HomeMy WebLinkAbout2007-09-11 - Finance-Accounting Committee Meeting Minutesi
• ITEM NO.
MINUTES OF THE
YORBA LINDA WATER DISTRICT
• FINANCE-ACCOUNTING COMMITTEE
SEPTEMBER 11, 2007
A meeting of the Yorba Linda Water District Finance-Accounting Committee was called
to order by Committee Chairman William R. Mills at 4:00 p.m. The meeting was held at
District Headquarters, 4622 Plumosa Drive, Yorba Linda.
DIRECTORS PRESENT:
Director William R. Mills, Chair
Director Michael J. Beverage
STAFF PRESENT:
Michael Payne, General Manager
Diane Cyganik, Finance Director
VISITORS PRESENT:
None
ACTION ITEMS:
1. Monthly Financial Statements for the period ended June 30, 2007
Finance Director Cyganik presented the Monthly Financial Statements for the
twelfth month of fiscal year 2006/2007 ending June 30, 2007. The Committee asked
a few questions and all were answered. The Committee will recommend that the
financial statements for the month ending June 30, 2007 be received and filed by
the Board of Directors.
2. Review of Investment Report for the month ending June 30, 2007.
The Investment Report for the month ending June 30, 2007 was discussed and
accepted as presented.
DISCUSSION ITEMS:
3. Discussion of Water Rates - General Manager Payne gave a brief overview of the
water rate process and gave scenarios of approximate water rate increases which
will be based on the total amount of certificates of participation that are issued as
well as water operating expenses. A Water Rate study is in the process of being
prepared and will be presented to the Finance Accounting Committee for their
review upon its completion.
4. Cash flow projections for fiscal year 2007/08 which includes both operational
expenses as well as capital projects was presented and discussed.
5. Monthly status reports on portfolio investment ending August 31, 2007. Keith
Khorey, Principal of Wells Capital Management reported via conference call at 4:10
p.m. to discuss the activity that transpired in the month of August 2007. Mr. Khorey
discussed the state of the financial economy and how it is impacting the District's
portfolio. He stated that the Fed's will probably be cutting rates on the 18th. General
Manager Payne as~ Mr. Khorey if he thought it was sOa wise decision to hold
the Countrywide Furlt~ing Corp security until its effective maturity date of December
19, 2007 with all of the controversial issues in the mortgage lending arena. Mr.
. Khorey feels that Countrywide has adequate near term liquidity based on publicly
filed financial statements. If the District were to sell the security today, the loss
would be approximately $7,000. However, he did state if Countrywide went into
bankruptcy that the bond holders would be the first to be paid. Mr. Khorey will
continue to monitor the situation and advise the District of any unsettling changes.
The question also arose as to whether the drop in the credit rating would affect the
issuance of the new certificates of participation (COP's). Mr. Khorey does not think
that this will impact the District's COP's, however, he advised the District to pose
this question to our Bond Counsel/Financial Advisor. Director Mills stated that if
there is not any negative impact from Bond Counsel then we should retain the
security and inform the Board of Directors. Director Beverage stated that we should
put an asterisk next to the security and note the fact that it is an exception to the
District's Investment Policy at this point in time. Mr. Khorey stated that he would be
glad to talk to Moody's or Fitch to see what their game plan is on this matter. No
further questions were asked and the conference call was concluded by thanking
Mr. Khorey.
ADJOURNMENT:
The Committee adjourned at approximately 5:20 p.m. The next Finance-Accounting
Committee meeting is scheduled for October 9th at 4:00 p.m. at District Headquarters,
4622 Plumosa Drive, Yorba Linda, CA.
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