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HomeMy WebLinkAbout13.a. Minutes Administration Committee 10-16-17Page 1 of 5 Item 13.a. Central Contra Costa Sanitary District November 2, 2017 TO: HONORABLE BOARD OF DIRECTORS FROM: ELAINE BOEHME, SECRETARY OF THE DISTRICT SUBJECT: OCTOBER 16, 2017 -ADMINISTRATION COMMITTEE - MEMBER MCGILL AND MEMBER WILLIAMS Attached are minutes of the above Committee meeting. Strategic Plan Tie -In GOAL ONE: Provide Exceptional Customer Service Strategy 1 - Foster Customer Engagement and Awareness ATTACHMENTS: 1. Minutes of 10-16-17 Administration Committee Meeting November 2, 2017 Regular Board Meeting Agenda Packet - Page 274 of 303 Page 2 of 5 Jl Central Contra Costa Sanitary District REGULAR MEETING OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT ADMINISTRATION COMMITTEE MINUTES Thursday, October 16, 2017 8:30 a.m. Executive Conference Room 5019 Imhoff Place Martinez, California ('nmmittaa Chair Mike McGill Member David Williams BOARD OF DIRECTORS: PAUL H CA USEY President JAMES A. NEJEDLY President Pro Tent MICHAEL R. MCGILL TAD J PILECKI DAVID R. WILLIAMS PHONE: (925) 228-9500 FAX- (925) 676-7211 www.centralsan.org Staff. Roger S. Bailey, General Manager Elaine R. Boehme, Secretary of the District Ann Sasaki, Deputy General Manager Phil Leiber, Director of Finance and Administration Jean -Marc Petit, Director of Engineering and Technical Services (left during Item 3.a.) Emily Barnett, Communication Services and Intergovernmental Relations Manager (arrived during Item 3.a. and left after Item 3.b.) Teji O'Malley, Human Resources Manager Todd Smithey, Finance Administrator Chris Thomas, Finance Administrator (left after Item 3.a.) Donna Anderson, Assistant to the Secretary of the District 1. Call Meeting to Order Chair McGill called the meeting to order at 8:38 a.m. 2. Public Comments None. 3. Items for Committee Recommendation to Board a. Review draft Position Paper recommending Board approval of (1) updated Board Policy No. BP 017 - Fiscal Reserves, and (2) authorizing the November 2, 2017 Regular Board Meeting Agenda Packet - Page 275 of 303 Page 3 of 5 Administration Committee Minutes October 16, 2017 Page 2 General Manager to establish with Contra Costa County a separate investment sub -account for the Operations and Maintenance (O&M) Sub - Fund Mr. Leiber summarized the rationale for the proposed revisions to BP 017, noting that they primarily relate to (1) adding language to clarify how reserve funds may be used, (2) increasing the Operations & Maintenance (O&M) reserve from 5 months to 6 months (to be phased in over a five- year period), and (3) adding language that recognizes creation of the Section 115 Pension Prefunding Trust and addresses several other miscellaneous issues. A lengthy discussion took place during which it was noted that a 1112th increase in the O&M reserve would minimize the periodic transfer of funds from the Capital Improvement reserve to the O&M reserve to cover shortfalls when the timing of deposits of Sewer Service Charge (SSC) revenue from the County (April and December) does not coincide with payment of expenditures. Staff believes an additional month's cushion would reduce or eliminate the need for such transfers. Mr. Leiber noted that the proposed additional language in the policy speaks to when reserves may be used and when they are replenished and essentially memorializes current practices. Chair McGill stated that he is not averse to having a cash reserve in the event of a major disaster where the District would have to maintain operations if its cash flow were interrupted. Noting that earnings on cash accounts are very low in this economic climate, he raised for discussion purposes the idea of having a bank line of credit available to address short-term cash flow needs. Member Williams stated that it appeared to him that the self-insurance fund reserve functions more as a true reserve fund, whereas the O&M and Capital reserve funds function more as working capital/cash flow funds. He stated a preference for calling them what they are, noting that working capitallcash flow funds should be for planned events, and reserve funds should be for unplanned events. Mr. Bailey commented that staff essentially considers both the O&M reserves and the Capital reserves as working capital. He stated that most agencies that bill monthly and receive steady revenue have true reserve funds beyond working capitallcash flow funds. In his opinion, the District should, in the long-term, be working toward establishing true reserve funds. November 2, 2017 Regular Board Meeting Agenda Packet - Page 276 of 303 Page 4 of 5 Administration Committee Minutes October 16, 2017 Page 3 Chair McGill commented that the only true reserve is for self-insurance. He also questioned why the debt service and other reserves language was included in the policy. Mr. Leiber said he believed it was of value to mention all reserve -like funds in the policy, and that was how the 2015 policy was approached. Based on the discussion, Mr. Bailey said it appeared that the Committee would prefer less restriction on staff's ability to pay expenses from either of the two existing reserve funds (O&M and Capital) and that a statement to that effect could be included in the policy. He will ask staff to research the past usage (over a 5 to 10 -year period) on the two funds to get a clear picture of past cash flow needs. Mr. Bailey concluded that there is no need for urgent action on the existing policy. Given the discussion at this meeting, he will work with staff over the coming months to consider proposed changes to the policy that could take into consideration the concept of separating cash flow reserves from true reserves, and also provide various approaches for funding the reserves. He suggested this may be a good topic for discussion at the March 8, 2018 Financial Planning Workshop. COMMITTEE ACTION: Provided input to staff. b. Conduct biennial review of Board Policy No. BP 021 — Social Media Communication COMMITTEE ACTION: Concurred with staff recommendation of no changes to the policy. 4. Other Items a. Receive report on employee turnover rates for Fiscal Year 2016-17 and benchmarking studies of other agencies' turnover rates COMMITTEE ACTION: Due to time constraints, this item was continued to a future meeting. b. Review additional options to bring the District to the next most cost- effective level of compliance with the Bay Area Commuter Benefits Program (BACBP) Ms. O'Malley explained the available options for moving beyond the current level of compliance with the BACBP. November 2, 2017 Regular Board Meeting Agenda Packet - Page 277 of 303 Page 5 of 5 Administration Committee Minutes October 16, 2017 Page 4 COMMITTEE ACTION: Recommended Board approval of adding Option 1 (allowing employees to exclude their transit or vanpool costs from taxable income to the maximum extent permitted by Internal Revenue Service regulations (currently $255 per month)) to those options already provided. C. Receive information on Contra Costa County Employees' Retirement Association (CCCERA) formulas for calculating employer and employee contribution rates COMMITTEE ACTION: Due to time constraints, this item was continued to a future meeting. 5. Announcements — None. 6. Future Scheduled Meetings a. Tuesday, October 24, 2017 at 8:30 a.m. Tuesday, November 21, 2017 at 8:30 a.m. Tuesday, December 12, 2017 at 8:30 a.m. 7. Suggestions for future agenda items None. 8. Adjournment — at 10:02 a.m. November 2, 2017 Regular Board Meeting Agenda Packet - Page 278 of 303