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HomeMy WebLinkAbout5.a. Conduct biennial review of the following Board Policies: BP 004, 025, 031, 040, 041 Page 1 of 12 Item 5.a. CENTRAL SAN July 5, 2022 TO: ADMINISTRATION COMMITTEE FROM: KATIE YOUNG, SECRETARYOF THE DISTRICT REVIEWED BY: KENTON L. ALM, DISTRICT COUNSEL ROGER S. BAILEY, GENERAL MANAGER SUBJECT: CONDUCT BIENNIAL REVIEW OF THE FOLLOWING BOARD POLICIES: • BP 004 - INTEGRATED PEST MANAGEMENT • BP 025 - NAMING OF DISTRICT FACILITIES • BP 031 - USE OF TEMPORARY EMPLOYEES • BP 040 - ELECTRONIC SIGNATURES AND APPROVALS • BP 041 - PENSION FUNDING Attached are copies of the above referenced Board Policies, which are being presented to the Committee for biennial review. Staff has no recommended changes to these existing policies. If the Committee concurs, the policies will remain as it is and will be reviewed again in two years. However, if the Committee recommends changes, the policy will be brought to the full Board for consideration of any proposed revisions. Strategic Plan Tie-In GOAL ONE: Customer and Community Strategy 1—Deliver high-quality customer service, Strategy 2—Maintain a positive reputation GOAL TWO: Environmental Stewardship Strategy 1—Achieve 100% compliance in all regulations GOAL THREE: Fiscal Responsibility Strategy 2—Ensure integrity and transparency in financial management GOAL FOUR: Workforce Development Strategy 1—Proactively plan for future operational staffing needs, Strategy 3— Inspire employee engagement ATTACHMENTS: 1. BP 004- Integrated Pest Management 2. BP 025 - Naming of District Facilities July 5, 2022 Regular ADM IN Committee Meeting Agenda Packet- Page 28 of 41 Page 2 of 12 3. BP 031 - Use of Temporary Employees 4. BP 040 - Electronic Signatures and Approvals 5. BP 041 - Pension Funding July 5, 2022 Regular ADMIN Committee Meeting Agenda Packet- Page 29 of 41 ATTACHMW'D Df 12 Number: BP 004 Related Administrative Procedure: AP 004 Authority: Board of Directors ---- Effective: September 15, 2011 Revised: August 6, 2020 CENTRALSAN Reviewed: July 21, 2020 Initiating Dept./Div.: Engineering/Resource Recovery BOARD POLICY INTEGRATED PEST MANAGEMENT DEFINITION Integrated Pest Management (IPM) is a science-based strategy and decision-making process that provides effective, long-term pest control while emphasizing pest prevention and the use of non-chemical pest management practices through physical, cultural, biological and, when appropriate, chemical control methods to effectively manage pests with minimal risk to public health and the environment. POLICY It will be Central San's policy to manage pests using IPM principles and techniques in all pest control activities conducted by Central San staff, vendors, and contractors in Central San's properties, facilities, and collection system. [Original Retained by the Secretary of the District] July 5, 2022 Regular ADMIN Committee Meeting Agenda Packet- Page 30 of 41 Page 4 of 12 ATTACHMENT 2 Number: BP 025 Authority: Board of Directors Effective: July 21, 2016 Revised: July 19, 2018 Reviewed: June 16, 2020 CENTRALSAN Initiating Dept./Div.: Administration BOARD POLICY NAMING OF DISTRICT FACILITIES PURPOSE To set forth policy and criteria for the naming or dedication of District facilities. POLICY Periodically the Board of Directors may wish to consider naming one of the District facilities in honor of exemplary public service rendered by an individual or community organization. Criteria and Eligibility 1. District facilities may be named in honor of individuals or community organizations that have made exceptional contributions to the District or demonstrated commitment to the industry, including one or more of the following: o Extraordinary public service as an elected official; o Extraordinary public service as a District employee; o Extraordinary public service as a community volunteer; o Extraordinary contribution to foundations/organizations which directly support the District's mission. 2. Particular consideration should be given to the following: o The period of time during which the individual served; o The number of people that directly or indirectly benefitted from the individual's service; o The extent to which the actions of the individual improved: the lives of those affected by the service, and/or the environment. July 5, 2022 Regular ADMIN Committee Meeting Agenda Packet- Page 31 of 41 Page 5 of 12 Number: BP 025 NAMING OF DISTRICT FACILITIES Page 2 of 2 3. No person who is currently running for elected office or who is serving as an elected official of the District will be eligible for nomination during such service. 4. A nomination of a deceased individual may be considered no sooner than one year after the individual's death. 5. Recognition by naming may be bestowed upon an individual/organization for one District facility only. 6. No facility shall be named after an individual who has been convicted of a felony. If a person for whom a facility has been named is, in the future, convicted of a felony, their name will be removed from that facility. 7. Naming requests may be originated by a Board Member or submitted through the General Manager for consideration by the Board. 8. Any requests to name a District facility after an individual will be presented to the Administration Committee for review and recommendation prior to scheduling for Board action. 9. Any and all recommendations for naming a District facility must be decided by the full Board. Final action on any recommendation requires a four-fifths vote of the Board. 10. The Board of Directors shall have the authority to rename buildings or facilities that have already been officially named. [Original Retained by the Secretary of the District] July 5, 2022 Regular ADM IN Committee Meeting Agenda Packet- Page 32 of 41 Page 6 of 12 ATTACHMENT 3 Number: BP 031 Authority: Board of Directors Effective: August 3, 2017 Revised: July 16, 2020 ot!vi Reviewed: Initiating Dept./Div.: Operations/Human Resources ECENTRALSAN BOARD POLICY USE OF TEMPORARY EMPLOYEES PURPOSE To adopt a policy regarding the District's use of temporary employees. POLICY The District may use temporary employees for reasons such as those listed below: • Backfilling for authorized leaves of absence • Addressing peaks in workload • Succession planning/retirements • Backfilling vacant positions while awaiting a recruitment • Assistance with special projects of a limited duration • Seasonal work The Department Director and the Human Resources Division will evaluate each request to ensure that it meets either one of the following criteria prior to approval: • Not filling the position on a temporary basis would result in an adverse impact to District operations. • It would not be cost effective to hire a permanent employee to perform the requested services. After each request is evaluated, final approval must be granted by the General Manager. [Original Retained by the Secretary of the District] July 5, 2022 Regular ADM IN Committee Meeting Agenda Packet- Page 33 of 41 Page 7 of 12 ATTACHMENT 4 Number: BP 040 Related Admin. Procedure: Pending Authority: Board of Directors Adopted: July 16, 2020 ----- oo Revised: Reviewed: CENTRALSAN Initiating Dept./Div.: Administration/SOD BOARD POLICY ELECTRONIC SIGNATURES AND APPROVALS PURPOSE To establish a policy on the use of electronic signatures and approvals on District documents. POLICY In furtherance of its objectives to embrace innovation, increase efficiencies, and encourage the use of paperless electronic documents, it is the policy of the Board of Directors to support the use of electronic signatures on District documents and to support the use of electronic approvals as part of the District's enterprise resource planning (ERP) system. To the fullest extent permitted by law, Central San accepts electronic signatures on District documents as legally binding and equivalent to handwritten signatures to signify an agreement in accordance with California Government Code Section 16.5. For authorized documents under this policy where state or federal laws, regulations, or rules require a handwritten signature, that requirement is met if the document contains an electronic signature, unless otherwise prohibited by such laws, regulations or rules. The General Manager or designee is responsible for determining acceptable technologies and vendors for electronic signatures to ensure the security and integrity of any data and signatures, and shall comply with all applicable regulations, including but not limited to ensuring that the level of security used to identify the signer of a document and transmit the signature are sufficient for the transaction being conducted. The use, or Central San's acceptance, of an electronic signature is at the option of Central San and the signer(s). Nothing in this policy requires Central San to use or accept the submission of a document containing an electronic signature. [Original retained by the Secretary of the District] July 5, 2022 Regular ADMIN Committee Meeting Agenda Packet- Page 34 of 41 Page 8 of 12 ATTACHMENT 5 Number: BP 041 Authority: Board of Directors Adopted: September 18, 2020 -- Revised: Reviewed: CENTRALSAN Initiating Dept./Div.: Administration/Finance BOARD POLICY PENSION FUNDING OBJECTIVE Central San's primary financial objective is to maintain long-term fiscal stability. Properly monitoring, managing, and funding the District's defined benefit pension obligations is critical to achieving this objective. PURPOSE This policy documents the method the District will use to determine its actuarially determined contributions to fund the long-term cost of benefits to the plan participants and annuitants. The policy also: • Provides guidance in making annual budget decisions; • Demonstrates prudent financial management practices; • Reassures bond rating agencies; and • Discloses to employees and the public how pensions will be funded. Nothing in this policy shall constitute an obligation upon the District, nor an implied contract. The Board of Directors may revoke or amend this policy in the best interests of the District. BACKGROUND Central San provides defined benefit retirement benefits through the Contra Costa County Employees' Retirement Association (CCCERA). CCCERA is a multiple- employer public employee defined benefit pension plan. All full-time District employees are eligible to participate in CCCERA. CCCERA provides retirement and disability benefits, annual cost of living adjustments and death benefits to plan members and their beneficiaries. CCCERA acts as a common investment and administrative agent for participating public entities within the County. Benefit provisions are determined by participating agency policy, CCCERA policy, state statute, and Court decisions. The financial objective of a defined benefit pension plan is to fund the long-term cost of benefits provided to the plan participants. In order to assure that the plan is financially July 5, 2022 Regular ADM IN Committee Meeting Agenda Packet- Page 35 of 41 Page 9 of 12 Number: BP 041 PENSION FUNDING Page 2 of 5 sustainable, the plan should accumulate adequate resources in a systematic and disciplined manner over the active service life of benefitting employees. This policy outlines the method the District will utilize to determine its actuarially determined contributions to fund the long-term cost of benefits to the plan participants and annuitants and, in addition, provides a framework for additional contributions to be made to (1) CCCERA or (2) the Secondary Pension Trust to meet the goal of having a fully funded pension. The Secondary Pension Trust, also referred to internally as the "Pension Prefunding Trust," is an irrevocable IRC Section 115 Pension Trust and serves as a supplemental trust to help address pension unfunded actuarial accrued liabilities (UAAL) and acts as a hedge against unforeseen volatility in Normal Cost and UAAL pension contribution requirements. As the name implies, this is a "secondary" pension trust, with the CCCERA-administered plan being the primary trust. Any contributions to the Secondary Pension Trust do not result in GASB accounting basis reductions to the District's funded plan status, despite there being other important benefits as described previously. The District also maintains a trust for the accumulation of assets for Other Post-Employment Benefits, known as the OPEB Trust. Pension Funding:A Guide for Elected Officials, issued by eleven national groups including the U.S. Conference of Mayors, the International City/County Management Association, and the Government Finance Officers Association, established the following five general policy objectives for a pension funding policy: • Actuarially Determined Contributions. A pension funding plan should be based upon an actuarially determined contribution (ADC) that incorporates both the cost of benefits in the current year and the amortization of the plan's UAAL. • Funding Discipline. A commitment to make timely, actuarially determined contributions to the retirement system is needed to ensure that sufficient assets are available for all current and future retirees. • Intergenerational equity. Annual contributions should be reasonably related to the expected and actual cost of each year of service so that the cost of employee benefits is paid by the generation of taxpayers who receives services from those employees. • Contributions as a stable percentage of payroll. Contributions should be managed so that employer costs remain relatively consistent as a percentage of payroll over time. • Accountability and transparency. Clear reporting of pension funding should include an assessment of whether, how, and when the plan sponsor will ensure sufficient assets are available for all current and future retirees. July 5, 2022 Regular ADMIN Committee Meeting Agenda Packet- Page 36 of 41 Page 10 of 12 Number: BP 041 PENSION FUNDING Page 3 of 5 POLICY This policy is based on the five general principals noted above, as well as the following principles: • It is both appropriate and responsible to pay the cost of current utility operations in the period such costs are incurred, rather than defer those costs to future periods. • Annual contributions toward defined contribution benefit plans should be made to ensure that the funded ratio is targeted at and maintained as close to 100% as is reasonably practicable. • When defined benefit plan funded ratios are below 100%, efforts should be taken to ensure the funded ratios are restored to 100% as soon as is practicable given other reasonable rate making constraints. The amount of funding to be provided to meet the fully-funded pension goal as noted above is based on two components: A. Actuarially Determined Contributions (ADC) CCCERA actuaries will determine Central San's ADC to CCCERA based on annual actuarial valuations. The ADC will include the normal cost for current service and amortization of any under-funded amount, in accordance with CCCERA's UAAL amortization policies (currently allocated over 18 years). The normal cost will be calculated using the entry age normal cost method using economic and non-economic assumptions approved by the CCCERA Board. Central San will review the CCCERA annual actuarial valuations to validate the completeness and accuracy of the member census data and the reasonableness of the actuarial assumptions. B. Additional Discretionary Payment (ADP) Contributions Central San will consider making ADP contributions with either budgeted or other one-time resources, with the objectives of increasing the plan's funded status, by reducing the UAAL, and reducing ongoing pension costs through two potential funding sources: • Normal Budgeted Contributions - A budgeted contribution, above the required amount of the ADC, may be made, in an amount guided by the Table below. An additional budgeted contribution toward either pension or OPEB obligations has been included in the Central San annual budget for several years. The additional budgeted contribution can be specified in the budget process as earmarked for either pension or OPEB obligations, or to be determined by the Board of Directors during the fiscal year. July 5, 2022 Regular ADM IN Committee Meeting Agenda Packet- Page 37 of 41 Page 11 of 12 Number: BP 041 PENSION FUNDING Page 4 of 5 • Budgetary Surplus or Nonrecurring Revenues - The second component is a potential contribution of one-time monies that may or may not be available at each year end. The actual dollar amount of available one-time funds will be presented to the Board of Directors with a recommendation as to how much shall be contributed to either CCCERA or the Pension Prefunding Trust. This recommendation will be based on the dollars available, other competing priorities, and input from the Board of Directors. With respect to operation of the ADP contributions, the following guidance shall apply, where the bracketed number refers to the columns in the table that follows: In the context of the CCCERA amortization of new annual UAAL layers over 18 years, while the pension is f 1 1 funded, the District f 2 1 through f 3 1, target bringing the funded ratio to 100% over not less than a f 4 1-year period, through contributions to f 5 1. (1) (2) (3) (4) (5) Pension Funding Funding Funding Source Time to Restore to Contributions Ratio(CCCERA and Language 100%in Years to Trust) Less than 80% Shall budgeted (100% - Funded CCCERA contributions and ratio)/2 funding from (and not to available year- exceed 15 end variances years). � T Between 80-90% Shall budgeted (100% -Funded CCCERA or contributions and ratio)/2 Trust funding from available year- end variances Between 90-95% Shall budgeted (100% -Funded Trust contributions and ratio)/2 funding from available year- end variances Between 95- May available funding (100% -Funded I Trust 100% from year-end ratio)/2 variances Greater than May ' available funding N/A Trust 100% from year-end variances For purposes of this policy, the term "funded ratio" refers to the level of the pension plan assets, at actuarial value, in proportion to the pension plan's accrued liability. This is an July 5, 2022 Regular ADMIN Committee Meeting Agenda Packet- Page 38 of 41 Page 12 of 12 Number: BP 041 PENSION FUNDING Page 5 of 5 annual point-in-time measurement, as of the valuation date. Concurrently with the calculation of the recommended ADP contribution as informed by the above table, Central San will also calculate an alternative plan to close the funding gap in potentially a shorter period of time, by looking at the market value of plan assets in lieu of the actuarial value. As to the timing of any additional contributions toward CCCERA and the Pension Prefunding Trust as specified in the table above, a recommendation shall be provided by staff as to whether the contribution should be made in a single contribution or allocated over a reasonable period, such as the balance of the fiscal year. TRANSPARENCY AND REPORTING Funding and funded status of Central San's pension plan should be transparent to interested parties, including plan participants, annuitants, the Board of Directors, and the District's customers. In order to achieve this transparency, the following information shall be available: • Copies of the annual actuarial valuations for Central San's pension plan shall be made available to the Board of Directors. • Central San's independently audited Comprehensive Annual Financial Report shall be published on its website. This report includes information on the District's annual contributions to CCCERA and the Pension Prefunding Trust and OPEB Trust and the funded status of the pension plan. • Central San's annual operating budget shall include the District's required contributions to CCCERA, and any additional budgeted contributions available to be made toward the Pension Prefunding Trust or OPEB Trust. • Central San shall periodically, but no less than annually, report to the Board of Directors on the long-term UAAL trend showing progress toward fully-funded status. REVIEW OF POLICY Central San will monitor changes to and expansions of pension funding best practices, as well as any additional guidance provided by the Government Finance Officers Association that relate to the funding of defined benefit pension plans. Additionally, funding a defined benefit pension plan requires a long-term horizon. In light of these factors, the Board of Directors will review this policy at least every two years to determine if changes are needed to ensure adequate resources are being accumulated. [Original Retained by the Secretary of the District] July 5, 2022 Regular ADMIN Committee Meeting Agenda Packet- Page 39 of 41