HomeMy WebLinkAbout2010-03-15 - Finance-Accounting Committee Meeting Agenda Packet
Yorba Linda
Water District
AGENDA
YORBA LINDA WATER DISTRICT
FINANCE-ACCOUNTING COMMITTEE MEETING
Monday, March 15, 2010, 8:00 AM
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
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. January Budget to Actual Results
Recommendation: That the Committee review, receive and file the January 2010
budget to actual results.
2.2. Monthly Investment Report for January 2010
Recommendation: That the Committee receive and file the Investment Report.
2.3. One Year Budget for Fiscal Year 2010/11
Recommendation: That the Committee support staffs recommendation to complete
a one year budget for the 2010/11 fiscal year.
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. Budget Calendar Update and Progress Report
3.2. Consolidation of Funds
3.3. Future Agenda Items and Staff Tasks
4. ADJOURNMENT
4.1. The next regular meeting of the Finance-Accounting Committee will be held on April 12,
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: March 15, 2010 Budgeted: N/A
To: Finance-Accounting Committee
Funding Source: N/A
From: Ken Vecchiarelli, General
Manager
Presented By: Stephen Parker, Finance Dept: Finance
Director
Reviewed by Legal: N/A
Prepared By: Stephen Parker, Finance CEQA Compliance: N/A
Director
Subject: January Budget to Actual Results
STAFF RECOMMENDATION:
That the Committee review, receive and file the January 2010 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 in both the Water and Sewer Funds.
PRIOR RELEVANT BOARD ACTION(S):
On February 17, 2010, the Committee reviewed, received and filed the December 2009 budget to
actual results.
ATTACHMENTS:
Name: Description: Type:
Water January 2010.xls Water January 2010 Backup Material
Sewer January 2010.xls Sewer January 2010 Backup Material
Water Sewer Jan 2010.xls January 2010 Summary Backup Material
Yorba Linda Water District
Water Fund
For the Seven Months Ended January 31, 2010
FY 2010 % of
Annual January Actual Annual
Budget 2010 YTD Budget
Water Revenue (Residential) $17,692,953 $1,326,772 $10,141,327 57.32%
(Restricted for Debt Service) - (160,688) (1,595,602)
Water Revenue (Commercial & Fire Det.) 1,680,500 137,193 1,020,307 60.71%
Water Revenue (Landscape/Irrigation) 3,654,419 190,133 2,126,886 58.20%
Other Operating Revenue 643,792 41,497 415,092 64.48%
Total Operating Revenue: 23,671,664 1,534,907 12,108,010 51.15%
Expenses (Operating):
Variable Water Costs (G.W., Import & Power) 12,259,937 531,953 6,600,116 53.83%
Salary Related Expenses 6,538,008 458,188 3,172,564 48.52%
Supplies & Services:
Communications 268,694 20,046 186,036 69.24%
Contractual Services 964,090 80,356 576,267 59.77%
Data Processing 116,148 2,674 24,478 21.07%
Dues & Memberships 30,068 3,396 24,581 81.75%
Fees & Permits 50,160 1,378 36,887 73.54%
Insurance 342,433 - 194,997 56.94%
Materials 427,424 17,028 275,691 64.50%
District Activities, Emp Recognition 13,832 - 1,867 13.50%
Maintenance 384,362 10,806 77,369 20.13%
Non-Capital Equipment 139,910 12,726 46,531 33.26%
Office Expense 66,775 3,622 17,180 25.73%
Professional Services 760,575 16,891 216,191 28.42%
Training 61,518 3,141 13,994 22.75%
Travel & Conferences 48,892 99 6,216 12.71 %
Uncollectible Accounts 47,320 - 418 0.88%
Collection Agency Fee 3,185 - - 0.00%
Utilities 27,027 5,874 72,127 266.87%
Vehicle Equipment 279,683 12,510 168,135 60.12%
Supplies & Services Sub-Total 4,032,096 190,547 1,938,965 48.09%
Depreciation & Amortization 3,945,750 335,326 2,352,184 59.61%
Total Operating Expenses 26,775,791 1,516,014 14,063,829 52.52%
Operating Income (Loss) (3,104,127) 18,893 (1,955,818) 63.01%
Revenue (Non-Operating):
Interest 500 5,131 31,503 6300.60%
Interest (Restricted for Capital Projects) - 7,757 58,348
Property Taxes 1,092,000 59,139 668,377 61.21%
Debt Service Income (through water revenue) - 160,688 1,595,601
Other Non-Operating Revenue 172,900 36,857 258,810 149.69%
Total Non-Operating Revenue: 1,265,400 269,572 2,612,639 206.47%
Expenses (Non-Operating):
Interest on Long Term Debt (1,981,300) (161,612) (1,139,037) 57.49%
Job Closing Expense (40,000) 0.000/0
Other Expense (154,500) (4,722) (113,936) 73.74%
Total Non-Operating Expenses: (2,175,800) (166,334) (1,252,973) 57.59%
Non-Operating Income (Loss) (910,400) 103,238 1,359,666
Total Income (Loss) $ (4,014,527) $ 122,131 $ (596,152) 14.85%
Contributed Capital $ 190,962 $ 18,254 $ 190,124 99.56%
Yorba Linda Water District
Sewer Fund
For the Seven Months Ended January 31, 2010
FY 2010 % of
Annual January Actual Annual
Budget FY 2010 YTD Budget
Revenue (Operating):
Sewer Charge Revenue $1,160,000 $99,487 $692,412 59.69%
Locke Ranch Assessments 116,000 1,528 60,930 52.53%
Other Operating Revenue 5,100 261 1,913 37.51%
Total Operating Revenue: 1,281,100 101,276 755,255 58.95%
Expenses (Operating):
Salary Related Expenses 817,041 61,536 422,276 51.68%
Supplies & Services:
Communications 26,654 1,983 18,609 69.82%
Contractual Services 137,255 6,297 85,899 62.58%
Data Processing 11,487 264 2,421 21.08%
Dues & Memberships 3,360 336 2,555 76.04%
Fees & Permits 6,040 115 3,505 58.03%
Insurance 33,867 19,285 56.94%
Materials 21,301 368 8,990 42.20%
District Activities 1,368 185 13.52%
Maintenance 29,789 164 6,223 20.89%
Non-Capital Equipment 18,631 1,259 4,728 25.38%
Office Expense 9,550 358 1,472 15.41%
Professional Services 77,925 1,671 21,500 27.59%
Training 8,632 1,294 2,380 27.57%
Travel& Conferences 6,893 10 653 9.47%
Uncollectible Accounts 4,680 - 0.00%
Collection Agency Fee 315 - 0.00%
Utilities 2,673 581 7,133 266.85%
Vehicle Equipment 47,068 2,902 21,147 44.93%
Supplies & Services Sub-Total 447,488 17,602 206,685 46.19%
Depreciation & Amortization 595,050 47,602 333,217 56.00%
Total Operating Expenses 1,859,579 126,740 962,178 51.74%
Operating Income (Loss) (578,479) (25,464) (206,929) 35.77%
Revenue (Non-Operating):
Interest 7,000 1,274 7,205 102.93%
Interest (Restricted for Capital Projects) - 151 1,064
Property Taxes 108,000 - - 0.00%
Other Non-Operating Revenue 12,600 384 (125) -0.99%
Total Non-Operating Revenue: 127,600 1,809 8,144 6.38%
Expenses (Non-Operating):
Job Closing Expense (5,000) - 0.00%
Other Expense (2,300) (272) (1,695) 73.70%
Total Non-Operating Expenses: (7,300) (272) (1,695) 23.22%
Non-Operating Income (Loss) 120,300 1,537 6,449 5.36%
Total Income (Loss) $ (458,179) $ (23,927) $ (200,474)
Contributed Capital $74,240 $5,950 $52,917 71.28%
Yorba Linda Water District
Summary Financial Report
Water & Sewer Funds
For the Seven Months Ended January 31, 2010
Annual % of
Budget Actual Annual Bueget
FY 09/10 YTD through Ameneded
Amended 10/21/09 January 31, 2010 10/21/09
Revenue (Operating):
Water Revenue (Consumption & Flat Charge) $23,027,872 $13,288,520 57.71%
(Restricted for Debt Service) - (1,595,602) 0.00%
Sewer Revenue 1,276,000 753,342 59.04%
Other 648,892 417,005 64.26%
Total Operating Revenue: 24,952,764 12,863,265 51.55%
Expenses (Operating):
Variable Water Costs (G.W., Import & Power) 12,259,937 6,600,116 53.83%
Salary Related Expenses 7,355,049 3,594,841 48.88%
Supplies & Services 4,479,584 2,145,650 47.90%
Depreciation & Amortization 4,540,800 2,685,401 59.14%
Total Operating Expenses: 28,635,370 15,026,008 52.47%
Operating Income (Loss) (3,682,606) (2,162,742) 58.73%
Revenue (Non-Operating):
Interest 7,500 38,708 516.11%
Interest (Restricted for Capital Projects) - 59,412 0.00%
Property Taxes 1,200,000 668,377 55.70%
Debt Service Income (through water revenue) - 1,595,601 0.00%
Other 185,500 258,685 139.45%
Total Non-Operating Revenue: 1,393,000 2,620,782 188.14%
Expenses (Non-Operating):
Interest on Long Term Debt (1,981,300) (1,139,037) 57.49%
Other Expense (201,800) (115,631) 57.30%
Total Non-Operating Expenses: (2,183,100) (1, 254, 668) 57.47%
Non-Operating Income (Loss) (790,100) 1,366,114
Net Income (Loss) (4,472,706) (796,628) 17.81%
Contributed Capital 265,202 243,041 91.64%
ITEM NO. 2.2
AGENDA REPORT
Meeting Date: March 15, 2010 Budgeted: N/A
To: Finance-Accounting Committee
Funding Source: N/A
From: Ken Vecchiarelli, General
Manager
Presented By: Stephen Parker, Finance Dept: Finance
Director
Reviewed by Legal: N/A
Prepared By: Sandi Van Etten, Senior CEQA Compliance: N/A
Accountant
Subject: Monthly Investment Report for January 2010
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 RECOMMENDATION:
That the Committee receive and file the Investment Report.
DISCUSSION:
Staff is submitting the January 2010 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:
Name: Description: Type:
Invst Rpt 1-101.x1s Investment Report Backup Material
Agenda, 3-8_backup-Jan.doc Backup Backup Material
Yorba Linda Water District
Investment Portfolio Report
January 31, 2010
Market % Percent Investment Maturity
Value Cost of Total Institution Yield Date Date
Money Market Accounts:
$ 829,000 $ 829,000 Wells Fargo Money Market 0.30% N/A
- - Wells Fargo MM/Annexation
$ 829,000 $ 829,000 2.20% Total 0.30%
$ 829,000 $ 829,000 2.20% Sub-total 0.30%
California Asset Mgmt. Program:
$ 5,100,169 $ 5,100,169 13.51% California Asset Mgmt. Program 0.22% N/A
Money Market Account:
$ 15,322,592 $ 15,322,592 US Bank 2008 Revenue Bond 0.30%
4 4 US Bank 2003 Revenue Bond 0.27% N/A
$ 15,322,596 $ 15,322,596 40.58% 0.30%
$ 21,251,765 $ 21,251,765 56.28% Sub Total Investments 0.28%
Individual Management Account:
$ 16,536,882 $ 16,507,992 43.72% Wells Capital Management 0.68% N/A
$ 37,788,647 $ 37,759,757 100% Total Investments 0.46%
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.
Sandi Van Etten, Senior Accountant
1/31/2010
Investment Report Summary
Below is a chart summarizing the yields as well as terms and maturities for the month of
January 2010:
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
January 0.28% 0.46% 189 82
Below is a chart comparing operating fund interest for current and prior fiscal years.
Actual Interest 1/31/09 1/31/10
Monthly, Operating Fund $ 392 $ 4,394
Year-to-Date, Operating Fund $ 4,770 $ 24,804
Budget 2008/2009 2009/2010
Interest Budget, Operating Fund, January YTD $37,625 $4,375
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 1/31/10
Annexation $4,416,337 11.68%
Water Operating 3,992,756 10.56%
Water R&R 2,057,829 5.44%
COP Revenue Bond 2003 4 0.00%
COP Revenue Bond 2008 15,322,592 40.51%
Sewer Operating 1,303,260 3.45%
Sewer R&R 478,654 1.27%
Sewer Capital Projects 189,564 0.50%
ID1 2,993,990 7.92%
D2 7,071,174 18.69%
$37,826,160 100.00%
ITEM NO. 2.3
AGENDA REPORT
Meeting Date: March 15, 2010 Budgeted: N/A
To: Finance-Accounting Committee
Funding Source: N/A
From: Ken Vecchiarelli, General
Manager
Presented By: Stephen Parker, Finance Dept: Finance
Director
Reviewed by Legal: N/A
Prepared By: Stephen Parker, Finance CEQA Compliance: N/A
Director
Subject: One Year Budget for Fiscal Year 2010/11
SUMMARY:
Staff recommends preparing a one year budget for the upcoming fiscal year.
STAFF RECOMMENDATION:
That the Committee support staff's recommendation to complete a one year budget for the 2010/11
fiscal year.
DISCUSSION:
In the past the District has prepared a two year budget. This practice was not utilized for the FY
2009/10 Budget, which was a year with rapidly changing dynamics and late breaking water supply
issues, rates increases and allocation information that affected YLWD's costs and revenue
projections. Staff recently completed a FY2009/10 mid-year budget revision to evaluate affects from
the District's recent rate increase and to determine if additional reduction of expenses is necessary
to continue to meet our bond rate covenant. As we begin the budget process for the 2010/11 fiscal
year, it is the desire of staff to continue to use a one-year budget for reasons including the following:
1. With the uncertainty of future costs of water from Metropolitan Water District of Southern
California and Orange County Water District, as well as potential rate increases from Southern
California Edison and The Gas Company, predicting revenues and corresponding expenses
more than a year out would be very difficult.
2. A two-year budget would have to be reviewed and revised after one year anyway, and would
not result in greater efficiencies.
3. As the District uses the budget more fully as a tool for ensuring that departments do not
exceed planned expenses, it is important that the budget be reviewed and adjusted more
often rather than less often.
4. To that end, the District did a mid-year revision of the current years' budget, and plans to at
least review the budget semi-annually in the ongoing future.
5. It is difficult to predict second year revenues with a potential change in rate structure being
considered in the 2011/12 fiscal year.
6. With the economic and market conditions still depressed, a two year budget does not provide
a particular advantage.
PRIOR RELEVANT BOARD ACTION(S):
No prior relevant board actions.
ITEM NO. 3.1
AGENDA REPORT
Meeting Date: March 15, 2010 Budgeted: N/A
Total Budget: N/A
To: Finance-Accounting Committee Cost Estimate: N/A
Funding Source: N/A
From: Ken Vecchiarelli, General Account No: N/A
Manager
Job No: N/A
Presented By: Stephen Parker, Finance Dept: Finance
Director
Reviewed by Legal: N/A
Prepared By: Stephen Parker, Finance CEQA Compliance: N/A
Director
Subject: Budget Calendar Update and Progress Report
SUMMARY:
At the February 17, 2010 Finance-Accounting Committee Meeting, staff recommended a one year
budget and presented a budget calendar for planning and identifying milestone objectives. This
calendar has been updated and amended to include a Prop. 218 Notice and Public Hearing in the
event the Board determines one is necessary through the budget process.
DISCUSSION:
Attached is the budget calendar for FY 2010/11 presented last month, with minor revisions since
then shown in red. Staff will continue to update the schedule as changes become necessary.
ATTACHMENTS:
Narne: Description: Type:
Budget Calendar_03152010.xls FY2010/11 Budget Calendar Backup Material
BUDGET CALENDAR FOR FISCAL YEAR 2010111
DATE BOARD/COMMITTEE SCHEDULE
FEBRUARY
February 17, 2010 Finance-Accounting Committee Approval of the Budget Calendar
February 23, 2010 Manager's Meeting Discuss Budget Calendar and Process
February 25, 2010 Board of Directors Board Review of Budget Calendar
MARCH
March 8, 2010 Board Workshop Asset Management Program/°^r^ ~ & Rate Discussion
March 9, 2010 Manager's Meeting Personnel & Capital Budget Discussion
March 23, 2010 Manager's Meeting Department Budgets (v 1.0) Complete and Submitted to Finance
March - TBD Board Workshop - Revenue & Rates Operating Revenues (v 1.0), Reserve Fund Analysis (v 1.0)
APRIL
April 1, 2010 Planning-Engineering-Operations Committee Capital Improvement & Replacement Projects Budget (v 1.0)
April 6, 2010 Public Information-Technology Committee IT & Public Information Budget (v 1.0)
April 6, 2010 Manager's Meeting Encumbrances (v 1.0)
April 12, 2010 Finance-Accounting Committee Operating & Non-operating expenses budget, (v 1.0)
April 13, 2010 Personnel-Risk Mgmt Committee Labor and Benefits (v 1.0)
April 20, 2010 Manager's Meeting Discussion of Committee Response to Budgets
April - TBD Board Workshop - Revenue & Rates Operating Revenues (v 2.0), Reserve Fund Analysis (v 2.0)
April 30, 2010 Prop. 218 Notice Mailed (If needed) (If increase needed & includes other than approved pass throughs)
MAY
May 4, 2010 Manager's Meeting Department Budgets (v 2.0), Encumbrances (v 2.0)
May 4, 2010 Public Information-Technology Committee IT & Public Information Budget (v 2.0)
May 6, 2010 Planning-Engineering-Operations Committee Capital Improvement & Replacement Projects Budget (v 2.0)
May 11, 2010 Personnel-Risk Mgmt Committee Labor and Benefits (v 2.0)
May 17, 2010 Finance-Accounting Committee Draft Budget Overview Discussion (v 1.0)
May 18, 2010 Manager's Meeting Encumbrances (v 2.0)
May - TBD Board of Directors Workshop Budget Workshop (Full Board)
JUNE
June 1, 2010 Manager's Meeting Budget Discussions/Revisions as Needed
June 10, 2010 Board of Directors Draft Budget - Public Review
June 15, 2010 Manager's Meeting Final Budget Discussions/Revisions as Needed
June 24, 2010 Board of Directors Budget Adoption (Full Board) & Rate Hearing (If needed)
ITEM NO. 3.2
AGENDA REPORT
Meeting Date: March 15, 2010 Budgeted: N/A
To: Finance-Accounting Committee
Funding Source: N/A
From: Ken Vecchiarelli, General
Manager
Presented By: Stephen Parker, Finance Dept: Finance
Director
Reviewed by Legal: N/A
Prepared By: Stephen Parker, Finance CEQA Compliance: N/A
Director
Subject: Consolidation of Funds
SUMMARY:
Staff recommends consolidating the District fund structures from four to two, keeping water and
sewer and eliminating the ID 1 and ID 2 separate funds. Consolidating the fund structure will reduce
unnecessary accounting workload in the Finance Department. Staff will take this action to the Board
for their consideration by official Resolution once the resolution has been approved by legal
counsel. At this point, Staff is bringing this matter to the Finance-Accounting Committee as an
information item so they are aware of the pending recommendation. The ID 1 and ID 2 fund
balances are already designated as restricted reserves for water system capital improvements and
have been so allocated.
DISCUSSION:
The District's financial statements for decades have shown four separate funds: Water, Sewer, ID 1
and ID 2. Improvement Districts (ID) 1 and 2 were formed over thirty years ago by landowners who
needed water service from the District and a means to finance the capital related to that need to
support proposed future development of their properties. This relatively small group of landowners
approved the issuance of debt with payments from property taxes from the current and future
landowners. Debt was issued at a pace with the land development, in amounts estimated to
complete the capital infrastructure that was required to serve the developments as they were
planned for construction. When the pace of development slowed, fund balances stretched further
and were used to continue the financing and construction of capital improvements that benefited the
ID-1 and 2 service areas with no new issuance of bonds required.
All capital projects identified in the documents from the various series of debt issuance have long
since been completed, and the debt service for ID 1 and ID 2 was retired. Taxes were last levied in
2004 when the debt was officially paid off. Once that occurred, the obligation for separate tracking
of assets or expenses of those funds also ended. This was confirmed through numerous
discussions with the District's bond counsel Kurt Yeager of Stradling Yocca Carlson & Rauth.
However, the District has continued to track the ID 1 and 2 fund balances separately. This practice
is both time consuming and unnecessary. The District's current external auditors, Diehl Evans &
Company, have stated that they would not take any issue with the consolidation of ID 1 and 2.
Therefore, as we develop the elements of a more formal reserve policy, staff will also prepare a
resolution for the Board's consideration to consolidate ID 1 and 2 into the water fund reserves, with
the net assets being restricted for capital projects.