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HomeMy WebLinkAbout2011-09-26 - Finance-Accounting Committee Meeting Agenda Packet Yorba Linda Water District AGENDA YORBA LINDA WATER DISTRICT FINANCE-ACCOUNTING COMMITTEE MEETING Monday, September 26, 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. Contract Extension with Total Compensation Systems Recommendation: That the Committee recommend the Board of Directors authorize staff to extend the current professional services agreement with Total Compensation Systems, Inc. to complete a "roll-over" valuation for the years 2012 and 2013 at a cost not to exceed $1,400. 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. Audit Update (Verbal Report) 3.2. July 2011 & August 2011 Budget to Actual Results 3.3. Investment Reports through August 2011 3.4. Status Report on Committee Specific Strategic Plan Initiatives 3.5. Future Agenda Items and Staff Tasks 4. ADJOURNMENT 4.1. The next meeting of the Finance-Accounting Committee will be held on October 24, 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: September 26, 2011 Budgeted: Yes To: Finance-Accounting Committee Cost Estimate: $1,400.00 Funding Source: Operating Funds From: Ken Vecchiarelli, General Manager Account No: 1-3010-0780-00 Presented By: Stephen Parker, Finance Director Dept: Finance Reviewed by Legal: N/A Prepared By: Joann Gitmed, Accounting CEQA Compliance: N/A Assistant II Subject: Contract Extension with Total Compensation Systems SUMMARY: In March 2011, the District entered into a professional services agreement with Total Compensation Systems, Inc. for preparation of the "Actuarial Study of Retiree Health Liabilities". The March 2011 actuarial valuation was completed so the District would be compliant with CaIPERS's requirements for the District to participate in the California Employees Benefit Retirement Trust (CBERT). Under GASB 45, if an entity is a member of a retirement trust, an actuarial valuation must be completed every two years. In order to be compliant with the reporting requirements for CERBT, the District needed to complete an actuarial valuation for the period ending June 30, 2011 and then complete an additional valuation for 2012 and 2013. STAFF RECOMMENDATION: That the Committee recommend the Board of Directors authorize staff to extend the current professional services agreement with Total Compensation Systems, Inc. to complete a "roll-over" valuation for the years 2012 and 2013 at a cost not to exceed $1,400. DISCUSSION: In January 2011, the Board authorized a CERBT Program Agreement and Election of Yorba Linda Water District to Prefund OPEB through PERS. As a member of CERBT, an agency is required to complete an actuarial valuation every two years. In order for the District to continue contributing to the Trust, a current actuarial valuation needs to be completed and submitted to CERBT. In April 2009, the District had its first actuarial valuation completed for the periods ending June 30, 2009 and June 30, 2010. In order to comply with the biennial valuation requirement, and to coincide with the CBERT valuation years, the District opted to complete a new valuation for 2011 and then do a "roll-over" valuation for 2012 and 2013. The 2011 valuation was done by Total Compensation Systems, Inc., at a cost of $3,800. The price for the two year roll-over valuation will be $1,400. Although the District already has a professional services agreement with Total Compensation Systems, Inc., the cost of the roll-over valuation is greater than 10% of the original contract, therefore, according to current purchasing procedures Board authorization is necessary. PRIOR RELEVANT BOARD ACTION(S): On January 26, 2011, the Board authorized the President to execute a CERBT Program Agreement and Election of YLWD to Prefund Other Post Employment Benefits through CalPERS. ITEM NO. 3.2 AGENDA REPORT Meeting Date: September 26, 2011 To: Finance-Accounting Committee From: Ken Vecchiarelli, General Manager Presented By: Stephen Parker, Finance Dept: Finance Director Reviewed by Legal: N/A Prepared By: Delia Lugo, Senior Accountant CEQA Compliance: N/A Subject: July 2011 & August 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 months of July 2011 and August 2011. For the month of July 2011, the District revenue is trending below expectations due to lower water consumption. Water operating revenue is 9.2% of annual budget, which is lower by approximately 2.6% from the historical trend for the first reporting month of the fiscal year. Other Operating Revenue is 36.58% of annual budget for the month of July. The District received $93,568 from Vista Del Verde II, LLP for 144 connections pertaining to Tract 17105 - Area T that was not expected or budgeted.Variable water costs as a percentage of budget are higher than operating revenues as a result of purchasing more import water prior to Metropolitan Water District of Southern California's 7.5% rate increase, which takes effect on January 1, 2012. Salary related expense are lower than expected because approximately half of the expenses paid in July actually related to June and were accrued into the prior fiscal year.The majority of the individual supplies and services expenses are trending below or on budget, with the exception of Dues and Memberships, where the 2011/12 memberships for LAFCO and CSDA hit in July, and Non-Capital Equipment, where work was completed on the Walnut PRS's A/C unit and purchases of traffic clip- on signs. In the month of July Sewer Other Operating Revenue was 131.9% of annual budget. Funds received included $20,590 due to the invoicing FOG Fees for the year and $54,235 from Vista del Verde II,LLP for 146 sewer connections pertaining to Tract 17105 - Area T which were not expected nor budgeted. For the month of August 2011, the District revenue is trending below expectations with the same scenario as in the month of July. Water operating revenue is 18.4% of annual budget, which is lower by approximately 5% from the normal trend for the second reporting month of the fiscal year. Through the month of August customer demand is down by 14% year to date.Variable water costs as a percentage of budget are also higher than operating revenues. The other expenses and revenues are generally below or are on target with the budget projections with the exception of the Dues and Memberships, which was previously described and Insurance, where $193,399 was paid to JPIA for the District's annual premium. Sewer revenue for the reporting months is trending equal to that reported in the prior fiscal year through the month of August. The effect in sewer revenue, in regards to the new accounts transferred from the City of Yorba Linda, will not be reflected the statements till the month of September 2011. PRIOR RELEVANT BOARD ACTION(S): On August 8, 2011 the Committee reviewed, received and filed the June 30, 2011 Budget to Actual Results. ATTACHMENTS: RI.<Arr) 9 cv, aticrt: u : July 2011 Combined.xls July 2011 Consolidated Statement Backup Material July 2011 Water.xls July 2011 Water Statement Backup Material July 2011_Sewer.xls July 2011 Sewer Statement Backup Material August 2011 Combined.xls August 2011 Consolidated Statement Backup Material August 2011 Water.xls August 2011 Water Statement Backup Material August 2011 Sewer.xls August 2011 Sewer Statement Backup Material Yorba Linda Water District Summary Financial Report Water & Sewer Funds For One Month Ending July 31, 2011 Original YTD YTD YTD Budget Actual Under(Over) % of FY 2012 FY 2012 Budget Budget Revenue (Operating): Water Revenue (Residential) $17,904,893 $1,462,051 $16,442,842 8.17% Water Revenue (Commercial & Fire Det.) 1,726,651 162,940 1,563,711 9.44% Water Revenue (Landscape/Irrigation) 3,757,058 404,803 3,352,255 10.77% Water Revenue (Service Charge) 3,406,392 279,582 3,126,810 8.21% Sewer Charge Revenue 1,548,550 97,628 1,450,922 6.30% Locke Ranch Assessments 159,862 - 159,862 0.00% Other Operating Revenue 754,361 245,538 508,823 32.55% Total Operating Revenue: 29,257,767 2,652,542 26,605,225 9.07% Revenue (Non-Operating): Interest 190,000 81 189,919 0.04% Property Tax 1,232,000 - 1,232,000 0.00% Other Non-Operating Revenue 499,369 88,807 410,562 17.78% Total Non-Operating Revenue: 1,921,369 88,888 1,832,481 4.63% Total Revenue 31,179,136 2,741,430 28,437,706 8.79% Expenses (Operating): Variable Water Costs (G.W., Import & Power) 13,671,538 1,641,348 12,030,190 12.01% Salary Related Expenses 7,941,303 345,699 7,595,605 4.70% Supplies & Services Sub-Total 4,020,832 190,997 3,829,837 4.75% Total Operating Expenses 25,633,673 2,178,044 23,455,632 8.50% Expenses (Non-Operating): Interest on Long Term Debt 1,906,426 158,855 1,747,571 8.33% Other Expense 123,193 2,947 120,246 2.39% Total Non-Operating Expenses: 2,029,619 161,802 1,867,817 7.97% Total Expenses 27,663,292 2,339,846 25,323,449 8.46% Net Income (Loss) Before Capital Contributions 3,515,844 401,584 3,114,257 11.42% Captial Contributions - - - - Net Income (Loss) Before Depreciation 3,515,844 401,584 3,114,257 11.42% Depreciation & Amortization 5,561,699 554,992 5,006,707 9.98% Total Net Income (Loss) ($2,045,855) ($153,408) ($1,892,450) 7.50% Capital - Direct Labor (27,358) 27,358 Yorba Linda Water District Water Fund For One Month Ending July 31, 2011 ORIGINAL JUL YTD YTD YTD BUDGET Actual Actual Under(Over) % of FY 2012 FY 2012 FY 2012 Budget Budget Revenue (Operating): Water Revenue (Residential) $17,904,893 $1,462,051 $1,462,051 $16,442,842 8.17% Water Revenue (Commercial & Fire Det.) 1,726,651 162,940 162,940 1,563,711 9.44% Water Revenue (Landscape/Irrigation) 3,757,058 404,803 404,803 3,352,255 10.77% Water Revenue (Service Charge) 3,406,392 279,582 279,582 3,126,810 8.21% Other Operating Revenue 697,360 170,364 170,364 526,996 24.43% Total Operating Revenue: 27,492,354 2,479,740 2,479,740 25,012,614 9.02% Revenue (Non-Operating): Interest 170,000 53 53 169,947 0.03% Property Tax 1,232,000 - - 1,232,000 0.00% Other Non-Operating Revenue 495,394 85,613 85,613 409,781 17.28% Total Non-Operating Revenue: 1,897,394 85,666 85,666 1,811,728 4.51% Total Revenue 29,389,748 2,565,406 2,565,406 26,824,342 8.73% Expenses (Operating): Variable Water Costs (G.W., Import & Power) 13,671,538 1,641,348 1,641,348 12,030,190 12.01% Salary Related Expenses 6,953,531 308,150 308,150 6,645,381 4.77% Supplies & Services: Communications 366,513 4,888 4,888 361,625 1.33% Contractual Services 527,485 29,107 29,107 498,378 5.52% Data Processing 119,645 40 40 119,605 0.03% Dues & Memberships 55,682 21,946 21,946 33,736 39.41% Fees & Permits 136,504 3,595 3,595 132,909 2.63% Insurance 221,526 - - 221,526 0.00% Materials 352,642 23,936 23,936 328,706 6.79% District Activities, Emp Recognition 20,757 847 847 19,910 4.08% Maintenance 368,603 5,975 5,975 362,628 1.62% Non-Capital Equipment 79,221 7,436 7,436 71,785 9.39% Office Expense 45,714 2,959 2,959 42,755 6.47% Professional Services 799,481 35,969 35,969 763,512 4.50% Training 48,625 2,067 2,067 46,558 4.25% Travel & Conferences 49,649 1,217 1,217 48,432 2.45% Uncollectible Accounts 35,340 250 250 35,090 0.71% Utilities 113,925 5,664 5,664 108,261 4.97% Vehicle Equipment 278,209 20,714 20,714 257,495 7.45% Supplies & Services Sub-Total 3,619,521 166,610 166,610 3,452,911 4.60% Total Operating Expenses 24,244,590 2,116,108 2,116,108 22,128,482 8.73% Expenses (Non-Operating): Interest on Long Term Debt 1,906,426 158,855 158,855 1,747,571 8.33% Other Expense 117,193 2,947 2,947 114,246 2.51% Total Non-Operating Expenses: 2,023,619 161,802 161,802 1,861,817 8.00% Total Expenses 26,268,209 2,277,910 2,277,910 23,990,299 8.67% Net Income (Loss) Before Capital Contributions 3,121,539 287,496 287,496 2,834,043 9.21% Capital Contributions - - - - 0.00% Net Income (Loss) Before Depreciation 3,121,539 287,496 287,496 2,834,043 9.21% Depreciation & Amortization 4,628,999 446,764 446,764 4,182,235 9.65% Total Net Income (Loss) ($1,507,460) ($159,268) ($159,268) ($1,348,192) 10.57% Capital - Direct Labor (23,300.00) (23,300.00) 23,300.00 Yorba Linda Water District Sewer Fund For One Month Ending July 31, 2011 ORIGINAL JUL YTD YTD YTD BUDGET Actual Actual Under(Over) % of FY 2012 FY 2012 FY 2012 Budget Budget Revenue (Operating): Sewer Charge Revenue $1,548,550 $97,628 $97,628 $1,450,922 6.30% Locke Ranch Assessments 159,862 - - 159,862 0.00% Other Operating Revenue 57,001 75,174 75,174 (18173) 131.88% Total Operating Revenue: 1,765,413 172,802 172,802 1,592,611 9.79% Revenue (Non-Operating): Interest 20,000 28 28 19,972 0.14% Other Non-Operating Revenue 3,975 3,194 3,194 781 80.35% Total Non-Operating Revenue: 23,975 3,222 3,222 20,753 13.44% Total Revenue 1,789,388 176,024 176,024 1,613,364 9.84% Expenses (Operating): Salary Related Expenses 987,772 37,549 37,549 950,223 3.80% Supplies & Services: Communications 30,587 368 368 30,219 1.20% Contractual Services 40,135 2,226 2,226 37,909 5.55% Data Processing 9,005 3 3 9,002 0.03% Dues & Memberships 4,505 1,645 1,645 2,860 36.51% Fees & Permits 14,066 13 13 14,053 0.09% Insurance 16,674 - - 16,674 0.00% Materials 35,703 5,411 5,411 30,292 15.16% District Activities, Emp Recognition 1,562 62 62 1,500 3.97% Maintenance 74,267 283 283 73,984 0.38% Non-Capital Equipment 18,799 834 834 17,965 4.44% Office Expense 3,411 223 223 3,188 6.54% Professional Services 52,719 9,770 9,770 42,949 18.53% Training 5,100 508 508 4,592 9.96% Travel & Conferences 4,202 75 75 4,127 1.78% Uncollectible Accounts 2,660 - - 2,660 0.00% Utilities 9,575 437 437 9,138 4.56% Vehicle Equipment 78,341 2,529 2,529 75,812 3.23% Supplies & Services Sub-Total 401,311 24,387 24,387 376,924 6.08% Total Operating Expenses 1,389,083 61,936 61,936 1,327,147 4.46% Expenses (Non-Operating): Other Expense 6,000 - - 6,000 0.00% Total Non-Operating Expenses: 6,000 - - 6,000 0.00% Total Expenses 1,395,083 61,936 61,936 1,333,147 4.44% Net Income (Loss) Before Capital Contributions 394,305 114,088 114,088 280,217 28.93% Capital Contributions - - - - 0.00% Net Income (Loss) Before Depreciation 394,305 114,088 114,088 280,217 28.93% Depreciation & Amortization 932,700 108,228 108,228 824,472 11.60% Total Net Income (Loss) ($538,395) $5,860 $5,860 ($544,255) -1.09% Capital - Direct Labor (4058) (4058) 4058 Yorba Linda Water District Summary Financial Report Water & Sewer Funds For One Month Ending August 31, 2011 Original YTD YTD YTD Budget Actual Under(Over) % of FY 2012 FY 2012 Budget Budget Revenue (Operating): Water Revenue (Residential) $17,904,893 $3,044,827 $14,860,066 17.01% Water Revenue (Commercial & Fire Det.) 1,726,651 337,562 1,389,089 19.55% Water Revenue (Landscape/Irrigation) 3,757,058 852,283 2,904,775 22.68% Water Revenue (Service Charge) 3,406,392 559,956 2,846,436 16.44% Sewer Charge Revenue 1,548,550 229,398 1,319,152 14.81% Locke Ranch Assessments 159,862 294 159,568 0.18% Other Operating Revenue 754,361 332,056 422,305 44.02% Total Operating Revenue: 29,257,767 5,356,377 23,901,390 18.31% Revenue (Non-Operating): Interest 190,000 24,906 165,094 13.11% Property Tax 1,232,000 4,147 1,227,853 0.34% Other Non-Operating Revenue 499,369 140,843 358,526 28.20% Total Non-Operating Revenue: 1,921,369 169,896 1,751,473 8.84% Total Revenue 31,179,136 5,526,273 25,652,863 17.72% Expenses (Operating): Variable Water Costs (G.W., Import & Power) 13,671,538 3,135,991 10,535,547 22.94% Salary Related Expenses 7,941,303 869,690 7,071,613 10.95% Supplies & Services 4,020,832 632,296 3,388,537 15.73% Total Operating Expenses 25,633,673 4,637,977 20,995,697 18.09% Expenses (Non-Operating): Interest on Long Term Debt 1,906,426 317,711 1,588,715 16.67% Other Expense 123,193 5,893 117,300 4.78% Total Non-Operating Expenses: 2,029,619 323,604 1,706,015 15.94% Total Expenses 27,663,292 4,961,581 22,701,712 17.94% Net Income (Loss) Before Capital Contributions 3,515,844 564,692 2,951,151 16.06% Contributed Capital - 360 (360) 0.00% Net Income (Loss) Before Depreciation 3,515,844 565,052 2,950,792 16.07% Depreciation &Amortization 5,561,699 1,109,984 4,451,715 19.96% Total Net Income (Loss) ($2,045,855) ($544,932) ($1,500,923) 26.64% Capital - Direct Labor - (61,684) 61,684 0.00% Yorba Linda Water District Water Fund For Two Months Ending August 31, 2011 Original Aug-11 YTD YTD YTD Budget Actual Actual Under(Over) % of FY 2012 FY 2012 FY 2012 Budget Budget Revenue (Operating): Water Revenue (Residential) $17,904,893 $1,582,776 $3,044,828 $14,860,065 17.01% Water Revenue (Commercial & Fire Det.) 1,726,651 174,622 337,562 1,389,089 19.55% Water Revenue (Landscape/Irrigation) 3,757,058 447,480 852,283 2,904,775 22.68% Water Revenue (Service Charge) 3,406,392 280,374 559,956 2,846,436 16.44% Other Operating Revenue 697,360 84,712 255,076 442,284 36.58% Total Operating Revenue: 27,492,354 2,569,964 5,049,705 22,442,649 18.37% Revenue (Non-Operating): Interest 170,000 22,951 23,004 146,996 13.53% Property Tax 1,232,000 4,147 4,147 1,227,853 0.34% Other Non-Operating Revenue 495,394 48,113 133,726 361,668 26.99% Total Non-Operating Revenue: 1,897,394 75,211 160,877 1,736,517 8.48% Total Revenue 29,389,748 2,645,175 5,210,582 24,179,166 17.73% Expenses (Operating): Variable Water Costs (G.W., Import & Power) 13,671,538 1,494,642 3,135,991 10,535,547 22.94% Salary Related Expenses 6,953,531 452,908 761,058 6,192,473 11.72% Supplies & Services: Communications 366,513 23,623 28,511 338,002 7.78% Contractual Services 527,485 31,489 60,596 466,889 11.49% Data Processing 119,645 11,453 11,493 108,152 9.61% Dues & Memberships 55,682 2,600 24,546 31,136 44.08% Fees & Permits 136,504 6,060 9,655 126,849 7.07% Insurance 221,526 179,861 179,861 41,665 81.19% Materials 352,642 36,157 60,093 292,549 17.04% District Activities, Emp Recognition 20,757 933 1,780 18,977 8.58% Maintenance 368,603 13,765 19,740 348,863 5.36% Non-Capital Equipment 79,221 2,796 10,231 68,990 12.91% Office Expense 45,714 2,556 5,515 40,199 12.06% Professional Services 799,481 54,498 90,467 709,014 11.32% Training 48,625 4,258 6,325 42,300 13.01% Travel & Conferences 49,649 1,620 2,838 46,811 5.72% Uncollectible Accounts 35,340 140 390 34,950 1.10% Utilities 113,925 8,508 14,172 99,753 12.44% Vehicle Equipment 278,209 20,062 40,776 237,433 14.66% Supplies & Services Sub-Total 3,619,521 400,379 566,989 3,052,532 15.66% Total Operating Expenses 24,244,590 2,347,929 4,464,038 19,780,552 18.41% Expenses (Non-Operating): Interest on Long Term Debt 1,906,426 158,855 317,711 1,588,715 16.67% Other Expense 117,193 2,947 5,893 111,300 5.03% Total Non-Operating Expenses: 2,023,619 161,802 323,604 1,700,015 15.99% Total Expenses 26,268,209 2,509,731 4,787,642 21,480,567 18.23% Net Income (Loss) Before Capital Contributions 3,121,539 135,444 422,940 2,698,599 13.55% Capital Contributions - - - - 0.00% Net Income (Loss) Before Depreciation 3,121,539 135,444 422,940 2,698,599 13.55% Depreciation & Amortization 4,628,999 446,764 893,528 3,735,471 19.30% Total Net Income (Loss) ($1,507,460) ($311,320) ($470,588) ($1,036,872) 31.22% Capital - Direct Labor - (30,470) (53,769) 53,769 - Yorba Linda Water District Sewer Fund For Two Months Ending August 31, 2011 ORIGINAL AUG YTD YTD YTD BUDGET Actual Actual Under(Over) % of FY 2012 FY 2012 FY 2012 Budget Budget Revenue (Operating): Sewer Charge Revenue $1,548,550 $131,770 $229,398 $1,319,152 14.81% Locke Ranch Assessments 159,862 294 294 159,568 0.18% Other Operating Revenue 57,001 1,806 76,980 (19,979) 135.05% Total Operating Revenue: 1,765,413 133,870 306,672 1,458,741 17.37% Revenue (Non-Operating): Interest 20,000 1,874 1,902 18,098 9.51% Other Non-Operating Revenue 3,975 3,923 7,117 (3,142) 179.04% Total Non-Operating Revenue: 23,975 5,797 9,019 14,956 37.62% Total Revenue 1,789,388 139,667 315,691 1,473,697 17.64% Expenses (Operating): Salary Related Expenses 987,772 71,083 108,632 879,140 11.80% Supplies & Services: Communications 30,587 2,805 3,173 27,414 10.37% Contractual Services 40,135 2,519 4,745 35,390 11.82% Data Processing 9,005 862 865 8,140 9.61% Dues & Memberships 4,505 196 1,841 2,664 40.87% Fees & Permits 14,066 306 319 13,747 2.27% Insurance 16,674 13,538 13,538 3,136 81.19% Materials 35,703 354 5,765 29,938 16.15% District Activities, Emp Recognition 1,562 68 130 1,432 8.32% Maintenance 74,267 1,547 1,830 72,437 2.46% Non-Capital Equipment 18,799 4,657 5,491 13,308 29.21% Office Expense 3,411 192 415 2,996 12.17% Professional Services 52,719 8,362 18,132 34,587 34.39% Training 5,100 255 763 4,337 14.96% Travel & Conferences 4,202 195 270 3,932 6.43% Uncollectible Accounts 2,660 11 11 2,649 0.41% Utilities 9,575 700 1,137 8,438 11.87% Vehicle Equipment 78,341 4,353 6,882 71,459 8.78% Supplies & Services Sub-Total 401,311 40,920 65,307 336,004 16.27% Total Operating Expenses 1,389,083 112,003 173,939 1,215,144 12.52% Expenses (Non-Operating): Other Expense 6,000 - - 6,000 0.00% Total Non-Operating Expenses: 6,000 - - 6,000 0.00% Total Expenses 1,395,083 112,003 173,939 1,221,144 12.47% Net Income (Loss) Before Capital Contributions 394,305 27,664 141,752 252,553 35.95% Contributed Capital - 360 360 (360) 0.00% Net Income (Loss) Before Depreciation 394,305 28,024 142,112 252,193 36.04% Depreciation & Amortization 932,700 108,228 216,456 716,244 23.21% Total Net Income (Loss) ($538,395) ($80,204) ($74,344) ($464,051) 13.81% Capital - Direct Labor (3,856) (7,914) 7,914 ITEM NO. 3.3 AGENDA REPORT Meeting Date: September 26, 2011 To: Finance-Accounting Committee From: Ken Vecchiarelli, General Manager Presented By: Stephen Parker, Finance Dept: Finance Director Reviewed by Legal: N/A Prepared By: Delia Lugo, Senior Accountant Subject: Investment Reports through August 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. DISCUSSION: Staff is submitting the July 2011 and August 2011 Monthly Investment Reports for the Committee's review. 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 reserves categories. The total yield for the month ending July 2011 decreased to 1.01%. Contributing to the decrease on the overall yield was the transfer of $1,200,000 from CaITRUST Short Term account, where the yield was 0.52%, to a new account established with the Local Agency Investment Fund (LAIF), where the yield on investment is 0.38%. In addition, the yield in CaITRUST's Medium Term fund decreased from 1.36% to 1.31 and the yield decreased form 0.20% to 0.16% for investments held in the Well Fargo Money Market account. The overall decrease in the investment balance from the previous month is $522,367, mostly due to the District's biannual replenishment assessment payment to the Orange County Water District in the amount of $1,071,671. In the month of July, staff initiated transfers between some water funds. One transfer was completed when reconciling Capital and Operating, where Capital reimbursed the Operating Fund for items paid out of Operating that were Capital-related. The other transfer was necessitated by a gradual draining of the Reserve for Debt Service, as staff was allocating to the reserve the same $0.29 per unit sold that had been determined in 2008, when the District was selling much more water. The fiscal year that calculation was determined the District sold 10.6 million units, but in FY 10/11, only 7.8 million units were sold. With less units sold, a higher percentage of what we make on each unit needs to be allocated to this reserve. This transfer is a catch-up for the decreases in the fund over the last two fiscal years, and going forward staff will allocate to the Reserve for Debt Service based on the prior years' actual consumption. The result of those transfers has the following effect: . an increase in the Water Operating Reserve of $651,000 . an increase in the Reserve for Debt Service of $645,000 . a decrease in Water Capital Project Reserve of $1,373,250 The total yield for the month ending August 2011 decreased from 1.01 % to 0.96% predominantly as a result of the yield in CaITRUST's Medium Term fund decreasing from 1.31 % to 1.21 %.The overall increase in the investment balance between the months of July and August is $23,500. Some of the larger balance changes include an increase of $554,000 in Water Operating Fund due to larger summer revenues, an increase of $243,000 in Reserve for Debt Service as a result of the monthly transfer based on units sold, and a decrease of $825,000 in the 2008 COP Revenue Bond due to spending on CIP projects. 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 June 30, 2011 was received and filed by the Finance-Accounting Committee on August 8, 2011. The Investment Report for the quarter ended June 30, 2011 was received and filed by the Board of Directors on August 11, 2011. ATTACHMENTS: Name: Description: Type: Invst Rpt 7-11.xlsx July 2011 Investment Report Backup Material Invst Agenda Backup July 2011.xlsx Agenda Backup - July 2011 Backup Material Invst_Rpt 8-11.xlsx August 2011 Investment Report Backup Material Invst Agenda Backup Aug 2011.xlsx Agenda Backup - August 2011 Backup Material Yorba Linda Water District Investment Portfolio Report July 31, 2011 Market % Percent Value Cost of Total Institution Yield Checking Account: $ 19,951 $ 19,951 Wells Fargo Bank $ 19,951 $ 19,951 0.06% Total 0.00% Money Market Accounts: $ 847,262 $ 847,262 Wells Fargo Money Market 0.16% 5,277,349 5,277,349 US Bank (2008 Revenue Bond) 0.10% 1,927 1,927 US Bank (2008 Bond Reserve) 0.10% $ 6,126,538 $ 6,126,538 19.45% Total 0.11% Federal Home Loan Bank: $ 2,152,499 $ 2,144,397 US Bank (2008 Bond Reserve) 1.35% $ 2,152,499 $ 2,144,397 6.83% 1.35% Pooled Investment Accounts: $ 1,200,000 $ 1,200,000 Local Agency Investment Fund 0.38% 1,095,221 915,757 Ca1TRUST Short Term 0.52% 20,901,125 20,495,372 Ca1TRUST Medium Term 1.31% $ 23,196,346 $ 22,611,129 73.66% 1.23% $ 31,495,334 $ 30,902,015 100% Total Investments 1.01% 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 7/31/11 Investment Summary Report Below is a chart summarizing the yields as well as terms and maturities for the month of July 2011: Avg. Portfolio Avg. Portfolio Avg. Term Month Yield Without Yield With of Portfolio of 2010 CalTRUST CaITRUST In Days July 0.42% 1.01% 515 Below is are charts comparing operating fund interest for current and prior fiscal years. Actual Interest 7/31/2010 7/31/2011 Monthly - July $ 287 $ 81 Year-to-Date $ 287 $ 81 Budget 2010/2011 2011/2012 Interest Budget, July YTD $ 13,000 $ 15,833 Interest Budget, Annual $ 156,000 $ 190,000 Interest earned on investments is recorded in the fund that owns the investment. Investment Summary Comparison Between Current and Previous Month The distribution of investments in the portfolio both in dollars and as a percentage of the total portfolio by funds is as follows: June 2011 % Alloc July 2011 % Alloc Fund Description Balance 6/30/2011 Balance 7/31/2011 Water Operating Reserve $ 1,375,000 4.31% $ 2,025,798 6.45% Water Emergency Reserve 999,271 3.13% 1,002,180 3.18% Water Capital Project Reserve 19,343,391 60.63% 17,970,141 57.09% Water Reserve for Debt Service 451,898 1.42% 1,097,059 3.49% COP Revenue Bond 2008 - Reserve 2,145,021 6.72% 2,154,426 6.84% COP Revenue Bond 2008 5,645,669 17.70% 5,277,349 16.76% Sewer Operating 143,997 0.45% 118,762 0.38% Sewer Emergency Reserve 998,019 3.13% 1,001,128 3.18% Sewer Capital Project Reserve 801,412 2.51% 828,540 2.63% $ 31,903,678 100.00% $ 31,475,383 100.00% Wells Fargo Bank Checking Water Operating 107,673 6,972 Sewer Operating 6,350 12,979 114,023 19,951 Totals $ 32,017,701 $ 31,495,334 Yorba Linda Water District Investment Portfolio Report August 31, 2011 Market % Percent Value Cost of Total Institution Yield Checking Account: $ 389,747 $ 389,747 Wells Fargo Bank $ 389,747 $ 389,747 1.24% Total 0.00% Money Market Accounts: $ 847,358 $ 847,358 Wells Fargo Money Market 0.16% 4,452,264 5,277,349 US Bank (2008 Revenue Bond) 0.10% 1,927 1,927 US Bank (2008 Bond Reserve) 0.10% $ 5,301,549 $ 6,126,634 16.82% Total 0.11% Federal Home Loan Bank: $ 2,165,972 $ 2,144,397 US Bank (2008 Bond Reserve) 1.34% $ 2,165,972 $ 2,144,397 6.87% 1.34% Pooled Investment Accounts: $ 2,143,000 $ 2,143,000 Local Agency Investment Fund 0.41% 1,090,188 1,068,897 Ca1TRUST Short Term 0.51% 20,428,450 20,001,377 Ca1TRUST Medium Term 1.26% $ 23,661,638 $ 23,213,274 75.08% 1.15% $ 31,518,906 $ 31,874,052 100% Total Investments 0.96% 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 8/31/11 Investment Summary Report Below is a chart summarizing the yields as well as terms and maturities for the month of August 2011: Avg. Portfolio Avg. Portfolio Avg. Term Month Yield Without Yield With of Portfolio of 2010 CalTRUST CaITRUST In Days August 0.42% 0.96% 508 Below is are charts comparing operating fund interest for current and prior fiscal years. Actual Interest 8/31/2010 8/31/2011 Monthly - August $ 23,616 $ 24,824 Year-to-Date $ 23,903 $ 24,905 Budget 2010/2011 2011/2012 Interest Budget, August YTD $ 26,000 $ 31,666 Interest Budget, Annual $ 156,000 $ 190,000 Interest earned on investments is recorded in the fund that owns the investment. Investment Summary Comparison Between Current and Previous Month The distribution of investments in the portfolio both in dollars and as a percentage of the total portfolio by funds is as follows: July 2011 % Alloc August 2011 % Alloc Fund Description Balance 7/31/2011 Balance 8/31/2011 Water Operating Reserve $ 2,025,798 4.31% $ 2,226,248 7.15% Water Emergency Reserve 1,002,180 3.13% 1,003,134 3.22% Water Capital Project Reserve 17,970,141 60.63% 17,989,548 57.81% Water Reserve for Debt Service 1,097,059 1.42% 1,339,814 4.30% COP Revenue Bond 2008 - Reserve 2,154,426 6.72% 2,167,899 6.96% COP Revenue Bond 2008 5,277,349 17.70% 4,452,264 14.30% Sewer Operating 118,762 0.45% 118,775 0.38% Sewer Emergency Reserve 1,001,128 3.13% 1,002,242 3.22% Sewer Capital Project Reserve 828,540 2.51% 829,235 2.66% $ 31,475,383 100.00% $ 31,129,159 100.00% Wells Fargo Bank Checking Water Operating 6,972 360,445 Sewer Operating 12,979 29,302 19,951 389,747 Totals $ 31,495,334 $ 31,518,906 ITEM NO. 3.4 AGENDA REPORT Meeting Date: September 26, 2011 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: Status Report on Committee Specific Strategic Plan Initiatives DISCUSSION: Attached are the strategies identified in the 2011-2013 Strategic Plan that relate to Fiscal Responsibility, which are overseen by the Finance-Accounting Committee. Included is an update on each strategy relating to Fiscal Responsibility. PRIOR RELEVANT BOARD ACTION(S): On June 9, 2011 the Board adopted the 2011-2013 Strategic Plan. ATTACHMENTS: Name: Description: Type: Strategic Plan Tracking- FA.xlsx Strategic Plan Tracking - FAC Backup Material Strategic Plan Initiatives Status Report Finance - Accounting Committee Strategies Start Date Completion Lead Party Sep 2011 Progress Date FR 1: Maintain Fiducia Res onsibilit Prepare a High Level Annual Budget Document and Completed Budget June 2011. Submitted budget for Comprehensive CSMFO and GFOA award September 2011. CAFR on FR 1 -13 Annual Financial Feb -11 Jun -11 Finance Director schedule to be submitted to the FAC and Board in October Report and Compete 2011. Staff will submit for the GFOA award in November for Recognition by the 2011. Government Finance Officers Association Revise the Water and Sewer Rules and Preliminary review of fee schedule completed. A number of Regulation and General revisions to the water and sewer rules and regs completed FR 1 -C Evaluate Fee Feb -11 Dec -11 Manager/ pending. Plan to finalize in November for submission in Schedules Regularly Finance Director December. for Proper Cost of Service Coverage Include in Maintain Commitment Sept -09 Rate Quarterly Board of Quarterly review of debt service ratios will continue as well FR 1 -E to Strong Debt Increase Financial Directors as integrating the ratio into forward financial projections. Services Ratio Review FR 2: Increase Reserve Funding Annual Review Implement an of CIP Forward projection of reserve balances will be completed Approach to Ensure Financial Finance along with future financial projections. The District's FR 2 -C Apr -11 Director/ Board Reserves are Needs Included of Directors reserve needs may be updated for FY 2012/13 with this Responsibly Funded in Budget new data. Preparation FR 3: IdeLntifV and Develop Additional Revenue Options Review Opportunities Staff has met with five credit card companies and intends to Earn "Cash Back" to submit a vendor match list to nine companies prior to FR 3 -13 on Operating Expense Jan -11 On -going Finance Director interviewing the remaining. Staff is planning to make a through Commercial Credit Card Accounts recommendation to the FAC in November. Staff began a new practice of requesting reimbursement from US Bank for the 2008 COP money after approval of Manage Cash Flow to the invoices, but in advance of the check being cut. This FR 3 -C Maximize Investment On -going On -going Finance Director allows investment of the COP money at the LAIF rate for Income an extra week. The LAIF rate is currently 0.41 %, which is an improvement over the current 0.10% for US Bank. FR 4: Provide a Rate Structure that Promotes Water Use Efficiency Staff met with Raftelis and finalized the recommendations Complete the Cost of Finance that will be presented to the Board at an upcoming FR 4 -A Service and Water Mar -10 Mar -12 Director/ Board workshop. Due to a number of workshops already Rates Study of Directors scheduled, the next open month was January 2012. Evaluate Equitable Board of The Board will be given information on multiple rate Rate Structures that Directors/ structure options in January 2012 with which they can FR 4 -B promote Conservation Oct -11 Mar -12 General give staff direction as to what rate structure they believe and Efficiency Manager would best promote conservation and efficiency. Com leted Develop a 5 -year financial plan included in budget. Water and sewer FR 1 -A Comprehensive Multi- Feb -11 Oct -11 Finance Director financial models should be available by January 2012. Year Financial Plan Evaluate and Revise Completed March 2011. Consider changing allocation FR 1 -D the Sewer Fund Nov -10 Mar -11 Finance Director methodology in conjunction with FY 2012/13 budget Allocation process. Review the Reserve Finance Completed review /revision of reserve policy in June 2011. FR 2 -A Policy and Funding Apr -11 Jul -11 Director /Board Will review again in conjunction with the 2012/13 Budget Levels Annually of Directors process.