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HomeMy WebLinkAbout2010-04-30 - Board of Directors Meeting Minutes 2010-68 MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS WORKSHOP MEETING April 30, 2010 1. CALL TO ORDER The April 30, 2010 Yorba Linda Water District Board of Directors Workshop Meeting was called to order by President Mills at 9.02 a.m. The meeting was held at the District's Administrative Office at 1717 East Miraloma Avenue, Placentia CA 92870 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL DIRECTORS PRESENT STAFF PRESENT William R. Mills, President Ken Vecchiarelli, General Manager Michael J Beverage, Vice President Pat Grady, Assistant General Manager Ric Collett Stephen Parker, Finance Director Phil Hawkins Annie Alexander, Executive Secretary ' John W Summerfield OTHER VISITORS Cindy Navaroli, Principal, Platinum Consulting Group 4. ADDITIONS/DELETIONS TO THE AGENDA None. 5. PUBLIC COMMENTS None. 6. DISCUSSION ITEMS 6.1. Fitch Ratings for YLWD 2003 & 2008 Water Bonds Mr Vecchiarelli reported that Fitch has confirmed YLWD's AA- bond rating and would be recalibrating the District's ratings for its 2003 and 2008 water bonds at the end of the month from AA- to AA. Mr Vecchiarelli explained that the reason for Fitch's review and surveillance was that the District had experienced weakened financial performance during FY 2008/09, resulting partially from a delay in the implementation of a rate increase following the Freeway Complex Fire in 2008. The District was also impacted by a considerable cost increase in its imported water supply as well as mandated reductions in water sales. 1 2010-69 Mr. Parker stated that staff had communicated with confidence to the bond ' holders that the District would be able to maintain its bond covenants. Mr Vecchiarelli further explained that the rationale behind the recalibration was that Fitch would like to ensure a greater degree of comparability across its portfolio of credit ratings, among non-profit government agencies and for-profit businesses. Mr Vecchiarelli then concluded his comments by stating that it was a great accomplishment for the District to be able to maintain these ratings and thanked Ms. Navaroli and Mr Parker for their efforts and assistance in this endeavor 6.2. Reserve Policy Ms. Navaroli explained that the Finance-Accounting Committee had recently reviewed a draft reserve policy and that the purpose of her report was to present the Board with various reserve level options. Ms. Navaroli then provided the Board with a PowerPoint presentation regarding the purpose and benefits of adopting a formal reserve policy, the various reserve types and thresholds, and the Districts current designated reserves. Ms. Navaroli, Mr Vecchiarelli and Mr Parker then responded to questions from the Board regarding the District's designated reserves and debt ' service requirements. Mr Vecchiarelli stated that staff planned to continue developing recommendations for a reserve policy to be adopted with the FY 2010/11 budget in June. Mark Schock addressed the Board and asked how the District's bond ratings compared to those of Walnut Valley Water District and Mesa Consolidated Water District (MCWD). Ms. Navaroli responded that she did not have this information but that she believed MCWD was rated AAA. Ms. Navaroli then stated that Fitch looks favorable on agencies that adopt a formal reserve policy and that it would be helpful should the District desire to issue bonds again in the future. Mr Vecchiarelli then responded to additional questions from the Board regarding the water rate study 6.3. Draft FY 2010/11 Budget Mr Vecchiarelli provided the Board with a PowerPoint presentation regarding the draft FY 2010/11 budget. This included a review of , accomplishments during FY 2009/10, goals and objectives for FY 2010/11, and a summary of the FY 2010/11 budget assumptions 2 2010-70 ' Mr Vecchiarelli, Mr Grady and Mr Parker then responded to questions from the Board regarding the draft budget and projected expenses. President Mills requested that staff look into transferring the cost of preparing a CEQA document for the OCWD annexation from operating to capital. Mr Vecchiarelli concluded his presentation by saying that staff was ahead of schedule and planned to present the Board with a draft budget for review at the meeting scheduled May 27, 2010 President Mills commended staff on their budget related efforts. Mr Vecchiarelli then asked the Board for direction regarding balancing the draft budget. President Mills requested that staff look into the potential fiscal impacts, if the OCWD annexation does not occur until July 2011 Mr Vecchiarelli confirmed staffs assumptions for FY2010/11 do not consider the annexation occurring in that fiscal year 7. ADJOURNMENT 7.1. The meeting was adjourned at 11 13 a.m. The next regular meeting of the ' Board of Directors will be held May 13, 2010 at 8,30 a.m. On Vecchiarelli Board Secretary 3