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Home My WebLink About12.c. Committee Minutes-Finance 03-23-21 Page 1 of 14 Item 12.c. CENTRALSAN jdf A- hom CENTRAL CONTRA COSTA SANITARY DISTRICT April 1, 2021 TO: HONORABLE BOARD OF DIRECTORS FROM: KATIE YOUNG, SECRETARYOF THE DISTRICT SUBJECT: MARCH 23, 2021 - FINANCE COMMITTEE - CHAIR PILECKI AND MEMBER MCGILL Attached are minutes of the above Committee meeting. ATTACHMENTS: 1. Minutes of 03-23-21 meeting 2. Item 5.c. (Handout) ICMA-RC Presentation from Meeting April 1, 2021 Regular Board Meeting Agenda Packet- Page 138 of 153 Page 2 of 14 F CENTRAL SAN CENTRAL CONTRA COSTA • IMHOFF PLACE, MARTINEZ, CA 9A553-A392 REGULAR MEETING OF THE BOARD OF DIRECTORS: TAD J PILECKI CENTRAL CONTRA COSTA President SANITARY DISTRICT DAVID R. WILLIAMS President Pro Tens FINANCE COMMITTEE BARBARA D.HocKETT MARIAHN LAURITZEN MICHAEL R.MCGILL MINUTES PHONE: (925)228-9500 Tuesday, March 23, 2021 FAX: (925)372-0192 2:00 p.m. www.centralsan.org (All attendees participated via videoconference) Committee: Chair Tad Pilecki Member Mike McGill Guest: Erika Armstrong, Relationship Manager, ICMA-RC (left after Item 5.c.) Staff. Roger S. Bailey, General Manager Katie Young, Secretary of the District Philip Leiber, Director of Finance and Administration Steve McDonald, Director of Operations Jean-Marc Petit, Director of Engineering and Technical Services Danea Gemmell, Planning and Development Services Division Manager Edgar Lopez, Capital Projects Division Manager Kevin Mizuno, Finance Manager Stephanie King, Purchasing and Materials Manager (left during Item 5.a.) Shari Deutsch, Risk Management Administrator Benjamin Armstrong, Internal Auditor Donna Anderson, Assistant to the Secretary of the District (left during Item 6.b.) 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 conduct the meeting by teleconference, videoconference, or both. The agenda included instructions for options in which the public could participate in the meeting. April 1, 2021 Regular Board Meeting Agenda Packet- Page 139 of 153 Page 3 of 14 Finance Committee Minutes March 23, 2021 Page 2 2. Call Meeting to Order Chair Pilecki called the meeting to order at 2:00 p.m. Mr. Mizuno asked that Items 6.a. and 5.c. be taken out of order to accommodate an outside guest and a staff member who needed to leave the meeting by a certain time. Chair Pilecki said yes. The Committee proceeded to Item 6.a. immediately after Item 3. 3. Public Comments — None. 4. Old Business a. Follow-up to questions asked at the February 23, 2021 meeting regarding certain expenditures Mr. Mizuno reviewed the memorandum included with the agenda material, during which it was noted that staff will be moving forward with a 3% vacancy factor for the coming year's budget, as opposed to the 2% vacancy factor used in the current budget. COMMITTEE ACTION: Received the information. b. Review of Finance Committee and Board of Director responsibilities for review of expenditures Mr. Leiber recapped the memorandum included with the agenda material. Member McGill said he very much appreciated District Counsel Kent Alm's opinion that the questions posed by the Committee Members on various expenditures discharge their responsibility in terms of standard of duty or care. He also felt comfortable that, with the information provided, the Committee Members were doing what they are supposed to be doing in terms of reviewing expenditures. Finally, he referenced the wording in the memorandum that a Committee Member need not possess an accounting or business background to perform their duties regarding review of expenditures. However, against that backdrop, and given his background, he opined that he bore some additional responsibility to use his background knowledge when reviewing the expenditures. Chair Pilecki noted Mr. Alm's opinion that the Committee Members were meeting the standard of duty or care by the questions they ask about expenditures; however, the minutes do not recap the specific questions asked unless follow-up information is needed. He asked if further describing the questions, or possibly attaching them to the minutes, was necessary to April 1, 2021 Regular Board Meeting Agenda Packet- Page 140 of 153 Page 4 of 14 Finance Committee Minutes March 23, 2021 Page 3 meet the standard of care. Mr. Leiber said staff has retained written records of the questions and responses and could provide them if necessary. Member McGill said he appreciated staff's efforts in preparing the informative memorandum and addressing his original inquiry about the Committee Members'duties regarding approval of expenditures. COMMITTEE ACTION: Received the information. 5. Items for Committee Recommendation to the Board a. Review and recommend approval of expenditures incurred February 10, 2021 through March 11, 2021 Staff responded to a list of questions posed in advance of the meeting by Chair Pilecki. All staff responses were to his satisfaction. Member McGill said he had some comments, none of which were of concern. They were more related to trying to tie together some of the expenditures with various capital projects. He said he would schedule a meeting with Mr. Mizuno to familiarize himself with where the numbers appear in the expenditures listing. With regard to the issue concerning the inability to tie together the totals for Procurement-Card expenditures, Mr. Mizuno said staff has begun preparing a monthly reconciliation report to explain any differences. Member McGill said he would be interested in seeing the reconciliation report since staff was already preparing it. Chair Pilecki said he was comfortable with that request. Mr. Leiber noted that the reconciliation report may have to lag one meeting due to time constraints. Member McGill said that was not a problem. COMMITTEE ACTION: Recommended Board approval. b. Receive January 2021 Budget-to-Actual Financial Overview Mr. Mizuno reviewed the financial overview reports included with the agenda material. In follow-up to the comment made at the February 23, 2021, Finance Committee meeting that there has been a backlog in processing construction invoices within the new Oracle Enterprise Resource Planning (ERP) system, Mr. Lopez said the backlog has now been eliminated. Chair Pilecki, who attended the Engineering & Operations Committee meeting held earlier in the day, noted that capital project bids generally have been coming in below the engineer's estimate. Aggregate savings are in the April 1, 2021 Regular Board Meeting Agenda Packet- Page 141 of 153 Page 5 of 14 Finance Committee Minutes March 23, 2021 Page 4 range of$5 million to $7 million for projects in this period. He asked if a brief narrative could be included in the financial reports as to the amount saved. COMMITTEE ACTION: Recommended Board receipt. C.* Review draft Position Paper to receive the 2020 Annual Deferred Compensation Report encompassing Central San's 457(b) Deferred Compensation, 401(a) Money Purchase, and 401(h) Retirement Health Savings Plans This item was taken out of order, immediately after Item 6.a. Mr. Mizuno began by recapping the information in the draft Position Paper included with the agenda material, after which he introduced Ms. Armstrong of ICMA-RC, the District's Plan Administrator. Ms. Armstrong announced that ICMA-RC will be changing its name to "Mission Square Retirement"over the next six to twelve months. The name change is intended to be more memorable and emphasize the organization's mission to help employees build retirement security. Ms. Armstrong then presented a 2020 Plan Review (see attached). During her presentation, she noted that there has been a 75% decrease in plan rollouts from 2019, meaning that many retirees and those who have separated from service are choosing to leave their plan balances with ICMA even after separating from service. Chair Pilecki asked Mr. Mizuno to include that information in the "Plan Performance — Calendar Year 2020" section of the Deferred Compensation Committee Minutes from February 3, 2021. Member McGill said he has never heard any negative comments about ICMA's plan management. Given such a comprehensive program with so many Central San participants, he opined that must be reflective of a job well done by ICMA. Chair Pilecki asked what portion of the total balances in ICMA in both the 457 and 401(a) plans was attributable to Central San retirees and those who have separated from service. Ms. Armstrong stated that almost 50% of the plan assets are held by former employees. Given that data, Chair Pilecki said it is critical for ICMA to conduct outreach to retirees. Ms. Armstrong said part of Mission Square's new focus will be more outreach to retirees. Mr. Mizuno then reviewed the draft Deferred Compensation Plan Administrative Procedures, which were not being brought forth for Board approval and, thus, staff was not seeking the Committee's recommendation for such approval. However, he said staff was interested in any feedback the Committee might have with respect to the draft procedures. (A separate, more high-level Board Policy on deferred compensation will be presented for April 1, 2021 Regular Board Meeting Agenda Packet- Page 142 of 153 Page 6 of 14 Finance Committee Minutes March 23, 2021 Page 5 review by the Administration Committee at a future date, at which time staff will seek the Administration Committee's recommendation for Board approval.) With regard to the draft administrative procedures, Chair Pilecki said that, as a former member of the Deferred Compensation Plan Advisory Committee during the 1980s and 1990s, he was pleased to see that the procedures include an established schedule for regular meetings and a requirement for conflict of interest statements, and removed the minimum employee contribution. He was also very glad to see the requirement for mandatory education of Committee members. He offered the following suggestions: 1) With respect to Item 3 (Background) where it states that the "Finance Manager serves as the designated Plan Administrator,"he asked if that individual would be a regular committee member, an alternate, or total backup if they were to leave the District. He thought the role of the Plan Administrator should be better defined. Mr. Mizuno said that was the intent, and that staff will clarify that in the final procedures. 2) Regarding Item 5 (Changes Affecting the Deferred Compensation Plan), where it states that any changes in the Internal Revenue Service regulations and laws that would affect the contribution amount would be communicated by the Finance Manager to the employees, he suggested adding the words "and retirees." He also asked that quarterly meeting notes be available to employees and retirees on the intranet because a significant portion of plan assets is owned by retirees. Mr. Mizuno said the draft administrative procedures do not put a cap on the number of Advisory Committee members. Currently, there are seven members. He asked if the Committee had any comments. Chair Pilecki said he considered that to be within staff's purview, so long as it was an odd number of members. COMMITTEE ACTION: Recommended Board receipt. Upon conclusion of the above item, the Committee reverted to the original agenda order, beginning with Item 4.a. 6. Other Items a. Annual review of contracts and blanket purchase orders (BPOs) older than five years with an annual spend greater than $25,000 This item was taken out of order, immediately after Item 3. April 1, 2021 Regular Board Meeting Agenda Packet- Page 143 of 153 Page 7 of 14 Finance Committee Minutes March 23, 2021 Page 6 Ms. King referred to the list of BPOs older than five years with an annual spend greater than $25,000 that was included with the agenda material. She noted that the list was shrinking as staff has been able to bid the contracts. The first four contracts are currently in the bid process; the remaining two should be complete by the end of the current fiscal year. The goal is not to have any contracts older than five years with an annual spend greater than $25,000 in future years. Both Committee Members were very pleased with the progress in reducing the number of BPOs on the list. COMMITTEE ACTION: Received the report. Upon conclusion of the above item, the Committee moved to Item 5.c. b. Review Risk Management Loss Control Report as of March 8, 2021 COMMITTEE ACTION: Received the report. 7. Announcements a. Mr. Leiber introduced Benjamin Armstrong, the District's new Internal Auditor. 8. Suggestions for Future Agenda Items a. Receive list of upcoming agenda items and provide suggestions for any other future agenda items COMMITTEE ACTION: Received the list. 9. Future Scheduled Meetings Tuesday, April 27, 2021 at 2:00 p.m. Monday, May 17, 2021 at 1:30 p.m. (Special meeting) Tuesday, May 25, 2021 at 2:00 p.m. 10. Adjournment— at 3:38 p.m. * Attachment April 1, 2021 Regular Board Meeting Agenda Packet- Page 144 of 153 Page 8 of 14 Item 5.c. (Handout) icmA RC BUILDING PUBLIC SECTOR RETIREMENT SECURITY 2020 Plan Review 1 Central Contra Costa Sanitary District Date:March 23,2021 Presented by: ICMA-RC AC:50528-0121 1 Real izeRetirement° Building better outcomes ' ENGAGE BUILD rr REALIZE 2 1 April 1, 2021 Regular Board Meeting Agenda Packet- Page 145 of 153 Page 9 of 14 ~ Wq \ , - ƒ� f - /:�§» � . � � 2g2q �|�� [OV�OW April 1, 2021Regular Board Meeting Agenda Packet- -,.. 146 . Page 10 of 14 Plan participation 100% —( Featured Initiatives 457 Plan Enrollments fa+nRC Start Your Journey Campaign ....................... ✓ ++Rl..rna..,.rr. upo..lwaam.d Virtual New Employee Meetings a� 2019 versus 2020 5 5 Plan saving 3% �0 Featured Initiatives increase in savings rate* SAVING DOESN'T HAVE TO BE STRESSFUL Saving More Campaign :WX00MLYHYRRsr,,,d.W , mj5.,np"'fo vs hcnefn8i6n°dvY ®edeodgeme. 0.fQW[CE oWu,. Online Deferrals Olo,�e,w.,mMEulum. ICAM� W5.K M14tt4Pp 2019 versus 2020 6 6 3 April 1, 2021 Regular Board Meeting Agenda Packet- Page 147 of 153 Page 11 of 14 Plan engagement 20% Featured Initiatives j,nrease in participant _ account log ins* Managing Your Retirement T Account Access Tips MANAGhNG YOUR RETIREMENT IS A CLICK AWAY! 33% icMnRC mobile log-ins* m„„". 2019 versus 2020 7 Plan retention 75% Featured Initiatives decrease in plan rollouts* We Continue Working for You Campaign ICMA-RC Continues Working for You ry FM wtr�ptuniE.�wr�eYeYeW b Ww•mlp spy ► Managed Accounts GM+ne•wa+r�� ► Retirement Plans Specialist Appointments *2019 versus 2020 a 8 4 April 1, 2021 Regular Board Meeting Agenda Packet- Page 148 of 153 Page 12 of 14 2020 education results REALIZE RETIREMENT® . . . Building better outcomes ENGAGE 9 401(a) Enrollments 9 457 Enrollments 115 Participant Meetings ` 2 Central San Specific CFP Webinars 15 CFP Consultations REALIZE 50 Webinar Attendees 9 9 Managed account utilization 45 $10.7 Million Participants Total Assets a 10 5 April 1, 2021 Regular Board Meeting Agenda Packet- Page 149 of 153 Page 13 of 14 CARES Act communications & education CLW Mr. Y Washington Plan Sponsor Brainshark video Live webinars Perspective and Participant overview Resource Centers 11 CARES Act system enhancements & actions Suspended RMDs Updated systems Developed CRD and communicated to allow Coronavirus- forms and RMD waiver Related Distributions related materials (CRDs) 12 6 April 1, 2021 Regular Board Meeting Agenda Packet- Page 150 of 153 Page 14 of 14 CARES Act-related distributions 1 $75,000 Total Distributions Total DollarAmount 13 13 7 April 1, 2021 Regular Board Meeting Agenda Packet- Page 151 of 153