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HomeMy WebLinkAbout2016-02-16 - Board of Directors Meeting Minutes 2016-022 MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS WORKSHOP MEETING Thursday, February 16, 2016, 2:00 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The February 16, 2016 Yorba Linda Water District Board of Directors Workshop Meeting was called to order by President Collett at 2:00 p.m. The meeting was held in the Board Room at the District's Administration Building located at 1717 East Miraloma Avenue in Placentia, California 92870. 2. PLEDGE OF ALLEGIANCE President Collett led the pledge. 3. ROLL CALL DIRECTORS PRESENT STAFF PRESENT Ric Collett, President Marc Marcantonio, General Manager Michael J. Beverage, Vice President Steve Conklin, Engineering Manager Phil Hawkins John DeCriscio, Operations Manager Robert R. Kiley Gina Knight, Human Resources/Risk Manager Gary T. Melton Delia Lugo, Finance Manager Art Vega, Information Technology Manager Damon Micalizzi, Public Information Manager Annie Alexander, Executive Secretary Cindy Botts, Water Cons Supvr/Mgmt Analyst Kelly McCann, Senior Accountant OTHER ATTENDEES Ben Parker, Resident 4. PUBLIC COMMENTS Mr. Ben Parker, resident, asked if the District would consider placing the following documents on its website: the Line of Credit agreement with Wells Fargo; the 2008 Revenues Certificates of Participation; and the 2012A Refunding Revenue Bonds. Staff will follow up with Mr. Parker regarding his request. Minutes of the YLWD Board of Directors Workshop Meeting Held February 16,2016 at 2:00 p.m. 1 2016-023 5. DISCUSSION ITEMS 5.1. Draft Unaudited Financial Statements for the Period Ending December 31, 2015 Mrs. Lugo clarified that the purpose of this meeting was to review and discuss the budget and mid-year financial statements for FY 2015/16. She noted that the draft budget for FY 2016/17 would be discussed at future workshop meetings. Mrs. Lugo then provided a presentation related to the District's capital improvement projects (CIP), responsible emergency reserves, and the emergency conservation mandate issued by the State Water Resources Control Board (SWRCB). A detailed copy of the CIP budget and projections was distributed to the Board and those in attendance. Mrs. Lugo then provided an overview of this document and associated reserve requirements. Mr. Conklin then responded to questions from the Board related to budgeting needs for the future replacement and refurbishment of the District's infrastructure. Mrs. Lugo noted that future CIP projects would be discussed at the scheduled workshop meetings. She then reviewed the District's reserve types and recommended balances as identified in the recent water/sewer rate study. Mrs. Botts continued the presentation and reviewed: the District's actual water consumption for the fiscal year as compared to the conservation mandate established by the SWRCB; key budget assumptions; budgeted and actual operating plans; and historical water demands. She then provided an overview of the District's fixed and variable water costs and how they relate to the base rate. Mrs. Botts also reviewed the District's import/groundwater costs and historical power/pumping costs and Mr. DeCriscio responded to related to questions from the Board. 5.2. Potential Amendments to Budget for FY 2015/16 and Ordinance No. 15-01 Mrs. Botts explained that in the latest revision of the emergency drought regulations, the fine amount to be levied against water agencies for non- compliance was changed from $10K/day to $500/day. However, the Attorney General's Office still has the power to issue a $10K/day fine or a Cease and Desist Order. Staff believes that if the District was to be fined, it would be at the $500/day level. As such, staff would like to ask if the Board is interested in making a mid-year adjustment to the Fees & Permits line item in the FY 2015/16 budget to reflect this change. Mrs. Botts also noted that the emergency drought declaration had been extended through October 2016 and that the District may be eligible for up to an 8% adjustment to its assigned conservation percentage of 36%. Staff is planning to apply for all qualifying credits before the March 15, 2016 deadline. Mrs. Botts and Mr. Marcantonio then responded to related questions from the Board. Minutes of the YLWD Board of Directors Workshop Meeting Held February 16, 2016 at 2:00 p.m. 2 2016-024 Mrs. Lugo noted that when the water/wastewater study was performed, the following items were not included: • revenue received from administrative penalties referenced in Ord. 15-01; • expenses associated with staffing the new Conservation Division; and • $10K/day potential fines. Mrs. Lugo also noted that as stated in Ord. 15-01, any revenue generated from administrative penalties cannot be used to help offset the cost of providing water service. She also explained that due to the lowering of the potential fines that could be assessed by the SWRCB, staff would like to ask if the Board is interested in restructuring (or relaxing) the administrative penalty structure for residential customers. Mrs. Lugo then responded to questions from the Board and provided an overview of two possible restructuring scenarios. Following discussion, staff was instructed to come back to the Board at a future meeting with agenda items for consideration related to the potential restructuring of the administrative penalty structure for residential customers in Ord. 15-01 and an adjustment to the Fees & Permits line item in the FY 2015/16 budget. Ms. Christie Parker, resident, addressed the Board and commented on the variances in the length of the District's billing periods. Staff explained that a normalization process had been implemented in the District's billing system which mitigates this issue. Mrs. Lugo then provided a summary of the FY 2014/15 budget vs. actuals, the FY 2015/16 budget, and the District's debt service obligation and coverage ratio. She also identified where the $2.7M in potential fines from SWRCB had been placed in the current budget per instruction received from the District's auditors. 5.1. Draft Unaudited Financial Statements for the Period Ending December 31, 2015 (Continued) Mrs. Lugo reviewed the draft unaudited statements and responded to related questions from the Board. She also noted the impact of the emergency drought regulations on the District's revenues and expenses (including employee overtime), and the costs associated with the increased number of Public Records Requests. Mrs. Lugo clarified the District's status as a not-for-profit entity, explaining that any revenue collected is used to pursue the organizations objectives. Mrs. Lugo then responded to questions from the Board regarding the District's annual audit process and the difference between regular and forensic audits. Minutes of the YLWD Board of Directors Workshop Meeting Held February 16,2016 at 2:00 p.m. 3 2016-025 Director Hawkins requested that staff look into identifying alternative funding sources for the District's CIP projects. Mr. Marcantonio noted that staff would be working with the Board at some point in the future to update the District's strategic plan. 6. ADJOURNMENT 6.1. The meeting was adjourned at 4:04 p.m. The next Regular Board of Directors Meeting will be held Thursday, February 25, 2016 at 8:30 a.m. / Annie Alexander Assistant Board Secretary Minutes of the YLWD Board of Directors Workshop Meeting Held February 16, 2016 at 2:00 p.m. 4