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HomeMy WebLinkAbout2013-04-22 - Finance-Accounting Committee Meeting Minutes1 MINUTES OF THE YORBA LINDA WATER DISTRICT FINANCE-ACCOUNTING COMMITTEE MEETING Monday, April 22, 2013 12:00 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The April 22, 2013 meeting of the Yorba Linda Water District’s Finance- Accounting Committee was called to order by Director Hawkins at 12:00 p.m. The meeting was held in the Admin Conference Room at the District’s Administration Building located at 1717 East Miraloma Avenue in Placentia, California 92870. 2. ROLL CALL COMMITTEE STAFF Director Phil Hawkins, Chair Steve Conklin, Acting General Manager Director Gary T. Melton Stephen Parker, Finance Manager 3. PUBLIC COMMENTS None. 4. ACTION CALENDAR 4.1. Investment Report for Period Ending March 31, 2013 Mr. Parker presented the March Investment Report to the Committee. Mr. Parker covered the changes in the current month – primarily a semi- annual debt service payment, and pointed out that the current yield was 0.63%. The Committee had a few other questions that Mr. Parker answered, and the Committee supported the investment Report going to the full Board on the Consent calendar. 4.2. Adopting a Public Investment Policy Mr. Parker explained that this fiscal year the California Municipal Treasurer’s Association (CMTA) began an Investment Policy Certification Program. As staff looked into the requirements, it was determined that the District’s investment policy had not had a large-scale updating in over a decade, and a number of best practices established by CMTA were not in place. As such, staff spent a considerable amount of time updating the District’s policy so that it could be submitted for the Certification Program. While significant changes were made to the policy, Mr. Parker described the majority of them as clarifying policies and procedures and conforming to best practices, rather than changing what investments the District might participate in. 2 Mr. Parker noted that the only investment added in the policy from the previous version was authorizing investments in Certificates of Deposit, which while not specifically authorized, had already been used by the District as an investment option. Mr. Parker further noted that Legal Counsel had not yet completed their review of the policy, and if significant changes were proposed by legal counsel, Mr. Parker would come back to the Committee with the changes. If not, Mr. Parker would present any legal counsel-recommended changes to the full Board along with this a resolution and investment policy. The Committee supported moving the Investment Policy on to the full Board at the next meeting after Legal Counsel’s review. 5. DISCUSSION ITEMS 5.1. March 2013 Budget to Actual Results Mr. Parker presented the March Budget to Actual Results. Mr. Parker pointed out that Water Other-Non-Operating Revenues were above the annual budget this month due to the MWDOC refund received. In addition, Water Supplies and Services are trending at budget, while Sewer Supplies and Services are over budget due to a couple of Maintenance Expense items (Asphalt Paving and Line Repairs). The remaining items were similar to prior months. The Committee had a few other questions that Mr. Parker answered. 5.2. Draft Reserve Policy for FY 2013/14 Mr. Parker explained the revision to the reserve policy from what had previously been submitted to the Committee. As he was preparing for the Budget Workshop, Mr. Parker noticed that the reserves detailed in the Reserve Policy did not include a reserve currently utilized by the District – the Debt Service Reserve. Mr. Parker proposed that the Reserve Policy be updated to include a Debt Service Reserve, and that it be established at an amount of one year’s debt service payments. As the District is currently funding the annual needs in their rates, this change would not propose an increase in annual funding. To establish the reserve initially, money would be moved over from the Operating Reserve. The inclusion of the reserve in the policy would increase the minimum reserve threshold, but would not increase the annual funding recommendation. The Committee supported the new language, and Mr. Parker stated that the same language would come back to the Committee in the following meeting as an Action Item before going on to the full Board. 5.3. Broker Dealer Approval Mr. Parker informed the Committee that staff had vetted Peter Becker with Time Value Investments, Inc. as a broker/dealer. He added that once the proposed investment policy was adopted, he would begin using the District’s four vetted broker/dealers to begin diversifying the District’s portfolio. The Committee approved this. 3 5.4. CalPERS Rate Increase (Verbal Report) Mr. Parker reported that the CalPERS Pensions and Health Benefits Committee voted last week to adopt staff recommended revisions to Amortization Periods and Smoothing Methods for Retirement Trust Funds. This item will go to the full CalPERS Board for a vote on Wednesday, April 24th, and if adopted, will increase rates for employers. The employer increases will amount to a little less than 50% over the next 7 years. It was explained that approximately half of that increase was previously known from last years’ decision to change the investment return assumption from 7.75% to 7.5%. Mr. Parker added that the District’s low pension benefit might allow it to see an even lower increase, and stated that he would provide more information to the Board as it became available. 5.5. Future Agenda Items and Staff Tasks None 6. ADJOURNMENT 6.1. The meeting was adjourned at 1:10 p.m. The next Finance-Accounting Committee meeting is scheduled to be held Friday, May 31, 2013 at 8:30 a.m.