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HomeMy WebLinkAboutFinance MINUTES 01-24-23Page 2 of 6 110ENTRAL SAN REGULAR MEETING OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT FINANCE COMMITTEE MINUTES Tuesday, January 24, 2023 9:30 a.m. (All attendees participated via videoconference) Committee: Chair Barbara Hockett Member Mariah Lauritzen BOARD OF DIRECTORS: BARBARA D.HOCKETT President MARIAHN LAURITZEN President Pro Tent MICHAEL R. MCGILL TAD J PILECKI DAVID R. WILLIAMS PHONE: (925) 228-9500 FAX.- (925) 372-0192 www.centralsan.org Staff. Katie Young, Secretary of the District Danea Gemmell, Provisional Director of Engineering and Technical Services Philip Leiber, Director of Finance and Administration Benjamin Johnson, Internal Auditor Emily Barnett, Communication Services and Government Relations Manager (left after Item 6.b.) Edgar Lopez, Capital Projects Division Manager (joined during Item 5.a.; left during Item 6.b.) Kevin Mizuno, Finance Manager Christopher Thomas, Accounting Supervisor Olivia Ruiz, Accounting Supervisor (joined during Item 6.b.) Shari Deutsch, Risk Management Administrator Stephanie King, Contracts and Procurement Program Administrator Amelia Berumen, Assistant to the Secretary of the District Notice This meeting was conducted virtually in accordance with the provisions stipulated in Assembly Bill 361 and adopted on January 12, 2023 by the Central San Board of Directors. The agenda included instructions for options in which the public could participate in the meeting. 2. Call Meeting to Order Chair Hockett called the meeting to order at 9:30 a.m. February 23, 2023 Special Board Meeting Agenda Packet - Page 96 of 122 Page 3 of 6 Finance Committee Minutes January 24, 2023 Page 2 3. Public Comments None. 4. Committee Charter a. Review Committee Charter as set forth in Board Policy No. BP 013 — Standing Committee Protocols, Guidelines and Charters The Committee had no comments. COMMITTEE ACTION: Reviewed the Charter. 5. Old Business a. Follow-up to questions asked at the December 19, 2022 Finance Committee meeting regarding one specific expenditure Mr. Mizuno reviewed the details provided in the agenda memorandum in regard to a payment to Alfred Conhagen, Inc. (Check 307693, $531, 768.74). He advised that upon further investigation, it was found that some of the invoice components were considered a capital expenditure. Staff has since transferred $124,000 to the proper capital project. The Committee had no further questions. COMMITTEE ACTION: Received the information. 6. Items for Committee Recommendation to the Board a. Review and recommend approval of expenditures incurred December 9, 2022 through January 5, 2023 Mr. Mizuno provided the Committee with an extensive overview of the current District process to review expenditures. Chair Hockett spoke of the practice and advised she had reached out to District Counsel to understand the statute. She opined that at the time the statute was created nearly a century ago, expenditures were handled quite differently than in today's business practice. As such, she would be interested in the statute being amended. Discussion continued on the current practice. Mr. Leiber advised this item was presented first so the Committee would see the current approach, and that the following agenda item was to discuss alternatives for consideration. February 23, 2023 Special Board Meeting Agenda Packet - Page 97 of 122 Page 4 of 6 Finance Committee Minutes January 24, 2023 Page 3 The Committee had no questions on the expenditures. COMMITTEE ACTION: Recommended Board approval. b. Review draft Position Paper to consider revisions to the expenditure and contracts review process conducted by the Finance Committee and provide recommendations to either affirm or amend the current process Mr. Leiber reviewed the information provided in the draft Position Paper and discussed the listed alternatives as included in the agenda materials. These alternatives are to pursue changes in the state code specifying Board approval of expenditures, or to revise the existing process while aiming to maintain compliance with the requirement. With respect to the first alternative, he advised that staff has started conversations with CASA (California Association of Sanitation Agencies) and local representatives regarding change to the statute. Ms. Barnett provided a more detailed summary of some of the steps taken. She advised that some large steps have been taken with local legislators that have been encouraging. She anticipates staff will be able to provide more detail in the coming months on a possible legislative effort. Mr. Mizuno drew attention to a new Finance Committee Member onboarding document staff prepared and provided in advance of the meeting which provided pertinent details of the finance process, including internal procedures. He noted that should a change in the requirement through legislation be successful, it may be an opportunity for Central San to have a one page Board Policy for expenditure oversight that would direct future processes. He later spoke of updates staff provides the Board and Committee related to contracts executed within General Manager authority for transparency. A lengthy discussion followed regarding potential alternatives. With respect to changes to processes potentially within the existing code language, staff noted that enhanced Board review and approval could be provided for contracts funded within the Operations and Maintenance budget, and that expenditures could be filtered in a summary report that met various subjective or objective criteria. Chair Hockett thanked staff for the work accomplished thus far and noted the goal was not to add to staff's task. Member Lauritzen stated her support of a systemic, legislative fix and that it would be premature to make changes to the process prior to seeing the results of that approach. February 23, 2023 Special Board Meeting Agenda Packet - Page 98 of 122 Page 5 of 6 Finance Committee Minutes January 24, 2023 Page 4 In response to a question posed by Chair Hockett on whether contract reviews should be a Committee function, Member Lauritzen stated it would be useful to review some of the operations contracts. In her experience, there is value in consistency of supplies, and some long-term contracts are of use for basic goods. There was further discussion regarding long-term contracts. Chair Hockett would like the District to be able to change vendors to ensure competitive pricing, as appropriate. She also expressed concern about consulting rates that may be viewed as excessive, and that hourly rates should also be subject of oversight. Member Lauritzen agreed this was an area of concern and transparency was warranted. At the item conclusion, it was directed by the Committee for staff to pursue the legislative path and provide relevant updates to the Committee before presenting the issue to the Board for action. COMMITTEE ACTION: Reviewed the information and directed staff to pursue pending legislative action and provide an update to the Committee at a future meeting. C. Receive Budget -to -Actual Expenditure overview through the month of December 2022 Mr. Mizuno provided the Committee with a detailed explanation of the monthly expenditure overview reports. In regard to the capital expenditures, Mr. Mizuno explained the blue graph line is the target line for 90% of budget with roll -forward. The year-to-date line has been adjusted for a reduction in the carry -forward that was highlighted at the recent financial workshop. The District remains at about the 50% mark with expenditures to date; however, staff expects that figure to increase during spring with better weather. As a result of these carryforward adjustments, the actual vs. 90% budget with roll -forward will be less than it would have been. Mr. Leiber referred to additional information provided in the January 23, 2023 Engineering & Operations Committee agenda packet. He noted the Capital Projects Division Manager prepared a good report that explained the current capital budget spending status. Staff responded to various questions posed to the Committee's satisfaction. February 23, 2023 Special Board Meeting Agenda Packet - Page 99 of 122 Page 6 of 6 Finance Committee Minutes January 24, 2023 Page 5 COMMITTEE ACTION: Recommended Board receipt. 7. Other Items a. Review Risk Management Loss Control Report as of January 10, 2023 Ms. Deutsch provided the Committee with the background and an overview of the report, including an explanation of insurance coverage, and some aspects of internal claims handling and classification. She reviewed each loss -type category in detail and noted that nothing of significance had transpired since the posting of the agenda. COMMITTEE ACTION: Received the information. 8. Announcements None. 9. 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. 10. Future Scheduled Meetings Tuesday, February 21, 2023 at 9:30 a.m. Tuesday, March 21, 2023 at 9.30 a.m. Tuesday, April 25, 2023 at 9:30 a.m. 11. Adjournment — at 10:46 a.m. February 23, 2023 Special Board Meeting Agenda Packet - Page 100 of 122