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HomeMy WebLinkAboutFinance MINUTES 11-22-21Page 2 of 6 110ENTRAL SAN REGULAR MEETING OF THE BOARD OF DIRECTORS: TAD J PHECKI CENTRAL CONTRA COSTA President SANITARY DISTRICT DAVIDR. WILLIAMS President Pro Tent FINANCE COMMITTEE BARBARA D. HOCKETT MARIAHN LAURITZEN MICHAEL R. MCGILL MINUTES PHONE: (925) 228-9500 Tuesday, November 22, 2021 FAX.- (925) 372-0192 2:00 p.m. www.eentralsan.org (All attendees participated via videoconference) Committee: Chair Tad Pilecki Member Barbara Hockett (alternate for Member McGill) Guest: Andrew Brown, HighMark Capital Management (left after Item 6.a.) Staff. Roger S. Bailey, General Manager (joined during Item 6.a.) Katie Young, Secretary of the District (joined during Item 4.a.) Philip Leiber, Director of Finance and Administration Steve McDonald, Director of Operations (joined during Item 4.a.) Jean -Marc Petit, Director of Engineering and Technical Services (joined during Item 6.a.) Danea Gemmell, Planning & Development Services Division Manager Edgar Lopez, Capital Projects Division Manager Christopher Thomas, Accounting Supervisor (left after Item 5.c.) Olivia Ruiz, Accounting Supervisor Shari Deutsch, Risk Management Administrator Benjamin Johnson, Internal Auditor Amelia Berumen, Assistant to the Secretary of the District Dee Dee Barrett, Administrative Services Assistant Notice This meeting was held virtually in accordance with the Brown Act provisions stipulated in Assembly Bill (AB) 361 and adopted by the Central San Board of Directors on October 21, 2021, via Resolution 2021-076, effective for the month of November 2021. The agenda included instructions for options in which the public could participate in the meeting. December 2, 2021 Regular Board Meeting Agenda Packet - Page 157 of 176 Page 3 of 6 Finance Committee Minutes November 22, 2021 Page 2 2. Call Meetina to Order Chair Pilecki called the meeting to order at 2:00 p.m. 3. Public Comments ►►= =0 Chair Pilecki announced Item 6.a. would be heard as the first item of business. 4. Old Business The balance of the agenda, beginning with Item 4. a., was heard in its original order after the conclusion of Item 6.a. a. Receive overview of Procurement Card (P-Card) Program internal controls Mr. Leiber provided a succinct overview of the internal controls and processes described in the agenda material. Member Hockett commented the information was very thorough and comprehensive, and solidified trust in the District's administration. As it pertained to P-Card Limits (Attachment 4), Chair Pilecki recollected two prior emergency -type situations where staff was unable to get a hold of Purchasing staff for immediate procurement needs and, at one time, a former employee was brought in to assist. With that said, he inquired whether it would be worthwhile to evaluate and consider elevating the P-Card threshold for the Department Directors for similar situations in the future. For example, he suggested the Director's limit match that of the Purchasing and Materials Manager. Member Hockett suggested an alternative would be an on -call rotation of the Purchasing staff to help as needed. Mr. Leiber thought a back-up plan was a good idea and indicated he would conduct an internal discussion to determine which route would be most beneficial and report back at a future meeting. COMMITTEE ACTION: Received the update and provided input to staff. December 2, 2021 Regular Board Meeting Agenda Packet - Page 158 of 176 Page 4 of 6 Finance Committee Minutes November 22, 2021 Page 3 5. Items for Committee Recommendation to the Board a. Review and recommend approval of expenditures incurred October 15, 2021 through November 10, 2021 Mr. Leiber provided responses to seven expenditure questions posed by Chair Pilecki in advance of the meeting. The Committee was satisfied with the responses and no further questions were asked. COMMITTEE ACTION: Recommended Board approval. b. Receive Fiscal Year (FY) 2021-22 Quarterly Financial Review report through the quarter ended September 30, 2021 Mr. Leiber explained this quarterly report provides a more comprehensive format than what was previously provided monthly and would be used as the quarterly report format moving forward. He provided a summary review of the content and responded to minimal questions. Chair Pilecki reflected back on an earlier expenditure question which dealt with an older service period payment and a Position Paper recently considered at a Board Meeting which alluded to an expected budget overrun. He requested that such large -ticket items be reflected and pointed -out in future reports. Mr. Leiber advised that staff maintains an informal list of such known items and would make sure that staff reviews that list in preparation of these reports, with mentions as appropriate. During discussion of Sewer Service Charge (SSC) revenues, Chair Pilecki inquired about a low interest rate received in the first quarter that was attributed to the paydown of the Unfunded Actuarially Accrued Liability (UAAL), but thought a large sum had been deposited to the SSC from the bond proceeds transaction. Mr. Leiber explained that multiple fund movements were planned in connection with the UAAL paydown. He noted that interest rates for new funds remained quite low, which could explain some of the drop, but that staff would look into the variance and would provide additional explanatory information at a future meeting, to which Chair Pilecki agreed. Lastly, Mr. Leiber reviewed fund overview charts that will continue to be provided to the Committee on a monthly basis. COMMITTEE ACTION: Recommended Board receipt. December 2, 2021 Regular Board Meeting Agenda Packet - Page 159 of 176 Page 5 of 6 Finance Committee Minutes November 22, 2021 Page 4 C. Receive the Financial Overview through the month of October 2021 Mr. Leiber explained this financial overview report will be the format for future monthly updates, as requested at a prior Committee meeting. Chair Pilecki inquired when the Committee could expect to review the revised cashflow projections now that a large capital project was not moving forward as originally planned. Mr. Leiber replied that staff is working to define the cashflow; however, no specific estimation was known at this time. Mr. Petit added that the Capital Improvement Budget (CIB) and Ten -Year Capital Improvement Plan (CIP) were in the process of being reviewed. He indicated that staff should be ready to provide an update at the Board Financial Workshop to be held in the first quarter of 2022. COMMITTEE ACTION: Recommended Board acceptance. 6. Other Items a. Receive Highmark Other Post -Employment Benefits (OPEB) and Pension Prefunding Sub -trust Reports for the Third Quarter of calendar year 2021 This item was heard out of order as the first item of business. Mr. Brown reviewed the quarterly report provided in the agenda materials and as summarized in the agenda memorandum. He indicated the economic forecast for 2022 would be one of sustained growth, estimating a 3.5%-4% growth of Gross Domestic Product (GDP). He opined it may not be as strong as this year, but estimates it will be up. As far as quarterly projections in 2022, Mr. Brown indicated two -to -three quarters may in the high 2% Consumer Price Index (CPI) range and may take three quarters to return to a reasonable level. It is anticipated there will be three federal hikes by this time next year; therefore, next year is estimated to be a "good year." In review of the OPEB Asset Allocation information in Attachment 2 of the agenda item, Mr. Brown stated most assets were sold on the pension prefunding plan a few months back. As of today, (i.e., October 1-November 22), the OPEB Trust is over $87 million, an approximate 3.7-3.8% increase in value. Moreover, the fourth quarter is projected to be even better than this quarter. COMMITTEE ACTION: Received the report. December 2, 2021 Regular Board Meeting Agenda Packet - Page 160 of 176 Page 6 of 6 Finance Committee Minutes November 22, 2021 Page 5 b. Review Risk Management Loss Control Report as of November 9, 2021 Ms. Deutsch reviewed the Loss Control Report provided and noted three overflow claims were received for the month of October, which happened to occur during a storm event. Ms. Deutsch also mentioned receipt of two new injury claims alleged to arise from manhole offsets with surrounding pavement. She mentioned the District had implemented a Manhole Inspection Program before these incidents occurred and is working with defense counsel to review those records. Chair Pilecki requested the Board receive a briefing on the Manhole Inspection Program in the near future. Lastly, Ms. Deutsch responded to inquiry about two line items under the Property Incidents category described as "homeless. " She explained the Property Incidents section of the report details damage/loss to the District's own property. There have been homeless encampments on and around District property. Risk Management and Planning staff are working with law enforcement to remove the camp, and will coordinate to identify and implement measures to prevent future encampments. COMMITTEE ACTION: Received the update. 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 As mentioned in Item 6.b., an informational presentation of the Manhole Inspection Program was requested to be provided at a future Board meeting. COMMITTEE ACTION: Received the list and provided input to staff. 9. Future Scheduled Meetinas Tuesday, December 21, 2021 at 2:00 p.m. 10. Adjournment — at 2.53 p.m. December 2, 2021 Regular Board Meeting Agenda Packet - Page 161 of 176