HomeMy WebLinkAbout2012-01-23 - Finance-Accounting Committee Meeting Agenda Packet
Yorba Linda
Water District
AGENDA
YORBA LINDA WATER DISTRICT
FINANCE-ACCOUNTING COMMITTEE MEETING
Monday, January 23, 2012, 4:00 PM
1717 E Miraloma Ave, Placentia CA 92870
COMMITTEE STAFF
Director Robert R. Kiley, Chair Ken Vecchiarelli, General Manager
Director Phil Hawkins Stephen Parker, Finance Manager
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. 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.
2.1. New Member Orientation
2.2. CSMFO Budget Award Notification
2.3. December 2011 Budget to Actual Results
2.4. Investment Report for Period Ending December 31, 2011
2.5. Broker/Dealer Research
2.6. Financial Model - Alternate Results
2.7. Proposed Calendar for FY 2012/13 Budget
2.8. Status of Strategic Plan Initiatives
2.9. Future Agenda Items and Staff Tasks
3. ADJOURNMENT
3.1. The next meeting of the Finance-Accounting Committee will be held on February 27,
2012 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: January 23, 2012
To: Finance-Accounting Committee
From: Ken Vecchiarelli, General
Manager
Presented By: Stephen Parker, Finance Dept: Finance
Manager
Prepared By: Stephen Parker, Finance
Manager
Subject: New Member Orientation
SUMMARY:
To provide an idea of the types of items dealt with in the Finance-Accounting Committee, staff
reviewed the agendas and minutes from the past twelve months and documented items of action
and discussion by the Finance-Accounting Committee beyond the normal monthly budget to actual
and investment reports. In addition, staff has proposed a short list of items that could be submitted
to the Committee during the 2012 calendar year.
DISCUSSION:
Action was taken on the following items in 2011 by the Finance-Accounting Committee:
. California Employers' Retirement Benefit Trust (OPEB pre-funding)
. Financial Reserve Policy
. Independent Audit Services Contract
. OPEB Liability Pay Down
. Authorization to Invest in LAIF
. Sewer Financial Model
. FY 2011/12 Budget
. Sewer Maintenance Charge for Locke Ranch & City of YL MFR and CII Accounts
. Contract Extension for OPEB Actuarial
. Submission of 2011 Audit Reports
. Quarterly Full-Accrual Statements
. Purchasing Card Recommendation
. Revising Public Investment Policy
. Adopting Water Development and Customer Service Fees
The items below were discussed in 2011 by the Finance-Accounting Committee:
. Sewer Financial Projections
. CSMFO CAFR Award Notification
. Quarterly Debt Service Ratio calculations
. Continuing Disclosure Annual Report
. District Credit Card Options
. Sewer Allocation Study
. GFOA CAFR Award Notification
. Required Communication From Auditors (SAS 114)
. Investment for 2008 COP Reserve Funds
. Status of Strategic Plan Initiatives Begin
. FAC Meeting Date Changed
In addition, the Committee will address the following items in the 2012 calendar year:
. Revision of the Investment Policy
. Comparison of Investment Yields to Local Water Districts (Future Staff Task)
. Adjustment to Sewer Customer Fee Schedule
. Revision of the Financial Reserves Policy
. Debt Service Restructuring Diligence
. Potential Short-Term Financing of CIP's
. Long-Term Finance Planning & Strategies
. FY 2012/13 Budget
. FY 2011/12 CAFR
ITEM NO. 2.2
AGENDA REPORT
Meeting Date: January 23, 2012
To: Finance-Accounting Committee
From: Ken Vecchiarelli, General
Manager
Presented By: Stephen Parker, Finance Dept: Finance
Manager
Prepared By: Stephen Parker, Finance
Manager
Subject: CSMFO Budget Award Notification
DISCUSSION:
Yorba Linda Water District was notified that their FY 11/12 Operating Budget was selected to
receive the Excellence in Budgeting Award from the California Society of Municipal Finance Officers
(CSMFO). The CSMFO has two levels of budget awards, a Meritorious Budget Award and the
Excellence in Budgeting Award, with the latter being the more difficult to attain. This is the first time
that YLWD's Budget has attained this recognition.
STRATEGIC PLAN:
FR 1-B: Prepare a High Level Annual Budget Document and Comprehensive Annual Financial
Report and Compete for Recognition by the Government Finance Officers Association
ATTACHMENTS:
Name: Description: Type:
CSMFO Budget Award Letter.pdf CSMFO Budget Award Letter Backup Material
CrAIs ]'T{{,r0 R.~ttrr [
A i..., i I, 9 S£ y UN 1 4 PA L,
031111FINANCE OFFICERS
Professional Standards and Recognition Committee
Chu Thai, Chair Terri Willoughby, Vice Chair
City of South Pasadena City of Menifee
1414 Mission 5t. 29714 Haun Road
South Pasadena, CA 91030 Menifee, CA 92586
ctha1@ci.south-pasadena.ca.us tilloughby@cityofinenifee.us
January 15, 2012
Stephen Parker
Finance Manager
Yorba Linda Water District
1717 E. Miraloma Avenue
Placentia, CA 92870
Dear Stephen,
Congratulations! Your agency's Operating Budget submission to the CSMFO Budget Award
Program has been reviewed and has been selected to receive the Excellence in Budgeting
Award. The Awards will be presented at the CSMFO Annual Conference scheduled from
February 29, 2012 through March 2, 2012. We sincerely hope you will attend the event.
The Budget Awards Program is designed to recognize those agencies that have prepared a
budget document or a communication tool that meets certain standards. You can be proud that
your peers judged your submission as meeting the awards criteria.
Rating sheets that summarize the ratings and comments of the reviewer are enclosed for your
reference. The rating process includes two primary reviews for each submission and a third
review to resolve any significant variances between the two primary reviews. If you have
received an Excellence rating in the past, your document received a single review. Please keep
the rating sheets and be prepared to write a response to the comments if you plait on submitting
your document next year or the year after for a two-year document. if you have submitted a two-
year document, the award covers both years and you will not be eligible to submit that
document again next year.
Please call me at (562) 860-0311, ext. 2038 or email me at schang@cerritos.us if you have any
questions. Again, congratulations and we hope to see you at the Annual CSMFO Conference.
Sincerely,
Siu-Lee Chang, CPA, MPA
Member, CSMFO Professional Standards and Recognition Committee
Accountant, City of Cerritos
ITEM NO. 2.3
AGENDA REPORT
Meeting Date: January 23, 2012
To: Finance-Accounting Committee
From: Ken Vecchiarelli, General Manager
Presented By: Stephen Parker, Finance Manager Dept: Finance
Prepared By: Delia Lugo, Senior Accountant
Subject: December 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 December 2011.
For the month of December 2011, the District water revenue is trending slightly below expectations due to
lower water consumption from a cooler than normal weather pattern. Water operating revenue is 52% of
annual budget, which is lower by approximately 2.9% from the historical trend for the first five reporting
months of the fiscal year. Our 20 by 2020 baseline is 286.1 gallons per capita per day (GPCD), with a target
of 228.9. For the current fiscal year through December 2011, the reduction of 48.0 GPCD brings us 84% of
the way to our goal.
Other Operating Revenue is 64% of annual budget for the month of December. This is primarily due to the
activity that was reported in the previous months in relation to the Vista Del Verde project.
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.
The majority of the Water Fund's individual supplies and services expenses are trending below or on budget,
with the exception of Dues and Memberships, Insurance and Employee Recognition due to timing differences.
Also, Maintenance expenses are higher due to unexpected road repairs and Materials expenses are higher
due to replacement meter purchases exceeding budget.
In the month of December, Sewer Other Operating Revenue is well over budget due to the Vista del Verde
Project as reported in previous months. Sewer Other Non-Operating Revenue is also well over budget, which
is primarily due to receiving $264,000 from the City of Yorba Linda for the sewer transfer. The supplies and
services expenses are trending below or on budget, with the exceptions of Dues and Memberships and
Insurance, which are higher due to timing differences.
In the month of December Sewer Fund's Other Expense is higher due to the District having processed refunds
to our customers that were overcharged sewer fees in previous years.
ATTACHMENTS:
Name Description: Type:
December 2011 Combined.xls December 2011 Combined Statement Backup Material
Dec 2011 Water Statement.xlsx December 2011 Water Statement Backup Material
December 2011 Sewer.xls December Sewer Statement Backup Material
Yorba Linda Water District
Summary Financial Report
Water & Sewer Funds
For Six Months Ending December 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 $8,988,935 $8,915,958 50.20%
Water Revenue (Commercial & Fire Det.) 1,726,651 1,003,387 723,264 58.11%
Water Revenue (Landscape/Irrigation) 3,757,058 2,298,176 1,458,882 61.17%
Water Revenue (Service Charge) 3,406,392 1,682,840 1,723,552 49.40%
Sewer Charge Revenue 1,548,550 736,805 811,745 47.58%
Locke Ranch Assessments 159,862 108,756 51,106 68.03%
Other Operating Revenue 754,361 546,301 208,060 72.42%
Total Operating Revenue: 29,257,767 15,365,200 13,892,567 52.52%
Revenue (Non-Operating):
Interest 190,000 125,243 64,757 65.92%
Property Tax 1,232,000 677,509 554,491 54.99%
Other Non-Operating Revenue 499,369 484,020 15,349 96.93%
Total Non-Operating Revenue: 1,921,369 1,286,772 634,597 66.97%
Total Revenue 31,179,136 16,651,972 14,527,164 53.41%
Expenses (Operating):
Variable Water Costs (G.W., Import & Power) 13,671,538 7,552,481 6,119,057 55.24%
Salary Related Expenses 7,941,306 3,567,191 4,374,115 44.92%
Supplies & Services 4,070,833 1,793,626 3,388,537 44.06%
Total Operating Expenses 25,683,677 12,913,298 13,881,709 50.28%
Expenses (Non-Operating):
Interest on Long Term Debt 1,906,426 944,379 962,047 49.54%
Other Expense 123,193 84,943 38,250 68.95%
Total Non-Operating Expenses: 2,029,619 1,029,322 1,000,297 50.72%
Total Expenses 27,713,296 13,942,620 14,882,006 50.31%
Net Income (Loss) Before Capital Contributions 3,465,840 2,709,352 (354,842) 78.17%
Contributed Capital - 17,061,427 (17,061,427) 0.00%
Net Income (Loss) Before Depreciation 3,465,840 19,770,779 (16,304,939) 570.45%
Depreciation & Amortization 5,561,699 3,267,302 2,294,397 58.75%
Total Net Income (Loss) ($2,095,859) $16,503,477 ($18,599,336) -787.43%
Capital - Direct Labor - (197,500) 197,500
Yorba Linda Water District
Water Fund
For Six Months Ending December 31, 2011
Dec 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 $919,029 $8,988,935 $8,915,958 50.20%
Water Revenue (Commercial & Fire Det.) 1,726,651 115,806 1,003,387 723,264 58.11%
Water Revenue (Landscape/Irrigation) 3,757,058 155,073 2,298,176 1,458,882 61.17%
Water Revenue (Service Charge) 3,406,392 280,783 1,682,840 1,723,552 49.40%
Other Operating Revenue 697,360 39,029 449,295 248,065 64.43%
Total Operating Revenue: 27,492,354 1,509,720 14,422,633 13,069,721 52.46%
Revenue (Non-Operating):
Interest 170,000 18,029 115,615 54,385 68.01%
Property Tax 1,232,000 552,759 677,509 554,491 54.99%
Other Non-Operating Revenue 495,394 26,070 228,508 266,886 46.13%
Total Non-Operating Revenue: 1,897,394 596,858 1,021,632 875,762 53.84%
Total Revenue 29,389,748 2,106,578 15,444,265 13,945,483 52.55%
Expenses (Operating):
Variable Water Costs (G.W., Import & Power) 13,671,538 868,423 7,552,481 6,119,057 55.24%
Salary Related Expenses 6,953,531 749,648 3,106,336 3,847,195 47.29%
Supplies & Services:
Communications 369,303 32,704 95,966 273,337 25.99%
Contractual Services 527,888 36,078 201,139 326,749 38.10%
Data Processing 119,645 20,782 45,089 74,556 37.69%
Dues & Memberships 55,973 1,355 46,351 9,622 82.81%
Fees & Permits 140,030 3,048 53,133 86,897 37.94%
Insurance 221,526 870 180,737 40,789 81.59%
Materials 361,161 64,522 234,872 126,289 65.03%
District Activities, Emp Recognition 20,758 4,966 8,331 12,427 40.13%
Maintenance 418,603 97,441 229,677 188,926 54.87%
Non-Capital Equipment 79,221 7,433 28,460 50,761 35.92%
Office Expense 45,686 2,878 18,487 27,199 40.47%
Professional Services 794,406 99,305 298,849 495,557 37.62%
Training 49,964 3,773 17,754 32,210 35.53%
Travel & Conferences 48,221 2,103 11,202 37,019 23.23%
Uncollectible Accounts 35,340 - 432 34,908 1.22%
Utilities 114,855 2,477 36,112 78,743 31.44%
Vehicle Equipment 278,209 13,879 112,500 165,709 40.44%
Supplies & Services Sub-Total 3,680,788 393,614 1,619,091 2,061,697 43.99%
Total Operating Expenses 24,305,857 2,011,685 12,277,908 12,027,949 50.51%
Expenses (Non-Operating):
Interest on Long Term Debt 1,906,426 155,938 944,379 962,047 49.54%
Other Expense 117,193 35,143 69,173 48,020 59.02%
Total Non-Operating Expenses: 2,023,619 191,081 1,013,552 1,010,067 50.09%
Total Expenses 26,329,476 2,202,766 13,291,460 13,038,016 50.48%
Net Income (Loss) Before Capital Contributions 3,060,272 (96,188) 2,152,805 907,467 70.35%
Capital Contributions - - 16,537 (16,537) 0.00%
Net Income (Loss) Before Depreciation 3,060,272 (96,188) 2,169,342 890,930 70.89%
Depreciation & Amortization 4,628,999 445,399 2,675,829 1,953,170 57.81%
Total Net Income (Loss) ($1,568,727) ($541,587) ($506,487) ($1,062,240) 32.29%
Capital - Direct Labor - (26,234) (181,761) 181,761 -
Yorba Linda Water District
Sewer Fund
For Six Months Ending December 31, 2011
Dec 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 $107,378 $736,805 $811,745 47.58%
Locke Ranch Assessments 159,862 96,805 108,756 51,106 68.03%
Other Operating Revenue 57,001 (167) 97,006 (40,005) 170.18%
Total Operating Revenue: 1,765,413 204,016 942,567 822,846 53.39%
Revenue (Non-Operating):
Interest 20,000 2,016 9,629 10,371 48.15%
Other Non-Operating Revenue 3,975 (1,995) 255,511 (251,536) 6427.95%
Total Non-Operating Revenue: 23,975 21 265,140 (241,165) 1105.90%
Total Revenue 1,789,388 204,037 1,207,707 581,681 67.49%
Expenses (Operating):
Salary Related Expenses 987,775 97,462 460,855 526,920 48.25%
Supplies & Services:
Communications 27,797 2,462 8,176 19,621 29.41%
Contractual Services 39,733 2,840 15,641 24,092 39.36%
Data Processing 9,006 1,564 3,393 5,613 37.68%
Dues & Memberships 4,213 307 3,831 382 90.93%
Fees & Permits 10,540 229 5,313 5,227 50.41%
Insurance 16,674 65 13,603 3,071 81.58%
Materials 27,184 346 12,818 14,366 47.15%
District Activities, Emp Recognition 1,562 363 611 951 39.11%
Maintenance 74,267 563 35,359 38,908 47.61%
Non-Capital Equipment 18,799 506 9,954 8,845 52.95%
Office Expense 3,439 217 1,392 2,047 40.48%
Professional Services 59,794 4,497 35,458 24,336 59.30%
Training 3,761 284 1,930 1,831 51.32%
Travel & Conferences 3,630 158 929 2,701 25.60%
Uncollectible Accounts 2,660 - 14 2,646 0.53%
Utilities 8,645 234 3,006 5,639 34.77%
Vehicle Equipment 78,341 4,865 23,107 55,234 29.50%
Supplies & Services Sub-Total 390,045 19,500 174,535 215,510 44.75%
Total Operating Expenses 1,377,820 116,962 635,390 742,430 46.12%
Expenses (Non-Operating):
Other Expense 6,000 15,770 15,770 (9,770) 262.83%
Total Non-Operating Expenses: 6,000 15,770 15,770 (9,770) 262.83%
Total Expenses 1,383,820 132,732 651,160 732,660 47.06%
Net Income (Loss) Before Capital Contributions 405,568 71,305 556,547 (150,979) 137.23%
Contributed Capital - - 17,044,890 (17,044,890) 0.00%
Net Income (Loss) Before Depreciation 405,568 71,305 17,601,437 (17,195,869) 4339.94%
Depreciation & Amortization 932,700 107,438 591,473 341,227 63.42%
Total Net Income (Loss) ($527,132) ($36,133) $17,009,964 ($17,537,096) -3226.89%
Capital - Direct Labor (2,608) (15,739) 15,739
ITEM NO. 2.4
AGENDA REPORT
Meeting Date: January 23, 2012
To: Finance-Accounting Committee
From: Ken Vecchiarelli, General
Manager
Presented By: Stephen Parker, Finance Dept: Finance
Manager
Prepared By: Delia Lugo, Senior Accountant
Subject: Investment Report for Period Ending December 31, 2011
SUMMARY:
Staff is submitting the December 2011 Monthly Investment Reports for the Committee's review.
DISCUSSION:
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 December 2011 decreased to 1.00%. This is the result from the
yield change of investments held in CaITRUST's Medium Term portfolio from 1.24% to 1.19%.
The overall increase in the investment balance from the previous month is $720,000. A couple of
the larger balance changes include an increase in the Reserve for Debt Service fund of $253,000
due to the District meeting its monthly obligation to ensure that funds are set aside for the March
2012 debt service interest payment, an increase of $603,000 in the Water Operating fund primarily
due to the receipt of scheduled property tax apportionments, and a decrease of $193,000 in the
2008 COP Revenue account for CIP project activity.
PRIOR RELEVANT BOARD ACTION(S):
The Investment Report for the quarter ended September 30, 2011 was received and filed by the
Board of Directors on November 10, 2011.
ATTACHMENTS:
Name: Description: Type:
Invst Rpt 12-1 1.xlsx December 2011 Investment Report Backup Material
Invst Agenda Backup - Dec 2011.xlsx Agenda Backup Backup Material
Yorba Linda Water District
Investment Portfolio Report
December 31, 2011
Market % Percent
Value Cost of Total Institution Yield
Checking Account:
$ 38,667 $ 38,667 Wells Fargo Bank
$ 38,667 $ 38,667 0.13% Total 0.00%
Money Market Accounts:
$ 9,997 $ 9,997 Wells Fargo Money Market 0.05%
1,642,550 1,642,550 US Bank (2008 Revenue Bond) 0.10%
2,699 2,699 US Bank (2008 Bond Reserve) 0.10%
$ 1,655,246 $ 1,655,246 5.75% Total 0.10%
Federal Home Loan Bank:
$ 2,156,687 $ 2,144,397 US Bank (2008 Bond Reserve) 1.35%
$ 2,156,687 $ 2,144,397 7.49% 1.35%
Pooled Investment Accounts:
$ 4,977,179 $ 4,977,179 Local Agency Investment Fund 0.39%
19,977,136 19,934,958 Ca1TRUST Medium Term 1.19%
$ 24,954,315 $ 24,912,137 86.63% 1.03%
$ 28,804,915 $ 28,750,447 100% Total Investments 1.00%
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.
<~S V~l
Delia Lugo, Senior Accountant
12/31/11
Investment Summary Report
Below is a chart summarizing the yields as well as terms and maturities for the month of December 2011:
Avg. Portfolio Avg. Portfolio # of
Month Yield Without Yield With Days to
of 2011 CalTRUST CalTRUST Maturity
December 0.57% 1.00% 518
Below is are charts comparing operating fund interest for current and prior fiscal years.
Actual Interest 12/31/2010 12/31/2011
Monthly - December $ 21,298 $ 20,046
Year-to-Date $ 111,100 $ 125,244
Budget 2010/2011 2011/2012
Interest Budget, December YTD $ 78,000 $ 95,000
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:
November 2011 % Alloc December 2011 % Alloc
Fund Description Balance 11/30/2011 Balance 12/31/2011
Water Operating Reserve $ 2,587,673 9.27% $ 3,290,837 11.45%
Water Emergency Reserve 1,002,093 3.59% 1,002,119 3.48%
Water Capital Project Reserve 17,576,741 62.98% 17,577,157 61.10%
Water Reserve for Debt Service 521,556 1.87% 775,025 2.69%
COP Revenue Bond 2008 - Reserve 2,159,872 7.74% 2,159,386 7.51%
COP Revenue Bond 2008 1,835,549 6.58% 1,642,550 5.71%
Sewer Operating 99,290 0.36% 170,718 0.59%
Sewer Emergency Reserve 1,001,446 3.59% 1,001,472 3.48%
Sewer Capital Project Reserve 1,121,611 4.02% 1,146,982 3.99%
$ 27,905,831 100.00% $ 28,766,246 100.00%
Wells Fargo Bank Checking
Water Operating 94,727 (4,835)
Sewer Operating 84,927 43,504
179,654 38,669
Totals $ 28,085,485 $ 28,804,915
ITEM NO. 2.5
AGENDA REPORT
Meeting Date: January 23, 2012
To: Finance-Accounting Committee
From: Ken Vecchiarelli, General
Manager
Presented By: Stephen Parker, Finance Dept: Finance
Manager
Prepared By: Stephen Parker, Finance
Manager
Subject: Broker/Dealer Research
DISCUSSION:
California Government Code Section 27000.5 states: "When investing, reinvesting, purchasing,
acquiring, exchanging, selling, or managing public funds, the primary objective of the county
treasurer or the board of supervisors, as the case may be, shall be to safeguard the principal of the
funds under the treasurer's or the board's control. The secondary objective shall be to meet the
liquidity needs of the depositor. The third objective shall be to achieve a return on the funds under
his or her control." This section of the code is usually summed up by indicating that a Treasurer's
priorities are 1) Safety, 2) Liquidity, and 3) Yield.
The majority of the District's investment dollars are currently with CalTRUST. While CalTRUST has
many advantages, and has one of the best yields around in an interest rate environment like we are
in right now, the pooled investment comes with a negative - a floating Net Asset Value (NAV).
Because the investment dollars are on a floating NAV, they are subject to investment gains or
losses in addition to the interest income they earn. While this is not the current case, in an interest
rate rising environment, the District's investment base would lose value if it was sold.
As such, and keeping in mind that staff's primary role as the District's Treasurer is that of
safeguarding the principal (Safety), staff has been in contact with potential broker/dealers who could
offer the District fixed income options that would also abide by the California Government Code, but
would not have the potential to lose value. Staff plans to interview addition broker/dealers to explore
alternative investment options. At the end of the process, staff will have multiple experienced
broker/dealers with which securities could be purchased. This would allow the District to diversify it's
portfolio - which is prudent with a focus on Safety - with a limited loss to yield.
ITEM NO. 2.6
AGENDA REPORT
Meeting Date: January 23, 2012
To: Finance-Accounting Committee
From: Ken Vecchiarelli, General
Manager
Presented By: Stephen Parker, Finance
Manager
Prepared By: Stephen Parker, Finance
Manager
Subject: Financial Model - Alternate Results
SUMMARY:
Staff will show the Finance-Accounting Committee a few capabilities of the Water Rate Model that
was included as a deliverable from the Cost of Service and Water Rate Study completed by Raftelis
Financial Consultants. Staff will also show results achieved by modifying the input variables and the
CIP assumptions following the Board Workshop on January 16, 2012.
STRATEGIC PLAN:
FR 1-A: Develop a Comprehensive Multi-Year Financial Plan
The Water Rate Model (which includes a Financial Model as a component of the whole) will provide
staff with an excellent resource in preparing future multi-year financial plans.
ATTACHMENTS:
Name: hescriptiow Type:
Revised CIP.pdf Revised CIP Backup Material
Revised CIP with No Well 22 or Meter Replacement and No Increase
Chart I - Revenue Adjustments Coverage Chart Chart 2 - Operating Financial Plan
100.0% 200% $30
c
0
80.0% 150% = $20
60.0% 100% $10
40.0%
20.0% 50% $0
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 2012 2013 2014 2015 2016 2017
0.0% 0% -$10
2012 2013 2014 2015 2016 2017
Rev Adj Coverage
YLWDO&M Water Cost Debt Service Non-Operating
Rev Adj -0 Coverage Ratio Required Coverage Alert Coverage Res Funding Current Rev - Proposed Rev
Millions Chart - Total Reserve hw ,ila _
$30 $10
o $8 Select CIP Options
$20 -
~
$10
$3 $1 $6
$1 4 $4
$0 $6 yy $2
I~
-$10 $0
2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017
Ending Balances -+~Target Alert Balances Debt Funding PayGo
Select No of Yr Select Displayed Reserve(s) Pass-thru Water &
Power Costs?
Debt Issues $1,000,000 4 ► S0 $0 $0 $0 $0 S0 $0 $0
Est Water Sales (AF) 18,043 19,000 19,079 19,158 19,237 19,316 19,395 19,474 19,553 19,632
RFC OCWD % - Annex 48.1% 48.1% 65.0% 65.0% 65.0% 65,0% 65.0% 65.0% 65.0%
OCWD% - No Annex 48.1% 48.1% 48.1% 48.1% 48.1% 48.1% 48.1% 48.1% 48.1%
caN~oav~c
Est Water Sales (AF) 100
High sales 18,043 21,166 21,254 21,342 21,430 21,518 21,606 21,694 21,782 21,870
11 Low sales 18,043 19,000 19,079 19,158 19,237 19,316 19,395 19,474 19,553 19,632
Revised CIP Misc. Inputs 3% Increase for 5 years
Chart I - Revenue Adjustments Coverage Chart Chart 2 - Operating Financial Plan
4.0% 300% $40
3.0% 3.0% 3.0% 3. % o $30
3.0%
200%
2.0% $20
1.0% 100% $10
0.0% I
0.0% _I 0% $0
2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017
Rev Adj Coverage
YLWDO&M Water Cost Debt Service Non-Operating
Rev Adj -0 Coverage Ratio Required Coverage Alert Coverage Res Funding Current Rev - Proposed Rev
Millions Char: - dotal Reserve Chw-=~
$25 $10
$20 0 $8 Select CIP Options
$15 $6
$10 $7 $4
$5 1A $2 r
$0 $0
2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017
Ending Balances -+~Target Alert Balances Debt Funding PayGo
Select No of Yr Select Displayed Reserve(s) Pass-thru Water &
Power Costs?
Debt Issues $1,000,000 4 ► S0 $0 $0 $0 $0 S0 $0 $0
Est Water Sales (AF) 18,043 19,000 19,079 19,158 19,237 19,316 19,395 19,474 19,553 19,632
RFC OCWD % - Annex 48.1% 48.1% 65.0% 65.0% 65.0% 65,0% 65.0% 65.0% 65.0%
OCWD% - No Annex 48.1% 48.1% 48.1% 48.1% 48.1% 48.1% 48.1% 48.1% 48.1%
caN~oav~c
Est Water Sales (AF) 100
High sales 18,043 21,166 21,254 21,342 21,430 21,518 21,606 21,694 21,782 21,870
11 Low sales 18,043 19,000 19,079 19,158 19,237 19,316 19,395 19,474 19,553 19,632
Revised CIP Construction up 1%, General up 1%, Salaries up 1.5%
Chart I - Revenue Adjustments Coverage Chart Chart 2 - Operating Financial Plan
100.0% 200% $30
c
0
80.0% 150% = $20
60.0% 100% $10
40.0% 0 0 0 0
20.0% 50% $0
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 2012 2013 2014 2015 2016 2017
0.0% 0% -$10
2012 2013 2014 2015 2016 2017
Rev Adj Coverage
YLWDO&M Water Cost Debt Service Non-Operating
Rev Adj -0 Coverage Ratio Required Coverage Alert Coverage Res Funding Current Rev - Proposed Rev
Millions Chart - Total Reserve Chw-=~
$25 $10
$20 0 $8 Select CIP Options
$15 $6
$10 $4
$5 $3 $2 ~ $4
$0 ~$1 $2
-$5 $0
2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017
Ending Balances -+~Target Alert Balances Debt Funding PayGo
Select No of Yr Select Displayed Reserve(s) Pass-thru Water &
Power Costs?
Debt Issues $1,000,000 4 ► S0 $0 S0 $0 $0 S0 $0 $0
Est Water Sales (AF) 18,043 19,000 19,079 19,158 19,237 19,316 19,395 19,474 19,553 19,632
RFC OCWD % - Annex 48.1% 48.1% 65.0% 65.0% 65.0% 65,0% 65.0% 65.0% 65.0%
OCWD% - No Annex 48.1% 48.1% 48.1% 48.1% 48.1% 48.1% 48.1% 48.1% 48.1%
caN~oav~c
Est Water Sales (AF) 100
High sales 18,043 21,166 21,254 21,342 21,430 21,518 21,606 21,694 21,782 21,870
11 Low sales 18,043 19,000 19,079 19,158 19,237 19,316 19,395 19,474 19,553 19,632
Revised CIP with No Well 22 or Meter Replacement and No Increase Construction Costs up 1%
Chart I - Revenue Adjustments Coverage Chart Chart 2 - Operating Financial Plan
100.0% 200% $30
c
0
80.0% 150% = $20
60.0% 100% $10
40.0% 0 0
20.0% 50% $0
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 2012 2013 2014 2015 2016 2017
0.0% 0% -$10
2012 2013 2014 2015 2016 2017
Rev Adj Coverage
YLWDO&M Water Cost Debt Service Non-Operating
Rev Adj -0 Coverage Ratio Required Coverage Alert Coverage Res Funding Current Rev - Proposed Rev
Millions Chart - Total Reserve Chw-=~
$30 $10
o $8 Select CIP Options
$20 -
~ $6
$10 $4 $2
$0 $4
$0 ~ `$5 $2
-$10 $0
2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017
Ending Balances -+~Target Alert Balances Debt Funding PayGo
EM I Select Displayed Reserve(s) Pass-thru Water &
Select No of Yr
Power Costs?
Debt Issues $1,000,000 4 ► S0 $0 $0 $0 $0 S0 $0 $0
Est Water Sales (AF) 18,043 19,000 19,079 19,158 19,237 19,316 19,395 19,474 19,553 19,632
RFC OCWD % - Annex 48.1% 48.1% 65.0% 65.0% 65.0% 65,0% 65.0% 65.0% 65.0%
OCWD% - No Annex 48.1% 48.1% 48.1% 48.1% 48.1% 48.1% 48.1% 48.1% 48.1%
caN~oav~c
Est Water Sales (AF) 100
High sales 18,043 21,166 21,254 21,342 21,430 21,518 21,606 21,694 21,782 21,870
11 Low sales 18,043 19,000 19,079 19,158 19,237 19,316 19,395 19,474 19,553 19,632
ITEM NO. 2.7
AGENDA REPORT
Meeting Date: January 23, 2012
To: Finance-Accounting Committee
From: Ken Vecchiarelli, General
Manager
Presented By: Stephen Parker, Finance Dept: Finance
Manager
Prepared By: Stephen Parker, Finance
Manager
Subject: Proposed Calendar for FY 2012/13 Budget
DISCUSSION:
Attached is the proposed budget calendar for FY 2012/13. This schedule includes two complete
reviews of all departmental expenses by each respective Board Committee. In addition, as the
largest driver of the District's long-term financial needs, included are a number of reviews of the
Capital Improvement Projects listing with both PEO and all Board members during Board meetings.
Two Board Workshops are also included on the schedule, which is set up to allow for a possible
Prop 218 process. This schedule will be updated as changes become necessary.
ATTACHMENTS:
Name: Description: Type:
Budget Calendar - FY 12.13.xlsx FY 12/13 Budget Calendar Backup Material
BUDGET CALENDAR FOR FISCAL YEAR 2012/13
DATE BOARD/COMMITTEE SCHEDULE
JANUARY
January 17, 2012 Manager's Meeting Discuss Budget Calendar and Process
Personnel & Capital budget discussion
January 23, 2012 Finance-Accounting Committee Review the Budget Calendar
FEBRUARY
February 2, 2012 Planning-Engineering-Operations Committee Capital Improvement Projects budget (v 0.5)
February 23, 2012 Board of Directors Capital Improvement Projects budget (v 1.0)
February 27, 2012 Finance-Accounting Committee Finance budget (v 1.0), Operating revenues (v 1.0)
Reserve policy analysis (v 1.0)
MARCH
March 1, 2012 Planning-Engineering-Operations Committee Engineering and Operations budget (v 1.0)
March 5, 2012 Public Affairs-Communications-Tech Committee IT & Public Affairs budget (v 1.0)
March 8, 2012 Board of Directors Capital Improvement Projects budget (v 2.0) (if needed)
March 13, 2012 Personnel-Risk Mgmt Committee Labor and benefits (v 1.0), HR budget (v 1.0)
March 20, 2012 Exec-Admin-Organizational Committee Board of Directors and Administration budget (v 1.0)
March 22, 2012 Board of Directors Capital Improvement Projects budget (v 3.0) (if needed)
March 26, 2012 Finance-Accounting Committee Finance budget (v 2.0) (if needed), Reserve policy analysis (v 2.0)
* March 29, 2012 Planning-Engineering-Operations Committee Engineering and Operations budget (v 2.0) (if needed)
APRIL
April 2, 2012 Public Affairs-Communications-Tech Committee IT & Public Affairs budget (v 2.0) (if needed)
* April 5, 2012 Board Workshop - Budget Budget presented to Board for review and discussion
Reserve policy discussion
April 10, 2012 Personnel-Risk Mgmt Committee HR budget (v 2.0) (if needed), Labor and Benefits (v 2.0)
April 12, 2012 Board of Directors Possible Prop 218 decision
April 17, 2012 Exec-Admin-Organizational Committee Board of Directors and Administration budget (v 2.0) (if needed)
MAY
May 24, 2012 Board of Directors Draft Budget (Full Board)
May 28, 2012 Finance-Accounting Committee Possible reserve policy recommendation
Draft reserve policy
* May 31, 2012 Board of Directors Prop 218 Public Hearing
JUNE
June 14, 2012 Board of Directors Budget review and possible adoption (Full Board)
Reserve policy possible adoption
June 28, 2012 Board of Directors Budget review and possible adoption (Full Board)
* Tentative date
ITEM NO. 2.8
AGENDA REPORT
Meeting Date: January 23, 2012
Subject: Status of 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.
ATTACHMENTS:
Name: Description: Type:
Strategic Plan Tracking- FA.xlsx Strategic Plan Tracking - FA Backup Material
Strategic Plan Initiatives Status Report
Finance-Accounting Committee
Strategies Lead Party Comments Jan 2012 Progress
FR 1: Maintain Fiduciary Res onsibilit
Finance Accounting
Develop a Comprehensive Committee to 5-year financial plan included in budget. A more comprehensive version
FR 1-A Finance Director consider Adding
Multi-Year Financial Plan Sewer Model to will be included in the FY 2012/ 13 budget.
S
Contract in Jun-1 1
Revise the Water and Complete Study in
Sewer Rules and General House and Water Rules and Regulations recommended changes submitted to EAO
FR 1-C Regulation and Evaluate Manager/ Recommend Fees and corresponding recommended fee schedule changes submitted to
Fee Schedules Regularly Structure Update for FAC in December. '!`1 ese items are pending a legal, review 'before
Finance Director
for Proper Cost of Service Adoption by both iternm are sti'%tnitte to the Board.
Coverage December 2011
FR 3: Identify and Develop Additional Revenue Options
Review Opportunities to Card Options On December 22, 2011, the Board approved YLWD entering into an
Discussed with
Earn "Cash Back" on Finance-Accounting agreement with US Bank and the State of California in the CalCard
FR 3-B Operating Expense Finance Director Committee in March program. Staff has submitted all required paperwork to US Bank
-
through Commercial Add'l research and is waiting on a reply to get the program set up. It should take
Credit Card Accounts Required another 4-6 weeks to get fully set up.
FR 4: Provide a Rate Structure that Promotes Water Use Efficienc
Complete the Cost of Finance Board to Consider The January 16, 2012 Board Workshop showed the end product of
FR 4-A Service and Water Rates Director/Board Rate Structure the cost of service and water rate study. Raftelis might continue
Alternatives in Oct work with the District if a Prop 218 process is requested by the
Study of Directors
2011 Board in conjunction with the fiscal year 2012-13 budget process.
Evaluate Equitable Rate Board of Board to Consider Multiple rate structure options were presented to the Board in a
Structures that Promote Directors/ Rate Structure workshop on January 16, 2012. No specific direction was given on
FR 4-B Conservation and General Alternatives in Oct the rate structure, and this item will be discussed further
Efficiency Manager 2011 throughout the fiscal year 2012-13 budget process .
Completed
Prepare a High Level
Annual Budget
Document and Completed Budget June 2011. Submitted budget for CSMFO and GFOA
Comprehensive Annual Include Fees in FY award September 2011. CAFR submitted to the FAC and Board in
FR 1-13 Financial Report and Finance Director 2011/12 Budget October 2011. Staff submitted for the GFOA award in November 2011.
Compete for Recognition vl-,WD xece ved Che Exceffence -ins U dget-;1;4- Award frees°m, CSMFO on
by the Government the :F 2011/1.2 tau get ip hdanaar .
Finance Officers
Association
Evaluate and Revise the Revised Allocation Completed March 2011. Consider changing allocation methodology in
FR 1-D Finance Director included in FY
Sewer Fund Allocation 2011 12 Budget conjunction with FY 2012/ 13 budget process.
Substantial Rate
Maintain Commitment to Increase Adopted in
Board of Completed March 2011. Consider changing allocation methodology in
FR 1-E Strong Debt Services Sept 2009 followed by
conjunction with FY 2012/ 13 budget process.
Directors Through
Ratio Pass
Increase in Aug 2010
Latest Revisions
Reviewed by Finance-
Review the Reserve Policy Finance Accounting Completed March 2011. Consider changing allocation methodology in
FR 2-A and Funding Levels Director/Board
Annually of Directors Committee for Board conjunction with FY 2012/ 13 budget process.
of Directors to
Consider in Jun-11
Implement an Approach Finance Rates, COP'S and Forward projection of reserve balances will be completed along with
FR 2-C to Ensure Reserves are Director/Board Other Capital future financial projections. The District's reserve needs will be updated
Responsibly Funded of Directors Financing Options for FY 2012/ 13 with this new data.
Track Opportunities
Manage Cash Flow to Delia Lugo, Senior Accountant reviews the cash balances and needs
FR 3-C Maximize Investment Finance Director and Effectiveness daily. Mutliple times a month, excess cash is transferred to investments
with Quarterly
Income to earn interest until the next check register.
Investment Reports