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HomeMy WebLinkAbout2013-01-28 - Finance-Accounting Committee Meeting Agenda Packet Yorba Linda Hater District AGENDA YORBA LINDA WATER DISTRICT FINANCE-ACCOUNTING COMMITTEE MEETING Monday, January 28, 2013, 12:00 PM 1717 E Miraloma Ave, Placentia CA 92870 COMMITTEE STAFF Director Phil Hawkins, Chair Steve Conklin, Acting General Manager Director Gary T. Melton 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. 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. Authorized Officers for Investments Held at Pershing Recommendation. That the Committee recommend the Board of Directors approve Resolution No. 13 XX Authorizing the Acting General Manager and Finance Manager to Act on Behalf of the District Relating to District Investments Held at Pershing LLC and Rescinding Resolution 12-24. 2.2. Investment Report for Period Ending December 31, 2012 Recommendation. That the Committee recommend the Board of Directors receive and file the Investment Report for the Period Ending December 31, 2012. 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. New Member Orientation 3.2. Broker Dealer Approval 3.3. Continuing Disclosure Annual Report 3.4. Proposed Calendar for FY 2013/14 Budget 3.5. Budget to Actual Results for December 2012 3.6. Status of Strategic Plan Initiatives 3.7. Future Agenda Items and Staff Tasks 4. ADJOURNMENT 4.1. The next meeting of the Finance-Accounting Committee will be held Monday, February 25, 2013 at 12:00 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 28, 2013 To: Finance-Accounting Committee From: Steve Conklin, Acting General Manager Presented By: Stephen Parker, Finance Manager Dept: Finance Reviewed by Legal: Yes Prepared By: Stephen Parker, Finance Manager Subject: Authorized Officers for Investments Held at Pershing STAFF RECOMMENDATION: That the Committee recommend the Board of Directors approve Resolution No. 13-XX Authorizing the Acting General Manager and Finance Manager to Act on Behalf of the District Relating to District Investments Held at Pershing LLC and Rescinding Resolution 12-24. DISCUSSION: In September 2012, the Finance-Accounting Committee supported staff's recommendation by recommending the Board approve a resolution identifying to Pershing that the Acting GM and Finance Manager are authorized to act on behalf of the District pertaining to District investments held at Pershing. The Board went on to pass the same item as Resolution No. 12-24 on October 11, 2012. It recently came to staff's attention that Pershing's legal counsel took exception to some verbiage in the Whereas section of the District's resolution and was unable to use it. As a result, staff is submitting this resolution which serves the same purpose, but removes the language that Pershing's legal counsel had issues with. In the District's current investment policy approved December 2011, the Board authorizes the District's Treasurer to invest funds of the District. Staff recommends adding the Acting General Manager to the resolution as a back-up should the Treasurer not be available for an extended period of time. For the Committee's information, a markup version is included to identify the language that changed from the previously approved resolution. PRIOR RELEVANT BOARD ACTION(S): On December 22, 2011, the Board adopted the Public Funds Investment Policy in Resolution 11-24. ATTACHMENTS: Name: Description: Type: Resolution No 13- Resolution No.13-XX Authorized Officers for Investments XX Authorized Officers for Investments Held at Pershing.pdf Held at Pershing Backup Material Resolution No 13- Resolution No.13-XX Markup Version Backup Material XX Authorized Officers for Investments Held at Pershing Markup.pdf RESOLUTION NO. 13-XX RESOLUTION OF THE BOARD OF DIRECTORS OF YORBA LINDA WATER DISTRICT AUTHORIZING THE ACTING GENERAL MANAGER AND FINANCE MANAGER TO ACT ON BEHALF OF THE DISTRICT RELATING TO DISTRICT INVESTMENTS HELD AT PERSHING LLC AND RESCINDING RESOLUTION 12-24 WHEREAS, in July 2012, District staff completed the process of vetting Matthew D'Avanzo, Senior Vice-President - Fixed Income Strategies at First Empire Securities (First Empire) as a broker/dealer; WHEREAS, First Empire has an agreement with Pershing LLC (Pershing) where the District can choose to have investments purchased through First Empire be held at Pershing; WHEREAS, First Empire requires that a resolution be adopted authorizing people to act on behalf of the District relating to District investments held at Pershing; and WHEREAS, the District's current investment policy approved December 2011 authorizes the District's Treasurer to invest funds of the District and the Board of Directors desires adding the Acting General Manager as a back- up should the Treasurer not be available for an extended period of time. NOW, THEREFORE, the Board of Directors of the Yorba Linda Water District does hereby find, determine, and resolve the following: Section 1. Resolution No 12-24 is hereby rescinded. Section 2. Steven R. Conklin, Acting General Manager, and Stephen Parker, Finance Manager, each of whom holds the office indicated, is authorized to act on behalf of the Yorba Linda Water District to buy, sell, assign, loan, borrow, endorse for transfer, transfer and receive stocks, bonds, securities, money and other assets now or hereafter registered in [INTENTIONALLY BLANK] Resolution No. 13-XX Authorized Officers for Investments Held at Pershing the name of or held for Yorba Linda Water District at Pershing LLC. PASSED AND ADOPTED this 14th day of February 2013 by the following called vote: AYES: NOES: ABSTAIN: ABSENT: Gary Melton, President Yorba Linda Water District ATTEST: Steven R. Conklin, Secretary Yorba Linda Water District Reviewed as to form by General Counsel: Arthur G. Kidman, Esq. Kidman Law, LLP Resolution No. 13-XX Authorized Officers for Investments Held at Pershing RESOLUTION NO.4213-24XX RESOLUTION OF THE BOARD OF DIRECTORS OF YORBA LINDA WATER DISTRICT AUTHORIZING THE ACTING GENERAL MANAGER AND FINANCE MANAGER TO ACT ON BEHALF OF THE DISTRICT RELATING TO DISTRICT INVESTMENTS HELD AT PERSHING LLC AND RESCINDING RESOLUTION 12-24 WHEREAS, in July 2012, District staff completed the process of vetting Matthew D'Avanzo, Senior Vice-President- Fixed Income Strategies at First Empire Securities (First Empire)as a broker/dealer; WHEREAS, First Empire has an agreement with Pershing LLC (Pershing) where the District can choose to have investments purchased through First Empire be held at Pershing at. „s++„the DiGtFiGt'l WHEREAS, the DiGtFin+ oorchiRgFirst Empire requires that a resolution be adopted authorizing people to act on behalf of the District relating to District investments held at Pershing; and WHEREAS, the District's current investment policy approved December 2011 authorizes the District's Treasurer to invest funds of the District and the Board of Directors desires adding the Acting General Manager as a back- up should the Treasurer not be available for an extended period of time. NOW, THEREFORE,uF BOARD OF DIRFE `TORSS uCDCQV RFESO \/CCthe Board of FOnmett-d-Font:Not Bold Directors of the Yorba Linda Water District does hereby find, determine, and resolve; that oonh and aRY of the following: Section 1. Resolution No 12-24 is hereby rescinded. Section 2. Formatted:Font:Bold Steven R. Conklin,Acting General Manager, and Formatted:Indent:Left: 0°,First line: 0" Stephen Parker, Finance Manager, each of whom holds the office indicated, is authorized to act on behalf of the Yorba Linda Water District to buy, sell, assign, loan, borrow, endorse for transfer, transfer and receive stocks, bonds, securities, money and other assets now or hereafter registered in Resolution No.12-13-24XXAuthorized Officers for Investments Held at Pershing i [INTENTIONALLY BLANK] the name of or held for Yorba Linda Water District at Pershing LLC. PASSED AND ADOPTED this 4e-14th day of GAtAbor February 2012 2013 by the following called vote: AYES: NOES: ABSTAIN: ABSENT: Phil WA,A LincGary Melton, President Yorba Linda Water District ATTEST: nRnie AlexandepSteven R. Conklin, Assistant Secretary Yorba Linda Water District Reviewed as to form by General Counsel: Arthur G. Kidman, Esq. Kidman Law, LLP Resolution No.421324-M Authorized Officers for Investments Held at Pershing ' Formatted:Justified,Border:Top:(Single solid line,White, 0.75 pt Line width),Bottom: (Single solid line,White, 0.75 pt Line width, From tent: 10 pt Border spacing:),Left: (Single solid line,White, 0.75 pt Line width), Right:(Single solid line,White, 0.75 pt Line width),Tab stops: 0",Left+ 0.5",Left+ 1.5',Left+ 2",Left+ 2.5',Left+ 3",Left+ 3.5',Left+ 4",Left+ 4.5',Left+ 5",Left+ 5.5',Left+ 6",Left+ 6.5',Left Resolution No.4213-24XXAuthorized Officers for Investments Held at Pershing ITEM NO. 2.2 AGENDA REPORT Meeting Date: January 28, 2013 To: Finance-Accounting Committee From: Steve Conklin, Acting General Manager Presented By: Stephen Parker, Finance Dept: Finance Manager Prepared By: Delia Lugo, Senior Accountant Subject: Investment Report for Period Ending December 31, 2012 SUMMARY: Staff is submitting the December 2012 Monthly Investment Reports for the Committee and Board's review. STAFF RECOMMENDATION: That the Committee recommend the Board of Directors receive and file the Investment Report for the Period Ending December 31, 2012. DISCUSSION: The Investment Portfolio Report presents the market value and percent yield for all 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 December 2012 decreased to 0.68%. This is the result of the yield change of investments held in CaITRUST's Medium Term portfolio from 0.88% to 0.76% and Short Term portfolio from 0.36% to 0.30%. The overall decrease in the investment balance from the previous month is approximately $19,000. A couple of the larger balance changes include a decrease in the Water Capital Projects fund of $235,000 due to the spending on CIP projects, an increase in the Water Operating fund of $650,000 due to receiving schedule property tax apportionments from the County of Orange Assessor's Office, and a decrease of approximately $300,000 in the Sewer funds due to the purchase of the Kenworth T440 Vactor from Haaker Equipment. STRATEGIC PLAN: FR 1-G: Continue to Improve Communications of the Districts Financial Information to the Board of Directors, Member Agencies, Management, and the Financial Community ATTACHMENTS: Name: Description: Type: Invst Rpt 12-12.xlsx Investment Report-December 2012 Backup Material Invst Agenda Backup - Dec 2012.xlsx Agenda Backup-Report Backup Material Yorba Linda Water District Investment Portfolio Report December 31, 2012 Market % Percent Value Cost of Total Institution Yield Checking Account: $ 210,056 $ 210,056 Wells Fargo Bank $ 210,056 $ 210,056 1.13% Total 0.00% Money Market Accounts: $ 54,940 $ 54,940 Wells Fargo Money Market 0.05% 1,901,945 1,901,945 Bank of the West 0.35% 17,248 17,248 US Bank(2008 Bond Reserve) 0.04% $ 1,974,134 $ 1,974,133 10.67% Total 0.34% Federal Home Loan Bank: 2,151,167 $ 2,144,397 US Bank(2008 Bond Reserve) 1.35% $ 2,151,167 $ 2,144,397 11.62% 1.35% Pooled Investment Accounts: $ 3,813,268 $ 3,813,268 Local Agency Investment Fund 0.33% 27,816 27,816 Ca1TRUST Short Term 0.30% 10,331,212 10,308,574 Ca1TRUST Medium Term 0.76% $ 14,172,296 $ 14,149,658 76.58% 0.64% $ 18,507,652 $ 18,478,244 100% Total Investments 0.68% 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 12/31/12 Investment Summary Report Below is a chart summarizing the yields as well as terms and maturities for the month of December 2012: Avg. Portfolio Avg. Portfolio #of Month Yield Without Yield With Days to of 2012 CaITRUST CaITRUST Maturity December 0.68% 0.59% 79 Below is are charts comparing operating fund interest for current and prior fiscal years. Actual Interest 12/31/2011 12/31/2012 Monthly- December $ 43,925 $ 7,827 Year-to-Date $ 149,123 $ 63,297 Budget 2011/2012 2012/2013 Interest Budget, December YTD $ 95,000 $ 75,000 Interest Budget, Annual $ 190,000 $ 150,000 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 2012 %Alloc December 2012 %Alloc Fund Description Balance 11/30/2012 Balance 12/31/2012 Water Operating Reserve $ 2,565,670 16.13% $ 3,965,764 21.68% Water Emergency Reserve 1,005,780 5.67% 1,005,507 5.50% Water Capital Project Reserve 8,398,178 48.73% 8,161,885 44.61% Water Reserve for Debt Service 745,593 2.48% 745,041 4.07% Maintenance Reserve 200,420 1.13% 186,920 1.02% COP Revenue Bond 2008- Reserve 2,151,907 12.16% 2,151,167 11.76% COP Revenue Bond 2008 17,248 0.02% 17,248 0.09% Sewer Operating 85,519 0.48% 16,167 0.09% Sewer Emergency Reserve 1,004,774 5.67% 1,004,502 5.49% Sewer Capital Project Reserve 1,336,165 7.53% 1,043,395 5.69% $ 17,511,254 100.00% $ 18,297,596 100.00% Wells Fargo Bank Checking Water Operating 814,680 63,830 Sewer Operating 162,447 146,226 977,127 210,056 Totals $ 18,488,381 $ 18,507,652 ITEM NO. 3.1 AGENDA REPORT Meeting Date: January 28, 2013 To: Finance-Accounting Committee From: Steve Conklin, Acting 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 2013 calendar year. DISCUSSION: Action was taken on the following items in 2012 by the Finance-Accounting Committee: • Quarterly Full-Accrual Financial Statements • Quarterly Investment Statements • Appropriations Limit • Financial Reserve Policy . Authorization to Invest with Bank of the West . OPEB Liability Pay Down . Prepayment of PERS Side Fund . Sewer Charges Collected on Tax Roll for FY 12/13 . Submission of 2012 Audit Reports . Authorization to Invest in LAIF . Authorized Officers for Investments Held at Pershing . Adopting Water Development and Customer Service Fees The items below were discussed in 2012 by the Finance-Accounting Committee: • Monthly Budget to Actual Statements • Monthly Investment Statements . Strategic Plans . Quarterly Debt Service Ratios . Broker/Dealer Research/Approval . Results of Financial Model Options . Budget Calendar . Finance Department Supplies & Services Budget • Upcoming Pension Accounting Changes • Line of Credit Financing Option/Updates • Comparison of Investment Types and Yields of Local Water Districts • Reserve Policy . 2003 Advance Refunding Updates . Auditor Discussion with Those In Governance In addition, the Committee will likely address the following items in the 2013 calendar year: • Revision of the Investment Policy • Comparison of Investment Yields to Local Water Districts • Revision of the Financial Reserves Policy • Potential Short-Term Financing of CIP's • FY 2013/14 Budget • FY 2012/13 CAFR • Adjustment to Sewer Customer Fee Schedule • Revision of Sewer Rules and Regulations ITEM NO. 3.2 AGENDA REPORT Meeting Date: January 28, 2013 To: Finance-Accounting Committee From: Steve Conklin, Acting General Manager Presented By: Stephen Parker, Finance Dept: Finance Manager Prepared By: Stephen Parker, Finance Manager Subject: Broker Dealer Approval DISCUSSION: Staff has completed the process of vetting Mark Edelman, Financial Advisor at Cantella & Co., Inc. as a broker/dealer. Resolution No. 11-24 adopted the current investment policy. Section 9 states: Before a broker/dealer is used, they are subject to investigation and approval by the General Manager or the designated representative and must submit the following: • Certification of having read and understood this investment policy resolution and agreeing to comply with the District's investment policy; • Proof of National Association of Security Dealers certification and state registration; • Compliance with federal capital adequacy regulations and provide documentation of financial solvency; • Provide audited financial statements within 120 days of fiscal year end; • Provide similar services to other public-sector clients. Mr. Edelman currently provides broker/dealer services in southern California for Laguna Beach County Water District, Cucamonga Valley Water District, Imperial Irrigation District, Rainbow Water District, Orchard Dale Water District and the City of Rosemead, among others. Staff is currently comfortable with the number of broker/dealers available for use by the District, with three vetted. The next step to take is a revision to the investment policy with legal council's help prior to making investments through Mr. Edelman. ITEM NO. 3.3 AGENDA REPORT Meeting Date: January 28, 2013 To: Finance-Accounting Committee From: Steve Conklin, Acting General Manager Presented By: Stephen Parker, Finance Dept: Finance Manager Prepared By: Stephen Parker, Finance Manager Subject: Continuing Disclosure Annual Report DISCUSSION: The Continuing Disclosure Annual Report is required to be filed annually as long as the District has outstanding obligations relating to their 2008 Certificates of Participation (COP's) and 2012 Refunding Revenue Bonds. Attached is the most recently filed Continuing Disclosure Annual Report for the Fiscal Year Ending (FYE) June 30, 2012. STRATEGIC PLAN: FR 1-G: Continue to Improve Communications of the Districts Financial Information to the Board of Directors, Member Agencies, Management, and the Financial Community ATTACHMENTS: Description: Type: FY 2011-12 CDAR.PDF Continuing Disclosure Annual Report Backup Material CONTINUING DISCLOSURE ANNUAL REPORT FISCAL YEAR ENDING JUNE 30, 2012 IN CONNECTION WITH THE CONTINUING DISCLOSURE OBLIGATIONS FOR: YORBA LINDA WATER DISTRICT REVENUE CERTIFICATES OF PARTICIPATION (2008 CAPITAL IMPROVEMENT PROJECTS) SERIES 2008 YORBA LINDA WATER DISTRICT REVENUE REFUNDING BONDS, SERIES 2012A YORBA LINDA WATER DISTRICT 1717 E. Miraloma Avenue Placentia, California 92870 YORBA LINDA WATER DISTRICT REVENUE CERTIFICATES OF PARTICIPATION (2008 CAPITAL IMPROVEMENT PROJECTS) SERIES 2008 Maturity (October 1) CUSIP* 2013 98618M BD 0 2014 98618M BE 8 2015 98618M BF 5 2016 98618M BG 3 2017 98618M BH 1 2018 98618M BJ 7 2019 98618M BK 4 2020 98618M BL 2 2021 98618M BM 0 2022 98618M BN 8 2023 98618M BP 3 2024 98618M BQ 1 2025 98618M BR 9 2026 98618M BS 7 2027 98618M BT 5 2028 98618M BU 2 2029 98618M BV 0 2030 98618M BW 8 2031 98618M BX 6 2032 98618M BY 4 2038 98618M BZ 1 YORBA LINDA WATER DISTRICT REVENUE REFUNDING BONDS, SERIES 2012A Maturity (October 1) CUSIP 2013 98618LAA9 2014 98618LAB7 2015 98618LAC5 2016 98618LAD3 2017 98618LAE1 2018 98618LAF8 2019 98618LAG6 2020 98618LAH4 2021 98618LAJO 2022 98618LAK7 2023 98618LAL5 2024 98618LAM3 2025 98618LAN1 2026 98618LAP6 2027 98618LAQ4 2028 98618LAR2 2029 98618LASO 2031 98618LASO 2033 98618LAT8 *CUSIPO is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by S&P Capital IQ. Copyright©2013 CUSIP Global Services. All rights reserved. This data is not intended to create a database and does not serve in any way a substitute for the CUSIP Global Services. CUSIPO numbers are provided for convenience of reference only. Yorba Linda Water District does not take any responsibility for the accuracy of such numbers. TABLE OF CONTENTS INTRODUCTION ............................................................................................................................................. 1 AUDITED FINANCIAL STATEMENTS.......................................................................................................... 2 PRINCIPAL AMOUNT OF OUTSTANDING CERTIFICATES...................................................................... 2 AMOUNTS IN THE RESERVE FUNDS ......................................................................................................... 2 UPDATE OF INFORMATION FROM OFFICIAL STATEMENTS................................................................. 2 HISTORIC WATER SUPPLY.......................................................................................................................................3 HISTORIC WATER CONNECTIONS............................................................................................................................3 HISTORIC WATER DELIVERIES.................................................................................................................................4 HISTORIC WATER SALE REVENUES.........................................................................................................................4 TAX LEVIES AND DELINQUENCIES............................................................................................................................5 LARGESTCUSTOMERS.............................................................................................................................................5 WATER SYSTEM RATES AND CHARGES..................................................................................................................6 HISTORIC OPERATING RESULTS AND DEBT SERVICE COVERAGE.........................................................................8 CREDITRATINGS.......................................................................................................................................... 9 CONCLUSION...............................................................................................................................................S-1 EXHIBIT A AUDITED FINANCIAL STATEMENTS OF THE DISTRICT (THIS PAGE INTENTIONALLY LEFT BLANK) INTRODUCTION THIS CONTINUING DISCLOSURE ANNUAL REPORT has been prepared to satisfy the obligations of the Yorba Linda Water District (the "District"), as provided in the following continuing disclosure certificates: 2008 Certificates. The Continuing Disclosure Certificate, dated as of February 1, 2008 (the "2008 Disclosure Certificate"), executed by the District, in connection with the execution and delivery of the Yorba Linda Water District Revenue Certificates of Participation (2008 Capital Improvement Projects) Series 2008 (the "2008 Certificates"). The 2008 Certificates have been executed and delivered pursuant to a Trust Agreement, dated as of February 1, 2008 (the "2008 Trust Agreement"), by and among the District, the Corporation and the Trustee. 2012 Bonds. The Continuing Disclosure Certificate, dated September 19, 2012 (the "2012 Disclosure Certificate"), executed by the District, in connection with the issuance of the Yorba Linda Water District Revenue Refunding Bonds, Series 2012A (the "2012 Bonds"). The 2012 Bonds have been issued pursuant to an Indenture of Trust, dated as of August 1, 2012 (the "2012 Indenture"), by and between the District and the Trustee. Corporation. Corporation means the Yorba Linda Water District Public Financing Corporation, a nonprofit public benefit corporation duly organized and existing under the laws of the State of California. Disclosure Certificates or Disclosure Certificate. Disclosure Certificates or Disclosure Certificate means the 2008 Disclosure Certificate and the 2012 Disclosure Certificate. Obligations or Obligation. Obligations or Obligation means the 2008 Certificates and the 2012 Bonds. Rule. Rule means Rule 15c2-12 of the Securities Exchange Act of 1934, as amended. Trustee. Trustee means U.S. Bank National Association, a national banking association duly organized and existing under by virtue of the laws of the United States of America, or a successor Trustee under the Trust Agreements. Governing Documents. Governing Documents means the 2008 Trust Agreement and the 2012 Indenture. 1 The District has agreed under the Disclosure Certificates and the Rule to provide certain annual financial information and operating data and, in a timely manner, notices of certain reporting of significant events. These covenants have been made in order to comply with the Rule. As provided in Section 3 of the Disclosure Certificates, this Continuing Disclosure Annual Report is being prepared for publication with the Electronic Municipal Market Access ("EMMA"), a service of the Municipal Securities Rulemaking Board ("MSRB"), for the benefit of the Beneficial Owners of the Certificates and the Participating Underwriters. Capitalized terms used in the Disclosure Certificates which are not otherwise defined herein shall have the respective meaning specified in the Governing Documents. The information being provided herein is based on the requirements under Section 4 of the Disclosure Certificate. AUDITED FINANCIAL STATEMENTS The audited financial statements of the District for the Fiscal Year ending June 30, 2012 are attached hereto as Exhibit A. PRINCIPAL AMOUNT OF OUTSTANDING CERTIFICATES Currently, the outstanding principal amount on the 2008 Certificates is $32,070,000. Currently, the outstanding principal amount on the 2012 Bonds is $8,330,000. AMOUNTS IN THE RESERVE FUNDS Pursuant to the 2008 Trust Agreement, the District is required to establish the Reserve Fund (the "2008 Reserve Fund") in an amount equal to $2,147,076.26, the Reserve Fund Requirement. The balance of the 2008 Reserve Fund was $2,153,865.85 as of January 3, 2012. The 2012 Bonds do not have a reserve fund requirement. UPDATE OF INFORMATION FROM OFFICIAL STATEMENTS The following tables are updated from the 2008 Certificates Official Statement, dated February 12, 2008 and the 2012 Bonds Official Statement, dated September 6, 2012. 2 Historic Water Supply Set forth below is a summary of the District's sources of water supply for the last five fiscal years. YORBA LINDA WATER DISTRICT HISTORIC GROUNDWATER AND IMPORTED WATER (IN ACRE-FEET PER YEAR) Imported Increase/ Fiscal Year Groundwater Water Total (Decrease) 2008 13,676 10,976 24,652 (3.92)% 2009 14,966 8,451 23,417 (5.01) 2010 9,400 10,754 20,154 (13.93) 2011 8,853 10,435 19,288 (4.30) 2012 10,020 10,812 20,832 8.00 Source: Yorba Linda Water District. Historic Water Connections The following table shows the number of water connections to the District's Water System for the five most recent fiscal years. YORBA LINDA WATER DISTRICT HISTORIC WATER CONNECTIONS Fiscal Year ending the last day of June Connections(') Increase 2008 23,505 0.71% 2009 23,586 0.34 2010 23,788 0.86 2011 23,644(2) (0.61) 2012 237979 1.42 Excludes private fire connections. (2) Decrease in Fiscal Year 2011 connections reflects effects of the economic recession. Source: Yorba Linda Water District. 3 Historic Water Deliveries The following table presents a summary of historic water deliveries for the Water System in acre-feet per year for the five most recent fiscal years. YORBA LINDA WATER DISTRICT HISTORIC WATER DELIVERIES (IN ACRE FEET PER YEAR) Water Increase/ Fiscal Year Deliveries(i) (Decrease) 2008 23,291 (3.04)% 2009 24,371 4.64 2010 19,351 (20.60) 2011 17,907 (7.46) 2012 20,656 15.35 The differences between historic water deliveries and historic water supply reflect system losses. Source: Yorba Linda Water District. Historic Water Sale Revenues The following table shows annual water sale revenues from water sales in the service area for the five most recent fiscal years. The increases in water sales revenues reflect both increased connections as well as rate increases. YORBA LINDA WATER DISTRICT HISTORIC WATER SALES REVENUES Fiscal Year ending Sales the last day of June Revenues Increase 2008 $19,470,109 2.78% 2009 19,626,738 0.80 2010 22,141,731 12.81 2011 22,686,251 4.04 2012 24,998,673 10.19 Source: Yorba Linda Water District. 4 Tax Levies and Delinquencies The table below sets forth property tax collections and delinquencies in the District as of June 30 for fiscal years 2008 through 2012. The information in the table below has been provided by California Municipal Statistics, Inc. The District has not independently verified the information in this table below and does not guaranty its accuracy. YORBA LINDA WATER DISTRICT PROPERTY TAX LEVIES AND COLLECTIONS FISCAL YEARS 2008 THROUGH 2012 Amount Secured Delinquent % Delinquent Tax Charge June 30 June 30 2007-08 $1,233,431.30 $49,578.43 4.02% 2008-09 1,235,906.65 45,472.67 3.68 2009-10 1,125,148.67 27,179.99 2.24 2010-11 1,209,831.35 19,811.11 1.64 2011-12 1,233,765.39 18,038.70 1.46 1% General Fund apportionment. Includes secured and supplemental rolls. Delinquency reflects county-wide rate of 1.34%for secured roll and 18.40%for supplemental roll. Source: California Municipal Statistics, Inc. Largest Customers The following table sets forth the District's ten largest customers in the service area as of June 30, 2012 as determined by annual payments. YORBA LINDA WATER DISTRICT TEN LARGEST WATER SYSTEM CUSTOMERS Type of Business Annual Customer Payments Percent of Total City of Yorba Linda Government $ 2,016,152 7.30% Placentia Yorba Linda Unified School District Government 273,764 0.99 Yorba Linda Villages Homeowners' Association 111,714 0.40 Archstone Apartments Apartments 107,771 0.39 Fairmont Hill Community Assoc. Homeowners' Association 101,384 0.37 The Hills at Yorba Linda Homeowners' Association 86,258 0.31 Kerrigan Ranch II Community Association Homeowners' Association 80,886 0.29 Lake Park Mobile Home Community Homeowners' Association 72,570 0.26 Woodgate Condominiums Homeowners' Association 55,482 0.20 Rancho Dominguez Community Homeowners' Association 52,828 0.19 Total J2,958,808 10.71% Source: Yorba Linda Water District. 5 Water System Rates and Charges General. District rates and charges for water service in the District's service area are set by the Board of Directors and are not subject by statute to the jurisdiction of, or regulation by, the California Public Utilities Commission or any other regulatory body. The Board of Directors currently sets water charges to pay the costs of water pumping and to recover operating expenses for the Water System. Capital improvements and debt service payments for the Water System are funded from capital facilities fees and property tax revenues. Water Service Charges. The District requires water meters for all of its customers. Since August 1, 2010, the District's water service charges have been $11.73 per month for all meter sizes plus $2.52 per 100 cubic feet (748 gallons) (a "unit") of water use. On June 21, 2012, after compliance with the notice, hearing and protest provisions of Proposition 218, the Board adopted a resolution: (1) changing the monthly water service charge from $11.73 per month for all customers to a capacity rate based on water meter size, as set forth in the below table. The capacity charges took effect beginning July 1, 2012 and will increase in Fiscal Years 2014 and 2015 as set forth below; and (2) changing the per-unit charge from $2.52 to $2.57. YORBA LINDA WATER DISTRICT MONTHLY CAPACITY CHARGES Meter Size August 1, 2010 July 1, 2012 July 1, 2013 July 1, 2014 5/8" and 3/4"(1) $11.73 $ 7.56 $ 8.80 $ 10.06 1"(1) 11.73 12.60 14.67 16.77 1/1/2" 11.73 25.20 29.34 33.54 2" 11.73 40.32 46.94 53.66 3" 11.73 88.20 102.67 117.37 4" 11.73 158.76 187.80 211.26 6" 11.73 352.80 410.67 469.47 Approximately 93%of District connections, representing approximately 72%of Water System Revenues in Fiscal Year 2011, were to residential customers with 5/8", 3/4"or 1" meters. Source: Yorba Linda Water District. 6 The table below sets forth a comparison of the District's annual water rates and charges for a single family residential user to those of nearby water purveyors as of June 30, 2012. All amounts reflect the billing for 20 units of water use per month: WATER SERVICE CHARGE COMPARISON Community Total Bill Golden State Water Company $95.93 Mesa Consolidated Water District 83.75 Yorba Linda Water District 64.00(') City of Brea 62.38 City of La Palma 56.90(2) City of Anaheim 45.45 As set forth in Table 10 above, District water service charges increased on July 1, 2012. The water service charge for a single family residential user consuming 20 units per month is approximately$64.00 ($2.57 per unit multiplied by 20 units ($51.40) plus a$12.60 capacity charge for a 1" meter). cz) Based upon assumed monthly fixed charge of$10.15, plus a per unit/commodity charge of$1.87 per unit. Source: Yorba Linda Water District. 7 Historic Operating Results and Debt Service Coverage The following table is a summary of operating results of the Water System of the District for the last five fiscal years. YORBA LINDA WATER DISTRICT HISTORICAL OPERATING RESULTS FISCAL YEAR ENDED THE LAST DAY OF JUNE 2008 2009 2010 2011 2012 Revenues Water Sales $19,470,109 $ 19,626,738 $22,141,731 $22,686,251 $ 24,998,673 Ad Valorem Tax Revenues 1,257,943 1,276,638 1,269,441 1,258,769 1,273,855 Interest Income 1,028,575 468,011 248,882 252,522 253,478 Other(') 578,699 925,951 757,395 1,714,109 1,292,298 Total Revenues 22.335.326 22.297.338 24.417.449 25.911.651 27.818.304 Operating Expenses Variable Water Costs $10,516,507 $10,859,328 $10,688,318 $ 11,267,615 $ 12,275,853 Personnel Services 5,168,852 5,864,468 5,863,006 6,114,939 6,125,692 Supplies&Services 4,010,377 3,705,278 3,228,241 3,160,419 3,461,250 Total Operating and Maintenance Expenses 19.695.736 X20,429,074 19.771565 L2U42,973 122442,7975 Net Operating Revenues after O&M Costs $ 2,639,590 $ 1,868,264 $ 5,037,884 $ 5,368,678 $ 5,775,509 Non-Operating Expenses Other Expense $ 123,934 $ 157,241 $ 148,476 $ 291,195 z $ 90,485 Total Non-Operating Expenses 123,934 157,241 L 148,476 291195 $ 90485 Net Revenues LAA89.408 15JQ77.483 5..685.024 Debt Obligations Series 2003 Installment Payments $ 674,595 $ 674,306 $ 673,074 $ 670,726 $ 672,383 Series 2008 Installment Payments - 1,472,5653 2,133,196 2,133,496 2,132,796 Total Debt Obligations $ 674,595 $ 2,146,871 $ 2,806,270 $ 2,804,223 $ 2,805,179 Net Revenues After Debt $ 1,841,061 $ (435,848) $ 2,083,138 $ 2,273,260 $ 2,879,845 Obligations Debt Service Ratio 3.73 0.80 1.74 1.81 2.03 Includes customer service charges, rental and royalty income and other miscellaneous revenues. Fiscal Year 2009 amount includes approximately $119,000 in capital contributions. Beginning in Fiscal Year 2010, Other Revenues also included between approximately $400,000 in certain connection fees which were previously characterized as contributed capital. (Z) Increase reflects accounting treatment as expenses of certain projects which were initially budgeted as capital expenditures. (3) $580,963 of capitalized interest was applied to pay Series 2008 Installment Payments. Source: Yorba Linda Water District. 8 CREDIT RATINGS For the benefit of the owners of the Obligations, the following are the current underlying ratings on the Obligations. Fitch Ratings Standard & Poor's Rating Services 2008 Certificates AA AA+ 2012 Bonds AA AA+ 9 CONCLUSION The Tax Levies and Delinquencies information which was obtained from California Municipal Statistics, Inc. is believed by the District to be reliable but has not been independently verified by the District and is not guaranteed as to accuracy by the District. There can be no assurance as to the accuracy of such information and inquiries concerning the scope and methodology of procedures carried out to complete such information should be directed to California Municipal Statistics, Inc., at 5460 College Avenue, Oakland, California 94618 whose telephone number is (510) 658-2640. YORBA LINDA WATER DISTRICT �& /V Stephen P rker, Finance Manager S-1 ITEM NO. 3.4 AGENDA REPORT Meeting Date: January 28, 2013 To: Finance-Accounting Committee From: Steve Conklin, Acting General Manager Presented By: Stephen Parker, Finance Dept: Finance Manager Prepared By: Stephen Parker, Finance Manager Subject: Proposed Calendar for FY 2013/14 Budget DISCUSSION: Attached is the proposed budget calendar for FY 2013/14. 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. One Board Workshop is also included on the schedule. The time line is pretty aggressive, but will allow the process to be completed in May (or allow wiggle room should delays occur), and keep staff used to a time line that would be necessary should the Prop 218 process be needed in the future. This schedule will be updated as changes become necessary. STRATEGIC PLAN: FR 1-13: Prepare a High Level Annual Budget Document and Comprehensive Annual Financial Report and Compete for Recognition by the Government Finance Officers Association ATTACHMENTS: Description: Type: Budget Calendar - FY 13.14.xlsx FY 13/14 Budget Calendar Backup Material BUDGET CALENDAR FOR FISCAL YEAR 2012/13 DATE BOARD/COMMITTEE SCHEDULE JANUARY January 15,2013 Manager's Meeting Discuss Budget Calendar and Process Personnel &Capital budget discussion January 28,2013 Finance-Accounting Committee Review the Budget Calendar FEBRUARY February 5,2013 Manager's Meeting Personnel &Capital budget discussion February 7,2013 Planning-Engineering-Operations Committee Capital Improvement Projects budget(v 0.5) February 25, 2013 Finance-Accounting Committee Finance budget(v 1.0), Operating revenues(v 1.0) Reserve policy analysis(v 1.0) February 27, 2013 Exec-Admin-Organizational Committee Board of Directors and Administration budget(v 1.0) February 28, 2013 Board of Directors Capital Improvement Projects budget(v 1.0) MARCH March 4, 2013 Public Affairs-Communications-Tech Committee IT&Public Affairs budget(v 1.0) March 7, 2013 Planning-Engineering-Operations Committee Engineering and Operations budget(v 1.0) Capital Improvement Projects budget(v 1.5)(if needed) March 12, 2013 Personnel-Risk Mgmt Committee Labor and benefits(v 1.0), HR budget(v 1.0) March 14, 2013 Board of Directors Capital Improvement Projects budget(v 2.0)(if needed) March 19, 2013 Exec-Admin-Organizational Committee Board of Directors and Administration budget(v 2.0)(if needed) March 25, 2013 Finance-Accounting Committee Finance budget(v 2.0)(if needed), Reserve policy analysis(v 2.0) March 28, 2013 Board of Directors Capital Improvement Projects budget(v 3.0)(if needed) APRIL April 1,2013 Public Affairs-Communications-Tech Committee IT&Public Affairs budget(v 2.0)(if needed) April 4,2013 Planning-Engineering-Operations Committee Engineering and Operations budget(v 2.0)(if needed) April 9,2013 Personnel-Risk Mgmt Committee HR budget(v 2.0)(if needed), Labor and Benefits(v 2.0) * April 18, 2013 Board Workshop-Budget Budget presented to Board for review and discussion Reserve policy discussion April 22, 2013 Finance-Accounting Committee Possible reserve policy recommendation Draft reserve policy MAY May 9,2013 Board of Directors Draft Budget(Full Board) Reserve policy adoption May 23, 2013 Budget review and adoption (Full Board) * Tentative date ITEM NO. 3.5 AGENDA REPORT Meeting Date: January 28, 2013 To: Finance-Accounting Committee From: Steve Conklin, Acting General Manager Presented By: Stephen Parker, Finance Dept: Finance Manager Prepared By: Delia Lugo, Senior Accountant Subject: Budget to Actual Results for December 2012 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 2012. For the month of December 2012, the District water revenue is 61% of annual budget, which is 6% higher when compared to the historical trend for this point in the year. Our water consumption baseline is 298 gallons per capita per day (GPCD), with a 20% reduction by 2020 target of 238.5 GPCD. Currently we are at 265.4 GPCD, which is 54.8% of the way to our goal. Variable water costs are higher than budgeted due to the District's intentional strategy to use a greater percentage of the more expensive imported water in the first half of the year, before MWD's rate increase goes into effect. The majority of the Water Fund's individual Supplies and Services expenses are trending below or near budget. Dues and Memberships and Insurance are over due to the timing of receiving and paying annual invoices. Non-Capital Equipment, Office Expense, Materials and Professional Services are all trending more than a month ahead of schedule, with reasons previously reported. Sewer Other Operating Revenue is well over budget due to the timing of invoicing and receiving payments for FOG fees. In addition to items mentioned regarding the Water Fund, Fees & Permits and Vehicle Equipment are trending higher in Sewer, as was previously reported. STRATEGIC PLAN: FR 1-F: Continue to Record and Report the Fairly Stated Financial Activities of the District in a Timely and Transparent Manner to the Board of Directors and Member Agencies ATTACHMENTS: 114arne. Description: Type: December 2012 Combined.xlsx December 2012 Combined Statement Backup Material Dec 2012 Water Stmt.xlsx December 2012 Water Statement Backup Material Dec 2012 Sewer Stmt.xlsx December 2012 Sewer Statement Backup Material Yorba Linda Water District Summary Financial Report Water&Sewer Funds For Six Months Ending December 31, 2012 Original YTD YTD YTD Budget Actual Under(Over) %of FY 2013 FY 2013 Budget Budget Revenue (Operating): Water Revenue (Residential) $15,405,197 $9,612,264 $5,792,933 62.40% Water Revenue (Commercial & Fire Det.) 1,822,665 1,073,156 749,509 58.88% Water Revenue (Landscape/Irrigation) 4,035,121 2,629,647 1,405,474 65.17% Water Revenue (Service Charge) 3,755,191 1,843,240 1,911,951 49.09% Sewer Charge Revenue 1,548,682 792,883 755,799 51.20% Locke Ranch Assessments 198,433 110,760 87,673 55.82% Other Operating Revenue 643,737 431,149 212,588 66.98% Total Operating Revenue: 27,409,026 16,493,099 10,915,927 60.17% Revenue (Non-Operating): Interest 170,000 60,876 109,124 35.81% Property Tax 1,244,320 682,982 561,338 54.89% Other Non-Operating Revenue 494,437 364,119 130,318 73.64% Total Non-Operating Revenue: 1,908,757 1,107,977 800,780 58.05% Total Revenue 29,317,783 17,601,076 11,716,707 60.04% Expenses (Operating): Variable Water Costs (G.W., Import& Power) 12,953,024 7,627,093 5,325,931 58.88% Salary Related Expenses 7,648,891 3,445,265 4,203,626 45.04% Supplies &Services 3,863,102 1,974,904 1,888,198 51.12% Total Operating Expenses 24,465,017 13,047,262 11,417,755 53.33% Expenses (Non-Operating): Interest on Long Term Debt 2,011,395 905,513 1,105,882 45.02% Other Expense 124,210 27,192 97,018 21.89% Total Non-Operating Expenses: 2,135,605 932,705 1,202,900 43.67% Total Expenses 26,600,622 13,979,967 12,620,655 52.56% Net Income(Loss) Before Depreciation 2,717,161 3,621,109 (903,948) 133.27% Depreciation &Amortization 6,602,339 3,358,605 3,243,734 50.87% Total Net Income(Loss) ($3,885,178) $262,504 ($4,147,682) -6.76% Yorba Linda Water District Water Fund For Six Months Ending December 31, 2012 Dec YTD YTD YTD Budget Actual Actual Under(Over) %of FY 2013 FY 2013 FY 2013 Budget Budget Revenue (Operating): Water Revenue (Residential) $15,405,197 $997,422 $9,612,264 $5,792,933 62.40% Water Revenue (Commercial &Fire Det.) 1,822,665 131,420 1,073,156 749,509 58.88% Water Revenue (Landscape/Irrigation) 4,035,121 242,916 2,629,647 1,405,474 65.17% Water Revenue (Service Charge) 3,755,191 312,361 1,843,240 1,911,951 49.09% Other Operating Revenue 585,929 42,360 394,444 191,485 67.32% Total Operating Revenue: 25,604,103 1,726,479 15,552,751 10,051,352 60.74% Revenue (Non-Operating): Interest 150,000 6,273 52,713 97,287 35.14% Property Tax 1,244,320 460,686 682,982 561,338 54.89% Other Non-Operating Revenue 490,262 126,631 359,700 130,562 73.37% Total Non-Operating Revenue: 1,884,582 593,590 1,095,395 789,187 58.12% Total Revenue 27,488,685 2,320,069 16,648,146 10,840,539 60.56% Expenses(Operating): Variable Water Costs (G.W., Import& Power) 12,953,024 529,547 7,627,093 5,325,931 58.88% Salary Related Expenses 6,741,403 590,526 3,045,847 3,695,556 45.18% Supplies &Services: Communications 280,232 13,896 66,157 214,075 23.61% Contractual Services 455,041 17,096 196,009 259,032 43.08% Data Processing 125,866 735 40,783 85,083 32.40% Dues &Memberships 57,609 3,830 53,739 3,870 93.28% Fees &Permits 139,165 4,561 71,894 67,271 51.66% Board Election 47,988 - - 47,988 0.00% Insurance 259,656 651 210,006 49,650 80.88% Materials 455,226 39,939 285,397 169,829 62.69% District Activities, Emp Recognition 17,298 3,619 9,234 8,064 53.38% Maintenance 323,820 26,913 154,929 168,891 47.84% Non-Capital Equipment 93,507 6,398 58,414 35,093 62.47% Office Expense 37,702 3,718 21,644 16,058 57.41% Professional Services 749,878 (93,732) 417,420 332,458 55.67% Training 41,353 (313) 10,566 30,787 25.55% Travel &Conferences 40,833 537 10,033 30,800 24.57% Uncollectible Accounts 36,270 - (478) 36,748 -1.32% Utilities 79,050 3,328 44,503 34,547 56.30% Vehicle Equipment 282,400 7,831 134,603 147,797 47.66% Supplies &Services Sub-Total 3,522,893 39,007 1,784,853 1,738,040 50.66% Total Operating Expenses 23,217,320 1,159,080 12,457,793 10,759,527 53.66% Expenses(Non-Operating): Interest on Long Term Debt 2,009,777 135,535 905,513 1,104,264 45.06% Other Expense 118,210 2,198 27,192 91,018 23.00% Total Non-Operating Expenses: 2,127,987 137,733 932,705 1,195,282 43.83% Total Expenses 25,345,307 1,296,813 13,390,498 11,954,809 52.83% Net Income(Loss) Before Depreciation 2,143,378 1,023,256 3,257,648 (1,114,270) 151.99% Depreciation &Amortization 5,332,175 453,752 2,717,084 2,615,091 50.96% Total Net Income(Loss) ($3,188,797) $569,504 $540,564 ($3,729,361) -16.95% Yorba Linda Water District Sewer Fund For Six Months Ending December 31,2012 Dec YTD YTD YTD Budget Actual Actual Under(Over) %of FY 2013 FY 2013 FY 2013 Budget Budget Revenue(Operating): Sewer Charge Revenue $1,548,682 $128,349 $792,883 $755,799 51.20% Locke Ranch Assessments 198,433 80,868 110,760 87,673 55.82% Other Operating Revenue 57,808 547 36,705 21,103 63.49% Total Operating Revenue: 1,804,923 209,764 940,348 864,575 52.10% Revenue(Non-Operating): Interest 20,000 1,554 8,163 11,837 40.82% Other Non-Operating Revenue 4,175 (2,064) 4,419 (244) 105.84% Total Non-Operating Revenue: 24,175 (510) 12,582 11,593 52.05% Total Revenue 1,829,098 209,264 962,930 876,168 62.10% Expenses(Operating): Salary Related Expenses 907,488 61,455 399,418 508,070 44.01% Supplies&Services: Communications 23,018 1,046 5,173 17,845 22.47% Contractual Services 34,280 1,330 15,465 18,815 45.11% Data Processing 9,474 55 2,824 6,650 29.81% Dues&Memberships 4,583 288 3,915 668 85.42% Fees&Permits 12,155 487 8,434 3,721 69.39% Board Election 3,612 - - 3,612 0.00% Insurance 19,544 49 15,806 3,738 80.87% Materials 34,799 358 9,445 25,354 27.14% District Activities, Emp Recognition 1,302 272 693 609 53.23% Maintenance 71,650 18,709 66,737 4,913 93.14% Non-Capital Equipment 17,044 939 7,229 9,815 42.41% Office Expense 2,823 280 1,629 1,194 57.70% Professional Services 37,582 (7,055) 16,940 20,642 45.07% Training 4,747 382 1,932 2,815 40.70% Travel&Conferences 3,418 40 716 2,702 20.95% Uncollectible Accounts 2,730 - (45) 2,775 -1.65% Utilities 5,950 306 3,733 2,217 62.74% Vehicle Equipment 51,499 1,048 29,425 22,074 57.14% Supplies&Services Sub-Total 340,209 18,534 190,051 150,158 55.86% Total Operating Expenses 1,247,697 79,989 589,469 658,228 47.24% Expenses(Non-Operating): Interest Expense 1,618 - - 1,618 0.00% Other Expense 6,000 6,000 0.00% Total Non-Operating Expenses: 7,618 - - 7,618 0.00% Total Expenses 1,266,316 79,989 689,469 666,846 46.96% Net Income(Loss)Before Depreciation 673,783 129,266 363,461 210,322 63.34% Depreciation&Amortization 1,270,164 106,951 641,521 628,643 50.51% Total Net Income(Loss) ($696,381) $22,314 ($278,060) ($418,321) 39.93% ITEM NO. 3.6 AGENDA REPORT Meeting Date: January 28, 2013 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: FA - Strategic Plan Trackinq.pdf Strategic Plan Tracking-FA Backup Material Strategic Plan Initiatives Status Report Finance-Accounting Committee Strategies Lead Party Comments December 2012 Progress FR 1: Maintain Fiduciary Res onsibili Revise the Water and Sewer Rules General Complete Study in House Updated Customer Service Fee Schedule presented to Finance-Accounting FR 1-C and Regulation and Evaluate Fee Manager/ and Recommend Fees Committee on September 26. Sewer Rules and Regulations and Fee Schedule will be Schedules Regularly for Proper Finance Structure Update for brought before the Board in 2013. Cost of Service Coverage Director Adoption by December 2011 Continue to Record and Report Quarterly the Board receives the Fairly Stated Financial General full-accrual financial The Board received the September 2012 investment report at the November 21st FR 1-F Activities of the District in a Manager/ statements. The annual Board meeting and the 1st quarter full-accrual financial statements at the December Timely and Transparent Manner Finance audit is provided timely to 6th Board meeting. to the Board of Directors and Director the Board and public. Member Agencies Continue to Improve Monthly financial Communications of the District's General information is provided to The Finance-Accounting Committee received the December 2012 budget to actual FR 1-G Financial Information to the Manager/ management and the financial statements and the December 2012 investment report at the January Board of Directors,Member Finance Finance-Accounting 28th Committee meeting. Agencies,Management,and the Director Financial Community Committee. Com leted Strategies Lead Party Comments December 2012 Progress Finance Accounting Multi-year financial plan provided to the Board during April 11 workshop. A FR 1-A Develop a Comprehensive Multi- Finance Committee to consider comprehensive version is included in the FY 2012/13 budget,which was presented Year Financial Plan Director Adding Sewer Model to to the Board on June 14,2012. Contract in Jun-11 Prepare a High Level Annual FY 2011/12 Budget and CAFR for period ending June 30,2011 received Government Budget Document and Finance Officer's Association awards for excellence. FY 2012/13 Budget approved Comprehensive Annual Financial Finance Include Fees in FY 2011/12 by the Board on June 28,2012. Staff submitted for the CSMFO budget award in FR 1-13 Report and Compete for Director Budget August and the GFOA budget award in September.The Board accepted the 2012 Recognition by the Government CAFR on October 11,2012 and staff submitted the CAFR for the GFOA award in Finance Officers Association November. Evaluate and Revise the Sewer Finance Revised Allocation included Completed March 2011. Consider changing allocation methodology in conjunction FR 1-D Fund Allocation Director in FY 2011/12 Budget with FY 2013/14 budget process. Substantial Rate Increase Maintain Commitment to Strong Board of Adopted in Sept 2009 Quarterly review of debt service ratios will continue as well as integrating the ratio FR 1-E Debt Services Ratio Directors followed by Pass Through into forward financial projections. Increase in Aug 2010 Latest Revisions Reviewed by Review the Reserve Policy and Finance Finance-Accounting Completed review/revision of reserve policy for FY 12/13. Reserve policy adopted by FR 2-A Funding Levels Annually Director/Board Committee for Board of the Board on June 14,2012. of Directors Directors to Consider in Jun 11 Implement an Approach to Finance Financial model allowed review of reserves on a long-term basis. Staff recommended FR 2-C Ensure Reserves are Responsibly Director/Board Rates,COP's and Other a 3-year rate increase to ensure reserves are responsibly funded. Board voted to Funded of Directors Capital Financing Options approve 1.5, 1.5,2.5%rate increase on the fixed charge plus a change in the fixed charge to be based on the meter size at the Public Hearing on June 21. Review Opportunities to Earn Card Options Discussed FR 3-B "Cash Back"on Operating Finance with Finance-Accounting YLWD is online with Cal-CARD. Expense through Commercial Director Committee in March-Add'] Credit Card Accounts research Required Manage Cash Flow to Maximize Finance Track Opportunities and Delia Lugo,Senior Accountant reviews the cash balances and needs daily. Muthple FR 3-C Effectiveness with Quarterly times a month,excess cash is transferred to investments to earn interest until the Investment Income Director Investment Reports next check register. Finance Board to Consider Rate The January 16,2012 Board Workshop showed the end product of the cost of FR 4-A Complete the Cost of Service and Director/Board Structure Alternatives in Oct service and water rate study. Raftefis Financial Consultants completed a document Water Rates Study of Directors 2011 to support the District's Prop 218 notice,which was received and filed by the Board on April 26. Board of A recommendation to update the current fixed charge with a volumetric approach Evaluate Equitable Rate Directors/ Board to Consider Rate was presented to the Board during the April 11 Workshop. The Rate Increase Notice FR 4-13 Structures that Promote Genera] Structure Alternatives in Oct approved by the Board on April 26 to be mailed to the District's customers reflects Conservation and Efficiency 2011 those proposed changes.The public hearing on those changes occurred on June 21, Manager 2012.