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Home My WebLink AboutBUDGET AND FINANCE ACTION SUMMARY 09-03-13Central Costa sanitary District SPECIAL MEETING OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT BUDGET AND FINANCE COMMITTEE ACTION SUMMARY Chair McGill Member Nejedly Tuesday, September 3, 2013 3:00 p.m. Middle Conference Room 1470 Executive Drive, 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: Chair Mike McGill, Member Jim Nejedly, General Manager Roger Bailey, Finance Manager Thea Vassallo, Secretary of the District Elaine Boehme (Item 3.), Safety & Risk Administrator Shari Deutsch (Item 5.), Environmental Services Division Manager Danea Gemmell (Item 6.), Engineering Assistant III Earlene Millier (Item 6.), Finance Administrator Todd Smithey (Items 7. and 8.) 1. Call Meeting to Order Chair McGill called the meeting to order at 3 p.m. 2. Public Comments None. 3. Discuss and prioritize Budget and Finance topics to be discussed at Board Priorities Workshop Finance Manager Thea Vassallo noted that many of the topics are specifically summarized in the 10 -Year planning document issued each January. This document summarizes the direction of the Board given to staff. Discuss cash reserve policy (Pilecki) Discuss financial impacts of a blended approach of short-term borrowing and use of cash reserves (Piiecki) Budget and Finance Committee September 3, 2013 Page 2 Discuss Contra Costa County Employees' Retirement Association (CCCERA) and monitoring /paydown of Unfunded Actuarial Accrued Liability (UAAL) (causey/ Pilecki) Review the District's background and philosophy with regard to long -term financial planning (causey) Review assumptions used in Ten -Year Financial Planning Model (causey) Discuss FY 2014 -15 Sewer Service Charge process (will the full $34 be needed ?). What information is needed from staff and when? ( Stafq COMMITTEE ACTION: Provided input to staff and directed Secretary of the District Elaine Boehme to put all topics on the Board Workshop Agenda for discussion. 4. Old Business a. Review staff's responses to the Committee's request for information regarding the following expenditures at the previous meeting: Check Date Amount Vendor 196146 7/25/13 $19,943.79 Dresser -Rand Co 196147 7/25/13 16,804.28 E &M Electric & Machinery 196160 7/25/13 38,300.00 JT Thorpe & Son, Inc. 196270 8/01/13 5,571.48 Pan - Pacific Supply Co. 196182 7/25/13 $ 4,384.35 Russo Auto Body V #200 196278 8/01/13 4,203.00 Russo Auto Body V #201 196278 8/01/13 783.49 Russo Auto Body V #223 Why does the District use this vendor? Why so many repairs on District vehicles? Staff was asked to get more information from Purchasing for sending all auto body work to one vendor within the service area. COMMITTEE ACTION: Reviewed staff's responses. 5. Risk Management a. Review Loss Control Report and discuss outstanding claims COMMITTEE ACTION: Reviewed the report. Budget and Finance Committee September 3, 2013 Page 3 6. Review Position Paper considering adopting Resolution 2013 -031 directing that delinquent charges related to the property located at 3382 Johnson Road in Lafayette be placed on the Fiscal Year 2013 -14 and future Contra Costa County property tax roll for collection. Continued from July 25, 2013 Board meeting. (item 6.a. in Board Binder) COMMITTEE ACTION: Reviewed and recommended Board adoption of the resolution. 7. Receive and discuss information received from the Contra Costa County on advancing the Sewer Service Charge (SSC) Ms. Vassallo discussed that the District would be required to deplete all cash and investment accounts held by the County before the County would advance taxes under the Teeter Plan. COMMITTEE ACTION: Received update. 8. Receive update on and discuss Governmental Accounting Standards Board (GASB) 45 and Contra Costa County Employees' Retirement Association (CCCERA) Unfunded Actuarial Accrued Liability (UAAL) GASB 45 UAAL Staff reported that the GASB 45 actuarial valuation as of July 1, 2012 projects July 1, 2013 UAAL of $75.7M. District's CCCERA 2012 UAAL Activity Ms. Vassallo and Finance Administrator Todd Smithey discussed the District's 2012 CCCERA UAAL activity, which included a pay -down of ($1.7M), an actuarial loss of $12.6 /0, and assumption changes of $22.5M. It was discussed that the focus should be on the big picture versus the bottom line VAAL amount Ms. Vassallo also provided a summary of the District's CCCERA assets and VAAL and interest cost of funding the additional $51W pay -down in July versus December using various debt funding options. CCCERA Fund in Total It was discussed that, only six years ago, the CCCERA fund in total was 90 funded and super - funded in the 1990's. The economy appears to be shifting and if the market does not experience extraordinary losses as it did in the Technology and Housing falls the fund could significantly change to being nearly fully funded again. Mr. Smithey pointed out that in the last 2011 valuation the unrecognized net investment loss was $389M, the total unrecognized net investment gain as of December 31, 2012 is approximately $157M, which is a positive shift of $546M. These deferred gains will be recognized as part of CCCERA's 5 -year smoothing. Budget and Finance Committee September 3, 2013 Page 4 COMMITTEE ACTION: Received updates. 9. Review July 2013 Financial Statements and Investment Reports (Item 4.c. in Board Binder) Ms. Vassallo reported that the favorable labor and benefits are due to the $5M UAAL pay -down being spread over a 12 -month period. During the budgeting process, the timing of the $5M pay -down was unknown. The budget has been adjusted going forward to reflect the December planned payment. The Permit Counter has been busy, which is resulting in favorable Facility Capacity Fees. It was also reported that the current investment balance with Local Agency Investment Fund (LAIF) at the end of August is $31.7M. The next installment of Sewer Service Charges (SSC) is anticipated for the 3'd week of December. COMMITTEE ACTION: Reviewed and recommended Board approval. 10. Expenditures a. Review Expenditures (Item 4.b. in Board Binder) COMMITTEE ACTION: Reviewed and recommended Board approval. Staff was asked to provide additional information on the following: Check Date Amount Vendor 196395 8/15/13 $7,344.83 D & L Supply How many manholes were ordered and why? Does the District order in lots? For normal stock or replacement project in process? 11. Announcements Ms. Vassallo reported the following: 2011 Comprehensive Annual Financial Report (CAFR) award was received last week. This was included in the General Manager Written Announcements in the September 5, 2013 Board agenda packet. Andrew Brown of HighMark Capital Management will be attending the next Committee meeting on 9/16/13 to give an update covering the last 6 months and address any questions related to the Investment Guidelines Document and fee changes on the GASB 45 OPEB account. • Maze & Associates finished its fieldwork and will be finalizing the draft financials back in the office. First year will be single year report and next year will be comparative going forward. Budget and Finance Committee September 3, 2013 Page 5 • Prop 1A monies were received the end of June in the amount of $1,051,461. The amount represents $985,916 loan, plus $65,545 in interest income. • City of Concord 2012 billings for Operations and Maintenance and Capital were partially paid in the amount of $12.5M in August. The remaining amount will be paid by mid- September since management needs Council approval. Remaining amount is $1.5M. Follow -up item from August 15, 2013 Board meeting, where Member Causey suggested using the Self - Insurance funds to pay down the CCCERA UAAL prior to December 2013: per District Code Section 2.28.050, the Self- Insurance fund is to be used only for the purposes authorized by the Board or prescribed in Self- Insurance fund policies. 12. Suggestions for future agenda items Ms. Vassallo announced that overhead rate information will be provided at the next meeting for discussion. Ms. Vassallo also noted that the current Cash Reserve Practice will also be distributed for review. 13. Adjournment — at 4:15 p.m.