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HomeMy WebLinkAbout2013-05-31 - Finance-Accounting Committee Meeting Minutes1 MINUTES OF THE YORBA LINDA WATER DISTRICT FINANCE-ACCOUNTING COMMITTEE MEETING Friday, May 31, 2013 8:30 a.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The May 31, 2013 meeting of the Yorba Linda Water District’s Finance- Accounting Committee was called to order by Director Hawkins at 8:30 a.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 Stephen Parker, Finance Manager Director Gary T. Melton 3. PUBLIC COMMENTS None. 4. ACTION CALENDAR 4.1. Fats, Oils and Grease (FOG) Discharge Permit Fees Mr. Parker explained that during a recent review of the FOG program, staff determined that the Orange County Health Care Agency (OCHCA) FOG review could be eliminated. That combined with efficiencies found in- house resulted in a significant reduction of fees necessary to administer the FOG Program. As a result, staff requested the elimination of the OCHCA inspection services and the reduction of the FOG fees to $145 for initial and annual FOG Permits, the Noncompliance Fee reduced to $200 and the Mitigation Fee reduced to $1,500. The Committee supported staff recommendation, with Director Melton recusing himself. 4.2. Financial Reserves Policy for FY 2013/14 Mr. Parker presented the Financial Reserves Policy for FY 13/14. Mr. Parker explained that by adding the Debt Service Reserve to the Reserve Policy, there would be an initial transfer from Operating Reserves to establish the Debt Service Reserve, and no future rate increase would be required to fund the reserve as it is already funded with existing rates. The Committee had questions about the new reserve increasing the minimum reserve threshold and whether the District would be able to stay within it. Mr. Parker explained that the reserve policy was not binding to the Board, but more goal-setting. He also affirmed that should OCWD approve the District’s annexation request and the District use a short-term financing option, the District should be able to stay above the minimum reserve threshold. The Committee supported staff recommendation. 2 4.3. Appropriations Limit for FY 2013/14 Mr. Parker offered for the Committee’s review the annual Appropriations Limit calculation. Mr. Parker explained that the Appropriations Limit was a state requirement designed to assure that government agencies do not assess and collect taxes in excess of controlled limits. Since the District receives a very small amount of property tax money, the District will always be quite far from the limit. Mr. Parker showed the calculation moving up to $5,983,590 for the upcoming year. The Committee supported staff’s recommendation of the resolution adopting the new limit. 4.4. Unaudited Financial Statements for the Period Ending March 31, 2013 Mr. Parker presented the unaudited quarterly financial statements to the Committee. He explained that this item would go on the consent calendar for the Board with the Committee’s approval. The March 2013 debt service coverage is at 1.78%, well above the 1.10 required coverage level. Mr. Parker said that he believed this would go up in the final three months of the year, as January – March is the District’s lowest revenue period of the fiscal year. After some further discussion about the financial statements the Committee supported staff recommendation. 5. DISCUSSION ITEMS 5.1. Short-Term Financing Options (Verbal Report) Mr. Parker shared some of the conversations he had been having with CSDA Finance Corporation as well as other financial institutions looking at different short-term financing options. Mr. Parker presented preliminary terms from the different institutions and the Committee recommended that Mr. Parker continue discussions with the financial institutions. 5.2. CalPERS Employer Contribution Rate Increase (Verbal Report) Mr, Parker informed the Committee that with the recent CalPERS vote, future employer rates will be going up by approximately 1% per year over the next 5 or 6 years. Mr. Parker shared that the District’s current rate was between 10% and 11%. 5.3. Investment Report for Period Ending April 31, 2013 Mr. Parker presented the investment report for April 2013. He also explained that the District’s yield of 0.65% would be going up in the coming months, as staff has begun making investments in Certificates of Deposit (below the $250,000 FDIC threshold) and Federal Agency Securities (which have the full faith and credit of the US Government). He further explained that all investments purchased so far had a higher yield than the CalTRUST medium term portfolio’s 0.67%. As such, Mr. Parker expected the yields in future month’s reports to begin inching up. Mr. Parker pointed out that the District gained over $700,000 in total reserves and explained that it was due to capital project being paid for with borrowing from the District’s Line of Credit. 3 5.4. Budget to Actual Results for April 2013 Mr. Parker shared the April Budget to Actual results with the Committee. As nothing dramatic had changed from previous results, the Committee had no questions. 5.5. Broker Dealer Approval Mr. Parker informed the Committee that he has vetted his 5th (and final) broker/dealer. Bank of the West is owned by BNP Paribas, the 5th largest bank in the world, and being a primary dealer, Craig Conley will be able to provide the District with inventory that 3 of the other 4 broker dealers do not have access to. 5.6. Future Agenda Items and Staff Tasks None. 6. ADJOURNMENT 6.1. The meeting was adjourned at 9:40 a.m. The next Finance-Accounting Committee meeting is scheduled to be held Friday, June 28, 2013 at 8:00 a.m.