HomeMy WebLinkAboutBUDGET AND FINANCE ACTION SUMMARY 03-04-13Central Contra Costa Sanitary District
Protecting public health and the environment 5019 Imhoff Place, Martinez, CA 94=
SPECIAL MEETING OF THE
CENTRAL CONTRA COSTA B04RD OFDZRECTOKS:
J.4.1IESA. nEJEDLP
SANITARY DISTRICT Prvs,aknt
BUDGET AND FINANCE COMMITTEE D_�FZDR TZLLL ��
President Pro Tem
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A C T 10 N SUMMARY _j11('HAELR.:W(YTILL
T.4D J. PILECB7
Chair McGill
Member Nejedly
Monday, March 4, 2013
3:00 p.m.
Middle Conference Room
1470 Enea Circle, Second Floor
Concord, California
PHOAE: (925) 228 -9500
E_-I: (925) 676 -7211
innr. centralsan. org
PRESENT: Mike McGill, Jim Nejedly, Curt Swanson, Thea Vassallo, Todd Smithey
1
2
3
Call Meeting to Order
Chair McGill called the meeting to order at 3:00 p.m.
Public Comments
None.
Old Business
a. Review staff's response to the Committee's request for information
regarding the following expenditures at a previous meeting:
Check# Amount Vendor
193700 $3,932.11 Consulting Team LLC Total of contract?
193733 $4,614.80 MuniQuip, Inc. What are wear plates?
COMMITTEE ACTION: Received staff's responses.
Budget and Finance Committee
March 4, 2013
Page 2
4. Risk Management
a. Review Loss Control Report and discuss outstanding claims
COMMITTEE ACTION: Reviewed the report.
*5. Discuss Public Employees' Pension Reform Act (PEPRA) Update
Finance Administrator Todd Smithey gave an update (attached) on both Public
Employees' Pension Reform Act (PEPRA) and Contra Costa County Employees'
Retirement Association (CCCERA).
Provisional General Manager Curt Swanson reported that the District had
received a letter from CCCERA stating that CCCERA will file a motion to join all
participating employers in the litigation challenging the constitutionality of newly -
enacted state law AB 197. Mr. Swanson will be working with District Counsel
Kent Alm on this issue.
COMMITTEE ACTION: Received and discussed the updates.
6. Review report to the Board on outcome of Fieldman Rolapp study re possible
use of Pension Obligation Bonds to fund CCCERA Unfunded Actuarial Accrued
Liability (UAAL) (Item 5.a.1) in Board Binder)
Staff discussed its conference call of Friday, March 1, 2013 and stated that
Fieldman, Rolapp plans to present the basics of how Pension Obligation Bond
issuance works and their original November 2012 recommendations.
COMMITTEE ACTION: Reviewed the staff report. The full Board will
receive the report at its March 7 meeting.
7. Review January 2013 Financial Statements and Investment Reports (Item 3.c. in
Board Binder)
COMMITTEE ACTION: Reviewed and recommended Board approval.
8. Expenditures
a. Review Expenditures (Item 3.b. in Board Binder)
COMMITTEE ACTION: Reviewed and recommended Board approval.
Budget and Finance Committee
March 4, 2013
Page 3
Requested additional information on the following:
Check# Date Vendor Amount
35136 2121113 DD Management $28,675.46
b. Review Legal Expenditure Summary
COMMITTEE ACTION: Reviewed Legal Expenditure Summary.
*9. Reports and Announcements
Finance Manager Thea Vassallo reported that signing of checks by the
Secretary of the District and invoices by the Finance Manager has had
the same $1,000 limit for the estimated last 30 years. The Committee
concurred with staff's recommendation to increase the limit to $2,500,
effective immediately.
Ms. Vassallo distributed the Benefit and Overhead Benchmark
Comparison results received to date (attached). The previous 2008
Survey was also provided (attached).
Ms. Vassallo provided the Committee with information on the history of
the District overhead rate for the last 5 years (attached). An item will be
placed on the March 18, 2013 Budget and Finance Committee agenda
for discussion.
Ms. Vassallo distributed the results of a Cash Reserve Survey initiated
by Orange County Sanitation District the last week of February
(attached).
10. Suggestions for future agenda items
Discussion of the District overhead rate will be placed on the March 18,
2013 Budget and Finance Committee agenda.
11. Adjournment — at 3:59 p.m.
* Attachment
5
Update on Public Employees' Pension Reform Act ( PEPRA)
• The District is currently paying a rate of 51.5% of payroll for PEPRA -tier
employees. This compares to a rate of 59.7% & 56.4% for all other employees.
Per the Contra Costa County Employees' Retirement Association ( CCCERA)
Board decision on 1/9/13, CCCERA's staff is reviewing all participating
agencies' pay codes to determine which codes are pensionable under PEPRA. At
issue is special compensation. CalPERS issued a Circular Letter giving the
criteria by which such compensation would be pensionable. The criterion that
seems to cause the most debate is that the pay must paid pursuant to publicly
available pay schedule. CCCERA staff plans on presenting their findings to the
Board on 3/27/13.
• Because some of the language in PEPRA is unclear, CCCERA staff stated that
clean -up language to the law is expected to pass and will give more guidance on
the legislative intent.
Of great interest to the District is the outcome of the lawsuit filed by employee
groups against CCCERA regard changes enacted by AB197. The State has
recently agreed to defend the law in Contra Costa County Superior Court as
CCCERA had not been arguing against the lawsuit. Should the lawsuit fail, the
District would see a reduction in rates as the terminal pay assumption for most
employees would drop from 24% to a number closer to 8 %. The next hearing is
scheduled for 3/26/13 at 9:30am.
Other CCCERA Updates
• The unofficial investment earnings return for 2012 was 14.1 % (compared to
13.26% for CalPERS). As is there practice, this gain will be smoothed over the
next five years, and that amount will be amortized over the next 18 years.
• The triennial review of economic actuarial assumptions was presented to the
CCCERA Board on 2/27/13. The Board voted to accept the actuary's
recommendation of lowering the current investment return assumption from
7.75% to 7.25% (tied with one other County- system for the lowest in the State).
This will raise the normal costs of retirement while lowering the interest expense
on our unfunded liability. The net cost impact of this change is an increase in our
rates by about 5.8% (4.8% when employee cost - sharing is fully implemented)
The CCCERA board will vote later on whether to implement this rate increase all
at once or over a period of 2 -3 years.
• The triennial experience study (demographics) will also be performed this year
and its results will also affect contribution rates.
q.
Benefit and Overhead Benchmark Comparison
February 2013
THESE RATES DO NOT INCLUDE THE SALARY COMPONENT
DEFINITION OF OVERHEAD FOR THIS SURVEY (EMPLOYEE BENEFITS +ADMINISTRATIVE AND DIVISION OVERHEAD + NON -WORK PRODUCTIVE) COSTS - Don't Include Salary
Benefits Overhead Non -Work
•' Check this box if you calculate different division rates, or use different rates for capital projects compared to outside billings or for other purposes.
Use multiple lines if you use multiple rates (See Oro Loma example) and use the comments section to describe the purpose.
Comments
Agency
Benefits
Overhead
Non -Work
Total
se
multiple
rates?
Comments/ Effective Date of Rates
Castro Valley Sanitary District
65%
125%
20%
210%
No
Effective 2012
Central Contra Costa Sanitary District
85%
117%
18%
220%
No
For 2013 -14; increases in pension, GASB 45 and medical
premiums. Salaries, which are the denominator, decreased due
to several retirements and unfilled positions. Prior year was
194 %.
Central Marin Sanitation Agency
165%
Based on 2001 -02, 17% dept exp included In Overhead Column
Fairfield- Suisun Sewer District
0%
N/A
N/A
Delta Diablo Sanitation District
Don't have need to charge overhead reimbursement
Oro Loma (1)
70%
0%
23%
151%
Dublin/San Ramon Services District
48%
86%
20%
153%
Yes
From hand -out at January 2013 Finance Group Meeting.
Overhead for Divisions are calculated separately. Used the
Engineering Division overhead of 153 %; the highest rate is
Mechanical Maintenance Full Cost Recovery at 289.71% Effective
for 2013
Fairfield- Suisun Sewer District
WA
60%
WA
60%
y nave a suandard 6111% for overhead, that y rarely use. Just
salary and benefits is charged to capital projects.
Mt. View Sanitary District
70%
-
159%
0%
Napa Sanitation
0%
not been updateed since 1989 and do not represent the collection
of the cost of service.
Oro Loma 1
0%
Oro Loma 2
0%
Ross Valley Sanitary District
0%
South Ba side Sewer Authority
0%
UniOn San o C� H $
N/A
N/A
N/A
234%
NO
Using 171% total (without depreciation); 234% with depreciation -
for 2012 -13. We did not receive a breakdown of the components.
Vallejo Sanitation & Flood Control District
0%
West Bay Sanitary
0%
West County Wastewater District
0%
From Previous Survey
Benefit and Overhead Benchmark Comparison
February 2008
Agency
Benefits Overhead Non -Work
Total
Comments
Castro Valley Sanitary District
63%
100%
15%
178%
2006 -2007
Proposed for 2008 -09 based on 2006 -07 actual. Using 1761,6 in 2007 -
CCCSD
71%
100%
19%
190%
08
Delta Diablo
43%
105%
17%
165%
Based on 2001 -02, 17% dept exp included In Overhead Column
Fairfield- Suisun Sewer District
N/A
N/A
0%
Don't have need to charge overhead reimbursement
Oro Loma (1)
70%
58%
23%
151%
For 2007 -08 and 2008 -09 - Two Year Budget
Oro Loma (2)
70%
156%
23%
249%
(Includes additional 'cost of depreciations) to bill developers)
South Bayside System Authority
28%
15%
17%
60%
West County
89%
70%
-
159%
Non -work hours in benefit
2/28/2013 3:26 PM N:\ACCOUNTING \GMTEMPI\Admin Overhead \benchmark chartFeb 2013
CENTRAL CONTRA COSTA SANITARY DISTRICT
History of Overhead
Fiscal Year
Admin O/H
Non -Work Hours
Employee Benefits
Total Overhead %
Indirect Costs
Salaries
Admin O/H %
09/10 10/11 11/12 12/13 13/14
q.
3 Yr 5 Yr
Average Average
98
98
93
105
117
105.0
102.2
19
19
19
18
18
18.3
18.6
61
61
61
71
85
72.3
67.8
220
178
178
173
194
195.7
188.6
10/11 audit 11/12 audit
22,176,335 24,548,295
21,201,139 20,949,444
1.05 1.17
Note - Salaries are the denominator. Salaries were lower due to several retirements and unfilled positions.
(Higher denominator results in lower OH %, Lower denominator results in higher OH %)
N:WDMINSUP\ADMIN \FINANCE MANAGER \Budget and Finance Committee \Overhead summary 3- 4- 133/5/2013
q.
Comparison of Agency Reserves
FY 2011 -12
Reserves
Total FY 2011 -12 % of Reserves to
Budgeted Outlay Budgeted Outlay
CCCSD*
55.0
99.0
55.6%
EMBUD **
80.2
127.3
63.0%
SRCSD * **
165.7
201.2
82.4%
OCSD * * **
577.3
405.8
142.3%
CSDLA * * * **
1,878.4
841.8
223.1%
*Central Contra Costa Sanitary District
*Eastern Municipal Utility District
* *Sacramento Regional County Sanitation District
** *Orange County Sanitation District
* ** *County Sanitation District of Los Angeles
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