Loading...
HomeMy WebLinkAboutFinance MINUTES 05-09-22 (Special) Page 2 of 5 r CENTRAL SAN CONTRACENTRAL •STA SANITARY DISTRICT 5019 IMHOFF SPECIAL MEETING OF THE BOARD OF DIRECTORS: DAVID R. WILLIAMS CENTRAL CONTRA COSTA President SANITARY DISTRICT BARBARA D.HOCKETT President Pro Tena FINANCE COMMITTEE MARIAHNLAURITZEN MICHAEL R.MCGILL TAD J PILECKI MINUTES PHONE: (925)228-9500 Monday, May 9, 2022 FAX.- (925)372-0192 2:30 p.m. www.eentralsan.org (All attendees participated via videoconference) Committee: Chair Mike McGill Member Tad Pilecki (Alternate for Member D. Williams) Staff.- Roger S. Bailey, General Manager Kenton Alm, District Counsel Katie Young, Secretary of the District Philip Leiber, Director of Finance and Administration Steve McDonald, Director of Operations Danea Gemmell, Planning and Development Services Division Manager (left during Item 4.b.) Edgar Lopez, Capital Projects Division Manager (left during Item 4.b.) Kevin Mizuno, Finance Manager Benjamin Johnson, Internal Auditor (left during Item 4.b.) Thomas Brightbill, Senior Engineer (left after Item 4.a.) Olivia Ruiz, Accounting Supervisor Christopher Thomas, Accounting Supervisor (left during Item 4.b.) Christina Gee, Management Analyst (left during Item 4.b.) Amelia Berumen, Assistant to the Secretary of the District 1. Notice This meeting was conducted virtually in accordance with the provisions stipulated in Assembly Bill 361 and adopted by the Central San Board of Directors on May 5, 2022. The agenda included instructions for options in which the public could participate. 2. Call Meeting to Order Chair McGill called the meeting to order at 2:30 p.m. May 26, 2022 Special Board Meeting Agenda Packet- Page 524 of 532 Page 3 of 5 Finance Committee Minutes May 9, 2022 Page 2 3. Public Comments None. 4. Agenda Items a. Review draft Position Paper to conduct a public hearing to receive public comment and consider adopting uncodified Ordinance No. amending the Schedule of Capacity Fees, Rates and Charges, replacing Ordinance No. 309 in accordance with District Code chapter 6.12 Mr. Brightbill discussed the agenda material to be reviewed and considered at the upcoming and recently set June 16 public hearing. He stated there were not many changes made from the previous year and that staff continues to use the buy-in fee method for investment equalization amongst new and existing customers. Additionally, Table 1 (provided as Attachment 4 in the materials) was expanded to include a value of contributed assets and equity. The calculation of the fees follows the WEF'and AWWAI manuals and has been reviewed by Central San's financial planning consultant, Raftelis. Mr. Brightbill responded to various questions and used scenario situations for explanation and Committee discussion. Mr. Alm discussed pending legislation regarding the Grayson Assembly Bill (AB) 2536. The bill had been an attempt to eliminate the use of the buy-in concept for capacity fees as a means to bring down impact fees paid on new construction. It would restrict the fees to costs for direct benefits to that specific development. Elimination of the buy-in concept for capacity fees would pose a large problem, fortunately, at present the modified language does not include elimination of that concept. Chair McGill notated the use of the term Contra Costa Times in the draft Position Paper and opined it should instead reflect the circulation title East Bay Times. A brief discussion ensued about staff's protocol for noticing and correspondence with the Contra Costa Times Legal Notices division. Some potential wordsmith options were discussed; staff will collaborate on a language update to address this comment. As it pertained to the methodology of fee setting, the Committee recalled the last study done in 2017 with Black and Veatch and asked when it would be revisited. Ms. Gemmell replied that staff will include in the cost of service review this year as part of consultant Raftelis'review. She advised staff will bring forth a policy item discussion on cost of service, capacity fees will be WEF defined as Water Environment Federation; AWWA defined as American Water Works Association May 26, 2022 Special Board Meeting Agenda Packet- Page 525 of 532 Page 4 of 5 Finance Committee Minutes May 9, 2022 Page 3 included in that presentation. In response to a notion to include cost of service studies for capacity fees on the same schedule as cost of service reviews for Sewer Services Charges, Mr. Alm cautioned against doing so. He stated the statute requires studies to be conducted every five years; however, based on the prior discussion of AB 2536, Central San would need to do conduct a study regardless as it would set forth certain criteria and the methodology may change next year. At the conclusion of the questions and discussion, the Committee concurred to conduct the public hearing to consider the proposed Ordinance to amend the fees as presented. COMMITTEE ACTION: Recommended the Board conduct the public hearing and consider adoption of the proposed uncodified Ordinance. b. Review proposed Fiscal Year 2022-23 Central San Operations and Maintenance, Self-Insurance, and Debt Service budgets Mr. Leiber and Mr. Mizuno provided an in-depth review of the agenda materials, including updated (highlighted) presentation information that was also provided immediately afterwards to the agenda materials available on the District's website. Staff responded to several questions posed during the discussion of the various budgetary sections. Strategic Plan: As it pertained to the slides regarding Strategic Plan priorities that reflect on the budgetary aspect to achieve the goals, Member Pilecki suggested including a line to address potential projects that are being pursued with EBMUD2 and SFPUC2 as part of those priorities. It was concurred to include this important task. Member Pilecki inquired about the (**) footnote on the bottom of slide 9, "excludes overall contributions to reserves,"and whether that was a global comment to the entire summary. Mr. Leiber explained the footnote was not specific to any particular figures; other than, sources are higher than what is currently being spent. Use of Funds: One of the updates was to slide 11, which provided an explanation of the net contribution to a reserve budget highlighted at the bottom of the slide. The policy practice has been to collect funds in advance of when it may be needed. The budget reflects an increase in Operations and Maintenance 2 EBMUD defined as East Bay Municipal Utility District; SFPUC defined as San Francisco Public Utilities Commission May 26, 2022 Special Board Meeting Agenda Packet- Page 526 of 532 Page 5 of 5 Finance Committee Minutes May 9, 2022 Page 4 (O&M) and a decrease in Capital, which equated to the reserve contribution of$22 million. Source of Funds: Mr. Leiber highlighted that to-date no funds have yet been drawn from the State Revolving Fund (SRF) loan acquired for the original Solids Handling Facility Improvements Project. Staff anticipates $42 million to be drawn from that source during FY 2022-23, a total of$100 million is anticipated to be drawn for elements of the project that remain in the scope from the original $173 million loan versus new scope in the revised project that will need to be funded from other sources. It was reiterated during the discussion to ensure the City of Concord be made aware of the budget review meetings schedule and is also invited to the June 16 public hearing. The Committee requested staff include additional slides to the final Board presentation providing information on the Concord/Clayton reimbursement revenue and how it is expected to be impacted by the June 2021 pension UAAL3 payoff. On slide 18, it was requested that the content either be updated to include footnote references to the asterisked columns, or removed for clarity. The Committee was satisfied with the responses provided by staff to their questions. COMMITTEE ACTION: Reviewed and provided input to staff. 5. Announcements None. 6. Suggestions for Future Agenda Items None. 7. Future Scheduled Meetings Tuesday, May 24, 2022 at 2:00 p.m. Tuesday, June 21, 2022 at 2:00 p.m. Tuesday, July 26, 2022 at 2:00 p.m. 8. Adjournment— at 4:44 p.m. 3 UAAL defined as unfunded actuarial accrued liability May 26, 2022 Special Board Meeting Agenda Packet- Page 527 of 532