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Home My WebLink AboutAGENDA BACKUP 10-16-97 ~ (,entral Contra Costa Sanitary District BOARD OF DIRECTORS '::::111111111111111111::::1'11: BOARD MErnO~~ober 16, 1997 Page 1 of 1 NO. 4. CONSENT CALENDAR d. DATE TYPE OF ACTlON October 8, 1997 AUTHORIZE ATTENDANCE SUBJECT AUTHORIZE ATTENDANCE OF THOMAS TRICE, SENIOR ENGINEERING ASSISTANT, AT A SEMINAR ENTITLED "IMPROVING CONSTRUCTION INSPECTION SKILLS," AND HENRY THOM, SENIOR ENGINEER, AT A SEMINAR ENTITLED "MAINTAINING ASPHALT PAVEMENTS;IIN LAS VEGAS, NEVADA, AT A TOTAL COST OF $1,900 SUBMtTTED BY INITlATlNG DEPT~V Jay S. McCoy, Infrastructure Division Manager Engineering Department/Infrastructure Division ISSUE: Approval by the Board of Directors is required for travel outside of California or if the expense will exceed $500. BACKGROUND: Henry Thom, Senior Engineer, is responsible for construction management in the Infrastructure Division. Thomas Trice, Senior Engineering Assistant, is responsible for various contract administration and inspection duties associated with the construction of collection system projects. Attendance of Mr. Thom and Mr. Trice at two upcoming seminars in Las Vegas will provide them with information to enhance the performance of their duties. The seminars are sponsored by the University of Wisconsin and the University of Nevada. One seminar is entitled Improving Construction Inspection Skills and will be held on December 2 and 3, 1997. This seminar provides knowledge on improving quality control of public works construction projects and on handling construction complaints. Attendance at this seminar by Thomas Trice will provide him with updated knowledge in a variety of public works inspection techniques, including information on concrete, underground inspection, and public relations. The other seminar is entitled Maintaining Asphalt Pavements and will be held on December 4 and 5, 1 997. This seminar provides a wide range of information on the evaluation of existing pavement conditions and various repair methods. Attendance of Henry Thom will increase his knowledge, which he can use to effectively negotiate frequent pavement restoration demands made by various cities and Contra Costa County and to address the issues in a cost-effective manner. Funds are available for both seminars in the Infrastructure Division's Technical Training, Conferences, and Meetings budget. However, the location and the specific titles of the seminars were not stated in the budget. RECOMMENDATION: Authorize the attendance of Thomas Trice, Senior Engineering Assistant, at the December 2 and 3, 1997, seminar on Improving Construction Inspection Skills, and authorize the attendance of Henry Thom, Senior Engineer, at the December 4 and 5, 1997, seminar on Maintaining Asphalt Pavements, in Las Vegas, Nevada, at a total cost of $1,900. ~ AND RECOMMEMJED FOR BOARD AC110N RAB J);e ~ Ctii1tral Contra Costa Sanitar 1 District BOARD OF DIRECTORS Page 1 of 1 BOARD MEETING OF October 16,1997 NO. 4. CONSENT CALENDAR e. DATE TYPE OF ACTION October 7, 1997 AUTHORIZE ALLOCATION SUBJECT AUTHORIZE ALLOCATION OF $8,500 FROM THE GENERAL IMPROVEMENT PROGRAM CONTINGENCY ACCOUNT TO COMPLETE THE PURCHASE OF AN OVERFLOW RESPONSE EQUIPMENT TRAILER SUBMITTED BY Robert S. Mowers, Field Operations INmATlNG DEPTIUIV Collection System Operations ISSUE: The purchase of an overflow response equipment trailer was included in the 1996/97 Equipment Budget. The purchase was not completed. Board authorization of General Improvement Program Contingency funds is needed in order to complete the purchase. BACKGROUND: Contingency planning for overflow response identified the need for equipment to transport the equipment to the site of the overflow. A van and a trailer were included in the approved 1996/97 Equipment Budget. The van purchase was completed within the fiscal year; however, the trailer purchase was not completed because of substantial delays in its manufacture. The trailer is needed prior to the wet weather season. The total cost of the trailer is $8,500. The 1996/97 Equipment Budget funds that were included for the purchase of the trailer were not spent. RECOMMENDATION: Authorize the allocation of $8,500 from the General Improvement Program Contingency Account to complete the purchase of an overflow response equipment trailer. REVIEWED AND RECOMMENDED FOR BOARD AC770N L INmATING DEPARTMENTIDIVlSION \ll- C:\1WIP\TRAILER.PP 8/6/96 ~ Central Contra Costa Sanitary District ~ BOARD OF DIRECTORS Page 1 of 1 ::::::..I:::::::::.::::III~.:.:::;:.:.::;:;.:.::.i:.:::::::~::'::~ii.#.:Ii,~::~::::::::: BOARO MEEllONG OtF b 1 6 1997 NO. E NG NEE RING xm!0ll::::::::::::;::/\::!\::::.!!:mmlil!!me:!I??? coer, 8. . I a . DATE TYPE OF ACTION October 8, 1997 AUTHORIZE AGREEMENT SUBJECT AUTHORIZE THE GENERAL MANAGER-CHIEF ENGINEER TO EXECUTE AN AGREEMENT WITH WOODWARD-CLYDE FOR OUTFALL INCLINOMETER MONITORING, OUTFALL IMPROVEMENTS PROJECT, PHASE 4, DISTRICT PROJECT 7184 SUBMITTED BY Ba T. Than, Associate Engineer INITIATING DEPT/DIV Engineering Department/Plant Engineering Division ISSUE: Authorization of the Board of Directors is required for the General Manager-Chief Engineer to execute a professional services agreement in an amount greater than $50,000. BACKGROUND: Thirteen (13) inclinometer casings were originally installed along the outfall alignment in 1988 as part of the Outfall Rehabilitation Project, Phase 2. Inclinometers are similar to a plastic pipe well casing and are used to monitor horizontal soil movement. The pipe deflects with soil movement and a device is periodically inserted into the pipe to measure the deflection. This information is then compared to previous measurements and used to determine whether the soil movement may be significant enough to damage the outfall pipeline. The outfall inclinometers have been routinely monitored by Woodward-Clyde. The most recent measurements in June, 1997 indicated that the soil movement was not excessive. However, the upcoming closure of Acme Landfill's north parcel and the future closure of the east parcel raised concerns. There will be substantial earthwork construction associated with these activities, which has the potential to cause soil movement around the outfall pipeline. Based on Woodward-Clyde's recommendations, staff proposes to install four new inclinometer casings along the outfall alignment near Acme. Additional work will include replacing one damaged inclinometer surface casing, providing protective bollards around inclinometers near the IT Baker site, performing three reading cycles through 1998, and doing maintenance on the existing casings after nine years of service. Staff recommends that Woodward-Clyde be retained to continue performing the outfall inclinometer monitoring because of past satisfactory performance. A professional engineering services agreement not to exceed the amount of $116,000 has been negotiated with WWC. The Outfall Improvements Project, Phase 4, is included in the Fiscal Year 1997-98 Capital Improvement Budget on pages TP-13 through TP-15. Staff has concluded that this project is exempt from the California Environmental Quality Act (CEOA) under District CEOA Guidelines Section 18.2, since it involves minor alterations to existing sewage facilities with no increase in capacity. The Board of Directors' approval of this project will constitute an independent finding that this project is exempt from CEOA. RECOMMENDATION: Authorize the General Manager-Chief Engineer to execute a professional engineering services agreement with a cost ceiling not to exceed the amount of $116,000 with Woodward-Clyde for outfall inclinometer monitoring, Outfall Improvements Project, Phase 4, DP 7184. BTT WEB RAB INITIATING DEPARTMENT/DIVISION BTT hI. e .., L:\Position Papers\7184agreement.btt.wpd 9/16/96 ~ \'~ntral Contra Costa Sanitaa f District BOARD OF DIRECTORS Page 1 of 1 BOARD MEETING OF October 16, 1997 NO. 9. LEGAL/LITIGATION a. October 9, 1997 TYPE OF ACTION Deny Claim DATE SUBJECT DENY CLAIM FOR PROPERTY DAMAGE BY MR. GUS S. KRAMER, PROPERTY OWNER AT 1225 ARREBA STREET, MARTINEZ, CA SUBMITTED BY Bonnie Allen/Risk Manager INITIATING DEPT/DIV Administrative/Risk Management ISSUE: Mr. Gus S. Kramer has filed a claim against the District for property damage resulting from a sewage overflow. Claim denials require action by the Board of Directors. BACKGROUND: A Government Code claim was submitted on September 15, 1997, by Mr. Gus S. Kramer asserting that during last winter a sewer main became surcharged resulting in flooding of a rear unit on his property at 1225 Arreba Street, Martinez. The District has 45 days from the date of submission to take action on a claim. Based on the information obtained to date, we are unable to substantiate that the District has responsibility for the claimed damage, and, therefore, recommend denial at this time. RECOMMENDATION: action as required. Deny claim by Mr. Gus S. Kramer for property damage. Refer to staff for further ~ PM AND RECOMMENDED FOR BOARD ACTION c:\ WPWIN\ WORKFILE\KRAMER2. WPD 9/16/96 ~ (,~ntral Contra Costa Sanitar) District BOARD OF DIRECTORS Page 1 of 8 !1!1!1111~II:illlllli. BOARD MEETING OF October 16, 1997 NO. 11. BUDGET & FINANCE a. October 3, 1997 TYPE OF ACTION RECEIVE AUDITED FINANCIAL STATEMENTS DATE SUBJ ECT RECEIVE THE AUDITED FINANCIAL STATEMENTS AND MANAGEMENT LETTER FOR THE FISCAL YEAR ENDED JUNE 30, 1997. SUBMITTED BY Debbie Ratcliff, Controller INITIATING DEPTIDIV Administrative/Finance and Accounting ISSUE: The audited financial statements and Management Letter of the Central Contra Costa Sanitary District for the fiscal year ended June 30, 1997 are being submitted to the Board of Directors. BACKGROUND: The firm of Hood and Strong, Certified Public Accountants, has completed its examination of the District's financial statements for the fiscal year ended June 30, 1997, and has submitted the audited financial statements and auditor's opinion thereon. In the routine performance of their examination of the financial statements, the auditors evaluate the District's internal accounting controls to determine the nature and extent of the auditing procedures required. Based on their observations during the course of the examination, the auditors routinely advise District management of any recommendations to improve the system of internal accounting controls. The Management Letter is provided as Attachment I. Staff accepts the auditor's recommendations and will implement them over the next fiscal year. A brief staff presentation will outline the District's response to the recommendations. The audited financial statements and Management Letter were reviewed in detail with the Board's Budget and Finance Committee. Also, a copy of the audited financials was send to the State Controller's Office by the annual deadline. A copy of the audited financial statements has been received by the Board under separate cover. RECOMMENDATION: Receive the audited financial statements and Management Letter for the fiscal year ended June 30, 1997. DR D NO RECOMMENDED FOR BOARD ACTION INITIATING OEPARTMENTIDIVlSION S :\ADMIN\POSP APER\AUDFI N .PP 9116/96 CENTRAL CONTRA COSTA SANITARY DISTRICT REpORT TO MANAGEMENT JUNE 30, 1997 , August 22, 1997 THE BOARD OF DIRECTORS CENTRAL CONTRA COSTA SANITARY DISTRICT Martinez, California In planning and perfonning our audit of the financial statements of CENTRAL CONTRA COSTA SANITARY DISTRICT (the District) for the year ended June 30, 1997, we considered the District's internal control structure in order to detennine our auditing procedures. Although our audit was not designed to provide assurance on the internal control structure, we noted certain matters involving the internal control structure and its operation, and are submitting for your consideration related recommendations designed to help the District make improvements and achieve operational efficiencies. Additionally, we have included a statement on communications with the Finance Committee as required by professional auditing standards. The accompanying comments and recommendations do not affect our report dated August 22, 1997 on the financial statements of the District and are intended for the infonnation and use of the management of the District, the Finance Committee, the Board of Directors, and others within the organization. CENTRAL CONTRA COSTA SANITARY DISTRICT 1997 REPORT TO MANAGEMENT CONTENTS Section I Required Communications 1 - 2 Section II Comments and Recommendations 3-4 CENTRAL CONTRA COSTA SANITARY DISTRICT 1997 REPORT TO MANAGEMENT I. REQUIRED COMMUNICATIONS Professional auditing standards require auditors to communicate with the Finance Committee on a number of subjects. The following information satisfies these requirements, and is intended for use of the Finance Committee, Board of Directors and management. 1. The Auditor's Responsibility Under Generally Accepted Auditing Standards An audit performed in accordance with generally accepted auditing standards is intended to provide reasonable assurance that the financial statements are free of material misstatement. The following characteristics of an audit are important to understanding the level of the auditors' responsibility and the difference between reasonable assurance and a guarantee or absolute assurance as it pertains to the balance sheet. · For reasons of economy, an audit does not include the examination of 100% of the information supporting or presented in fmancial statements. As a result, judgment is required in deciding what kind and how much evidence is to be examined in determining the fairness of the financial presentation. · The financial statements necessarily require certain estimates of management (e.g., . the amount of uncollectible receivables). An audit includes procedures designed to review and test the reasonableness of these estimates in relation to the financial statements as a whole. However, estimates are, by their nature, inherently imprecise and an audit cannot be relied upon to provide assurance that estimates (individually or in the aggregate) are completely accurate or precise. · An audit is planned and performed with an attitude of professional skepticism, the objective of which is to provide reasonable assurance of detecting significant errors or irregularities. An auditor, however, is not trained to detect forgeries. Irregularities or frauds that are concealed through forgery or collusion (among client personnel and/or outsiders) may not be detected or detected only by chance. An audit is intended to provide reasonable assurance that financial statements are free of material misstatements. For the reasons described above, an audit cannot be relied upon as a guarantee or to provide absolute assurance that the financial statements are free of all material misstatements. 2. Significant Accounting Policies and Unusual Transactions The accounting policies adopted by the District are those used to prepare the financial statements and are disclosed in the footnotes to those statements. During the year ended June 30, 1997, there were no significant changes in accounting policies or unusual transactions. CENTRAL CONTRA COSTA SANITARY DISTRICT 1997 REPORT TO MANAGEMENT (CONTINUED) I. REQUIRED COMMUNICATIONS (Continued) 3. Management Judgments and Accounting Estimates The amount of uncollectible receivables requires an estimate on the part of management. This estimate is based on known information and communication between management and the debtors. The amount of receivables recorded in the financial statements reflects the portion which management believes to be collectible. The calculation of depreciation expense also requires estimates. The useful life of an asset, initial date of service and depreciation method are estimates made by management in order to derive depreciation expense for fixed assets individually. 4. Significant Audit Adjustments There were no significant audit adjustments recorded during the course of our audit. 5. Disagreements with Management There were no disagreements with management concerning accounting matters during the course of our audit. 2 CENTRAL CONTRA COSTA SANITARY DISTRICT 1997 REPORT TO MANAGEMENT (CONTINUED) II. COMMENTS AND RECOMMENDATIONS 1. Construction in Progress Situation As part of the audit process we discuss the status of certain capital projects with the project's lead engineering manager. Based on those discussions three significant projects were determined to have been completed by the end of the year but remained in construction in progress at June 30, 1997. This resulted in the projects not being transferred to an asset account and depreciated. Recommendation We recommend that a means of communication be established between the accounting department and project managers in the engineering department to improve the recording of projects when complete. This may need to involve discussions of the accounting definition of a completed project with engineers, and a means of allowing projects to be closed knowing that small expenditures remain to be incurred. On an ongoing basis, project engineers should be responsible to report to the accounting department when projects are substantially complete and are placed in service. The necessary entries would then be made by the accounting department to close the project and reflect it as a depreciable asset in the accounting records. 2. Investments Comment The Governmental Accounting Standards Board (GASB) issued Statement No. 31 in March 1997. The standard is effective for the 97-98 fiscal year and addresses accounting for investments in debt and equity securities as well as in pooled investments at their market value. We have discussed the implementation of this standard with the District's Controller. The District currently invests in securities and pooled funds whose costs approximate their market value such that differences would have been immaterial to the District's financial position at June 30, 1997. Based on this situation the District does not believe it is cost beneficial to modify its accounting for investments at this time. \~:~;-- 3 CENTRAL CONTRA COSTA SANITARY DISTRICT 1997 REPORT TO MANAGEMENT (CONTINUED) 2. Investments (Continued) Recommendation Based on the current holdings of the District we would concur with the District's decision to continue its method of accounting for investments. However, we recommend the District expand its monthly investment report to the Board of Directors to include the market value of each investment held. Management should continue to monitor market fluctuations of investments held and determine if the difference between the amortized cost and market value of investments individually and in aggregate is significant. Annually, we would also evaluate this treatment as part of the audit of the financial statements. 3. Administrative Overhead Comment As we commented last year, the District maintains a capital project system which records the detail of all capital disbursements by project. The District is capitalizing to projects internal labor, benefits, and administrative overhead as well as construction and purchasing expenditures. The overhead rate is a percentage applied to labor dollars charged to the projects. The overhead rate currently being used was established by a consultant in a costing study approximately 10 years ago. Recommendation Although the rate used for the application of overhead appears conservative, we recommend that the District consider an analysis of its actual overhead rates. In addition, a policy should be developed to document the method of the calculation and frequency with which it should be updated. The District could choose from a wide range of calculation and costing methods but should strive to select a method which can be established by the District and easily replicated. 4 --~ ~ l,dntral Contra Costa Sanitat 'I District BOARD OF DIRECTORS ............................................................................................. ::::::1111'111111::::11111,.:::::::::::::: BOARD MEETING OF :::::"))):",;,,,?/::,)\)\\.:\,),....,.,.,.,'.........'.:': October 16, 1997 DATE October 8, 1997 SUBJECT Page 1 of 22 Pages NO, 11. BUDGET & FINANCE b. TYPE OF ACTION RECEIVE ANNUAL REPORT RECEIVE THE 1996 -1997 ANNUAL REPORT OF THE DEFERRED COMPENSATION PLAN ADVISORY COMMITTEE SUBMITTED BY Debbie Ratcliff, Controller INITIATING DEPT IDIV Administrative/Finance & Accounting ISSUE: The Deferred Compensation Plan Advisory Committee (Committee) respectfully submits its 1996- 1997 annual report. BACKGROUND: The Board of Directors approved the establishment of the Committee in January 1982. The scope of activities of the Committee includes: . Establishing internal administrative procedures . Educating participants regarding the Plan . Reviewing emergency withdrawal requests . Reviewing investment performance of the Plan . Submission of an annual report to the Board of Directors and Plan participants The Committee is made up of the following Departmental representatives: Debbie Ratcliff - Darlene Ross - Dennis Hall Ron Galloway - Wayne Miner - Chairperson Administrative Engineering Collection System Operations Plant Operations The Committee made several major accomplishments this year; among the most important are: . Analyzed new contract and negotiated improved contract terms with Hartford Life Insurance Company. . Implemented the 401 (a) Plan on January 1, 1997, which is a Money Purchase Plan that allows employer contributions to be separated from the deferred compensation (457) monies, thus allowing employees to defer greater amounts into the 457 Plan. INITIATING DEPARTMENTIDIVlSION /J~ ,R. S:IADMIN\POSPAPERIANNRPT,PP AND RECOMMENDED FOR BOARD ACTION :.;.:.:.:.:.;.:.:.:.;.:.:.;.:.;.;.;.;.;.;.;.;.;.;.;.;.;.;;:.:.;.:.:.:.;.;.;.;.;.;.;.;.:.;.:.;.:.:.:.:.:.:.:.;.;.;.;;;.;.:.:.:.:.:.:.:.:.:.:::.:.:.:.;.;.;.;.;.;.;.;.;.;.;.:.:.;.;.. ..............,'.1 DATE !iiiiiiiiiiiiiiiiii!il1lllilllllle&1I October 8, 1997 I Page 2 of 22 Pages SUBJ Eel RECEIVE THE 1996-1997 ANNUAL REPORT OF THE DEFERRED COMPENSATION PLAN ADVISORY COMMITTEE Staff has asked Lee Trucker, Benefit Attorney, to research and prepare a response to a question asked by the Board as to the Board's oversight responsibility for the Deferred Compensation Plan. This response will be brought to the Board at a future Board meeting. RECOMMENDATION: Receive the annual report of the Deferred Compensation Plan Advisory Committee for 1996-1997, and provide any comments to staff. Central Contra Costa Sanitary District DEFERRED COMPENSATION PLAN ADVISORY COMMITTEE ANNUAL REPORT JULY 1996 - JUNE 1997 The Deferred Compensation Plan Advisory Committee (the Committee) was established by the Board of Directors to facilitate the internal administration of the District's Deferred Compensation Plan. The scope of the Committee's activities encompass the following: . Establish internal District administrative procedures within the provisions of the Deferred Compensation Plan document. . Educate participants regarding the Plan provisions by issuing a handbook which summarizes the Deferred Compensation Plan and responding to questions from participants. . Review accountability by the Program Administrators, Hartford Life Insurance Company (Hartford), Great Western Bank (Great Western), and ICMA Retirement Corporation (ICMA) and respond to participants' queries regarding accuracy or propriety of account balances. . Review participants' requests for emergency withdrawal of funds and make recommendations for acceptance or denial to Board of Directors. . Review investment performance of the Deferred Compensation Plan on an annual basis. Committee Accomplishments The following activities were completed by the Committee during the period July 1996 through June 1997: . Internal District Administrative Procedures Two new Deferred Compensation committee members were selected and trained to support their respective departments; Dennis Hall and Ron Galloway. Education workshops were provided on the new 401 (a) plan offered by ICMA. . Review Accountabilitv bv Proaram Administrators The Committee reviewed a 457 proposal submitted by Aetna Investment Services Inc. and did not accept the proposed contract. The Committee reviewed a proposal by ICMA to pay the contingent deferred sales charges enforced by Hartford for any employee wishing to transfer to ICMA. This proposal was not accepted by the Committee. S :\ADMIN\RA TCLlFF\DEFCOMP\ANNUA L. R PT Page 3 of 22 Pages The new alliance of Great Western and FundSelect was monitored throughout the year. Monthly confirmation statements and quarterly account statements were submitted to the District by Hartford, Great Western, and ICMA. Quarterly account statements were distributed to all participants. . Review Requests for EmerQencv Withdrawals of Funds Four emergency withdrawal requests were reviewed by the Committee, and two were recommended for approval by the Board of Directors. Two were denied as they did not meet the requirements for emergency withdrawal established by the Internal Revenue Service. . Review Investment Performance A summary which presents the investment performance of the Hartford, Great Western, and ICMA programs for the calendar year 1996, and the first six months of 1997 is attached. Current Committee Activities . The Deferred Compensation Plan document will be updated to comply with reforms which apply to Section 457 Plans that are included in the Small Business Job Protection Act of 1996 which was passed in August, 1996. . The Deferred Compensation Program Handbook will be updated to reflect changes in the Plan as well as changes in the Great Western and Hartford contracts. Conclusion During the period July 1996 through June 1997, the Committee addressed all of the activities included in its scope of responsibilities through the conscientious efforts of all of the Committee members. The performance of Hartford, Great Western, and ICMA in administering the Deferred Compensation Plan during the 1996-1997 report period is considered to be satisfactory. The performance results of the Hartford, Great Western, and ICMA stock and bond investments for the calendar year 1996 and the first six months of 1997, follow. S :\ADMIN\RA TCLlFF\DEFCOMP\ANNUAl.RPT Page 4 of 22 Pages Please be aware of the following when reviewing Plan results: . The Dow Jones Industrial Average, Standard & Poors 500 and Lehman Brothers Bond Index are used as market indices. They are bolded throughout the tables in the document. . Calendar year stock indices named above include reinvestment of dividend and interest income. . Six-month stock indices do not include reinvestment of dividend and interest income. . Hartford reports their performance results net of annual asset-based fees, which include fund manager fees and marketing fees, and separate account charges taken by Hartford which are equivalent to additional administrative fees. . Great Western performance results are net of annual asset-based fees, but do not reflect the deduction of any administrative fees. . ICMA reports their performance results net of annual asset-based fees and administrative fees. Hartford The return on the stock fund for the 1996 calendar year was 23.05 percent which underperformed the general market indices, as measured by the Dow Jones Industrials and the Standard & Poors 500 (S & P 500), which both registered a gain of 29.10 percent and 23.10 percent, respectively. The bond account which earned 2.43 percent outperformed the Lehman Brothers Bond Index which declined by (0.71) percent. Through the first six months ended June 30, 1997, the 21.51 percent gain on the stock account outperformed the S & P 500 and Dow Jones Industrial which gained 19.49 percent and 18.99 respectively. The gain of 3.25 percent on the bond account outperformed the Lehman Brothers Index, which gained 2.09 percent. S :\ADMIN\RA TCLlFF\DEFCOMP\ANNU AL. R PT Page 5 of 22 Pages Great Western For the 1996 calendar year, one stock fund, Vanguard Windsor II, underperformed the Dow Jones Industrial Average and outperformed the S & P 500. The performance results for the year are as follows: Dow Jones Industrial Average Vanguard Windsor II Standard & Poors 500 Vanguard 500 Fidelity Contra Fund Fidelity Equity Income Fund Fidelity Growth & Income Fund Investment Company of America 20th Century Select Fund Vanguard Wellington Fund Income Fund of America Fidelity Puritan Fund 20th Century Growth Fund Growth Fund of America 20th Century Ultra Fund Fidelity Overseas Fund 20th Century Balance Fund Fidelity Magellan Fund Vanguard Wellesley Fund Fidelity Retirement Growth Fund 29.10% 24.18% 23.10% 22.90% 21.94% 21.02% 20.02% 19.30% 19.10% 16.20% 15.20% 15.15% 14.92% 14.80% 13.77% 13.10% 12.54% 11.69% 9.42% 8.33% S :\ADMIN\RA TCLlFF\DEFCOMP\AN N U AL.RPT Page 6 of 22 Pages Great Western - Continued Through the six months ended June 30, 1997, two funds, 20th Century Select and Vanguard 500, outperformed the S & P 500. All remaining stock funds underperformed the S & P 500 and the Dow Jones Industrial Average. 20th Century Select Fund Vanguard 500 Standard & Poors 500 Dow Jones Industrial Average Investment Company of America Fidelity Growth & Income Fund 20th Century Growth Fund Fidelity Equity Income Fund Vanguard Windsor II 20th Century Ultra Fund Fidelity Overseas Fund Fidelity Magellan Fund Fidelity Puritan Fund Fidelity Retirement Growth Fund Vanguard Wellington Fund Growth Fund of America Fidelity Contra Fund Income Fund of America 20th Century Balance Fund Vanguard Wellesley Fund 21.23% 20.50% 19.49% 18.99% 18.10% 18.06% 17.64% 17.38% 16.53% 16.41 % 16.08% 15.90% 13.99% 13.07% 12.72% 12.50% 11.22% 10.00% 9.34% 6.52% Bonds: The Bond Fund of America earned 6.28 percent, outperforming the Lehman Brothers Bond index for calendar year 1996. Bond Fund of America Lehman Brothers Bond Index 6.28% (0.71)% S :\ADMIN\RA TCLlFF\DEFCOMP\ANNU AL.RPT Page 7 of 22 Pages Great Western - Continued For the first six months of 1997, the Bond Fund of America gained 3.90 percent outperforming the Lehman Brothers Bond Index. Bond Fund of America Lehman Brothers Bond Index 3.90% 2.09% leMA Trust Familv of Funds: During the calendar year 1996, one of the stock funds, the Aggressive Opportunities Fund, underperformed the Dow Jones Industrial Average but outperformed Standard & Poor 500 with a gain of 24.80 percent. The performance results are as follows: Dow Jones Industrial Average Aggressive Opportunities Fund Standard & Poors 500 Growth Stock Fund Broad Market Index Fund Equity Income Fund International Fund Asset Allocation Fund Social Responsibility Fund 29.10% 24.80% 23.10% 20.90% 20.10% 17.70% 15.80% 15.10% 11.00% Bonds: The Core Bond Fund gained 1.80 percent during calendar year 1996, outperforming the Lehman Brothers Bond Index. Core Bond Fund Lehman Brothers Bond Index 1.80% (0.71)% S :\ADMIN\RA TCLlFF\DEFCOMP\AN N U AL.RPT Page 8 of 22 Pages ICMA - Continued Mutual Fund Series During the calendar year 1996, all funds underperformed the Dow Jones Industrial Average and the Standard & Poor 500 market indices. The performance results are as follows: Dow Jones Industrial Average Standard & Poors 500 Fidelity Contra Fund Fidelity Growth & Income Fund Vanguard Wellington Fund Fidelity Blue Chip Fidelity Puritan Fund 20th Century Ultra Fund Putnam Voyager Fidelity Magellan Fund Lindner Dividend Gabelli Value 29.10% 23.10% 20.60% 19.00% 14.60% 14.40% 14.20% 12.30% 12.00% 10.80% 10.30% 7.90% Trust Familv of Funds: Through the six months ended June 30, 1997, all funds underperformed both market indices. The results are as follows: Standard & Poors 500 Dow Jones Industrial Average Broad Market Index Fund Equity Income Fund Asset Allocation Fund Growth Stock Fund International Fund Aggressive Opportunities Fund 19.49% 18.99% 17.00% 16.20% 13.10% 12.60% 11.10% 8.80% S :\ADMIN\RA TCLlFF\DEFCOMP\ANNUAL. R PT Page 9 of 22 Pages ICMA - Continued Bonds: The Core Bond Fund gained 2.30% percent during the six months ended June 30, 1997, outperforming the Lehman Brothers Bond Index. Core Bond Fund Lehman Brothers Bond Index 2.30% 2.09% Mutual Fund Series: For the six months ended June 30, 1997, one fund, Gabelli Value Fund, outperformed both market indices. The performance results are as follows: Gabelli Value Standard & Poors 500 Dow Jones Industrial Average Fidelity Growth & Income Fund Fidelity Blue Chip 20th Century Ultra Fund Fidelity Magellan Fund Fidelity Puritan Fund Vanguard Wellington Fund Putnam Voyager Fidelity Contra Fund Lindner Dividend Social Responsibility Fund * 22.00% 19.49 % 18.99% 17.50% 16.20% 15.90% 15.40% 13.60% 12.20% 10.90% 10.70% 4.30% ----- % * (Rate of Return is not available due to fund restructuring in April 1997.) S :\ADMIN\RA TCLlFF\DEFCOMP\ANNU A L. R PT Page 10 of 22 Pages LEGEND: 20th Century Funds: 20th C. BF 20th C. GF 20th C. SF 20th C. UF Balanced Growth Select Ultra VanQuard Funds 500 Wellg Welly Wind II Fidelitv Funds: Fidelity EI F Fidelity M F Fidelity OF Fidelity PF Fidelity RG Fidelity CN Fidelity GI Equity Income Magellan Overseas Puritan Retirement Growth Contra Growth & Income American Funds: G.W. GFA G.W.ICA G.W.IFA Growth Fund Investment Company Income Fund ICMA Funds - Trust Familv of Funds: ICMA AGG Aggressive Opportunities Fund ICMA SR Social Responsibility Fund ICMA CMF Cash Management ICMA CBF Core Bond ICMA UST U.S. Treasury Securities ICMA AAF Asset Allocation Fund ICMA ElF Equity Income Fund ICMA BMIF Broad Market Index Fund ICMA GSF Growth Stock Fund ICMA IF International Fund Mutual Fund Series: Gab Val Put Voy Fidelity G & I Fidelity CTR 20th MG Lind Div Fidelity PFF Vanguard WB Fidelity MCA Fidelity BC Gabelli Value Putnam Voyager Aggressive Growth Fund Fidelity Growth & Income Fund Fidelity Contra Fund 20th Century Ultra Momentum Growth Lindner Dividend Income Fidelity Puritan Balanced Fund (former Flexible Fund) Vanguard Wellington Balanced Fund Fidelity Magellan Capital Appreciation Fund Fidelity Blue Chip Growth Market Indices: Dow Jones S & P 500 L. B. Bond Index Dow Jones 30 Industrials Average Standard & Poors 500 Lehman Brothers ADS/S/ Admin/Ratcliff /DefComp/Legend .Ist October 2, 1997 500 Wellington Wellesley Windsor II Page 11 of 22 Pages Page <0 l(') - '#. -- -q-C L- ::J ~ (]) c:: \f- a (1) ~ co c:: eN o 22 Pages Page 22 of 22 Pages