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HomeMy WebLinkAboutFinance MINUTES 05-23-23Page 2 of 6 110ENTRAL SAN REGULAR MEETING OF THE BOARD OF DIRECTORS: BARBARA D. HOCKETT CENTRAL CONTRA COSTA President SANITARY DISTRICT MARIAHNLAURITZEN President Pro Tent FINANCE COMMITTEE MICHAEL R. MCGILL TAD J PILECKI FLORENCE T WEDINGTON MINUTES Tuesday,May 23, 2023 PHONE: (925) 228-9500 y FAX.- (925) 372-0192 9:30 a.m. www.centralsan.org ('.nmmittaa Chair Barbara Hockett Member Mariah Lauritzen Staff. Roger S. Bailey, General Manager Katie Young, Secretary of the District Philip Leiber, Deputy General Manager Edgar Lopez, Provisional Director of Engineering and Technical Services Benjamin Johnson, Internal Auditor Charles Mallory, Information Technology Manager (joined during Item 3.c.) Danea Gemmell, Planning and Development Services Division Manager (joined during Item 3.a.) Kevin Mizuno, Finance Manager Stephanie King, Contracts and Procurement Administrator (joined during Item 3.b.) Christopher Thomas, Accounting Supervisor (joined during Item 3.b.) Olivia Ruiz, Accounting Supervisor Stacey Durocher, Administrative Services Assistant 1. Call Meeting to Order Chair Hockett called the meeting to order at 9:00 a.m. 2. Public Comments None. June 1, 2023 Regular Board Meeting Agenda Packet - Page 161 of 168 Page 3 of 6 Finance Committee Minutes May 23, 2023 Page 2 3. Items for Committee Recommendation to the Board a. Review and recommend approval of expenditures incurred April 14, 2023 through May 11, 2023 The Committee had no questions. COMMITTEE ACTION: Recommended Board approval. b. Receive Budget -To -Actual Expenditure overview through the month of April 2023 Mr. Mizuno provided a brief overview of the FY 22-23 Budget -To -Actual expenditures through the month of April, 2023 for the Operations and Maintenance Fund and the Sewer Construction Fund provided in the agenda materials. The Committee had no questions. COMMITTEE ACTION: Recommended Board receipt. C. Receive Quarterly Financial Review for quarter ending March 31, 2023 Mr. Mizuno provided an overview of the quarterly report through March 31, 2023 included in the agenda materials. Mr. Mizuno reported that all funds were on target, with the exception of the Self -Insurance fund expense, reporting a relatively immaterial negative year-to-date variance of 0.3 percent, however, the fund is expected to correct itself by the close of the fiscal year. Mr. Mizuno emphasized that as an overview of expenditures for the O&M and Sewer Construction fund was already provided in last month's committee meeting, todays overview would be primarily focused on items not covered, such as lower -level expenditure details and year-to-date revenue results. Mr. Mizuno then provided an overview of revenues through March 31, 2023 for the 3rd Quarter of Fiscal Year 22-23 for the Operations and Maintenance (O&M) and Sewer Construction Funds. Mr. Mizuno advised that the O&M Fund is reporting a positive variance of $1.1 million due in primarily to positive revenue variances from Sewer Service Charges and Investment Income. Member Lauritzen asked why there would be positive variances in sewer service charges. Ms. Gemmell responded that there can be variances because commercial customers are charged based on their volumes and that fluctuates. In terms of revenue at the permit counter, Central San collects fees at the time a permit is submitted due to the time it takes to get it on the tax roll. Another contributing factor is that the budget revenue June 1, 2023 Regular Board Meeting Agenda Packet - Page 162 of 168 Page 4 of 6 Finance Committee Minutes May 23, 2023 Page 3 estimates are finalized in March/April annually, and new development in Central San's service territory between then and when the assessment roll is delivered to the County in July/August. Mr. Mizuno stated that the Sewer Construction Fund is also reporting a positive revenue variance due primarily to Capacity Fees reporting a favorable variance of $2.7 million and Investment Income reporting a favorable variance of $1 million. Further discussion ensued regarding how the report could better show how Central San's budget is balanced by planned utilizations of reserves when revenues are less than expenses. Mr. Bailey requested that staff indicate on the report revenues being used from reserves. COMMITTEE ACTION: Recommended Board receipt. 4. Other Items a. Receive Highmark Other Post -Employment Benefits (OPEB) and Pension Prefunding Subtrust Reports for the First Quarter of calendar year 2023 Mr. Leiber provided a brief overview of the materials in the agenda packet. Since inception in 2009, the OPEB Trust continues to meet or exceed the targeted returns. Returns in the recent the quarter were 4.4 percent and were slightly above the benchmark of 4.39 percent. Mr. Bailey stated the Board will have to have a policy discussion on what to do with any favorable variances, including potential contributions to the OPEB or Pension Trusts. Member Lauritzen asked for clarification regarding drawing money from the Pension Trust. Mr. Leiber responded that there is flexibility to funds from the Trust for any pension related purpose, including any required or option pension contributions to Contra Costa County Employees' Retirement Association (CCCERA). Member Lauritzen inquired about the transparency of the UAAL payoff transaction for the public and questioned whether a notation can be included in the report. Mr. Leiber stated the savings are being tracked each year and that the first annual report has already been completed. Further discussion ensued and all questions posed by the Committee were answered. COMMITTEE ACTION: Received the report and provided input to staff. June 1, 2023 Regular Board Meeting Agenda Packet - Page 163 of 168 Page 5 of 6 Finance Committee Minutes May 23, 2023 Page 4 b. Review annual contracts and blanket purchase orders (BPO's) older than five years with an annual spend greater than $25,000 Mr. Mizuno reviewed the memorandum included in the agenda materials. This report provides transparency on sole source contracts older than five years with greater an spend of $25, 000 or greater in order to help prevent conflicts with long-term agreements that should be competitively bid. Central San currently has two contracts that meet the criteria which are PacWest Security Services and PFM Financial Advisors, LLC, and both have justifiable reasons to remain in place. Central San also has some permanent authorized sole source agreements with public agencies that are excluded from the attached report. Member Lauritzen asked how services are financially managed if there isn't a purchase order or contract in place. Mr. Mizuno responded that all supplier commitments and payments must be tracked using a purchase order in the system unless specifically exempt. He explained Central San has Administrative Procedures (AP) in place that was approved by the General Manager that lists specific types of payments that are exempt from purchase order requirements such as payments to other public agencies for permits and fees. Mr. Bailey responded to a question posed by Chair Hockett about an agreement with a consortium to obtain better pricing on chemicals purchased and stated that Bay Area Clean Water Agencies (BACW4) solicits information on pricing for chemicals that is shared with all agencies. Ms. King stated that Central San participates in the Bay Area Chemical Consortium which is bid out yearly for many of the chemicals that Central San purchases and is reviewed annually with a set price for each chemical. Mr. Bailey asked what chemicals are included in this Consortium. Ms. King stated that the list was not immediately available for this meeting, but that staff can provide it upon request. COMMITTEE ACTION: Reviewed and provided input to staff. 5. Announcements None. 6. 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 and provided input to staff. June 1, 2023 Regular Board Meeting Agenda Packet - Page 164 of 168 Page 6 of 6 Finance Committee Minutes May 23, 2023 Page 5 7. Future Scheduled Meeti Tuesday, June 20, 2023 at 9:30 a.m. Tuesday, July 18, 2023 at 9:30 a.m. Tuesday, August 22, 2023 at 9:30 a.m. 8. Adjournment — at 10:22 a.m. June 1, 2023 Regular Board Meeting Agenda Packet - Page 165 of 168