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HomeMy WebLinkAboutBUDGET & FINANCE AGENDA 06-02-08 Central Contra Costa Sanitary District 5019 Imhoff Place, Maltlllez, CA 94553-4392 (925) 228-9500 . wwwcentralsan,org BUDGET AND FINANCE COMMITTEE Chair McGill Member Nejedly Monday, June 2, 2008 3:00 p.m. Executive Conference Room 5019 Imhoff Place Martinez, California 1. CALL MEETING TO ORDER 2. PUBLIC COMMENTS 3. OLD BUSINESS 4. CLAIMS MANAGEMENT a. Discuss May 20,2008 meeting with homeowner McBride at 79 Lorna Vista, Orinda. 5. REPORTS/ANNOUNCEMENTS a. Review and consider recommending Position Paper on conducting public hearings to establish the Sewer Service Charge rate for 2008-09 and approving the FY 2008-09 O&M, Debt Service, and Self-Insurance Budgets. (Item 5.b. in Board Binder) b. Review and consider recommending Position Paper regarding the annual renewal of the District's insurance policies. (Item 4.s. in Board Binder) *c. Receive draft GASB 45 Trust Investment Policies that will be reviewed in detail at the June 16, 2008 Committee meeting. *d. Review of draft Position Paper and Policy on Board Conference and Meeting Attendance. 6. REVIEW FINANCIAL STATEMENTS a. Review April 2008 Financial Statements (Item 4.b. in Board Binder) A ", Recycled Paper S.c. Central Contra Costa Sanitary District June 2, 2008 FROM: BUDGET AND FINANCE COMMITTEE JAMES M. KELLY, GENERAL MANAGER fAZ- RANDALL M. MUSGRAVES, DIRECTOR OF ADMINISTRATION ~i^ DEBBIE RATCLIFF, CONTROLLER /fJ~ TO: VIA: SUBJECT: OPTIONS FOR GASB 45 TRUST FUND INVESTMENTS At the May 12, 2008 Budget and Finance Committee meeting, staff was directed to work with Mr. Andrew Brown of HighMark Capital Investment Group (associated with PARS) to develop investment policies for a moderate and moderate aggressive investment strategy. Attached are the draft policies for your review. In addition, there are three basic investment strategy options to consider (see below). They range from conservative (security) to aggressive (yield). In addition, the transfer of funds to the trust can be altered to allow more time to evaluate the return on investment. Due to the volatility of stocks and the stock market, staff would like to review the options with the Committee at the June 2, 2008 Committee meeting. Investment Implementation The Board could invest the funds set aside for GASB 45 over time on all at once. For example, the District could Place $2,000,000 every other month (or $1,000,000 per month) from LAIF into the GASB 45 Trust. This would provide approximately ten months to transfer the full amount and allow additional time to monitor the stock market. The amount and frequency can be altered by the performance of the stock market. Or, the Committee could recommend to place the full $10,000,000 into the trust upon creation. Option 1 - Conservative Place funds into the conservative investments as defined by HighMark Capital Management Group. The funds can be moved to any investment strategy within three working days. Option 2 - Moderate Place funds into moderate investments as defined by HighMark Capital Management Group. The funds can be moved to any investment strategy within three working days. Option 3 - Moderate Aggressive Place funds into moderate aggressive investments as defined by HighMark Capital Management Group. The funds can be moved to any Investment strategy within three working days. Central Contra Costa Sanitary District May 30,2008 TO: BUDGET AND FINANCE COMMITTEE VIA: JAMES KELLY, GENERAL MANAGER r k::- DEBBIE RATCLIFF ,t7;e RANDALL MUSGRAVES {(/HI/\. SUBJECT: GASB 45 TRUST INVESTMENT POLICY FROM: At the May 12, 2008 Budget and Finance Committee meeting, Andrew Brown, Investment Advisor with HighMark Capital, presented various investment strategies for the District to consider for monies that will be deposited into a GASB 45 trust. Four investment strategies were discussed: conservative, moderately conservative, moderate, and moderately aggressive. The Committee asked that an investment guideline document be drafted for both the moderate and moderately aggressive strategy and brought back for Committee review. An investment guideline document for each of the two strategies is attached. Behind each guideline document is a sample portfolio of potential investments. Also attached are a copy of the District's current investment policy, a list of investments for LAIF as of April 2008, and a list of permitted asset classes and security types that are approved by HighMark for use in client portfolios. The yellow highlights on that list signify investments that are common to LAIF as well. All the others are additional investment vehicles. The attached documents will be reviewed in detail at the June 16, 2008 Budget and Finance Committee meeting and are being distributed early to allow time for Committee review. After the Committee review is completed, staff has been asked to schedule a special workshop with the full Board to discuss the two investment strategies and to provide staff with direction. H:\GASB 45 Investment Guidelines.doc INVESTMENT GUIDELINES DOCUMENT Central Contra Costa Sanitary District Central Contra Costa Sanitary District Investment Guidelines May 2008 1 Central Contra Costa Sanitary District Investment Guidelines Document In response to the Government Accounting Standards Board (GASB) Statement Number 45 disclosure requirements for Other Post-Employment Benefit (OPEB) Plans, the Central Contra Costa Sanitary District has adopted a Section 115 Trust and Plan that seeks to satisfy these liabilities for certain eligible employees Executive Summary Client Name: Central Contra Costa Sanitary District Investment Authority: Full Investment Authority Account Number(s): To be determined Current Assets: $ 10 million (est. May 2008) Risk Tolerance: Moderate Objective Time Horizon: Long-Term Investment Objective: The primary objective is to maximize total Plan return, subject to the risk and quality constraints set forth below. The Plan's targeted rate of return is 7.0%. The Investment objective the District has selected is the Moderate Objective. The asset allocation ranges for this objective are listed below: Strategic Ranges: o - 20% Cash 40 - 60% Fixed Income 40 - 60% Equity Communication Schedule: Committee meetings quarterly. Monthly statements. HCM Portfolio Manager: Andrew Brown, CFA 415-705-7605 Andrew. Brown@Uboc.com HCM Back up -Portfolio Manager: Delbert Chang CFA 415-705-7603 Delbert. Chana@Uboc.com UBOC Administrative Officer: John Fulton, 415-273-2508 John.Fulton@Uboc.com The managing director for HighMark Capital Management is Kevin Rogers, he can be reached at 949-553-2580 Central Contra Costa Sanitary District Investment Guidelines May 2008 2 Portfolio Constraints Income Needs/Cash Flow Required: Annual cost estimated to be at $2.2 million. Unique Needs and Circumstances: None Client(s) Signature: Date: HCM Portfolio Manager: Date: UBOC Administrative Officer: Date: Detailed Information for Central Contra Costa Sanitary District Investment Guidelines May 2008 3 Investment Guidelines Document Overview The purpose of this Investment Guidelines document (/GD) is to assist you and your Portfolio Manager in effectively supervising, monitoring and evaluating the investment of your portfolio. Your investment program is defined in the various sections of the IGD by: 1. Stating in a written document your attitudes, expectations, objectives and guidelines for the investment of all assets. 2. Setting forth an investment structure for managing your portfolio. This structure includes various asset classes, investment management styles, asset allocation and acceptable ranges that, in total, are expected to produce an appropriate level of overall diversification and total investment return over the investment time horizon. 3. Encouraging effective communications between you and your Portfolio Manager. 4. Complying with all applicable fiduciary, prudence and due diligence requirements experienced investment professionals would utilize, and with all applicable laws, rules and regulations from various local, state, and federal entities that may impact your assets Diversification Your Portfolio Manager is responsible for maintaining the balance between fixed income and equity securities based on the asset allocation. The following parameters shall be adhered to in managing the portfolio: Fixed Income · The long-term fixed income investments (greater than seven-years in maturity) shall constitute no more than 25%, and as little as 0% of the total Plan assets. · The intermediate-term fixed income investments (between three-seven years in maturity) shall constitute no more than 60%, nor less than 25% of the total Plan assets. · The high-yield portion of the Plan shall constitute no more than 10%, and as little as 0% of the total Plan assets. · The convertible bond exposure shall constitute no more than 10%, and as little as 0% of the total Plan assets. · The short-term fixed income investments (between one-three years in maturity) shall constitute no more than 25%, and as little as 0% of the total Plan assets. Equity · The domestic large cap equity investments of the Plan shall constitute no more than 45% nor less than 15% of the total Plan assets. · The domestic mid-capitalization equity investments of the Plan shall constitute no more than 10%, and as little as 0% of the total Plan assets. · The domestic small capitalization equity investments of the Plan shall constitute no more than 15% nor less than 0% of the total Plan assets. · The international equity investments of the Plan shall constitute no more than 15% and as little as 0% of the total Plan assets. Central Contra Costa Sanitary District Investment Guidelines May 2008 4 · The real estate investments of the Plan shall constitute no more than 10% and as little as 0% of the total Plan assets. Permitted Asset Classes and Security Tvpes The following asset classes and security types have been approved by HighMark for use in client portfolios: Asset Classes · Fixed Income o Domestic Bonds o Non-U.S. Bonds . Equities o Domestic o Non-U.S. o Emerging Markets o Real Estate Investment Trust (REITs) · Cash and Cash Equivalents Security Types · Equity Securities o Domestic listed and unlisted securities o Equity and equity-related securities of non~US corporations, in the form of American Depository Receipts ("ADRs") . Equity Mutual Funds o Large Cap Growth and Value o Mid Cap Core o Small Cap Growth and Value o International and Emerging Markets o REITs · Exchange Traded Funds (ETFs) . Fixed Income Securities o Government/Agencies o Mortgage Backed Bonds o Corporate Bonds and Notes · Fixed Income Mutual Funds o Corporate o Government o High Yield o International and Emerging Market o Convertible o Preferred . Closed end funds · Cash and Cash Equivalents o Money Market Mutual Fund o Commercial Paper o CDs and Bankers Acceptance Prohibited assets · Precious metals · Venture Capital · Short sales Central Contra Costa Sanitary District Investment Guidelines May 2008 5 · Purchases of Letter Stock, Private Placements, or direct payments · Leveraged Transactions · Commodities Transactions Puts, calls, straddles, or other option strategies, · Purchases of real estate, with the exception of REITs · Derivatives, with exception of ETFs Rebalancina Procedures From time to time, market conditions may cause your asset allocation to vary from the established target. To remain consistent with the asset allocation guidelines established by this Investment Guidelines document, your Portfolio Manager will rebalance the portfolio on a quarterly basis. Duties of Responsibilities of Portfolio Manaaer Your portfolio manager is expected to manage your portfolio in a manner consistent with this Investment Guidelines document and in accordance with State and Federal law and the Uniform Prudent Investor Act. HighMark Capital Management is a registered investment advisor and shall act as such until you decide otherwise. Your portfolio manager shall be responsible for: 1. Designing, recommending and implementing an appropriate asset allocation consistent with the investment objectives, time horizon, risk profile, guidelines and constraints outlined in this statement. 2. Advising the committee about the selection of and the allocation of asset categories. 3. Identifying specific assets and investment managers within each asset category. 4. Monitoring the performance of all selected assets. 5. Recommending changes to any of the above. 6. Periodically reviewing the suitability of the investments, being available to meet with the committee at least once each year, and being available at such other times within reason at your request. 7. Preparing and presenting appropriate reports. 8. Informing the committee if changes occur in personnel that are responsible for portfolio management or research. You shall be responsible for: 1. The oversight of the investment portfolio. 2. Providing your portfolio manager with all relevant information on the Plan, and shall notify him or her promptly of any changes to this information. 3. Advising your portfolio manager of any change in the Plan's circumstances, such as a change in the actuarial assumptions, which could possibly necessitate a change to your overall risk tolerance, time horizon or liquidity requirements; and thus would dictate a change to your overall investment objective and goals for the portfolio. 4. Monitoring performance by means of regular reviews to assure that objectives are being met and that the policy and guidelines are being followed. Communication As a matter of course, your portfolio manager shall keep you apprised of any material changes in HighMark Capital's outlook, recommended investment policy and tactics. In addition, your Central Contra Costa Sanitary District Investment Guidelines May 2008 6 ,......~..__"__..______..______~_...__.,_.,_."",._.___.___,._,__,._.____........~.._u portfolio manager shall meet with you no less than annually to review and explain the portfolio's investment results and any related issues. Your portfolio manager shall also be available on a reasonable basis for telephone communication when needed. Any material event that affects the ownership of HighMark Capital Management or the management of the portfolio must be reported immediately to you. 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'" ..s::: s::: ;;: o ..s::: '" '" .~ ";,:: ;:,: \..) c'J ~ ~~ ~::i: C-'~ ~~ ::C~ ~ INVESTMENT GUIDELINES DOCUMENT Central Contra Costa Sanitary District Central Contra Costa Sanitary District Investment Guidelines May 2008 1 Central Contra Costa Sanitary District Investment Guidelines Document In response to the Government Accounting Standards Board (GASB) Statement Number 45 disclosure requirements for Other Post-Employment Benefit (OPEB) Plans, the Central Contra Costa Sanitary District has adopted a Section 115 Trust and Plan that seeks to satisfy these liabilities for certain eligible employees Executive Summary Client Name: Central Contra Costa Sanitary District Investment Authority: Full Investment Authority Account Number(s): To be determined Current Assets: $ 10 million (est. May 2008) Risk Tolerance: Moderately Aggressive Objective Time Horizon: Long-Term Investment Objective: The primary objective is to maximize total Plan return, subject to the risk and quality constraints set forth below. The Plan's targeted rate of return is 8.0%. The Investment objective the District has selected is the Moderately Aggressive Objective. The asset allocation ranges for this objective are listed below: Strategic Ranges: o - 20% Cash 30 - 50% Fixed Income 50 - 70% Equity Communication Schedule: Committee meetings quarterly. Monthly statements. HCM Portfolio Manager: Andrew Brown, CFA 415-705-7605 Andrew. BrownCCUUboe.eom HCM Back up -Portfolio Manager: Delbert Chang CFA 415-705-7603 Delbert. ChanqCCUU boe.eom UBOC Administrative Officer: John Fulton, 415-273-2508 John. FultonCCUU boc.eom The managing director for HighMark Capital Management is Kevin Rogers, he can be reached at 949-553-2580 Central Contra Costa Sanitary District Investment Guidelines May 2008 2 Portfolio Constraints Income Needs/Cash Flow Required: Annual cost estimated to be at $2.2 million. Unique Needs and Circumstances: None Client(s) Signature: Date: HCM Portfolio Manager: Date: UBOC Administrative Officer: Date: Central Contra Costa Sanitary District Investment Guidelines May 2008 3 Detailed Information for Investment Guidelines Document Overview The purpose of this Investment Guidelines document (IGD) is to assist you and your Portfolio Manager in effectively supervising, monitoring and evaluating the investment of your portfolio. Your investment program is defined in the various sections of the IGD by: 1. Stating in a written document your attitudes, expectations, objectives and guidelines for the investment of all assets. 2. Setting forth an investment structure for managing your portfolio. This structure includes various asset classes, investment management styles, asset allocation and acceptable ranges that, in total, are expected to produce an appropriate level of overall diversification and total investment return over the investment time horizon. 3. Encouraging effective communications between you and your Portfolio Manager. 4. Complying with all applicable fiduciary, prudence and due diligence requirements experienced investment professionals would utilize, and with all applicable laws, rules and regulations from various local, state, and federal entities that may impact your assets Diversification Your Portfolio Manager is responsible for maintaining the balance between fixed income and equity securities based on the asset allocation. The following parameters shall be adhered to in managing the portfolio: Fixed Income · The long-term fixed income investments (greater than seven-years in maturity) shall constitute no more than 20%, and as little as 0% of the total Plan assets. · The intermediate-term fixed income investments (between three-seven years in maturity) shall constitute no more than 50%, nor less than 15% of the total Plan assets. · The high-yield portion of the Plan shall constitute no more than 10%, and as little as 0% of the total Plan assets. · The convertible bond exposure shall constitute no more than 10%, and as little as 0% of the total Plan assets. · The short-term fixed income investments (between one-three years in maturity) shall constitute no more than 20%, and as little as 0% of the total Plan assets. Equity · The domestic large cap equity investments of the Plan shall constitute no more than 50% nor less than 30% of the total Plan assets. · The domestic mid-capitalization equity investments of the Plan shall constitute no more than 15%, and as little as 0% of the total Plan assets. Central Contra Costa Sanitary District Investment Guidelines May 2008 4 · The domestic small capitalization equity investments of the Plan shall constitute no more than 20% nor less than 0% of the total Plan assets. · The international equity investments of the Plan shall constitute no more than 20% and as little as 0% of the total Plan assets. · The real estate investments of the Plan shall constitute no more than 10% and as little as 0% of the total Plan assets. Permitted Asset Classes and Security TVDes The following asset classes and security types have been approved by HighMark for use in client portfolios: Asset Classes · Fixed Income o Domestic Bonds o Non-U.S. Bonds . Equities o Domestic o Non-U.S. o Emerging Markets o Real Estate Investment Trust (REITs) · Cash and Cash Equivalents Security Types · Equity Securities o Domestic listed and unlisted securities o Equity and equity-related securities of non-US corporations, in the form of American Depository Receipts ("ADRs") · Equity Mutual Funds o Large Cap Growth and Value o Mid Cap Core o Small Cap Growth and Value o International and Emerging Markets o REITs · Exchange Traded Funds (ETFs) · Fixed Income Securities o GovernmenVAgencies o Mortgage Backed Bonds o Corporate Bonds and Notes · Fixed Income Mutual Funds o Corporate o Government o High Yield o International and Emerging Market o Convertible o Preferred · Closed end funds · Cash and Cash Equivalents o Money Market Mutual Fund o Commercial Paper o CDs and Bankers Acceptance Central Contra Costa Sanitary District Investment Guidelines May 2008 5 Prohibited assets · Precious metals · Venture Capital · Short sales · Purchases of Letter Stock, Private Placements, or direct payments · Leveraged Transactions · Commodities Transactions Puts, calls, straddles, or other option strategies, · Purchases of real estate, with the exception of REITs · Derivatives, with exception of ETFs Rebalancing Procedures From time to time, market conditions may cause your asset allocation to vary from the established target. To remain consistent with the asset allocation guidelines established by this Investment Guidelines document, your Portfolio Manager will rebalance the portfolio on a quarterly basis. Duties of Responsibilities of Portfolio Manager Your portfolio manager is expected to manage your portfolio in a manner consistent with this Investment Guidelines document and in accordance with State and Federal law and the Uniform Prudent Investor Act. HighMark Capital Management is a registered investment advisor and shall act as such until you decide otherwise. Your portfolio manager shall be responsible for: 1. Designing, recommending and implementing an appropriate asset allocation consistent with the investment objectives, time horizon, risk profile, guidelines and constraints outlined in this statement. 2. Advising the committee about the selection of and the allocation of asset categories. 3. Identifying specific assets and investment managers within each asset category. 4. Monitoring the performance of all selected assets. 5. Recommending changes to any of the above. 6. Periodically reviewing the suitability of the investments, being available to meet with the committee at least once each year, and being available at such other times within reason at your request. 7. Preparing and presenting appropriate reports. 8. Informing the committee if changes occur in personnel that are responsible for portfolio management or research. You shall be responsible for: 1. The oversight of the investment portfolio. 2. Providing your portfOliO manager with all relevant information on the Plan, and shall notify him or her promptly of any changes to this information. 3. Advising your portfolio manager of any change in the Plan's circumstances, such as a change in the actuarial assumptions, which could possibly necessitate a change to your overall risk tolerance, time horizon or liquidity requirements; and thus would dictate a change to your overall investment objective and goals for the portfolio. 4. Monitoring performance by means of regular reviews to assure that objectives are being met and that the policy and guidelines are being followed. Central Contra Costa Sanitary District Investment Guidelines May 2008 6 Communication As a matter of course, your portfolio manager shall keep you apprised of any material changes in HighMark Capital's outlook, recommended investment policy and tactics. In addition, your portfolio manager shall meet with you no less than annually to review and explain the portfolio's investment results and any related issues. 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XXXX o::::~:::::>>- I-oo:::;:(/)- 1-.o:::::L1..I ll..I>ll.. ,*,,*,~'::R. -vNO 0 . 0 N 0 N N . . ~~I'-O ?Ie ClC! -"0 M C , 0 ~c::l E E o .... o a> CI- "C E ~ .... ><2 u:: c "0 C o c::l E"O ....- a> a> I- 0- t>- o.c .c.Ql (/)I :2 :2 "0 a> ~ (/) .... a> .~ o ~ .... ro :2 .c .gl I X X o :2 I -t: ~ ~ .~ ::t: '0> s:: .~ ~ <> '" ~ "" 'S 'e ",,' .~ ,2 "" .~ ~ 0 ~ ~ ~ 0 0 t:l 0 ~ <> 0 6- - ~ ~ "" ~ s:: ~ 0 ~ '" '" .~ ";:: ;:s <> c'3 '::R. o ex:> N J: In ca o ...J <( l- e I- Lt) @ ~~ ~i ~:i: o~ ~!:: ~~ ~ Attachment CENTRAL CONTRA COSTA SANITARY DISTRICT STATEMENT OF INVESTMENT POLICY The investment policy of the Central Contra Costa Sanitary District is embodied in the following eleven sections: I. Statement of Objectives The temporary investment portfolio of the District will be managed to ensure that normal cash needs, as well as scheduled extraordinary cash needs can be met. Therefore, adequate liquidity will be the first priority. Second priority will be the safety of the portfolio ensuring that the investments could be readily converted to cash if needed without causing a material change in the value of the portfolio. Lastly, the portfolio will be invested to attain a market average rate of return, after meeting the first two previously stated objectives. II. Permissible Investments Within the constraints prescribed by the Government Code of the State of California for permissible investments, the District's investment portfolio will only be invested in the following instruments: · United States Treasury Bills and Notes, and obligations of government agencies for which the full faith and credit of the United States are pledged. · Bankers Acceptances, drawn on and accepted by a commercial bank, which are eligible for purchase by the Federal Reserve System. · Collateralized Certificates of Deposit issued by a Federal or State chartered bank or a Federal or State chartered savings and loan association. · Negotiable Certificates of Deposit issued by a Federal or State chartered bank or a Federal or State chartered savings and loan association. · Commercial Paper of prime quality limited to corporations with assets over $500,000,000. · Medium Term Notes of a maximum of five years maturity issued by U. S. corporations or any Federal or State despository institution. · Local Agency Investment Fund of the State of California. · Investment Trust of California (CaITRUST) N:\AOMINSUP\AOMIN\POSPAPER\Approve Investment Policy 09-06-07.doc Page 3 of 5 III. Bank and Dealers The District will use the services of the Treasurer's Office of the County of Contra Costa which will transact the District's investment decisions in compliance with the requirements described in this investment policy. The County Treasurer's Office will execute the District's investments through such brokers, dealers and financial institutions as are approved by the County Treasurer, and through the State Treasurer's Office for investment in the Local Agency Investment Fund. IV. Maturities The maximum maturity for investments of the District is one year. Prior approval of the Board of Directors must be obtained to acquire investments with maturities beyond one year. However, investments in Treasury Notes and the Local Agency Investment Fund would not be subject to the one year maximum maturity. V. Diversification To minimize the risk of loss through default, the total amount invested in a single issuer will not be greater than 15 percent of the District's investment portfolio value, except that the 15 percent limitation will not apply to United States Treasury Bills and Notes and investment in the Local Agency Investment Fund and CaITRUST. VI. Risk Credit and market risks will be minimized through adherence to the list of permissible investments, a limit on maximum maturities, and the limitation on the total investment in a single issuer. VII. Delegation and Authority The District Controller will be responsible for investment transactions which should be made in accordance with this investment policy and within the internal controls described in Section IX. VIII. Prudence Prudent judgment must be exercised by the District Controller responsible for investment transactions undertaken in accordance with this investment policy. N:\ADMINSUP\ADMIN\POSPAPER\Approve Investment Policy 09-06-07.doc Page 4 of 5 IX. Controls The District Controller will establish subsidiary accounting records of each investment which will enable the determination of income earned monthly and through maturity, and the balancing of the principal amounts to a control account in the general ledger. Internal control procedures will require the countersignature of the Director of Administration for all transactions, which are initiated by the Controller. The dollar limit of the Director of Administration will be $5 million. Investment transactions which exceed $5 million will require the additional approval of the General Manager. Such internal controls are to be reviewed by the District's independent auditors annually. X. Reporting The District Controller will annually render a statement of investment policy to the Board of Directors. The Controller will submit a monthly report to the District's General Manager, Board of Directors and internal auditor showing the type of investment, issuer, date of maturity, par (or face), dollar amount invested, current market value of all securities, and the source of this same valuation, and a statement of compliance of the portfolio with the investment policy. XI. Performance Evaluation A performance evaluation will be completed by the District's independent auditors every year, commencing with the 2004-2005 fiscal year, to determine whether the investment objective of achieving a market-average rate of return is being realized. In determining the market-average rate of return, the average return of three month U.S. Treasury Bills will be used as a comparison. The weighted average of the portfolio will be calculated each month and compiled to determine the annual yield. Results of the comparison between the District's portfolio and the three month T -Bill benchmark will be reported to the Board annually. N:\AOMINSUP\AOMIN\POSPAPER\Approve Investment Policy 09-06-07.doc Page 5 of 5 State of California Pooled Money Investment Account Market Valuation 4/30/2008 Carrying Cost Plus Description Accrued Interest Purch. Fair Value Accrued Interest United States Treasury: Bills $ 1,340,973,555.57 $ 1,348,010,500.00 NA Notes $ 3,065,700,460.48 $ 3,051,270,000.00 $ 51,527,480.00 Federal Aqencv: SBA $ 568,397,310.76 $ 565,211,249.98 $ 4,290,861.89 MBS-REMICs $ 1,146,978,163.95 $ 1,154,037,010.07 $ 5,441,591.88 Debentures $ 4,647,025,827.35 $ 4,670,904,514.00 $ 103,623,599.45 Debentures FR $ 5,654,292,973.62 $ 5,648,697,880.00 $ 25,325,650.30 Discount Notes $ 14,773,012,394.4 7 $ 14,991,588,900.00 NA FHLMC PC $ 109,789.72 $ 112,146.77 $ 1,812.11 GNMA $ 168,807.65 $ 190,657.83 $ 1,673.74 CDs and YCDs FR $ 200,000,000.00 $ 200,000,000.00 $ 1,664,690.00 Bank Notes $ 1,105,000,000.00 $ 1,104,492,118.80 $ 4,636,325.00 CDs and YCDs $ 15,110,071,761.72 $ 15,109,154,519.80 $ 82,730,750.68 Commercial Paper $ 6,900,380,488.96 $ 6,914,033,997.80 NA Corporate: Bonds FR $ 129,081,571.14 $ 127,179,284.00 $ 518,206.38 Bonds $ 123,534,783.58 $ 125,156,881.48 $ 977,885.40 Repurchase Aqreements $ - NA Reverse Repurchase $ - $ - $ - Time Deposits $ 9,625,500,000.00 $ 9,625,500,000.00 NA AB 55 & GF Loans $ 9,098,005,325.60 $ 9,098,005,325.60 NA TOTAL $ 73,488,233,214.57 $ 73,733,544,986.13 $ 280,740,526.83 Fair Value Including Accrued Interest $ 74,014,285,512.96 Repurchase Agreements, Time Deposits, AB 55 & General Fund loans, and Reverse Repurchase agreements are carried at portfolio book value (carrying cost). Permitted Asset Classes and Security Types The following asset classes and security types have been approved by HighMark for use in client portfolios: Asset Classes . Fixed Income o Domestic Bonds o Non-U.S. Bonds . Equities o Domestic o Non-U.S. o Emerging Markets o Real Estate Investment Trust (REITs) . Cash and Cash Equivalents Security Types . Equity Securities o Domestic listed and unlisted securities o Equity and equity-related securities of non-US corporations, in the form of American Depository Receipts (UADRsU) . Equity Mutual Funds o Large Cap Growth and Value o Mid Cap Core o Small Cap Growth and Value o International and Emerging Markets o REITs . Exchange Traded Funds (ETFs) . Fixed Income Securities o Government/Agencies o Mortgage Backed Bonds o Corporate Bonds and Notes . Fixed Income Mutual Funds o Corporate o Government o High Yield o International and Emerging Market o Convertible o Preferred . Cash and Cash Equivalents o Money Market Mutual Fund o Commercial Paper o CDs and Bankers Acceptance Central Contra Costa Sanitary District Investment Guidelines May 2008 2 ~ Central Contra Costa Sanitary District BOARD OF DIRECTORS ~ DRAFT POSITION PAPER Board Meeting Date: June 19, 2008 No.: 5. d.. Type of Action: Subject: BOARD MEMBER CONFERENCE AND MEETING ATTENDANCE APPROVAL PROCESS Submitted By: Initiating Dept./Div.: REVIEWED AND RECOMMENDED FOR BOARD ACTION: James M. Kelly, General Manager E. Boehme Secretary of the District K.Alm District Counsel ISSUE: Board Members requested that the current process for Board approval of Board Member conference attendance and attendance at other meetings be reviewed to ensure transparency for the public and to comply with AB 1234, and to determine if revisions are appropriate. The Budget and Finance Committee reviewed the process on May 12 and made recommendations for Board consideration. RECOMMENDATION: Consider the current process and adopt the attached resolution and policy which sets forth the process for approval and reporting of Board Member conference/meeting attendance. FINANCIAL IMPACTS: $44,000 has been budgeted for fiscal year 2008-09 for Board Member conference attendance at California Association of Sanitation Agencies (CASA), California Special Districts Association (CSDA), Water Environment Federation Technical Conference (WEFTEC), and other miscellaneous conferences that may be requested and approved throughout the year. It also includes reimbursement for attendance at local meetings. Reimbursement will be in accordance with adopted Board policies. ALTERNATIVES/CONSIDERATIONS: Do not revise the current practice, or consider a greater degree of advance notification prior to attendance. BACKGROUND: It has been suggested that, to improve transparency, a more visible process be established for approval of Board Member conference and meeting attendance. The Board Budget and Finance Committee (McGiII/Nejedly) reviewed the current process on May 12, 2008 with that in mind. Currently, Board Member conference attendance is included and approved in the District budget, and Board Members report out at a Board Meeting upon their return from the conference, in compliance with AB 1234. They also report out at a Board Meeting following their attendance at other local meetings for which they receive a stipend or reimbursement. POSITION PAPER Board Meeting Date: June 19, 2008 Subject: BOARD MEMBER CONFERENCE AND MEETING ATTENDANCE APPROVAL PROCESS $44,000 has been budgeted for Board Member conference and meeting attendance for fiscal year 2008-09. Each conference can cost up to approximately $2,000. Following a review of the current policy and consideration of various options provided by staff, the Budget and Finance Committee recommended that two changes be made to the current process: (1) In addition to inclusion in the budget, Board Member conference/meeting attendance and the dollar amount budgeted will be highlighted as part of the budget process and presentation. (2) Board Members will announce at a Board Meeting, in advance, their attendance at any upcoming conferences that have been approved in the budget. Any additional conferences a Board Member may wish to attend that were not listed in the budget will need separate Board approval in advance. Board Members will also, when timing permits, announce in advance their attendance at local business meetings, including but not limited to Contra Costa Mayors' Conference meetings and Contra Costa Council events. Each Board Member will continue providing reports at a Board Meeting following the event on his or her conference/meeting attendance, in compliance with AB 1234. For fiscal year 2008-09, Board Members indicated interest in attending the following conferences: August 20-23, 2008, Monterey CASA Barbara Hockett (stipend for 2 Exec Board meetings) Mike McGill January 7-10,2009, Indian Wells Barbara Hockett (stipend for 2 Exec Board meetings) Mike McGill March 2009, Washington, DC April 29 - May 2, 2009, Napa Barbara Hockett Jerry Lucey Barbara Hockett (stipend for 2 Exec Board meetings) Mike McGill POSITION PAPER Board Meeting Date: June 19,2008 Subject: BOARD MEMBER CONFERENCE AND MEETING ATTENDANCE APPROVAL PROCESS California Special Districts Association September 22-25, 2008, Irvine Mike McGill (stipend for each day attended) Water Environment Federation Technical Conference October 18-22, 2008, Chicago Barbara Hockett Mike McGill This totals 11 individual conference attendances, each of which can cost up to approximately $2,000. Additional money has been budgeted in the event that Board Members may ask to attend other conferences throughout the year. RECOMMENDED BOARD ACTION: Approve the revisions to the current process for Board Member conference/meeting attendance, as recommended by the Budget and Finance Committee. Adopt the Resolution and Exhibit A. RESOLUTION NO. 2008-? A RESOLUTION SETTING FORTH PROCEDURES FOR APPOINTMENT TO AND ESTABLISHMENT OF BOARD COMMITTEES AND MEETING COMPENSATION REQUIREMENTS FOR BOARD MEMBERS WHEREAS, Section 6489 of the California Health and Safety Code provides that compensation be paid to Board Members for each day's attendance at meetings of the Board or for each day's service rendered as a Director by request of the Board; and WHEREAS, in accordance with the Health and Safety Code and the California Water Code Sections 20200 et seq., Ordinance 241 was adopted on February 15, 2006, setting the Board compensation at $221 per approved meeting, not to exceed more than one meeting per day and six meetings per calendar month; and WHEREAS, in accordance with Section 2.04.020 of the District Code, when the Board considers it necessary for the efficient transaction of business, it may approve the creation of a committee for the purpose of reviewing, investigating, and recommending with reference to a particular matter; and the President shall appoint the members of said committee and shall have the authority to appoint an ad hoc committee or representative to similarly act pending a Board Meeting; and WHEREAS, the President may name an alternate to serve in the absence of an appointed Committee Member or District representative, and such alternate shall receive the compensation previously set forth; and WHEREAS, the Board has deemed it necessary for the efficient operation of the District to appoint Board Members to represent the District on various commissions, committees and joint powers authorities, and to act as liaisons to cities and the County; and WHEREAS, in accordance with AB 1234, the Board hereby adopts the attached policy (Exhibit A) which sets forth meeting compensation, reimbursement and reporting requirements and approval process for Board Member attendance at meetings and conferences; and WHEREAS, in accordance with AB 1234 and to encourage participation and attendance at conferences and organizations which serve the interests of and provide benefit to the District, the Board has determined that Board Members may be compensated for each day's attendance at conferences and meetings listed in Exhibit A, Section 2; and WHEREAS, compensation may be approved for attendance at a meeting or conference not covered in Exhibit A to this Resolution if approved in advance by the Board; and -- - - --~--~------~--,-_.",~-~--'--"-"---'----'---'--"-----,-~-----,--"-~---""""--"-'--'----"-'-"--~'-'",_._.._~-,....._-,.,._,-...- ._--_.__._.._--_._~ WHEREAS, travel days to and from meetings or conferences are not compensable. NOW, THEREFORE, BE IT RESOLVED, that the President of the Board of Directors adopts Exhibit A as the Board Member conference and meeting attendance policy, and shall appoint Board Members to the standing committees and other appointments as listed in Exhibit A, Section 2. BE IT FURTHER RESOLVED, that meeting attendance slips for Board Members for the meetings listed above and for regular Board Meetings shall be approved by the Board President or, in his or her absence, the President Pro Tern. Meeting attendance slips for the Board President shall be approved by the President Pro Tern, or, in his or her absence, a Board Member designee. PASSED AND ADOPTED this 19th day of June, 2008, by the following vote: AYES: NOES: ABSTAIN: Members: Members: Members: President of the District Board of the Central Contra Costa Sanitary District, County of Contra Costa, State of California COUNTERSIGNED: Secretary of the Central Contra Costa Sanitary District, County of Contra Costa, State of California Approved as to Form: Kenton L. Aim District Counsel EXHIBIT A This policy sets forth the requirements and approvals for conference and meeting attendance, and reporting requirements, in compliance with AB 1234. 1. Definitions Stipend (also referred to as compensation) - this is the compensation Board Members receive for attendance at meetings approved by the Board. The stipend is set forth by District ordinance in accordance with the Health and Safety Code and the California Water Code Sections 20200 et seq. Ordinance 241 was adopted on February 15, 2006, setting the Board compensation at $221 per approved meeting, not to exceed more than one meeting per day and six meetings per calendar month. Reimbursement - this is where the District either reimburses after the fact or may pay in advance for Board Member attendance at conferences or business meetings. It is separate from the stipend. Reimbursement covers such items as mileage, registration, meals and other travel-related expenses incurred to attend the meeting or conference, in accordance with the District's Travel Policy. For certain meetings, Board Members may receive both the stipend and receive reimbursement for travel and other expenses. 2. Meetinas for which the Stipend (Compensation) is received Board Members are hereby authorized to receive the stipend and appropriate reimbursement for attending the following meetings. Representatives are appointed each year by the Board President. i Budget and Finance Committee Capital Projects Committee Human Resources Committee Outreach Committee Recycled Water Committee Household Hazardous Waste Committee Real Estate Committee Ad Hoc Committees Board Liaison to Cities and County California Special Districts Association - Contra Costa Chapter Friends of the San Francisco Estuary Sanitation and Water Agencies of Contra Costa County In addition, the stipend and appropriate reimbursement will be paid for each day's attendance at the following: Meetings of the California Association of Sanitation Agencies (CASA) Executive Board, if serving as a member of the Executive Board; California Special Districts Association Conferences (Appropriate reimbursement refers to the reimbursement of mileage, parking, registration, meals, etc.) 3. Meetinas for which Reimbursement is received Board Members will receive reimbursement for attending meetings at which their attendance is of benefit to the District. These include but are not limited to Contra Costa Mayors' Conference meetings, Contra Costa Council events, local Chamber events within the District, meetings with Cities within the District, and other meetings where the topic or purpose is of benefit or interest to the District, or promotes inter-agency co-operation and partnerships. 4. Approval Process Meetinos for which Stipend is received Approval for attendance at these meetings is listed above in Section 2. Conferences Board Members will indicate which conferences they wish to attend in advance of each fiscal year. These will be included and highlighted clearly during the budget process and approved as part of the budget. Any conferences not included and approved in the budget must be approved by the Board in advance, as required by AB 1234. Meetinos This policy sets forth the approval that Board Members may attend meetings as described above. 5. Reportina Process Board Members will announce, in advance, when timing permits, their attendance at upcoming conferences or other meetings for which they receive the stipend and/or reimbursement. Board Members will also provide a brief report at the meeting following their return on their meeting or conference attendance, in compliance with AB 1234. Expenditure Summary SELF INSURANCE FUND $4,471.15 Block Environmental Services, Inc. 003-0000-991.14-22 $991.25 $1,441.25 $1,060.40 $978.25 003-0000-991.14-22 $894.45 003-0000-991.14-20 $600.00 003-0000-991.14-22 $500.00 003-0000-991.14-22 $3,026.25 003-0000-991.14-20 $316,334.07 003-0000-991.14-20 $803.27 003-0000-991.14-22 $3,136.87 003-0000-991.14-22 $599.00 003-0000-991.14-20 $4,803.50 003-0000-991.14-22 $1,244.00 003-0000-991.14-22 $3,502.56 003-0000-991.14-22 $230.00 2 102870 $894.45 Blue Sky Cleaners 3 102871 $600.00 Janet Murray 4 102872 $500.00 Perfect Service, Inc. 5 102873 $3,026.25 Restoration Management Co. 6 102874 $316,334.07 Kaiser Foundation Hospital 7 102875 $803.27 Miracle Auto Painting 8 102876 $3,136.87 Restoration Management Co. 9 102877 $599.00 Rota-Rooter Sewer Service 10 102878 $4,803.50 U.S. Bank Corp Payment 11 102879 $1,244.00 Hunter Plumbing Consulting, Inc. 12 102880 $3,502.56 Restoration Management Co. 13 102881 $230.00 Tom's Piano Moving Co. 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