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HomeMy WebLinkAbout2010-02-17 - Finance-Accounting Committee Meeting Minutes MINUTES OF THE YORBA LINDA WATER DISTRICT FINANCE - ACCOUNTING COMMITTEE MEETING February 17, 2010 A meeting of the Finance-Accounting Committee was called to order by Director Summerfield at 4:05 p.m. The meeting was held at the District's Administrative Office at 1717 E Miraloma Ave, Placentia CA 92870. COMMITTEE STAFF Director John W. Summerfield, Chair Ken Vecchiarelli, General Manager Director Ric Collett Stephen Parker, Finance Director Cindy Navaroli, Interim Finance Director 1. PUBLIC COMMENTS None. 2. DISCUSSION ITEMS 2.1. CalTrust Investment Alternative (Conference Call with Consultant) Mr. Khorey, the Wells Capital investment consultant for the District, introduced Lyle Defenbaugh, investment representative for CaITRUST, who was available via conference call. Mr. Defenbaugh gave detailed information about CaITRUST, which is a JPA of over 85 California governmental agencies that pools resources similar to the State's Local Agency Investment Fund (LAIF). Mr. Defenbaugh discussed CaITRUST investment options, which are money funds, short-term funds, and medium-term funds. It was noted that the ratings for CaITRUST'S money funds are AAA and the ratings for the short-term funds are AA and S1 + for volatility, which is the highest rating possible for a bond fund. It was also noted that yields on all of the investment options are greater than our current average investment portfolio yield. The Committee agreed to recommend a transfer of the Wells Capital portfolio to CaITRUST as soon as feasible. Mr. Defenbaugh indicated that although the State of California's investment code allows the use of JPA's, the District's current policy does not and would have to be modified accordingly. Staff was directed to bring to the Board a modified investment policy and a proposal to transfer funds from Wells Capital to CaITRUST. 2.2. Monthly Portfolio Reports for January 2010 Mr. Khorey presented the monthly portfolio reports and indicated that the overall the portfolio has a slight unrealized gain, and is in line with the current short term market. 1 2.3. Introduction of Stephen Parker, Newly Hired Finance Director Mr. Vecchiarelli introduced Stephen Parker, who is a CPA and former Senior Manager from Mayor Hoffman LLP. The Committee welcomed Mr. Parker as the new Director of Finance. 3. ACTION CALENDAR 3.1. December Budget to Actual Results and FYE Projections Ms. Navaroli presented the December budgeted results and noted that the year-to-date results are fairly consistent with the prior year. Ms. Navaroli also noted that a year-end budget projection column was added on the financials. Ms. Navaroli noted that managers and staff worked diligently to reduce budgets where possible to give the District some financial flexibility should water sales be lower than projected. These projections were compiled for the water and sewer funds to determine the anticipated debt service ratio at year-end and to help manage the District's finances for the rest of the fiscal year. She also noted that the projected debt service ratio of 133% is above the required 110%, and staff will continue to monitor those projections through year-end. 3.2. Monthly Investment Report for December 2009 Ms. Navaroli presented the monthly investment report and noted that Water Operating balance appeared high because the $1.2 million replenishment assessment had not been paid as of 12/31/09. 4. DISCUSSION ITEMS 4.1. Proposed Calendar for FY 2010/11 Budget Ms. Navaroli presented the proposed budget calendar for FY 2010/11. The Committee requested that the Proposition 218 process should be tentatively added to the calendar should the need arise. 4.2. Water Rate Study Update (Verbal Report) Ms. Navaroli noted that six consulting firms responded to the Water Rate Study RFP, and that staff would information and suggestions to the full Board at the March 8t" Board workshop. 4.3. Retirement Alternatives Survey Ms. Navaroli noted that 31 agencies responded to the survey, which asked questions about plans to change or two-tier employee retirement plans. She noted that 16 of the respondents were stand-alone water districts, and none of the 16 agencies have made a change to the level of retirement benefits offered. She did note that two of the agencies are considering a two-tiered retirement system in the future and one district increased new employee contributions to the full CalPERS employee rate (7%). 2 Ms. Navaroli noted that overall, the most common changes being considered by other agencies are reduced spending, hiring freezes, furloughs, and changes in employee benefits. She also indicated that agencies are commenting that changes to retirement system are considered as a last resort since these changes are not made easily and are hard to change once in place. Additionally, changes to the retirement system will not produce the immediate cost savings that are needed now, and will hurt the competiveness of the District when recruiting new employees. 4.4. Future Agenda Items and Staff Tasks None. 5. ADJOURNMENT 5.1. The Committee adjourned at 5:47 p.m. The next regular meeting of the Finance-Accounting Committee will be held March 15, 2010 at 4:00 p.m. 3