HomeMy WebLinkAboutBUDGET & FINANCE AGENDA 01-19-11 Central Contra Costa sanitary District
Protecting public health and the environment 5019 Imhoff Place, Martinez, CA 94553-4392
SPECIAL MEETING OF THE
CENTRAL CONTRA COSTA BOARD OFDIRECTORS:
BARBARA D. HOCK=
SANITARY DISTRICT President
BUDGET AND FINANCE COMMITTEE JAMES N Pro Tem
President rm
Prrstdr
MICHAEL R. MCGILL
Chair Nejedly DAVDR.WI IAM;
Member Hockett PHONE: (925)228 -9500
FAX: (925) 676 -7211
Wednesday, January 19, 2011 www.centralsan.org
3:00 p.m.
Executive Conference Room
5019 Imhoff Place
Martinez, California
INFORMATION FOR THE PUBLIC
ADDRESSING THE COMMITTEE ON AN ITEM ON THE AGENDA
Anyone wishing to address the Committee on an item listed on the agenda will be heard when the
Committee Chair calls for comments from the audience. The Chair may specify the number of minutes
each person will he permitted to speak based on the number of persons wishing to speak and the time
available. After the public has commented, the item is closed to further public comment and brought to the
Committee for discussion. There is no further comment permitted from the audience unless invited by the
Committee.
ADDRESSING THE COMMITTEE ON AN ITEM NOT ON THE AGENDA
In accordance with state law, the Committee is prohibited from discussing_ items not calendared on the
agenda. You may address the Committee on any items not listed on the agenda, and which are within their
jurisdiction, under PUBLIC COMMENTS. Matters brought up which are not on the agenda may be
referred to staff for action or calendared on a future agenda.
AGENDA REPORTS
Supporting materials on Committee agenda items are available for public review at the Reception Desk,
5019 Imhoff Place, Martinez. Reports or information relating to agenda items distributed within 72 hours
of the meeting to a majority of the Committee are also available for public inspection at the Reception
Desk. During the meeting, information and supporting materials are available in the Conference Room.
AMERICANS WITH DISABILITIES ACT
in accordance with the Americans With Disabilities Act and state law, it is the policy of the Central Contra
Costa Sanitary District to offer its public meetings in a manner that is readily accessible to everyone,
including those with disabilities. If you are disabled and require special accommodations to participate,
please contact the Secretary of the District at least 48 hours in advance of the meeting at (925) 229 -7303.
Budget and Finance Committee
January 19, 2011
Page 2
1. Call Meeting to Order
2. Public Comments
3. Old Business
*a. Review purchase from Snap -On for $464.42.
4. Risk Management
*a. Review Loss Control Report
b. Discuss outstanding claims
c. Discuss new claims
5. Discuss most recent Contra Costa County Employees' Retirement Association
(CCCERA) Board meeting (Item 7.a. in Board Binder)
6. Review response to CCCERA's proposed three -year phase -in option for the
de- pooling financial impact to the District (Item 7.b. in Board Binder)
*7. Ten -Year Plan Financial Plan Information
*8. PARS November 2010 Trust Account Statement
9. Review Expenditures (Item 4.a. in Board Binder)
10. Reports and Announcements
11. Adjournment
* Attachment
Central Contra Costa Sanitary District
January 14, 2011
TO: BOARD BUDGET AND FINANCE COMMITTEE
Al
FROM: RANDALL MUSGRAVES, DIRECTOR OF ADMINISTRATION
DEBBIE RATCLIFF, CONTROLLER -
SUBJECT: JANUARY 3, 2011 COMMITTEE MEETING
There was one outstanding question from the last Board Budget and Finance
Committee meeting which required additional staff research, The question and answer
are provided below:
1. 183210 Snap -on Industrial — The Committee asked for additional
information on the $464.42 purchase from Snap -on Industrial.
The Committee requested additional information regarding the purchase of six screw
driver sets costing $464.42. The six sets were for safety suggestion awards, not for
CSO. The District provides awards for viable safety suggestions. There are two levels
of award. Level 1 is for items addressing significant safety exposure with a high degree
of frequency and /or severity. Those award items are approximately $70 each, as
shown below. For safety items with lesser exposure to frequency or severity, a Level 2
award is given costing approximately $25. Approximately 15 -20 awards are given out in
a fiscal year, and for FY 2010, awards totaling $405 for Level 1 and $155 for Level 2
were awarded. The District's Injury and Illness Prevention Program discusses the
safety suggestion program as a tool to solicit employee input regarding District safety,
attached.
First Level - High Severity and/or frequency. Hazard or uncontrolled exposure may
result in severe injury or death to at least one employee; an injury is likely to result from
the exposure; many employees or the public are exposed to the hazardous condition.
1st Level Awards
Snap -on Screw driver set
Mag -Lite Flashlights
Safety Road Kits
Two -way Radios
Second Level - Moderate to low severity /frequency. Hazard or uncontrolled exposure
may result in a minor injury; few employees exposed; injury not likely.
2nd Level Awards
Baseball Caps
Commuter Safety Kit
First Aid Kit
Rechargeable Flash Light
1.0 In - ur and Illness Prevention Pro • ram
Central Contra Costa Sanitary District
safety areas on bulletin boards for each major Division, and full meeting minutes are posted on
OTIS, the District's intranet. Additionally, each Department shall present a summary of topics
covered in the District Safety Committee meeting, and when appropriate, recent accidents
within the Department shall also be discussed, with the goal of preventing any recurrence of the
incident. For the Operations Department, this is done during the monthly "O &M" or "End of the
Month" meetings. For the Engineering and Administrative Departments, in smaller divisional
staff meetings. Refer to Appendix C for membership and member term information for the
District Safety Committee and Department Safety Teams.
Topics discussed at the DSC include:
Review of accidents and investigation with discussion and recommendation of solutions to
prevent recurrence
Review results of periodic, scheduled worksite inspections
Discussion of hazardous conditions brought to the attention of the DSC
Assist with safety training needs with recommendation of how training can be accomplished
Review and discuss employee safety suggestions
Any other safety issues which have been brought to the attention of the DSC or Safety Team
members
1.7.3 Safety Suggestion Program (IIPP Form 2)
It is policy to maintain open communication between all employees on matters pertaining to
safety. Suggestions regarding safety are considered important and active participation in the
Safety Program is encouraged. Employees are equally encouraged to express any safety
concerns or suggestions during safety meetings, individually with the supervisor, or in writing by
using the "Employee Safety Suggestion Form" (IIPP Form 2). Completed Safety Suggestion
forms can be sent (via interoffice mailer), hand delivered, or e- mailed to anyone in the Safety &
Risk Management Division. Safety suggestions can also be made by leaving a voicemail
message on the Safety Suggestion Hotline (mailbox 400). Safety suggestions may be made
anonymously; however, this will make it difficult to provide special recognition if the suggestion
is implemented. Be assured that all safety suggestions will be given serious consideration, and
employees will not be subject to reprisal for any suggestion submitted.
The following summarizes the sequence of events that are to occur once a Safety Suggestion
has been made:
Injury and Illness Prevention Program IIPP 1 - 10
1.0 In lur and Illness Prevention Pro • ram
Central Contra Costa Sanitary District
Figure 1.1
Risk Operations
Employee Management Operations
ee ageme
p y Safety Specialist submits Technician Safety \ contacts
Safety acknowledges suggestor AND
assigned to
Suggestion' / receipt via / \ area supervisor
memo to investigate V to fully
suggestor investigate
WITHIN 1 MONTH
WITHIN 2 MONTHS
The District Safety
Department DSC Secretary Committee hears the
management reviews enters Safety suggestion and votes
with OSS and Suggestion onto on the merits of the
determines the Safety Suggestion \ suggestion based on
feasibility of Log for tracking the frequency and
implementation purposes severity of the
exposure
OSS works with Once DSC Secretary
Department completed, DSC Safety
sends an e-mail Su estion to
personnel to enter OSS verifies to suggestor gg g
Work Order/ corrective is reviewed
informing them each month
Purchase Order to action and - of final
accomplish u resolution of and master log
recommend action DSC log kept for three
suggestion years
'Employees are expected to report seriously unsafe practices or conditions (imminent hazards) immediately to
their supervisor or take immediate action to remedy, or otherwise safeguard the area.
1.7.4 Hazardous Condition or Near Miss Reporting System (IIPP Form 3)
The Central Contra Costa Sanitary District has a notification system whereby employees who
wish to report workplace hazards may do so by submitting an "Report of Hazardous Condition
or Near Miss" (IIPP Form 3) to the safety office via interoffice mailer. All such reports will be
investigated in a prompt and thorough manner.
Employees involved in a "near miss" incident (injury or vehicle) are encouraged by the District to
share that experience with other employees by relating it during Tailgate Safety meetings,
Safety Team meetings, or other monthly staff meetings in the interest of drawing attention to a
potential accident, even though it was successfully avoided. No disciplinary action will be taken
by any District department official for reporting a near miss accident, unless the near miss was
caused by clear and obvious negligence or unsafe work procedures (e.g., horseplay or blatant
Injury and Illness Prevention Program IIPP 1 -11
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Central Contra Costa Sanitary District
January 14, 2011
TO: BUDGET AND FINANCE COMMITTEE u1
FROM: JAMES KELLY, GENERAL MANAGER Q SI
SUBJECT: 10 -YEAR FINANCIAL PLAN INFORMATION FOR THE 1/19/2011
BOARD BUDGET AND FINANCE COMMITTEE MEETING
Staff provides the Board Budget and Finance Committee data related to preparation of
the 10 -Year Plan prior to final preparation.
This year, the Board Financial Planning Workshop has been moved from the last week
in January to first meeting in March, and will take place on March 3, 2011. The
recommended scenario presented on March 3 will be based on the 6 -month O &M and
Capital mid -year reviews that include annual 2010 -2011 full -year projections. The O &M
and Capital mid -year reviews will be presented to the Board on February 24, 2011.
Attached are bulleted summaries titled Rate - Setting Rules of Thumb and
Background and Preliminary Scenario Assumptions that develop the financial plan
based on information available at this time. Staff will continue to refine scenario
assumptions due to significant changes in economic factors, financial impacts, and
regulatory requirements.
CCB:slc
. cc: Board of Directors
RATE SETTING RULES OF THUMB AND BACKGROUND
1/19/2011
• A $1 per year rate increase to the SSC equals about $170,000.
• Every $1.0 million dollars of change (up or down) to revenue or expense equates to
approximately $6 per year on the SSC.
• There are exceptions to the above rule due to reimbursement from Concord. The City is
billed based on their flow percentage into our plant, which is around 30 %. An increase in
treatment plant projects costs and /or an increase to treatment plant O &M expenses nets to
only 70% of the total expense since Concord reimburses us the other 30% based on their
flow into our plant. (Example: $1.0 million more in treatment plant utility expense nets to
only $700,000 due to the Concord reimbursement.)
• The Funds Required amount we calculate is the cash on hand, or Funds Available needed,
without any short -term borrowing, on July 1 of any given year to pay for all District
expenditures until the first installment of our SSC and property tax is posted to our account
by the County around December 20th. Based on cash flow analyses, the calculation is 32%
of the following year's O &M expenses plus 30% of the following year's Capital costs plus
100% of debt service.
• The District has utilized a combination approach of pay -as- you -go and selective bond
financing for larger, long -lived projects.
• Regular rate increases are viewed favorably by bond rating agencies.
The following table provides information by fiscal year that shows the District's
combination approach of pay -as -you go (SSC rate information) and selective bond
financing (debt information):
Outstanding Annual
Debt Balance at Debt
6 /30 /XX (Bonds Service
SSC O &M SSC Capital Total SSC SSC Total and State (Principal
Rate Rate Rate per Annual Recycled Water and Property Tax
Component Component RUE Increase Loan) Interest) Revenue
Fiscal Year $ $ $ $ $ $ $
2000 -2001 185 15 $200 12 42,474,891 2,411,359 7,238,662
2001 -2002 204 20 $224 24 41,068,939 2,465,526 7,551,581
2002 -2003 207 41 $248 24 39,614,842 2,952,930 8,801,230
2003 -2004 218 54 $272 24 38,112,519 3,145,858 8,919,327
2004 -2005 204 76 $280 8 35,986,885 3,901,491 4,010,381
2005 -2006 234 46 $280 0 33,792,855 3,888,334 4,836,304
2006 -2007 213 76 $289 9 31,520,340 3,881,619 11,762,730
2007 -2008 242 58 $300 11 29,169,250 3,869,232 12,254,167
2008 -2009 260 51 $311 11 26,724,491 3,866,445 12,539,375
2009 -2010 292 19 $311 0 55,460,968 4,091,990 11,274,207
2010 -2011 300 11 $311 0 51,848,584 5,674,287 12,200,000
CENTRAL CONTRA COSTA SANITARY DISTRICT
MARCH 3, 2011 BOARD FINANCIAL PLANNING WORKSHOP
PRELIMINARY SCENARIO ASSUMPTIONS
For January 19, 2011 Board Budget & Finance Committee
Scenario Parameters:
• Capital project spending assumptions presented at the December 16, 2010 CIB
Workshop are used in the model. Specifically, the model includes a new incinerator
solids handling project ($50 million current dollars) and new nitrification project ($70
million current dollars) but does not include the Concord Recycled Water project
which would be funded by grants and SRF loan if it proceeds.
• Current economic assumptions and future year projections are reviewed and
updated using economic analyses and indicators such as the State Department of
Finance website and UCLA economic forecasts.
• Some of the scenarios explore making additional payments to pay down our
unfunded liabilities.
Revenue:
• Assumptions for interest rates were lowered based on current information. Interest
rates range from 0.5% in 2010 -11 and 2011 -12 and caps at 5.0% in 2020 -21. The
2010 scenario used a range from 1.3% to 5.5 %. •
• 2010 -2011 Capital Revenue projections are estimated to be around $3 million less
than budget. This estimate will be refined further in the mid -year review process.
• O &M estimated revenue will be calculated during the 6 -month review process, and
is anticipated to be lower than budget. Our largest revenue source, the 2010 -2011
SSC Revenue is anticipated to be $750,000 - $1.0 million below budget due to
drought impact on commercial customers and the poor economy in general.
• Current 2010 -2011 Property Tax Revenue is estimated to be $12.2 million versus a
total budget of $12.5 million.
• The State repayment of borrowed property tax of $1.1 million is included in 2012-
2013.
• No property tax revenue growth is predicted through 2012 -13, and then 1% /year
increases are assumed through 2014 -2015, 2% /year in 2015 -16, and then 3% /year
going forward.
Expense /Expenditures /Debt:
• Capital Project Inflation was reduced from 3% /year to 1% in 2012 -13, 1.5% in 2013-
14, 2.0% in 2014 -15 and then 3% /year thereafter.
• O &M annual inflation is being reviewed at this time.
• Capital spending estimates as discussed in the first bullet in this document.
• Includes employee retiree and refilling assumptions, and expense account
assumption changes from Department Directors' review (such as utility cost
fluctuations).
CENTRAL CONTRA COSTA SANITARY DISTRICT
MARCH 3, 2011 BOARD FINANCIAL PLANNING WORKSHOP
PRELIMINARY SCENARIO ASSUMPTIONS
For January 19, 2011 Board Budget & Finance Committee
• Salary vacancy of 3 %, and benefit vacancy of 4% are used in the model.
• Significant increases to retirement rates are included in the model. In 2011 -12, a
9% rate increase is confirmed, and includes de- pooling costs. 2012 -13 and 2013-
14 include 5% /year rate increases to cover market losses that will be carried
forward on a rolling 5 -year smoothing basis. 2015 -16 forward assumes 1% rate
increases /year — this year's model retirement costs over a 10 -year period are $12
million higher than what was assumed in the January 2010 Workshop scenarios.
• Medical Premiums are projected to increase by 16% in 2011 -12 (based on
HealthNet projection to HR 12/2010). The increase is due in part to the Health Care
Reform Act. 6.5% - 7.5% rate increases are used in future years based on the
GASB 45 actuarial assumptions for consistency. Medical expenses are $10 million
higher in total in the 2011 scenario compared to 2010, mainly due to the large
increase in 2011 -12 and the compounding effect in future years.
GASB 45 /OPEB:
• The OPEB /GASB 45 contribution is $6,676,364 ($39 of the SSC rate) based on the
actuarial estimate and then ranges from $5.5 — 6.0 million in future years. Updated
information will be provided after the actuarial analysis is done.
Funds Required /Available:
• The Funds Required calculation remains the same: 32% of next year's O &M + 30%
of next year's Capital costs + 100% of Debt Service. The Funds Required formula
is reviewed each year compared to actual spending.
• Funds Available are made up of Running Expense and Sewer Construction Fund
cash and investment accounts. Keeping Funds Available above Funds Required
eliminates the need for short-term borrowing for cash flow.
Other:
• The State's budget deficit and deteriorating credit rating may impact future year
assumptions in spite of Prop 1A and current legislation protecting local government
funds. Staff is monitoring State issues that can impact the District and other local
governments.
• Staff is monitoring regulatory impacts that can impact future spending but won't
have a definitive direction until the new 129 regulations are promulgated (court
battles are ongoing and the District could hear the week of January 16, or by July
2011) and the NPDES permit is issued in 2012.
•
•
•
PUBLIC
AGENCY 1 RS
RETIREMENT
SERVICES
CENTRAL CONTRA COSTA SANITARY DISTRICT Monthly Account Report for the Period
PARS GASB 45 Program 11/1/2010 to 11/30/2010
Colette Curtis -Brown
Finance Administrator
Central Contra Costa Sanitary District
5019 Imhoff Place
Martinez, CA 94553
Account Summary
Beginning Ending
Balance as of Balance as of
Source 11 /1/2010 Contributions Earnings Expenses Distributions Transfers 11/30/2010
Employer Contribution $14,124,243.31 $360,417.00 - $20,676.39 $5,117.90 $0.00 $0.00 $14,458,866.02
Totals $14,124,243.31 $360,417.00 - 520,67639 55,117.90 50.00 50.00 514,458,866.02
•
Investment Selection
. Central Contra Costa Sanitary District 115 Trust
Investment Objective
Individual account based on Moderate HighMark PLUS. The dual goals of the Moderate Strategy are growth of principal and income. It
is expected that dividend and interest income will comprise a significant portion of total return, although growth through capital
appreciation is equally important. The portfolio will be allocated between equity and fixed income investments.
Investment Return
Annualized Return •
1 -Month 1 3- Months 1 1 -Year 3 -Years 1 5 -Years 1 10 -Years Inception Date
-0.14% 7.49% 9.88% N/A N/A N/A 3/19/2009
Information as provided by Union Bank, Trustee for PARS GASB 45 Program; Not FDIC Insured, No Bank Guarantee; May Lose Value
Past Performance does not guarantee future results. Performance returns may not reflect the deduction of applicable fees, which could reduce returns. Information is deemed reliable but
may be subject to change.
Investment Return: Annualized rate of rerun is the return on an investment over a period other than one year multiplied or divided to give a comparable one -year return.
Inception Date: Plans inception date
4350 Von Kerman Ave., Suite 100, Newport Beach, CA 92660 800.540.6369 Fax 949.250.1250 www.pars.org
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