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Home My WebLink AboutFINANCE MINUTES 02-21-17 9odsl dna contra costa Semler :District ............ BOARD OF DIRECTORS: REGULAR MEETING of TFC PAULH,CAUSEY CENTRAL CONTRA c sT Pr'estdertt SANITARY D .JAMES.A.NEJEDLY President Pro Tem FINANCE COMMEE MICHAEL R.MC'GII.L TAD J.PILECKI DAVID R.WILLIAMS PHONE: (925)228-9500 IMAX: (925)372-0.192 Tuesday, February 21, 2017 www.centralsan.org 1;00 P.M. Executive Conference Froom 5019 Imhoff P lace Martinez, California Committee: Chair Jim Nejedly Member Tad Pileoki Invited guests: Andrew Brown, Director, HighMark Capital Management deft after Item 4.c.) Mitch Barker, Executive vice President, PARS (left after Item 4.c.) Staff.- Roger ta .-Roger S. Bailey, General Manager Ann Sasaki, Deputy General Manager Phil Leiber, Director of Finance and Administration Stephanie King, Purchasing and Materials Manager Thea vassallo, Finance Manager Todd Smithey, Finance Administrator Cindy Granzella, Senior Administrative Technician 1. call Meeting to order Chair Nejed`ly called the meeting to order at 1:01 p.m. 2. Public Comments None.. 3. old Business a. Review staff's response to questions regarding expenditures at the January 2017 meeting: Finance committee Minutes February 21, 2017 Page 2 ------ . ............. '' ............................`_ Ipt 0 ............... � ,. ................................. f :i �� .................. f ...... #212392 $3,25.7.00. Aqua-Science Lhair lllejedly requested a brief report on 12/29/16 why this study could not have been handled in-house. COMMITTEE ACTION: Reviewed staff's responses. 4. , Meet with representatives of HighMark capital Management and the Public Agency Retirement Services (PARS) to discuss: (60 minutes) a. Quarterly updates on OPEl3 Trust (Q3 9/30/16 and Q4 12/31/16 reports) Mr. Brown reviewed the information included in the agenda materials, with a focus on the fourth quarter, and responded to questions. b. PFM Asset Management LLGs independent review of the GASB 45 Trust and OPER (Other Pest-Employment Benefits) Trust investments, and Mr. Brown stated that in looking at the 12-month return period, the fixed income market returned 6.2%, the raid cap investments exceeded the benchmark, and small caps underperformed, as it was a disappointing last six months. He explained that acture managers have had a hard time adding value through investing to generate returns alcove their added costs. Rather than gaiting for things to change, HighMark has made changes. .He explained that HighMark is not waiting for acture management to come around; they are using a hybrid approach, and they are open to new gays of thinking for managing these assets. Mr. Brown also referred to PFM's analysis, stating that asset allocation is more important than the contrast between passive and acture management. Mr. Bailey suggested that Mr. Brown return to the Committee for a discussion on the alternative solutions regarding the passive versus active investment option. Member Pilecki said he would also like more information on a wider range of fixed income options. C. Overview and discussion of PARS section 115 Pension Rate stabilization Program and cost Mr. Barker reviewed the presentation included in the agenda materials, and responded to questions. COMMITTEE ACTION: [discussed, provided input to staff, and requested that Mr. Brown return to discuss alternative solutions. Finance Committee Minutes February 21, 2017 Page 3 5. Expenditures a. Review Expenditures COMMITTEE ACTION: Reviewed and recommended Board approval. Requested additional information on the following: . .............................. ................... ......................... ..... .... ...................... ............................................... ... ....... . .......................... ....... ........ ............. :.......... ........ ................. ...... ........................... . ..... ..;.......................... .. .......... i ...... ......... ....... ................ s ae vin ............ d ... ................... .......... I. ........... .... gra n::: � ue�te ............................................. #213192 $1,344.00 Alex Le Member Pilecki requested additional . 1/12/17 information on a refund of a permit fee. #213392 $955.00 Wonder Ice Chair Nejedly requested the cost . 1/26/17 Cream, Inc. breakdown of the 70th Anniversar event. #213554 $15 0.99 lie i n h o It Chair Nejedly questioned if this was a 2/9/17 En ineen monthcharge: b. Review Procurement Card (P-Card) Statements Chair Nejedly had several questions on charges. Ms. vassallo said she would research the charges, and report back at the next meeting. COMMITTEE ACTION-: Reviewed and requested additional information. 5. Review January 2017 Financial Statements and investment Reports Mr. Leiber explained that last month the Committee was provided both the old and new formats of the Financial Statements, arra this month it is a blend of both reports. Staff willcontinue to refine the format over time. Ms. vassallo stated that year-to-date Operations and Maintenance (0&M) revenues are $440.,000 under budget, mainly due to a shortage in the first sewer service charge installment. O&M expenses are running a $3.2 million favorable variance due to labor, repairs, maintenance, and outside services. Sewer construction revenues are running a $1.8 million unfavorable variance due to the shortage in the first sewer service charge installment. Sever construction expenses, or capital sending, is $17.5million, or #7. of budget. COMMITTEE ACTION: Reviewed and recommended Board approval. 7. Receive the 2015 Annual Report of the ICMA Deferred Compensation Plans Ms. vassallo reviewed the report included in the agenda materials. Member Pilecki asked why the 457 PTS Marr (Temporary Employees) fees are so high in S Finance Committee Minutes February 21, 2017 Page 4 comparison to the other funds. Ms. vassallo will follow up with Kim Hammond and report back... COMM TTE'E ACTION: Reviewed and recommended Board approval. 8. Review and discuss Budget Calendar and General Manager merno.to staff Mr. Leiter explained that the internal budget process has commenced. staff is currently working on pass one, and will have several reviews during March. The inten tion is to have a flat►budget, with a few focused exceptions. COMMITTEE ACTION: Reviewed and provided input to staff. 9. Announcements r a. Future scheduled meetings: Tuesday, larch 28, 20,17 at 1:0o p.m. Tuesday, April 25, 2017 at 1:99 p.m. Tuesday, May 23, 2017 at 1:00 p.m. 10. suggestions for future agenda items None. 11. Adjournment.— at 2:34 P.M..