The URL can be used to link to this page

Home My WebLink AboutBUDGET AND FINANCE ACTION SUMMARY 04-01-13Central Contra Costa Sanitary District SPECIAL MEETING OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT BUDGET AND FINANCE COMMITTEE ACTION SUMMARY Member Nejedly Member Pilecki (Alternate) Monday, April 1, 2013 3:00 p.m. Middle Conference Room 1470 Enea Circle, Second Floor Concord, California BOARD OF DIRECTORS: JAMES A NEJEDLY President DAVID R WILLIAMS President Pro Tem PAUL H CAUSEY MICHAEL R MCGILL TAD J PILECKI PHONE: (925) 228 -9500 FAX: (925) 676 -7211 www. centralsan. org PRESENT: Acting Chair Jim Nejedly, Alternate Member Tad Pilecki, Provisional General Manager Curt Swanson, Finance Manager Thea Vassallo, Environmental Services Division Manager Danea Gemmell 1. Call Meeting to Order Acting Chair Nejedly called the meeting to order at 3:00 p.m. 2. Public Comments None. 3. Risk Management a. Review Loss Control Report and discuss outstanding claims COMMITTEE ACTION: Reviewed the report. 4. Review staff presentation regarding proposed revision of administrative overhead percentage and survey results of overhead rates charged by other agencies (relates to Item 9.a. in Board Binder) Finance Manager Thea Vassallo said staff intends to further explore other alternatives to revising its methods for calculating full cost recovery. Budget and Finance Committee Action Summary April 1, 2013 Page 2 COMMITTEE ACTION: Reviewed presentation and survey results and confirmed previous recommendation for Board approval of a revised three - year average for administrative overhead percentage of 196 percent for Fiscal Year 2013 -14 for billing outside agencies and for calculating the annual Environmental and Development - Related Rates and Charges. 5. Review the financial status and budget of the Self- Insurance Fund and allocation for the Fiscal Year 2013 -14 Operations and Maintenance (O &M) Budget, as well as key O &M budget assumptions COMMITTEE ACTION: Reviewed and recommended Board approval of a $600,000 transfer from O &M to Self Insurance for Fiscal Year 2013 -14. 6. Review report of Schultz Collins Lawson and Chambers Investment Counsel regarding the District's Governmental Accounting Standards Board (GASB) 45 Other Post - Employment Benefits (OPEB) PARS Trust COMMITTEE ACTION: Item continued to next meeting. 7. Review February 2013 Financial Statements and Investment Reports (Item 3.c. in Board Binder) Finance Manager Thea Vassallo commented that all retro salary increases had been processed as of the February financials. Member Pilecki requested clarification on Sewer Construction negative revenue adjustments to accounts 4700 Other Agency Reimb — Misc, and 6507 Alhambra Vly Assessments. COMMITTEE ACTION: Reviewed and recommended Board approval. 8. Expenditures a. Review Expenditures (Item 3.b. in Board Binder) Staff was asked to provide additional information on the following expenditures: Check # Amount Vendor Request 194160 $ 6,387.34 Air Systems, Inc. Additional information 194190 16,222.71 DMS Facility Sry Summary of monthly charges and information on whether the District is still paying for the Headquarters Office Building (HOB) while undergoing seismic retrofit Budget and Finance Committee Action Summary April 1, 2013 Page 3 Check # Amount Vendor 194343 6,362.58 US Bank 2,209.13 6,952.18 470.35 348.63 963.64 Request Additional information COMMITTEE ACTION: Reviewed and recommended Board approval. b. Review Legal Expenditure Summary COMMITTEE ACTION: Reviewed Legal Expenditure Summary. 9. Announcements None. 10. Suggestions for future agenda items None. 11. Adjournment - at 3:50 p.m. Administrative Overhead Review Presented by: Thea Vassallo Finance Manager Overview of Presentation 1. Admin Overhead Components (3) 2. Calculation of Individual Components 3. 2008 Survey 4. 2013 Survey 5. Staff Recommendation 6. Examples of Changes * Complete 2013 Survey attached as last page Pa Overhead Components • Admin Overhead 11/12 Audited Financial Statements used for 13/14 Admin Overhead Percentage (2 year lag) = Indirect Cost as a % of Adjusted Salaries • Employee Benefits 12/13 Benefits Budgeted (most up to date info available) = District Benefits as a % of Budgeted Salaries • Non -Work Hours Value of vacation, sick leave, administrative leave, birthday holiday, and earned overtime expressed as = Non -Work Hours as a % of Salaries 3 Admin Overhead Salaries Admin (all) Eng, CSO, POD (Directors & support staff) Benefits (thru payroll) OPEB (premium + contrib PARS) Other Expenses Adjustments ($915k deprec) Total Adjusted Indirect Costs Divided by Adjusted Salaries (ENG, CSO, POD, PS) 11 -12 Audited Financials 4.9M 0.9M 4.3M 8.3M 4.8M 1.3M 24.5M 20.9M Total Admin Overhead % =117% 4 Employee Benefits (Current Year Budget is Used Since it is More Accurate) Retirement Health Insurance All Other Total Benefits Benefits moved to Admin OH (8.3M is OPEB ARC) Adjusted Benefits Divide by Budgeted Salaries = Employee Benefit % 12/13 Buduet 15.3M 9.6M 6.5M 31.4M (8.7M) 11/12 Budget 12.7M 8.5M 7.5M 28.7M (8.7M) 2.7M 22.7M 20.OM 2.7M 26.91VI 28.1M (1.2M) 85% 71% 14% 14.7% 5 Change in Variance % of Salary 2.6M 11.6% 1.1m 5.6% (1.0M) (2.5)% 2.7M 22.7M 20.OM 2.7M 26.91VI 28.1M (1.2M) 85% 71% 14% 14.7% 5 Non -Work Hours (Hire date - #ee's - #Days - Convert H rs = Weighted %) Vacation 6% Sick Leave 5% Holidays 5% Admin Leave & Bdays 1 Comp Time 1 Total 18% A CCCSD Previous Survey Benefit and Overhead Benchmark Comparison February 2008 Agency Oro Loma (1) Oro Loma (2) Benefits Overhead Non -Work 70% 58% 23% 70% 156% 23% Total Comments 151% For 2007 -08 and 2008 -09 - Two Year Budget Includes additional "cost of depreciations) to bill 249% developers Proposed for 2008 -09 based on 2006 -07 actual. Using CCCSD 71% 100% 19% 190% 178% in 2007 -08 Castro Valley Sanitary District 63% 100% 15% 178% 2006 -2007 Based on 2001 -02, 17% dept exp included in Overhead Delta Diablo 43% 105% 17% 165% Column West County 89% 70% - 159% Non -work hours in benefit % South Bayside System Authority 28% 15% 17% 60% 7 Fairfield- Suisun Sewer District N/A N/A N/A 0% Don't have need to charge overhead reimbursement Benefit and Overhead Benchmark Comparison —March 2013 Agency Union San * *Use Admin Multiple Benefits Overhead Non -Work Total rates? - 234% No Central Contra Costa Sanitary District 1 - Capital Project Charges 85% 117% 18% 220% Yes Castro Valley Sanitary District 65% 125% 20% 210% No Oro Loma (3) - External Project Rate (PROPOSED RATE) 67% 108% 22% 197% Yes Central Contra Costa Sanitary District 2 - 3 Year Average 73% 105% 18% 196% Yes Delta Diablo Sanitation District West County Wastewater District Dublin /San Ramon Services District Oro Loma (2) - Internal Project Rate (PROPOSED RATE) Oro Loma (1) - Benefits and non - productive time (PROPOSED RATE) South Bayside Sewer Authority Fairfield- Suisun Sewer District Central Marin Sanitation Agency Napa Sanitation 43% 105% 17% 165% No 89% 70% 0% 159% No 48% 86% 20% 153% Yes 67% 27% 22% 116% Yes 67% 0% 22% 90% Yes 28% 15% 17% 60% No N/A 60% N/A 60% No - 26% - 26% No - - - 0% No 8 Staff Recommendation • Use 3 year average of 196% for FY 13 -14 — Billing of outside agencies Clean Water and HHW billings — Calculating the Annual Environmental and Development - Related Rates and Charges 9 Change in Admin Overhead Due to Change in CCCERA Assumed Rate (Assumed rate decreased from 7.75% to 7.25 %) Retirement Health Insurance All Other Total Benefits Benefits moved to Admin OH (8.3M is OPEB ARC) 12/13 @7.75 Budget 15.3M 9.6M 6.5M 31.4M (8.7M) 12/13 @7.25 Bu 16.8M 9.6M 6.5M 32.9M (8.7M) Adjusted Benefits 22.7M 24.2M Divide by Budgeted Salaries 26.9M 26.9M = Employee Benefit % 85% 90% CCCERA ER +5.55% 1.5M 5% 10 Benefit and Overhead Benchmark Comparison - March 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 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. *"Use multiple Agency Benefits Overhead Non -Work Total rates? Comments/ Effective Date of Rates The overhead rate is mainly for outside agency work, unless there is a contract that supersedes the District overhead rate. Labor is never charged to capital projects. Using 171 % total (without depreciation) and Union San - - - 234% NO 234% including depreciation - for 2012 -13. For 2013 -14; increases in pension, GASEI 45 and medical Central Contra Costa Sanitary District 1- premiums. salaries, which are the denominator, decreased due to Capital Project Charges (Initial Calc) 85% 117% 18% 220% Yes several retirements and unfilled positions. Prior year was 194 %. Castro Valley Sanitary District 65% 125% 20% 210% No Effective 2012 Oro Loma (3) - External Project Rate Current rate is 214% as of 2012 -13 - rates in the table are proposed for (PROPOSED RATE) 67% 1 108% 22% 197% Yes 2013 -14 - 2014 -15 Central Contra Costa Sanitary District 2- Proposing rolling -year average rate of 0 for some outside billings and internally when calculating permit counter related Most Outside Billings (3 Yr Average) 73% 105% 18% 196% Yes fees and charges. Effective for 2002 -03 based on 2001 -02 financial data. Not a top priority to increase overhead at this time as it negatively impacts Delta Diablo Sanitation District 43% 105% 17% 165% No customers. From February 2008 Survey of other agencies; non -work component is West County Wastewater District 89% 70% 0% 159% No included in the benefit % 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 Dublin /San Ramon Services District 48% 86% 20% 153% Yes Cost Recovery at 289.71% Effective for 2013 Oro Loma (2) - Internal Project Rate Current rate is 125% as of 2012 -13 - rates in the table are proposed for (PROPOSED RATE) 67% 27% 22% 116% Yes 2013 -14 - 2014 -15 Oro Loma (1) - Benefits and non - productive time Current rate is 98% as of 2012 -13 - rates in the table are proposed for (PROPOSED RATE) 67% 0% 22% 90% Yes 2013 -14 - 2014 -15 South Bayside Sewer Authority 28% 15% 17% 60% No From February 2008 Survey of other agencies Uses a standard 60% for overhead, that is rarely used. Just salary and Fairfield- Suisun Sewer District N/A 60% N/A 60% No benefits is charged to capital projects. Applies overhead for certain types of contracts. The rate is either 10% or 26 %. At a minimum, CMSA recovers all expenses incurred including billing for staff time at the weighted /fully burdened salary rate Central Marin Sanitation Agency - 26% - 26% No (calculated by person - does not have an overall average). Napa San does not currently calculate overhead rates. Fees have not been updated since 1989 and do not represent the collection of the Napa Sanitation - - - 0% No cost of service. Vallejo Sanitation & Flood Control District - - - - - Response not received. Mt. View Sanitary District - - - I - I NO lOverhead is rarely billed out. Review of Self Insurance Budget and 13-14 transfer from O &M Review of Pass 2 O &M Budget expense assumptions W a S w ZZ F� W Io a o ry m m e N r .1 n r o !n ry m rt m N r v n .l c � F U H a �d N O r1 M 111 N N N M QI N l0 T H .•, .+ .+ ry r, ti a a > �J ✓ Q F m m O m O O A O a OI N O 1� N O O N O VI V O H 01 OI ❑ C 1'1 Ill A v1 0 m h 1� N N O 01 N 1� W rt N U O N N N H m H T N p 1.1 m .Qj X Q W H w h 0 Q n r m B H Q 1la lFa� ,r�7] Zy 3 W lwd £❑ Q K W x a m w N N W 0 O N M m m .w W .,i O z m m m 10 m o r Ic e m r m w K W o w O w[a.. w W U H a v N a o N a m n m Io .1 O,i Fwl �( d O a ❑ C x o Vwl F W U) > w PO � � . . . . . . . . . . . . N w a a r m 1 H In N o o o m m ry o r 1 N N /� V l� N Nm N 01 O O O m m� T N t'1 111 O Y1 'i O 10 10 F t 1 e 1 MUjY ~ m ❑ '` F 1WW"1 IG N h Ill ri ri N ri � N P 111 wHw M o m F 2F O O h m O m 111 N M Ip O I� N N � N N 111 O 111 Ol ��qqq w� A m IO O 1� O O N N W � .1 d O1 U H ❑ NI W W ~O M N O O N O O m 0 m r r H 1Il m m IO N O Ill O O N M N f Y F 10 T C1 ri ri V 1'l m m O O m 10 Ill O H N w O ri w O m O rl O H C[UU~J � N rl m b 01 m m 01 U d r Q a• b N N N ❑ N m e o tIl i W m m CI - N H H n H .i m.. O m O. 1p m 01 N m m O a o 01 v m h 01 � m N H Ill OI 1p Yl N 01 N O m N N 'A rl N1 M rl 1'1 N N m N N m S O � F a �J ✓ � ❑ 2 14 N w m N W J .Qj X Q W H w h 0 o U w H m Ul a In w W H W F O W B H Q Q W W M H UZy Ul W ,r�7] Zy 3 W lwd £❑ Q K W x a m w N N W 0 O N M .w W .,i O H iWl [O[-�� F K Z N 0 H IQ-1 O U H H H H W H X R' o m w K W o w O w[a.. w O,i Fwl �( d O ❑ C x o Vwl F W PO � � . . . . . . . . . . . . S � Y �J ✓ � s 1 I J 1 S � S CENTRAL CONTRA COSTA SANITARY DISTRICT SELF - INSURANCE FUND (SIF) July 1, 2007 - June 30, 2014 Revenues SIF Allocation from O &M Fund Insurance Allocation from HHW Subrogation Recovery Interest Income Total Revenue Expenses Claims Adjusting Insurance Consulting Loss Payments Legal Services Technical Services Insurance Premiums Total Expenses Revenue Over Expense Reserves Beginning of Year Revenue over Expense End of Year Reserves Uncommitted Reserves Actuarial Reserves - GASB 10 (Fund A) Non- Actuarial Reserves - GASB 10 (Fund B) Non -GASB 10 Reserves (Fund C) Total Reserves Change in Reserves Actual Actual Actual Actual Actual Projected Budget 2007 -2008 2008 -2009 2009 -2010 2010 -2011 2011 -2012 2012 -2013 2013 -2014 1,117,000 850,000 1,383,000 850,000 850,000 850,000 80 29,334 0 52,471 26,563 24,878 31,500 31,500 14,644 18,031 0 7,500 1,660 0 0 159,501 87,106 29,815 23,873 19,436 14,500 14,850 1,320,479 955,137 1,465,286 907,936 895,974 896,000 896,350 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 722,483 718,715 1,437,389 1,342,210 1,427,335 1,393,835 1,367,685 0 0 0 0 4,827,335 1,500 1,500 0 0 0 0 0 5,000 0 399,956 166,040 45,347 240,844 72,605 235,000 260,000 69,371 200,710 31,163 210,677 304,672 190,000 i 130,000 75,355 83,962 15,482 137,445 14,803 22,500 / 80,000 401,292 388,013 404,620 414,149 418,769 475,500 451,000 945,974 838,725 496,612 1,003,115 810,849 929,500 922,500 374,505 116,412 968,674 (95,179) 85,125 (33,500) (26,150) 3,377,798 3,752,303 3,868,715 4,837,389 4,742,210 4,827,335 4,793,835 374,505_ 116,412 968,674 (95,179) 85,125 (33,500) (26.150 629,820 750,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 722,483 718,715 1,437,389 1,342,210 1,427,335 1,393,835 1,367,685 3,752,303 3,868,715 4,837,389 4,742,210 4,827,335 4,793,835 4,767,685 374,505 116,412 968,674 (95,179) 85,125 (33,500) (26150) Exhibit I Expenses Claims Adjusting CENTRAL CONTRA COSTA SANITARY DISTRICT 0 C-rC-)�_ 0 SELF - INSURANCE FUND (SIF) 251,500 1,500 Insurance Consulting 0 July 1, 2007 - June 30, 2014 0 0 0 5,000 Actual Actual Actual Actual Actual Projected Budget 45,347 2007 -2008 2008 -2009 2009 -2010 2010 -2011 2011 -2012 2012 -2013 2013 -2014 Revenues 69,371 200,710 31,163 210,677 SIF Allocation from O &M Fund 1,117,000 850,000 1,383,000 850,000 850,000 850,000 600,000 Insurance Allocation from HHW 29,334 0 52,471 26,563 24,878 31,500 31,500 Subrogation Recovery 14,644 18,031 0 7,500 1,660 381,100 0 Interest Income 159,501 87,106 29,815 23,873 19,436 14,500 14,850 Total Revenue 1,320,479 955,137 1,465,286 907,936 895,974 1,277,100 646,350 Expenses Claims Adjusting 0 0 0 0 0 251,500 1,500 Insurance Consulting 0 0 0 0 0 5,000 0 Loss Payments 399,956 166,040 45,347 240,844 72,605 616,100 260,000 Legal Services 69,371 200,710 31,163 210,677 304,672 190,000 130,000 Technical Services 75,355 83,962 15,482 137,445 14,803 22,500 80,000 Insurance Premiums 401,292 388,013 404,620 414,149 418,769 475,500 451,000 Total Expenses 945,974 838,725 496,612 1,003,115 810,849 1,560,600 922,500 Revenue Over Expense 374,505 116,412 968,674 (95,179) 85,125 (283,500 (276,150) Reserves Beginning of Year 3,377,798 3,752,303 3,868,715 4,837,389 4,742,210 4,827,335 4,543,835 Revenue over Expense 374,505 116,412 968,674 (95,179) 85,125 (283,500) (276,150 End of Year Reserves 3.752.303 3.868.715 4.837.389 4 749 91n a R97 ;ar, d rAq WAR d Or.7 rQr. Uncommitted Reserves Actuarial Reserves - GASB 10 (Fund A) 629,820 750,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 Non- Actuarial Reserves - GASB 10 (Fund B) 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 Non -GASB 10 Reserves (Fund C) 722,483 718,715 1,437,389 1,342,210 1,427,335 1,143,835 867,685 Total Reserves 3,752,303 3,868,715 4,837,389 4,742,210 4,827,335 4,543,835 4,267,685 Change in Reserves 374,505 116,412 968,674 (95,179) 85,125 (283,500) (276,150) Exhibit I Z_ SELF - INSURANCE FUND Actual 2011 -2012, Projected 2012 -13 and Budget 2013 -2014 SUB -FUND A: GASB -10 ACTUARIALLY BASED RISKS GENERAL LIABILITY AND AUTOMOBILE LIABILITY Expenses: Losses Actual Projected Budget Legal 2011 -2012 2012 -2013 2013 -2014 Actuarial Reserves - GASB 10 - Beginning of Year $ 1,000,000 $ 1,000,000 $ 1,000,000 Revenues: 0 0 0 O &M - _ _ Subrogation Recovery 1,660 - - Interest 4,140 3,200 3,250 Total Revenues 5,800 3,200 3,250 Expenses: Losses 72,605 85,000 250,000 Legal 247,337 5,000 15,000 Technical 13,090 15,000 40,000 Insurance Consulting Services 0 0 0 Total Expenses 333,032 105,000 305,000 Revenue over Expense (327,232) (101,800) (301,750) Reserves: Transfer (to) /from Sub -Fund C Transfer (to) /from Sub -Fund C Total Reserves Projected End of Year 327,232 101,800 301,750 $ 11000,000 $ 1,000,000 $ 1,000,000 Exhibit 11 SELF - INSURANCE FUND Actual 2011 -2012, Projected 2012 -13 and Budget 2013 -2014 SUB -FUND B: GASB -10 NON - ACTUARIALLY BASED RISKS EMPLOYMENT RELATED AND POLLUTION RISKS Actual Projected Budget 2011 -2012 2012 -2013 2013 -2014 Beginning Reserves $ 2,400,000 $ 2,400,000 $ 2,400,000 Revenues: O &M Recovery - - - Interest 9,934 7,600 7,800 Total Revenues 9,934 7,600 7,800 Expenses: Losses - 150,000 - Legal 50,997 175,000 100,000 Technical 1,713 2,500 35,000 Total Expenses 52,710 327,500 135,000 Revenue over Expense (42,776) (319,900) (127,200) Reserves: Transfer (to) /from Sub -Fund A - - - Transfer (to) /from Sub -Fund C 42,776 319,900 127,200 Total Reserves Projected End of Year $ 2,400,000 $ 2,400,000 $ 2,400,000 Exhibit 111 4 c.�✓�- �j.►�.�.t��- ��- �- "'`�'>�. ✓- e.c�.� -�� X81, t ot� SELF - INSURANCE FUND Actual 2011 -2012, Projected 2012 -13 and Budget 2013 -2014 SUB -FUND C: NON GASB -10 RISKS RISK MANAGEMENT PROGRAM INSURANCE PREMIUMS AND COSTS OF INITIATING CLAIMS /LAWSUITS AGAINST OTHERS Beginning Reserves Revenues: Actual Projected Budget 2011 -2012 2012 -2013 2013 -2014 $ 1,342,210 $ 1,427,335 $ 1,143,835 O &M 850,000 850,000 600,000 Subrogation Recovery - 381,100 - Insurance Recovery from HHW Partners 24,878 31,500 31,500 Interest 5,362 3,700 3,800 Total Revenues 880,240 1,266,300 635,300 Expenses: Insurance Consulting Services 5,000 ?\ - Claims Adjustment 251,500 > 97' ttX 1,500 Losses - 381,100 / �d` 10,000 Legal 6,338 10,000 15,000 Technical - 5,000 5,000 Insurance Premiums 418,769 475,500 451,000 Total Expenses 425,107 1,128,100 482,500 Revenue over Expense 455,133 138,200 152,800 Reserves: Transfer (to) /from Sub -Funds A (327,232) (101,800) (301,750) Transfer (to) /from Sub -Funds B (42,776) (319,900) (127,200 Total Reserves Projected End of Year $ 1,427,335 $ 1,143,835 $ 867,685 Exhibit IV