HomeMy WebLinkAbout2010-01-11 - Finance-Accounting Committee Meeting Agenda Packet
'rb Linda
Water District
AGENDA
YORBA LINDA WATER DISTRICT
FINANCE-ACCOUNTING COMMITTEE MEETING
Monday, January 11, 2010, 4:00 PM
1717 E Miraloma Ave, Placentia CA 92870
COMMITTEE STAFF
Director John W. Summerfield, Chair Ken Vecchiarelli, General Manager
Director Ric Collett Cindy Navaroli, Interim Finance Director
Sandi Van Etten, Senior Accountant
1. PUBLIC COMMENTS
Any individual wishing to address the committee is requested to identify themselves and state the matter on
which they wish to comment. If the matter is on this agenda, the committee Chair will recognize the individual for
their comment when the item is considered. No action will be taken on matters not listed on this agenda.
Comments are limited to matters of public interest and matters within the jurisdiction of the Water District.
Comments are limited to five minutes.
2. ACTION CALENDAR
This portion of the agenda is for items where staff presentations and committee discussions are needed prior to
formal committee action.
2.1. November 2009 Budget to Actual Results
Recommendation: That the Committee receive and file the November 2009 Budget
to Actual Results.
2.2. November 2009 Monthly Investment Report
Recommendation: That the Committee receive and file the November 2009 Monthly
Investment Report.
3. DISCUSSION ITEMS
This portion of the agenda is for matters such as technical presentations, drafts of proposed policies, or similar
items for which staff is seeking the advice and counsel of the Committee members. This portion of the agenda
may also include items for information only.
3.1. Retirement Alternatives (Verbal Report)
3.2. Monthly Portfolio Reports for December
3.3. Inventory Surplussed in Compliance with Restrictive Lead Regulation
3.4. Future Agenda Items and Staff Tasks
4. ADJOURNMENT
4.1. The next regular meeting of the Finance-Accounting Committee will be held February 8,
2010 at 4:00 p.m.
Items Distributed to the Committee 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 Committee 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. 2.1
AGENDA REPORT
Meeting Date: January 11 , 2010 Budgeted: N/A
To: Finance-Accounting Committee
Funding Source: N/A
From: Ken Vecchiarelli, General
Manager
Presented By: Cindy Navaroli, Interim Finance Dept: Finance
Director
Prepared By: Cindy Navaroli, Interim Finance CEQA Compliance: N/A
Director
Subject: November 2009 Budget to Actual Results
STAFF RECOMMENDATION:
That the Committee receive and file the November 2009 Budget to Actual Results.
DISCUSSION:
Attached are the budget to actual results for the Water Fund, Sewer Fund, and a summary of both
funds. Overall, the District is on target with projections. Major items to note are:
• Operating Revenues are lagging from prior year at around 40% of budgeted revenue,
compared to the prior year figure of 50% at this same time. Some of this variance is due to
additional conservation efforts in the current fiscal year. Since the new water rate became
effective in mid-September, staff anticipates that much of the difference will be made up in the
third and fourth quarters of the fiscal year.
• Variable expenses are 45% of budgeted expenses, whereas in the prior year variable costs at
this time totaled 55%. This is due to lower water purchases based on customer conservation,
as well as the timing of the payments and record keeping in the prior year.
• The remaining expenses and revenues are approximately in proportion to prior years and are
on target with budgeted projections.
PRIOR RELEVANT BOARD ACTION(S):
On December 7, 2009 the Committee approved the October 2009 budget to actual results.
ATTACHMENTS:
'yarn Description: Type.
Water November 2009.pdf Water Fund Backup Material
Sewer_November 2009.pdf Sewer Fund Backup Material
Water Sewer November 2009.pdf Water&Sewer Fund Backup Material
Yorba Linda Water District
Water Fund
For the Five Months Ended November 30, 2009
FY 2010 % of
Annual November Actual Annual
Budget 2009 YTD Budget
Revenue (Operating):
Water Revenue (Residential) $17,692,953 $1,787,669 $7,814,504 44.171/.
(Restricted for Debt Service) - (184,597) (1,256,929)
Water Revenue (Commercial & Fire Det.) 1,680,500 192,729 788,147 46.90%
Water Revenue (Landscape/Irrigation) 3,654,419 370,747 1,739,841 47.61%
Other Operating Revenue 643,792 50,222 310,356 48.21%
Total Operating Revenue: 23,671,664 2,216,770 9,395,919 39.69%
Expenses (Operating):
Variable Water Costs (G.W., Import & Power) 12,259,937 852,752 5,503,866 44.89%
Salary Related Expenses 6,538,008 409,853 2,242,241 34.30%
Supplies & Services:
Communications 268,694 22,635 145,660 54.21%
Contractual Services 964,090 124,935 409,217 42.45%
Data Processing 116,148 4,952 5,308 4.57%
Dues & Memberships 30,068 178 4,725 15.71%
Fees & Permits 50,160 958 30,783 61.37%
Insurance 342,433 - 194,360 56.76%
Materials 427,424 28,851 195,604 45.76%
District Activities, Emp Recognition 13,832 (2) 620 4.48%
Maintenance 384,362 458 63,786 16.601%
Non-Capital Equipment 139,910 3,999 26,198 18.72%
Office Expense 66,775 3,154 11,002 16.48%
Professional Services 760,575 (9,001) 199,412 26.22%
Training 61,518 4,149 9,163 14.89%
Travel & Conferences 48,892 1,823 4,084 8.35%
Uncollectible Accounts 47,320 418 418 0.881/.
Collection Agency Fee 3,185 - - 0.00%
Utilities 27,027 8,549 63,438 234.72%
Vehicle Equipment 279,683 18,289 141,152 50.47%
Supplies & Services Sub-Total 4,032,096 214,345 1,504,930 37.32%
Depreciation & Amortization 3,945,750 336,541 1,680,777 42.60%
Total Operating Expenses 26,775,791 1,813,491 10,931,814 40.83%
Operating Income (Loss) (3,104,127) 403,279 (1,535,895) 49.48%
Revenue (Non-Operating):
Interest 500 4,303 21,826 4365.20%
Interest (Restricted for Capital Projects) - 8,153 42,605
Property Taxes 1,092,000 87,627 142,438 13.04%
Debt Service Income (through water revenue) - 184,596 1,256,929
Other Non-Operating Revenue 172,900 31,919 184,089 106.47%
Total Non-Operating Revenue: 1,265,400 316,598 1,647,887 130.23%
Expenses (Non-Operating):
Interest on Long Term Debt (1,981,300) (161,611) (815,813) 41.18%
Job Closing Expense (40,000) 0.001%
Other Expense (154,500) (16,470) (41,518) 26.87%
Total Non-Operating Expenses: (2,175,800) (178,081) (857,331) 68.05%
Non-Operating Income (Loss) (910,400) 138,517 790,556
Total Income (Loss) $ (4,014,527) $ 541,796 $ (745,339) 18.57%
Contributed Capital $ 190,962 $ 20,001 $ 155,470 81.41%
Yorba Linda Water District
Sewer Fund
For the Five Months Ended November 30, 2009
FY 2010 % of
Annual November Actual Annual
Budget 2009 YTD Budget
Revenue (Operating):
Sewer Charge Revenue $1,160,000 $128,149 $532,946 45.94%
Locke Ranch Assessments 116,000 11,076 12,771 11.01%
Other Operating Revenue 5,100 261 1,391 27.27%
Total Operating Revenue: 1,281,100 139,486 547,108 42.71%
Expenses (Operating):
Salary Related Expenses 817,041 55,993 297,112 36.36%
Supplies & Services:
Communications 26,654 2,239 14,615 54.83%
Contractual Services 137,255 16,767 60,702 44.23%
Data Processing 11,487 490 525 4.57%
Dues & Memberships 3,360 17 459 13.66%
Fees & Permits 6,040 67 2,150 35.60%
Insurance 33,867 - 19,222 56.76%
Materials 21,301 5,060 8,011 37.61%
District Activities 1,368 - 61 4.46%
Maintenance 29,789 40 5,929 19.90%
Non-Capital Equipment 18,631 151 1,401 7.52%
Office Expense 9,550 311 941 9.85%
Professional Services 77,925 (890) 19,841 25.46%
Training 8,632 573 939 10.88%
Travel & Conferences 6,893 181 442 6.41%
Uncollectible Accounts 4,680 - - 0.00%
Collection Agency Fee 315 - - 0.00%
Utilities 2,673 348 1,587 59.37%
Vehicle Equipment 47,068 1,752 16,520 35.10%
Supplies & Services Sub-Total 447,488 27,106 153,345 34.27%
Depreciation & Amortization 595,050 47,602 238,010 40.00%
Total Operating Expenses 1,859,579 130,701 688,467 37.02%
Operating Income (Loss) (578,479) 8,785 (141,360) 24.44%
Revenue (Non-Operating):
Interest 7,000 1,126 4,702 67.17%
Interest (Restricted for Capital Projects) - 142 758
Property Taxes 108,000 - - 0.00%
Other Non-Operating Revenue 12,600 (382) 313 2.48%
Total Non-Operating Revenue: 127,600 886 5,773 69.66%
Expenses (Non-Operating):
Job Closing Expense (5,000) - - 0.00%
Other Expense (2,300) (263) (1,131) 49.17%
Total Non-Operating Expenses: (7,300) (263) (1,131) 49.17%
Non-Operating Income (Loss) 120,300 623 4,642 3.86%
Total Income (Loss) $ (458,179) $ 9,408 $ (136,718)
- - -
Contributed Capital $74,240 $6,162 $46,967 63.26°k
Yorba Linda Water District
Summary Financial Report
Water & Sewer Funds
For the Five Months Ended November 30, 2009
Annual % of
Budget Actual Annual
FY 2010 YTD through Amended
Amended 10/21/09 November 30, 2009 Budget
Revenue (Operating):
Water Revenue (Consumption & Flat Charge) $23,027,872 $10,342,492 44.91%
(Restricted for Debt Service) - (1,256,929) 0.00%
Sewer Revenue 1,276,000 545,717 42.77%
Other 648,892 311,747 48.04%
-
Total Operating Revenue: 24,952,764 9,943,027 39.85%
Expenses (Operating):
Variable Water Costs (G.W., Import & Power) 12,259,937 5,503,866 44.89%
Salary Related Expenses 7,355,049 2,539,354 34.53%
Supplies & Services 4,479,584 1,658,275 37.02%
Depreciation & Amortization 4,540,800 1,918,787 42.26%
Total Operating Expenses: 28,635,370 11,620,282 40.58%
Operating Income (Loss) (3,682,606) (1,677,255) 45.55%
Revenue (Non-Operating):
Interest 7,500 26,528 353.71%
Interest (Restricted for Capital Projects) - 43,363 0.00%
Property Taxes 1,200,000 142,438 11.87%
Debt Service Income (through water revenue) - 1,256,929 0.00%
Other 185,500 184,402 99.41%
Total Non-Operating Revenue: 1,393,000 1,653,660 118.71%
Expenses (Non-Operating):
Interest on Long Term Debt (1,981,300) (815,813) 41.18%
Other Expense (201,800) (42,649) 21.13%
Total Non-Operating Expenses: (2,183,100) (858,462) 39.32%
Non-Operating Income (Loss) (790,100) 795,198
Net Income (Loss) (4,472,706) (882,057) 19.72%
Contributed Capital 265,202 202,437 76.33%
ITEM NO. 2.2
AGENDA REPORT
Meeting Date: January 11, 2010 Budgeted: N/A
To: Finance-Accounting Committee
Funding Source: N/A
From: Ken Vecchiarelli, General
Manager
Presented By: Cindy Navaroli, Interim Finance Dept: Finance
Director
Reviewed by Legal: N/A
Prepared By: Sandi Van Etten, Senior CEQA Compliance: N/A
Accountant
Subject: November 2009 Monthly Investment Report
SUMMARY:
Government Code Section 53607, et. seq., requires the person delegated to invest funds to make a
quarterly report of the investments to the legislative body. Staff presents a quarterly report of
investments for the Board of Directors to review, receive and file. Staff also presents monthly
investment reports to the Finance-Accounting Committee for their review and discussion. The
summary report and details for November 2009 are attached.
STAFF RECOMMENDATION:
That the Committee receive and file the November 2009 Monthly Investment Report.
DISCUSSION:
Staff is submitting the November 2009 Monthly Investment Report for your review and approval.
Staff will submit a Quarterly Investment Report ending December 31, 2009 for Board action upon its
approval by the Finance-Accounting Committee.
PRIOR RELEVANT BOARD ACTION(S):
Monthly Investment Reports are presented to the Finance-Accounting Committee on a regular
basis. Quarterly Investment Reports are presented to the Board of Directors. The Investment
Reports for the quarters ending June 30 and September 30, 2009 were received and filed by the
Board of Directors on December 23, 2009.
ATTACHMENTS:
Agenda _1-11_backup-Nov.doc Backup Backup Material
Invst Rpt 11-09.xls -,/estment Rpt Backup Material
Investment Report Summary
Below is a chart summarizing the yields as well as terms and maturities for the month of
November 2009.
Avg. Portfolio Avg. Portfolio # of Avg. Term
Month Yield Without Yield With Days to of Portfolio
of 2009 Wells Capital Wells Capital Maturity in Days
November 0.28% 0.51% 115 48
Below is a chart comparing operating fund interest for current and prior fiscal years.
Actual Interest 11/30/08 11/30/09
Monthly, Operating Fund $ 794 $ 3,560
Year-to-Date, Operating Fund $ 3,859 $16,686
Budget 2008/2009 2009/2010
Interest Budget, Operating Fund, November YTD $26,875 $3,125
Interest Budget, Operating Fund, Annual $64,500 $7,500
Interest earned on investments is recorded in the Fund that owns the investment.
Investment Summary Comparison
The distribution of investments in the portfolio both in dollars and as a percentage of the total
portfolio by funds is as follows:
Fund Description Balance 11/30/09
Annexation $4,607,875 11.39%
Water Operating 2,251,300 5.57%
Water R&R 2,055,713 5.08%
Water Capital Projects 231,204 0.57%
Restricted for Debt Service 889,226 2.20%
COP Revenue Bond 2003 4 0.00%
COP Revenue Bond 2008 16,877,454 41.72%
Sewer Operating 1,355,246 3.35%
Sewer R&R 447,910 1.11%
Sewer Capital Projects 189,369 0.47%
ID1 3,409,439 8.43%
D2 8,138,179 20.11%
$40,452,919 100.00%
Yorba Linda Water District
Investment Portfolio Report
November 30, 2009
Market % Percent Investment Maturity
Value Cost of Total Institution Yield Date Date
Cash & Checking Accounts:
$ 861,661 $ 861,661 Wells Fargo Bank N/A
1,200 1,200 Imprest Cash
$ 862,861 $ 862,861 2.14% Total 0.00%
Money Market Accounts:
$ 178,774 $ 178,774 Wells Fargo Money Market 0.30% N/A
- - Wells Fargo MM/Annexation 0.30%
$ 178,774 $ 178,774 0.44% Total 0.30%
$ 1,041,635 $ 1,041,635 2.58% Sub-total 0.05%
California Asset Mgmt. Program:
$ 5,098,133 $ 5,098,133 12.62% California Asset Mgmt. Program 0.27% N/A
Money Market Account:
$ 16,877,454 $ 16,877,454 US Bank 2008 Revenue Bond 0.30%
4 4 US Bank 2003 Revenue Bond 0.27% N/A
$ 16,877,458 $ 16,877,458 41.79% 0.30%
$ 23,017,226 $ 23,017,226 56.99% Sub Total Investments 0.28%
Individual Management Account:
$ 17,393,145 $ 17,368,273 43.01% Wells Capital Management 0.82% N/A
$ 40,410,371 $ 40,385,499 100% Total Investments 0.51%
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.
.L&&: V care e,46p-vt
Sandi Van Etten, Senior Accountant
11/30/2009
ITEM NO. 3.2
AGENDA REPORT
Meeting Date: January 11, 2010
Subject: Monthly Portfolio Reports for December
ATTACHMENTS:
YLWD Overview Pagel.pdf ?ec portfolio 1 Backup Material
YLWD_SummaryPage2.pdf )ec portfolio 2 Backup Material
YLWD Cash FlowPage3.pdf )ec portfolio Backup Material
YLWD Holdings Page4.pdf )ec portfolio 4 Backup Material
Cal Trust about the_program.pdf -alTrustl Backup Material
Cal Trust investment policy.pdf CalTrust2 Backup Material
Cal_Trust _fags.pdf CalTrust3 Backup Material
Cal Trust December2009.pdf lTrust4 Backup Material
Account Overview
Yorba Linda Water District
Account #18611500
Funding Date: 10/25/2005
Portfolio Statistics as of: 12/31/2009
Account Characteristics:
Portfolio Yield to Maturity 0.63%
Total Unrealized Gains/(Losses) - Current: 19,898
Total Net Realized Gains/(Losses) - Since Inception: 2,243
Total Long-Term Investments: -
Total Short Duration Investments/Money Market Secs: 18,259,565
Total Market Value: 18,259,565
Total Number of Issues in the Portfolio: 26
MARKET DATA
Overnight Fed Funds Rate: 0.00%
6-Month T-Bill Yield: 0.19%
12-Month T-Note Yield: 0.43%
WELLS CAPITAL MANAGEMENT
Portfolio Summary Report Yorba Linda Water District
For the period : 12/01/09 to 12/31/09 18611500
Portfolio Characteristics Portfolio Breakdown
Market Value: 18,259,565.32 Market Value % of Account
Unrealized G/L: 19,898.45 Agency Discount Note 2,799,600.00 15.33%
Certs of Deposit 500,000.00 2.74%
Yield To Maturity: 0.63% Commercial Paper 3,848,811.86 21.08%
Portfolio Duration: 0.28 Years Fixed Rate 1,475,703.88 8.08%
Floating Rate 1,673,673.40 9.17%
Avg. Days to Maturity: 118 Money Market Fund 3,941,564.09 21.59%
Avg. Portfolio Credit Quality: Aa1 Pending_Cash 0.09 0.00%
Treasury Obligation 2,012,109.00 11.02%
US Agency Fixed Rate 2,008,103.00 11.00%
Total 18,259,565.32 100.00%
Market Data 12/31/09 11/30/09
Yields:
6 Month Treasury Bill: 0.19% 0.15%
2 Year Treasury Note: 1.14% 0.66%
5 Year Treasury Note: 2.68% 2.00%
Fed Funds Target: 0-0.25% 0-0.25%
Credit Quality* Effective Maturity Distribution
0.35
P1/MIG1/VMIG1/A-1 23.8% 0.30
Aaa/AAA 37.3%
Aa/AA 9.2% 0.25
A/A 8.0%
Baa/BBB 0.0% 0.20
Other 0.0%
Cash/Overnights 21.6% 0.15
Not Rated 0.0%
100.0% 0.10
* Moody's Ratings - Primary 0.05
S&P Ratings - Secondary
Fitch Ratings - Tertiary 0.00
o/n 2 to 90 91 to 180 181 to 1 year 1 to 2 years > 2 years
The above information is an estimate of certain investment calculations and does not represent your audited statement of record.
YORBA LINDA WATER DISTRICT
Statement of Cash Flows/Earnings for December 2009
I - Beginning Period Balances As of 1113(1/2(1(19
Total Original Cost 17,379,918
+ Net Amort/Accr to Date (11,645)
=Adjusted Book Value: 17,368.273
+ Accrued Interest Receivable 42,548
+ Unrealized Gain/(Loss) 24,872
= Total Market Value Plus Accrued Interest 17,435,693
II: Period Income Earned
+ Ending Accrual 49,003
- Begininning Accrual (42,548)
+ Interest Received 12,977
- Interest Paid at Purchase (5,155)
+ Interest Received at Sale -
= Interest Earned in Period 14,276
+ (Anort)/Accr This Period (3,508)
= Monthly Portfolio Income $ 1(1,768
+ Contributions 870,000
- Withdrawals -
+ Realized Gain/(Loss) -
- Fees Paid This Period (2,920)
- Prior Period Unrealized Gain/Loss (24,872)
+ End Of Period Unrealized Gain/Loss 19,898
+ Net Receipts/Deliveries in Kind 0.00
+ Adjustments 0.00
= Net Change to the Portfolio 858,599
=Total Market Value Plus Accrued
Interest 18,3(18,568
III: End of Period Balances As of 12/31/(19
Total Original Cost 18,255,737
+ Net Amort/Accr to Date (16,070)
= Adjusted Book Value 18 239,667
+ Accrued Interest Receivable 49,003
+ Unrealized Gain/(Loss) 19,898
= Total Market Value Plus Accrued
Interest 18,308,568
Reconciliation Difference: -
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CaITRUST: About the Program Page 1 of 1
• Home • How do Join 0 Resources 0 Portfolio & Performance 0 Your Account • Contact Us
The Program:
Organized as a Joint Powers Authority ("IPA"), the Investment Trust of California
• = • • (CaITRUST) is a program established by public agencies in California for the purpose
of pooling and investing local agency funds - operating reserves as well as bond
Board ofTn.tstees proceeds. A Board of Trustees supervises and administers the investment program of
the Trust. The Board is comprised of experienced investment officers and policy-
Investment Policy makers of the public agency members.
Porfolio&PerPa miance CaITRUST offers the option of four accounts to provide participating agencies with a
convenient method of pooling funds - a money market, a short-term, a medium-term, CkXSfiDM Frequen'Askeri and soon-to-bc opened long-term account. Each account seeks to attain as high a level
of current income as is consistent with the preservation of principal.
Any California local agency may participate in the Trust and invest its funds, and in the
case of counties, the funds of other local agencies that have invested with the County
Treasurer's Office.
Money, Markel Account
For the CaITRUST-Wells Fargo Advantage Funds Heritage money market account
(The CaITRUST-Heritage MMF), participants may invest through CaITRUST in the
Heritage MMF at the most favorable expense ratio available to institutional investors.
Short-Term, Medium-Term, and Long-Term Accounts
For the CaITRUST Short-Term, Medium-Term, and Long-Term Accounts, funds from
all participants arc poled in each of the accounts. Participants receive units in the Trust
and designated shares for the particular accounts in which they invest.
CaITRUST invests in fixed income securities eligible for investment pursuant to
California Government Code Sections 53601, ct. seq. and 53635, et. seq. Investment
guidelines adopted by the board of Trustees may further restrict the types of
investments help by the Trust. Leveraging within the Trust's portfolios is prohibited.
Account Liquidity Target Duration
Money Market Same Da 90 Days-or Lcss=`
Short Term Next Day 0 - 2 Years
Medium Term Monthly 1-1/2 - 3-1/2 Years
Long Term Monthly 5 - 7 Years
"dollar weighted average maturity
The information on this website is intended only for public agencies within the meaning of the Joint Exercise Of Powers Act and does not
represent an offer to sell or a solicitation of an offer to buy shares of the Trust or any other security. Shares in the Trust are sold or bought only
based on the information contained in the current Information Statement. The Information Statement contains important information and should
be read carefully before investing.
Home How to Join Resources Portfolio & Performance Your Account Contact Us
http://www.caltrust.or-/about_the_pro-ram.html 1/5/2010
CalTRUST: Investment Policy Page 1 of 1
• Home • How do Join 0 Resources 0 Pornk& & Performance 0 Your Account • Contact Us
Investment Philosophy:
Board ofTmsf s The Ca1TRUST accounts have been created to facilitate the centralization of the
investment management function on behalf of California local agencies. The
InvestrnenLPolicv Ca1TRUST Board of Trustees selected Metropolitan West Securities, LLC to serve as
Investment Adviser to the Trust. Effective February 2, 2007, Metropolitan West
Portfdiio8. trance Securities, LLC became Wachovia Portfolio Services. As of December 31. 2009, Wells
Fargo & Company acquired Wachovia Corporation. As part of that acquisition.
FrequerrttyAskeci CkxsbDns Wachovia Portfolio Services and Evergreen Investments were integrated into Wells
Capital Management.
Wells Capital Management (WellsCap), a wholly-owned Subsidiary of Wells Fargo
Bank, N.A., is an investment advisory and asset management firm specializing in
investment management for separate accounts, mutual funds, and money market funds.
WellsCap is responsible for the decision to buy and sell the Securities for the
Ca1TRUST accounts and arrange for the execution of security transactions on behalf of
the accounts. WellsCap senior executives bring decades of public agency funds
management experience and demonstrated success in the management of California
public sector funds to the Trust.
As of March 31, 2009, the combined WellsCap (including Evergreen and Wachovia
Portfolio Services) had S365 billion in assets under management.
Following the investment policy direction established by the Board of Trustees, the
primary objcctivc of the investment manager is to safeguard the principal. The
secondary objcctivc shall be to meet the liquidity needs of the participants and the first
objective shall be to maximize the yield in a manner consistent with the first two
objectives. The objcctivc of the investment policy is to obtain the best possible return
commensurate with the degree of risk that participants arc willing to assume in
obtaining such return.
The information on this website is intended only for public agencies within the meaning of the Joint Exercise Of Powers Act and does not
represent an offer to sell or a solicitation of an offer to buy shares of the Trust or any other security. Shares in the Trust are sold or bought only
based on the information contained in the current Information Statement. The Information Statement contains important information and should
be read carefully before investing.
Home A, i How to Join Resources Portfolio & Performance Your Account Contact Us
http://www.caltrLIst.or-/investment_policy.httnl 1/5/2010
CaITRUST: FAQ's Page 1 of 4
• Home • How to Join 0 Resources 0 Portfolio & Performance 0 Your Account • Contact Us
.L.l tv~ "nc urn. I r'" - r~ fi in-A"
Board ofTmgees Ca1TRUST is a Joint Powers Authority created by puhlic agencies to provide a
convenient method for puhlic agencies to pool their assets for investment purposes.
IrtrmerttPolicy Ca1TRUST is governed by a Board of Trustees made up of experienced local agency
treasurers and investment officers. The Board sets overall policies for the program and
Portfo4iio8, Ptdonrrance selects and supervises the activities of the investment manager and other agents.
Fr,A, pg±lyAskedc its it tt tatttttd tt : fi't~ 'dtt ~ ~Qr ptttf tt~ i ' tt, I"tt `91'R ll_' ST?
As a practical matter, any public agency that is authorized to join a Joint Powers
Authority can participate in CalTRUST. The specific sections of the California
Government Code that govern participation in CalTRUST (Sections 6500 and 6509.7),
provide that the following types of agencies may participate:
"the federal government or any federal department or agency, this state, another
state or any state department or agency, a county, county hoard of education,
county superintendent of schools, city, puhlic corporation, public district, or
regional transportation commission of the State of California or another state, or
any joint powers authority formed pursuant to this article [Article I of the Joint
Exercise of Powers Act] by any of these agencies," (Section 6500), and "a
nonprofit corporation whose memhership is confined to puhlic agencies or puhlic
officialsr" (Section 6509.7).
If you have any questions about participation, please contact CalTRUST at:
by phone: 888-422-8778
by c-mail: caltrust@wachoviaps.com
on the wch: www.caltrust.org
Ho . an <c c 41606,mi 4>F~a Ef. 0 i,a @.Wr 95 ~ "rE~ lU s
Legislation enacted in 2004 (AB 969 - Chapter 470, Statutes of 2004) simplified
participation in CalTRUST. AB 969 authorizes local agencies to directly invest in
shares issued by JPA pooled investment programs. As a result, agencies interested in
investing through the CalTRUST Program no longer need to adopt a resolution to
formally become a memher of the CalTRUST Joint Powers Authority.
Opening an account in the CalTRUST program is quite simple; just carefully read the
Information Statement, the Joint Powers Agreement, the CalTRUST Investment Policy,
and complete the Account Registration Form and Participation Agreement.
.AJVZ.T',~
Ca1TRUST offers four account options - Money Market, Short-Term and Medium-
Term Accounts, and a soon-to-he-opened Long-Term Account. Agencies can select
account options that match their investment time horizon and cash flow needs: and
http://www.caltrust.or-/fags.html 1/5/2010
CaITRUST: FAQ's Page 2 of 4
easily reallocate among accounts as circumstances warrant.
All Ca1TRUST accounts comply with the limits and restrictions placed on agency
investments by the California Government Code; no leverage is permitted in any of the
Ca1TRUST accounts.
tile 11 tt ttt~ll, a nlottnt th t 1113-1 . et_10 CAR l Iv-st ill the
C d]IMIJS.i, c: v= °gtt d
The Ca1TRUST Board of Trustees has established S250,000 as the minimum
investment in one or more of the CalTRUST accounts. The Board also has authorized
the Ca1TRUST Program Administrator to waive this minimum investment requirement
in its discretion.
What is the maximum amount that an agency can invest in the
CaITRUST program`'
There is no maximum investment amount for any of the CalTRUST accounts.
There is no limit on the number of accounts that an agency can maintain. This provides
additional flexibility to agencies, allowing them to tailor the number and types of
accounts to best suit their local needs and priorities. For example, an agency may want
or need to segregate its enterprise-type assets from its general operating reserves.
CalTRUST provides the flexibility to meet this local preference.
\,D hl, sru tfl,fl§" @ rwwix-,~ -.,.risks £Cn SIG. t::^40,w w.~ C~&J krt S41fo
Investments in Ca1TRUST, like investments in other types of bond funds, are subject
primarily to interest rate risk and credit risk.
Interest rate risk is the potential for a decline in bond prices and hence the market
value of bonds in the portfolio due to rising market interest rates. In general, bond
prices vary inversely with interest rates. The change in a bond's price depends on
several factors, including its maturity date. ht general, bonds with longer maturities are
more sensitive to changes in interest rates than bonds with shorter maturities. Similarly,
bond funds with longer average portfolio maturities, such as the CalTRUST Medium-
Term and Long-Term Accounts, will be more sensitive to interest rate changes than
those with shorter average portfolio maturities, such as the Ca1TRUST Short-Term
account.
Credit risk is the possibility that a deterioration in the underlying creditworthiness of an
issuer will adversely affect the value of its outstanding bonds or that a bond issuer will
fail to make timely payments of interest or principal on its outstanding bonds (default).
A decline in a bond issuer's credit rating, or creditworthiness, may cause prices for its
outstanding bonds to decline.
Similar to shares in a bond mutual fund, the value of CalTRUST shares will change
with market conditions, as will the value of an agency's investment account. An agency
could lose money on an investment in a Ca1TRUST account or an investment in a
Ca1TRUST account could undenperform other investments.
Ny ilat is the Cost ( tY ansferring funds heoo een the Short-1 err i Account
and the Medium-Term Account or vice-versa`'
http://www.caltrust.or-/fags.html 1/5/2010
CaITRUST: FAQ's Page 3 of 4
There is no cost to transfer funds from any CalTRUST account to another Ca1TRUST
account. In addition, there is no cost for wirin- funds into or out of any of the
Ca1TRUST accounts (although a local agency's bank may charge a nominal fee for
sending and receiving wires).
in All participating agencies have 24-hour, password-protected online access to their
individual account information at www.caltrust.org. The CalTRUST websitc shows the
current value of CalTRUST shares, as well as additional relevant information regarding
the underlying pools of Securities in the CalTRUST accounts. Month-end statements
can be downloaded directly from the Ca1TRUST website, or an agency can opt to
receive printed monthly statements.
There are no out-of-pocket costs for an agency to invest funds in CalTRUST. As with
other programs, such as the Local Agency hlvestment Fund, managed by the State
Treasurer's Office, all expenses associated with participation in Ca1TRUST are
deducted from the yield.
The current total annual operating expense of the Ca1TRUST Heritage Money Market
Account is 13 basis points (0.13%) of the average daily net assets of the account.
For the Short-Tcrm Account, current total operating expenses are 14 basis points
(0.14%) of the average daily net assets of the Account. These expenses drop as the total
size of the Account increases; to 13 basis points for assets between 5500 million and S1
billion and to 12 basis points for assets over S1 billion.
Total annual operating expenses for the Medium-Term and Long-Term Accounts arc 24
basis points (0.24%). Again, as the size of the Accounts increase these expenses drop:
to 22 basis points for assets between 5500 million and S1 billion, and to 20 basis points
for assets over S 1 billion.
Expenses for each of the Ca1TRUST Funds arc deducted from the net assets of the
Funds on a monthly basis.
.y
N c7.~:„~"l.eir 1,' R~S.
Legislation signed by Governor Schwarzenegger in September 2004 clarified the
authority for local agencies to participate in Joint Powers Authority invesuncnt pools,
and makes it easier to participate in CalTRUST.
Chapter 470, StatuleS of 2004 (Assembly Bill 969 - Corrca) revised the provisions of
California Government Code Section 53601 to provide an explicit grant of authority for
local agencies to invest in shares of beneficial interest issued by a Joint Powers
Authority, provided the JPA:
1. Invests only in securities and obligations eligible for local agency investment
directly, and
2. Retains an investment adviser that
a. Is registered with the Securities and Exchange Commission or is exempt
from registration;
http://www.caltrust.or-/fags.html 1/5/2010
CaITRUST: FAQ's Page 4 of 4
b. Has not less than five years experience investing in securities and
obligations eligible for local agency investment; and
c. Has at least 5500 million in assets under management.
The information on this website is intended only for public agencies within the meaning of the Joint Exercise Of Powers Act and does not
represent an offer to sell or a solicitation of an offer to buy shares of the Trust or any other security. Shares in the Trust are sold or bought only
based on the information contained in the current Information Statement. The Information Statement contains important information and should
be read carefully before investing.
Home How to Join Resources Portfolio & Performance Your Account contact Us
http://www.caltrLIst.or-/fags.html 1/5/2010
Page 1 of 2
9uuumbEr 2009 Volume 9 1 9umberIl
#9)7~hly
P
Pa~ledd~vestr~sarfarvds JL f 1ulJE
_15 for 1wdipBeles
CN] ❑E 1 COKMUN1[Y COLLEGE LEAGUE
wwwcaltrustorg A
Special Announcement
HAPPY HOLIDAYS TO ALL FROM CaITRUST
President's Perspective
This past year has been one of transition and tremendous success for the CalTRUST program.
• Wells Fargo completed its acquisition of Wachovia Bank and with it the CalTRUST program. Wells Capital Management
demonstrated its commitment to the program by dedicating a highly professional team to ensure a seamless transition in the
middle of a severe banking and economic crisis.
• We said goodbye to three people who were instrumental in the growth and development of the program: Paul McDonnell, from Riverside
County, and Russ Gould and Pam Dolk from Wachovia/WellsCap. The hard work they invested in preparing a strong foundation for the
growth of the program cannot go unrecognized. We wish each of them the best of luck in their new endeavors.
• Tapping into the resources of Wells Fargo, we successfully launched a Money Market option, providing participants with same-day liquidity
and a rock-solid "AAA" rating.
• And, finally, it is my pleasure to announce that the program has exceeded $1 billion in assets. The magnitude of this accomplishment for
a program that began less than five years ago, with 4 participants and $42 million in assets, cannot be overstated.
As we move into 2010, the future of CalTRUST is bright, as we continue to offer a solid and valuable program to financial
professionals in municipalities across our State.
On behalf of the CalTRUST Board of Trustees, our sponsoring associations, and our private sector partners, here is wishing you all
the
calomeliPsolanocounty. com
Financial Markets Update
Recent Data Continues to Show Mixed, But Larctely Irnproving, Trends For- the LIS Econornv~ Equgies Resume Their Climb
1
In the In the December issue of his Market Update. John Lynch. Chief Market Analyst for Evergreen Investments. notes that while
recent economic data shows some improvement in the US economy, that growth is from still-weak levels. This "slower-than-hoped-
for-growth" permits the Federal Reserve to keep the Fed Funds rate at near-zero for an "extended period", particularly with year-
over-year inflation at -0.2% (CPA) through October.
The equities markets had a fairly easy month in November; right up to the Thanksgiving holiday.. when news broke of the unfolding
debt crisis in Dubai. This precipitated a global sell-off in the final trading days of the month; although by the time US markets re-
opened for trading on November 30th, buyers were back in the market, preserving gains of almost 6% for the month.
The credit concerns in Dubai "exposed the raw nerves that perhaps too many investors had ignored" in recent months. John
believes. as equity markets were driven higher by global stimulus measures.
You can read John's Market Update here.
CalTRUST Portfolio Snapshot (as or November 30.2009)
http://www.caltrLIst.or-/links/December2009.htiiii 1/5/2010
Page 2 of 2
CAIR05T Sh.irt•Tr=rnr LAI; Cs RUST hl,diuai•Trrin N4-rnll 1.5 Yr Trial ROum
Trial W-14 Yr:Od Yr0-1111 Tora1 Tro.i9ft
Rrlnrn P?trurn Pa,4vn ROurn RlI111T1 Ap,m. Corp,% G%t
"RIO, 0.66% 01.61% 1.511; 1.04:; 1.39'`?:
Fffer-we Curatea^ {1,57 IWA 1.71 2.52 2.58
F:r2Va-urity ;Y?n U.06 8.65 1.81 2,59 2.71
Re#ums
--"e Alcnt, DA3% 17.45". 0.051. 0.12% 4.5$°a 0.91'. O.W.I.
O-e 2.48% 1.485•: 1.39'... 3.435: 4.37°: 3.37': 5,9727.
Twc`ez' 2.26% 2.12'6 2.48''.: 3.161.a 3.62°: 5.315% 5,13,':.
Tliree'Yeat' 3.23°.': 3.19'`. 3.361: 3.921;. 4.2a°,. 6.0-0. 5.78°e.
=^C=-:Ept n'' 161'3.57®. 3.581: 3-73`.. 3.951. 4.94'. 4.W.
1. CaITRUST Short-Term and Medium-Term and LAIF yields are net of fees. Merrill 1-5 Year Indexes are unmanaged: and do not reflect any deduction for administrative fees
or expenses.
2. CaITRUST and LAIF returns are net of all investment advisor, administrative and program fees.
3. Annualized.
43he CaITRUST Short-Term and Medium-Term portfolios commenced operations according to their current investment objectives on February 13. 2005.
CaITRUST Heritage Money Market Fund
Since
Month-End Perfoamadlce ?,-3-2C_.F 1-year 3-year 5-ye3r 10-year Inception
CaITRUST Heritage MMF 10.70°.': 3,04% 3.38x`. 3.18% 3.89".
Average Annual Total P.eturn :2--20-2_C
CatTRUST Heritage MMF 1,11% 3,32% 3,43°. 7.27% 734%
Lipper lalstit MMF Average 0,75 3'W', 7,15`a 102%
Treasury Yield Curve
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The CaITRUST Monthly Market Update is prepared monthly by the Investment Trust of California (CaITRUST) for participants in the CaITRUST Joint Powers Authority pooled
investment program. The Newsletter is prepared solely for informational purposes and is not to be construed as the solicitation of an offer to sell or of an offer to buy any
security, nor is it intended to constitute a recommendation for the purchase or sale of any security. The information contained herein is based upon data obtained from
sources believed to be reliable, but is not guaranteed by us as being accurate and does not purport to be a complete summary of the available data. Additional data will be
provided upon request. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is
made regarding future performance. Information, opinions and estimates contained in the Monthly Market Update reflect a judgment at its preparation date by CaITRUST and
are subject to change without notice. The price, value of, and income from any securities or financial instruments issued by the entities mentioned in this Monthly Market
Update may fall as well as rise.
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CSAC Finance Corporation 11100 K Street, Suite 101 I Sacramento I CAI 95814
http://www.caltrLIst.or-/links/December2009.htiiii 1/5/2010
ITEM NO. 3.3
AGENDA REPORT
Meeting Date: January 11, 2010 Budgeted: N/A
To: Finance-Accounting Committee Cost Estimate: ($29,800)
Funding Source: N/A
From: Ken Vecchiarelli, General
Manager
Presented By: Cindy Navaroli, Interim Finance Dept: Finance
Director
Reviewed by Legal: N/A
Prepared By: Cindy Navaroli, Interim Finance CEQA Compliance: N/A
Director
Subject: Inventory Surplussed in Compliance with Restrictive Lead Regulation
DISCUSSION:
On September 30, 2006, the State of California passed into law Assembly Bill 1953, which restricts
the content of lead in potable drinking water distribution systems and plumbing fixtures, to a
maximum of 0.25% lead composition. The law went into effect January 1, 2010 and prohibits the
sale and use of any pipe, fitting or plumbing fixture which exceeds the allowable lead content and is
intended to convey or dispense water for drinking or cooking. The purpose of the law is to enhance
water quality by reducing the potential for lead to leach into drinking water from plumbing and
fixtures in contact with the water. At this time only two states have passed such restrictive
regulations; California and Vermont.
Staff reviewed existing inventory earlier in the year to determine which items, if not used before
January 1, 2010, would need to be surplussed and replaced with similar reduced-lead items.
Approximately $37,000 of leaded inventory became unusable as of January 1, 2010. The initial cost
to replace this inventory with low-lead parts, ordered at minimum stock levels, is approximately
$10,000. To help defray this cost, the District sold approximately $11,700 of the surplus leaded
inventory at a reduced price of $4,500 to a supplier in Arizona. The remaining inventory was
weighed and scrapped netting an additional $2,700.
The total estimated financial impact is a net loss in inventory of $29,800 ($37,000 - $4,500 -
$2,700). This will be considered with the mid-year budget review to determine overall budget
performance and the need for budget transfers between accounts to compensate for the
unanticipated loss and to cover for any replacement inventory purchases.
PRIOR RELEVANT BOARD ACTION(S):
The Committee discussed selling the leaded inventory in the meeting on December 7, 2009. Staff
was instructed to bring back a report after the inventory had to been sold and/or scrapped.