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HomeMy WebLinkAbout2017-06-08 - Board of Directors Meeting Minutes 2017-111 MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS WORKSHOP MEETING Thursday, June 8, 2017, 4:00 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The meeting was called to order at 4:01 p.m. 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL DIRECTORS PRESENT STAFF PRESENT J. Wayne Miller, President Marc Marcantonio, General Manager Al Nederhood, Vice President Steve Conklin, Engineering Manager Andrew J. Hall, Director John DeCriscio, Operations Manager Phil Hawkins, Director Gina Knight, HR/Risk and Safety Manager Brooke Jones, Director Delia Lugo, Finance Manager Art Vega, Information Technology Manager Annie Alexander, Executive Secretary Cindy Botts, Management Analyst ALSO PRESENT Andrew Gagen, Partner, Kidman Law LLP Brett Barbre, Director, MWDSC and MWDOC 4. PUBLIC COMMENTS Ms. Pat Nelson (resident) commended the Board and staff for their efforts. She also commented on the Ad Hoc Citizens Advisory Committee's recommendations to the Board. Director Brett Barbre commented on the importance of reserves, other agencies reserve levels, and benefits in relation to rate stabilization. Minutes of the YLWD Board of Directors Workshop Meeting Held June 8, 2017 at 4:00 p.m. 1 2017-112 5. DISCUSSION ITEMS 5.1. Revenues and Reserves for FY 2018 Ms. Delia Lugo outlined the topics to be discussed and noted that representatives from Raftelis would be present at the next workshop meeting to demonstrate the financial model. Ms. Lugo then reviewed assumptions for FY17 total volumetric revenue and the FY18 budget. Discussion ensued regarding demand recovery for the previous few months, projected demand recovery through the end of June, variances between water production and demand, benefits of advanced metering infrastructure, and budgeting for sewer related repairs in the east end of the District's service area. Ms. Lugo provided an overview of historical and forecasted water purchases and demand recovery. Discussion followed regarding the impact of potential increased demand recovery during FY18 and exploration of future reserve levels utilizing the financial model. Ms. Lugo then reviewed projected water and sewer combined operating/non-operating revenue for FY18 and the same for water only. The Board and staff discussed the projected decrease in property tax revenue for FY18 and amounts billed versus collected. Director Barbre commented on his previous work experience at the County's Treasurer-Tax Collector's Office, the average percentage of uncollected property taxes, and the County's method for assessment. Discussion continued regarding anticipated decrease in water demand due to the City's vacation of certain landscape maintenance easements, projected decrease in other operating revenue, and anticipated revenue associated with the phased development of Esperanza Hills. Ms. Lugo provided a historical comparison of total water revenues and current water usage trends. At the request of a member of the Board, Director Barbre commented on the MWDSC's process for projecting water sales. Ms. Lugo reviewed total water revenues projected for FY17 and budgeted for FY18 and the composition of "other" water revenue. Minutes of the YLWD Board of Directors Workshop Meeting Held June 8,2017 at 4:00 p.m. 2 2017-113 Ms. Lugo then provided on overview of projected sewer operating/non- operating revenue for FY18, a historical comparison of total sewer revenues, total sewer revenues projected for FY17 and budgeted for FY18, and the composition of"other" sewer revenue. Ms. Pat Nelson (resident) commented on the cost for replacing the District's sewer collection system and the need for an associated reserve. Director Barbre commented on the benefits of transferring the City of Yorba Linda's sewer collection system to the District. Mr. Terry Harris (resident) commented on recommendations provided by the Ad Hoc Citizens Advisory Committee (AHCAC) related to rates, reserves and refunds. Ms. Lugo outlined a timeline for review and adoption of the District's reserve policy for FY18. She also summarized the purpose of reserves, reserve fund types, the importance of establishing minimum/maximum reserve levels, and the roll of reserves during the bond rating process. Ms. Lugo then reviewed the District's current reserve types and levels and those recommended by Raftelis in the 2015 rate study and by Fieldman Rolapp, the District's financial advisors. This included discussion regarding the District's current bond rating, bond rating goals associated with both sets of recommendations, and the District's unfunded liabilities. Director Barbre commented on the benefits of paying down Post Employment Benefit (OPEB) liabilities. Discussion ensued regarding paying down the District's OPEB liability versus funding an Employee Liability Reserve, the District's current and projected total reserve amounts for FY17, the management of reserve funds in relation to payment of significant expenses, and the format of the District's financial statements. Mr. Terry Harris (resident) commented on the District's reserve levels and the AHCAC's related recommendations. Further discussion regarding the format of the District's financial statements and applicability of a Risk Management Reserve followed. Ms. Julia Schultz (resident) commented on the District's management of capital improvement projects, the format of the District's financial statements, and the benefits of establishing a Rate Stabilization Reserve. Minutes of the YLWD Board of Directors Workshop Meeting Held June 8,2017 at 4:00 p.m. 3 2017-114 Discussion continued regarding benefits provided by having a Rate Stabilization Reserve and issuing bonds for construction of the Fairmont Booster Pump Station Upgrade Project. Ms. Pat Nelson (resident) commented on the District's Capital Improvement Plan, recommended reserve levels, and benefits associated with establishing a Rate Stabilization Reserve. She also spoke against the issuance of refunds. Ms. Lugo finished reviewing the District's current reserve types. Ms. Cindy Botts requested feedback from the Board regarding the draft reserve policy. Further discussion regarding the current and two sets of recommended reserve levels, updating the District's strategic plan, establishing a Rate Stabilization Reserve, and desired bond ratings followed. 6. ADJOURNMENT 6.1. The meeting was adjourned at 6:33 p.m. Annie Alexander Assistant Board Secretary Minutes of the YLWD Board of Directors Workshop Meeting Held June 8,2017 at 4:00 p.m. 4