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Home My WebLink About04.b. Receive July 2020 Budget-to-Actual financial overview and investment portfolio reports Page 1 of 7 Item 4.b. CENTRAL SAN September 22, 2020 TO: FINANCE COMMITTEE FROM: CHRISTOPHER THOMAS, FINANCE ADMINISTRATOR KEVIN MIZUNO, FINANCE MANAGER REVIEWED BY: PHILIP LEIBER, DIRECTOR OF FINANCE AND ADMINISTRATION ROGER S. BAILEY, GENERAL MANAGER SUBJECT: RECEIVE JULY2020 BUDGET-TO-ACTUAL FINANCIAL OVERVIEW AND INVESTMENT PORTFOLIO REPORTS Financial Highlights Attached for review are the July 2020 Budget-to-Actual Overview Reports for the Running Expense Fund (Operations and Maintenance (O&M) Fund) and Sewer Construction Fund (Attachment 1) along with Investment Portfolio Reports for the O&M Fund, Sewer Construction, and Self-Insurance funds (Attachment 2). The financial overview reports were generated using the District's new enterprise resource planning (ERP) system, Oracle, which went"live" on September 1, 2020. As such, the reports have a slightly different appearance from the prior monthly financial overview reports the Board is accustomed to. Staff provided an overview of the impact of the new chart of accounts and ERP system at the September 3, 2020 Board meeting. The new Oracle quarterly financial packet, commencing with the quarter ending September 30, 2020 will provide much greater detail of expenses at the departmental level and include charts illustrating fiscal performance. While staff is adapting to the new ERP system and implementing new protocols, minor delays are expected to interim financial reporting and the first FY 2020-21 quarterly financial packet is expected to be presented at the November 17, 2020 Finance Committee meeting. As outlined in attachment 1, O&M Fund expenditure results are favorable at approximately 7.1% of the total FY 2020-21 budget, or 1.2% under the year-to-date budget target of 8.3%. O&M Fund revenues are slightly below the year-to-date target by$193,188 (42.7%), which is reasonable due to July being a historically low revenue month for the District and the fact that miscellaneous revenues (apart from Sewer Service Charge (SSC))were budgeted on a "straight line" basis through out the year. One favorable factor relating to revenues is that the SSC revenue amount placed on the tax roll and to be billed through direct bills is $943,583 above the amount included in the FY 2020-21 budget. The actual variance could be lower due to any variance in prior period adjustments and Permit-Counter billed amounts, but the $943,583 favorable variance is not susceptible to being fully offset by any adjustments in those areas. The Sewer Construction Fund has spent$1.3 million or 1.2% of the total year-to-date budget for capital project expenditures. On the revenue side, the Sewer Construction Fund is reporting a positive year-to- date variance of $128,291 (21.9%). Investment Portfolio Highlights In accordance with Section 53646 of the California Government Code, staff shall submit an investment September 22, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 36 of 75 Page 2 of 7 report to the General Manager and Board of Directors. While state law mandates this reporting shall be done at least quarterly, Central San's Investment Policy further stipulates this reporting shall be conducted on a monthly basis. Accordingly, this month's financial reporting packet includes investment portfolios for the month of July 2020, which was reviewed with the Finance Committee on September 22, 2020. The investments held by Central San on July 31, 2020 are shown by fund in the attached Investment Portfolio Report. Pursuant to the Investment Policy and state law, the Investment Portfolio Report reports the following: type of investment, issuer, date of maturity, par(or face) and dollar amount invested on all securities, as well as the current market value as of the date of the report. The following table provides a summary of the highlights included in the attached Investment Portfolio Report: Fund Total Total Market Wgtd. Wgtd. FY 2020-21 FY 2020-21 Face Value Avg. Avg. Actual Int. Budgeted Int. Value Yield Maturity Rev. (YT D) Rev. (YT D) O&M $25.1 M $25,193,920 0.60% 0.07 yrs $32,188 $15,833 Sewer $65.OM $65,190,735 0.51% 0.09 $31,055 $24,458 Construction Self-Insurance $6.9M $6,945,019 0.92% N/A $6,184 $9,338 The portfolio is in compliance with the Board's adopted policy regarding Central San's investments and as of July 31, 2020. The attached Investment Portfolio report also indicates Central San will meet expenditure requirements for the next six months from a combination of maturing investments and revenues from budgeted operations. Strategic Plan re-In GOAL THREE: Fiscal Responsibility Strategy 1—Maintain financial stability and sustainability, Strategy 2—Ensure integrity and transparency in financial management ATTACHMENTS: 1. July 2020 Financial Report 2. Investment Portfolio Report September 22, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 37 of 75 ATTACHMENT 1 Friday,September 11,2020 � CENTRAL SAN To:The Board of Directors From:Finance Division Subject:0&M Fund Budget-to-Actual Overview 5019 IMHOFF PLACE,MARTINEZ,CA 94553-4392 Timeframe:FY 2020-21 Year-to-Date(Through July 2020) YTD YTD Total FY YTD YTD Fav/(Unfav) Fav/(Unfav) Budget Budgeted Actual Variance($) Variance(%) Significant Variance Explanations Revenue: Operating Revenues $ 62,464,762 $ 204,797 $ 7,212 $ (197,585) -96.5% Non-SSC revenues budgeted evenly throughout year. Expecting actual revenues to catch up later in FY. Non-Operating Revenues 2,967,400 247,283 251,681 4,398 1.8% Total Revenue $65,432,162 $ 452,080 $ 258,893 $ (193,188) -42.7% Expenses: Salaries&Wages $ 39,543,191 $ 3,295,266 $ 3,006,980 $ 288,286 8.7% Employee Benefits 11,545,173 962,098 1,018,748 (56,651) -5.9% Higher payouts for retiring employees at start of FY than projected. Expected to normalize in subsequent months. Retiree Costs 15,827,016 1,318,918 1,122,525 196,393 14.9% Purchased Property Services: Repairs&Maintenance 4,090,401 340,867 82,459 258,408 75.8% Hauling&Disposal 1,014,425 84,535 (127,197) 211,732 250.5% Reversal of PY accruals in July but paid after July. Negative balance projected to be eliminated in following month. Security 650,800 54,233 821 53,413 98.5% Expanded on-site security to address higher foot traffic for significant treatment plant projects has not yet commenced. Rentals 190,701 15,892 14,611 1,280 8.1% Cleaning 388,250 32,354 31,353 1,002 3.1% Purchased Professional,Technical& Other Services: Professional Services 728,200 60,683 69,822 (9,139) -15.1% Technical Services 3,236,580 269,715 97,500 172,215 63.9% Other Purchased Services 2,340,697 195,058 98,619 96,439 49.4% Supplies&Materials: Utilities&Fuel 4,689,650 390,804 189,536 201,269 51.5% Chemicals 1,534,000 127,833 160,180 (32,347) -25.3% General Supplies 3,242,650 270,221 213,462 56,759 21.0% Other Expenses: Insurance&Risk Management 450,000 37,500 450,000 (412,500) -1100.0% Contribution to Self-Insurance fund,done annually in July. Memberships 628,279 52,357 22,645 29,712 56.7% Training&Meetings 515,075 42,923 7,463 35,460 82.6% Lower costs incurred for training and meetings while COVID- 19 precautions remain in place. Miscellaneous Other 51,250 4,271 810 3,461 81.0% Total Expenses $90,666,338 $ 7,555,528 $ 6,460,335 $ 1,095,193 14.5% PY=Prior Year Page 1 of 2 September 22, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 38 of 75 Friday,September 11,2020 _ � CENTRAL SAN To:The Board of Directors From: Finance Division MUM M. Subject:Sewer Construction (Capital) Fund Budget-to-Actual Overview 5019 IMHOFF PLACE,MARTINEZ,CA 94553-4392 Timeframe: FY 2020-21 Year-to-Date(Through July 2020) YTD YTD Total YTD YTD Fav/(Unfav) Fav/(Unfav) FY Budget Budgeted Actual Variance Variance(%) Significant Variance Explanations Revenue: Sewer Service Charges-Capital $ 56,673,402 $ - $ 55,224 $ 55,224 - Bulk of sewer service charges collected later in FY. Other Revenues 22,979,500 586,625 659,692 73,067 12.5% Capital Contributions 15,300,000 - - - - Concord share of treatment plant capital billed and collected after close of FY(Aug/Sept)each year. Total Revenue: $ 94,952,902 $ 586,625 $ 714,916 $ 128,291 21.9% Expenses by Program: Collection System 46,686,784 2,187,958 1,360,784 (827,174) -37.8% Treatment Plant 39,194,584 677,668 (796,137) (1,473,805) -217.5% Reversal of accruals for projects 7348 and 7351 for$1.4M and $673k,respectively. Incurred in the PY but paid after 7/31. General Improvements 6,108,365 391,370 651,611 260,241 66.5% Recycled Water 11,506,037 219,924 81,492 (138,432) -62.9% Contingency 2,535,179 - - Total Expenses: $ 109,030,949 $ 2,944,036 $ 1,297,750 (1,646,286) -55.9% * ** * Includes rollover of unspent capital project appropriations from prior year of$21.0 million. **Spent 44.08%of projected YTD budget. Page 2 of 2 September 22, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 39 of 75 ATTACHMENT 2 CENTRAL CONTRA COSTA SANITARY DISTRICT RUNNING EXPENSE FUND TEMPORARY INVESTMENTS JULY,2020 INVESTMENTS INTEREST INCOME (cents omitted) (cents omitted) DATE OF Days to ANNUAL CASH B.O.M. PURCHASE E.O.M. E.O.M %of CURRENT B.O.M. E.O.M. NO. ISSUER TYPE PURCHASE MATURITY Maturity YIELD OUTLAY FACE VALUE (MATURITY) FACE VALUE MKT VALUE Portfolio MONTH CUMULATIVE CUMULATIVE 519 State of Calif. LAIF 10/99- ------- 1 (1) $15,100,000 $36,100,000 ($21,000,000) $15,100,000 $15,198,520 60.16% $26,090 $0 $26,090 RE16 USTreasury T-Bill 07/02/2020 10/01/2020 61 0.127% $9,996,840 $0 $10,000,000 $10,000,000 $9,995,400 39.84% $1,042 $0 $1,042 (3) $25,096,840 $36,100,000 ($11,000,000) $25,100,000 $25,193,920 100.00% 27,132 - 27,132.19 (2) 5,042 5,042 $32,174 $0 $32,174 NOTE:(1) Annual yield of Local Agency Investment Fund(LAIF)varies with the composition of the Fund. The estimated yield as of July,2020 was 0.920%. (2) The face value indicates the value of the investment if held until maturity,which is the usual District Practice. (3) The weighted average yield of the total Running Expense portfolio is 0.604%. The weighted average maturity is 0.07 years. As the District is a voluntary participant in the County Treasury Pool,this calculation excludes investments purchased after the 15th day of the month,which is the cut-off for month-end reporting by Contra Costa County. (4) The market value of the portfolio on July 31,2020 was$25,193,920. (5) All investments held by the Running Expense Fund comply with Central San's investment policy approved by the Board of Directors[California Government Code §53646(b)(2)] (6)Sufficient liquidity and anticipated revenues are available for Central San to meet budgeted expenditures of the Running Expense fund for the next six(6)months[California Government Code§53646(b)(3)] (7)Of the total investments held in the Running Expense Fund, $1,610,000 is restricted for the Rate Stabilization Fund. N:\Accou ,q\GMTEMPI\1mv me ,TY2021\0121\Running Exp July 2020 September 22, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 40 of 75 CENTRAL CONTRA COSTA SANITARY DISTRICT SEWER CONSTRUCTION FUND TEMPORARY INVESTMENTS JULY,2020 INVESTMENTS INTEREST INCOME (cents omitted) (cents omitted) DATE OF Days to ANNUAL CASH B.O.M. PURCHASE E.O.M. E.O.M. %of CURRENT B.O.M. E.O.M. NO. ISSUER TYPE PURCHASE MATURITY Maturity YIELD OUTLAY FACE VALUE (MATURITY) FACE VALUE MKT VALUE Portfolio MONTH CUMULATIVE CUMULATIVE 519 State of Calif. LAIF 8/86-2/90 ---- 1 (1) $30,000,000 $32,000,000 (2,000,000) $30,000,000 $30,195,735 46.15% $24,601 $0 $24,601 952 FHLB Fed Agency 6/26/20 9/25/20 56 0.142 $19,992,922 $20,000,000 $0 $20,000,000 $19,997,400 30.77% $2,411 $0 $2,411 953 US Treasury T-Bill 7/02/20 10/01/20 62 0.127 $14,995,260 $0 $15,000,000 $15,000,000 $14,997,600 23.08% $1,563 $0 $1,563 (4) $64,988,183 $52,000,000 $13,000,000 $65,000,000 $65,190,735 100.00% 28,574 28,574 (3) (5) 2,610 2,610 31,184 $0 $31,184 NOTE: (1) Annual Yield of Local Agency Investment Fund(LAIF)varies with the composition of the Fund. The estimated yield as of July,2020 was 0.920%. (2) The face value indicates the value of the investment if held until maturity, which is the usual District practice. (3) The weighted average yield of the total Sewer Construction portfolio is 0.5102%. The weighted average maturity is.09 years. As the District is a voluntary participant in the County Treasury Pool,this calculation excludes investments purchased after the 15th day of the month,which is the cut-off for month-end reporting by Contra Costa County. (4) The market value of the portfolio on July 31,2020 was$65,190,735. GASB 31 requires adjusting investments to market value. The District will adjust annually,but report market values monthly. (5) All investments held by the Sewer Construction Fund comply with Central San's investment policy approved by the Board of Directors[California Government Code §53646(b)(2)] (6)Sufficient liquidity and anticipated revenues are available for Central San to meet budgeted expenditures of the Sewer Construction fund for the next six(6)months[California Government Code§53646(b)(3)] (7)Of the total investments held in the Sewer Construction Fund, $1,000,000 is restricted for the Rate Stabilization Fund. September 22, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 41 of 75 CENTRAL CONTRA COSTA SANITARY DISTRICT SELF-INSURANCE FUND TEMPORARY INVESTMENTS July,2020 INVESTMENTS INTEREST INCOME (cents omitted) (cents omitted) DATE OF Days to ANNUAL CASH B.O.M. PURCHASE E.O.M. E.O.M %of CURRENT B.O.M. E.O.M. NO. ISSUER TYPE PURCHASE MATURITY Maturity YIELD OUTLAY FACE VALUE(MATURITY) FACE VALUE MKT VALUE Portfolio MONTH CUMULATIVE CUMULATIVE 519 State of Calif. LAIF 110/99- ------- 1 (1) $6,900,000 $6,900,000 $6,900,000 $6,945,019 100.00% $5,391 $5,391 (3) $6,900,000 $6,900,000 $0 $6,900,000 $6,945,019 100.00% 5,391 5,391 (2) (4) 793 793 $6,184 $0 $6,184 NOTE: (1) Annual yield of Local Agency Investment Fund(LAIF)varies with the composition of the Fun( The estimated yield as of July,2020 was 0.920%. (2) The face value indicates the value of the investment if held until maturity,which is the usual District Practic( (3) The weighted average yield of the total Self-Insurance portfolio is 0.920% (4) The market value of the portfolio on July 31,2020 was$6,945,019 (5) All investments held by the Self Insurance Fund comply with Central San's investment policy approved by the Board of DirectorsCalifornia Government Code§53646(b)(2)] (6)Sufficient liquidity and anticipated revenues are available for Central San to meet budgeted expenditures of the Self Insurance fund for the next six(6)months[California Government Code§53646(b)(2 September 22, 2020 Regular FINANCE Committee Meeting Agenda Packet- Page 42 of 75