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HomeMy WebLinkAbout2011-10-24 - Finance-Accounting Committee Meeting Minutes MINUTES OF THE YORBA LINDA WATER DISTRICT FINANCE-ACCOUNTING COMMITTEE MEETING October 24, 2011 A meeting of the Finance-Accounting Committee was called to order by Director Collett 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 Ric Collett, Chair Ken Vecchiarelli, General Manager Director Robert R. Kiley Stephen Parker, Finance Director OTHER ATTENDEES Nitin Patel, CPA, Audit Engagement Partner, White Nelson Diehl Evans LLP Daphnie Munoz, CPA, Audit Engagement Manager, White Nelson Diehl Evans LLP 1. PUBLIC COMMENTS None. 2. ACTION CALENDAR 2.1. Submission of 2011 Audit Reports Mr. Nitin Patel and Ms. Daphnie Munoz from White Nelson Diehl Evans LLP (formerly Diehl Evans & Co., LLP) were on hand to present three reports from the conculsion of their audit of the District for the year ending June 30, 2011. Mr. Patel went through the CAFR and commented extensively on the Independent Auditors' Report, including identifying that their opinion was unqualified or "clean". He mentioned that this year's CAFR includes the Certificate of Acheivement for Excellence in Financial Reporting from the GFOA for the first time. He pointed out in the financial statements that the current year and prior years' revenues and expenses are very comparable, but a large difference between the two years is the decrease in capital contributions, which are developer contributed capital assets. Mr Patel also went over the Report on Internal Control, where four recommendations for improvements in internal control were identified by the auditors. The Committee asked questions of staff regarding the comments and what was going to be done to ensure the comments were corrected. Mr. Patel then went over the final letter, which doesn't have a title, but is referred to as SAS 114 Communications. He explained that there was nothing out of the ordinary in this letter, but that these were required disclosures. The Committee commended staff on a job well done, and Mr. Parker thanked the auditors for working well with staff through the audit. At this time Mr. Vecchiarelli walked Mr. Patel and Ms. Munoz out. 1 2.2. Investment Report through September 2011 Mr. Parker presented the investment report through September 2011. Mr. Parker explained that this item would go on to the Board to receive and file at the first meeting in November. Mr. Parker commented on an improved yield to over 1% as being mostly due to spending down 2008 COP proceeds, which are only yielding 0.10%. He also mentioned that the District would easily spend down the remaining spendable bond proceeds before the fiscal year ended. Large changes in specific reserves were identified by Mr. Parker as including a significant decrease in the Reserve for Debt Service, as our semi-annual interest and annual principal payment on the 2003 and 2008 COP Bonds was made in September. In addition, Mr. Parker noted that the Sewer Capital Fund had increased mostly due to $264,000 received from the City of Yorba Linda relating to the completed transfer of the City sewer system to YLWD. The Committee recommended submitting the report to the Board of Directors to receive and file. 3. DISCUSSION ITEMS 3.1. Summary of January Workshop Discussion Mr. Parker described at a high level, items that would be discussed at the January Board Workshop on the Cost of Service and Water Rate Study. Mr. Vecchiarelli came back early in this discussion. It was stressed by the Committee that information relating to any future rate increases make their way to the Citizen's Advisory Committee and the District's PIO to ensure that the message makes it's way out prior to an increase taking effect. 3.2. September 2011 Budget to Actual Results Mr. Parker presented the September 2011 budget to actual results. He commented that at the following Committee meeting he would be presenting the full-accrual quarterly budget to actual results that would go on to the full Board, but these were just the standard monthly statements. Mr. Parker commented that while water consumption was lower than budgeted, it had made an improvement over the comparison to budget from August's consumption. The Committee requested that in the future staff report the conservation percentage monthly and provide this information to the full Board as well. Mr. Parker commented on variable water cost being higher than budgeted based on the District's strategy of purchasing more import water prior to the January 1 MWD rate increase. Mr. Parker also reviewed specific supplies and services expenses that were trending higher than budgeted and explained why those looked out of place. 3.3. Status of Strategic Plan Initiatives Mr. Parker highlighted the current strategic plan initiatives, including progress made with evaluating procurement credit card options, rewriting water and sewer rules and regulations and customer service and 2 developer fees, and a change being evaluated in the processing of customers' credit cards that will result in reduced merchant fees. 3.4 Future Agenda Items and Staff Tasks Staff will submit a revised investment policy to the FAC at the November meeting to ensure the District is in compliance with its investment policy. The FAC recommended they receive in future meetings current information regarding the rate of consumption YLWD customers have been using in the current fiscal year. 4. ADJOURNMENT 4.1. The Committee adjourned at 5:10 p.m. The next regular meeting of the Finance-Accounting Committee will be held November 28, 2011 at 4:00 p.m. 3