HomeMy WebLinkAbout2011-05-09 - Finance-Accounting Committee Meeting Agenda Packet
Yorba Linda
Water District
AGENDA
YORBA LINDA WATER DISTRICT
FINANCE-ACCOUNTING COMMITTEE MEETING
Monday, May 9, 2011, 4:00 PM
1717 E Miraloma Ave, Placentia CA 92870
COMMITTEE STAFF
Director Ric Collett, Chair Ken Vecchiarelli, General Manager
Director Robert R. Kiley 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. Independent Audit Services Contract
Recommendation: That the Committee recommend the Board of Directors
authorize execution of a Professional Services Agreement with Diehl Evans & Co.
for a fee not to exceed $97,695 for independent auditing services for the fiscal
years ending June 30, 2011 through June 30, 2013, with two subsequent one-year
options.
2.2. March 2011 Budget to Actual Results
Recommendation: That the Committee review, receive and file the March 2011
Budget to Actual Results.
2.3. Investment Report Through March 31, 2011
Recommendation: That the Committee review and recommend the Board receive
and file the year to date Investment Report through March 2011.
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. Draft Budget Overview, Draft Reserve Policy
3.2. FY 2011/12 Budget Calendar Update (To be presented at the meeting.)
3.3. March 2011 Debt Service Ratio
3.4. Future Agenda Items and Staff Tasks
4. ADJOURNMENT
4.1. The next regular meeting of the Finance-Accounting Committee will be held on June 13,
2011 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: May 9, 2011 Budgeted: Yes
Total Budget: $25,000 for 2011/12
To: Finance-Accounting Committee Cost Estimate: 1yr-$18,960; 5yrs-
$97,695
Funding Source: Operating Funds
From: Ken Vecchiarelli, General Account No: 1-3010-0780-00
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: Independent Audit Services Contract
SUMMARY:
Staff solicited proposals for independent auditing services to audit the District's financial statements
for the fiscal years ending June 30, 2011, 2012 and 2013 with the option of auditing its financial
statements for the two subsequent fiscal years. Following an evaluation, staff recommends
awarding a three-year contract with two subsequent one-year options to Diehl Evens and Co. for a
fee not to exceed $97,695.
STAFF RECOMMENDATION:
That the Committee recommend the Board of Directors authorize execution of a Professional
Services Agreement with Diehl Evans & Co. for a fee not to exceed $97,695 for independent
auditing services for the fiscal years ending June 30, 2011 through June 30, 2013, with two
subsequent one-year options.
DISCUSSION:
On March 10, 2011, staff submitted a Request for Proposals to ten firms with offices in Los Angeles,
Orange or Riverside Counties, with a deadline for responses of April 11, 2011. Five firms responded
by the deadline - all of whom had complete proposals and met the qualifications. The District's
review team evaluated the proposals based on experience auditing similar agencies, audit
approach and price. The cost for services was included in a sealed envelope, which was not
opened until the mandatory elements and technical qualifications were assessed. Below are the
results of the ranking.
Overall
Consulting Firm Name Fee Ranking
Mayer Hoffman McCann P.C. $97,695 1
Diehl Evans & Company, LLP $102,836 2
Teaman, Ramirez & Smith, Inc. $124,500 3
Vavrinek, Trine, Day & Company, LLP$102,950 4
Lance, Soll & Lunghard, LLP $123,403 5
While there were two clear-cut top options after the review process, staff has a proven working
relationship with Diehl Evans & Company, LLP, and called to see if they would lower their fee to
match that of the lowest proposer. They informed us that they would match that fee (broken out to
fees of $18,960, $18,960, $19,435, $19,920 and $20,420 for the fiscal years ending June 30, 2011
through June 30, 2015, respectively). As that reduction results in the lowest fee available to the
District combined with a historically successful working relationship, staff recommends executing a
professional services agreement with Diehl Evans & Company, LLP.
PRIOR RELEVANT BOARD ACTION(S):
On March 27, 2008, the Board authorized the General Manager to execute a Professional Services
Agreement with Diehl, Evans & Company to perform the independent auditing services for fiscal
years ending June 30, 2008 through June 30, 2010.
ITEM NO. 2.2
AGENDA REPORT
Meeting Date: May 9, 2011
To: Finance-Accounting Committee
From: Ken Vecchiarelli, General
Manager
Presented By: Stephen Parker, Finance Director Dept: Finance
Reviewed by Legal: N/A
Prepared By: Delia Lugo, Senior Accountant
Subject: March 2011 Budget to Actual Results
STAFF RECOMMENDATION:
That the Committee review, receive and file the March 2011 Budget to Actual Results.
DISCUSSION:
Attached are the District's budget to actual summary results for the Water Fund, Sewer Fund and a
combined statement for both funds pertaining to the reporting month of March 2011. Overall, the
District revenue is trending below expectations due to lower water consumption from above normal
rainfall and cooler temperatures. Water operating revenue is 67.3% of annual budget, which is lower
by approximately 4.1 % from the normal trend for the reporting nine months of the fiscal year. The
budget was based on 15% conservation, and through March customer demands are down by 24%
year to date. Variablewater costs as a percentage of budget are lower than operating revenues, and
trending even lower as the District purchases a higher percentage of groundwater in the coming
months.
The majority of the individual supplies and services expenses are trending below or on budget, with a
few exceptions that have been previously discussed in Finance-Accounting Committee meetings.
District Activities/Employee Recognition has exceeded its budget due to the change in proposed plans
for the District's annual employee recognition event. Fees & Permits as well as Materials expenses
are significantly above budget due to the timing of payment due dates. While we are 75% through the
fiscal year, we have reached only 21 % of the District's budgeted net loss of $2.2 million resulting in a
savings of over $1 million as compared to the budget.
PRIOR RELEVANT BOARD ACTION(S):
On April 11, 2011, the Committee reviewed, received and filed the February 28, 2011 Budget to
Actual Results.
ATTACHMENTS:
Name: Description: Type:
Water Sewer March 2011.xls March 2011 Consolidated Statement Backup Material
Water March 2011.xlsx March 2011 Water Statement Backup Material
Sewer March 2011.xls March 2011 Sewer Statement Backup Material
Yorba Linda Water District
Summary Financial Report
Water & Sewer Funds
For Nine Months Ending March 31, 2011
Annual Actual YTD
Budget YTD through Under/(Over) %of
FY 10/11 March 31, 2011 Budget Annual Budget
Revenue (Operating):
Water Revenue (Consumption & Flat Charge) $25,672,831 $17,051,199 $8,621,632 66.42%
Sewer Revenue 1,235,402 963,752 $271,650 78.01%
Other 714,221 724,114 ($9,893) 101.39%
Total Operating Revenue: 27,622,454 18,739,065 8,883,389 67.84%
Expenses (Operating):
Variable Water Costs (G.W., Import & Power) 12,667,236 8,228,276 4,438,960 64.96%
Salary Related Expenses 7,624,683 4,718,467 2,906,216 66.42%
Supplies & Services 3,987,702 2,356,096 1,631,606 59.08%
Depreciation & Amortization 52017,876------------------ 3,936255 1,081,621 78.44%
Total Operating Expenses: 29,297,497 19,239,094 10,058,403 65.67%
Operating Income (Loss) (1,675,043) (500,029) (1,175,014) 29.85%
Revenue (Non-Operating):
Interest and Investments 156,000 204,070 (48,070) 130.81%
Property Taxes 1,206,000 783,623 422,377 64.98%
Other 126,133 539,619 (41-3-,-486)- 427.82%
Total Non-Operating Revenue: 1,488,133 1,527,312 (39,179) 102.63%
Expenses (Non-Operating):
Interest on Long Term Debt (1,940,954) (1,437,966) (502,988) 74.09%
Other Expense (103,193) (58,109) (45,084) 56.31%
Total Non-Operating Expenses: (2,044,147) (1,496,075) (548,072) 73.19%
Non-Operating Income (Loss) (556,014) 31,237 (587,251) -5.62%
Net Income (Loss) ($2,231,057) ($468,792) ($1,762,265) 21.01%
Contributed Capital 145,860 445,168 (299,308) 305.20%
Capital - Direct Labor - 345,928 345,928
Yorba Linda Water District
Water Fund
For Nine Months Ending March 31, 2011
FY 2011 YTD % of
Annual March Actual Under/(Over) Annual
Budget 2011 YTD Budget Budget
Revenue (Operating):
Water Revenue (Residential) $ 17,248,481 $ 788,880 $ 10,825,824 $ 6,422,657 62.76%
Water Revenue (Commercial & Fire Det.) 1,522,341 107,606 1,314,198 208,143 86.33%
Water Revenue (Landscape/Irrigation) 3,588,335 105,767 2,476,283 1,112,052 69.01%
Water Revenue (Service Charge) 3,313,674 279,385 2,434,894 878,780 73.48%
Other Operating Revenue 701,089 57,995 705,074 (3,985) 100.57%
Total Operating Revenue: 26,373,920 1,339,633 17,756,273 8,617,647 67.33%
Expenses (Operating):
Variable Water Costs (G.W., Import & Power) 12,666,536 492,129 8,227,789 4,438,747 64.96%
Salary Related Expenses 6,809,598 382,848 4,186,093 2,623,505 66.49%
Supplies & Services:
Communications 374,576 27,541 178,282 196,294 47.60%
Contractual Services 708,372 49,146 523,510 184,862 73.90%
Data Processing 102,771 20,405 58,849 43,922 57.26%
Dues & Memberships 30,778 750 25,650 5,128 83.34%
Fees & Permits 44,020 4,225 45,959 (1,939) 104.40%
Board Election 72,800 - 32,485 40,315 0.00%
Insurance 314,314 31,175 194,349 119,965 61.83%
Materials 337,982 24,159 299,954 38,028 88.75%
District Activities, Emp Recognition 11,648 48 12,295 (647) 105.55%
Maintenance 325,227 28,800 118,103 207,124 36.31%
Non-Capital Equipment 92,611 7,761 38,394 54,217 41.46%
Office Expense 41,221 2,243 20,859 20,362 50.60%
Professional Services 632,764 29,135 272,826 359,938 43.12%
Training 48,147 1,142 14,972 33,175 31.10%
Travel & Conferences 40,830 2,202 14,436 26,394 35.36%
Uncollectible Accounts 45,955 - 5,612 40,343 12.21%
Utilities 111,930 108 65,405 46,525 58.43%
Vehicle Equipment 256,302 4,755 167,294 89,008 65.27%
Supplies & Services Sub-Total 3,592,248 233,595 2,089,234 1,503,014 58.16%
Depreciation & Amortization 4,403,257 390,722 3,482,468 920,789 79.09%
Total Operating Expenses 27,471,639 1,499,294 17,985,584 9,486,055 65.47%
Operating Income (Loss) (1,097,719) (159,661) (229,311) (868,408) 20.89%
Revenue (Non-Operating):
Interest 142,000 23,698 187,620 (45,620) 132.13%
Property Taxes 1,206,000 70,018 783,623 422,377 64.98%
Other Non-Operating Revenue 100,687 73,872 525,722 (425,035) 522.13%
Total Non-Operating Revenue: 1,448,687 167,588 1,496,965 (48,278) 103.33%
Expenses (Non-Operating):
Interest on Long Term Debt (1,940,954) (158,855) (1,437,966) (502,988) 74.09%
Other Expense (102,193) (5,903) (50,242) (51,951) 49.16%
Total Non-Operating Expenses: (2,043,147) (164,758) (1,488,208) (554,939) 72.84%
Non-Operating Income (Loss) (594,460) 2,830 8,757 (603,217) -1.47%
Total Income (Loss) $ (1,692,179) $ (156,831) $ (220,554)7E7(1,471,625) 13.03%
Contributed Capital $ 92,807 $ - $ 118,531 $ (25,724) 127.72%
Capital - Direct Labor - $ (34,912) $ (341,274) $ 341,274
Yorba Linda Water District
Sewer Fund
For Nine Months Ending March 31, 2011
FY 2011 YTD % of
Annual March Actual Underi(Over) Annual
Budget FY 2011 YTD Budget Budget
Revenue (Operating):
Sewer Charge Revenue $ 1,132,574 $ 94,499 $ 898,202 $ 234,372 79.31%
Locke Ranch Assessments 102,828 6,490 65,550 37,278 63.75%
Other Operating Revenue 13,132 478 19,040 (5,908) 144.99%
Total Operating Revenue: 1,248,534 101,467 982,792 265,742 78.72%
Expenses (Operating):
Variable Costs (Power) 700 - 487 213 69.57%
Salary Related Expenses 815,085 61,613 532,374 282,711 65.89%
Supplies & Services:
Communications 39,284 3,336 18,412 20,872 46.87%
Contractual Services 61,613 4,884 45,511 16,102 73.87%
Data Processing 10,164 2,018 5,821 4,343 57.27%
Dues & Memberships 3,340 74 2,680 660 80.24%
Fees & Permits 6,382 477 5,022 1,360 78.69%
Board Election 7,200 - 3,213 3,987 44.63%
Insurance 31,086 3,083 19,222 11,864 61.83%
Materials 18,833 304 15,993 2,840 84.92%
District Activities 1,152 5 1,216 (64) 105.56%
Maintenance 41,973 185 36,330 5,643 86.56%
Non-Capital Equipment 20,509 4,482 12,288 8,221 59.92%
Office Expense 3,879 222 2,049 1,830 52.82%
Professional Services 66,576 3,136 31,218 35,358 46.89%
Training 5,629 88 2,361 3,268 41.94%
Travel & Conferences 4,371 151 1,351 3,020 30.91%
Uncollectible Accounts 4,545 - 555 3,990 12.21%
Utilities 11,070 11 6,450 4,620 58.27%
Vehicle Equipment 57,849 3,598 57,170 679 98.83%
Supplies & Services Sub-Total 395,455 26,054 266,862 128,593 67.48%
Depreciation & Amortization 614,619 50,998 453,787 160,832 73.83%
Total Operating Expenses 1,825,859 138,665 1,253,510 572,349 68.65%
Operating Income (Loss) (577,325) (37,198) (270,718) (306,607) 46.89%
Revenue (Non-Operating):
Interest 14,000 1,987 16,450 (2,450) 117.50%
Other Non-Operating Revenue 25,446 344 13,897 11,549 54.61%
Total Non-Operating Revenue: 39,446 2,331 30,347 9,099 76.93%
Expenses (Non-Operating):
Other Expense (1,000) (7,867) 6,867 786.70%
Total Non-Operating Expenses: (1,000) - (7,867) 61867 786.70%
Non-Operating Income (Loss) 38,446 2,331 22,480 15,966 58.47%
Total Income (Loss) $ (538,879) $ (34,867) $ (248,238) $ (290,641) 46.07%
Contributed Capital $53,053 - 326,637 (273,584) 615.68%
Capital - Direct Labor - (1,154) (4,654) $4,654 0.00%
ITEM NO. 2.3
AGENDA REPORT
Meeting Date: May 9, 2011
To: Finance-Accounting Committee
From: Ken Vecchiarelli, General Manager
Presented By: Stephen Parker, Finance Director Dept: Finance
Prepared By: Delia Lugo, Senior Accountant
Subject: Investment Report Through March 31, 2011
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 review and recommend the Board receive and file the year to date Investment Report
through March 2011.
DISCUSSION:
Submitted for your review is the year to date Investment Report through March 2011. The Investment Portfolio
Report presents the market value and percent yield for all the District investments by institution. The
Investment Report Summary includes budget and actual interest and average term portfolio information as
well as market value broken out by reserve categories. The total yield for the month ending March 2011
declined 16% to 0.87% as a result of the yield in CaITRUST's Short Term fund decreasing from 0.73% to
0.50%, and the yield in CaITRUST's Medium Term fund decreasing from 1.56% to 1.30%.
The Finance Department has completed a reconciliation of capital project expenses for the reporting months
of July 2010 through March 2011. The Water Operating fund has funded the capital project expenses for
projects not covered by the 2008 Revenue Bond. As a result of this reconciliation, the CaITRUST Water
Capital Project fund has reimbursed the CaITRUST Water Operating fund $870,000. The Water Operating
fund at CaITRUST increased by an additional $490,000 due to transfers of excess funds from the District's
general checking account. One other item to note is that the Water Reserve for Debt Service account is lower
by $811,000 due to the March 31, 2011 Debt Service interest payment.
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 Report for the month
ended February 28, 2011 was received and filed by the Finance-Accounting Committee on April 11, 2011.
The Investment Report for the quarter ended December 31, 2010 was received and filed by the Board of
Directors on February 10, 2011.
ATTACHMENTS:
Name: Description: Type:
Invst_Rpt 3-11.xlsx Investment Report Backup Material
Agenda, May 9th_backup- Mar_2011.docx Agenda Backup Backup Material
Yorba Linda Water District
Investment Portfolio Report
March 31, 2011
Market % Percent
Value Cost of Total Institution Yield
Cash & Checking Accounts:
$ 166,063 $ 166,063 Wells Fargo Bank
$ 166,063 $ 166,063 0.52% Total 0.00%
Money Market Accounts:
$ 421,873 $ 421,873 Wells Fargo Money Market 0.30%
$ 421,873 $ 421,873 1.35% Total 0.30%
$ 587,936 $ 587,936 1.88% Sub-total 0.30%
Money Market Account:
$ 8,180,210 $ 8,180,210 US Bank 2008 Revenue Bond 0.20%
$ 8,180,210 $ 8,180,210 26.15% 0.20%
CaITR UST
$ - $ - Heritage Money Market Fund 0.21%
$ 4,996,943 $ 4,970,392 Ca1TRUST Short Term 0.50%
$ 17,519,606 $ 17,304,249 Ca1TRUST Medium Term 1.30%
$22,516,549 $22,274,641 71.98% 1.12%
$ 31,284,694 $ 31,042,786 100% Total Investments 0.87%
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.
Delia Lugo, Senior Accountant
3/31/11
Investment Report Summary
Below is a chart summarizing the yields as well as terms and maturities for the month of March
2011:
Avg. Portfolio Avg. Portfolio # of Avg. Term
Month Yield Without Yield With Days to of Portfolio
of 2010 CaITRUST CaITRUST Maturity in Days
March 0.20% 0.87% 368 273
Below is a chart comparing operating fund interest for current and prior fiscal years.
Actual Interest 03/31/10 03/31/11
Monthly - March $21,995 $25,685
Year-to-Date $181,107 $204,070
Budget 2009/2010 2010/2011
Interest Budget, March YTD $95,925 $117,000
Interest Budget, Annual $127,900 $156,000
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 03/31/11
Water Operating $2,396,918 7.53%
Water Emergency Reserve 2,072,500 6.51%
Water Capital Project Reserve 16,961,824 53.32%
Water Reserve for Debt Service 76 0.00%
COP Revenue Bond 2008 - Reserve 2,147,096 6.75%
COP Revenue Bond 2008 6,033,113 18.96%
Sewer Operating 469,394 1.48%
Sewer Emergency Reserve 1,005,375 3.16%
Sewer Capital Project Reserve 726,692 2.29%
$31,812,988 100.00%
Wells Fargo Bank Checking
Water Operating (510,058)
Sewer Operating 1( 8,236)
52( 8,294)
Total 31.284.694
ITEM NO. 3.1
AGENDA REPORT
Meeting Date: May 9, 2011 Budgeted: N/A
To: Finance-Accounting Committee
From: Ken Vecchiarelli, General
Manager
Presented By: Stephen Parker, Finance Dept: Finance
Director
Reviewed by Legal: N/A
Prepared By: Stephen Parker, Finance
Director
Subject: Draft Budget Overview, Draft Reserve Policy
DISCUSSION:
The budget calendar called for a draft budget overview and a draft reserve policy to go to the
Finance-Accounting Committee at the May 9th Committee meeting. As the second version of some
numbers have not been flushed through all Committees, yet, the draft budget overview is not
complete. The numbers have not changed dramatically from what was presented to the Committee
in April, and as a Budget Workshop will present more accurate data, staff will present the draft
budget overview at that time. The draft reserve policy was presented in the April meeting to the
Committee. Staff will also present forecasts for the end of the current fiscal year, and the budget's
effect on reserves through the end of the next budget year at the Budget Workshop.
ITEM NO. 3.2
AGENDA REPORT
Meeting Date: May 9, 2011
Dept: Finance
Subject: FY 2011/12 Budget Calendar Update (To be presented at the meeting.)
ATTACHMENTS:
Name: Description: Type:
Budget Calendar - FY 11 12 5 9 1 1.pdf Budget Calendar Backup Material
BUDGET CALENDAR FOR FISCAL YEAR 2011/12
DATE BOARD/COMMITTEE SCHEDULE
FEBRUARY
February 1, 2011 Manager's Meeting Discuss Budget Calendar and Process
February 7, 2011 Finance-Accounting Committee Approval of the Budget Calendar
February 10, 2011 Manager's Meeting Personnel & Capital budget discussion
MARCH
March 15, 2011 Manager's Meeting Department budgets complete (v 1.0) and submitted to the Finance Dept.
March 25, 2011 Board Workshop - Budget Discussion, guidance, goals and objectives
APRIL
Public Affairs-Communications-Technology
April 11, 2011 Committee IT & Public Information budget (v 1.0)
April 12, 2011 Planning-Engineering-Operations Committee Capital improvement & replacement projects budget (v 1.0)
Engineering and Operations budget (v 1.0)
April 11, 2011 Finance-Accounting Committee Finance budget (v 1.0), Reserve policy analysis (v 1.0)
Revenues (v 1.0), Preliminary budget overview (v 1.0)
April 12, 2011 Personnel-Risk Mgmt Committee Labor and benefits (v 1.0), HR budget (v 1.0)
April 19, 2011 Exec-Admin-Organizational Committee Board of Directors and Administration budget (v 1.0)
April 26, 2011 Manager's Meeting Department budgets (v 2.0) (if needed)
MAY
Public Affairs-Communications-Technology
May 2, 2011 Committee IT & Public Information budget (v 2.0) (if needed)
May 5, 2011 Planning-Engineering-Operations Committee Capital improvement & replacement projects budget (v 2.0)
Engineering and Operations budget (v 2.0) (if needed)
May 9, 2011 Finance-Accounting Committee Draft budget overview, Draft reserve policy
May 10, 2011 Personnel-Risk Mgmt Committee Labor and benefits (v 2.0)' seeded)
May 12, 2011 Board of Directors nr^ft b,,, get eveFyiew, DFaf+ r ^4^
\
May 26 29 1r1 Rnnrd Af n rnn+,rs
Draft R. + (Full Beard
JUNE
June 1, 2011 Board of Directors Draft budget overview, Draft reserve policy
* HRH a 2011 R'^"nn" A"n961 C;9MMi++"n Budget a4 .stmen+s; ° 7n f
June 9, 2011 Board of Directors R 1dget ad9p+9n (fu beaYd) Reserve 990^„
Draft Budget (Full Board)
June 23, 2011 Board of Directors Budget adoption (full board) & rate hearing (if Reeded
Reserve policy
* .n" 28, 2911 Rn"rd of n r^^+r.rc Drnn 218 D .hl HeaP n (f n 1 1\
* Tenative date
ITEM NO. 3.3
AGENDA REPORT
Meeting Date: May 9, 2011 Budgeted: N/A
To: Finance-Accounting Committee
From: Ken Vecchiarelli, General
Manager
Presented By: Stephen Parker, Finance Dept: Finance
Director
Reviewed by Legal: N/A
Prepared By: Stephen Parker, Finance
Director
Subject: March 2011 Debt Service Ratio
DISCUSSION:
Yorba Linda Water District covenanted with the issuance of the 2003 and 2008 Certificates of
Participation (COP's), "...to fix, prescribe and collect rates and charges for Water Service which will
be at least sufficient to yield, during each Fiscal Year, Net Revenues equal to 110% of the Debt
Service for such Fiscal Year." To confirm the covenant is upheld, a calculation is made and
reviewed by the external auditors and included in the Comprehensive Annual Financial Report.
Honoring these covenants allows the District to maintain high bond ratings and provides confidence
in the financial markets for any bond resales and future issuances.
The June 30, 2009 audit revealed that the District's debt service calculation was 86% - well below
the rate covenant. That prompted a significant rate increase in September 2009. To mitigate against
a year end recurrence, staff calculates the District's debt service ratio on a quarterly basis and
reports this figure to the Finance-Accounting Committee. Accordingly, March 2011's unaudited debt
service ratio is 205% as shown in the attached calculation. This number is up slightly from
December 2010's ratio of 202%. The District's financial health for the first nine months of Fiscal
Year 2010-2011 is strong as it pertains to the debt service ratio indicator.
ATTACHMENTS:
Narne: Uesc pbon: ype:
March 2011 Unaudited Debt Service Ratio Calculation.xlsx March 2011 Debt Service Ratio Backup Material
Yorba Linda Water District
Water Fund
For Nine Months Ending March 31, 2011
FY 2010/11 Included in
Actual YTD DSR Calc.
Revenue (Operating):
Water Revenue (Residential) $10,825,824 $ 10,825,824
Water Revenue (Commercial & Fire Det.) 1,314,198 1,314,198
Water Revenue (Landscape/Irrigation) 2,476,283 2,476,283
Water Revenue (Service Charge) 2,434,894 2,434,894
Other Operating Revenue 705,074 705,074
Total Operating Revenue: 17,756,273 17,756,273
Expenses (Operating):
Variable Water Costs (G.W., Import & Power) 8,227,789 8,227,789
Salary Related Expenses 4,186,093 4,186,093
Supplies & Services:
Communications 178,282 178,282
Contractual Services 523,510 523,510
Data Processing 58,849 58,849
Dues & Memberships 25,650 25,650
Fees & Permits 45,959 45,959
Board Election 32,485 32,485
Insurance 194,349 194,349
Materials 299,954 299,954
District Activities, Emp Recognition 12,295 12,295
Maintenance 118,103 118,103
Non-Capital Equipment 38,394 38,394
Office Expense 20,859 20,859
Professional Services 272,826 272,826
Training 14,972 14,972
Travel & Conferences 14,436 14,436
Uncollectible Accounts 5,612 5,612
Utilities 65,405 65,405
Vehicle Equipment 167,294 167,294
Supplies & Services Sub-Total 2,089,234 2,089,234
Depreciation & Amortization 3,482,468 -
Total Operating Expenses 17,985,584 14,503,116
Operating Income (Loss) (229,311) 3,253,157
Revenue (Non-Operating):
Interest 187,620 187,620
Property Taxes 783,623 783,623
Other Non-Operating Revenue 525,722 525,722
Total Non-Operating Revenue: 1,496,965 1,496,965
Expenses (Non-Operating):
Interest on Long Term Debt (1,437,966) -
Other Expense (50,242) (50,242)
Total Non-Operating Expenses: (1,488,208) (50,242)
Non-Operating Income (Loss) 8,757 1,446,723
Total Income (Loss) $ (220,554) $ 4,699,880
Contributed Capital $ 118,531
DEBT SERVICE RATIO CALCULATION:
NET REVENUES $ 4,699,880
DEBT SERVICE $ 2,292,968
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