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Home My WebLink About2017-11-28 - Board of Directors Meeting Minutes (B) 2017-239 MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS REGULAR MEETING Tuesday, November 28, 2017, 6:30 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The meeting was called to order at 6:36 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 Brett Barbre, Assistant General Manager Andrew J. Hall, Director Steve Conklin, Engineering Manager Phil Hawkins, Director John DeCriscio, Operations Manager Brooke Jones, Director Gina Knight, HR/Risk and Safety Manager Delia Lugo, Finance Manager Art Vega, Information Technology Manager Annie Alexander, Executive Assistant Mike Carreon, Facilities Maintenance Worker ALSO PRESENT Andrew Gagen, Partner, Kidman Law LLP Peggy Huang, Mayor, City of Yorba Linda Keith Stribling, Senior Portfolio Manager, HighMark Capital Management Jennifer Meza, Senior Client Services Coordinator, Public Agency Retirement Systems Nik Weigand, Client Services Coordinator, Public Agency Retirement Systems 4. ADDITIONS/DELETIONS TO THE AGENDA None. 5. INTRODUCTIONS AND PRESENTATIONS 5.1. Elected Official Liaison Reports Mayor Peggy Huang reported on the status of the Yorba Linda Town Center. She then introduced the Friends Christian School robotics team, Motorbots, who provided a short presentation regarding their water use Minutes of the YLWD Board of Directors Regular Meeting Held November 28, 2017 at 6:30 p.m. 1 2017-240 efficiency robotic device. The Board and staff commended the team on their efforts. Assistant General Manager Brett Barbre, in his role as Director, reported on recent Municipal Water District of Orange County (MWDOC) and Metropolitan Water District of Southern California (MWD) business. He also commented on the benefits of MWD's Water Rate Stabilization Fund, the CA WaterFix, and other legislative activity. 6. PUBLIC COMMENTS None. 7. CONSENT CALENDAR Director Hawkins made a motion, seconded by Director Jones, to approve the Consent Calendar. Motion carried 5-0 with Director Hall abstaining from voting on Item Nos. 7.1. and 7.2. 7.1. Minutes of the Board of Directors Regular Meeting Held October 24, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.2. Minutes of the Board of Directors Special Meeting Held November 8, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.3. Minutes of the Board of Directors Special and Regular Meetings Held November 14, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.4. Minutes of the Board of Directors Workshop Meeting Held November 16, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.5. Payments of Bills, Refunds, and Wire Transfers Recommendation: That the Board of Directors ratify and authorize disbursements in the amount of$2,508,219.63. Minutes of the YLWD Board of Directors Regular Meeting Held November 28,2017 at 6:30 p.m. 2 2017-241 7.6. Directors and General Manager Fees and Expenses Report for First Quarter of FY18 Recommendation: That the Board of Directors receive and file the Directors and General Manager Fees and Expenses Report for First Quarter of FYI 8. 8. ACTION CALENDAR 8.1. Selection of Investment Strategy for Public Agencies Post-Employment Benefits Trust with Public Agency Retirement Services (PARS) Staff explained the Board had previously determined to establish a PARS Public Agencies Post-Employment Benefits Trust for the purpose of pre- funding the District's pension and OPEB obligations. Representatives from PARS and HighMark Capital Management were in attendance to present information and respond to questions regarding the selection of an investment strategy. Jennifer Meza from PARS reviewed the District's Other Post-Employment Benefits (OPEB) actuarial results, California Public Employees' Retirement System pension funding status, and projected employer contributions. Keith Stribling then reviewed HighMark Capital Management's organizational structure, strategic asset allocation strategies and portfolios, and projected returns. Discussion followed regarding costs for shifting investment strategies, active versus passive portfolios, 5 and 10 year historical returns, long-term capital market assumptions, other participating agencies' investment strategies, and utilizing different strategies for the District's pension and OPEB funds in the Trust. Pat Nelson (resident) spoke in favor of a conservative investment strategy. Julia Schultz (resident) spoke in favor of a moderate investment strategy. Staff recommended the Board consider starting with the moderate rather than balanced investment strategy in order to pay down the District's pension and OPEB liabilities more quickly. Discussion continued regarding the different investment objectives and the process and cost for changing strategies. Minutes of the YLWD Board of Directors Regular Meeting Held November 28,2017 at 6:30 p.m. 3 2017-242 Director Nederhood made a motion, seconded by Director Hall, to select the moderate active investment strategy for the pension and OPEB funds in the PARS Public Agencies Post-Employment Benefits Trust. Brief discussion ensued regarding the timeline for reevaluating the selected strategy, the moderately conservative versus moderate investment strategy, and how often status reports would be presented to the Board. Motion carried 3-2 with Directors Hawkins and Miller voting No. 8.2. Revising Budgeted Positions for the Remainder of Fiscal Year 2018 Staff explained that per the General Manager's recommendation and for career progression, the Operations Manager's classification would be placed at Range 39. In accordance with a recent modification to the Personnel Rules, this change was being presented to the Board for ratification. Staff also indicated that a revised copy of the resolution had been distributed to the Board and made available to the public at the beginning of the meeting. Director Hall made a motion, seconded by Director Miller, to adopt Resolution No. 17-37 as amended, revising the budgeted positions for the remainder of Fiscal Year 2018 and rescinding Resolution No. 17-21. Motion carried 5-0 on a Roll Call vote. 8.3. Modifying Classifications and Salary Ranges for Management Employees Staff noted that a revised copy of the resolution had been distributed to the Board and made available to the public at the beginning of the meeting. Staff also explained that pursuant to CA Code of Regulations 570.5, the Board was required to approve amendments to pay schedules in a regular open meeting. Director Hall made a motion, seconded by Director Hawkins, to adopt Resolution No. 17-38 as revised, amending Exhibit B of Resolution No. 15-08 to modify the Classifications and Salary Ranges for Management Employees for the remainder of Fiscal Years 2015-2018. Motion carried 5-0 on a Roll Call vote. Minutes of the YLWD Board of Directors Regular Meeting Held November 28, 2017 at 6:30 p.m. 4 2017-243 9. DISCUSSION ITEMS 9.1. Results of Fitch Surveillance and Potential Issuance of Customer Rebate Staff distributed and commented on a press release regarding Fitch's reaffirmation of the District's AA rating. Staff noted that no further action was required in regards to issuance of the rebate previously approved by a majority of the Board in September. Staff then reviewed the process and timeline for issuance of the rebate. The Board commended staff for their efforts. Brief discussion regarding the cost of the surveillance as requested by the District as compared to an invitation to participate in a surveillance followed. Pat Nelson (resident) spoke against the issuance of a rebate and in favor of investing the funds instead. Julia Schultz (resident) spoke against the issuance of a rebate and in favor of utilizing the funds to pay down the District's debt. Terry Harris (resident) spoke in favor of issuing a rebate and reinstating the Citizens Advisory Committee to assist with the next budget process. Staff reviewed key information contained in the following financial reports. 9.2. Budget to Actual Reports for Period Ending October 31, 2017 9.3. Cash and Investment Report for Period Ending October 31, 2017 9.4. Unaudited Financial Statements for First Quarter of FY18 Discussion of Item No. 9.5. was deferred to the next regular meeting. 9.6. Needs Assessment and Estimated Costs for Upgrading AudioNisual System in Board Room (Nederhood) Staff reviewed the condition of the existing equipment and provided cost estimates for replacing the monitors and microphones. Discussion of other system enhancements followed. Staff also briefed the Board on the status of upgrading the District's phone system. Minutes of the YLWD Board of Directors Regular Meeting Held November 28, 2017 at 6:30 p.m. 5 2017-244 10. REPORTS, INFORMATION ITEMS, AND COMMENTS 10.1. Directors' Reports None. 10.2. General Manager's Report General Manager Marc Marcantonio asked each of the managers to report on activities within their respective departments. 10.3. General Counsel's Report General Counsel Andrew Gagen reported that during the Closed Session held immediately before this meeting, the Board had directed staff to amend the General Manager's contract to reflect a 3.1% salary increase and an additional week of vacation upon completion of the 4th year of employment. 10.4. Future Agenda Items and Staff Tasks Director Hall requested an agenda item in February/March 2018 to discuss the status and impact of the Governor's action plan "Making Water Conservation a California Way of Life". In the meantime, staff will continue to brief the Board on related activities during the General Manager's report. Director Nederhood requested a copy of staff's internal audit of the District's warehouse inventory. It was noted that the annual appointment of officers and review of Directors' compensation would take place at the next regular meeting. Director Jones requested an overview of the labor negotiations process. This will take place during Closed Session at the next regular meeting. 11. COMMITTEE REPORTS 11.1. Interagency Committee with MWDOC and OCWD (Miller/Nederhood) ■ Minutes of meeting held November 20, 2017 at 4:00 p.m. ■ Next meeting is scheduled January 25, 2018 at 4:00 p.m. Minutes of the YLWD Board of Directors Regular Meeting Held November 28,2017 at 6:30 p.m. 6 2017-245 11.2. Joint Agency Committee with City of Yorba Linda (Miller/Hawkins) ■ Next meeting is scheduled December 18, 2017 at 4:00 p.m. at YL City Hall. 11.3. Joint Agency Committee with City of Placentia (Miller/Nederhood) ■ Next meeting yet to be scheduled. 12. INTERGOVERNMENTAL MEETINGS The Directors reported on their attendance at the following meetings. 12.1 MWDOC Board — November 15, 2017 (Nederhood) 12.2 OCWA Luncheon — November 15, 2017 (Jones/Miller) 12.3. OCSD Board — November 15, 2017 (Jones) 12.4. OCSD State of the District — November 17, 2017 (Hawkins/Jones/Nederhood) 12.5. YL City Council — November 21, 2017 (Nederhood) 12.6. ACWA/JPIA Fall Conference — November 27-28, 2017 (Nederhood) 13. BOARD OF DIRECTORS ACTIVITY CALENDAR 13.1. Meetings from November 29 — January 31, 2018 The Board reviewed the activity calendar and made no changes. 14. CONFERENCES. SEMINARS. AND SPECIAL EVENTS 14.1 OCWA Luncheon — November 15, 2017 NWRI Workshop — December 5, 2017 Director Hall made a motion, seconded by Director Miller, to ratify and/or approve Director attendance at these events if desired. Motion carried 5-0. Minutes of the YLWD Board of Directors Regular Meeting Held November 28, 2017 at&30 p.m. 7 2017-246 15. ADJOURNMENT 15.1. The meeting was adjourned at 9:32 p.m. � Annie Alexander Assistant Board Secretary Minutes of the YLWD Board of Directors Regular Meeting Held November 28,2017 at 6:30 p.m. 8