HomeMy WebLinkAbout2010-08-09 - Finance-Accounting Committee Meeting Minutes
MINUTES OF THE
YORBA LINDA WATER DISTRICT
FINANCE -ACCOUNTING COMMITTEE MEETING
August 9, 2010
A meeting of the Finance-Accounting Committee was called to order by Director
Summerfield at 4:00 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
1. PUBLIC COMMENTS
None.
2. ACTION CALENDAR
2.1. June 2010 Budget to Actual Results
Mr. Parker presented the June monthly financials and clarified that the
numbers presented did not include all the year-end accruals, but included
all the routine monthly invoices. Mr. Parker explained that the monthly
report reflects a number of successes from last year and earlier in the
current year including variable expenses finishing at 86% of budget while
revenues were 95% of budget. In addition, supplies and services were
only 80% of budget due to aggressive efforts to limit or defer expenses
within staff's control. The Committee reviewed, received and filed the
June 2010 Budget to Actual Results.
2.2. Monthly Investment Report for June 2010
Mr. Parker presented the monthly investment report and shared that the
total average portfolio yield for the month of June was 0.83%. He also
noted that the COP Revenue Bond fund was reduced by approximately
$1 M due to approved CIP project spending, and that the Water Operating
Fund increased by over $500,000 from the previous month. Mr. Parker
mentioned that some formatting changes would take place with the report
presented to the Committee the following month. The Committee received
and filed the June 2010 Investment Report.
3. DISCUSSION ITEMS
3.1. SAS 114 Required Communications (As a courtesy to Mr. Patel,
this item was discussed out of order and prior to the other items.)
Mr. Nitin Patel, Partner with Diehl Evans discussed the upcoming annual
audit and explained to the Committee the required communications
including what the audit represents, what it is does not, the nature and
limitations of statistical sampling, acceptable auditing practices,
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reasonable professional standards and the expected timing of the audit.
The auditors will be in the field (i.e. at the District) the week of August 16th
and expect to present the results of the audit to the Board at the first
meeting in October. Mr. Parker mentioned that this year the District is
preparing a Comprehensive Annual Financial Report (CAFR) rather than
just basic financial statements for this year's audit. Mr. Parker and Mr.
Patel described the differences between basic financial statements and a
CAFR to the Committee. The Committee asked about any added costs or
resources required to complete a CAFR. Mr. Parker explained that staff
would prepare the additional tables and schedules needed to satisfy the
requirements and there would be no additional costs from the auditing firm
to review this document. Mr. Parker also clarified that while there are no
guarantees that the District will receive recognition for this effort, it is still
worthwhile to strive for achievement of the goal.
3.2. June 2010 Debt Service Ratio Calculation
Mr. Parker presented the preliminary debt service ratio calculation of 1.68
and explained that while a number of year-end accruals were not yet
included in this years' calculation, the capitalized interest journal entry,
which reduces the debt service amount in the denominator of the
calculation and improves the ratio, also was not yet included. Mr. Parker
expected the ratio to stay similar or increase some as a result. Mr.
Vecchiarelli clarified that while the capitalized interest may improve the
ratio in the current year, as the District spends down the bond revenue,
closes out and begins to depreciate the associated projects, the
capitalized interest amount will decrease dramatically and eventually falls
out of the calculation. This is expected to occur within the next year or two
when the 2008 Bond Fund revenues are completely spent.
3.3. Future Agenda Items and Staff Tasks
Mr. Vecchiarelli informed the Committee that staff is tentatively looking at
October for scheduling a workshop relating to financial results from the
water rate study. Mr. Vecchiarelli also shared that if discussions progress
with the City of Yorba Linda for the possible transfer of the public sewer
system, the Finance Department will prepare a financial analysis, following
completion of the annual audit, showing more detailed information
regarding the financial impacts of this tentative transfer.
4. ADJOURNMENT
4.1. The Committee adjourned at 4:34 p.m. The next regular meeting of the
Finance-Accounting Committee will be held on September 13, 2010 at
4:00 p.m.
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