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HomeMy WebLinkAbout08.d.1)c) [Revised] Minutes-Finance Committee 12-27-16(Revised) 8.d.1)c) REGULAR MEETING OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT FINANCE COMMITTEE M I N U T E S [REVISED] Tuesday, December 27, 2016 3:00 p.m. Executive Conference Room 5019 Imhoff Place Martinez, California Committee: Chair Tad Pilecki Member Paul Causey Invited Guest: Lauren Brant, Managing Director, PFM Asset Management LLC (left after Item 5.) Ellen Clark, Senior Managing Consultant, PFM Asset Management LLC (left after Item 5.) Staff: General Manager Roger S. Bailey Director of Finance and Administration Phil Leiber Director of Engineering and Technical Services Jean-Marc Petit Finance Manager Thea Vassallo Finance Administrator Todd Smithey (left after Item 5.) Senior Administrative Technician Cindy Granzella 1. Call Meeting to Order Chair Pilecki called the meeting to order at 3:00 p.m. 2. Public Comments None. 3. Old Business a. Review staff’s response to questions regarding P-Card Statement at the November meeting: BOARD OF DIRECTORS: TAD J. PILECKI President PAUL H. CAUSEY President Pro Tem MICHAEL R. MCGILL JAMES A. NEJEDLY DAVID R. WILLIAMS PHONE: (925) 228-9500 FAX: (925) 372-0192 www.centralsan.org Finance Committee Minutes December 27, 2016 Page 2 Date Amount Vendor Information Requested 9/16/16 $215.28 Disney Resorts Chair Pilecki asked for more information on the charge. COMMITTEE ACTION: Reviewed staff’s response. 4. Receive results of PFM Asset Management LLC’s independent review of the GASB (Governmental Accounting Standards Board) 45 Trust and OPEB (Other Post-Employment Benefits) Trust investments – Invited guests: Lauren Brant and Ellen Clark of PFM Ms. Brant reviewed the Executive Summary (pages 1 – 8 of the report), and responded to questions. Page 8 of the report listed PFM’s recommendations. With regard to the first of four PFM recommendations listed on page 8 of the Executive Summary, Chair Pilecki noted that Board Policy BP 005 - Statement of Investment Policy is currently reviewed annually by the Administration Committee, yet the Finance Committee reviews the investment results of the OPEB Trust assets. He believes that in order to manage the assets more effectively, BP 005 should instead be reviewed by the Finance Committee. Member Causey agreed. Based on the discussion, Chair Pilecki suggested that two additional recommendations be added for the Board 's consideration: a. Review the current fund structure, and b. Once the fund structure has been reviewed, consider future benefits in issuing a Request for Proposal (RFP) for an administrator. Member Causey agreed to add these two recommendations. COMMITTEE ACTION: Recommended: 1) Board receipt of the PFM report with two additional recommendations, and 2) that BP 005 - Statement of Investment Policy be reviewed annually by the Finance Committee rather than the Administration Committee. 5. Provide input on risk analysis questionnaire related to establishing new Internal Revenue Code (IRC) Section 115 Pension Trust to be initially funded by the $3.359 million extra reserve fund balance at the end of Fiscal Year 2015 -16 - Invited guests: Lauren Brant and Ellen Clark of PFM Finance Committee Minutes December 27, 2016 Page 3 Ms. Brant explained that at the November 10, 2016 Board Workshop, the Board directed staff to present the Board with an action item at a future meeting to establish a new IRC Section 115 pension trust to be initially funded by the $3.359 million extra reserve fund balance at the end of Fiscal Year 2015-16. These funds will be used to offset the unfunded actuarial accrued liab ility (UAAL) associated with Contra Costa County Employees’ Retirement Association (CCCERA) and will help mitigate budgetary issues from volatility associated with CCCERA's required pension contributions, and potential future legislative changes. As explained at the Workshop, Ms. Brant said, ultimately, the purpose of a 115 pension trust is to provide more flexibility and greater control over asset allocation than would occur if the funds were paid to CCCERA. As part of the process of establishing a 115 pension trust, Ms. Brant led the Committee through the risk analysis questionnaire, the results of which will be used to, among other things, develop a written investment policy statement detailing Central San's investment objectives and long-range plan for achieving the objectives. She explained that the input from the Committee members will be used as the basis of creating an investment policy to present to the full Board. COMMITTEE ACTION: Provided input to staff. 6. Expenditures a. Review Expenditures COMMITTEE ACTION: Reviewed and recommended Board approval. Requested additional information on the following: Check / Date Amount Vendor Information Requested #212675 12/8/16 $15,782.93 John D. Curtis Committee requested confirmation that these reimbursement fees were ultimately charged against the sewer construction fund. 7. Review November 2016 Financial Statements and Investment Reports Ms. Vassallo reported that the Operations and Maintenance (O&M) revenue is running a favorable variance of about a million dollars due to revenue from direct billing of sewer service charges and permit/application/side sewer fees. O&M expenses are running a favorable variance of $2.7 million, mainly due to reduced labor costs, repairs and maintenance, and outside services. She stated that sewer construction revenues are relatively on budget, and that spending on Capital Projects is approximately $12.8 million to date, which is about 35% of the budget. Finance Committee Minutes December 27, 2016 Page 4 Chair Pilecki referred to the Recycled Water Program on page 8, stating that the budgeted versus actual dollars has a large discrepancy. Mr. Leiber will work with staff to update the accounts and reallocate expenses as needed in conjunction with the original Recycled Water budget. COMMITTEE ACTION: Reviewed and recommended Board approval. 8. Review the final Comprehensive Annual Financial Report (CAFR) as of June 30, 2016 for submission to the Government Finance Officers Association Mr. Leiber and Ms. Vassallo reviewed the report and responded to questions. The Committee recommended changes regarding the number of Full Time Equivalents (FTEs) filled as of June 30, 2016; the Management Discussion and Analysis Capital Assets; Household Hazardous Waste customers served annually; and recycled water truck services were added to the statistical section. Other minor revisions will be made next fiscal year. COMMITTEE ACTION: Reviewed and recommended Board approval with minor revisions. 9. Announcements a. Future scheduled meetings: Wednesday, January 18, 2017 at 1:00 p.m. b. Receive list of Scheduled/Parking Lot items COMMITTEE ACTION: Received the announcements. 10. Suggestions for future agenda items None. 11. Adjournment – at 5:25 p.m.