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HomeMy WebLinkAboutFinance MINUTES 07-24-18 Page 2 of 12 ENTRAL SAN -9-a CENTRAL CONTRA COSTA SANITARY DISTRICT 5019 IMHOFF PLACE, MARTINEZ, CA 9AS53-A392 REGULAR MEETING OF THE BOARD OF DIRECTORS: CENTRAL CONTRA COSTA JAMES A.NEJEDLY President SANITARY DISTRICT DAVIDR, WILLIAMS FINANCE COMMITTEE President Pro Tem PAUL H.CA USEY MICHAEL R.MCGILL M I N U T E S TAD J PILECKI PHONE: (925)228-9500 Tuesday, Jul 242018 FAX.- (925)372-0192 y y , www.centralsan.org 2:00 p.m. Executive Conference Room 5019 Imhoff Place Martinez, California Committee: Chair Jim Nejedly Member Tad Pilecki Invited Guests: Sarah Hollenbeck, PFM Financial Advisors LLC (left after Item 4.b.) Thomas Innis, Piper Jaffray (left after Item 4.b.) Greg Schwartz, Piper Jaffray (left after Item 4.b.) Staff.- Katie Young, Secretary of the District (arrived during Item 4.a.) Ann Sasaki, Deputy General Manager Phil Leiber, Director of Finance and Administration Emily Barnett, Communications and Intergov. Relations Manager (left after item 3.a.) Stephanie King, Purchasing and Materials Manager Thea vassallo, Finance Manager Shari Deutsch, Risk Management Administrator (left after Item 5.a.) Donna Anderson, Assistant to the Secretary of the District 1. Call Meeting to Order Chair Nejedly called the meeting to order at 2:00 p.m. 2. Public Comments None. August 2, 2018 Regular Board Meeting Agenda Packet- Page 241 of 253 Page 3 of 12 Finance Committee Minutes July 24, 2018 Page 2 3. Old Business a. Follow-up to questions asked at the June 26, 2018 meeting regarding check expenditures Ms. Barnett briefly reviewed the memorandum included with the agenda material. COMMITTEE ACTION: Received the information. 4. Items for Committee Recommendation to the Board a.* Review and approve expenditures dated August 2, 2018 The Committee reviewed the expenditures included with the agenda material, and staff responded to questions, some of which had been provided by Member Pilecki in advance of the meeting. Several questions related to items on the listing of procurement card (P-card) transactions in the expenditures listing. Ms. Vassallo explained that the listing was more brief than in the past due to several processing optimizations that staff has been working on (see Summary of P-Card Optimizations attached). Line items are now being grouped by account number, which consolidates numerous transactions into a single line, thus making some of the dollar amounts appear larger than in the past. Upon discussion, it was agreed that beginning with the next reporting cycle, more detail would be included with regard to monthly P-card transactions. It was left to the staff to determine the most appropriate method for providing this information, balancing the Committee's need to provide oversight with the also important objective of streamlining the time-consuming accounting process for P-card transactions. Ms. Vassallo mentioned that one of the requirements of the new ERP (Enterprise Resource Planning) system is a procurement/P-card module, which should help provide improved reporting on P-card transactions as well as streamlined processing. Chair Nejedly asked staff to provide additional information at the next meeting with regard to check#219906 to Acme Fill Corporation in the amount of$1,259.76 described as "interest on cash deposit." COMMITTEE ACTION: Reviewed and recommended Board approval. August 2, 2018 Regular Board Meeting Agenda Packet- Page 242 of 253 Page 4 of 12 Finance Committee Minutes July 24, 2018 Page 3 b.* Review draft Position Paper to consider adopting a Revenue Bond Issuance Resolution for the issuance of revenue bonds to refinance existing 2009 Certificates of Participation Mr. Leiber reviewed the information included with the agenda material, noting that the cost savings from the refinancing is expected to be X2.4 million, roughly$1 million more than previous estimates. He distributed three updated/strikeout pages to the draft Preliminary Official Statement and the draft Indenture attached to the draft Position Paper(attached). Member Pilecki requested clarification be made in the final Position Paper in the following two respects: • An escrow account will be needed for refinancing the Series 20098 bonds. • No changes are needed to Board Policy No. BP 017— Fiscal Reserves in order to proceed with the refinancing. Member Pilecki said he was comfortable recommending Board approval of the refinancing as presented, and Chair Nejedly concurred. COMMITTEE ACTION: Reviewed and recommended Board approval. 5. Other Items a. Review Risk Management Loss Control Report as of July 16, 2018 Ms. Deutsch reviewed the Loss Control Report included with the agenda material and responded to questions from the Committee Members. COMMITTEE ACTION: Received the report. b. Receive annual report on status of loans under Board Policy No. BP 001 — Employee Computer Purchase Assistance Program Ms. Vassallo briefly reviewed the memorandum included with the agenda material. COMMITTEE ACTION: Received the report. August 2, 2018 Regular Board Meeting Agenda Packet- Page 243 of 253 Page 5 of 12 Finance Committee Minutes July 24, 2018 Page 4 6. Announcements a. June and July 2018 Financial Statements and Investment Reports to be reviewed at August 21, 2018 Committee meeting COMMITTEE ACTION: Received the announcement. 7. Future Scheduled Meetings a. Tuesday, August 21, 2018 at 2:00 p.m. Tuesday, September 25, 2018 at 2:00 p.m. Tuesday, October 23, 2018 at 2:00 p.m. 8. Suggestions for Future Agenda Items a. Receive list of future agenda items COMMITTEE ACTION: Received the list. 9. Adjournment— at 2:35 p.m. * Attachment August 2, 2018 Regular Board Meeting Agenda Packet- Page 244 of 253 Page 6 of 12 Item 4.a. (Committee Handout) Central San Summary of PCard Optimization 2016-18 Strategic Plan Goal 6—Embrace technology, innovation and environmental sustainability Strategy 2—Evaluate business processes and optimize business operations Finance—Goals was to streamline the PCard process and cut down on staff time to process activity Old process • Technician would enter each employee log separately • Looking to limit risk for credit card theft by eliminating access to (master account and ee account numbers) • Use another method of reporting that excluded cc numbers, and employee names New process • The monthly master statement is downloaded into an excel spreadsheet • All charges within a dept are sorted, combined and entered as one total • Generic description "Procurement Payment" Quarterly report to Finance Committee • Will provide US Bank download of monthly statement with the following: 1. Transaction date 2. Transaction amount 3. Merchant Effective next month for June statement. As part of the New ERP requirements we are looking for the vendor to provide fora "Procurement Module" which will provide more detail and direct mapping from US Bank(credit card vendor) into Central San accounting system. N 7/24/18 August 2, 2018 Regular Board Meeting Agenda Packet- Page 245 of 253 Page 7 of 12 Item 4.b. (Committee Handout) (c) the proceeds derived by the District directly or indirectly from the sale,lease or other disposition of a part of the Wastewater System as permitted in the Indenture. The term"Gross Revenues"does not include(i)Tax Revenues,(ii)customers'deposits or any other deposits subject to refund until such deposits have become the property of the District, (iii) the proceeds of any ad valorem property taxes levied for the purpose of paying general obligation bonds of the District relating to the Wastewater System, and (iv)the proceeds of any special assessments or special taxes levied upon real property within any improvement district for the purpose of paying special assessment bonds or special tax obligations of the District relating to the Wastewater System. "Operation and Maintenance Costs" means the reasonable and necessary costs paid or incurred by the District for maintaining and operating the Wastewater System,determined in accordance with generally accepted accounting principles,including but not limited to(a)all reasonable expenses of management and repair and other expenses necessary to maintain and preserve the Wastewater System in good repair and working order,and(b)all administrative costs of the District that are charged directly or apportioned to the operation of the Wastewater System, such as salaries and wages of employees,ems Ioee benefils{includ�n actuarial annus! erasion payment; overhead,taxes(if any) and insurance. "Operating and Maintenance Costs"do not include(i)administrative costs of the Bonds which the District is required to pay under the Indenture,(ii)payments of debt service on bonds,notes or other obligations issued by the District with respect to the Wastewater System,(iii)depreciation,replacement and obsolescence charges or reserves therefor, and (iv) amortization of intangibles or other bookkeeping entries of a similar nature iincluding. without limitation GASB ear-end adjustments atll nbutable tca P-eqs-io ng rid OPER]. 'Tax Revenues"means all ad valorem taxes allocable to the Wastewater System which are levied upon taxable property in the District by the Board of Supervisors of Contra Costa County, and which are allocated to the District under the provisions of Chapter 6 of Part 0.5 of Division 1 of the Revenue and Taxation Code of the State of California, including all payments, subventions and reimbursements,if any,to the District specifically attributable to taxes lost by reason of tax exemptions and tax rate limitations;but excluding any taxes levied for the sole purpose of providing for payment of principal and interest on any voter-approved indebtedness incurred by the District, which taxes would not otherwise be subject to levy but fa r the issuance of such indebtedness. "Concord Agreement"means that certain Agreement,dated September 10, 1974,between the District and the City of Concord,as amended from time to time,including as amended on November 16, 1976,on June 11, 1982,on October 6, 1985, on June 18, 1987,and on April 9,2002 Concord Agreement Gross Revenues includes payments received by the District under the Concord Agreement. See"THE DISTRICT—Concord Agreement"for a description of the Concord Agreement. Flow of Funds under the Indenture The District previously established the"Wastewater System Funds,"which the District agrees in the Indenture to continue to hold and maintain for the purposes and uses set forth in the Indenture. The District agrees to deposit all of the Tax Revenues and Gross Revenues in the Wastewater System Funds immediately upon receipt. In addition to the transfers required to be made under any Parity Obligations,the District will withdraw amounts on deposit in the Wastewater System Funds and apply such amounts at the times and for the purposes,and in the priority,as follows: 10 August 2, 2018 Regular Board Meeting Agenda Packet- Page 246 of 253 Page 8 of 12 (c) the proceeds derived by the District directly or indirectly from the sale, lease or other disposition of a part of the wastewater System as permitted in the Indenture. The term "Gross Revenues" does not include (i) Tax Revenues, (ii) customers' deposits or any other deposits subject to refund until such deposits have become the property of the District, (iii) the proceeds of any ad valorem property taxes levied for the purpose of paying general obligation bonds of the District relating to the wastewater System, and (iv) the proceeds of any special assessments or special taxes levied upon real property within any improvement district for the purpose of paying special assessment bonds or special tax obligations of the District relating to the wastewater System. "Operation and Maintenance Costs" means the reasonable and necessary costs paid or incurred by the District for maintaining and operating the wastewater System, determined in accordance with generally accepted accounting principles, including but not limited to (a) all reasonable expenses of management and repair and other expenses necessary to maintain and preserve the wastewater System in good repair and working order, and (b) all administrative costs of the District that are charged directly or apportioned to the operation of the wastewater System, such as salaries and wages of employees, employee benefits (including actuarial annual pension payment), overhead, taxes (if any) and insurance. "Operating and Maintenance Costs"do not include (i) administrative costs of the Bonds which the District is required to pay under the Indenture, (ii) payments of debt service on bonds, notes or other obligations issued by the District with respect to the wastewater System, (iii) depreciation, replacement and obsolescence charges or reserves therefor, and (iv) amortization of intangibles or other bookkeeping entries of a similar nature (including, without limitation, GASB year-end adjustments attributable to pension and OPEB). "Tax Revenues" means all ad valorem taxes allocable to the wastewater System which are levied upon taxable property in the District by the Board of Supervisors of Contra Costa County, and which are allocated to the District under the provisions of Chapter 6 of Part 0.5 of Division 1 of the Revenue and Taxation Code of the State of California, including all payments, subventions and reimbursements, if any, to the District specifically attributable to taxes lost by reason of tax exemptions and tax rate limitations; but excluding any taxes levied for the sole purpose of providing for payment of principal and interest on any voter-approved indebtedness incurred by the District, which taxes would not otherwise be subject to levy but for the issuance of such indebtedness. "Concord Agreement" means that certain Agreement, dated September 10, 1974, between the District and the City of Concord, as amended from time to time, including as amended on November 16, 1976, on June 11, 1982, on October 6, 1985, on June 18, 1987, and on April 9, 2002. Concord Agreement Gross Revenues includes payments received by the District under the Concord Agreement. See "THE DISTRICT—Concord Agreement"for a description of the Concord Agreement. Flow of Funds under the Indenture The District previously established the"Wastewater System Funds,"which the District agrees in the Indenture to continue to hold and maintain for the purposes and uses set forth in the Indenture. The District agrees to deposit all of the Tax Revenues and Gross Revenues in the wastewater System Funds immediately upon receipt. In addition to the transfers required to be made under any Parity obligations, the District will withdraw amounts on deposit in the wastewater System Funds and apply such amounts at the times and for the purposes, and in the priority, as follows: 10 August 2, 2018 Regular Board Meeting Agenda Packet- Page 247 of 253 Page 9 12 �.5 Comparative Sewer Service Charges.Set forth in the following table is a comparison of the District's sewer service charges to rates in the surrounding region. TABLE 9 CENTRAL CONTRA COSTA SANITARY DISTRICT Comparative Annual Sewer Charges July 20187 Annual Sewer A enc Service Charge 1021 Berkeley E BM UD for treatment 1,379 Santa Rcsaa-q����400- $1.3221.29 �e44 BeniciiaR-SaRll fy ID;6ki t 8896 97l Food vv Sanitary Di trot Benicia H2 Petaluma 953 Richmond 7-74 rocket SanitaEy Department Mand- 749769 � 1 r i f ea l,Y e r44 Oakland(EBMUD for 764767 treat me,nt Cf— c�tt S o r;;ate.. Dem Napa Sanitation District 639676 E3rentwccdmf 64X653 Livermorc&ef e &24�32. Novato 694615 Concord(CCCSD for treatment) "7592 Mt View Sanitary District 674-591 West County Wastewater District 576 Central San 567 Plersanron(DRSD for X560 treatment)P4tG 1 - 4eat;;% ) Stege SD(EBMUD for treatment) 624546 Qefltr Vallejo 520 Pittsburg l Delta Diablo fcr treatmc nt) 491 Fairfield f,FSSD) 458 Antioch(Delta Diablo for treatment) X457 Dublin San Ramon Services District 423 Bay Point(Delta Diablo for treatment) 602421 4 Union Sanitary District 3004p7 Pi its a.,.pep&F-��&400 97- Oro Loma Sanitary District 2,38256 E (1) Annual Sewer Service Charge per Single Faml,y Res_dence,or SFR I (2) Rates In effect on Ju y 1 of FY 201EP-189.July 1,2010 3 August 2, 2018 Regular Board Meeting Agenda Packet- Page 248 of 253 Page 10 of 12 Comparative Sewer Service Charges. Set forth in the following table is a comparison of the Districts sewer service charges to rates in the surrounding region. TABLE 9 CENTRAL CONTRA COSTA SANITARY DISTRICT Comparative Annual Sewer Charges July 2018 Annual Sewer Agency Service Change(1)(2) Berkeley(EBMUD for treatment) $1,379 Santa Rosa 11322 Benicia 971 Rodeo Sanitary DistrictBenicia 962 Petaluma 953 Richmond 824 Crockett Sanitary Department ?89 Oakland (EBMUD for treatment) 767 Napa Sanitation District 676 Brentwood 653 Livermore 632 Novato 615 Concord (CCCSD for treatment) 592 Mt View Sanitary District 591 West County Wastewater District 576 Central San 567 Pleasanton (DSRSD for treatment) 560 Stege SD (EBMUD for treatment) 546 Vallejo 520 Pittsburg (Delta Diablo for treatment) 491 Fairfield (FSSD) 468 Antioch (Delta Diablo for treatment) 457 Dublin San Ramon Services District 423 Bay Point (Delta Diablo for treatment) 421 Union Sanitary District 407 Oro Loma Sanitary District 255 (1) Annual Sewer Service Charge per Single Family Residence,or SFR. (2) Rates in effect on July 1 of FY 2018-19(July 1,2018) 33 August 2, 2018 Regular Board Meeting Agenda Packet- Page 249 of 253 Page 1 of 12 h; ` remaining after payment of all expenses (including attorneys' fees) incurred in the collection of such proceeds. "Net Revenues" means, for any period, an amount equal to all of the Gross Revenues received during such period minus the amount required to pay all Operation and Maintenance Costs coming payable during such period. "Nominee" means (a) initially, Cede & Co. as nominee of DTC, and (b) any other nominee of the Depository designated under Section 2.04(a). "Office" means, with respect to the Trustee, the corporate trust office of the Trustee at the address set forth in Section 9.09, or at such other or additional offices as may be specified by the Trustee in writing to the District; except that with respect to presentation of Bonds for payment or for registration of transfer and exchange, such term means the office or agency of the Trustee at which, at any particular time, its corporate trust agency business is conducted. "Operation and Maintenance Costs" means the reasonable and necessary costs paid or incurred by the District for maintaining and operating the wastewater System, , determined in accordance with generally accepted accounting principles, including but not limited to (a) all reasonable expenses of management and repair and other expenses necessary to maintain and preserve the wastewater System in good repair and working order, and (b) all administrative costs of the District that are charged directly or apportioned to the operation of the Wastewater System, such as salaries and wages of employees, emp to ee benefits includin actuarial annual ension a _ � � yment�� overhead, taxes (if any) and insurance. "operating and Maintenance Costs" do not include (i) administrative costs of the Bonds which the District is required to pay hereunder, (ii) payments of debt service on bonds, notes or other obligations issued by the District with respect to the wastewater System, (iii) depreciation, replacement and obsolescence charges or reserves therefor, and (iv) amortization of intangibles or other bookkeeping entries of a similar nature{_ including,_. without limitation GASB year-en_0 astments attributable to pension and OPEB). "tri inal Purchase" means Piper Jaffray & Co., as the original purchaser of the Bonds upon their delivery by the Trustee on the Closing Date. Outstandinf, when used as of any particular time with reference to Bonds, means all Bonds theretofore, or thereupon being, authenticated and delivered by the Trustee under this Indenture except: (a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation; (b) Bonds with respect to which all liability of the District has been discharged in accordance with Section 9.03; (c) Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds shall have been authenticated and delivered by the Trustee under this Indenture; and (d) Bonds which are required to be disregarded and not deemed Outstanding under Section 9.05. "ownerr', when used with respect to any Bond, means the person in whose name the ownership of such Bond is registered on the Registration Books. "Parity obli ations" means bonds, notes, loan agreements, installment safe agreements leases or other obligations of the District payable from and secured by a A-5 August 2, 2018 Regular Board Meeting Agenda Packet- Page 250 of 253 Page 12 of 12 remaining after payment of all expenses (including attorneys' fees) incurred in the collection of such proceeds. "Net Revenues" means, for any period, an amount equal to all of the Gross Revenues received during such period minus the amount required to pay p all Operation and Maintenance Costs coming payable during such period. "Nominee" means (a) initially, Cede & Co. as nominee of DTC, and (b) any other nominee of the Depository designated under Section 2.04(a). "Office" means, with respect to the Trustee, the corporate trust office of the Trustee at the address set forth in Section 9.09, or at such other or additional offices as may be specified by the Trustee in writing to the District; except that with respect to presentation of Bonds for payment or for registration of transfer and exchange, such term means the office or agency of the Trustee at which, at any particular time, its corporate trust agency business is conducted. "Operation and Maintenance Costs" means the reasonable and necessary costs paid or incurred by the District for maintaining and operating the wastewater System, determined in accordance with generally accepted accountingprinciples, including but p p g not limited to (a) all reasonable expenses of management and repair and other expensesnecessary to maintain and preserve the wastewater System in good repair and working order, and (b) all administrative costs of the District that are charged directly or apportioned to the operation of the wastewater System, such as salaries and wages of employees, employee benefits (including actuarial annual pension payment), overhead, taxes (if any) and insurance. Operating and Maintenance Costs" do not include (i) administrative costs of the Bonds which the District is required toa pY hereunder, (ii) payments of debt service on bonds, notes or other obligations issued by the District with respect to the wastewater System, (iii) depreciation, replacement and obsolescence charges or reserves therefor, and (iv) amortization of intangibles or other bookkeeping entries of a similar nature, (including, without limitation, GASBY ear-end adjustments attributable to pension and OPEB). "Original Purchases'' means Piper Jaffray & Co., as the original purchaser of the Bonds upon their delivery by the Trustee on the Closing Date. "Outstanding", when used as of any particular time with reference to Bonds, means all Bonds theretofore, or thereupon being, authenticated and delivered by the Trustee under this Indenture except: (a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation; (b) Bonds with respect to which all liability of the District has been discharged in accordance with Section 9.03; (c) Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds shall have been authenticated and delivered by the Trustee under this Indenture; and d Bonds which are required to be disregarded and not deemed outstanding under Section 9.05. "owner", when used with respect to any Bond, means the person in whose name the ownership of such Bond is registered on the Registration Books. "Parit obli ations" means bonds, notes, loan agreements, installment sale agreements, leases or other obligations of the District payable from and secured by a A-5 August 2, 2018 Regular Board Meeting Agenda Packet- Page 251 of 253