site/re/890402) Page 5 of 9[ Press Release ] Fitch Affirms Yorba Linda Water District, CA's Water Revs at '... 11/29/2017https://www.fitchratings.com/site/pr/1032994 ITEM NO. 9.1. MATERIALS SUBMITTED BY: Brett Barbre MEETING DATE: November 28, 2017 Additional Disclosures Dodd-Frank Rating Information Disclosure Form (https://www.fitchratings.com/site/dodd-frank-disclosure/1032994) Solicitation Status (https://www.fitchratings.com/site/pr/1032994#solicitation) Endorsement Policy (https://www.fitchratings.com/regulatory) ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTPS://WWW.FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS (https://www.fitchratings.com/understandingcreditratings). IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM (https://www.fitchratings.com). PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. DIRECTORS AND SHAREHOLDERS RELEVANT INTERESTS ARE AVAILABLE AT HTTPS://WWW.FITCHRATINGS.COM/SITE/REGULATORY (https://www.fitchratings.com/site/regulatory). FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright © 2017 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753- 4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be Page 6 of 9[ Press Release ] Fitch Affirms Yorba Linda Water District, CA's Water Revs at '... 11/29/2017https://www.fitchratings.com/site/pr/1032994 ITEM NO. 9.1. MATERIALS SUBMITTED BY: Brett Barbre MEETING DATE: November 28, 2017 credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. 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The rating Page 7 of 9[ Press Release ] Fitch Affirms Yorba Linda Water District, CA's Water Revs at '... 11/29/2017https://www.fitchratings.com/site/pr/1032994 ITEM NO. 9.1. MATERIALS SUBMITTED BY: Brett Barbre MEETING DATE: November 28, 2017 does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. 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Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001 Solicitation Status Page 8 of 9[ Press Release ] Fitch Affirms Yorba Linda Water District, CA's Water Revs at '... 11/29/2017https://www.fitchratings.com/site/pr/1032994 ITEM NO. 9.1. 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Page 9 of 9[ Press Release ] Fitch Affirms Yorba Linda Water District, CA's Water Revs at '... 11/29/2017https://www.fitchratings.com/site/pr/1032994 ITEM NO. 9.1. MATERIALS SUBMITTED BY: Brett Barbre MEETING DATE: November 28, 2017