HomeMy WebLinkAboutFinance MINUTES 09-19-23Page 2 of 5
110ENTRAL SAN
REGULAR MEETING OF THE
CENTRAL CONTRA COSTA
SANITARY DISTRICT
FINANCE COMMITTEE
MINUTES
Tuesday, September 19, 2023
9:30 a.m.
Committee:
Chair Barbara Hockett
Member Mariah Lauritzen
Staff.
Greg Norby, Deputy General Manager — Operations
Philip Leiber, Deputy General Manager — Administration
Benjamin Johnson, Internal Auditor
Kevin Mizuno, Finance Manager
Christopher Thomas, Accounting Supervisor (joined during Item 3.b.)
Olivia Ruiz, Accounting Supervisor
Shari Deutsch, Risk Management Administrator (joined during Item 3.b.)
Stacey Durocher, Administrative Services Assistant
1. Call Meetina to Order
Chair Hockett called the meeting to order at 9:30 a.m.
2. Public Comments
None.
3. Items for Committee Recommendation to the Board
BOARD OF DIRECTORS:
BARBARA D. HOCKETT
President
MARIAHN LAURITZEN
President Pro Tent
MICHAEL R. MCGILL
TAD J PILECKI
FLORENCE T WEDINGTON
PHONE: (925) 228-9500
FAX.- (925) 372-0I92
www.central.san.org
a. Review and recommend approval of expenditures incurred August 17, 2023
through September 7, 2023
The Committee had no questions.
COMMITTEE ACTION: Recommended Board approval.
October 5, 2023 Regular Board Meeting Agenda Packet - Page 135 of 144
Page 3 of 5
Finance Committee Minutes
September 19, 2023
Page 2
b. Receive Quarterly Financial Review for Quarter ending June 30, 2023
Mr. Mizuno provided an overview of the presentation included in the agenda
materials.
Operations & Maintenance Fund (O&M)
Mr. Mizuno pointed out that O&M is reporting favorable expenditures and
revenue variances at year end that are in line with expectations from prior
meeting discussions. He continued to highlight that O&M is reporting total
year-end expenditures of $81.4 million through the 4th Quarter which is
approximately 4.3 percent under the Fiscal Year (FY) 2022-23 Budget. The
favorable expense variance was largely due to lower -than -expected
spending as well as other contributing factors within the "other purchased
services" categories, which includes professional, technical, and
administrative services. He said the O&M fund revenues also reported a
favorable variance of approximately 3.1 percent due largely to sewer service
charges and investment income.
Chair Hockett asked if staff has started cybersecurity initiatives for District
data. Mr. Leiber responded that Information Technology (IT) has a new
Cybersecurity Analyst, and that enhancing cybersecurity infrastructure is one
of four initiatives outlined in the IT Strategic Plan which will be presented to
the Board this fall.
Member Lauritzen asked for more information regarding the unfunded
employee -related liabilities negative variance. Mr. Mizuno responded that
the variance was attributable to Board action in the Fall of 2022 to allocate a
portion of the favorable expense variance from FY 2022 to the Other Post -
Employment Benefits (OPEB) Trust Fund. He stated this trust contribution
appears in the FY 2023 4th Quarter report as a negative variance because it
was not budgeted in FY 2023. He went on to clarify that at the time of this
Board action, staff was confident the overall FY 2023 adopted Budget would
be sufficient to cover the unbudgeted trust contribution, therefore it was not
necessary to amend the FY 2023 Budget. Further discussion ensued.
Mr. Mizuno lost the internet connection to the presentation materials and
continued his presentation by referring to Page 5 in the agenda materials
(Page 9 of 38 in the PDF) and said revenues are also showing a favorable
variance of 3.1 percent with the main drivers being sewer services charges
and investment revenue returns.
October 5, 2023 Regular Board Meeting Agenda Packet - Page 136 of 144
Page 4 of 5
Finance Committee Minutes
September 19, 2023
Page 3
Sewer Construction Fund (SCF)
Mr. Mizuno referred to Page 14 of the agenda materials (Page 17 of 38 in
the PDF) and stated that the 4t" Quarter sewer construction fund total for
Capital Project expenditures were 64.9 percent of the total adopted FY 2023
Budget however carryforward of Capital Project appropriations from the prior
year in the amount of $67 million increased the FY 2023 Budget to $158
million. He advised that in order to address Board concerns about the
relatively low spend factor, staff was authorized to transfer approximately
$18.5 million in carryforward to the sewer construction fund reserves in the
FY 2024 Capital Improvement Budget (CIB). Additionally, Mr. Mizuno pointed
out that the CIB was also decreased significantly for FY 2024 to $71.2 million
down from $108 million in FY 2022 and $91 million in FY 2023.
Mr. Mizuno referred to Page 13 of the agenda materials (Page 16 of 38 in
the PDF) and stated that the sewer construction revenues are showing a
significant favorable variance of approximately 13.5 percent. He said there
are several explanations for the favorable variance, but the largest
contributor was due to investment income due to higher interest rates. Other
explanations for the large revenue variances were favorable outcomes in the
annual capital Concord bill, capacity fee revenues, State Revolving Fund
(SRF) loan proceeds, and Sewer Service Charges.
Member Lauritzen asked why the investment income was 300 percent in one
section but 2,100 percent in another. Mr. Mizuno replied that one was for the
O&M Fund and the other was for the SCF.
COMMITTEE ACTION: Recommended Board receipt.
C. Receive Budget -to -Actual Expenditure overview through the month of August
2023.
The Committee had no questions.
COMMITTEE ACTION: Recommended Board receipt.
4. Other Items
a. Review Risk Management Loss Control Report as of August 31, 2023
Ms. Deutsch provided an overview of the materials included in the agenda
packet. She mentioned that the District's contractor insurer accepted the
tender for defense on a litigated matter arising from work near 644 Vallecito
Lane. She also reported that the statute of limitations for a bike injury claim,
which was denied in May 2023, will expire in early October, and staff is
expecting a lawsuit before then.
October 5, 2023 Regular Board Meeting Agenda Packet - Page 137 of 144
Page 5 of 5
Finance Committee Minutes
September 19, 2023
Page 4
In response to Chair Hockett's inquiry about the Kappel issue, Ms. Deutsch
said the trial date was vacated and a new trial date is pending.
COMMITTEE ACTION: Received the report.
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.
7. Future Scheduled Meetinas
Tuesday, October 24, 2023 at 9:30 a.m.
Tuesday, November 21, 2023 at 9:30 a.m.
Tuesday, December 19, 2023 at 9:30 a.m.
8. Adjournment — at 10:02 a.m.
October 5, 2023 Regular Board Meeting Agenda Packet - Page 138 of 144