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Home My WebLink AboutADMINISTRATION MINUTES 11-21-17Page 2 of 5 Jl Central Contra Costa Sanitary District MIN U T E S PHONE: (925) 228-9500 FAX- (925) 676-7211 www.centralsan.org Tuesday, November 21, 2017 8:30 a.m. Executive Conference Room 5019 Imhoff Place Martinez, California (-nmmittPP Chair Mike McGill Member David Williams Staff. - Roger S. Bailey, General Manager (left after Item 4.c.) Donna Anderson, Provisional Secretary of the District Ann Sasaki, Deputy General Manager Phil Leiber, Director of Finance and Administration Teji O'Malley, Human Resources Manager Thea Vassallo, Finance Manager (left after Item 4.a.) Shari Deutsch, Risk Management Administrator (left after Item 4.a.) Theresa Nidetz, Temporary Internal Auditor Christina Gee, Senior Administrative Technician (left after Item 4.c.) Anika Doria, Administrative Assistant Temp 1. Call Meeting to Order Chair McGill called the meeting to order at 8:30 p.m. In the interest of time, Chair McGill said the agenda items would be considered in the following order after any Public Comments are made: Item 4.c., 4.b., 4.a. and 3. a. 2. Public Comments None. December 7, 2017 Regular Board Meeting Agenda Packet - Page 230 of 255 BOARD OF DIRECTORS: PAUL H CA USEY REGULAR MEETING OF THE President CENTRAL CONTRA COSTA JAMES A.NEJEDLY President Pro Tent SANITARY DISTRICT MICHAEL R.MCGILL ADMINISTRATION COMMITTEE TAD JPILECKI DAVID R. WILLIAMS MIN U T E S PHONE: (925) 228-9500 FAX- (925) 676-7211 www.centralsan.org Tuesday, November 21, 2017 8:30 a.m. Executive Conference Room 5019 Imhoff Place Martinez, California (-nmmittPP Chair Mike McGill Member David Williams Staff. - Roger S. Bailey, General Manager (left after Item 4.c.) Donna Anderson, Provisional Secretary of the District Ann Sasaki, Deputy General Manager Phil Leiber, Director of Finance and Administration Teji O'Malley, Human Resources Manager Thea Vassallo, Finance Manager (left after Item 4.a.) Shari Deutsch, Risk Management Administrator (left after Item 4.a.) Theresa Nidetz, Temporary Internal Auditor Christina Gee, Senior Administrative Technician (left after Item 4.c.) Anika Doria, Administrative Assistant Temp 1. Call Meeting to Order Chair McGill called the meeting to order at 8:30 p.m. In the interest of time, Chair McGill said the agenda items would be considered in the following order after any Public Comments are made: Item 4.c., 4.b., 4.a. and 3. a. 2. Public Comments None. December 7, 2017 Regular Board Meeting Agenda Packet - Page 230 of 255 Page 3 of 5 Administration Committee Minutes November 21, 2017 Page 2 3. Items for Committee Recommendation to Board a. Follow-up discussion from September 28, 2017, meeting to review draft Position Paper to consider whether to recommend Board endorsement of the sewer lateral insurance program being offered by Contra Costa Water District (CCWD), and allow use of Central San's name and logo on marketing materials Ms. Sasaki reviewed the material included with the agenda packet, noting that at this point the Committee may recommend proceeding with a pilot program with CCWD. To the extent any Central San customers not included in the pilot program express an interest, the general staff response would be that staff is assessing the pilot program and, if deemed successful, will consider providing a similar program to all customers. In the interim, staff can direct customers to HomeServe, who provides similar coverage on an individual basis. COMMITTEE ACTION: Recommended that the Board endorse the sewer lateral insurance program being offered by CCWD on a pilot basis, allowing the use of Central San's name and logo on marketing materials. 4. Other Items a. Discuss potential incentives to encourage more employees to participate in Toastmasters Ms. Vassallo summarized the suggested incentives as outlined in the agenda materials. She noted that a recent Open House at which refreshments were provided was successful and is expected to boost membership. Ms. O'Malley said she has seen an increase in suggestions included in performance evaluations over the past year that recommend participation in Toastmasters. COMMITTEE ACTION: Supported all three recommendations stated in the agenda materials for promoting participation in Toastmasters. b. Follow-up to June 20, 2017 discussion on evaluating earthquake insurance -targeted risk analysis to include flood and earthquake scenarios Ms. Deutsch stated that, after conducting an analysis as directed by the Committee, it was concluded that earthquake insurance would not be of value to the District. While her analysis led her to believe that flood December 7, 2017 Regular Board Meeting Agenda Packet - Page 231 of 255 Page 4 of 5 Administration Committee Minutes November 21, 2017 Page 3 insurance may be of some value, there is some newly proposed legislation currently pending which may allow commercial markets to provide flood coverage, leading her to believe there may be some opportunities to pursue flood options in the future that do not currently exist. She will continue assessing the situation and will return to the Committee if anything develops. COMMITTEE ACTION: Received the report. C. Receive presentation introducing the concept of an internal audit function at Central San Mr. Leiber introduced Theresa Nidetz, the District's temporary internal auditor. Ms. Nidetz reviewed her background, noting that she has extensive experience as an internal auditor. She explained the Three Lines of Defense Model on the second slide of the presentation included with the agenda materials, noting that it is a widely -accepted approach utilized globally to achieve a robust internal controls environment. Member Williams asked to whom internal auditors typically report. Ms. Nidetz said that functional reporting is generally to an audit committee of the Board, but performance evaluations, etc. typically are conducted by the general manager/chief executive officer. Mr. Bailey said he has no particular recommendation at this point in this regard. Mr. Leiber stated that one of the initiatives in the Fiscal Year 2016-18 Strategic Plan under Strategy 2 — Manage Costs is to perform targeted audits of critical/high risk functions or processes. As part of the Mentorship Program, a project was initiated earlier this year to identify high cost/high risk functions in each Division, and a preliminary list of risk areas has been established. This listing, once further refined, may serve as a source of potential audits. Mr. Leiber explained the intention is to bring forward an internal audit work plan for the Board's approval at the beginning of each year Periodic audit reports would be provided to the Board throughout the year based on completed audits from the work plan or as otherwise called for. Ms. Deutsch pointed out that multiple elements go into assessing risk, including economic and operational factors. Regular internal audits are meant to improve processes before issues arise. December 7, 2017 Regular Board Meeting Agenda Packet - Page 232 of 255 Page 5 of 5 Administration Committee Minutes November 21, 2017 Page 4 Member Williams supported the concept of internal audits and inquired about the approach to staffing the function, including whether a full-time auditor would be preferable over the long term. Mr. Bailey said that certain audits will repeat over time so there will always be a long-term need. However, it is too early to determine long-term staffing needs, which is why a contract auditor has been retained. Chair McGill said that staff presented a very well thought-out approach which relies on industry standards. He fully supported proceeding with the approach as outlined. Mr. Bailey said at some point the Board will need to decide if it wishes to create a separate Audit Committee. COMMITTEE ACTION: Received the presentation and recommended proceeding with the internal audit approach outlined by staff. 5. Announcements None. 6. Future Scheduled Meetings a. Tuesday, December 12, 2017 at 8:30 a.m. 2018 Meeting Dates To Be Determined (see below) The Committee tentatively set a meeting date of Friday, January 12, 2018 at 8:30 a.m., with the understanding that it may be cancelled or moved based on new 2018 Committee assignments. 7. Suggestions for future agenda items None. 8. Adjournment — at 9:30 a.m. December 7, 2017 Regular Board Meeting Agenda Packet - Page 233 of 255