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HomeMy WebLinkAboutFinance MINUTES 05-18-20 Page 2 of 33 ,or76— I CENTRAL SAN CENTRAL • ■ • COSTA . IMHOFF PLACE, MARTINEZ, CA 9AS53-A392 SPECIAL MEETING OF THE BOARD OF DIRECTORS: CENTRAL CONTRA COSTA MICHAELMCGILL President SANITARY DISTRICT TAD JPILECKI FINANCE COMMITTEE President Pro Tem PAUL H CAUSEY JAMES A.NEJEDLY M I N U T E S DAVID R, WILLIAMS PHONE: (925)228-9500 MFAX. (925)372-0192 Monday, May 1$, 2020 www.centralsan.org 2:00 p.m. Executive Conference Room 5019 Imhoff Place Martinez, California (All attendees participated via videoconference) Committee: Chair Paul Causey Member Jim Nejedly Guests: Mitch Barker, Public Agency Retirement Services (PARS) (left after Item 6.a.) Andrew Brown, Highmark Capital Management (left after Item 6.a.) Staff. Roger S. Bailey, General Manager Katie Young, Secretary of the District Phil Leiber, Director of Finance and Administration Jean-Marc Petit, Director of Engineering and Technical Services Stephanie King, Purchasing and Materials Manager (left during Item 6.b.) Danea Gemmell, Planning and Development Services Division Manager Edgar Lopez, Capital Projects Division Manager Kevin Mizuno, Finance Manager Thomas Brightbill, Senior Engineer Todd Smithey, Finance Administrator Shari Deutsch, Risk Management Administrator (left after Item 6.b.) Christina Gee, Management Analyst Donna Anderson, Assistant to the Secretary of the District 1. Notice This meeting was held in accordance with the Brown Act as in effect under the State Emergency Services Act, the Governor's Emergency Declaration related to COVID- 19, and the Governor's Executive Order N-29-20 issued on March 17, 2020 that allowed attendance by Board Members, District staff, and the public to participate and June 4, 2020 Regular Board Meeting Agenda Packet- Page 418 of 449 Page 3 of 33 Finance Committee Minutes May 18, 2020 Page 2 conduct the meeting by teleconference, videoconference, or both. The agenda included instructions for options in which the public could participate in the meeting. 2. Call Meeting to Order Chair Causey called the meeting to order at 2:02 p.m. 3. Public Comments None. At this point, the Committee proceeded to hear Item 6.a. out of order. 4. Old Business Follow-up to question asked at the April 21 , 2020 Finance Committee meeting regarding specific expenditures The Committee expressed satisfaction with the follow-up information provided in the agenda material. COMMITTEE ACTION: Received the information. 5. Items for Committee Recommendation to the Board a. Review and recommend approval of expenditures incurred April 2, 2020 through April 30, 2020 Staff responded to a list of questions posed in advance of the meeting by Chair Causey and during the meeting by Member Nejedly concerning the expenditures listing. With regard to the payment made to Weco Industries, Inc. (Page 17, Check No. 228231 for$18,975.16) for camera repairs, staff explained that all 19 cameras were inoperable at the same time. Chair Causey said he hoped that procedures would be put in place to prevent such an occurrence in the future. The Committee expressed satisfaction with most staff responses but requested additional information on the following items: Page 15— Check No. 228213 to Republic Services, Inc. Chair Nejedly noted that the check covered billings back to February and asked if the February billing had been delayed. Page 29— Check No. 228331 to Resa Power Solutions - $42,500 Chair Causey inquired if this transformer repair was related to recycled water. Mr. Petit said he would investigate. June 4, 2020 Regular Board Meeting Agenda Packet- Page 419 of 449 Page 4 of 33 Finance Committee Minutes May 18, 2020 Page 3 Page 34 — Procurement Card Purchase "CERT WRKSHOP & EXAM/2 STAFF - $3,148.50 Mr. Mizuno said staff was investigating this purchase and would report back. Pages 31-24 — Procurement Card Purchases Member Nejedly noted the large quantity of procurement card purchases during the period covered, the overall amount of such purchases, and the lack of meaningful descriptions for some of them. Staff said they would review the purchases and report back. During the discussion, Chair Causey noted that there were payments related to contracts with Woodard & Curran, with whom he currently has a consulting contract on matters unrelated to Central San. Therefore, in an abundance of caution, he said he would be recusing himself from voting on approval of expenditures at the upcoming Board meeting. COMMITTEE ACTION: Recommended Board approval. b. Review April 2020 Financial Overview and Investment Reports Staff responded to several questions posed by Chair Causey related to favorable variances in the Operations and Maintenance (O&M) Budget through April 30, 2020. It was explained that Total Labor Charges were approximately $2.6 million under budget because hiring has slowed due to the difficulties associated with bringing new employees on board during the COVID-19 pandemic. It was also explained that "SAAS"in the description for the favorable variance in the Repairs & Maintenance category refers to "Software as a Service,"aka the new Oracle Cloud Enterprise Resource Planning (ERP) system. With regard to restructuring of the chart of accounts as part of the new Oracle Cloud ERP project, Chair Causey asked to have additional descriptions in the O&M Variance Analysis for the May financial overview. Mr. Mizuno explained it would be difficult given that not everything is a one- for-one translation between the old and new charts of accounts. Once the new chart of accounts goes live on July 1, 2020, it will be clearer. Chair Causey said he liked the new chart of accounts, but it was difficult at this point to see exactly how the new account structure relates to the soon- to-be-replaced chart of accounts. He said it would be helpful to receive a report that reconciles the old and new charts of accounts. Staff agreed to prepare such a report. COMMITTEE ACTION: Recommended Board receipt. June 4, 2020 Regular Board Meeting Agenda Packet- Page 420 of 449 Page 5 of 33 Finance Committee Minutes May 18, 2020 Page 4 6. Other Items a.* Review and provide input on Highmark Capital Management Government Accounting Standards Board (GASB) 45 Other Post- Employment Benefits (OPEB) and Pension Prefunding Sub-trust Reports for the First Quarter of calendar year 2020 This item was taken out of order, immediately after Item 3. Mr. Barker said he represents PARS, the trust administrator for Central San's OPEB Trust and Pension Prefunding Trust, and Mr. Brown manages the investments for both funds. Due to the ongoing COVID-19 pandemic and its impact on the financial markets, Mr. Brown provided an update as of April 30, 2020 (see attached) to the March 31, 2020 report that had been distributed with the agenda material. He said the economy is probably in the second or third inning of a recession. In terms of revised assumptions for 2020 and 2021, he said gross domestic product (GDP) could decline to roughly 5.5% in 2020 and be in the range of 2.5% to 4% in 2021. If unemployment can improve to 10% by the end of 2020, he would consider that a win. Inflation will continue to be low, with the federal funds rate running between zero and 0.25% in 2020, but there is no expectation of a negative federal funds rate. Mr. Brown went on to project that the stock market will improve in 2021-22 as the economy rebounds, albeit from a very low point. It may be four years before GDP levels return to what they were at the end of 2019. Given the depths of the recession, an ambitious goal for unemployment in 2021 is 5.5%. In response to a question from Chair Causey, Mr. Brown said the targeted returns for the OPEB Trust and Pension Prefunding Trust are 6.25% and 5.82%, respectively. He added that these long-term targets remain unchanged. Member Nejedly commented that as bleak as the situation appears, he was reassured that there is hope for recovery beginning next year. Mr. Brown said his projections were predicated on a vaccine or better line of therapy for COVID-19 but cautioned that he has no more information on that front than anyone else. However, he said he believes that ingenuity on the medical front will allow employees to return to work and life to return to a more normal state. That, in turn, will drive investors and general business confidence. June 4, 2020 Regular Board Meeting Agenda Packet- Page 421 of 449 Page 6 of 33 Finance Committee Minutes May 18, 2020 Page 5 In response to a question from Chair Causey, Mr. Brown explained why the OPEB Trust return for the period ending March 31 (41.83%) lagged the District's target rate of return of 6.25%, noting that it had to do with what has happened in the markets due to COVID-19. Chair Causey requested that Mr. Brown add the target rates of return to the table of returns on future reports. In conclusion, Mr. Brown said both the OPEB and Pension Prefunding Trusts have the same investments in stocks and bonds, but they differ in their allocation to each. Member Nejedly said he had no questions and was comfortable with the current frequency of quarterly reports from Highmark going forward. Mr. Mizuno said staff will be in touch with Highmark as to how the projections for 2020 and 2021 might impact Central San's forecast for timing of investments in the portfolios. Chair Causey noted that such decisions are affected by revenues. Mr. Leiber added that, per the Board's direction at the March 12, 2020 Financial Planning Workshop, staff intends to bring a draft Board policy on pension funding to the Board this summer. Mr. Mizuno noted that staff is expecting the biennial update on pension funding levels soon. Upon conclusion of Item 6.a., the Committee reverted to Item 4.a. COMMITTEE ACTION: Reviewed and provided input to staff. b. Review Risk Management Loss Control Report as of April 28, 2020 Ms. Deutsch reviewed the Loss Control Report with the Committee. COMMITTEE ACTION: Received the report. C.* Review proposed Fiscal Year 2020-21 Central San Operations and Maintenance, Self-Insurance, and Debt Service Budgets Chair Causey had provided a detailed list of questions before the meeting, to which staff had distributed written responses (see attached). Chair Causey generally expressed satisfaction with the responses and appreciation for the staff time required to prepare them. Mr. Bailey said staff would be reviewing the presentation included with the agenda material and address questions from the Committee. He also noted that one of the things staff will be doing relative to the COVID-19 pandemic is tracking all impacts on revenue and costs. However, as of this time, those impacts are not fully quantifiable for purposes of the budget. He said staff will provide updates periodically. June 4, 2020 Regular Board Meeting Agenda Packet- Page 422 of 449 Page 7 of 33 Finance Committee Minutes May 18, 2020 Page 6 Mr. Leiber and Mr. Mizuno reviewed the presentation, during which Chair Causey asked why Resource Recovery appears under the Engineering group as opposed to Operations. Mr. Bailey said he did not consider the matter to be a policy concern at this point. During Mr. Mizuno's portion of the presentation, Chair Causey asked if the proportionality of costs for the City of Concord would change based on reduced flows due to closed businesses and schools and, if so, how that might affect revenues. Mr. Bailey noted that both agencies will likely see a reduction in flows, but not necessarily in any direct proportion. He said staff would monitor the situation. The discussion then turned to the projected drawdown next year from the excess O&M reserve, to the extent they exceed the required levels. Mr. Leiber said more flexibility could theoretically be retained if less was drawn down, but sufficient flexibility remains every year in the allocation of Sewer Service Charge (SSC) between O&M and the capital program. Allocating less SSC to the capital program would need to be offset by increased borrowing or cuts to the program in the future. Chair Causey expressed concern that depending on whether the Board goes forward with further customer relief in terms of the SSC, the revenue loss could reach as high as $8 million next year($5.1 million from the loss of the 5.25% SSC rate increase, plus potentially other reductions affecting commercial/industrial customers and schools still under consideration). He cautioned that the revenue loss could be more substantial than is currently forecast. Mr. Mizuno referred to a question posed by Chair Causey about the ability to retrieve O&M reserves from the Sewer Construction Fund (SCF) once they have been allocated. He said District Counsel has indicated that generally the funds must remain in the SCF once allocated. However, under Section 6767 of the Health and Safety Code, which dates back nearly a century, there may be some flexibility in that regard to the extent there are excess monies in the SCF. Member Causey doubted that the obligations in the capital program will ever be entirely fulfilled and suggested it would be prudent to inform the Board about this restriction. With respect to projections for pension and OPEB valuations, Mr. Mizuno said a new pension projection is expected in Fall 2020; the following year's pension contribution will be based on that projection. OPEB valuations are done every two years as of July 1. Once these reports become available, they will help determine contribution levels and funding strategy. Mr. Leiber continued with the presentation, noting that the allocation of FY 2020-21 SSC revenues of$56.7 million to the SCF and$44.5 million to O&M was a change from prior years, with SSC available to go toward the capital program because of a drawdown of O&M reserves of$25.2 million (representing the portion that exceeds the required reserve target). As a June 4, 2020 Regular Board Meeting Agenda Packet- Page 423 of 449 Page 8 of 33 Finance Committee Minutes May 18, 2020 Page 7 result, the expanded Sewer Construction spending for FY 2020-21 is funded, while still increasing Sewer Construction reserves by$9.9 million. Chair Causey asked Mr. Leiber if it would be possible to have a mid-year budget evaluation in January 2021, after receipt of the first installment of the SSC. Mr. Leiber said it would, and Mr. Mizuno agreed. Mr. Bailey said a simpler alternative would be to adjust the following year's reserves. Chair Causey opined that the Board might want to look at further rate relief next year, depending on pressures from the COVID-19 pandemic, and it was important to leave all options open. He said he agreed with Member Nejedly that the recession may worsen over the next few years, and flexibility is important. Mr. Bailey agreed. Chair Causey said that while he did not agree with all the answers to his questions, the proposed budget document was impressive and staff had undertaken a hugely impressive effort; he was pleased with the results. Member Nejedly said he was amazed at the work put in by staff to develop the budget, and they had done a great job. Mr. Leiber expressed gratitude to the Finance team and others who contributed to developing the budget document. He noted that their contributions coincided with preparing to implement the Oracle Cloud ERP system effective July 1 and the changes in working conditions due to the COVID-19 pandemic. COMMITTEE ACTION: Reviewed and provided input to staff. 7. Announcements - None. 8. Suggestions for Future Agenda Items a. Receive list of upcoming agenda items and provide suggestions for any other future agenda items 1) As suggested during Item 5.b., Chair Causey requested a future discussion on reconciliation of the current monthly financial reports with the new chart of accounts under the Oracle Cloud ERP system. COMMITTEE ACTION: Received the list and provided input to staff. 9. Future Scheduled Meetings Tuesday, June 23, 2020 at 2:00 p.m. Tuesday, July 21, 2020 at 2:00 p.m. Tuesday, August 25, 2020 at 2:00 p.m. June 4, 2020 Regular Board Meeting Agenda Packet- Page 424 of 449 Page 9 of 33 Finance Committee Minutes May 18, 2020 Page 8 Chair Causey commented that if the Board requests any further changes to the O&M portion of the FY 2020-21 Budget, he hoped a special Board meeting could be convened. 10. Adjournment— at 4:46 p.m. June 4, 2020 Regular Board Meeting Agenda Packet- Page 425 of 449 PUBLIC AGENCY RETIREMENT PA SERVICES TRUSTED SOLUTIONS. LASTING RESULTS. CENTRAL CONTRA COSTA SANITARY DISTRICT Section 115 OPEB & Pension Rate Stabilization Program (PRSP) Trust Client Review May 18, 2020 CONTACTS PUBLIC ° AGENCY RETIREMENT SERVICES PARS H I G HMARK TRUSTED SOLUTIONS.LASTING RESULTS. CAPITAL MANAGEMENT Mitch Barker Andrew Brown, CFA Executive Vice President Director, Senior Portfolio Manager (800) 540-6369 x116 (415) 705-7605 mbarker@pars.org andrew.brown@highmarkcapital.com Angela Tang Client Services Coordinator (800) 540-6369 x159 atang@pars.org PUBLIC PARS AGENCY RETIREMENT SERVICES TRUSTED so�08'4A5T"Whular Board Meeting Agenda Packet- Page 427 of 449 CENTRAL CONTRA COSTA COUNTY SANITATION DISTRICT 2 PARS 115 TRUST TEAM Trust Administrator & Consultant rLIBLIC AGENCY 5 PARS Recordkeeping Processes contributions/disbursements RETREMENE Sub-trust accounting • Hands-on, dedicated support teams TRUSTED SOLUTIONS.LASTING RESULTS. . Monitors plan compliance • Coordinates all agency services 36 1 ,500+ 1 ,000+ 500 K+ SUB Years of Experience Plans under Public Agency Plan Participants Assets under (1984-2020) Administration Clients Administration Investment Manager CVbank. AHIGHMARK- CAPITAL MANAGEMENT • 5th largest commercial bank and one of the • Investment sub-advisor to trustee U.S. Bank nation's largest trustees for Section 115 trusts. • Investment policy assistance • Safeguard plan assets, • Uses open architecture • Oversight protection as plan fiduciary • Active and passive platform options • Custodian of assets • Customized portfolios (with minimum asset level) 157 $5.OT 101 S17.4B Years of Experience Assets under Years of Experience Assets under (1863-2020) Administration (1919-2020) Management PU AGENCY PARS RETIREMENT SERVICES TRUSTED Sod W8.4AST��WAgular Board Meeting Agenda Packet- Page 428 of 449 CENTRAL CONTRA COSTA COUNTY SANITATION DISTRICT 3 PARS IRS-APPROVED SECTION 115 TRUST Prefund • • GASB 75 0 Prefund Pension (PRSP) GASB 68 I I I I General Fund prefund Retiree Medical Benefits either or both Pension Rate Stabilization Program Assets can be used to: Assets can be used to: �r Reimburse agency; or F_ Reimburse agency; or Pay benefits provider Subaccounts Financial Stability Flexible Investing OPEB and pension assets are Assets in the PARS Section 115 Allows separate investment individually sub-accounted, Combination Trust can be used strategies for OPEB and and can be divided by dept., to address unfunded liabilities. pension subaccounts. bargaining group, or cost center OAnytime Access Economies-of-Scale No Set Up Cost or Minimums Trust funds are available OPEB and pension assets No set-up costs, no minimum anytime; OPEB for OPEB aggregate and reach lower fees annual contribution amounts, and pension for pension. on tiered schedule sooner - and no fees until assets are added. saving money! PUBLIC PARS AGENCY RETIREMENT SERVICES CENTRAL CONTRA COSTA COUNTY SANITATION DISTRICT 4 TRUSTED S108'4fI5 s"Whular Board Meeting Agenda Packet- Page 429 of 449 SUMMARY OF AGENCY'S OPEB PLAN Plan Type: IRC Section 115 Irrevocable Exclusive Benefit Trust Trustee Approach: Discretionary Plan Effective Date: November 6, 2008 Plan Administrator: Finance Manager Current Investment Strategy: Moderate High Mark PLUS (Active) Strategy; Individual Account AS OF APRIL 30, 2020: Initial Contribution: March 2009: $560,000 Additional Contributions: $43,170,900 Total Contributions: $43,730,900 Disbursements: $0 Total Investment Earnings: $23,916,147 Account Balance: $66,259,100 PUBLIC PARS AGENCY RETIREMENT SERVICES CENTRAL CONTRA COSTA COUNTY SANITATION DISTRICT 5 TRUSTED s108'4fI5 s"Whular Board Meeting Agenda Packet- Page 430 of 449 SUMMARY OF AGENCY'S PENSION PLAN Plan Type: IRC Section 115 Irrevocable Exclusive Benefit Trust Trustee Approach: Discretionary Plan Effective Date: July 20, 2017 Plan Administrator: Finance Manager Current Investment Strategy: Moderately Conservative HighMark Plus (Active) Strategy; Individual Account AS OF APRIL 30, 2020: Initial Contribution: August 2017 $3,359,000 Additional Contributions: $5,472,200 Total Contributions: $8,831,200 Disbursements: $0 Total Investment Earnings: $752,793 Account Balance: $9,676,664 PUBLIC PARS AGENCY RETIREMENT SERVICES TRUSTED so��N-4s SMNWA-gular Board Meeting Agenda Packet- Page 431 of 449 CENTRAL CONTRA COSTA COUNTY SANITATION DISTRICT 6 PARS: Central Contra Costa Sanitary District OPEB and Pension Plan April 30, 2020 UPDATE Presented by Andrew Brown, CFA JHIGHMARKC CAPITAL MANAGEMENT CENTRAL CONTRA COSTA COUNTY SANITATION DISTRICT 1 7 2020 2020 2021 Previous Revised Assumptions Assumptions Assumptions DP 1 .9To ".NO -4.8% - -6.3% 2.50% - 4.0% S&P500 earnings 40 40 Unemployment .70% 7%-10% 5.50% unds arget 1 .25% . 0% - 0.25% 0% - 1 .25° Selected Period Performance CCCSD -OPEB Period Ending: 4/30/2020 Year Inception to Date to Date 1 Month (4 Months) 1 Year 3 Years 5 Years 04/01/2009 Cash Equivalents .02 .32 1.63 1.56 1.03 .52 Lipper Money Mark et Funds Index .04 1.60 1.49 .95 .44 Fixed Income ex Funds 2.20 3.52 9.33 Total Fixed Income 2.27 2.86 8.48 4.64 3.57 4.77 BB Barclays US Aggregate Bd Index 1.78 4.98 10.84 5.17 3.80 4.36 Total Equities 12.20 -14.23 -6.14 4.87 5.45 12.19 Large Cap Funds 12.76 -10.08 -.29 8.16 8.22 13.69 S&P 500 Composite Index 12.82 -9.29 .86 9.04 9.12 14.76 Mid Cap Funds 14.51 -16.57 -10.07 3.03 3.88 Russell Midcap Index 14.36 -16.60 -10.00 3.46 4.81 14.41 Small Cap Funds 15.00 -22.38 -17.64 .68 4.21 14.16 Russell 2000 Index 13.74 -21.08 -16.39 -.82 2.88 12.28 International Equities 7.61 -18.04 -11.24 -.21 .29 6.99 MSCI EAFE Index 6.46 -17.84 -11.34 -.58 -.17 7.15 MSCI EM Free Index 9.16 -16.60 -12.00 .57 -.10 7.00 Real Estate - ETFs/Sctr Fds 8.74 -17.35 -9.15 Wilshire REIT Index 8.44 -19.35 -12.42 .20 2.64 15.31 Total Managed Portfolio 6.80 -5.83 .94 5.01 4.71 8.53 CCCSD OPEB 6.69 -4.93 1.78 5.04 4.83 8.58 Account Inception:4/2009 CCCSD OPEB Benchmark consists of:26.5%of S&P 500, 5% Russell Midcap,7.5%Russell 2000, 1.75%Wilshire REIT,3.25%MSCI EM Free,6%MSCI EAFE,33.5%BC Aggregate, 10%ML 1-3 Yr US Corp/Govt, 1.5% ML US High Yield Mstr II,and 5%Citigroup 1 Month T-Bill Indexes. Returns are gross-of-fees unless otherwise noted. Returns for periods over one year are annualized.The information presented has been obtained from sources believed to be accurate and reliable. Past performance is not indicative of future returns. Securities are not FDIC insured, have no bank Jguarantee, and may lose value. HIGHMARKC CAPITAL MANAGEMENT CENTRAL CONTRA COSTA COUNTY SANITATION DISTRICT 9 Selected Period Performance PARS/CCCSD 115P - PENSION Acount 6746055901 Period Ending: 4/30/2020 Year Inception to Date to Date 1 Month (4 Months) 1 Year 09/01/2017 Cash Equivalents .02 .33 1.65 1.66 Lipper Money Mark et Funds Index .04 .36 1.60 1.59 Fixed Income ex Funds 1.84 3.48 9.19 4.78 Total Fixed Income 2.01 3.01 8.65 4.51 BBG Barclays US Aggregate Bd Index 1.78 4.98 10.84 5.05 Total Equities 12.17 -14.36 -6.34 3.32 Large Cap Funds 12.74 -10.15 -.33 7.55 S&P 500 Composite Index 12.82 -9.29 .86 8.44 Mid Cap Funds 14.29 -16.66 -10.15 2.62 Russell Midcap Index 14.36 -16.60 -10.00 2.90 Small Cap Funds 15.28 -22.58 -17.84 -.44 Russell 2000 Index 13.74 -21.08 -16.39 -1.22 International Equities 7.71 -18.20 -11.19 -3.34 MSCI EAFE Index 6.46 -17.84 -11.34 -2.95 MSCI EM Free Index 9.16 -16.60 -12.00 -3.76 Real Estate - ETFs/Sctr Fds 6.30 -19.58 -11.59 .25 Wilshire REIT Index 8.44 -19.35 -12.42 -.72 Total Managed Portfolio 4.64 -2.26 3.94 4.12 CCCSD Pension 4.59 -1.41 4.67 4.52 Performance Inception: 09/2017 CCCSD Pension Benchmark consists of: 15.5%of S&P 500,3%Russell Midcap,4.5% Russell 2000, 1%Wilshire REIT,2%MSCI EM Free,4%MSCI EAFE,49.25%BC Aggregate, 14%ML 1-3 Yr US Corp/Govt, 1.75% ML US High Yield Mstr ll, and 5% Citigroup 1 Month T-Bill Indexes. Returns are gross-of-fees unless otherwise noted. Returns for periods over one year are annualized. The information presented has been obtained from sources believed to be accurate and reliable. Past performance is not indicative of future returns. Securities are not FDIC insured, have no bank Jguarantee, and may lose value. HIGHMARKC CAPITAL MANAGEMENT CENTRAL CONTRA COSTA COUNTY SANITATION DISTRICT 1 10 Page 20 of 33 Item 6.c. (Handout) The 2020/21 Budget document is a very excellent narrative and review of all of our financial needs and requirements. Congratulations again on an outstanding document and kudos to all who were involved in the production and development. This continues to be a very important part of the Districts transparency goals and answers just about anything that a customer could want to take the time too research. That said I do have some minor comments and questions for the finance committee meeting next Monday as follows: General Comments 1. All comments are only on the O&M portions of the budget as the E&O Committee will comment on the capital portions of the budget I have assumed. Staff Response: Noted 2. Clearly the document must now include the recent sewer rate holiday authorized by the Board last week- assume that will be handled in the final budget to be available for July 1st. However, there are several previous Board directions that are impacted by this decision that should be presented to the Board at the budget hearing especially as relates to then variance and use of the variance that was not really discussed last week. In addition, the impact to future budgets based upon the way SSCs are set on past water consumption that will or may significantly impact the next budget revenue estimates. Staff Response: Agreed. Staff prepared an updated Financial Summary section distributed to the Finance Committee on 5/14 that attempts to address these implications. As to the issue of the "use of the variance" which is projected from the FY 2019-20 fiscal year closeout, this is addressed as follows: o The O&M budget tables (Table 6 and 7) show projected 0&M revenues and expenditures for FY 2019-20. o The favorable variance noted there is incorporated in the projected working capital reserve balances in Table 14. o The allocation of the FY 2020-21 SSC is based on giving O&M enough revenue, so that the 6/30/2021 reserve balance meets the policy required level of 5/12 of the FY 2021-22 projected O&M budget. o Accordingly, the amount of the favorable O&M variance for FY 2019-20 is taken into account, and SSC above the required level is directed to the Sewer Construction fund. o To the extent the FY 2019-20 variance EXCEEDS the amount shown in the budget book, that money can be directed to uses specified by the Board this fall. June 4, 2020 Regular Board Meeting Agenda Packet- Page 436 of 449 Page 21 of 33 3. 1 suggest that the Introduction Section be expanded to add a new section discussing the known and potential impacts of the Covid crisis on the District. While there are some references later in the document there is not a broad statement of the known and potential impacts for the future of the Central San operation post pandemic. Staff Response: This is a good idea and we will work on such a centralized description. 4. 1 understand that there will be a new strategic goal and that will also need to be added to the final budget- will that also impact the individual department accomplishments and goals? Staff Response: The updated budget book in the June 4 Board packet will incorporate the seventh Strategic Goal: Agility and Adaptability- Preserve business continuity during pandemic events or major natural disasters. On a District-wide scale, a new Key Budget Priority, "Adjusting operations in response to the COVID-19 pandemic," has been added to tie to this Goal. With respect to impacts on the individual department accomplishments, the draft budget book distributed to the Board on May 7 included FY 2019-20 accomplishments with regard to COVID-19 response as they relate to the FY 2018-20 Strategic Plan (which did not contain Goal 7). While all individual departments and divisions have made accomplishments in adapting their operations to continue to provide Central San's essential services to the community, these divisions specifically list COVID-19-related FY 2019-20 strategic accomplishments: Office of the General Manager (p. 75), HR/Safety (p. 85), Office of the Director of Finance &Administration (p. 91), Communication Services and Intergovernmental Relations (p. 93), Information Technology (p. 101), Purchasing & Materials Services (p. 105), Capital Projects (p. 116), Planning and Development Services (p. 125), Office of the Director of Operations (p. 132), and Plant Operations (p. 143). In terms of impact to the department goals for FY 2020-21 (which tie to the Goals of the FY 2020-22 Strategic Plan), every division will be modifying operations to respond to the challenges of COVID-19. A new objective was specifically added to the HR/Safety division: "As may be necessary, modify work schedules and conditions to reflect social distancing best practices and ensure proper personal protective equipment is provided." 5. 1 suggested that as to the rates that the narrative include a statement and description about the Teeter Plan which is important to revenue receipts - maybe in the new Covid Section and the SSC section - page 33 introduction possibly. Staff Response: Noted. June 4, 2020 Regular Board Meeting Agenda Packet- Page 437 of 449 Page 22 of 33 6. 1 will be recommending that along with the next two year strategic plan that we begin making plans for a two year budget also. Staff Response: Staff will begin work on the Oracle budgeting module with the implementer during fall 2020. We intend to configure it to provide for this functionality. 7. Excellent discussion of the funds and subtends. Staff Response: Thank you. Noted. 8. The new chart of accounts is generally well stated and counted in the budget. Staff Response: Thank you. Noted. 9. Several department budgets include something called "Cleaning". What is this defined as? Why only some have it included? Staff Response: This is a roll-up/ parent expense category that includes sub accounts such as garbage service (not treatment hauling disposal services),janitorial services, uniform cleaning. 10. How will the Board be involved in the 75th anniversary-we should have an item to discuss the future plans and to receive our input (page 96) Staff Response: The Board will be involved similar to the 70th anniversary with updates on the date, marketing/outreach, specific items and elements for the event, anticipated attendance, final report, etc. Staff had scheduled to start planning 15 months in advance of the June/July 2021 timing, however with the pandemic that is on hold. The event is budgeted for this cycle, as the anticipated spending would be in the 20-21 FY. 11. 1 like many of the new targets added t many of the subgroups. Staff Response: Thank you. Noted. June 4, 2020 Regular Board Meeting Agenda Packet- Page 438 of 449 Page 23 of 33 Specific Comments 1. Page 14, Embrace ..., 3rd bullet - not to be effective until 1/1/21 currently implies completed and only the negotiations are completed. Staff Response: This bullet has since been updated to replace "Launched" with "Completed preliminary design of." Biweekly pay is subject to the meet and confer process, and Local One and MS/CG have both agreed to move forward with the transition. Biweekly pay is currently targeted to be effective with the January 4, 2021 paycheck. 2. Page 18 two tables -the Concord/Clayton pops for 2019 do not agree in the two tables. Staff Response: Noted and corrected. There was a typo; 151,542 should have been 141,542 3. Page 23 - needs revision based on rate holiday Staff Response: This section has been updated in a new draft to be distributed prior to scheduled budget approval. New sentence added "However, on May 7, the Board voted to waive implementation of the 5.25% rate adjustment that was to be effective on July 1, 2020; effectively postponing this adjustment until July 1, 2021, when that and a 4.75% increase would be effective. " 4. Page 27 -why are the last three items in the table red? Are they new? If so need a note Staff Response: This was an unintended artifact of the editing process and has been removed. 5. Page 31 -Workforce development needs to include performance evaluations in the first row -this is an area that requires improvement and should be stated herein - page 87 shows still way below the target and should be red not yellow. Staff Response: Central San's rate of performance evaluations completed on time is a Key Metric within the Strategic Plan, and staff is actively working to improve it. The Key Budget Priority listed on page 31 of "Driving employee performance and rewarding excellence" includes the use of performance evaluations as a way to drive employee performance, which does not necessitate the need to separate performance evaluations as a separate Key Budget Priority. However, as the performance evaluation completion rate is below target and a focus area for Central San, "including meaningful feedback via timely performance June 4, 2020 Regular Board Meeting Agenda Packet- Page 439 of 449 Page 24 of 33 evaluations" has been added to the end of the Primary Response currently listed with the pre-existing Key Budget Priority. 6. Figure 1 - loan proceeds limited to just $3000 next year on a $120M project? Is this indeed correct? Also on page 653rd paragraph. Staff Response: Yes, based on the project schedule, only$3 million of draws are anticipated. 7. Page 45, Capacity Fees -what is the impact of the Covid on these estimated activities I though it was reduced by 30 to 40% in our earlier discussions. Staff Response: Staff made a significant reduction in the forecasted capacity fees from over$8.5 million to the $6.262 million now forecast (for gravity and pumped zone capacity fees). 8. Page 58 - C, 3rd paragraph -good inclusion and statement about the future Staff Response: Noted. Thank you. 9. Page 58, C, 4th paragraph - is this paragraph still true given the approved rate holiday? Staff Response: Response: Yes, the paragraph is still generally true, but a supplement has been added to clarify that a portion of the favorable variance from FY 2018-19 has now been "spoken for"/allocated given the rate holiday. "The budget also includes $1.25 million for additional contributions toward either pension or OPEB obligations, to be determined by the Board during the fiscal year. This is a continuation of the $1.25 million budgeted in FY 2019-20. To the extent that budget savings are available with the completion of both FY 2019-20 and FY 2020-21, the Board may choose to direct part of the savings toward additional unfunded liabilities funding. However, the amount of the FY 2019-20 budget variance as shown in the prosection in Table 6 & 7 have already been accounted for in the reserve calculation (Table 14); so for additional funds to be available, the favorable variance would need to exceed these levels. " 10. Page 59, Table 8 - seems that given lack of travel that training will be way down and should be reevaluated under current circumstances; also why has collection jumped up 18%? June 4, 2020 Regular Board Meeting Agenda Packet- Page 440 of 449 Page 25 of 33 Staff Response: The figures were developed prior to mid-March health orders and the now more apparent potential of extended impacts of COVID-19. If not spent, the amounts would be available as a favorable variance for disposition by the Board at year-end. 11. Table 9 -why is the Board budget up significantly-just related to medical premiums? Staff Response: The major contributor in the increase from FY 2019-20 is $250,000 for election expense. Other increases were Benefits-Health Insurance ($56,229), Supplies ($150) and Miscellaneous ($2000) 12. Page 62 - Overtime up 14% or $200,000 why is this justified and needed? Staff Response: O&M overtime is up 10%from $1,381,653 to $1,514,370 on a budget to budget basis. It is up $227,670 from the projected FY 2019-20 level. The Table below shows OT by Department. Both Admin and OT have a somewhat modest increase from the budget, but higher increases from the FY 2019-20 projected level. I r —1 FY 2019- FY 2019- FY 2020- Diff %Chg Diff from %Che 20 20 21 from from Projected from Budget Projected Budget Bud Budget Projected Admin 8% 122% 145,068 70,400 155,991 10,923 85,591 1_1 r —i _i Engineering T184,000 -4% -22% 224,800 176,000 (8,000) 1(48,800' Operations 12% 19% 1,052,585 991,500 1,182,379 129,794 90,879 Total 10% 18% 1,381,653 1,286,700 1,514,370 132,717 227,670 With respect to the increase In Operations,for CSO from budget to budget of$65k appears significant, but from projected current year to budget next year is only about 4.7 percent, which when adjusted for the 2.9% COLA is closer to steady from the current year. June 4, 2020 Regular Board Meeting Agenda Packet- Page 441 of 449 Page 26 of 33 As to the rest of Operations, budget next year is$722k while current year budget is $657k, so the increase is $65k from budget, or about 10 percent. Pump Station OT is projected higher because of PGE PSPS's; we estimated about 4-5 per year based on PG&E's report out at the EPA-Sponsored PSPS exercise for water agencies in March. We also anticipate an increase related to the PS project's (OC, Moraga and Flushkleen) during FY 20/21. Part of B&G's increase is the anticipated CIP work for B&G related to TP project's in FY 20/21. For capital, OT is up $81,421 on a budget to budget basis, which represents an 82% increase. FY 2018-19 FY 2018-19 FY 2019-20 FY 2020-21 Budget to Budget Actual Budget Budget Budget Variance Overtime $101,621 $88,460 $99,727 $181,148 $81,421 = 82% For combined O&M and capital: FY 2018-19 FY 2018-19 FY 2019-20 FY 2020-21 Budget to Budget Actual Budget Budget Budget Variance Overtime $1,222,429 $1,220,692 $1,481,380 $1,695,518 $214,138 = 14.5% 13. Page 66 - Contingency-given the managers authority to move funds between projects not sure that we any longer need too contingency amount especially since they recently have been fully expended by Sept or Oct? Staff Response: Page 66 summarizes the CIB and includes the $2.5 million contingency that is budgeted for FY 2020-21. Historically, the CIB has included a contingency element, and these funds are typically used before transfers are made from other projects. There has been significant discussion about contingency, and while alternative approaches are certainly possible, this approach is working. This observation has been referred to the Capital Projects unit for further consideration. June 4, 2020 Regular Board Meeting Agenda Packet- Page 442 of 449 Page 27 of 33 14. Page 67 - discusses change in reserves and increase in SSC to Sewer Construction - how does this impact future bonding needs - reduced by $26M or$23M? Staff Response: The $26 million higher than anticipated O&M working capital reserves as of 6/30/20 Is available to reduce the allocation of SSC to the O&M fund and hence, increase the amount of SSC available for allocation to the Sewer Construction Fund has been taken into account in the reserve calculation and financial model results presented to the Board in April. Accordingly,this variance, along with other factors (i.e. lower borrowing interest rate, lower than expected forecast for FY 2020 and FY 2021, revision of assumptions)was taken into consideration in the 10 year plan to reduce borrowing the maximum extent possible while ensuring the stability of future SSC rates. The additional reserve balances above the policy required level that exists as of June 30, 2020 and June 30, 2021 are a favorable indicator, and in part are available to reduce future borrowing needs, although perhaps in less than a one to one relationship. Some of the funds are needed if the CIB is increasing and the future reserve requirement of 50%of the following year's cash funded CIB goal needs to be met as well. 15. Table 14- still shows the $1.25 payment to pension trust- can this still be accomplished with the rate holiday? Could some of this come from Item 14 above the SSC transfer to Sewer Construction? Staff Response: Yes, this is still included as a budgeted item in the $90.7 million O&M budget. Any additional amounts could be made available from favorable variances. 16. Page 71 - 1 appears from this graph that we have managed to fully utilize the PERS Health savings of$5.11VI in two years - is this correct? Should this be stated herein? This now means that a flat 0&M budget can only be accomplished in the future by reductions to salary and benefits? Is this now true? Staff Response: The FY 2020-21 O&M budget with the CalPERs savings incorporated was $87.5 million; the proposed budget for FY 2020-21 is $90.7 million, an increase of$3.2 million. The financial model now has an updated O&M forecast of$93.9 for FY 2021-22 (down from $96.2 forecast for that year in the model used for the 4 year rate increase). That represents a change of$6.4 million over the two years. The forecast for FY 2021-22 still conservatively includes the maximum COLA allowed for in the labor MOUS; the actual amount if we are in recession is likely to be lower. Each year, we endeavor to identify cost savings during the budgeting process to come in under the amount conservatively projected in the financial plan; we will aim to do so next year. June 4, 2020 Regular Board Meeting Agenda Packet- Page 443 of 449 Page 28 of 33 17. Figure 11 - either expand the table does the page or add a table of the values under the bar chart as the current values are not easily read. Staff Response: We have updated the table to make it easier to read. 18. Page 84 - election expense is only $250K yet at the Academy we stated that a full election would cost $450,000 -why is the number lower? Staff Response: The budgeted amount of$250K is based upon the cost of the 2018 election, which was $230K. If an election is held in FY 2020-21, the cost will be based on the number of voters and, based on the number of voters in Central San's service area, that could theoretically cost between $400-500K. 19. Page 84 - No goals and objective for the Board of Directors Staff Response: Goals and objectives are listed for each individual division within the Operating Departments. In lieu of these listings for higher-level offices such as the offices of the Executive Team members, a short paragraph in the "Overview" section summarizes the major accomplishments for all the divisions under the office's purview. The following sentence has been added to the Board of Directors' section: "The Board of Directors sets Central San's Vision, Mission, and Values; adopts District-wide Goals via the Strategic Plan; and provides the direction and resources for staff to execute this vision." 20. Page 87 - performance appraisal results continue to be poor and should have a much higher priority as we are still 35% short of these targets that is a large number of employees not receiving appraisals as required. Staff Response: Noted. The results listed in the budget book (62.4%) reflect where this metric stands as of March 31. The General Manager has directed staff to complete all performance evaluations by the end of the fiscal year. 21. Page 91 no goals for the future for the Director of finance? Staff Response: The last paragraph in the "Overview" section states that the Director of Finance & Administration's FY 2020-21 Strategic Objectives "are embedded within the sections of the individual divisions and programs overseen by the Director." The same is true for the Director of Operations and Director of Engineering &Technical Services. June 4, 2020 Regular Board Meeting Agenda Packet- Page 444 of 449 Page 29 of 33 22. Page 98 -good addition of the MHI but we should also add the lowest quintile MHI as the new financial capability assessment will be using that metric not MHI. Staff Response: The addition of the MHI to this section (which reflects the same update made in the publication of the FY 2020-22 Strategic Plan) was meant to merge the Strategic Plan metric with the performance indicator measurement in the annual American Water Works Association Utility Benchmarking study, which Central San uses as a basis for its internal Benchmarking Study. 23. Page 112 -way doesn't resource recovery have its own budget area - seems strange that it is included under the Dir of Eng and not separate like all other subgroups? Staff Response: While Resource Recovery will have a separate cost center in the general ledger, for budget book purposes, the program is presented within the Director of Engineering & Technical Services parent category this year. It could be shown separately in the future if desired. 24. Page 123 - seems like a goal for next years should deal with the submittal of the required NPDES permit renewal due 9/3/21 as it will require development during the next fiscal year. Staff Response: While this is a project the division will be working on in FY 2020-21, it falls under general compliance work and is in the same category as many other permits for which the group applies regularly (such as nutrients, air, lab certification, etc.). 25. Page 127 - CWEA moved to October not August Staff Response: Noted and updated. 26. Page 127 - would like to see a board presentation on the Large Diameter Force Main Condition Assessment Program Staff Response: This request has been referred to Engineering-Planning & Development. 27. Page 134 -why the huge drop in cleaning and CCTV this year? Almost 40% it appears- were we over cleaning previously? This is a big June 4, 2020 Regular Board Meeting Agenda Packet- Page 445 of 449 Page 30 of 33 change and if it results from new procedures suggests the need for staff evaluation for the future. Staff Response: The FY 2019-20 strategic performance in the budget book reflects the FY status as of March 31. The following are the cleaning and CCTV figures as projected to June 30: o Cleaning— projected number is 758 miles o Work Orders Completed— projected number is 18,285. This is a 3,729 work order decrease from 2018-19. The reason for this is that there were approximately 800 line segments that had pressure relief valves which resulted in multiple work orders per line. Pressure relief valves have been removed from GDI, therefore reducing the number of work orders but keeping the cleaning footage the same. Some of these lines are cleaned multiple times per year, and that is the difference between the work order number and line segment numbers. o % Cleaning on Hot spots— projected at 21% o Miles CCTV'd—projected number is 180 miles 28. Page 151 - does the rate holiday apply to the recycled water rates also? Hope not. Staff Response: Staff have not assumed that it did. The Board could clarify this. June 4, 2020 Regular Board Meeting Agenda Packet- Page 446 of 449 Page 31 of 33 From: PAUL CAUSEY Sent:05 13, 2020 03:24 PM To: Philip Leiber; Kevin Mizuno Cc: Roger Bailey Subject:Year End Variances Table Phil/Kevin, Working my way thru the budget and have a couple of needs for your attention for the finance committee on Monday. Will have more questions later this week but wanted to get one additional piece of information and identify one area of the budget that is not at all clear so you can begin working on a more understandable narrative. Attached is an EXCEL spreadsheet that I would like the year end variances by fund for the past 10 years. I am interested in seeing just how this is growing and whether it is the revenue or the expense area that is driving these year end variances. I also realize you do not have the 19/20 number but if you could estimate where you realistically think we will end please insert that number as an estimate. The other issues and more concerning is that the statements on page 53 and the narrative around Table 6 related to the sewer service charge reduction of$23M from the O&M fund -this is completely unclear and something that we will need to have a through discussion about on Monday. I am happy to talk before the meeting by phone if you like but the narrative is very unclear as to how this reduction does not impact the O&M fund. Thanks for your input. I will have additional questions as I finish any review of the O&M Budget later this week. Response: Member Causey, Yes, we will compile the requested information on variances. The budget book does have this information for one year, but not a long-term table for all of those components. You are welcome to call anytime to discuss the statements on page 53/Table 6. Page 51 provides the fuller description of the O&M working capital reserve situation,where the issue of the allocation of SSC to O&M and Capital is shown in Table 5. In short, each year we allocate SSC between the two funds to give O&M "what it needs" based on ensuring that the O&M working capital reserve meets the "5/12 of the following year's projected O&M budget" requirement. For this year, because the O&M working capital reserve is funded well above the required level, it required much less of the SSC allocation. That situation is described further on page 51. The updated definition of what constitutes "reserves"was a significant driver of that. The position paper on this matter from 11/7/20 is also attached. June 4, 2020 Regular Board Meeting Agenda Packet- Page 447 of 449 Page 32 of 33 Supplement: The variance trend over 10 years is provided in the chart below. 10-Year District-Wide Variance Trend 512,000,DOO &'Do% 510,000,000 5.00% 58,000,000 4.00% 56,000,000 3.00% $4,000,000 2.00% 52,000,000 1.00% 5 ' 0.00% 2411 ILS%l 7413 1130 ION' 7416 101 p�� ZOlg 7OZ4 FiscalYearEnded lune 30 �Total DisposaGleBudget Variance(S) tBudgetMarginofErrorj%) This chart of the annual budget variance includes all funds (thus District-wide) and excludes the following: out pension 115 trust contributions (budgeted but not expensed), pension interest positive variance (only 1 year since we commenced separate reporting in FY 2019), and positive CIB annual variances pertaining to expenditures which are addressed in carryforward. The margin of error is budgeted revenues plus budgeted expenses but does not include budgeted expenses for the CIB since we back that positive variance out anyways. The chart details the variances, which were generally used for the following purposes, although it will take additional research to confirm annual application: • OPEB Trust(UAAL) • Prefunding Pension Trust • CCCERA UAAL Contributions • Rate Stabilization Fund Reserve Account • Capital Improvement Budget • Used to smooth, reduce or avoid future rate increases (left in the relevant fund) June 4, 2020 Regular Board Meeting Agenda Packet- Page 448 of 449 30-Year 5-Year Average 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Average (Lasts Years) O&M Fund Revenues Budgeted Revenues 62,326,300 62,198,705 70,236,300 75,152,000 86,231,600 87,492,300 89,917,200 94,658,700 86,925,732 89,560,370 80,469,921 89,710,860 Actual Revenues 60,179,800 63,138,524 70,847,811 76,128,808 86,935,736 91,269,381 91,794,540 96,035,380 89,815,287 91,260,844 81,740,611 92,035,086 variance($) (2,146,500) 939,819 611,511 976,808 704,136 3,777,081 1,877,340 1,376,680 2,889,555 1,700,474 1,270,690 2,324,226 Variance(%) -3.44% 1.51% 0.87% 1.30% 0.82% 4.32% 2.09% 1.45% 3.32% 1.90% 1.58% 2.59% Expenses Budgeted Expenses 62,965,721 66,540,660 68,306,464 77,824,952 86,612,644 87,464,864 89,810,918 89,713,587 89,720,456 87,584,775 80,654,504 88,858,920 Actual Expenses 58,116,625 64,350,893 66,965,533 77,401,565 84,126,229 84,613,266 82,987,793 87,607,256 87,842,786 84,238,845 77,825,079 85,457,989 Variance($) 4,849,096 2,189,767 1,340,931 423,387 2,486,415 2,851,598 6,823,125 2,106,331 1,877,670 3,345,930 2,829,425 3,400,931 Variance(%) 7.70% 3.29% 1.96% 0.54% 2.87% 3.26% 7.60% 2.35% 2.09% 3.82% 3.51% 3.83% Sewer Construction Fund** Revenues Budgeted Revenues 19,669,000 22,246,000 21,787,000 25,243,000 22,281,000 28,767,500 34,905,400 39,327,800 55,889,268 65,598,130 33,571,410 44,897,620 Actual Revenues 15,812,724 21,494,537 22,281,642 26,948,757 23,572,364 32,300,513 37,313,244 44,850,099 60,899,723 70,709,000 35,618,260 49,214,516 Variance($) (3,856,276) (751,463) 494,642 1,705,757 1,291,364 3,533,013 2,407,844 5,522,299 5,010,455 5,110,870 2,046,851 4,316,896 Variance(%) -19.61% -3.38% 2.27% 6.76% 5.80% 12.28% 6.90% 14.04% 8.96% 7.79% 6.10% 9.61% Expenses Budgeted Expenses* 29,520,500 25,166,930 27,559,654 28,909,400 25,422,000 25,396,126 36,808,756 46,477,628 45,319,000 66,176,000 35,675,599 44,035,502 Actual Expenses 27,962,214 24,757,064 26,758,648 26,825,537 23,254,205 27,705,114 36,696,049 39,504,606 43,794,306 59,558,400 33,681,614 41,451,695 Variance($) 1,558,286 409,866 801,006 2,083,863 2,167,795 (2,308,988) 112,707 6,973,022 1,524,694 6,617,600 1,993,985 2,583,807 Variance(%) 5.28% 1.63% 2.91% 7.21% 8.53% -9.09% 0.31% 15.00% 3.36% 10.00% 5.59% 5.87% Self-Insurance Fund Revenues Budgeted Revenues 917,000 895,000 900,000 646,350 694,970 1,585,375 1,005,375 727,000 960,250 1,025,900 935,722 1,060,780 Actual Revenues 907,698 895,974 2,235,774 654,628 847,972 1,556,543 1,044,692 1,213,070 1,036,330 1,013,400 1,140,608 1,172,807 Variance($) (9,302) 974 1,335,774 8,278 153,002 (28,832) 39,317 486,070 76,080 (12,500) 204,886 112,027 Variance(%) -1.01% 0.11% 148.42% 1.28% 22.02% -1.82% 3.91% 66.86% 7.92% -1.22% 21.90% 10.56% Expenses Budgeted Expenses 960,000 979,500 1,097,000 922,500 661,500 1,917,000 1,917,000 936,500 924,500 1,073,700 1,138,920 1,353,740 Actual Expenses 1,003,115 810,849 2,380,446 858,739 1,333,519 1,600,616 697,792 788,689 1,125,404 997,000 1,159,617 1,041,900 Variance($) (43,115) 168,651 (1,283,446) 63,761 (672,019) 316,384 1,219,208 147,811 (200,904) 76,700 (20,697) 311,840 Variance(%) -4.49% 17.22% -117.00% 6.91% -101.59% 16.50% 63.60% 15.78% -21.73% 7.14% -1.82% 23.04% Debt Service Fund Revenues Budgeted Revenues 917,000 895,000 900,000 646,350 694,970 1,585,375 1,005,375 727,000 960,250 1,025,900 935,722 1,060,780 Actual Revenues 5,674,287 5,540,720 5,567,496 5,585,691 5,556,990 3,810,891 3,791,155 3,818,057 3,505,005 2,982,415 4,583,271 3,581,505 Variance($) 4,757,287 4,645,720 4,667,496 4,939,341 4,862,020 2,225,516 2,785,780 3,091,057 2,544,755 1,956,515 3,647,549 2,520,725 Variance(%) 518.79% 519.07% 518.61% 764.19% 699.60% 140.38% 277.09% 425.18% 265.01% 190.71% 389.81% 237.63% Expenses Budgeted Expenses 2,061,903 1,919,374 1,802,084 1,704,234 1,542,485 1,439,079 1,313,051 1,231,722 1,135,780 837,415 1,498,713 1,191,409 Actual Expenses 2,061,903 1,919,375 1,802,085 1,701,107 1,523,128 1,427,640 1,313,399 1,230,680 1,025,005 837,415 1,484,174 1,166,828 Variance($) - (1) (1) 3,127 19,357 11,439 (348) 1,042 110,775 - 14,539 24,582 Variance(%) 0.00% 0.00% 0.00% 0.18% 1.25% 0.79% -0.03% 0.08% 9.75% 0.00% 0.97% 2.06% ALL FUNDS Revenues Budgeted Revenues 83,829,300 86,234,705 93,823,300 101,687,700 109,902,540 119,430,550 126,833,350 135,440,500 144,735,500 157,210,300 115,912,775 136,730,040 Actual Revenues 82,574,509 91,069,755 100,932,723 109,317,884 116,913,062 128,937,328 133,943,631 145,916,606 155,256,345 165,965,659 123,082,750 146,003,914 Variance($) (1,254,791) 4,835,050 7,109,423 7,630,184 7,010,522 9,506,778 7,110,281 10,476,106 10,520,845 8,755,359 7,169,976 9,273,874 Variance(%) -1.50% 5.61% 7.58% 7.50% 6.38% 7.96% 5.61% 7.73% 7.27% 5.57% 6.19% 6.78% Expenses Budgeted Expenses 95,508,124 94,606,464 98,765,202 109,361,086 114,238,629 116,217,069 129,849,725 138,359,437 137,099,736 155,671,890 118,967,736 135,439,571 Actual Expenses 89,143,857 91,838,181 97,906,712 106,786,948 110,237,081 115,346,636 121,695,033 129,131,231 133,787,501 145,631,660 114,150,484 129,118,412 Variance($) 6,364,267 2,768,283 858,490 2,574,138 4,001,548 870,433 8,154,692 9,228,206 3,312,235 10,040,230 4,817,252 6,321,159 Variance(%) 6.66% 2.93% 0.87% 2.35% 3.50% 0.75% 6.28% 6.67% 2.42% 6.45%1 4.05%1 4.67% Notes *Represents CIB adopted budget,excluding prior year approved roll-overs. **Until FY 2017-18,CIB budget was prepared using allocation approach. June 4, 2020 Regular Board Meeting Agenda Packet- Page 449 of 449